Third Century Bancorp Releases Earnings for the Quarter and Nine-months Ended September 30, 2022

Rhea-AI Summary

Third Century Bancorp (TDCB) reported a net income of $639,000 for Q3 2022, down 18.49% from $784,000 in Q3 2021, resulting in earnings per share of $0.55 versus $0.66. A significant decline in non-interest income, particularly from investment securities and mortgage sales, contributed to this drop. Conversely, net interest income increased by 23.49% due to rising interest rates and loan growth. Total assets rose to $272.1 million, primarily driven by a 14.78% increase in loans. However, stockholders' equity fell from $21.5 million to $7.1 million amid rising market interest rates.

Positive

• Net interest income increased by $404,000, or 23.49%, due to higher interest rates and loan growth.
• Total assets rose by $30.5 million, or 12.63%, primarily from a $21.2 million increase in loans.

Negative

• Net income decreased by $145,000, or 18.49%, from $784,000 in Q3 2021.
• Non-interest income fell by $514,000, or 54.74%, primarily from a 100% decrease in gains on investment securities.
• Stockholders' equity decreased by $14.4 million, primarily due to a $15.5 million unrealized loss on available-for-sale securities.

FRANKLIN, Ind.--(BUSINESS WIRE)-- (OTCPINK: TDCB) - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $639,000 for the quarter ended September 30, 2022, or $0.55 per basic and diluted share, compared to net income of $784,000 for the quarter ended September 30, 2021, or $0.66 per basic and diluted share.

David A. Coffey, President and CEO, commented, “In these challenging economic times, we are pleased to report another solid quarter of performance for our Company. We have benefited from the changing interest rate environment and had a quarter of good loan growth.” Coffey concluded, “The key factor of our solid earnings is our people. Our talented team drives the success that translates to the numbers we report. I am proud of our team and all they do for our Bank. As we look forward, we will continue to take advantage of the market opportunities that will provide a fair return for our loyal stockholders.”

For the quarter ended September 30, 2022, net income decreased $145,000, or 18.49%, to $639,000 as compared to $784,000 for the same period in the prior year. The decrease in net income for the three-month period ended September 30, 2022 was driven primarily as a result of the $514,000, or 54.74%, decrease in non-interest income as compared to the same period in the prior year. The decrease in non-interest income was due primarily to a $271,000, or 100.00%, decrease in gains on the sale of investment securities, available-for-sale, as compared to the same period in the prior year. The decrease in non-interest income was partially offset by a $404,000, or 23.49%, increase in net interest income as compared to the same period in the prior year. The increase in net interest income was driven primarily by a $617,000, or 32.66%, increase in interest income as compared to the same period in the prior year due to the increase in interest rates and the growth of our loan portfolio. This was partially offset by a $213,000, or 126.04% increase in interest expense as compared to the same period in the prior year due to the increase in deposit expense as a result of rising interest rates.

The decrease in net income for the quarter ended September 30, 2022 was also the result of the $30,000 increase in the provision for loan losses compared to the same period in 2021. The increase in provision expense was due to the increase in loan balances during the nine-months ended September 30, 2022. The Company had no net charge-offs during the quarter ended September 30, 2022, and a net charge-off during the quarter ended September 30, 2021 of $2,000.

For the nine-months ended September 30, 2022, net income decreased $126,000, or 7.39%, to $1.6 million as compared to $1.7 million for the nine-months ended September 30, 2021. The decrease in net income for the nine-month period ended September 30, 2022 was driven primarily as a result of the $807,000, or 35.19%, decrease in non-interest income as compared to the same nine-month period in the prior year. The decrease in non-interest income was driven primarily by a $500,000, or 50.91%, decrease in the gain on sale of one-to-four family mortgages sold to Freddie Mac, as compared to the same nine-month period in the prior year. The decrease in non-interest income was also driven by a $271,000, or 100.00%, decrease in gains on the sale of investment securities, available-for-sale, as compared to the same period in the prior year. The decrease in non-interest income for the nine-month period ended September 30, 2022 was offset by a $874,000, or 17.62%, increase in net interest income as compared to the same nine-month period ended in the prior year. The increase in net interest income was primarily due to a $1.1 million, or 20.70%, increase in interest income, as compared to the same nine-month period in the prior year due to the increase in interest rates and the growth of our loan portfolio. The increase in interest income was partially offset by a $276,000, or 46.31%, increase in interest expense, as compared to the same nine-month period in the prior year due to the increase in deposit expense as a result of rising interest rates. Net income was also impacted by a $384,000, or 7.40%, increase in non-interest expense as compared to the same nine-month period in the prior year. In addition, the provision for loan losses decreased $60,000, or 66.67%, for the nine-month period ended September 30, 2022 as compared to the same nine-month period in the prior year as the Bank reached a level of adequate provision.

The increase in net income for the nine-months ended September 30, 2022 was also partially supported by a $131,000, or 48.70%, decrease in income tax expense as compared to the same period in the prior year. The decrease in income tax expense was due to a decrease in the effective income tax rate to 8.03% for the nine-months ended September 30, 2022 from 13.62% for the same period in the prior year.

Total assets increased $30.5 million to $272.1 million at September 30, 2022 from $241.6 million at December 31, 2021, an increase of 12.63%. The increase was primarily due to a $21.2 million, or 14.78%, increase in loans held-for-investment to $165.2 million at September 30, 2022. This increase was primarily funded by a $30.9 million, or 14.42%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the year. Total deposits were $245.6 million at September 30, 2022, up from $214.7 million as of December 31, 2021. Federal Home Loan Bank advances were $9.0 million at September 30, 2022 as compared to $5.0 million at December 31, 2021. At September 30, 2022, the weighted average rate of all Federal Home Loan Bank advances was 2.87% compared to 1.45% at December 31, 2021, and the weighted average maturity was 0.1 years at September 30, 2022 compared to 4.3 years at December 31, 2021.

The allowance for loan losses remained the same at $1.9 million at September 30, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.15% of total loans as of September 30, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $52,000, or 0.03%, of total loans as of September 30, 2022 as compared to $237,000, or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $7.1 million at September 30, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $14.4 million during the nine-months ended September 30, 2022 as a result of an increase in net unrealized loss of $15.5 million on available-for-sale securities due to the significant increase in market interest rates, partially offset by net income of $1.6 million. The decrease in stockholders’ equity was also impacted by repurchased stock of $176,000, dividends of $326,000 and stock awards of $20,000. Equity as a percentage of assets decreased to 2.63% at September 30, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended September 30, 2022, the Company did not repurchase any shares of common stock. At September 30, 2022, 24,422 shares of common stock have been repurchased by the Company through the stock repurchase program since its inception in January 2021.

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, 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 the COVID-19 pandemic, changes in the interest rate environment, changes in general economic conditions, inflation, 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.

Condensed Consolidated Statements of Income
(Unaudited)
In thousands, except per share data
	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2022			2022			2021			2022			2021
Selected Consolidated Earnings Data:
Total Interest Income	$	2,506		$	2,248		$	1,889		$	6,705		$	5,555
Total Interest Expense		382			288			169			872			596
Net Interest Income		2,124			1,960			1,720			5,833			4,959
Provision for Losses on Loans		30			-			-			30			90
Net Interest Income after Provision for Losses on Loans		2,094			1,960			1,720			5,803			4,869
Non-interest Income		425			569			939			1,486			2,293
Non-interest Expense		1,808			1,907			1,688			5,571			5,187
Income Tax Expense		72			48			187			138			269
Net Income	$	639		$	574		$	784		$	1,580		$	1,706
Earnings per share - basic	$	0.55		$	0.50		$	0.66		$	1.34		$	1.45
Earnings per share - diluted	$	0.55		$	0.49		$	0.66		$	1.34		$	1.45

Condensed Consolidated Balance Sheet
(Unaudited)
In thousands, except per share data
	September 30,				December 31,			September 30,
	2022				2021			2021
Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks	$	5,620			$	4,857		$	10,539
Investment Securities, Available-for-sale, at fair value		85,043				84,661			81,004
Loans Held-for-Sale		232				738			1,778
Loans Held-for-Investment		165,201				143,927			139,342
Allowance for Loan Losses		1,909				1,881			1,885
Net Loans		163,524				142,784			139,235
Accrued Interest Receivable		1,066				760			693
Other Assets		16,819				8,499			7,829
Total Assets	$	272,072			$	241,561		$	239,300
Liabilities
Noninterest-bearing Deposits	$	45,313			$	40,988		$	40,933
Interest-bearing Deposits		200,304				173,666			170,467
Total Deposits		245,617				214,654			211,400
FHLB Advances		9,000				5,000			5,000
Subordinated Notes, net of Issuances Costs		9,724				-			-
Accrued Interest Payable		78				32			26
Accrued Expenses and Other Liabilities		509				342			1,277
Total Liabilities		264,928				220,028			217,703
Stockholders' Equity
Common Stock		11,432				11,412			11,430
Retained Earnings		10,214				9,066			8,665
Accumulated other comprehensive income		(14,502	)			1,055			1,502
Total Stockholders' Equity		7,144				21,533			21,597
Total Liabilities and Stockholders' Equity	$	272,072			$	241,561		$	239,300

	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,				September 30,
	2022				2022				2021				2022				2021
Selected Financial Ratios and Other Data (Unaudited):
Interest rate spread during period		3.11	%			2.80	%			2.85	%			2.94	%			2.72	%
Net yield on interest-earning assets		3.82	%			3.35	%			3.24	%			3.50	%			3.17	%
Non-interest expense, annualized, to average assets		2.68	%			2.81	%			2.85	%			2.84	%			2.92	%
Return on average assets, annualized		0.95	%			0.85	%			1.32	%			0.80	%			0.96	%
Return on average equity, annualized		20.82	%			11.31	%			15.20	%			13.33	%			10.25	%
Average equity to assets		4.55	%			7.48	%			8.71	%			6.03	%			9.37	%
Average Loans	$	167,005			$	160,977			$	141,874			$	158,198			$	141,874
Average Securities		86,080				98,897				77,954				87,196				77,953
Average Other Interest-Earning Assets		9,065				8,263				13,491				10,185				13,492
Total Average Interest-Earning Assets		262,150				268,137				233,319				255,579				233,319
Average Total Assets		269,872				271,358				236,955				261,829				236,955
Average Noninterest-bearing Deposits	$	45,329			$	41,023			$	38,313			$	43,419			$	38,313
Average Interest-bearing Deposits		197,642				193,410				170,713				190,068				170,712
Average Total Deposits		242,971				234,433				209,026				233,487				209,025
Average Wholesale Funding		17,937				16,068				5,000				17,424				5,000
Average Interest-Bearing Liabilities		215,579				209,478				175,713				207,492				175,712
Average Interest-Earnings Assets to Average Interest-Bearings Liabilities		121.60	%			128.00	%			132.78	%			123.18	%			132.78	%
Non-performing loans to total loans		0.03	%			0.03	%			0.07	%			0.03	%			0.07	%
Allowance for loan losses to total loans outstanding		1.15	%			1.13	%			1.34	%			1.15	%			1.34	%
Allowance for loan losses to non-performing loans		3671.15	%			4084.78	%			1830.31	%			3671.15	%			1830.31	%
Net loan chargeoffs/(recoveries) to average total loans outstanding		0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Effective income tax rate		10.13	%			7.72	%			19.26	%			8.03	%			13.62	%
Tangible book value per share	$	6.12			$	7.43			$	18.31			$	6.12			$	18.31
Market closing price at the end of quarter	$	10.21			$	13.92			$	16.75			$	10.21			$	16.75
Price-to-tangible book value		166.95	%			187.42	%			91.48	%			166.95	%			91.48	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221017005704/en/

David A. Coffey, President and CEO

Ryan W. Cook, Senior Vice President and CFO

Tel. 317-736-7151

Fax 317-736-1726

Source: Third Century Bancorp

FAQ

What is the net income for Third Century Bancorp for Q3 2022?

Third Century Bancorp reported a net income of $639,000 for Q3 2022.

How did Third Century Bancorp's earnings per share change in Q3 2022?

Earnings per share decreased to $0.55 in Q3 2022 from $0.66 in Q3 2021.

What factors contributed to the decline in net income for Third Century Bancorp?

The decline was mainly due to a 54.74% drop in non-interest income.

How much did total assets increase for Third Century Bancorp by September 30, 2022?

Total assets increased by $30.5 million, reaching $272.1 million.

What was the change in stockholders' equity for Third Century Bancorp in 2022?

Stockholders' equity decreased from $21.5 million to $7.1 million due to unrealized losses on securities.