Tri-County Financial Group, Inc. Reports First Quarter 2021 Financial Results

MENDOTA, Ill., April 28, 2021 /PRNewswire/ -- Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced financial results for the first quarter of 2021.

Net income for the first quarter of 2021 was $3.6 million ($1.47 per share), compared to $3.2 million ($1.30 per share) during the first quarter of 2020.

Net interest income was $10.2 million during the three months ended March 31, 2021, compared to $8.7 million for the three months ended March 31, 2020, an increase of 17%. The net interest margin was 3.65% in 2021, and 3.30% in 2020.

Noninterest income was $6.0 million for the three months ended March 31, 2021, an increase of $0.6 million, or 11%, compared to $5.4 million during the three months ended March 31, 2020. The increase can be primarily attributed to growth in mortgage banking fees from the prior year. First State Mortgage net income increased by $0.7 million compared to the first quarter of 2021.

Noninterest expense was $10.7 million during the three months ended March 31, 2021, compared to $9.5 million for the three months ended March 31, 2020, an increase of $1.2 million, or 13%. The increase is related to increased mortgage banking activity, expenses related to the Bank's core processing conversion to Fiserv Premier and the acquisition of HF Gehant Bank in mid-March 2020.

Total loans decreased $13.5 million, or 1%, to $1.01 billion from $1.02 billion at March 31, 2020. There were $44 million in Paycheck Protection Plan (PPP) loans included in loan balances at March 31, 2021 compared to none the prior year quarter end. Non-agricultural business loan demand decreased sharply due to the pandemic impact, while portfolio mortgage and home equity loans declined as many were refinanced and sold into the secondary market due to historically low rates. Offsetting some of the decline was a strong increase in agricultural lending activity at March 31, 2021 compared to the prior year. Nonperforming loans as a percent of total loans were 0.55% as of March 31, 2021, up slightly from .53% at March 31, 2020.

The provision for loan loss was decreased slightly as asset quality has remained stable, despite the COVID-19 pandemic. The Company has taken $450,000 during the first quarter of 2021, a decrease of $100,000 over the prior year period. The allowance for loan loss ended at $15.4 million at March 31, 2021 and represented 1.53% of gross loans compared to 1.30% at March 31, 2020.

Deposits increased $182.1 million, or 18%, year-over-year, with much of the growth due to CARES Act economic relief programs and PPP funding.  As a result, total borrowed money decreased significantly at March 31, 2021, ending at $41.8 million, compared to $79.4 million at March 31, 2020. The investment portfolio increased $20.5 million or 20% year over year and totaled $122 million at March 31, 2021 due to the significant increase in deposits and excess liquidity.

The Company's capital levels remain solid as of March 31, 2021, with a Tier 1 leverage ratio of 8.81%, unchanged from last year at March 31, 2020, and a total risk-based ratio of 14.89%, compared to 13.07% at March 31, 2020. PPP lending did not impact risk-based capital ratios at quarter end 2021 due to the SBA guarantee which assigns a 0% risk-weighting to these loans.

On March 17, 2021, the Board of Directors declared a regular dividend of $0.15 per share payable April 15, 2021, to shareholders of record as of March 31, 2021.

In announcing the results, President and Chief Executive Officer, Tim McConville, stated "Our first quarter numbers showed continued improvement with net income up 13% from last year. Mortgage activity continues to favorably impact performance. Total mortgage production this year through March 31 totaled $236 million, up from $103 million in the prior year first quarter.  Asset quality as measured by nonperforming loans to total loans is stable as we continue to monitor the impact of COVID-19. As the economy opens back up, we expect to see business and consumer loan demand return to more normal levels later this year which will allow us to put some excess liquidity back to work."

Tri-County Financial Group, Inc. is the parent holding company for First State Bank, with offices in Mendota, Batavia, Bloomington, 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.

SOURCE Tri-County Financial Group, Inc.