Town and Country Financial Corporation Reports Fourth-Quarter Net Income

SPRINGFIELD, Ill., Feb. 6, 2015 /PRNewswire/ -- Town and Country Financial Corporation (OTC QB: TWCF) reported fourth-quarter core net income of $948 thousand, up 6.6% from earnings in the fourth quarter 2013.  Core net income was $716 thousand in the third quarter of 2014.  Including the dividend paid on preferred stock and income from security gains, net income available to common shareholders was $1.1 million, or $0.40 per share, compared with $0.34 per share in the year-ago period and $0.25 in the third quarter of 2014.

Full year 2014 reported net income was $3.0 million compared with $3.1 million in the prior year.  Earnings per share were $1.06 in 2014 compared with $1.08 in 2013.  Core net income, excluding security gains in both years, was up 3.7% in 2014 as compared with income reported in 2013.

President and Chief Executive Officer, Micah R. Bartlett commented, "2014 was another year of sound achievement for our businesses.   Average commercial loans were up 12% and customers' deposits grew by 3%.  Fee income was down 17% year-over-year primarily due to a 30% decline in mortgage originations.   Noninterest expense was virtually unchanged as expense management and process improvements were embraced as company-wide goals.  In summary, we are proud of our company's performance in 2014 with core earnings that were second only to those reported in 2012 at the height of the mortgage refinance boom.  And I am grateful every day for our employees and managers who contribute to the ongoing success of this company."

Discussion of Fourth Quarter Results

Net revenue was $6.1 million, an increase of 3.1% over the year ago quarter driven by a 2.3% increase in net interest income and security gains that were $286 thousand in the current quarter compared with $133 thousand in the fourth quarter of 2013.  Partially offsetting these higher revenue sources was a 3.1% reduction in noninterest income, primarily mortgage-related.  Compared with the preceding quarter, net revenue was up 7.8% due to mortgage processing fees, an adjustment to the value of the mortgage servicing rights asset, and security gains of $171 thousand compared to no gain in the third quarter.

The tax equivalent net interest margin was 3.30% in the current quarter compared to 3.33% in the year-ago quarter and 3.29% in the third quarter of 2014. 

Noninterest expense increased by 1.0% in the fourth quarter of 2014 as compared to the fourth quarter of 2013, primarily due to expense related to mortgage loans sold.  Noninterest expense declined by 5.5% as compared to the linked quarter, approximately two thirds of the change driven by timing differences and the remaining one third due to cost saving initiatives and a reduction in the level of other real estate owned. 

The provision for loan loss was $75 thousand compared to $175 thousand in the year-ago quarter and $35 thousand in the third quarter.  Net charge offs were 0.01% of average loans in the quarter and virtually unchanged from the year-ago and linked quarter. 

Loans that were past due 30 days or more, including non-accrual loans, totaled 0.50% of loans outstanding at December 31, 2014 compared with 0.76% at December 31, 2013.  The allowance for loan loss was 574% of total non-performing loans and 1.03% of total loans, excluding held for sale, compared with 286% and 1.04%, respectively, at the prior year-end.

At December 31, 2014 total assets were $498 million and total net loans were $354 million compared with $508 million and $348 million, respectively, at December 31, 2013.  Total deposits were $396 million and common equity capital was $43.1 million.  The reported book value was $15.43 per common share compared with $14.20 per share at December 31, 2013.  Tier 1 capital was $54 million, or 10.8% of average assets, while total regulatory capital was $60 million, an estimated 14.7% of risk-weighted assets.

The Board of Directors declared a $0.03 per share quarterly cash dividend payable on March 13, 2015 to stockholders of record March 2, 2015. 

Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town & Country Banc Mortgage Services, Inc. with offices in Buffalo, Decatur, Lincoln, Mt. Zion, Quincy, and Springfield.  Town and Country Financial Corporation shares are quoted under the symbol TWCF.

SOURCE Town and Country Financial Corporation