Third Century Bancorp Releases Record Earnings for the Quarter and Nine-Months Ended September 30, 2021

Rhea-AI Summary

Third Century Bancorp (TDCB) reported a net income of $784,000 for Q3 2021, significantly up from $532,000 in Q3 2020, marking a 47.37% increase. Earnings per share rose to $0.66 from $0.45. The growth was driven by a $165,000 boost in net interest income and a $165,000 reduction in non-interest expenses, particularly due to lower personnel costs. Total assets rose 14.16% to $239.3 million, largely fueled by a 19.36% increase in total deposits. However, non-interest income decreased by 10.66% compared to the previous year.

Positive

• Net income increased by $252,000, or 47.37%, to $784,000 for Q3 2021.
• Earnings per share rose to $0.66 from $0.45 year-over-year.
• Net interest income increased by $165,000, or 10.61%.
• Total assets grew by $29.7 million to $239.3 million, a 14.16% rise.
• Total deposits increased by $34.3 million, or 19.36%, to $211.4 million.
• Provision for loan losses decreased by $91,000, or 100%, indicating improved economic conditions.

Negative

• Non-interest income decreased by $112,000, or 10.66%, year-over-year.
• Significant drop in gains on the sale of residential mortgage loans, down $325,000 or 51.19%.

FRANKLIN, Ind.--(BUSINESS WIRE)-- (OTCPINK: TDCB) -- Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $784,000 for the quarter ended September 30, 2021, or $0.66 per basic and diluted share, compared to net income of $532,000 for the quarter ended September 30, 2020, or $0.45 per basic and diluted share.

David A. Coffey, President and CEO stated, “Our earnings and related metrics reflect the success of another quarter. The financial information reflects how we continued business as usual, in unprecedented times, and found additional ways to positively impact earnings.” Coffey further stated, “Regardless of what the numbers reflect, it isn’t lost on me that none of it is possible without a terrific team. It is the people who do the work and tell our story. We are blessed to have a team of dedicated professionals that strive to live our mission statement: Make dreams come true. Surpass expectations. Be the first choice for all financial needs.” Coffey concluded, “Our team is looking forward to concluding our year in a positive manner for our stakeholders.”

For the quarter ended September 30, 2021, net income increased $252,000, or 47.37%, to $784,000 as compared to $532,000 for the same period in the prior year. The increase in net income for the three-month period ended September 30, 2021 was driven primarily as a result of the $165,000, or 10.61%, increase in net interest income and a $165,000, or 8.90%, decrease in non-interest expense as compared to the same period in the prior year. The increase in net interest income was due to a combination of an increase in interest income and a decrease in interest expense due to increases in average assets largely due to an increase in the average balance of investment securities and decreases in average rates paid on liabilities primarily as a result of a decrease in average rates paid on deposits in the current low interest rate environment. Non-interest expense decreased as a result of a $170,000, or 14.25% decrease in personnel expenses. In addition, the increase in net income was supported by a decrease of $91,000, or 100.00%, in provision for loan losses as compared to the same period in the prior year. The increase in net income was partially offset by a $112,000, or 10.66%, decrease in non-interest income as compared to the same period in the prior year. The decrease in non-interest income was driven primarily by a $325,000 or 51.19%, decrease in gains on the sale of one-to-four family residential mortgage loans sold to Freddie Mac as compared to the same period in the prior year. This decrease was partially offset by a $271,000 or 100.00%, increase in gains on the sale of investment securities, available-for-sale, as compared to the same period in the prior year.

The $91,000 decrease in the provision for loan losses compared to the same period in 2020 was due to the improving economic conditions resulting from the current COVID-19 pandemic. The Company had no net charge-offs during the quarter ended September 30, 2021 compared to net loan recoveries of $2,000 for the same period in 2020. The Company expects that the current COVID-19 pandemic could impact the future provision for loan losses.

For the nine-months ended September 30, 2021, net income increased $245,000, or 16.77%, to $1.7 million as compared to $1.5 million for the nine-months ended September 30, 2020. The increase in net income for the nine-month period ended September 30, 2021 was driven primarily as a result of the $409,000, or 8.99%, increase in net interest income. The increase in net interest income was due to a combination of an increase in interest income and a decrease in interest expense due to increases in average assets largely due to an increase in the average balance of investment securities and decreases in average rates paid on liabilities primarily as a result of a decrease in average rates paid on deposits in the current low interest rate environment. The increase in net interest income for the nine-month period ended September 30, 2021 was partially offset by a decrease in non-interest income of $290,000, or 11.23% as compared to the same nine-month period ended in the prior year. This decrease was partially offset by a $192,000 or 245.15%, increase in gains on the sale of investment securities, available-for-sale, as compared to the same nine-month period in the prior year. In addition, the provision for loan losses decreased $186,000, or 67.39%, for the nine-month period ended September 30, 2021 as compared to the same prior year period.

The increase in net income for the nine-months ended September 30, 2021 was also supported by a $46,000 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 13.62% for the nine-months ended September 30, 2021 from 17.73% for the same period in the prior year.

Total assets increased $29.7 million to $239.3 million at September 30, 2021 from $209.6 million at December 31, 2020, an increase of 14.16%. The increase was primarily due to a $21.7 million, or 36.62%, increase in investment securities, available-for-sale to $81.0 million at September 30, 2021, primarily funded by a $34.3 million, or 19.36%, increase in total deposits. Total deposits were $211.4 million at September 30, 2021, up from $177.1 million as of December 31, 2020. Federal Home Loan Bank advances were $5.0 million at September 30, 2021 as compared to $11.7 million at December 31, 2020. At September 30, 2021, the weighted average rate of all Federal Home Loan Bank advances was 1.45% compared to 1.21% at December 31, 2020, and the weighted average maturity was 4.5 years at September 30, 2021 compared to 3.5 years at December 31, 2020. Total loans held-for-investment grew to $139.3 million at September 30, 2021 from $138.8 million at December 31, 2020, an increase of 0.37%.

The increase in total loan balances was partially the result of loans originated through the Small Business Administration’s Paycheck Protection Program (“PPP”) in which the Company participated. The Company originated $8.6 million of PPP loans in the program in 2020, of which $342,000 remained on the Company’s balance sheet as of September 30, 2021. The Company originated $4.6 million of PPP loans in the program in 2021, of which $1.3 million remained on the Company’s balance sheet as of September 30, 2021. As of September 30, 2021, a total of $1.6 million of PPP loans remained on the Company’s balance sheet with the remaining forgiven by the Small Business Administration.

The allowance for loan losses increased by $94,000, or 5.23%, to $1.9 million at September 30, 2021 from $1.8 million at December 31, 2020. The increase was primarily due to the provision for loan losses of $90,000 during the nine-months ended September 30, 2021 due to the economic conditions resulting from the COVID-19 pandemic. The allowance for loan losses totaled 1.34% of total loans as of September 30, 2021 as compared to 1.29% of total loans as of December 31, 2020. Nonperforming loans totaled $102,000 or 0.07%, of total loans as of September 30, 2021 as compared to $111,000 or 0.08%, of total loans as of December 31, 2020.

Stockholders’ equity was $21.6 million at September 30, 2021, up from $20.5 million at December 31, 2020. Stockholders’ equity increased by $1.1 million during the nine-months ended September 30, 2021 as a result of net income of $1.7 million, offset by a decrease in net unrealized gain of $270,000 of available-for-sale securities due to the sale of investment securities, available-for-sale, as well as an increase in market interest rates. The increase in stockholders’ equity was also offset by dividends of $201,000, repurchased stock of $167,000 and stock awards of $50,000. Equity as a percentage of assets decreased to 9.03% at September 30, 2021 compared to 9.76% at December 31, 2020.

During the nine-months ended September 30, 2021, the Company repurchased 10,800 shares of common stock at an average cost of $15.40 per share pursuant to the Company’s stock repurchase program. At September 30, 2021, 39,200 shares of common stock remain available for future repurchase by the Company through the stock repurchase program.

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, 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 in the twelve months ended December 31, 2020)
In thousands, except per share data
	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2021			2021			2020			2021			2020
Selected Consolidated Earnings Data:
Total Interest Income	$	1,889		$	1,862		$	1,795		$	5,555		$	5,377
Total Interest Expense		169			208			240			596			827
Net Interest Income		1,720			1,654			1,555			4,959			4,550
Provision for Losses on Loans		-			45			91			90			276
Net Interest Income after Provision for Losses on Loans		1,720			1,609			1,464			4,869			4,274
Non-interest Income		939			673			1,051			2,293			2,583
Non-interest Expense		1,688			1,738			1,853			5,187			5,081
Income Tax Expense		187			36			130			269			315
Net Income	$	784		$	508		$	532		$	1,706		$	1,461
Earnings per basic and diluted share	$	0.66		$	0.43		$	0.45		$	1.45		$	1.23
Condensed Consolidated Balance Sheet
(unaudited, except for periods ended on or before December 31, 2020)
In thousands, except per share data
	September 30,			December 31,			September 30,
	2021			2020			2020
Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks	$	10,539		$	4,888		$	3,080
Investment Securities, Available-for-sale, at fair value		81,004			59,292			47,200
Loans Held-for-Sale		1,778			434			3,499
Loans Held-for-Investment		139,342			138,834			142,545
Allowance for Loan Losses		1,885			1,791			1,730
Net Loans		139,235			137,477			144,314
Accrued Interest Receivable		693			686			655
Other Assets		7,829			7,283			8,160
Total Assets	$	239,299		$	209,626		$	203,409
Liabilities
Noninterest-bearing Deposits	$	40,933		$	32,049		$	31,362
Interest-bearing Deposits		170,467			145,069			140,440
Total Deposits		211,399			177,118			171,802
FHLB Advances		5,000			11,705			9,995
Accrued Interest Payable		26			54			57
Accrued Expenses and Other Liabilities		1,277			274			1,484
Total Liabilities		217,702			189,151			183,338
Stockholders' Equity - Net		21,597			20,475			20,071
Total Liabilities and Stockholders' Equity	$	239,299		$	209,626		$	203,409
	Three Months Ended
	September 30,			June 30,			September 30,
	2021			2021			2020
Selected Financial Ratios and Other Data:
Interest rate spread during period		2.85%			2.81%			2.94%
Net yield on interest-earning assets		3.24%			3.30%			3.58%
Non-interest expense, annualized, to average assets		2.85%			3.03%			3.66%
Return on average assets, annualized		1.32%			0.89%			1.05%
Return on average equity, annualized		15.20%			9.84%			10.70%
Average equity to assets		8.71%			9.00%			9.84%
Average Loans	$	141,874		$	143,396		$	143,810
Average Securities		77,954			73,687			46,526
Average Other Interest-Earning Assets		13,491			8,575			10,240
Total Average Interest-Earning Assets		233,319			225,658			200,576
Average Total Assets		236,955			229,379			202,262
Average Noninterest-bearing Deposits	$	38,313		$	36,542		$	32,418
Average Interest-bearing Deposits		170,713			164,399			137,910
Average Total Deposits		209,025			200,941			170,328
Average Wholesale Funding		5,000			6,757			11,498
Average Interest-Bearing Liabilities		175,713			171,156			149,408
Average Interest-Earnings Assets to Average Interest-Bearings Liabilities		132.78%			131.84%			134.25%
Non-performing loans to total loans		0.07%			0.07%			0.00%
Allowance for loan losses to total loans outstanding		1.34%			1.32%			1.18%
Allowance for loan losses to non-performing loans		1830.31%			1791.27%			-
Net loan chargeoffs/(recoveries) to average total loans outstanding		0.00%			0.00%			0.00%
Effective income tax rate		19.26%			6.57%			19.64%
Tangible book value per share	$	18.31		$	17.83		$	16.84
Market closing price at the end of quarter	$	16.75		$	15.01		$	10.17
Price-to-tangible book value		91.49%			84.19%			60.41%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211012005761/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 were Third Century Bancorp's earnings for Q3 2021?

Third Century Bancorp reported a net income of $784,000 for Q3 2021.

How much did Third Century Bancorp's net income increase compared to Q3 2020?

Net income increased by $252,000, or 47.37%, from $532,000 in Q3 2020.

What is the earnings per share for Third Century Bancorp in Q3 2021?

The earnings per share for Q3 2021 were $0.66.

What factors contributed to the increase in net income for Third Century Bancorp in Q3 2021?

The increase was primarily due to a $165,000 increase in net interest income and a $165,000 decrease in non-interest expenses.

How much did total assets increase for Third Century Bancorp by September 30, 2021?

Total assets increased by $29.7 million to $239.3 million, reflecting a 14.16% growth.