Third Century Bancorp Releases Unaudited Earnings for the Quarter and Six-months Ended June 30, 2022

Rhea-AI Summary

Third Century Bancorp (TDCB) reported net income of $574,000 for Q2 2022, up from $508,000 for Q2 2021, translating to $0.50 per basic share. This increase was driven by a $306,000 rise in net interest income, largely from a 20.73% uptick in interest income due to asset growth. However, non-interest income dropped by $302,000, largely from a 42.40% decrease in the gain on sold mortgages. Total assets grew by 12.90% to $272.7 million. Stockholders’ equity fell to $8.7 million, impacted by $13.5 million in unrealized losses from securities.

Positive

• Net income for Q2 2022 increased by 12.99% to $574,000 compared to Q2 2021.
• Net interest income rose by 18.50% to $306,000 due to increased interest income from asset growth.
• Total assets increased 12.90% to $272.7 million.

Negative

• Non-interest income decreased by 22.16%, primarily from a 42.40% drop in gains from mortgage sales.
• Stockholders’ equity declined by $12.7 million due to unrealized losses on securities.
• Total equity as a percentage of assets decreased to 3.18% from 8.91%.

FRANKLIN, Ind.--(BUSINESS WIRE)-- (OTCPINK: TDCB)--Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $574,000 for the quarter ended June 30, 2022, or $0.50 per basic share and $0.49 per diluted share, compared to net income of $508,000 for the quarter ended June 30, 2021, or $0.43 per basic and diluted share.

David A. Coffey, President and CEO stated, “We often note that when one area of loan demand slows, other areas increase. This is what continued to occur during the last three months. Commercial loan activity was terrific.” Coffey continued, “While we continue to see strong growth, our overall strong capital levels position us to continue to take advantage of opportunities in our market.”

For the quarter ended June 30, 2022, net income increased $66,000, or 12.99%, to $574,000 as compared to $508,000 for the same period in the prior year. The increase in net income for the three-month period ended June 30, 2022 was driven primarily as a result of the $306,000, or 18.50%, increase in net interest income as compared to the same period in the prior year. The increase in net interest income was due primarily to a $386,000, or 20.73%, increase in interest income as compared to the same period in the prior year due to growth in average assets. The increase in interest income was partially offset by an $80,000, or 38.46%, increase in interest expense as compared to the same period in the prior year.

The increase in net income for the quarter ended June 30, 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 since the beginning of the COVID-19 pandemic. The Company had net charge-offs during the quarter ended June 30, 2022 of $2,000 and a net recovery during the quarter ended June 30, 2021 of $2,000.

For the six-months ended June 30, 2022, net income increased $19,000, or 2.06%, to $941,000 as compared to $922,000 for the six-months ended June 30, 2021. The increase in net income for the six-month period ended June 30, 2022 was driven primarily as a result of the $479,000, or 14.83%, increase in net interest income as compared to the same six-month period in the prior year. The increase in net interest income was driven primarily by a $542,000, or 14.82%, increase in interest income as compared to the same six-month period in the prior year due to growth in average assets. This was partially offset by a $63,000, or 14.75%, increase in interest expense as compared to the same six-month period in the prior year. The increase in net income for the six-month period ended June 30, 2022 was partially offset by a $302,000, or 22.16%, decrease in non-interest income as compared to the same six-month period ended in the prior year. The decrease in non-interest income was primarily due to a $285,000, or 42.40%, decrease in the gain on sale of one-to-four family mortgages sold to Freddie Mac, as compared to the same six-month period in the prior year. Net income was also impacted by a $264,000, or 7.55%, increase in non-interest expense as compared to the same six-month period in the prior year. In addition, the provision for loan losses decreased $90,000, or 100.00%, for the six-month period ended June 30, 2022 as compared to the same six-month period in the prior year due to improving economic conditions.

The increase in net income for the six-months ended June 30, 2022 was also partially supported by a $16,000 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 6.55% for the six-months ended June 30, 2022 from 8.14% for the same period in the prior year.

Total assets increased $31.1 million to $272.7 million at June 30, 2022 from $241.6 million at December 31, 2021, an increase of 12.90%. The increase was primarily due to a $22.2 million, or 15.42%, increase in loans held-for-investment to $166.1 million at June 30, 2022. This increase was primarily funded by a $21.5 million, or 10.06%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the year. Total deposits were $236.2 million at June 30, 2022, up from $214.7 million as of December 31, 2021. Federal Home Loan Bank advances were $17.5 million at June 30, 2022 as compared to $5.0 million at December 31, 2021. At June 30, 2022, the weighted average rate of all Federal Home Loan Bank advances was 1.81% compared to 1.45% at December 31, 2021, and the weighted average maturity was 0.1 years at June 30, 2022 compared to 4.3 years at December 31, 2021.

The allowance for loan losses remained the same at $1.9 million at June 30, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.13% of total loans as of June 30, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $46,000, or 0.03%, of total loans as of June 30, 2022 as compared to $237,000 or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $8.7 million at June 30, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $12.7 million during the six-months ended June 30, 2022 as a result of an increase in net unrealized loss of $13.5 million of available-for-sale securities due to the significant increase in market interest rates, partially offset by net income of $941,000. The decrease in stockholders’ equity was also impacted by repurchased stock of $176,000 and stock awards of $3,000. Equity as a percentage of assets decreased to 3.18% at June 30, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended June 30, 2022, the Company repurchased 10,000 shares of common stock at an average cost of $17.51 per share pursuant to the Company’s stock repurchase program. At June 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, except for periods ended on or before December 31, 2021)
In thousands, except per share data
		Three Months Ended									Six Months Ended
		June 30,			March 31,			June 30,			June 30,			June 30,
		2022			2022			2021			2022			2021
Selected Consolidated Earnings Data:
Total Interest Income		$	2,248		$	1,951		$	1,862		$	4,199		$	3,657
Total Interest Expense			288			202			208			490			427
Net Interest Income			1,960			1,749			1,654			3,709			3,230
Provision for Losses on Loans			-			-			45			-			90
Net Interest Income after Provision for Losses on Loans			1,960			1,749			1,609			3,709			3,140
Non-interest Income			569			493			673			1,061			1,363
Non-interest Expense			1,907			1,856			1,738			3,763			3,499
Income Tax Expense			48			18			36			66			82
Net Income		$	574		$	367		$	508		$	941		$	922
Earnings per share - basic		$	0.50		$	0.31		$	0.43		$	0.81		$	0.78
Earnings per share - diluted		$	0.49		$	0.31		$	0.43		$	0.81		$	0.78

Condensed Consolidated Balance Sheet
(unaudited, except for periods ended on or before December 31, 2021)
In thousands, except per share data
		June 30,				December 31,				June 30,
		2022				2021				2021
Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks		$	6,849			$	4,857			$	3,784
Investment Securities, Available-for-sale, at fair value			85,353				84,661				76,920
Loans Held-for-Sale			237				738				1,360
Loans Held-for-Investment			166,117				143,927				141,845
Allowance for Loan Losses			1,879				1,881				1,885
Net Loans			164,475				142,784				141,321
Accrued Interest Receivable			617				760				794
Other Assets			15,428				8,499				7,757
Total Assets		$	272,722			$	241,561			$	230,576
Liabilities
Noninterest-bearing Deposits		$	44,662			$	40,988			$	35,826
Interest-bearing Deposits			191,583				173,666				167,446
Total Deposits			236,245				214,654				203,271
FHLB Advances			17,486				5,000				5,000
Subordinated Notes			9,717				-				-
Accrued Interest Payable			190				32				35
Accrued Expenses and Other Liabilities			408				342				1,151
Total Liabilities			264,046				220,028				209,458
Stockholders' Equity - Net			8,676				21,533				21,118
Total Liabilities and Stockholders' Equity		$	272,722			$	241,561			$	230,576
		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2022				2022				2021				2022				2021
Selected Financial Ratios and Other Data:
Interest rate spread during period			2.80	%			2.73	%			2.81	%			2.77	%			2.83	%
Net yield on interest-earning assets			3.35	%			3.16	%			3.30	%			3.26	%			3.35	%
Non-interest expense, annualized, to average assets			2.81	%			2.92	%			3.03	%			2.86	%			3.14	%
Return on average assets, annualized			0.85	%			0.58	%			0.89	%			0.72	%			0.83	%
Return on average equity, annualized			11.31	%			7.23	%			9.84	%			9.09	%			8.91	%
Average equity to assets			7.48	%			7.98	%			9.00	%			7.86	%			9.27	%
Average Loans		$	160,977			$	146,384			$	143,396			$	153,721			$	142,105
Average Securities			98,897				87,430				73,687				93,195				66,438
Average Other Interest-Earning Assets			8,263				13,275				8,575				10,755				9,472
Total Average Interest-Earning Assets			268,137				247,089				225,658				257,671				218,015
Average Total Assets			271,358				254,402				229,379				263,206				223,246
Average Noninterest-bearing Deposits		$	41,023			$	43,889			$	36,542			$	42,448			$	36,244
Average Interest-bearing Deposits			193,410				178,946				164,399				186,218				156,095
Average Total Deposits			234,433				222,835				200,941				228,666				192,339
Average Wholesale Funding			16,068				9,171				6,757				12,639				7,413
Average Interest-Bearing Liabilities			209,478				188,117				171,156				198,857				163,509
Average Interest-Earnings Assets to Average Interest-Bearings Liabilities			128.00	%			131.35	%			131.84	%			129.58	%			133.34	%
Non-performing loans to total loans			0.03	%			0.04	%			0.07	%			0.03	%			0.07	%
Allowance for loan losses to total loans outstanding			1.13	%			1.24	%			1.32	%			1.13	%			1.32	%
Allowance for loan losses to non-performing loans			4084.78	%			3300.00	%			1791.27	%			4084.78	%			1791.27	%
Net loan chargeoffs/(recoveries) to average total loans outstanding			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Effective income tax rate			7.72	%			4.68	%			6.57	%			6.55	%			8.14	%
Tangible book value per share		$	7.43			$	14.05			$	17.83			$	7.53			$	17.83
Market closing price at the end of quarter		$	13.92			$	17.55			$	15.01			$	13.92			$	15.01
Price-to-tangible book value			187.42	%			124.92	%			84.19	%			184.76	%			84.19	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220728006038/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 in Q2 2022?

Third Century Bancorp reported a net income of $574,000 for Q2 2022.

How much did net interest income increase in Q2 2022 for TDCB?

Net interest income increased by $306,000, or 18.50%, in Q2 2022.

What were the total assets of TDCB as of June 30, 2022?

Total assets were $272.7 million as of June 30, 2022.

How did stockholders’ equity change for TDCB in the first half of 2022?

Stockholders’ equity decreased to $8.7 million, down from $21.5 million at the end of 2021.

What was the impact of interest rates on Third Century Bancorp's financials?

The increase in market interest rates led to a significant unrealized loss of $13.5 million on available-for-sale securities.