Third Century Bancorp Releases Earnings for the Quarter and Six Months Ended June 30, 2019

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FRANKLIN, Ind.--(BUSINESS WIRE)-- OTCPINK “TDCB” Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”) announced it had net income of $240,000 for the quarter ended June 30, 2019, or $0.20 per basic and diluted share, compared to net income of $251,000 for the quarter ended June 30, 2018, or $0.21 per basic and diluted share. For the six-months ended June 30, 2019, the Company recorded net income of $443,000, or $0.38 per basic and diluted share, compared to net income of $449,000 for the six-months ended June 30, 2018, or $0.38 per basic and diluted share. For the quarter ended June 30, 2019, net income decreased $11,000, or 4.38%, to $240,000 as compared to $251,000 for the same period in the prior year. The decrease in net income for the three-month period ended June 30, 2019 was primarily a result of the $98,000 increase in non-interest expense and a $33,000 decrease in non-interest income. Largely offsetting this was a $117,000, or 8.75%, increase in net interest income, which was achieved through an increase in interest income of $218,000, or 14.11%, partially offset by a $101,000, or 48.65%, increase in interest expense in the quarter ended June 30, 2019 as compared to the same quarter in the prior year. 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 June 30, 2019 was partially offset by a $1,000 increase in provision for loan losses compared to the same period in 2018 on consistent loan growth over the periods. The decrease in net income for the three month period ended June 30, 2019 was also impacted by a $4,000 decrease 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 June 30, 2019 as compared to the prior year period. The increase in noninterest expense for the quarter ended June 30, 2019 compared to the same period in the prior year was primarily due to increases in overhead expenses. For the six-month period ended June 30, 2019, net income decreased $5,000, or 1.11%, to $443,000 from $448,000 for the six-month period ended June 30, 2018. The decrease in net income for the six-month period ended June 30, 2019 was primarily due to an increase in non-interest expense of $184,000, or 7.32%, to $2.7 million for the six-month period ended June 30, 2019 from $2.5 million for the six-month period ended June 30, 2018. This was partially offset by an increase in net interest income of $257,000, or 9.94% to $2.8 million for the six-month period ended June 30, 2019 from $2.6 million for the six-month period ended June 30, 2018. The increase in net interest income for the six-month period ended June 30, 2019 was due to a $453,000, or 15.18%, increase in interest income partially offset by a $196,000, or 49.12%, increase in interest expense as compared to the prior year. 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 consistency in provision for loan losses of $121,000 for both six month periods was primarily driven by loan growth and credit quality factors, including net loan recoveries of $20,000 during the six-months ended June 30, 2019 compared to net loan charge-offs of $12,000 for the same period in 2018. The decrease in net income for the six-months ended June 30, 2019 was also impacted by an $83,000 decrease in noninterest income, and a $4,000 decrease 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 six-months ended June 30, 2019 as compared to the same period in the prior year. The increase in noninterest expense for the six-months ended June 30, 2019 compared to the same period in the prior year was primarily due to increases in wages and benefits. The decrease in income tax expense was due to a reduced level of pre-tax income. Total assets increased $12.1 million to $171.2 million at June 30, 2019 from $159.1 million at December 31, 2018, an increase of 7.61%. The increase was primarily due to a $12.3 million, or 56.76%, increase in cash and investments, primarily funded by a $14.5 million, or 11.66%, increase in total deposits. Federal Home Loan Bank advances were $14.0 million at June 30, 2019 as compared to $17.5 million at December 31, 2018. At June 30, 2019, the weighted average rate of all Federal Home Loan Bank advances was 1.48% compared to 1.51% at December 31, 2018, and the weighted average maturity was 4.7 years at June 30, 2019 as compared to 4.2 years at December 31, 2018. The allowance for loan losses increased by $140,000, or 10.46%, to $1.5 million at June 30, 2019 compared to $1.3 million at December 31, 2018. The increase was due to the provision for loan losses of $121,000, and was supported by net loan recoveries of $20,000 during the six-months ended June 30, 2019. The allowance for loan losses totaled 1.13% of total loans as of June 30, 2019. Nonperforming loans totaled $121,000 or 0.01% of total loans as of June 30, 2019. Stockholders’ equity was $17.1 million at June 30, 2019, up from $16.5 million at December 31, 2018. Stockholders’ equity increased by $646,000 during the six-months ended June 30, 2019 as a result of net income of $443,000, partially offset by the increase in net unrealized gain of $368,000 of available-for-sale securities due to the increase in market interest rates and cash dividends paid of $165,000. Equity as a percentage of assets decreased to 10.00% at June 30, 2019 compared to 10.36% at December 31, 2018. “With over 128 years of serving customers in our markets, we remain the only locally based financial institution in Johnson County. Our team is comprised of quality bankers who truly enjoy helping people achieve their personal or business financial goals,” stated David A. Coffey, President and Chief Executive Officer. “We continue to see solid asset growth that we attribute to the building of relationships and providing quality banking services in the markets we serve.” 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 Otterbein Franklin Senior Life Community, as well as branches in Nineveh, Trafalgar and Greenwood, 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 June 30,   At December 31,   2019   2018 Selected Consolidated Financial Condition Data: (Dollars in thousands, except per share data) Total Assets $ 171,218 $ 159,077 Loans receivable-net of allowance for loan losses of $1,478 and $1,338 127,949 128,311 Loans held for sale 1,150 838 Cash and cash equivalents 13,109 3,055 Interest-earning time deposits in other banks 0 496 Investment securities 20,806 18,084 Deposits 139,285 124,740 FHLB advances and other borrowings 14,000 17,500 Interest payable and other liabilities 807 356 Stockholders’ equity-net 17,126 16,480 Equity to assets ratio at period end 10.00% 10.36% Non-performing loans to total loans 0.01 0.00 Allowance for loan losses to total loans outstanding 1.13 1.03 Allowance for loan losses to non-performing loans 1,221.14% N/A Number of full service offices 6 5 Tangible book value per share $ 14.51 $ 13.96 Market closing price at end of quarter $ 12.15 $ 10.75 Price-to-tangible book value 83.74% 77.01%       For the Three Months Ended June 30, 2019   2018 Selected Consolidated Earnings Data: (Dollars In Thousands, Except Share Data)     Total interest income $ 1,759 $ 1,546 Total interest expense 308 207 Net interest income 1,451 1,339 Provision for losses on loans 60 59 Net interest income after provision for losses on loans 1,391 1,280 Noninterest income 303 331 Noninterest expense 1,389 1,291 Income tax expense 65 69 Net income $ 240 $ 251 Earnings per basic and diluted share $ 0.20 $ 0.21       Selected Financial Ratios and Other Data:     Interest rate spread during period 3.73% 3.63% Net yield on interest-earning assets 4.28 4.20 Noninterest expense, annualized, to average assets 3.34 3.41 Return on average assets 0.58 0.66 Return on average equity 5.66 6.34 Average equity to assets 10.18 10.43 Average interest-earning assets to average interest-bearing liabilities 110.63 111.09 Net loan chargeoffs/(recoveries) to average total loans outstanding (0.01) (0.01) Effective income tax rate 21.43 21.68   For the Six Months Ended June 30, 2019   2018 Selected Consolidated Earnings Data: (Dollars in thousands, except per share data)     Total interest and dividend income $ 3,437 $ 2,984 Total interest expense 595 399 Net interest income 2,842 2,585 Provision for losses on loans 121 121 Net interest income after provision for losses on loans 2,721 2,464 Noninterest income 535 618 Noninterest expense 2,692 2,508 Income tax expense 121 125 Net income 443 448 Earnings per basic and diluted share $ 0.38 $ 0.38       Selected Financial Ratios and Other Data:     Interest rate spread during year 3.68% 3.56% Net yield on interest-earning assets 4.25 4.11 Noninterest expense to average assets 3.29 3.34 Return on average assets 0.54 0.60 Return on average equity 5.28 5.71 Average equity to average assets 10.24 10.49 Average interest-earning assets to average interest-bearing liabilities 110.66 102.28 Net charge-offs/(recoveries) to average total loans outstanding (0.02) 0.01 Effective income tax rate 21.47 21.69         View source version on businesswire.com: https://www.businesswire.com/news/home/20190719005258/en/ David A. Coffey, President and CEO Ryan Cook, Senior Vice President and CFO 317-736-7151 www.mymsb.bank Source: Third Century Bancorp

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