Third Quarter highlights:
- Reported net income of $2.4 million or $0.83 per share.
- Adjusted net income of $2.7 million or $0.93 per share, return on average assets (ROA) of 1.19% and Return on Tangible Common Equity (ROTCE) of 14.31% (adjusted to exclude merger-related costs and PPP fees).
- Commercial loan growth of $27.5 million since June 30, 2022
- Dividend declared of $0.14 per share.
SPRINGFIELD, Ill., Oct. 31, 2022 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the third quarter of 2022 with continued strong net income.
The Company recorded adjusted third quarter 2022 net income of $2.7 million ($0.93 per share), adjusted for $357 thousand ($287 thousand after tax) of merger-related expenses and Paycheck Protection Program (“PPP”) fee income. This compares to adjusted third quarter 2021 net income of $2.4 million ($0.83 per share), adjusted for $820 thousand ($586 thousand after tax) of PPP fee income. The reported third quarter 2022 net income was $2.4 million ($0.83 per shares) compared to third quarter 2021 reported net income of $2.9 million ($1.04 per share).
Micah R. Bartlett, President and Chief Executive Officer, noted, “We are pleased with our third quarter financial results and the hard work of our dedicated employees during a very busy quarter. We continue to see significant headwinds in our mortgage banking business based on interest rates and the housing market, offset somewhat by the increased value in mortgage servicing. And yet despite significant economic uncertainties, we grew our commercial loan portfolio by $27.5 million since June 30, 2022. We also saw an increase in our net interest income and net interest margin, particularly when excluding PPP fees. We also continued to maintain strong asset quality statistics. On August 23, 2022, we announced the signing of a definitive agreement pursuant to which HBT Financial, Inc. (“HBT”) will merge with Town and Country Financial Corporation. We are proud to continue to deliver strong financial results as we prepare to join the HBT team and merge our two high-performing banks.”
Total assets at September 30, 2022 were $896.3 million, up $3.7 million (0.4%), when compared to $892.6 million as of September 30, 2021. Total loans were $653.6 million at September 30, 2022, an increase of $55.2 million from September 30, 2021. Investments were $165.4 million at September 30, 2022, an increase of $31.1 million when compared to September 30, 2021, reflecting the deployment of cash and other liquid assets into higher yielding investment instruments.
Total deposits were $741.4 million at September 30, 2022, a decrease of $26.3 million from September 30, 2021, and a decrease of $38.7 million when compared to December 31, 2021. The year-over-year decrease was driven by growth in demand, money market and savings deposits, offset by reductions in time and brokered deposits.
Net interest income was $7.2 million for the quarter ended September 30, 2022, roughly flat with the quarter ended September 30, 2021, but up $0.9 million when adjusting for PPP fees in both quarters. The net interest margin for the third quarter of 2022 was 3.60%, up slightly from the third quarter of 2021. Net interest income for the nine month period ended September 30, 2022 ($20.8 million) is flat compared to the same time period ended September 30, 2021 ($20.8 million), but up $1.6 million, or 8.6%, when adjusting for PPP fees.
Noninterest income was $3.1 million in the third quarter of 2022, a decrease of $1.2 million when compared to $4.4 million in the third quarter of 2021. Noninterest income included a positive valuation adjustment to the carrying amount of mortgage servicing rights of $750,000 which partially offset the decrease in mortgage revenue due to the continued reduction in mortgage origination activity. The third quarter 2022 noninterest expense of $7.2 million was down slightly from $7.5 million for the third quarter 2021, also due to a decrease in mortgage-related expenses partially offset by expenses related to the merger.
The Company’s nonperforming loans as a percentage of total loans were 0.69% as of September 30, 2022, compared to 0.91% as of September 30, 2021. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.34% as of September 30, 2022 and 0.41% as of September 30, 2021.
Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 10.91% and a total risk-based ratio of 14.47% as of September 30, 2022. The tier 1 leverage ratio was 10.17% and the total risk-based ratio was 15.29% as of September 30, 2021.
On August 23, 2022, the Company signed a merger agreement with HBT Financial, Inc. During the third quarter of 2022, the Company recognized $382 thousand ($305 thousand after tax) of expenses associated with the merger.
On October 27, 2022, the board of directors declared a $0.14 per share cash dividend payable December 15, 2022, to shareholders of record as of December 1, 2022. The company’s book value per share was $26.90 at September 30, 2022, down from $29.93 as of December 31, 2021. Tangible book value per share was $24.64 at September 30, 2022, compared to $27.60 at December 31, 2021, an 11% decrease due to the change in unrealized market value of the investment portfolio.
Town and Country Financial Corporation, headquartered in Springfield, Illinois, operates as the parent holding company for Town and Country Bank including the Bank's subsidiary, Town and Country Banc Mortgage Services, Inc. (TCBMSI), with locations throughout the central, west-central, and metro-east areas of Illinois. While the Company specializes in commercial banking and mortgage lending, additional products and services offered through its 10 branch offices include retail banking, affordable housing finance options, Small Business Administration 504 and 7(a) loan programs, trust and investments, and agricultural banking. The Company, under TCBMSI, operates Community Mortgage Partners as a third-party provider for residential mortgages to other financial institutions throughout the United States. Town and Country Financial Corporation shares are quoted under the symbol TWCF.
| Contact: | Denise Skiles |
| Executive Vice President and Chief Financial Officer | |
| dskiles@townandcountrybank.com | |
| 217-321-3425 | |
Important Information and Where to Find It
In connection with the proposed merger transaction, HBT filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that includes a proxy statement of the Company and prospectus of HBT. The Registration Statement has not yet been declared effective. After the Registration Statement is declared effective by the SEC, HBT and the Company intend to mail a definitive proxy statement/prospectus to the stockholders of the Company. This communication is not a substitute for the proxy statement/prospectus or the Registration Statement or for any other document that HBT or the Company may file with the SEC and send to the Company’s stockholders in connection with the proposed transaction. THE COMPANY’S STOCKHOLDERS ARE URGED TO CAREFULLY AND THOROUGHLY READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT, AS MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY HBT OR THE COMPANY WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HBT, THE COMPANY, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of the Registration Statement and proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by HBT and the Company with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by HBT will be available free of charge from HBT’s website at https://ir.hbtfinancial.com or by contacting HBT’s Investor Relations Department at HBTIR@hbtbank.com.
Participants in the Proxy Solicitation
HBT, the Company and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from the Company’s stockholders in connection with the proposed transaction. Information regarding the executive officers and directors of HBT is included in its definitive proxy statement for its 2022 annual meeting filed with the SEC on April 5, 2022. Information regarding the executive officers and directors of the Company and additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
| Financial Highlights | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| CONSOLIDATED STATEMENT OF CONDITION | ||||||||||||||||
| As of the dates indicated: | September 30, 2022 | December 31, 2021 | September 30, 2021 | |||||||||||||
| ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 12,969,534 | $ | 70,154,840 | $ | 105,450,016 | ||||||||||
| Investments | 165,397,869 | 151,703,226 | 134,303,652 | |||||||||||||
| Loans held for sale | 1,517,570 | 2,840,208 | 4,554,054 | |||||||||||||
| Loans | 653,648,333 | 631,820,690 | 598,468,836 | |||||||||||||
| Less: Allowance for loan losses | (9,389,890 | ) | (10,183,297 | ) | (10,789,717 | ) | ||||||||||
| Net loans | 644,258,443 | 621,637,393 | 587,679,119 | |||||||||||||
| Other assets | 72,166,152 | 60,691,674 | 60,596,852 | |||||||||||||
| Total assets | $ | 896,309,568 | $ | 907,027,341 | $ | 892,583,693 | ||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||
| Deposits | $ | 741,351,808 | $ | 780,014,371 | $ | 767,633,283 | ||||||||||
| Borrowed money | 56,440,741 | 21,903,136 | 21,326,000 | |||||||||||||
| Other liabilities | 7,877,197 | 5,901,105 | 6,058,817 | |||||||||||||
| Total liabilities | 805,669,746 | 807,818,612 | 795,018,100 | |||||||||||||
| Jr. subordinated debt of unconsolidated subsidiaries | 14,175,980 | 14,136,451 | 14,123,274 | |||||||||||||
| Equity capital | 76,463,842 | 85,072,278 | 83,442,319 | |||||||||||||
| Total liabilities & equity | $ | 896,309,568 | $ | 907,027,341 | $ | 892,583,693 | ||||||||||
| CONSOLIDATED INCOME STATEMENT | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Interest income | $ | 8,067,838 | $ | 7,571,323 | $ | 22,465,000 | $ | 22,452,626 | ||||||||
| Interest expense | 845,076 | 458,208 | 1,684,593 | 1,698,227 | ||||||||||||
| Net interest income | 7,222,762 | 7,113,115 | 20,780,407 | 20,754,399 | ||||||||||||
| Provision for loan losses | - | - | (750,000 | ) | 600,000 | |||||||||||
| Noninterest income | 3,140,550 | 4,383,535 | 11,126,043 | 13,229,734 | ||||||||||||
| Noninterest expense | 7,214,166 | 7,532,781 | 20,695,310 | 21,885,604 | ||||||||||||
| Income before income taxes | 3,149,146 | 3,963,869 | 11,961,140 | 11,498,529 | ||||||||||||
| Income taxes | 780,330 | 1,020,460 | 3,059,690 | 2,933,610 | ||||||||||||
| Net income | $ | 2,368,816 | $ | 2,943,409 | $ | 8,901,450 | $ | 8,564,919 | ||||||||
| Financial Highlights | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Selected Highlights: | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Basic earnings per share | $ | 0.83 | $ | 1.04 | $ | 3.13 | $ | 3.01 | ||||||||
| Net charge offs to average loans less HFS | 0.01 | % | 0.00 | % | 0.01 | % | -0.01 | % | ||||||||
| Net revenue (in 000s) | $ | 10,363 | $ | 11,497 | $ | 31,906 | $ | 33,984 | ||||||||
| Net interest margin | 3.60 | % | 3.53 | % | 3.47 | % | 3.58 | % | ||||||||
| Fees from mortgage banking activities (in 000s) | $ | 1,775 | $ | 3,053 | $ | 6,841 | $ | 9,906 | ||||||||
| Return on common equity | 11.74 | % | 14.26 | % | 14.35 | % | 14.45 | % | ||||||||
| Return on tangible common equity | 12.77 | % | 15.54 | % | 15.58 | % | 15.81 | % | ||||||||
| Return on assets | 1.07 | % | 1.31 | % | 1.33 | % | 1.28 | % | ||||||||
| Balance Sheet Ratios | ||||||||||||||||
| (Dollars in thousands, except per share data) AS of the dates indicated: | September 30, 2022 | December 31, 2021 | September 30, 2021 | |||||||||||||
| Book value per common share | $ | 26.90 | $ | 29.93 | $ | 29.35 | ||||||||||
| Tangible book value per common share | $ | 24.64 | $ | 27.60 | $ | 27.00 | ||||||||||
| Tangible Equity Capital Ratio | 7.86 | % | 8.71 | % | 8.66 | % | ||||||||||
| Tier 1 leverage ratio (Bank only) | 10.91 | % | 10.07 | % | 10.17 | % | ||||||||||
| Total risk-based capital ratio (Bank only) | 14.47 | % | 14.69 | % | 15.29 | % | ||||||||||
| Nonperforming loans, excluding government guarantee | 0.34 | % | 0.36 | % | 0.41 | % | ||||||||||
| Delinquent loans, excluding nonperforming | 0.22 | % | 0.33 | % | 0.08 | % | ||||||||||
| Allowance for loan loss | 1.44 | % | 1.61 | % | 1.80 | % | ||||||||||
| Coverage ratio (allowance to NPLs) | 209 | % | 206 | % | 198 | % | ||||||||||
| Mortgage loans sold with servicing retained (in 000s) | $ | 844,402 | $ | 868,966 | $ | 877,107 | ||||||||||
| Trust assets under management (in 000s) | $ | 142,816 | $ | 170,209 | $ | 177,483 | ||||||||||
| HOLDING COMPANY ONLY STATEMENT OF CONDITION | ||||||||||||||||
| As of the dates indicated: | September 30, 2022 | December 31, 2021 | September 30, 2021 | |||||||||||||
| ASSETS | ||||||||||||||||
| Cash and other assets | $ | 7,842,292 | $ | 7,244,031 | $ | 5,807,898 | ||||||||||
| Investment in Town and Country Bank | 88,243,819 | 98,343,923 | 98,321,946 | |||||||||||||
| Total assets | $ | 96,086,111 | $ | 105,587,954 | $ | 104,129,844 | ||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||
| Other liabilities | $ | 253,789 | $ | 684,225 | $ | 701,751 | ||||||||||
| Borrowings | 5,192,500 | 5,695,000 | 5,862,500 | |||||||||||||
| Jr. subordinated debt of unconsolidated subsidiaries | 14,175,980 | 14,136,451 | 14,123,274 | |||||||||||||
| Equity capital | 76,463,842 | 85,072,278 | 83,442,319 | |||||||||||||
| Total liabilities & equity | $ | 96,086,111 | $ | 105,587,954 | $ | 104,129,844 | ||||||||||
