Town and Country Financial Corporation Reports Record First
Town and Country Financial Corporation Reports Record First

SPRINGFIELD, Ill., May 02, 2022 (GLOBE NEWSWIRE) — Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the first quarter of 2022 with record net income.

Key highlights included:

  • First quarter 2022 net income of $3.9 million or $1.37 per share, compared to $2.8 million or $0.99 per share in the first quarter of 2021.
  • Return on Tangible Common Equity (ROTCE) of 19.92% for the quarter-to-date period ending March 31, 2022, compared to 16.29% in the same quarter of 2021.
  • Dividend declared of $0.14 per share.

Micah R. Bartlett, President and Chief Executive Officer, noted, “We are extremely proud to report our strongest first quarter ever. Our results reflect our excellent asset quality, well positioned balance sheet, and balanced business model based on our core focus of commercial banking and mortgage lending. The steep rise in interest rates during the quarter presented challenges for most banks who hold investment securities based on the accounting practice of marking available-for-sale securities to market. As a result, the company’s tangible book value per share decreased by 3.1% during the first quarter which is a level significantly better than the industry average. Despite challenges in the mortgage business inherent in a rising rate environment, our first quarter performance reflects the balance between the production and servicing aspects of our successful mortgage business. While commercial loan demand continues to be a challenge across the industry, we remain optimistic based on our team of relationship bankers, the deep connections we have with our customers, and the advancements we have made in our SBA business.”

The Company recorded first quarter 2022 net income of $3.9 million ($1.37 per share), compared to $2.8 million ($0.99 per share) in the first quarter of 2021. First quarter 2022 net income includes a negative provision for loan losses of $500 thousand ($357 thousand after-tax), compared to a $600 thousand ($429 thousand after-tax) positive provision for loan losses in the first quarter of 2021. Total mortgage revenue in the first quarter was roughly flat compared to the first quarter of 2021. While 2021 first quarter results reflected relatively strong production volume, the first quarter of 2022 reflected a $2.3 million ($1.6 million after-tax) positive adjustment to the carrying value of mortgage servicing rights.

Total assets at March 31, 2022 were $896.8 million, up $16.6 million, when compared to $880.2 million as of March 31, 2021. The change was due to an increase in the investment portfolio of $53.3 million and a $30.7 million decrease in loans, primarily driven by $40.1 million in Paycheck Protection Program loan forgiveness. First Quarter 2022 loan balances decreased $25.9 million when compared to December 31, 2021, which was a result of $5.1 million in PPP forgiveness and lower commercial loan demand.

Total deposits were $772.6 million at March 31, 2022, an increase of $34.9 million from March 31, 2021, and a decrease of $7.4 million when compared to December 31, 2021. The year over year increase was driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. At the end of the first quarter in 2022, total borrowed money was $22.8 million compared to $42.0 million at end of the first quarter in 2021. This reduction was primarily due to the paydown of Federal Home Loan Bank advances as a result of liquidity.

Net interest income was $6.7 million for the quarter ending March 31, 2022, roughly flat with the quarter ending March 31, 2021. The net interest margin for the first quarter of 2022 was 3.34% down slightly when compared to 3.36% in the first quarter of 2021.

Noninterest income was $5.1 million in the first quarter of 2022, an increase of $395 thousand when compared to $4.7 million in the first quarter of 2021. A $2.3 million valuation adjustment was taken in response to the rise in interest rates which increases the value of the mortgage servicing rights that are held on the Company’s books. This offset the lower gains on sale of mortgages compared to the first quarter of 2021. The first quarter 2022 noninterest expense of $7.0 million was down slightly from $7.1 million for the first quarter 2021.

The Company’s nonperforming loans as a percentage of total loans were 0.77% as of March 31, 2022, compared to 1.03% as of March 31, 2021. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.32% as of March 31, 2022 and 0.49% as of March 31, 2021.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 10.37% and a total risk-based ratio of 14.90% as of March 31, 2022. The tier 1 leverage ratio was 9.50% and the total risked-based ratio was 14.19% as of March 31, 2021.

On April 28, 2022, the board of directors declared a $0.14 per share cash dividend payable June 15, 2022, to shareholders of record as of June 1, 2022. The company’s book value per share was $29.05 at March 31, 2022, down from $29.93 as of December 31, 2021. Tangible book value per share was $26.74 at March 31, 2022, compared to $27.60 at December 31, 2021, a 3% 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.

Financial Highlights
(Unaudited)
               
CONSOLIDATED STATEMENT OF CONDITION              
As of the dates indicated:   March 31, 2022 December 31, 2021 March 31, 2021
ASSETS              
Cash and due from banks   $ 54,200,518   $   70,154,840   $   65,426,430  
Investments     179,083,850       151,703,226       125,773,520  
Loans held for sale     3,453,149       2,840,208       3,749,938  
Loans     605,938,918       631,820,690       636,668,960  
Less: Allowance for loan losses     (9,685,542 )     (10,183,297 )     (10,779,869 )
Net loans     596,253,376       621,637,393       625,889,091  
Other assets     63,841,942       60,691,674       59,367,713  
Total assets   $ 896,832,835   $   907,027,341   $   880,206,692  
               
LIABILITIES & EQUITY              
Deposits   $ 772,609,709   $   780,014,371   $   737,722,498  
Borrowed money     22,841,636       21,903,136       42,015,500  
Other liabilities     4,647,559       5,901,105       8,138,871  
Total liabilities     800,098,904       807,818,612       787,876,869  
Jr. subordinated debt of unconsolidated subsidiaries     14,149,627       14,136,451       14,096,921  
Equity capital     82,584,304       85,072,278       78,232,902  
Total liabilities & equity   $ 896,832,835   $   907,027,341   $   880,206,692  
               
               
CONSOLIDATED INCOME STATEMENT    
    Three Months Ended
    March 31,
          2022       2021  
Interest income       $   7,077,988   $   7,447,932  
Interest expense           390,487       728,715  
Net interest income           6,687,501       6,719,217  
Provision for loan losses           (500,000 )     600,000  
Noninterest income           5,106,914       4,711,477  
Noninterest expense           7,016,489       7,061,229  
Income before income taxes           5,277,926       3,769,465  
Income taxes           1,395,010       961,150  
Net income       $   3,882,916   $   2,808,315  
               
               
Financial Highlights
(Unaudited)
               
Selected Highlights:    
    Three Months Ended
    March 31,
          2022       2021  
Basic earnings per share         $ 1.37     $ 0.99  
Net charge offs to average loans less HFS           0.00 %     -0.01 %
Net revenue (in 000s)         $ 11,794     $ 11,431  
Net interest margin           3.34 %     3.36 %
Fees from mortgage banking activities (in 000s)         $ 3,568     $ 3,806  
Return on common equity           18.39 %     14.84 %
Return on tangible common equity           19.92 %     16.29 %
Return on assets           1.74 %     1.27 %
               
               
Balance Sheet Ratios              
(Dollars in thousands, except per share data)AS of the dates indicated:   March 31, 2022 December 31, 2021 March 31, 2021
Book value per common share   $ 29.05   $   29.93   $   27.50  
Tangible book value per common share   $ 26.74   $   27.60   $   25.11  
Tangible Equity Capital Ratio     8.54 %     8.71 %     8.18 %
Tier 1 leverage ratio (Bank only)     10.37 %     10.07 %     9.50 %
Total risk-based capital ratio (Bank only)     14.90 %     14.69 %     14.19 %
Nonperforming loans, excluding government guarantee     0.32 %     0.36 %     0.49 %
Delinquent loans, excluding nonperforming     0.56 %     0.33 %     0.44 %
Allowance for loan loss     1.60 %     1.61 %     1.69 %
Coverage ratio (allowance to NPLs)     207 %     206 %     163 %
Mortgage loans sold with servicing retained (in 000s)   $ 852,732   $   868,966   $   865,744  
Trust assets under management (in 000s)   $ 170,336   $   170,209   $   177,147  
               
               
HOLDING COMPANY ONLY STATEMENT OF CONDITION              
As of the dates indicated:   March 31, 2022 December 31, 2021 March 31, 2021
ASSETS              
Cash and other assets   $ 7,541,011   $   7,244,031   $   5,466,696  
Investment in Town and Country Bank     95,220,172       98,343,923       93,842,803  
Total assets   $ 102,761,183   $   105,587,954   $   99,309,499  
               
LIABILITIES & EQUITY              
Other liabilities   $ 499,752   $   684,225   $   782,176  
Borrowings     5,527,500       5,695,000       6,197,500  
Jr. subordinated debt of unconsolidated subsidiaries     14,149,627       14,136,451       14,096,921  
Equity capital     82,584,304       85,072,278       78,232,902  
Total liabilities & equity   $ 102,761,183   $   105,587,954   $   99,309,499  
               

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