Third Century Bancorp Releases Earnings for the Quarter and Six-Months Ended June 30, 2021

(OTCPINK: TDCB) - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $508,000 for the quarter ended June 30, 2021, or $0.43 per basic and diluted share, compared to net income of $475,000 for the quarter ended June 30, 2020, or $0.40 per basic and diluted share.

“As we anticipated, this is another quarter of very solid performance. Our earnings and asset growth reflect the result of our team’s efforts as they maintain existing and build new relationships,” indicated David A. Coffey, President and CEO. Coffey also added, “Our strong earnings helped us positively impact shareholder value as the book value of our stock improved to $17.83 per share.”

For the quarter ended June 30, 2021, net income increased $33,000, or 6.94%, to $508,000 as compared to $475,000 for the same period in the prior year. The increase in net income for the three-month period ended June 30, 2021 was driven primarily as a result of the $205,000, or 14.13%, 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 and decreases in average rates paid on liabilities. In addition the increase in net income was supported by a decrease of $135,000, or 75.00%, in provision for loan losses as compared to the same period in the prior year. The increase in net interest income and decreases in provision for loan losses were partially offset by a $321,000, or 32.30%, decrease in non-interest income and a $42,000, or 2.51%. increase in non-interest expense as compared to the same period in the prior year. The decrease in non-interest income was driven primarily by a $252,000 or 46.50%, 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. The increase in non-interest expense was driven primarily by a $61,000, or 5.62%, increase in personnel expenses as compared to the same period in the prior year.

The $135,000 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 net loan recoveries of $2,000 during the quarter ended June 30, 2021 compared to net loan recoveries of $4,000 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 six-months ended June 30, 2021, net income decreased $6,000, or 0.69%, to $922,000 as compared to $928,000 for the six-months ended June 30, 2020. The decrease in net income for the six-month period ended June 30, 2021 was driven primarily as a result of the $271,000, or 8.41%, increase in non-interest expense. The increase in non-interest expense was driven primarily by a $82,000, or 4.08% increase in personnel expenses as compared to the same six-month period in the prior year. The decrease in non-interest income was driven primarily by a $169,000, or 20.14%, decrease in gains on the sale of one-to-four family residential mortgage loans sold to Freddie Mac as compared to the same six-month period in the prior year. The increase in non-interest expense and decrease in non-interest income for the six-month period ended June 30, 2021 was mostly offset by an increase in net interest income of $235,000, or 7.84% as compared to the same six-month period ended 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 for the six-months ended June 30, 2021. In addition, the provision for loan losses decreased $95,000, or 51.35%, for the six-month period ended June 30, 2021. The increase in net interest income and decreases in provision for loan losses were partially offset by a $168,000, or 10.98% decrease in non-interest income as compared to the six-month period in the prior year.

The decrease in net income for the six-months ended June 30, 2021 was also partially offset by a $103,000 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 8.14% for the six-months ended June 30, 2021 from 16.62% for the same period in the prior year.

Total assets increased $20.9 million to $230.6 million at June 30, 2021 from $209.6 million at December 31, 2020, an increase of 9.99%. The increase was primarily due to a $17.6 million, or 29.73%, increase in investment securities, available-for-sale, primarily funded by a $26.1 million, or 14.77%, increase in total deposits. Total deposits were $203.2 million at June 30, 2021, up from $177.1 million as of December 31, 2020. Federal Home Loan Bank advances were $5.0 million at June 30, 2021 as compared to $11.7 million at December 31, 2020. At June 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 4.8 years at June 30, 2021 compared to 3.5 years at December 31, 2020. Total loans held-for-investment grew to $141.8 million at June 30, 2021 from $138.8 million at December 31, 2020, an increase of 2.17%.

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 $394,000 remained on the Company’s balance sheet as of June 30, 2021. The Company originated $4.6 million of PPP loans in the program in 2021, of which $3.6 million remained on the Company’s balance sheet as of June 30, 2021. As of June 30, 2021, a total of $3.9 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 June 30, 2021 from $1.8 million at December 31, 2020. The increase was primarily due to the provision for loan losses of $90,000 due to the economic conditions resulting from the COVID-19 pandemic. The allowance for loan losses totaled 1.32% of total loans as of June 30, 2021 as compared to 1.29% of total loans as of December 31, 2020. Nonperforming loans totaled $105,000 or 0.07% of total loans as of June 30, 2021 as compared to $111,000 or 0.08%, of total loans as of December 31, 2020.

Stockholders’ equity was $21.1 million at June 30, 2021, up from $20.5 million at December 31, 2020. Stockholders’ equity increased by $643,000 during the six-months ended June 30, 2021 as a result of net income of $922,000, offset by a decrease in net unrealized gain of $119,000 of available-for-sale securities due to the increase in market interest rates. These changes in stockholders’ equity were also offset by dividends of $102,000, repurchased stock of $91,000 and stock awards of $33,000. Equity as a percentage of assets decreased to 9.21% at June 30, 2021 compared to 9.76% at December 31, 2020.

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

 

Six Months Ended

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

2021

 

2021

 

2020

 

2021

 

2020

Selected Consolidated Earnings Data:
Total Interest Income

$

1,862

 

$

1,795

 

$

1,718

 

$

3,657

 

$

3,582

 

Total Interest Expense

 

208

 

 

219

 

 

269

 

 

427

 

 

587

 

Net Interest Income

 

1,654

 

 

1,576

 

 

1,449

 

 

3,230

 

 

2,995

 

Provision for Losses on Loans

 

45

 

 

45

 

 

180

 

 

90

 

 

185

 

Net Interest Income after Provision for Losses on Loans

 

1,609

 

 

1,531

 

 

1,269

 

 

3,140

 

 

2,810

 

Non-interest Income

 

673

 

 

690

 

 

994

 

 

1,363

 

 

1,531

 

Non-interest Expense

 

1,738

 

 

1,761

 

 

1,696

 

 

3,499

 

 

3,228

 

Income Tax Expense

 

36

 

 

46

 

 

92

 

 

82

 

 

185

 

Net Income

$

508

 

$

414

 

$

475

 

$

922

 

$

928

 

 
Earnings per basic and diluted share

$

0.43

 

$

0.35

 

$

0.40

 

$

0.78

 

$

0.78

 

 
 
Condensed Consolidated Balance Sheet
(unaudited, except for periods ended on or before December 31, 2020)
In thousands, except per share data
 

June 30,

December 31,

June 30,

2021

2020

2020

Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks

$

3,784

 

$

4,888

 

$

8,930

 

Investment Securities, Available-for-sale, at fair value

 

76,920

 

 

59,292

 

 

46,289

 

Loans Held-for-Sale

 

1,360

 

 

434

 

 

1,925

 

Loans Held-for-Investment

 

141,845

 

 

138,834

 

 

138,210

 

Allowance for Loan Losses

 

1,885

 

 

1,791

 

 

1,638

 

Net Loans

 

141,321

 

 

137,477

 

 

138,497

 

Accrued Interest Receivable

 

794

 

 

686

 

 

581

 

Other Assets

 

7,757

 

 

7,283

 

 

7,881

 

Total Assets

$

230,576

 

$

209,626

 

$

202,178

 

 
Liabilities
Noninterest-bearing Deposits

$

35,826

 

$

32,049

 

$

31,755

 

Interest-bearing Deposits

 

167,446

 

 

145,069

 

 

133,724

 

Total Deposits

 

203,271

 

 

177,118

 

 

165,478

 

FHLB Advances

 

5,000

 

 

11,705

 

 

15,750

 

Accrued Interest Payable

 

35

 

 

54

 

 

81

 

Accrued Expenses and Other Liabilities

 

1,151

 

 

274

 

 

1,313

 

Total Liabilities

 

209,458

 

 

189,151

 

 

182,622

 

Stockholders' Equity - Net

 

21,118

 

 

20,475

 

 

19,556

 

Total Liabilities and Stockholders' Equity

$

230,576

 

$

209,626

 

$

202,178

 

 
 

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2021

2021

2020

2021

2020

Selected Financial Ratios and Other Data:
Interest rate spread during period

 

2.81

%

 

2.81

%

 

2.87

%

 

2.83

%

 

3.09

%

Net yield on interest-earning assets

 

3.30

%

 

3.36

%

 

3.61

%

 

3.35

%

 

3.93

%

Non-interest expense, annualized, to average assets

 

3.03

%

 

3.30

%

 

3.47

%

 

3.14

%

 

3.46

%

Return on average assets, annualized

 

0.89

%

 

0.78

%

 

0.97

%

 

0.83

%

 

0.99

%

Return on average equity, annualized

 

9.84

%

 

7.98

%

 

10.15

%

 

8.91

%

 

10.15

%

Average equity to assets

 

9.00

%

 

9.72

%

 

9.58

%

 

9.27

%

 

9.80

%

 
Average Loans

$

143,396

 

$

141,716

 

$

138,687

 

$

142,105

 

$

134,084

 

Average Securities

 

73,687

 

 

60,750

 

 

40,274

 

 

66,438

 

 

38,539

 

Average Other Interest-Earning Assets

 

8,575

 

 

10,941

 

 

11,187

 

 

9,472

 

 

9,692

 

Total Average Interest-Earning Assets

 

225,658

 

 

213,407

 

 

190,148

 

 

218,015

 

 

182,315

 

Average Total Assets

 

229,379

 

 

213,453

 

 

195,459

 

 

223,246

 

 

186,580

 

 
Average Noninterest-bearing Deposits

$

36,542

 

$

36,637

 

$

31,502

 

$

36,244

 

$

28,239

 

Average Interest-bearing Deposits

 

164,399

 

 

149,954

 

 

127,609

 

 

156,095

 

 

125,393

 

Average Total Deposits

 

200,941

 

 

186,591

 

 

159,111

 

 

192,339

 

 

153,632

 

Average Wholesale Funding

 

6,757

 

 

7,916

 

 

16,692

 

 

7,413

 

 

13,816

 

Average Interest-Bearing Liabilities

 

171,156

 

 

157,870

 

 

144,301

 

 

163,509

 

 

139,209

 

 
Average Interest-Earnings Assets to Average Interest-Bearings Liabilities

 

131.84

%

 

135.18

%

 

131.77

%

 

133.34

%

 

130.96

%

Non-performing loans to total loans

 

0.07

%

 

0.08

%

 

0.08

%

 

0.07

%

 

0.08

%

Allowance for loan losses to total loans outstanding

 

1.32

%

 

1.29

%

 

1.17

%

 

1.32

%

 

1.17

%

Allowance for loan losses to non-performing loans

 

1791.27

%

 

1701.85

%

 

1531.20

%

 

1791.27

%

 

1531.20

%

Net loan chargeoffs/(recoveries) to average total loans outstanding

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.02

%

Effective income tax rate

 

6.57

%

 

10.00

%

 

16.23

%

 

8.14

%

 

16.62

%

Tangible book value per share

$

17.83

 

$

16.80

 

$

16.40

 

$

17.83

 

$

16.40

 

Market closing price at the end of quarter

$

15.01

 

$

14.20

 

$

9.90

 

$

15.01

 

$

9.90

 

Price-to-tangible book value

 

84.19

%

 

84.54

%

 

60.35

%

 

84.19

%

 

60.35

%

 

Contacts

David A. Coffey, President and CEO

Ryan W. Cook, Senior Vice President and CFO

Tel. 317-736-7151 Fax 317-736-1726

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