Town and Country Financial Corporation Reports Record Earnings in 2019

SPRINGFIELD, Ill., Feb. 07, 2020 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the fourth quarter and the year ended December 31, 2019.

Key highlights included:

• Return on equity of 12.11% for 2019, the highest level in sixteen years
• Record core net income of $7.6 million in 2019, up 20% from the previous record set in 2018
• Commercial loan growth of nearly 11% in 2019
• Continued strong mortgage banking results, exceeding a strong 2018 by 4%.
• Continued efficiency improvements, with an efficiency ratio of 67%.
• Strong credit quality, with nonperforming loans excluding government guarantees of 0.35% of total loans

Core net income was $2.1 million in the fourth quarter of 2019, compared to $1.9 million in the fourth quarter of 2018. Core net income was $7.6 million in the year ended December 31, 2019, compared to $6.3 million in the year ended December 31, 2018, an increase of 20%. Core net income excludes securities gains and losses and other non-core items. Strong loan growth, solid noninterest income, and reduced expenses contributed to the increases in quarterly and annual results.

Net income was $2.1 million ($0.72 per share) in the fourth quarter of 2019, compared to $1.8 million ($0.63 per share) in the fourth quarter of 2018. Net income was $7.7 million ($2.69 per share) in the year ended December 31, 2019, an increase of 19% compared to $6.4 million in the year ended December 31, 2018.

In announcing the financial results, President and Chief Executive Officer, Micah R. Bartlett said, “We are pleased to report another successful record-setting year. We continue to achieve growth in our balance sheet and in our revenue, while also realizing positive operating leverage through our reduced expenses and efficiency ratio. We produced a return on equity ratio in 2019 of over 12% - our highest in 16 years. Our book value per share grew nearly 15% for the year, and we were able to increase our quarterly dividend by 40% in the fourth quarter of 2019. All of this was made possible by our team of professional bankers who continue to execute for our clients while providing expertise that goes beyond traditional banking products and services.”

Total loans, excluding loans held for sale, were $594 million as of December 31, 2019, an increase of $40 million during the year ended December 31, 2019, compared to $554 million as of December 31, 2018. Commercial loan growth, including commercial real estate, was the primary reason for the increase. Commercial loans were $483 million as of December 31, 2019, an increase of $46 million (11%) compared to $437 million as of December 31, 2018.

Loan growth was funded with deposits, reallocations from the investment portfolio, and retained earnings. Deposits grew to $655 million as of December 31, 2019, compared to $625 million as of December 31, 2018. Borrowed money was $71 million as of December 31, 2019, compared to $79 million as of December 31, 2018. The investment portfolio declined $14 million during 2019, to $144 million, from $158 million as of December 31, 2018, and the funds were used to fund loan growth. Equity capital grew $8.7 million to $68.2 million as of December 31, 2019, compared to $59.5 million as of December 31, 2018.

Net interest income was $6.1 million in the fourth quarter of 2019 and $5.9 million in the fourth quarter of 2018. The net interest margin was 3.38% in the fourth quarter of 2019, and 3.51% in the fourth quarter of 2018. Net interest income increased to $24.4 million in the year ended December 31, 2019, compared to $23.0 million in the year ended December 31, 2018. The net interest margin was 3.44% in 2019, and 3.45% in 2018.

Noninterest income was $2.9 million in the fourth quarter of 2019, and $2.8 million in the fourth quarter of 2018. Noninterest income was $11.8 million in the year ended December 31, 2019, compared to $11.2 million in the year ended December 31, 2018. Mortgage banking fees were $1.3 million in the fourth quarter of 2019 and $1.2 million in the fourth quarter of 2018. Noninterest income was 32% of revenue in the fourth quarter of 2019, unchanged from the fourth quarter of 2018. Noninterest income was 32% of revenue in the year ended December 31, 2019, and 33% of revenue in the year ended December 31, 2018.

Noninterest expenses declined from $6.3 million in the fourth quarter of 2018 to $6.1 million in the fourth quarter of 2019. Noninterest expenses declined $440,000 to $25.1 million in the year ended December 31, 2019, compared to $25.6 million in the year ended December 31, 2018.

Nonperforming loans as a percent of total loans were 0.80% as of December 31, 2019, compared to 0.67% as of December 31, 2018. A portion of these loans has government guarantees. Excluding the guaranteed portion, the adjusted ratio was 0.35% as of December 31, 2019, and 0.48% as of December 31, 2018.

Town and Country Bank’s capital levels remained strong as of December 31, 2019, with a Tier 1 leverage ratio of 9.66% and a total risked-based ratio of 13.00%. These ratios compare to 9.28% and 12.85% a year earlier. Book value was $23.94 per share as of December 31, 2019, compared to $20.90 per share as of December 31, 2018, an increase of 14.6%.

On January 30, 2020, the board of directors declared a $0.07 per share dividend payable Friday, March 13, 2020, to shareholders of record as of Monday, March 2, 2020.

Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town and Country Banc Mortgage Services, Inc. with offices in Bloomington, Buffalo, Decatur, Edwardsville, Fairview Heights, Jacksonville, Lincoln, Mt. Zion, Springfield, and Quincy. The Quincy branch operates under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.

Contact:	Doug Cheatham
	Executive Vice President and Chief Financial Officer
	[e-mail]
	[phone]

Financial Highlights
(Unaudited)
CONSOLIDATED STATEMENT OF CONDITION
As of the dates indicated:									December 31, 2019				December 31, 2018
ASSETS
Cash and due from banks									$		16,789,844		$		14,748,796
Investments											143,663,549				157,664,916
Loans held for sale											6,353,640				1,450,806
Loans											593,889,042				553,827,132
Less: Allowance for loan losses											5,863,740				5,779,551
Net loans											588,025,302				548,047,581
Other assets											59,834,592				62,442,515
Total assets									$		814,666,927		$		784,354,614
LIABILITIES & EQUITY
Deposits									$		655,098,329		$		624,628,228
Borrowed money											70,825,000				78,805,000
Other liabilities											6,521,077				7,462,129
Total liabilities											732,444,406				710,895,357
Jr. subordinated debt of unconsolidated subsidiaries											14,031,039				13,978,333
Equity capital											68,191,482				59,480,924
Total liabilities & equity									$		814,666,927		$		784,354,614
CONSOLIDATED INCOME STATEMENT
	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
	2019				2018						2019				2018
Interest income	$		8,039,087		$		7,548,857		$		31,995,453		$		28,381,528
Interest expense			1,891,268				1,614,974				7,547,900				5,410,801
Net interest income			6,147,819				5,933,883				24,447,553				22,970,727
Provision for loan losses			300,000				150,000				1,375,000				910,000
Noninterest income			2,932,332				2,761,540				11,762,402				11,232,383
Noninterest expense			6,133,506				6,280,005				25,120,962				25,561,081
Income before income taxes			2,646,645				2,265,418				9,713,993				7,732,029
Income taxes			594,109				392,864				2,098,552				1,395,538
Core Net Income			2,052,536				1,872,554				7,615,441				6,336,491
Non-Core items after tax			100				(77,802	)			48,197				94,917
Net income	$		2,052,636		$		1,794,752		$		7,663,638		$		6,431,408
Financial Highlights
(Unaudited)
Selected Highlights:
	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
	2019				2018						2019				2018
Basic earnings per share		$	0.72			$	0.63			$	2.69			$	2.25
Net charge offs to average loans less HFS			0.13	%			0.02	%			0.22	%			0.09	%
Net revenue (in 000s)		$	9,080			$	8,695			$	36,210			$	34,203
Net interest margin			3.38	%			3.51	%			3.44	%			3.45	%
Fees from mortgage banking activities (in 000s)		$	1,254			$	1,225			$	6,245			$	6,027
Return on common equity			12.26	%			12.16	%			12.11	%			11.41	%
Return on assets			1.00	%			0.92	%			0.95	%			0.84	%
Balance Sheet Ratios
As of the dates indicated:									December 31, 2019				December 31, 2018
Book value per common share									$		23.94		$		20.90
Tier 1 leverage ratio (Bank only)											9.66	%			9.28	%
Total risk-based capital ratio (Bank only)											13.00	%			12.85	%
Nonperforming loans											0.80	%			0.67	%
Delinquent loans, excluding nonperforming											0.55	%			0.80	%
Allowance for loan loss											0.99	%			1.05	%
Coverage ratio (allowance to NPLs)											123	%			156	%
Mortgage loans sold with servicing retained (in 000s)									$		725,207		$		676,098
Trust assets under management (in 000s)									$		156,454		$		147,804
HOLDING COMPANY ONLY STATEMENT OF CONDITION
As of the dates indicated:									December 31, 2019				December 31, 2018
ASSETS
Cash and other assets									$		4,859,465		$		5,371,401
Investment in Town and Country Bank											85,201,380				78,219,935
Total assets									$		90,060,845		$		83,591,337
LIABILITIES & EQUITY
Other liabilities									$		538,324		$		557,080
Borrowings											7,300,000				9,575,000
Jr. subordinated debt of unconsolidated subsidiaries											14,031,039				13,978,333
Equity capital											68,191,482				59,480,924
Total liabilities & equity									$		90,060,845		$		83,591,337