Third Century Bancorp (“Company”)(OTCPINK: TDCB), the holding company for Mutual Savings Bank (“Bank”) announced it had net income of $219,000 for the quarter ended September 30, 2017, or $0.19 per basic and diluted share, compared to net income of $172,000 for the quarter ended September 30, 2016, or $0.14 per basic and diluted share. The improvement in net income for the third quarter 2017 compared to the same period in 2016 was primarily driven by a $158,000 increase in net interest income. For the nine months ended September 30, 2017, the Company recorded net income of $559,000, or $0.47 per basic and diluted share, compared to net income of $465,000 for the nine months ended September 30, 2016, or $0.38 per basic and diluted share. The improvement in net income for the 2017 nine month period as compared to the same period in 2016 was primarily due to a $319,000 increase in net interest income.
For the quarter ended September 30, 2017, net income increased $47,000, or 27.33%, to $219,000 as compared to $172,000 for the same period in the prior year. The increase in net income for the three month period ended September 30, 2017 was primarily a result of a $158,000 or 14.75% increase in net interest income, which was achieved through an increase in interest income of $201,000 or 16.95%, partially offset by a $43,000 or 37.39% increase in interest expense. The increase in interest income was due to an increase in the average yield on interest-earning assets, along with higher average loan balances. The increase in interest expense was primarily due to higher average balances of interest bearing liabilities and a higher average rate paid on interest bearing liabilities.
The increase in net interest income for the quarter ended September 30, 2017 was partially offset by a $29,000 increase in provision for loan losses compared to the same period in 2016.
The increase in net income for the three month period ended September 30, 2017 was also impacted by a $4,000 decrease in noninterest income, a $42,000 increase in noninterest expense and a $36,000 increase in income tax expense. The decrease in noninterest income was due to decreases in gains on sales of loans, trust income, and deposit fee and service charge income for the three month period ended September 30, 2017 as compared to the prior year period. The increase in noninterest expense for the quarter ended September 30, 2017 compared to the same period in the prior year was primarily due to increases in wages and benefits, advertising expenses, and data processing expenses. The increase in income tax expense was due to the increase in income before income tax for the quarter ended September 30, 2017 as compared to the same period in the prior year.
For the nine month period ended September 30, 2017, net income increased $94,000, or 20.22%, to $559,000 from $465,000 for the nine month period ended September 30, 2016. The increase in net income for the nine month period ended September 30, 2017 was primarily due to an increase in net interest income of $319,000, or 10.11%, to $3,475,000 from $3,156,000 for the nine month period ended September 30, 2016. The increase in net interest income for the nine month period ended September 30, 2017 was due to a $405,000, or 11.61%, increase in interest income partially offset by a $86,000, or 25.90%, increase in interest expense. The increase in interest income was due to an increase in the average yield on interest-earning assets, along with higher average loan balances. The increase in interest expense was primarily due to higher average balances of interest bearing liabilities and a higher average rate paid on interest bearing liabilities.
The increase in net interest income for the nine months ended September 30, 2017 was partially offset by a $90,000 increase in provision for loan losses compared to the same period in 2016. The increase in provision for loan losses was primarily driven by credit quality factors including net loan charge-offs of $259,000 during the nine months ended September 30, 2017 compared to net loan recoveries of $9,000 for the same period in 2016.
The increase in net income for the nine month period ended September 30, 2017 was also impacted by a $3,000 decrease in noninterest income, a $65,000 increase in noninterest expense and a $67,000 increase in income tax expense. The decrease in noninterest income was due to decreases in gains on sales of loans, trust income, and deposit fee and service charge income for the nine month period ended September 30, 2017 as compared to the same period in the prior year. The increase in noninterest expense for the nine months ended September 30, 2017 compared to the same period in the prior year was primarily due to increases in wages and benefits, advertising expenses, and data processing expenses. The increase in income tax expense was due to the increase in income before income tax for the nine months ended September 30, 2017 as compared to the same period in the prior year.
Total assets increased $18.0 million to $153.9 million at September 30, 2017 from $135.9 million at December 31, 2016, an increase of 13.2%. The increase was primarily due to a $12.3 million, or 64.4%, increase in cash and investments, primarily funded by a $17.5 million, or 17.8%, increase in total deposits and a $500,000, or 2.3%, increase in FHLB advances. At September 30, 2017, the weighted average rate of all Federal Home Loan Bank advances was 1.45% compared to 1.35% at December 31, 2016, and the weighted average maturity was 2.6 years at September 30, 2017 compared to 3.5 years at December 31, 2016.
The allowance for loan losses decreased by $167,000, or 13.3%, to $1,080,000 at September 30, 2017 compared to $1,247,000 at December 31, 2016. The decline was due to net loan charge-offs of $259,000, partially offset by the provision for loan losses of $92,000 during the nine months ended September 30, 2017. The allowance for loan losses totaled 101.41% of non-performing loans and 0.92% of total loans as of September 30, 2017. Nonperforming loans totaled $1,065,000 or 0.91% of total loans as of September 30, 2017.
Stockholders’ equity was $15.9 million at September 30, 2017, up from $15.8 million at December 31, 2016. Stockholders’ equity increased by $160,000 during the nine month period ended September 30, 2017 with net income of $559,000, partially offset by the repurchase of 17,202 shares of common stock at a total cost of $211,000 and cash dividends paid of $179,000. Equity as a percentage of assets decreased to 10.36% at September 30, 2017 compared to 11.61% at December 31, 2016.
Founded in 1890, Mutual Savings Bank is a full-service financial institution based in Johnson County, Indiana. In addition to its main office at 80 East Jefferson Street, Franklin, Indiana, the bank operates branches in Franklin at 1124 North Main Street and the Franklin United Methodist Community, as well as in Nineveh and Trafalgar, Indiana.
This press release contains certain forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of the Company and the Bank, and changes in the securities markets. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in belief, expectations or events.
| Selected Consolidated Financial Data | ||||||||
| (unaudited) | ||||||||
| At September 30, | At December 31, | |||||||
2017 | 2016 | |||||||
| Selected Consolidated Financial Condition Data: | (Dollars in thousands, except per share data) | |||||||
| Total Assets | $ | 153,918 | $ | 135,932 | ||||
| Loans receivable-net of allowance for loan losses of $1,080 and $1,247 | 115,830 | 109,731 | ||||||
| Loans held for sale | - | 143 | ||||||
| Cash and cash equivalents | 20,034 | 6,421 | ||||||
| Interest-earning time deposits in other banks | 1,984 | 2,728 | ||||||
| Investment securities | 9,810 | 8,945 | ||||||
| Deposits | 116,311 | 98,303 | ||||||
| FHLB advances and other borrowings | 22,000 | 21,500 | ||||||
| Interest payable and other liabilities | 253 | 343 | ||||||
| Stockholders’ equity-net | 15,946 | 15,786 | ||||||
| Equity to assets ratio at period end | 10.36 | % | 11.61 | % | ||||
| Non-performing loans to total loans | 0.91 | 0.41 | ||||||
Allowance for loan losses to total loans outstanding | 0.92 | 1.12 | ||||||
| Allowance for loan losses to non-performing loans | 101.41 | 273.72 | ||||||
| Number of full service offices | 5 | 5 | ||||||
| Tangible book value per share | $ | 13.51 | $ | 13.02 | ||||
| Market closing price at end of quarter | $ | 12.40 | $ | 11.09 | ||||
| Price-to-tangible book value | 91.78 | % | 85.18 | % | ||||
| For the Three Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
| (Dollars In Thousands, Except Share Data) | ||||||||
| Selected Consolidated Earnings Data: | ||||||||
| Total interest income | $ | 1,387 | $ | 1,186 | ||||
| Total interest expense | 158 | 115 | ||||||
| Net interest income | 1,229 | 1,071 | ||||||
| Provision for losses on loans | 30 | 1 | ||||||
|
Net interest income after provision for losses
on loans | 1,199 | 1,070 | ||||||
| Noninterest income | 330 | 334 | ||||||
| Noninterest expense | 1,197 | 1,155 | ||||||
| Income tax expense | 113 | 77 | ||||||
| Net income | $ | 219 | $ | 172 | ||||
| Earnings per basic and diluted share | $ | 0.19 | $ | 0.14 | ||||
| Selected Financial Ratios and Other Data: | ||||||||
| Interest rate spread during period | 3.51 | % | 3.38 | % | ||||
| Net yield on interest-earning assets | 4.00 | 3.52 | ||||||
| Noninterest expense, annualized, to average assets | 3.34 | 3.28 | ||||||
| Return on average assets | 0.60 | 0.40 | ||||||
| Return on average equity | 5.51 | 3.26 | ||||||
| Average equity to assets | 10.81 | 12.53 | ||||||
Average interest-earning assets to average interest-bearing liabilities | 109.27 | 138.78 | ||||||
Net loan chargeoffs/(recoveries) to average total loans outstanding | 0.00 | (0.01 | ) | |||||
| Effective income tax rate | 34.04 | 30.92 | ||||||
| For the Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
| (Dollars in thousands, except per share data) | ||||||||
| Selected Consolidated Earnings Data: | ||||||||
| Total interest income | $ | 3,893 | $ | 3,488 | ||||
| Total interest expense | 418 | 332 | ||||||
| Net interest income | 3,475 | 3,156 | ||||||
| Provision for losses on loans | 92 | 2 | ||||||
|
Net interest income after provision for losses
on loans | 3,383 | 3,154 | ||||||
| Noninterest income | 903 | 906 | ||||||
| Noninterest expense | 3,461 | 3,396 | ||||||
| Income tax expense | 266 | 199 | ||||||
| Net income | 559 | 465 | ||||||
| Earnings per share basic | $ | 0.47 | $ | 0.38 | ||||
| Earnings per share diluted | $ | 0.47 | $ | 0.38 | ||||
| Selected Financial Ratios and Other Data: | ||||||||
| Interest rate spread during period | 3.44 | % | 3.39 | % | ||||
| Net yield on interest-earning assets | 3.89 | 3.52 | ||||||
| Noninterest expense to average assets | 3.34 | 3.29 | ||||||
| Return on average assets | 0.53 | 0.45 | ||||||
| Return on average equity | 4.70 | 3.64 | ||||||
| Average equity to average assets | 11.19 | 12.44 | ||||||
Average interest-earning assets to average interest-bearing liabilities | 109.55 | 138.46 | ||||||
Net charge-offs/(recoveries) to average total loans outstanding | 0.22 | 0.00 | ||||||
| Effective income tax rate | 32.24 | 29.96 | ||||||
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Contacts:
Robert D. Heuchan, President and CEO
David
A. Coffey, Executive Vice President and COO
Ryan Cook, Senior Vice
President and CFO
Tel. 317-736-7151
Fax 317-736-1726
