SPRINGFIELD, Ill., Jan. 31, 2019 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”), (OTC Pink: TWCF), today announced financial results for fourth quarter of 2018.
Key highlights included:
- 23.4% increase in core net income, to $6.3 million in 2018, primarily driven by revenue growth;
- 28.5% increase in core net income in the fourth quarter of 2018, to $1.9 million, compared to $1.5 million in the fourth quarter of 2017;
- Net interest margin increase of 11 basis points, to 3.45%, from 3.34% in 2017;
- Commercial loan growth of $57 million in 2018, or 15%, to $437 million as of December 31, 2018.
Reported net income, including securities gains and losses and other non-core items, was $1.8 million ($0.63 per share) in the fourth quarter of 2018 and $1.7 million ($0.60 per share) in the fourth quarter of 2017. For the full year, reported net income was $6.4 million ($2.25 per share), compared to $5.6 million ($1.98 per share) in 2017, a 13.9% increase.
President and Chief Executive Officer, Micah R. Bartlett, commented, “2018 was our best year yet on many fronts, as we achieved most of our goals. Commercial loan growth was strong, growing 15%, to $437 million. The mortgage business had another solid year despite higher interest rates, based on our expertise and product mix. We also saw record performance from an earnings standpoint, with net revenue in excess of $34 million and core net income of $6.3 million, both all-time highs. We are pleased with these results and we’re looking forward to continuing the trends established in 2018.”
Growth in commercial loans of $57 million was funded by a combination of deposit growth of $29 million, equity capital growth of $5.6 million, and reallocation of assets from the securities portfolio. Higher yielding loans, when compared to available investment yields, resulted in an increase in the net interest margin. The net interest margin increased from 3.37% in the fourth quarter of 2017 to 3.51% in the fourth quarter of 2018, as a result of this balance sheet realignment.
Net interest income was $6.0 million in the fourth quarter of 2018, compared to $5.2 million in the fourth quarter of 2017. For the full year, net interest income was $23.4 million in 2018, compared to $21.5 million in 2017
Noninterest income was $2.7 million in the fourth quarter of 2018, compared to $2.9 million in the fourth quarter of 2017. A slowdown in mortgage activity was the primary reason for the slight decline in noninterest income. However, noninterest income increased to $10.9 million in 2018, from $10.5 million in 2017.
Noninterest expenses were higher in 2018 than in 2017 due to investment in expansion in 2017, which affected part of 2017 and was fully in place in 2018. This is reflected in the 5% increase in noninterest expenses, to $25.6 million in 2018, from $24.4 million in 2017. The fourth quarter expenses were $6.3 million in 2018 compared to $5.9 million in the fourth quarter of 2017.
Assets grew to $784 million at December 31, 2018 from $749 million a year earlier, and total deposits grew to $624 million as of December 31, 2018 from $592 million a year earlier. The loan portfolio, excluding loans held for sale, grew to $553 million at December 31, 2018, from $498 million a year earlier. Nonperforming loans increased slightly but credit quality remained strong, with nonperforming loans at 0.67% of net loans at quarter-end compared to 0.46% a year earlier. The allowance for loan loss remained stable, at 1.05% at December 31, 2018 and 1.07% at December 31, 2017.
Town and Country Bank’s capital levels remained strong at quarter-end, with a Tier 1 leverage ratio of 9.29% and a total risked-based ratio of 13.08%. These ratios compare to 8.70% and 12.72% a year earlier. Consolidated equity capital grew to $59.5 million at December 31, 2018, from $53.9 million at December 31, 2017. Book value was $20.90 per share compared to $18.85 per share at December 31, 2017, an increase of 10.9%.
The holding company reported an investment in Town and Country Bank of $78.2 million at December 31, 2018, compared with $74.0 million as of December 31, 2017. Borrowings were $9.6 million and trust preferred securities were $14 million at quarter-end, as compared with $12.2 million in borrowings and $13.5 million in trust preferred securities as of December 31, 2017.
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.
| CONSOLIDATED STATEMENT OF CONDITION | |||||||||||||
| As of the dates indicated: | December 31, 2018 (unaudited) | December 31, 2017 | |||||||||||
| ASSETS | |||||||||||||
| Cash and due from banks | $ | 14,748,796 | $ | 13,841,349 | |||||||||
| Investments | 157,664,916 | 172,388,738 | |||||||||||
| Loans held for sale | 1,899,347 | 8,744,043 | |||||||||||
| Loans | 553,378,591 | 498,485,646 | |||||||||||
| Less: Allowance for loan losses | 5,779,551 | 5,355,387 | |||||||||||
| Net loans | 547,599,040 | 493,130,259 | |||||||||||
| Other assets | 62,442,515 | 61,133,775 | |||||||||||
| Total assets | $ | 784,354,614 | $ | 749,238,164 | |||||||||
| LIABILITIES & EQUITY | |||||||||||||
| Deposits | $ | 624,628,228 | $ | 592,385,016 | |||||||||
| Borrowed money | 78,805,000 | 81,625,000 | |||||||||||
| Other liabilities | 7,462,129 | 7,890,784 | |||||||||||
| Total liabilities | $ | 710,895,357 | $ | 681,900,800 | |||||||||
| Trust preferred securities | 13,978,333 | 13,476,627 | |||||||||||
| Equity capital | 59,480,924 | 53,860,737 | |||||||||||
| Total liabilities & equity | $ | 784,354,614 | $ | 749,238,164 | |||||||||
| SUMMARY INCOME STATEMENT | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2018 (Unaudited) | 2017 | 2018 (Unaudited) | 2017 | ||||||||||
| Interest income | $ | 7,650,947 | $ | 6,313,151 | $ | 28,784,659 | $ | 25,541,523 | |||||
| Interest expense | 1,615,261 | 1,110,269 | 5,403,586 | 4,011,877 | |||||||||
| Net interest income | $ | 6,035,686 | $ | 5,202,882 | $ | 23,381,073 | $ | 21,529,646 | |||||
| Provision for loan losses | 150,000 | 457,500 | 910,000 | 1,020,000 | |||||||||
| Noninterest income | 2,658,382 | 2,859,496 | 10,859,995 | 10,500,295 | |||||||||
| Noninterest expense | 6,278,639 | 5,896,163 | 25,597,778 | 24,377,702 | |||||||||
| Income before income taxes | $ | 2,265,429 | $ | 1,708,715 | $ | 7,733,290 | $ | 6,632,239 | |||||
| Income taxes | 392,864 | 251,888 | 1,396,788 | 1,498,210 | |||||||||
| Core Net Income | 1,872,565 | 1,456,827 | 6,336,502 | 5,134,029 | |||||||||
| Non-Core items after tax | (77,802 | ) | 268,970 | 94,917 | 511,268 | ||||||||
| Net income | $ | 1,794,763 | $ | 1,725,797 | $ | 6,431,419 | $ | 5,645,297 | |||||
| Selected Highlights: | Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2018 (Unaudited) | 2017 | 2018 (Unaudited) | 2017 | ||||||||||
| Basic earnings per share | $ | 0.63 | $ | 0.60 | $ | 2.25 | $ | 1.98 | |||||
| Net charge offs to average loans less HFS | 0.02 | % | 0.07 | % | 0.09 | % | 0.17 | % | |||||
| Net revenue (in 000s) | $ | 8,694 | $ | 8,062 | $ | 34,241 | $ | 32,030 | |||||
| Net interest margin | 3.51 | % | 3.37 | % | 3.45 | % | 3.34 | % | |||||
| Fees from mortgage banking activities (in 000s) | $ | 1,466 | $ | 1,488 | $ | 6,268 | $ | 6,050 | |||||
| Return on common equity | 12.01 | % | 13.47 | % | 11.18 | % | 11.10 | % | |||||
| Return on assets | 0.92 | % | 0.91 | % | 0.84 | % | 0.76 | % | |||||
| Balance Sheet Ratios | |||||||||||||
| As of the dates indicated: | December 31, 2018 (unaudited) | December 31, 2017 | |||||||||||
| Book value per common share | 20.90 | 18.85 | |||||||||||
| Tier 1 leverage ratio (TCB only per Basel III) | 9.29 | % | 8.70 | % | |||||||||
| Total risk-based capital ratio (TCB only per Basel III) | 13.08 | % | 12.72 | % | |||||||||
| Nonperforming loans | 0.67 | % | 0.46 | % | |||||||||
| Delinquent loans, excluding nonperforming | 0.80 | % | 0.27 | % | |||||||||
| Allowance for loan loss | 1.05 | % | 1.07 | % | |||||||||
| Coverage ratio (allowance to NPLs) | 156 | % | 235 | % | |||||||||
| Mortgage loans sold with servicing retained (in 000s) | $ | 676,098 | $ | 623,058 | |||||||||
| Trust assets under management (in 000s) | $ | 147,804 | $ | 155,950 | |||||||||
| HOLDING COMPANY ONLY | |||||||||||||
| As of the dates indicated: | December 31, 2018 (unaudited) | December 31, 2017 | |||||||||||
| ASSETS | |||||||||||||
| Cash and other assets | $ | 5,371,402 | $ | 6,529,046 | |||||||||
| Investment in TCB | 78,219,935 | 73,990,037 | |||||||||||
| Total assets | $ | 83,591,337 | $ | 80,519,083 | |||||||||
| LIABILITIES & EQUITY | |||||||||||||
| Other liabilities | $ | 557,080 | $ | 981,719 | |||||||||
| Borrowings | 9,575,000 | 12,200,000 | |||||||||||
| Trust preferred securities | 13,978,333 | 13,476,627 | |||||||||||
| Equity capital | 59,480,924 | 53,860,737 | |||||||||||
| Total liabilities & equity | $ | 83,591,337 | $ | 80,519,083 | |||||||||