Town and Country Financial Corporation Reports Fourth-Quarter 2018 Financial Results

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.

Contact:              
Doug Cheatham
Executive Vice President and Chief Financial Officer
[email protected]                                                                 
(217) 321-3424

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