Town and Country Financial Corporation Reports Record First Quarter 2022 Financial Results

Rhea-AI Summary

Town and Country Financial Corporation (TWCF) announced a record net income of $3.9 million ($1.37 per share) for Q1 2022, up from $2.8 million ($0.99 per share) in Q1 2021. The ROTCE improved to 19.92%, compared to 16.29% a year earlier. Despite challenges from rising interest rates and a 3.1% decline in tangible book value per share, total assets increased to $896.8 million. The company declared a dividend of $0.14 per share, further illustrating strong performance amid industry headwinds. Nonperforming loans improved to 0.77% of total loans.

Positive

• Record Q1 2022 net income of $3.9 million ($1.37 per share), up 39.3% YoY.
• Return on Tangible Common Equity (ROTCE) increased to 19.92%, from 16.29% YoY.
• Dividend declared at $0.14 per share, reflecting strong fiscal performance.
• Total assets rose to $896.8 million, an increase of $16.6 million YoY.
• Nonperforming loans as a percentage of total loans decreased to 0.77%.

Negative

• Tangible book value per share decreased by 3.1% during Q1 2022.
• Commercial loan demand remains challenging across the industry.
• Total mortgage revenue was flat compared to Q1 2021.

SPRINGFIELD, Ill., May 02, 2022 (GLOBE NEWSWIRE) -- Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the first quarter of 2022 with record net income.

Key highlights included:

• First quarter 2022 net income of $3.9 million or $1.37 per share, compared to $2.8 million or $0.99 per share in the first quarter of 2021.
• Return on Tangible Common Equity (ROTCE) of 19.92% for the quarter-to-date period ending March 31, 2022, compared to 16.29% in the same quarter of 2021.
• Dividend declared of $0.14 per share.
  

Micah R. Bartlett, President and Chief Executive Officer, noted, “We are extremely proud to report our strongest first quarter ever. Our results reflect our excellent asset quality, well positioned balance sheet, and balanced business model based on our core focus of commercial banking and mortgage lending. The steep rise in interest rates during the quarter presented challenges for most banks who hold investment securities based on the accounting practice of marking available-for-sale securities to market. As a result, the company’s tangible book value per share decreased by 3.1% during the first quarter which is a level significantly better than the industry average. Despite challenges in the mortgage business inherent in a rising rate environment, our first quarter performance reflects the balance between the production and servicing aspects of our successful mortgage business. While commercial loan demand continues to be a challenge across the industry, we remain optimistic based on our team of relationship bankers, the deep connections we have with our customers, and the advancements we have made in our SBA business.”

The Company recorded first quarter 2022 net income of $3.9 million ($1.37 per share), compared to $2.8 million ($0.99 per share) in the first quarter of 2021. First quarter 2022 net income includes a negative provision for loan losses of $500 thousand ($357 thousand after-tax), compared to a $600 thousand ($429 thousand after-tax) positive provision for loan losses in the first quarter of 2021. Total mortgage revenue in the first quarter was roughly flat compared to the first quarter of 2021. While 2021 first quarter results reflected relatively strong production volume, the first quarter of 2022 reflected a $2.3 million ($1.6 million after-tax) positive adjustment to the carrying value of mortgage servicing rights.

Total assets at March 31, 2022 were $896.8 million, up $16.6 million, when compared to $880.2 million as of March 31, 2021. The change was due to an increase in the investment portfolio of $53.3 million and a $30.7 million decrease in loans, primarily driven by $40.1 million in Paycheck Protection Program loan forgiveness. First Quarter 2022 loan balances decreased $25.9 million when compared to December 31, 2021, which was a result of $5.1 million in PPP forgiveness and lower commercial loan demand.

Total deposits were $772.6 million at March 31, 2022, an increase of $34.9 million from March 31, 2021, and a decrease of $7.4 million when compared to December 31, 2021. The year over year increase was driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. At the end of the first quarter in 2022, total borrowed money was $22.8 million compared to $42.0 million at end of the first quarter in 2021. This reduction was primarily due to the paydown of Federal Home Loan Bank advances as a result of liquidity.

Net interest income was $6.7 million for the quarter ending March 31, 2022, roughly flat with the quarter ending March 31, 2021. The net interest margin for the first quarter of 2022 was 3.34% down slightly when compared to 3.36% in the first quarter of 2021.

Noninterest income was $5.1 million in the first quarter of 2022, an increase of $395 thousand when compared to $4.7 million in the first quarter of 2021. A $2.3 million valuation adjustment was taken in response to the rise in interest rates which increases the value of the mortgage servicing rights that are held on the Company’s books. This offset the lower gains on sale of mortgages compared to the first quarter of 2021. The first quarter 2022 noninterest expense of $7.0 million was down slightly from $7.1 million for the first quarter 2021.

The Company’s nonperforming loans as a percentage of total loans were 0.77% as of March 31, 2022, compared to 1.03% as of March 31, 2021. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.32% as of March 31, 2022 and 0.49% as of March 31, 2021.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 10.37% and a total risk-based ratio of 14.90% as of March 31, 2022. The tier 1 leverage ratio was 9.50% and the total risked-based ratio was 14.19% as of March 31, 2021.

On April 28, 2022, the board of directors declared a $0.14 per share cash dividend payable June 15, 2022, to shareholders of record as of June 1, 2022. The company’s book value per share was $29.05 at March 31, 2022, down from $29.93 as of December 31, 2021. Tangible book value per share was $26.74 at March 31, 2022, compared to $27.60 at December 31, 2021, a 3% decrease due to the change in unrealized market value of the investment portfolio.

Town and Country Financial Corporation, headquartered in Springfield, Illinois, operates as the parent holding company for Town and Country Bank including the Bank's subsidiary, Town and Country Banc Mortgage Services, Inc. (TCBMSI), with locations throughout the central, west-central, and metro-east areas of Illinois. While the Company specializes in commercial banking and mortgage lending, additional products and services offered through its 10 branch offices include retail banking, affordable housing finance options, Small Business Administration 504 and 7(a) loan programs, trust and investments, and agricultural banking. The Company, under TCBMSI, operates Community Mortgage Partners as a third-party provider for residential mortgages to other financial institutions throughout the United States. Town and Country Financial Corporation shares are quoted under the symbol TWCF.

Contact:	Denise Skiles, Vice President and Controller
	dskiles@townandcountrybank.com
	217-321-3425

Financial Highlights
(Unaudited)
CONSOLIDATED STATEMENT OF CONDITION
As of the dates indicated:		March 31, 2022			December 31, 2021				March 31, 2021
ASSETS
Cash and due from banks		$	54,200,518		$		70,154,840		$		65,426,430
Investments			179,083,850				151,703,226				125,773,520
Loans held for sale			3,453,149				2,840,208				3,749,938
Loans			605,938,918				631,820,690				636,668,960
Less: Allowance for loan losses			(9,685,542	)			(10,183,297	)			(10,779,869	)
Net loans			596,253,376				621,637,393				625,889,091
Other assets			63,841,942				60,691,674				59,367,713
Total assets		$	896,832,835		$		907,027,341		$		880,206,692
LIABILITIES & EQUITY
Deposits		$	772,609,709		$		780,014,371		$		737,722,498
Borrowed money			22,841,636				21,903,136				42,015,500
Other liabilities			4,647,559				5,901,105				8,138,871
Total liabilities			800,098,904				807,818,612				787,876,869
Jr. subordinated debt of unconsolidated subsidiaries			14,149,627				14,136,451				14,096,921
Equity capital			82,584,304				85,072,278				78,232,902
Total liabilities & equity		$	896,832,835		$		907,027,341		$		880,206,692
CONSOLIDATED INCOME STATEMENT
					Three Months Ended
					March 31,
							2022				2021
Interest income					$		7,077,988		$		7,447,932
Interest expense							390,487				728,715
Net interest income							6,687,501				6,719,217
Provision for loan losses							(500,000	)			600,000
Noninterest income							5,106,914				4,711,477
Noninterest expense							7,016,489				7,061,229
Income before income taxes							5,277,926				3,769,465
Income taxes							1,395,010				961,150
Net income					$		3,882,916		$		2,808,315
Financial Highlights
(Unaudited)
Selected Highlights:
					Three Months Ended
					March 31,
							2022				2021
Basic earnings per share						$	1.37			$	0.99
Net charge offs to average loans less HFS							0.00	%			-0.01	%
Net revenue (in 000s)						$	11,794			$	11,431
Net interest margin							3.34	%			3.36	%
Fees from mortgage banking activities (in 000s)						$	3,568			$	3,806
Return on common equity							18.39	%			14.84	%
Return on tangible common equity							19.92	%			16.29	%
Return on assets							1.74	%			1.27	%
Balance Sheet Ratios
(Dollars in thousands, except per share data)AS of the dates indicated:		March 31, 2022			December 31, 2021				March 31, 2021
Book value per common share		$	29.05		$		29.93		$		27.50
Tangible book value per common share		$	26.74		$		27.60		$		25.11
Tangible Equity Capital Ratio			8.54	%			8.71	%			8.18	%
Tier 1 leverage ratio (Bank only)			10.37	%			10.07	%			9.50	%
Total risk-based capital ratio (Bank only)			14.90	%			14.69	%			14.19	%
Nonperforming loans, excluding government guarantee			0.32	%			0.36	%			0.49	%
Delinquent loans, excluding nonperforming			0.56	%			0.33	%			0.44	%
Allowance for loan loss			1.60	%			1.61	%			1.69	%
Coverage ratio (allowance to NPLs)			207	%			206	%			163	%
Mortgage loans sold with servicing retained (in 000s)		$	852,732		$		868,966		$		865,744
Trust assets under management (in 000s)		$	170,336		$		170,209		$		177,147
HOLDING COMPANY ONLY STATEMENT OF CONDITION
As of the dates indicated:		March 31, 2022			December 31, 2021				March 31, 2021
ASSETS
Cash and other assets		$	7,541,011		$		7,244,031		$		5,466,696
Investment in Town and Country Bank			95,220,172				98,343,923				93,842,803
Total assets		$	102,761,183		$		105,587,954		$		99,309,499
LIABILITIES & EQUITY
Other liabilities		$	499,752		$		684,225		$		782,176
Borrowings			5,527,500				5,695,000				6,197,500
Jr. subordinated debt of unconsolidated subsidiaries			14,149,627				14,136,451				14,096,921
Equity capital			82,584,304				85,072,278				78,232,902
Total liabilities & equity		$	102,761,183		$		105,587,954		$		99,309,499

FAQ

What were the financial results of Town and Country Financial Corporation (TWCF) for Q1 2022?

TWCF reported a net income of $3.9 million ($1.37 per share) for Q1 2022, a significant increase from $2.8 million ($0.99 per share) in Q1 2021.

How did the Return on Tangible Common Equity (ROTCE) change for TWCF in Q1 2022?

The ROTCE for Q1 2022 was 19.92%, an improvement from 16.29% in the same quarter of 2021.

What dividend did TWCF declare after the first quarter of 2022?

TWCF declared a cash dividend of $0.14 per share, payable on June 15, 2022.

What was the total assets figure for TWCF at the end of Q1 2022?

Total assets for TWCF reached $896.8 million as of March 31, 2022.

What was the status of nonperforming loans for TWCF in Q1 2022?

Nonperforming loans as a percentage of total loans decreased to 0.77% as of March 31, 2022, down from 1.03% a year earlier.