Third Century Bancorp Releases Earnings for the Quarter Ended March 31, 2022

Rhea-AI Summary

Third Century Bancorp reported a net income of $367,000 for Q1 2022, down 11.35% from $414,000 in Q1 2021. Earnings per share were $0.31, compared to $0.35 a year earlier. Despite a $198,000 drop in non-interest income, primarily due to decreased mortgage loan sales amid rising interest rates, net interest income rose by $173,000, supported by lower loan loss provisions. Total assets increased by $20 million to $261.6 million, while total deposits rose by $17.3 million. Shareholder equity fell to $16.5 million.

Positive

• Net interest income increased by $173,000 or 10.98%.
• Total assets grew by $20 million to $261.6 million.
• Total deposits increased by $17.3 million, up to $231.9 million.

Negative

• Net income decreased by $47,000 or 11.35% compared to Q1 2021.
• Non-interest income fell by $198,000 or 28.62% due to lower gains on mortgage sales.
• Stockholders’ equity decreased by $5 million during the quarter to $16.5 million.

FRANKLIN, Ind.--(BUSINESS WIRE)-- OTCPINK: TDCB - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $367,000 for the quarter ended March 31, 2022, or $0.31 per basic and diluted share, compared to net income of $414,000 for the quarter ended March 31, 2021, or $0.35 per basic and diluted share.

“Our first quarter 2022 growth continued to be significant for the company. In addition to a sub-debt capital raise of $10 million, our wholly owned subsidiary Mutual Savings Bank had significant balance sheet growth in normal operations,” stated David A. Coffey, President and CEO. “On the asset side of the balance sheet, our net loan balances increased nearly $7.2 million from year end 2021 due to strong commercial loan demand. On the liability side of the balance sheet, we saw deposit balance increase nearly $17.3 million from year end 2021 due to new account activity and existing customer balance growth.” Coffey concluded, “As the economic conditions continue to evolve this year, we continue to pursue our business strategy of quality growth and improved returns for our stockholders.”

For the quarter ended March 31, 2022, net income decreased $47,000, or 11.35%, to $367,000 as compared to $414,000 for the same period in the prior year. The decrease in net income for the three-month period ended March 31, 2022 was driven primarily as a result of the $198,000, or 28.62% 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 $180,000, or 47.27% decrease in the gains on the sale of one-to-four family residential mortgage loans sold to Freddie Mac, as a result of the rising interest rate environment. The decrease in non-interest income was partially offset by an increase in net interest income of $173,000, or 10.98%, which was the result of an increase of $156,000, or 8.69%, in interest income and a decrease of $17,000, or 7.76% in interest expense as compared to the same period in the prior year.

The increase in net interest income for the quarter ended March 31, 2022 was partially supported by the $45,000 decrease in the provision for loan losses compared to the same period in 2021. The decrease in provision expense was due to the improving economic conditions resulting from the COVID-19 pandemic. The Company had no net charge-offs during the quarters ended March 31, 2022 and March 31, 2021.

Total assets increased $20.0 million to $261.6 million at March 31, 2022 from $241.6 million at December 31, 2021, an increase of 8.31%. The increase was primarily due to a $7.7 million, or 9.10%, increase in investment securities, available-for-sale to $92.3 million and a $7.5 million, or 5.24%, increase in loans held-for-investment at March 31, 2022. These increases were primarily funded by a $17.3 million, or 8.05%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the quarter. Total deposits were $231.9 million at March 31, 2022, up from $214.6 million as of December 31, 2021. Federal Home Loan Bank advances were $3.0 million at March 31, 2022 as compared to $5.0 million at December 31, 2021. At March 31, 2022, the weighted average rate of all Federal Home Loan Bank advances was 1.73% compared to 1.45% at December 31, 2021, and the weighted average maturity was 5.1 years at March 31, 2022 compared to 4.3 years at December 31, 2021. Total loans held-for-investment grew to $151.5 million at March 31, 2022 from $142.8 million at December 31, 2021, an increase of 5.24%.

The allowance for loan losses remained the same at $1.9 million at March 31, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.24% of total loans as of March 31, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $57,000 or 0.04%, of total loans as of March 31, 2022 as compared to $237,000 or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $16.5 million at March 31, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $5.0 million during the quarter ended March 31, 2022 as a result of a change in net unrealized loss of $5.4 million of available-for-sale securities due to the increase in market interest rates, partially offset by net income of $367,000. The decrease in stockholders’ equity was also impacted by dividends of $105,000, repurchased stock of $40,000 and stock awards of $8,000. Equity as a percentage of assets decreased to 6.33% at March 31, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended March 31, 2022, the Company repurchased 2,222 shares of common stock at an average cost of $18.00 per share pursuant to the Company’s stock repurchase program. At March 31, 2022, 14,422 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, except for periods ended on or before December 31, 2021)
In thousands, except per share data
	Three Months Ended
	March 31,			December 31,			March 31,
	2022			2021			2021
Selected Consolidated Earnings Data:
Total Interest Income	$	1,951		$	1,945		$	1,795
Total Interest Expense		202			143			219
Net Interest Income		1,749			1,802			1,576
Provision for Losses on Loans		-			-			45
Net Interest Income after Provision for Losses on Loans		1,749			1,802			1,531
Non-interest Income		493			876			690
Non-interest Expense		1,856			1,945			1,761
Income Tax Expense		18			99			46
Net Income	$	367		$	634		$	414
Earnings per share - basic	$	0.31		$	0.54		$	0.35
Earnings per share - diluted	$	0.31		$	0.54		$	0.35

Condensed Consolidated Balance Sheet
(unaudited, except for periods ended on or before December 31, 2021)
In thousands, except per share data
	March 31,				December 31,				March 31,
		2022				2021				2021
Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks	$	8,699			$	4,857			$	8,402
Investment Securities, Available-for-sale, at fair value		92,362				84,661				66,938
Loans Held-for-Sale		402				738				302
Loans Held-for-Investment		151,462				143,927				141,715
Allowance for Loan Losses		1,881				1,881				1,838
Net Loans		149,983				142,784				140,179
Accrued Interest Receivable		802				760				720
Other Assets		9,777				8,499				7,644
Total Assets	$	261,623			$	241,561			$	223,883
Liabilities
Noninterest-bearing Deposits	$	43,144			$	40,988			$	37,960
Interest-bearing Deposits		188,790				173,666				160,385
Total Deposits		231,934				214,654				198,345
FHLB Advances		3,000				5,000				5,000
Subordinated Notes		9,734				-				-
Accrued Interest Payable		90				32				46
Accrued Expenses and Other Liabilities		313				342				519
Total Liabilities		245,071				220,028				203,910
Stockholders' Equity - Net		16,552				21,533				19,973
Total Liabilities and Stockholders' Equity	$	261,623			$	241,561			$	223,883
	Three Months Ended
	dollar figures are in thousands, except per share data
	March 31,				December 31,				March 31,
		2022				2021				2021
Selected Financial Ratios and Other Data:
Interest rate spread during period		2.73	%			2.94	%			2.81	%
Net yield on interest-earning assets		3.16	%			3.26	%			3.36	%
Non-interest expense, annualized, to average assets		2.92	%			3.23	%			3.30	%
Return on average assets, annualized		0.58	%			1.05	%			0.78	%
Return on average equity, annualized		7.23	%			12.29	%			7.98	%
Average equity to assets		7.98	%			8.58	%			9.72	%
Average Loans	$	146,384			$	143,448			$	141,716
Average Securities		87,430				83,268				60,750
Average Other Interest-Earning Assets		13,275				11,615				10,941
Total Average Interest-Earning Assets		247,089				238,330				213,407
Average Total Assets		254,402				240,513				213,453
Average Noninterest-bearing Deposits	$	43,889			$	40,335			$	36,637
Average Interest-bearing Deposits		178,946				170,457				149,954
Average Total Deposits		222,835				210,792				186,591
Average Wholesale Funding		9,171				5,000				7,916
Average Interest-Bearing Liabilities		188,117				175,457				157,870
Average Interest-Earnings Assets to Average Interest-Bearings Liabilities		131.35	%			135.83	%			135.18	%
Non-performing loans to total loans		0.04	%			0.16	%			0.08	%
Allowance for loan losses to total loans outstanding		1.24	%			1.30	%			1.29	%
Allowance for loan losses to non-performing loans		3300.00	%			793.67	%			1701.85	%
Net loan chargeoffs/(recoveries) to average total loans outstanding		0.00	%			0.00	%			0.00	%
Effective income tax rate		4.68	%			13.51	%			10.00	%
Tangible book value per share	$	14.05			$	18.28			$	16.80
Market closing price at the end of quarter	$	17.55			$	17.50			$	14.20
Price-to-tangible book value		124.92	%			95.75	%			84.54	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220422005400/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 was the net income for Third Century Bancorp in Q1 2022?

Third Century Bancorp reported a net income of $367,000 for Q1 2022.

What caused the decline in net income for Third Century Bancorp?

The decline was primarily due to a $198,000 decrease in non-interest income, mainly from lower gains on mortgage sales.

How much did total assets increase for Third Century Bancorp?

Total assets increased by $20 million to $261.6 million as of March 31, 2022.

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

Stockholders’ equity decreased by $5 million to $16.5 million during Q1 2022.