Town and Country Financial Corporation Reports Record Third Quarter 2020 Financial Results

SPRINGFIELD, Ill., Nov. 05, 2020 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the third quarter of 2020.

Key highlights included:

• Record third quarter 2020 net income of $2.1 million, up slightly from third quarter 2019, and after a quarterly provision for loan losses of $1.5 million.
• Record net revenue of $12.2 million, driven primarily by strong mortgage volumes in addition to continued growth in net interest income.
• Mortgage banking fees were up $1.6 million (67%) in the third quarter of 2020 compared to the third quarter of 2019 and up $2.4 million (44%) year-to-date 2020 compared to year-to-date 2019.
  

Micah R. Bartlett, President and Chief Executive Officer, noted, “We continue to deliver solid results in our mortgage banking and commercial banking businesses. Our team of mortgage professionals—both sales and operations—continue to execute extremely well, providing great solutions to our customers and delivering strong financial results at the same time. In addition, our bankers across all business lines are engaging deeply with our customers to stay connected during the economic uncertainties. The health and well-being of our employees and customers remains our top priority.”

Bartlett continued, “We posted record revenue and profits in the third quarter, largely driven by record mortgage volumes in addition to continued growth in net interest income. We were also able to record another $1.5 million in provision for loan losses to further strengthen our balance sheet due to uncertainties brought on by the COVID-19 Pandemic. We continue to believe our business is well positioned for the opportunities and challenges present in the banking industry.”

The Company reported a record third quarter 2020 net income of $2.066 million ($0.73 per share), compared to $2.061 million ($0.72 per share) in the third quarter of 2019. Net income for the nine month period ending September 20, 2020 was $4.1 million, compared to $5.6 million in the nine month period ending September 30, 2019. The decrease in year-to-date net income was a result of increased provision for loan losses and the additional adjustment to mortgage servicing rights.

The Company recorded $1.5 million in provision for loan losses in the third quarter 2020 compared to $400 thousand in the third quarter 2019.  The additional provision increased the allowance for loan losses to $9.4 million as of September 30, 2020 and was in response to the possible impact of the economic environment surrounding the COVID-19 pandemic. For the nine months ending September 30, 2020, the provision for loan losses was $4.0 million, compared to $1.075 million for the same period in 2019. The carrying value of mortgage servicing rights was also reduced by $955,000 in the third quarter 2020, bringing the year-to-date 2020 total valuation adjustment to $2.9 million.

Reported total assets at September 30, 2020 were $873 million, up $42 million (5.0%), when compared to $831 million as of September 30, 2019. The increase was due to loan portfolio growth of $55 million (9.2%) over that period of time, driven by commercial and PPP loans.

Total deposits were $702 million at September 30, 2020, an increase of $62.4 million from September 30, 2019. The increase over that time period was driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. Borrowed funds decreased $32.5 million to $71.6 million at September 30, 2020 compared to $104.2 million as of September 30, 2019.

Net interest income was $6.6 million for the quarter ending September 30, 2020, compared to $6.2 million for the quarter ending September 30, 2019. Net interest income was $19.2 million for the year-to-date period ending September 30, 2020, up $861,000 (4.7%) when compared to $18.3 million for 2019. The net interest margin for the nine month period ending September 30, 2020 was 3.31% compared to 3.46% for the same time period ending September 30, 2019. The lower margin ratio was due to lower asset yields as a result of decreased interest rates.

Noninterest income was $5.5 million in the third quarter of 2020, an increase of $2.1 million (63%) compared to $3.4 million in the third quarter of 2019.   For the nine month period ending September 30, noninterest income increased $2.8 million (30.7%) between 2020 ($11.7 million) and 2019 ($8.9 million). The primary reason for this increase was higher mortgage revenue of $2.4 million. Due to the continual heavy mortgage loan volumes, noninterest expense also increased when comparing the third quarter and year-to-date numbers. As of September 30, 2020, the year-to-date noninterest expense was $21.6 million, up $2.6 million (13.6%), when compared to $19.0 million for the prior period. Third quarter 2020 noninterest expense was up $1.4 million, or 22.1%, when compared to third quarter 2019.

The Company’s nonperforming loans as of percentage of total loans were 0.99% as of September 30, 2020 compared to 0.76% as of September 30, 2019. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.63% as of September 30, 2020 and 0.53% as of September 30, 2019.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 9.22% and a total risk-based ratio of 13.25% as of September 30, 2020. The tier 1 leverage ratio was 9.66% as of December 31, 2019 and 9.42% as of September 30, 2019, and the total risked-based ratio was 13.00% as of December 31, 2019, and 12.74% as of September 30, 2019.

On October 30, 2020, the board of directors declared a $0.07 per share cash dividend payable December 15, 2020, to shareholders of record as of December 1, 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:		Denise Skiles, Vice President and Controller
		[e-mail]
		217-321-3425

Financial Highlights
(Unaudited)
CONSOLIDATED STATEMENT OF CONDITION
As of the dates indicated:					September 30, 2020				December 31, 2019				September 30, 2019
ASSETS
Cash and due from banks					$		17,631,717		$		16,789,844		$		30,008,457
Investments							124,420,731				143,621,663				141,212,751
Loans held for sale							21,644,574				6,353,640				3,850,578
Loans							656,392,265				593,889,042				600,953,373
Less: Allowance for loan losses							(9,373,033	)			(5,863,740	)			(6,310,185	)
Net loans							647,019,232				588,025,302				594,643,188
Other assets							62,271,486				59,876,478				61,464,122
Total assets					$		872,987,740		$		814,666,927		$		831,179,096
LIABILITIES & EQUITY
Deposits					$		701,823,568		$		655,098,329		$		639,448,862
Borrowed money							71,645,500				70,825,000				104,175,000
Other liabilities							12,468,538				6,521,077				7,796,027
Total liabilities							785,937,606				732,444,406				751,419,889
Jr. subordinated debt of unconsolidated subsidiaries							14,070,568				14,031,039				14,017,863
Equity capital							72,979,566				68,191,482				65,741,344
Total liabilities & equity					$		872,987,740		$		814,666,927		$		831,179,096
CONSOLIDATED INCOME STATEMENT
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2020				2019						2020				2019
Interest income	$		7,774,076		$		8,226,201		$		23,516,418		$		23,989,333
Interest expense			1,142,196				2,042,870				4,356,104				5,689,599
Net interest income			6,631,880				6,183,331				19,160,314				18,299,734
Provision for loan losses			1,500,000				400,000				4,000,000				1,075,000
Noninterest income			5,526,110				3,390,440				11,660,581				8,923,018
Noninterest expense			7,949,700				6,513,446				21,598,050				19,012,874
Income before income taxes			2,708,290				2,660,325				5,222,845				7,134,878
Income taxes			642,390				599,422				1,079,540				1,523,619
Net income	$		2,065,900		$		2,060,903		$		4,143,305		$		5,611,259
Financial Highlights
(Unaudited)
Selected Highlights:
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2020				2019						2020				2019
Basic earnings per share		$	0.73			$	0.72			$	1.46			$	1.97
Net charge offs to average loans less HFS			0.00	%			0.02	%			0.08	%			0.09	%
Net revenue (in 000s)		$	12,158			$	9,574			$	30,821			$	27,223
Net interest margin			3.35	%			3.48	%			3.31	%			3.46	%
Fees from mortgage banking activities (in 000s)		$	4,084			$	2,450			$	7,727			$	5,377
Return on common equity			11.99	%			12.66	%			8.02	%			11.95	%
Return on assets			0.94	%			1.00	%			0.64	%			0.94	%
Balance Sheet Ratios
(Dollars in thousands, except per share data) AS of the dates indicated:					September 30, 2020				December 31, 2019				September 30, 2019
Book value per common share					$		25.67		$		23.94		$		23.08
Tier 1 leverage ratio (Bank only)							9.22	%			9.66	%			9.42	%
Total risk-based capital ratio (Bank only)							13.25	%			13.00	%			12.74	%
Nonperforming loans, excluding government guarantee							0.63	%			0.35	%			0.53	%
Delinquent loans, excluding nonperforming							0.23	%			0.55	%			0.44	%
Allowance for loan loss							1.43	%			0.99	%			1.05	%
Coverage ratio (allowance to NPLs)							144	%			123	%			138	%
Mortgage loans sold with servicing retained (in 000s)					$		807,226		$		725,207		$		709,379
Trust assets under management (in 000s)					$		154,974		$		156,454		$		148,290
HOLDING COMPANY ONLY STATEMENT OF CONDITION
As of the dates indicated:					September 30, 2020				December 31, 2019				September 30, 2019
ASSETS
Cash and other assets					$		5,139,689		$		4,859,465		$		5,004,702
Investment in Town and Country Bank							89,180,567				85,201,380				83,313,658
Total assets					$		94,320,256		$		90,060,845		$		88,318,360
LIABILITIES & EQUITY
Other liabilities					$		737,622		$		538,324		$		459,153
Borrowings							6,532,500				7,300,000				8,100,000
Jr. subordinated debt of unconsolidated subsidiaries							14,070,568				14,031,039				14,017,863
Equity capital							72,979,566				68,191,482				65,741,344
Total liabilities & equity					$		94,320,256		$		90,060,845		$		88,318,360