Town and Country Financial Corporation Reports First-Quarter Net Income
SPRINGFIELD, Ill., May 09, 2016 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (OTC Pink:TWCF) reported first-quarter operating net income of $867 thousand, or $0.30 per share, a 17% increase from $741 thousand, or $0.27 per share in the first-quarter of 2015.
The current quarter’s earnings were impacted by $15 thousand of net gains from the sale of equity securities and $137 thousand of acquisition-related expenses, after tax, related to the first quarter acquisition of West Plains Investors, Inc. There were no non-operating items of income or expense reported in the year-ago quarter. Net income including non-operating items was $745 thousand and net income available to common shareholders was $0.26 per share, compared with $0.27 per share in the year-ago period, each period including the dividend paid on preferred stock.
President and Chief Executive Officer, Micah R. Bartlett commented, “We are incredibly pleased to deliver this report of first quarter core earnings that are 15% higher than the year ago based on 9% loan growth and 15% fee income growth, each representing organic, non-acquisition results. On February 29, 2016, we completed the acquisition of West Plains Investors, Inc. and their subsidiary, Premier Bank of Jacksonville, with the data processing conversion scheduled to occur by the end of the second quarter. Finally, on January 27, 2016 we agreed to acquire the Fairview Heights branch of Centrue Bank. The branch acquisition is scheduled to close in the second quarter of 2016. In short, we are keeping the momentum going in 2016.”
Discussion of First Quarter Results
Net revenue was $6.2 million, an increase of 13.1% compared with $5.4 million in 2015, both results adjusted to exclude equity security gains. Net interest income was up 10.4% over the year-ago quarter based on 14.7% average loan growth, while non-interest income was up 19.3% due to a number of factors including stronger mortgage revenue from a 5.6% increase in the dollar amount of mortgage loans sold. In addition, trust fees were up 18.4% and deposit and other account fees were up 34.2%, the latter increase partially due to the acquisition.
The tax equivalent net interest margin was 3.20% in the current quarter compared with 3.35% in the year-ago, the change due to significant cash associated with the WPI acquisition, only some of which was invested by the end of the quarter.
Noninterest expense was $5.0 million, including $133 thousand in merger costs. Adjusted to exclude these costs, noninterest expense was up $649 thousand, or 14.1%, as compared to expense in the first quarter of 2015. The higher expense was primarily due to the acquisition and the bank’s decision, in 2015, to add more customer-facing bankers.
The provision for loan loss was $161 thousand compared to $125 thousand in the first quarter of 2015. Net charge offs were $35 thousand, or 0.01% of average loans compared with $33 thousand in the prior year’s quarter.
Loans that were past due 30 days or more, including non-accrual loans, totaled 1.57% of loans outstanding at March 31, 2016 compared with 1.67% at December 31, 2015. The allowance for loan loss was 1.01% of total loans, excluding loans held for sale, compared with 1.18% at the prior year-end. There is no allowance for loans associated with the acquisition, as purchased loans are recorded at their fair value.
At March 31, 2016, total assets were $704 million and total net loans were $446 million compared with $520 million and $365 million, respectively, at December 31, 2015. Total deposits were $585 million and common equity capital was $44.9 million. The reported book value was $15.77 per common share compared with $15.59 per share at December 31, 2015. Town and Country Financial Corporation is considered a small bank holding company and therefore Basel III capital standards do not apply. Town and Country Bank’s capital levels remained strong in the quarter under the Basel III transitional standardized approach with common equity tier 1 capital of $58 million, or 11.15%, and total regulatory capital of $63 million, or 12.08%, both stated as a percentage of risk-weighted assets.
On March 8, 2016, Town and Country Financial Corporation redeemed 100% of shares of its preferred stock issued in September 2011 to the U.S. Treasury in exchange for its participation in their SBLF program. The parent holding company reported an investment in Town and Country Bank of $68.6 million at March 31, 2016, compared with $51.0 million at the end of 2015. Borrowings increased to $15 million and trust preferred securities increased by $3 million, each as a result of the acquisition.
The Board of Directors declared a $0.03 per share quarterly cash dividend payable on June 1, 2016 to stockholders of record June 15, 2016.
Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town & Country Banc Mortgage Services, Inc. with offices in Buffalo, Decatur, Edwardsville, Jacksonville, Lincoln, Mt. Zion, Springfield, Waverly, White Hall and Quincy, that 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 MARCH 31 (UNAUDITED) | 2016 | 2015 | ||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 48,654,470 | $ | 14,714,587 | ||||
| Investments | 163,209,222 | 115,283,154 | ||||||
| Loans, net | 446,015,259 | 336,741,396 | ||||||
| Other assets | 46,453,580 | 28,953,266 | ||||||
| Total assets | $ | 704,332,531 | $ | 495,692,403 | ||||
| LIABILITIES & EQUITY | ||||||||
| Deposits | $ | 584,977,304 | $ | 404,347,354 | ||||
| Borrowed money | 53,000,000 | 27,900,000 | ||||||
| Other liabilities | 6,994,550 | 3,332,220 | ||||||
| Total liabilities | 644,971,854 | 435,579,574 | ||||||
| Trust preferred securities | 14,500,000 | 11,500,000 | ||||||
| SBLF preferred capital | - | 5,000,000 | ||||||
| Equity capital | 44,860,677 | 43,612,829 | ||||||
| Total liabilities & equity | $ | 704,332,531 | $ | 495,692,403 | ||||
| THREE MONTH PERIOD ENDED MARCH 31 (UNAUDITED) | 2016 | 2015 | ||||||
| Interest income | $ | 4,854,209 | 4,236,862 | |||||
| Interest expense | 663,513 | 441,217 | ||||||
| Net interest income | $ | 4,190,696 | $ | 3,795,645 | ||||
| Provision for loan losses | 160,556 | 125,000 | ||||||
| Noninterest income | 1,962,798 | 1,645,805 | ||||||
| Gain on sale of securities | 25,285 | - | ||||||
| Writedown due to impairment of securities | - | - | ||||||
| Noninterest expense | 4,998,679 | 4,215,750 | ||||||
| Income before income taxes | $ | 1,019,544 | $ | 1,100,700 | ||||
| Income taxes | 275,735 | 359,440 | ||||||
| Net income | 743,809 | 741,260 | ||||||
| Preferred dividend | 9,306 | 12,500 | ||||||
| Net income available to common stockholders | $ | 734,503 | $ | 728,760 | ||||
| Selected Financial Comparison: | ||||||||
| THREE MONTH PERIOD ENDED MARCH 31 (UNAUDITED) | 2016 | 2015 | ||||||
| Basic earnings per share | $ | 0.26 | $ | 0.26 | ||||
| Book value per common share | $ | 15.77 | $ | 15.62 | ||||
| Net charge offs to average loans less HFS | 0.01 | % | 0.01 | % | ||||
| Net revenue (in 000s) | $ | 6,179 | $ | 5,441 | ||||
| Net interest margin | 3.20 | % | 3.35 | % | ||||
| Fees from mortgage banking activities (in 000s) | $ | 994 | $ | 971 | ||||
| Return on common equity | 6.68 | % | 7.00 | % | ||||
| Return on assets | 0.52 | % | 0.60 | % | ||||
| (UNAUDITED) |
AS OF MARCH 31 2016 |
AS OF DECEMBER 31 2015 |
||||||
| Tier 1 leverage ratio (TCB only per Basel III) | 9.2 | % | 9.3 | % | ||||
| Total risk-based capital ratio (TCB only per Basel III) | 12.1 | % | 12.5 | % | ||||
| Nonperforming loans | 0.37 | % | 0.60 | % | ||||
| Delinquent loans, excluding nonperforming | 1.20 | % | 1.07 | % | ||||
| Allowance for loan loss | 1.01 | % | 1.18 | % | ||||
| Coverage ratio (allowance to NPLs) | 275 | % | 197 | % | ||||
| Mortgage loans sold with servicing retained (in 000s) | $ | 532,365 | $ | 441,649 | ||||
| Trust assets under management (in 000s) | $ | 131,798 | $ | 127,711 | ||||
| HOLDING COMPANY ONLY | ||||||||
| AS OF MARCH 31 (UNAUDITED) | 2016 | 2015 | ||||||
| ASSETS | ||||||||
| Cash and other assets | $ | 4,816,685 | $ | 5,503,219 | ||||
| Investment in TCB | 68,639,499 | 53,352,782 | ||||||
| Total assets | $ | 73,456,184 | $ | 58,856,001 | ||||
| LIABILITIES & EQUITY | ||||||||
| Other liabilities | $ | (904,493 | ) | $ | (1,256,827 | ) | ||
| Borrowings | 15,000,000 | - | ||||||
| Trust preferred securities | 14,500,000 | 11,500,000 | ||||||
| SBLF preferred capital | - | 5,000,000 | ||||||
| Equity capital | 44,860,677 | 43,612,828 | ||||||
| Total liabilities & equity | $ | 73,456,184 | $ | 58,856,001 | ||||
Contact: Nancy Bahre (217) 787-3100 nbahre@townandcountrybank.com
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