Tri-County Financial Group, Inc. Reports Third Quarter 2022 Financial Results

Rhea-AI Summary

Tri-County Financial Group reported a third-quarter net income of $5.6 million ($2.27 per share), up from $4.1 million ($1.64 per share) last year.

Net interest income increased by 5% to $11.8 million, while noninterest income fell 42% to $2.9 million due to reduced mortgage volume. Total loans grew 13% to $1.14 billion, and nonperforming loans decreased to 0.24%. The provision for loan loss was a negative $3.85 million. Deposits declined by 2%, but the investment portfolio surged 79% to $244.3 million.

Positive

• Net income increased by 37% year-over-year.
• Net interest income rose 5%, indicating stable lending performance.
• Total loans increased 13% year-over-year to $1.14 billion.
• Nonperforming loans improved to 0.24% of total loans.
• A negative provision for loan losses of $3.85 million signifies strong asset quality.

Negative

• Noninterest income declined 42%, primarily due to lower mortgage activity.
• Deposits dropped 2%, signaling potential liquidity concerns.

MENDOTA, Ill., Nov. 14, 2022 /PRNewswire/ -- Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced financial results for the third quarter of 2022.

Net income for the third quarter of 2022 was $5.6 million ($2.27 per share), compared to $4.1 million ($1.64 per share) during the third quarter of 2021.

Net interest income was $11.8 million during the quarter ended September 30, 2022, compared to $11.2 million in the same period of 2021, an increase of 5%. The net interest margin was 3.34% for the third quarter of 2022, compared to 3.42% for the third quarter of 2021. 

Noninterest income was $2.9 million for the quarter ended September 30, 2022, a decrease of $2.1 million, or 42%, compared to $5.0 million during the quarter ended September 30, 2021. The decrease can be primarily attributed to lower mortgage volume from the prior year. First State Mortgage had a net loss of $1.2 million as of the third quarter of 2022, compared to net income of $3.2 million at September 30, 2021. 

Noninterest expense was $10.8 million during the quarter ended September 30, 2022, compared to $10.3 million for the third quarter of 2021, an increase of $0.5 million, or 5%.

Total loans increased $132.6 million, or 13%, to $1.14 billion at September 30, 2022, from $1.01 billion at September 30, 2021.  Commercial real estate and agricultural lending activity increased compared to the prior year.  Nonperforming loans as a percent of total loans were 0.24% as of September 30, 2022, down from 0.45% at September 30, 2021.

The provision for loan loss had a negative provision of $3.85 million during the quarter ended September 30, 2022.  The allowance for loan loss ended at $13.13 million at September 30, 2022 and represented 1.17% of gross loans compared to 1.62% at September 30, 2021.  During the beginning of COVID, the provision was increased to account for potential losses and an increase in default payments.  However, asset quality continues to remain strong over two years later and a $4 million negative provision was made in the third quarter to account for the excess in our reserve and as we prepare for the Current Expected Credit Losses (CECL) new accounting standards that will be effective January 1, 2023.

Deposits decreased $26.7 million, or 2%, year-over-year.  The investment portfolio rose $107.7 million or 79% year over year and totaled $244.3 million at September 30, 2022.

The Company's capital levels remain solid as of September 30, 2022, with a Tier 1 leverage ratio of 9.76%, down from 10.13% last year.

On September 13, 2022, the Board of Directors declared a regular dividend of $0.20 per share payable October 13, 2022, to shareholders of record on September 30, 2022.

In announcing the results, President and CEO, Tim McConville, stated "Our third quarter numbers again represented strong earnings performance that we are experiencing in 2022.  Asset quality as measured by nonperforming loans to total loans is stable as we continue to see strong performance and good liquidity with our borrowers. Our commercial and agricultural loan demands have continued to be strong.  We continue to monitor the impact of inflationary pressures, supply chain issues, and staffing shortages on our businesses and consumers.  Overall, we anticipate loan demand to remain strong, and we look forward to supporting the credit needs of our businesses and communities."

Tri-County Financial Group, Inc. is the parent holding company for First State Bank, with offices in Mendota, Batavia, Bloomington, Champaign, Geneva, LaMoille, McNabb, North Aurora, Ottawa, Peru, Princeton, Rochelle, Shabbona, St. Charles, Streator, Sycamore, Waterman and West Brooklyn. First State Bank is the parent company of First State Mortgage, LLC and First State Insurance. Tri-County Financial Group, Inc. shares are quoted under the symbol TYFG and traded on OTCQX.

TRI COUNTY FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTER ENDED SEPTEMBER 30TH
(000s omitted, except share data)
			2022		2021
Interest Income			$    13,716		$    12,739
Interest Expense			1,964		1,499
Net Interest Income			11,752		11,240
Provision for Loan Losses			(3,850)		450
Net Interest Income After Provision for Loan Losses			15,602		10,790
Other Income			2,904		5,018
FDIC Assessments			123		90
Other Expenses			10,686		10,177
Income Before Income Taxes			7,697		5,541
Applicable Income Taxes			2,071		1,476
Security Gains (Losses)			-		-
Net Income (Loss)			$      5,626		$      4,065
Basic Net Income Per Share			$        2.27		$        1.64
Weighted Average Shares Outstanding			2,474,140		2,474,043

** Certain reclassifications have been made to preserve consistency between the periods presented.

 

TRI-COUNTY FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000s omitted, except share data)
ASSETS		9/30/2022		9/30/2021
Cash and Due from Banks		$             28,286		$           159,009
Federal Funds Sold		1,513		17,441
Investment Securities		244,338		136,591
Loans and Leases		1,137,763		1,005,156
Less:  Reserve for Loan Losses		(13,133)		(16,265)
Loans, Net		1,124,630		988,891
Bank Premises & Equipment		27,210		27,247
Intangibles		8,773		8,375
Other Real Estate Owned		145		2,623
Accrued Interest Receivable		6,404		5,893
Other Assets		37,605		33,265
TOTAL ASSETS		$        1,478,904		$        1,379,335
LIABILITIES
Demand Deposits		177,797		166,487
Interest-bearing Demand Deposits		413,281		386,930
Savings Deposits		269,428		277,082
Time Deposits		290,691		347,375
Total Deposits		1,151,197		1,177,874
Repurchase Agreements		27,899		24,272
Fed Funds Purchased		0		0
FHLB and Other Borrowings		149,000		5,000
Interest Payable		160		520
Subordinated Debt		9,779		15,736
Total Repos & Borrowings		186,838		45,528
Other Liabilities		11,056		19,475
Dividends Payable		505		380
TOTAL LIABILITIES		$        1,349,596		$        1,243,257
CAPITAL
Common Stock		2,474		2,470
Surplus		25,082		25,133
Preferred Stock		0		0
Retained Earnings		115,130		105,464
FASB 115 Adjustment		(13,378)		3,011
TOTAL CAPITAL		129,308		136,078
TOTAL LIABILITIES AND CAPITAL		$        1,478,904		$        1,379,335
Book Value Per Share		$              52.27		$              55.10
Tangible Book Value Per Share		$              48.72		$              51.71
Bid Price		$              48.75		$              46.85
Period End Outstanding Shares		2,473,798		2,469,798

 

 

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SOURCE Tri-County Financial Group, Inc.

FAQ

What were Tri-County Financial Group's earnings for Q3 2022?

Tri-County Financial Group reported a net income of $5.6 million for Q3 2022.

How much did Tri-County Financial Group's total loans increase in Q3 2022?

Total loans increased by 13% to $1.14 billion in Q3 2022.

What was the net interest income for Tri-County Financial Group in Q3 2022?

The net interest income was $11.8 million for Q3 2022.

What is the status of Tri-County Financial Group's nonperforming loans?

Nonperforming loans as a percentage of total loans decreased to 0.24%.

Did Tri-County Financial Group declare a dividend in 2022?

Yes, a regular dividend of $0.20 per share was declared, payable on October 13, 2022.