Third Century Bancorp Releases Earnings for the Quarter Ended September 30, 2024

Rhea-AI Summary

Third Century Bancorp (TDCB) reported Q3 2024 net income of $262,000 ($0.22 per share), down 3.39% from $271,000 ($0.23 per share) in Q3 2023. Net interest income rose to $2.0 million, with total interest income increasing 15.14% to $4,021,000, offset by a 33.44% rise in interest expense to $2,040,000. For the nine months ended September 30, 2024, net income increased 6.98% to $819,000. Total assets grew to $324.5 million, with loans held for investment increasing 4.66% to $203.4 million. The bank maintains strong credit quality with allowance for credit losses at 163% of non-performing loans.

Positive

• Net interest income increased to $2.0 million in Q3 2024
• Total interest income grew 15.14% to $4,021,000 in Q3
• Nine-month net income increased 6.98% to $819,000
• Total assets rose to $324.5 million from $312.9 million
• Loans held for investment increased 4.66% to $203.4 million
• Strong credit loss coverage at 163% of non-performing loans

Negative

• Q3 2024 net income decreased 3.39% to $262,000
• Interest expense increased 33.44% to $2,040,000 in Q3
• Non-interest income decreased 25.73% to $1,050,000 for nine months
• Non-performing loans increased to $1,800,000 from zero last year
• Securities sale losses of $48,000 from balance sheet restructuring

FRANKLIN, Ind.--(BUSINESS WIRE)-- OTCPINK: TDCB - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded unaudited net income of $262,000 for the quarter ended September 30, 2024, or $0.22 per basic and diluted share, compared to net income of $271,000 for the quarter ended September 30, 2023, or $0.23 per basic and diluted share.

“Our Third Century Bancorp financial performance for 2024 is on track with where we planned. We anticipated continued pressure on the net interest margin due to higher funding costs,” stated David A. Coffey, President and CEO. “With the FED action to lower the FED Funds target, we anticipate this translating in a positive way to our income statement.” Coffey concluded, “The Johnson County market is very competitive and has always been. However, as the only community bank located in Johnson County, Indiana, we feel our growth opportunities for the remainder of 2024 are pretty solid and will provide a positive outlook for the remainder of the year.”

For the quarter ended September 30, 2024, net income decreased $9,000, or 3.39%, to $262,000 as compared to $271,000 for the same period in the prior year. Net interest income increased to $2.0 million for the three months ended September 30, 2024, due to an increase in total interest income of $529,000, or 15.14%, to $4,021,000 for the three-month period ended September 30, 2024, as compared to $3,492,000 for the same period for the prior year. The increase in total interest income was due to an increase in average loan balances as well as higher average yields on interest earning assets. Offsetting the increase in total interest income was an increase in total interest expense of $511,000, or 33.44%, to $2,040,000 for the three-month period ended September 30, 2024, compared to $1,529,000 for the same period for the prior year. The increase in total interest expense was the result of higher fundings costs of retail deposits. The provision reversal for credit losses during the current quarter was ($52,000) compared to a provision of $35,000 for the same quarter last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model. Non-interest income increased by $40,000, or 11.57%, to $386,000 for the quarter ended September 30, 2024, as compared to $346,000 for the same period in the prior year. The increase in non-interest income occurred due to higher fee income on deposit accounts and a slightly higher volume of residential loan sales compared to the same period for the prior year. Non-interest expense increased by $136,000, or 6.78%, to $2,146,000 for the quarter ended September 30, 2024, as compared to $2,010,000 for the same period in the prior year due primarily to increased software service provider expenses.

For the nine-months ended September 30, 2024, net income increased $53,000, or 6.98%, to $819,000 as compared to $766,000 for the same period in the prior year. Net interest income increased to $5.9 million for the nine-months ended September 30, 2024, due to an increase in total interest income of $2,223,000, or 23.46%, to $11,700,000 for the nine-month period ended September 30, 2024, as compared to $9,477,000 for the same period for the prior year. The increase in total interest income resulted from higher average yields on interest earning assets and higher average loan balances. Offsetting the increase in total interest income was an increase in total interest expense of $1,952,000, or 49.74% to $5,876,000 for the nine-month period ended September 30, 2024, compared to $3,924,000 for the same period of the prior year. The increase in total interest expense was due to the increase in funding costs of both retail deposits and wholesale funding. The provision reversal for credit losses during the first nine months of 2024 was ($50,000) compared to a provision of $211,000 for the same period last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model.

For the nine-month period ended September 30, 2024, the allowance for credit losses totaled 163% of non-performing loans and 1.41% of total loans. For the same period last year, there were no nonperforming loans. As of September 30, 2024, nonperforming loans totaled $1,800,000, comprised of one commercial real estate participation loan. Our credit administration practices require loans to be placed on non-accrual if they are 90 days or more past due. This was the case for this one loan during the third quarter. Since that time, the loan has been brought current but remains on non-accrual. In addition, an evaluation was performed of the collateral securing the loan, and no specific allocation to the allowance for credit losses was required.

Non-interest income decreased by $364,000, or 25.73%, to $1,050,000 for the nine-months ended September 30, 2024, as compared to $1,414,000 for the same period in the prior year. The decrease in non-interest income occurred due to a year-to-date total of $48,000 in securities sale losses from balance sheet restructuring and lower loan fee income compared to the same period in the prior year. Non-interest expense increased by $67,000, or 1.10%, to $6,143,000 for the nine-months ended September 30, 2024, as compared to $6,076,000 for the same period in the prior year due to increased utilities and maintenance, software services, depreciation, and public relations costs.

Total assets rose to $324.5 million at September 30, 2024 compared to $312.9 million at December 31, 2023. This increase was partly due to a $5.8 million, or 43.66%, increase in cash and due from banks to $19.4 million at September 30, 2024. Loans held for investment also increased to $203.4 million as of September 30, 2024, which is an increase of 4.66% compared to net loans of $194.3 million at December 31, 2023. Total investment securities decreased $4.24 million, or 5.08% to $79.1 million at September 30, 2024 compared to $83.3 million at December 31, 2023. Total deposits were $248.1 million at September 30, 2024, up from $246.1 million as of December 31, 2023. As of September 30, 2024, the weighted average rate of all FHLB advances was 3.93% compared to 3.72% at December 31, 2023, and total FHLB advance balances were down $3.0 million, or 6.45% to $43.5 million at September 30, 2024 compared to $46.5 million at December 31, 2023.

Stockholders’ equity was $11.42 million at September 30, 2024, up from $9.51 million at December 31, 2023. Stockholders’ equity increased during the nine-months ended September 30, 2024, largely due to improvement in unrealized losses on available for sale securities as well as ongoing earnings. The available-for-sale securities portfolio consists of investments in government sponsored mortgage-backed securities as well as investments in municipal bonds, which provide cash flow for business purposes. Average equity as a percentage of assets was 3.09% at September 30, 2024 compared to 2.74% at December 31, 2023.

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 inflation, changes in the interest rate environment, changes in general economic conditions, geopolitical conflicts, public health issues, 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,				Sept 30,				Sept 30,
			2024				2024				2023				2024				2023
Selected Consolidated Earnings Data:
Total Interest Income		$	4,021			$	3,848			$	3,492			$	11,700			$	9,477
Total Interest Expense			2,040				1,968				1,529				5,876				3,924
Net Interest Income			1,980				1,881				1,963				5,824				5,553
Provision/(Credit) for Losses on Loans			(52	)			-				35				(50	)			211
Net Interest Income after Provision for Losses on Loans			2,032				1,881				1,928				5,874				5,342
Non-Interest Income			386				333				346				1,050				1,414
Non-Interest Expense			2,146				2,031				2,010				6,143				6,076
Income Tax Expense			10				(45	)			(7	)			(38	)			(86	)
Net Income		$	262			$	228			$	271			$	819			$	766
Earnings Per Share - basic		$	0.22			$	0.19			$	0.23			$	0.70			$	0.66
Earnings Per Share - diluted		$	0.22			$	0.19			$	0.23			$	0.70			$	0.65

Condensed Consolidated Balance Sheet
(Unaudited)
In thousands, except per share data
		September 30,				December 31,				September 30,
			2024				2023				2023
Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks		$	19,351			$	13,470			$	8,068
Investment Securities, Available-for-Sale, at Fair Value			76,132				80,367				76,842
Investment Securities, Held-to-Maturity			2,950				2,950				2,950
Loans Held-for-Sale			834				552				-
Loans Held-for-Investment			206,293				196,722				191,968
Allowance for Credit Losses			2,928				2,972				2,947
Net Loans			203,365				194,302				189,021
Accrued Interest Receivable			1,385				1,547				1,298
Other Assets			20,451				20,269				21,083
Total Assets		$	324,468			$	312,905			$	299,262
Liabilities
Noninterest-Bearing Deposits		$	40,739			$	43,692			$	43,003
Interest-Bearing Deposits			207,341				202,426				187,492
Total Deposits			248,080				246,118				230,495
FHLB Advances and Other Borrowings			53,500				46,500				51,500
Subordinated Notes, Net of Issuances Costs			9,778				9,758				9,751
Accrued Interest Payable			793				485				364
Accrued Expenses and Other Liabilities			893				536				1,105
Total Liabilities			313,044				303,397				293,215
Stockholders' Equity
Common Stock			11,510				11,480				11,467
Retained Earnings			11,042				10,338				10,143
Accumulated Other Comprehensive Gain/(Loss)			(11,128	)			(12,310	)			(15,563	)
Total Stockholders' Equity			11,423				9,508				6,047
Total Liabilities and Stockholders' Equity		$	324,468			$	312,905			$	299,262

		Three Months Ended												Nine Months Ended
		dollar figures are in thousands, except per share data
		September 30,				June 30,				September 30,				September 30,				September 30,
			2024				2024				2023				2024				2023
Selected Financial Ratios and Other Data (Unaudited):
Interest Rate Spread During Period			2.13	%			2.09	%			2.34	%			2.12	%			2.20	%
Net Yield on Interest-Earning Assets			5.30	%			5.19	%			4.78	%			5.18	%			4.38	%
Non-Interest Expense, Annualized, to Average Assets			2.69	%			2.60	%			2.66	%			2.58	%			2.78	%
Return on Average Assets, Annualized			0.33	%			0.29	%			0.36	%			0.34	%			0.35	%
Return on Average Equity, Annualized			10.61	%			11.03	%			13.15	%			11.99	%			11.55	%
Average Equity to Assets			3.09	%			2.64	%			2.73	%			2.87	%			3.03	%
Average Net Loans		$	199,422			$	195,685			$	189,897			$	196,336			$	185,054
Average Net Securities			79,135				78,971				82,795				80,169				87,603
Average Other Interest-Earning Assets			24,987				22,009				19,314				24,809				15,610
Total Average Interest-Earning Assets			303,544				296,665				292,006				301,314				288,267
Average Total Assets			319,355				312,570				302,142				317,125				291,877
Average Noninterest-Bearing Deposits		$	40,366			$	40,568			$	42,464			$	41,033			$	43,122
Average Interest-Bearing Deposits			204,469				205,295				190,553				205,325				193,659
Average Total Deposits			244,834				245,863				233,017				246,358				236,781
Average Wholesale Funding			53,500				48,764				59,670				51,131				45,804
Average Interest-Bearing Liabilities			257,969				254,059				250,223				256,456				239,463
Avg. Interest-Earnings Assets to Avg. Interest-Bearings Liabilities			117.67	%			116.77	%			116.70	%			117.49	%			120.38	%
Average equity		$	9,866.80			$	8,253.62			$	8,243.00			$	9,108.87			$	8,842.00
Non-Performing Loans to Total Loans			0.87	%			0.00	%			0.00	%			0.87	%			0.00	%
Allowance for Credit Losses to Total Loans Outstanding			1.41	%			1.49	%			1.54	%			1.41	%			1.54	%
Allowance for Credit Losses to Non-Performing Loans			162.68	%			-				-				162.68	%			-
Net Loan Chargeoffs/(Recoveries) to Avg. Total Loans Outstanding			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Effective Income Tax Rate			3.71	%			-24.85	%			-2.65	%			-4.89	%			-12.65	%
Tangible Book Value Per Share		$	9.71			$	8.02			$	5.11			$	9.71			$	5.11
Market Closing Price at the End of Quarter		$	7.32			$	6.94			$	7.75			$	7.32			$	7.75
Price-to-Tangible Book Value			75.38	%			86.59	%			151.71	%			75.38	%			151.71	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030057501/en/

David A. Coffey, President and CEO

S. Paul Arab, SVP and CFO

Tel. 317-736-7151

Source: Third Century Bancorp

FAQ

What was Third Century Bancorp's (TDCB) earnings per share in Q3 2024?

Third Century Bancorp reported earnings of $0.22 per basic and diluted share for Q3 2024.

How much did TDCB's total assets grow to in Q3 2024?

TDCB's total assets grew to $324.5 million as of September 30, 2024, compared to $312.9 million at December 31, 2023.

What was TDCB's net interest income for Q3 2024?

TDCB's net interest income was $2.0 million for the third quarter of 2024.

How did TDCB's loan portfolio perform in Q3 2024?

Loans held for investment increased 4.66% to $203.4 million compared to $194.3 million at December 31, 2023.