FRANKLIN, Ind.--(BUSINESS WIRE)--OTCPINK: TDCB - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded unaudited net income of $262,000 for the quarter ended September 30, 2024, or $0.22 per basic and diluted share, compared to net income of $271,000 for the quarter ended September 30, 2023, or $0.23 per basic and diluted share.
“Our Third Century Bancorp financial performance for 2024 is on track with where we planned. We anticipated continued pressure on the net interest margin due to higher funding costs,” stated David A. Coffey, President and CEO. “With the FED action to lower the FED Funds target, we anticipate this translating in a positive way to our income statement.” Coffey concluded, “The Johnson County market is very competitive and has always been. However, as the only community bank located in Johnson County, Indiana, we feel our growth opportunities for the remainder of 2024 are pretty solid and will provide a positive outlook for the remainder of the year.”
For the quarter ended September 30, 2024, net income decreased $9,000, or 3.39%, to $262,000 as compared to $271,000 for the same period in the prior year. Net interest income increased to $2.0 million for the three months ended September 30, 2024, due to an increase in total interest income of $529,000, or 15.14%, to $4,021,000 for the three-month period ended September 30, 2024, as compared to $3,492,000 for the same period for the prior year. The increase in total interest income was due to an increase in average loan balances as well as higher average yields on interest earning assets. Offsetting the increase in total interest income was an increase in total interest expense of $511,000, or 33.44%, to $2,040,000 for the three-month period ended September 30, 2024, compared to $1,529,000 for the same period for the prior year. The increase in total interest expense was the result of higher fundings costs of retail deposits. The provision reversal for credit losses during the current quarter was ($52,000) compared to a provision of $35,000 for the same quarter last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model. Non-interest income increased by $40,000, or 11.57%, to $386,000 for the quarter ended September 30, 2024, as compared to $346,000 for the same period in the prior year. The increase in non-interest income occurred due to higher fee income on deposit accounts and a slightly higher volume of residential loan sales compared to the same period for the prior year. Non-interest expense increased by $136,000, or 6.78%, to $2,146,000 for the quarter ended September 30, 2024, as compared to $2,010,000 for the same period in the prior year due primarily to increased software service provider expenses.
For the nine-months ended September 30, 2024, net income increased $53,000, or 6.98%, to $819,000 as compared to $766,000 for the same period in the prior year. Net interest income increased to $5.9 million for the nine-months ended September 30, 2024, due to an increase in total interest income of $2,223,000, or 23.46%, to $11,700,000 for the nine-month period ended September 30, 2024, as compared to $9,477,000 for the same period for the prior year. The increase in total interest income resulted from higher average yields on interest earning assets and higher average loan balances. Offsetting the increase in total interest income was an increase in total interest expense of $1,952,000, or 49.74% to $5,876,000 for the nine-month period ended September 30, 2024, compared to $3,924,000 for the same period of the prior year. The increase in total interest expense was due to the increase in funding costs of both retail deposits and wholesale funding. The provision reversal for credit losses during the first nine months of 2024 was ($50,000) compared to a provision of $211,000 for the same period last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model.
For the nine-month period ended September 30, 2024, the allowance for credit losses totaled 163% of non-performing loans and 1.41% of total loans. For the same period last year, there were no nonperforming loans. As of September 30, 2024, nonperforming loans totaled $1,800,000, comprised of one commercial real estate participation loan. Our credit administration practices require loans to be placed on non-accrual if they are 90 days or more past due. This was the case for this one loan during the third quarter. Since that time, the loan has been brought current but remains on non-accrual. In addition, an evaluation was performed of the collateral securing the loan, and no specific allocation to the allowance for credit losses was required.
Non-interest income decreased by $364,000, or 25.73%, to $1,050,000 for the nine-months ended September 30, 2024, as compared to $1,414,000 for the same period in the prior year. The decrease in non-interest income occurred due to a year-to-date total of $48,000 in securities sale losses from balance sheet restructuring and lower loan fee income compared to the same period in the prior year. Non-interest expense increased by $67,000, or 1.10%, to $6,143,000 for the nine-months ended September 30, 2024, as compared to $6,076,000 for the same period in the prior year due to increased utilities and maintenance, software services, depreciation, and public relations costs.
Total assets rose to $324.5 million at September 30, 2024 compared to $312.9 million at December 31, 2023. This increase was partly due to a $5.8 million, or 43.66%, increase in cash and due from banks to $19.4 million at September 30, 2024. Loans held for investment also increased to $203.4 million as of September 30, 2024, which is an increase of 4.66% compared to net loans of $194.3 million at December 31, 2023. Total investment securities decreased $4.24 million, or 5.08% to $79.1 million at September 30, 2024 compared to $83.3 million at December 31, 2023. Total deposits were $248.1 million at September 30, 2024, up from $246.1 million as of December 31, 2023. As of September 30, 2024, the weighted average rate of all FHLB advances was 3.93% compared to 3.72% at December 31, 2023, and total FHLB advance balances were down $3.0 million, or 6.45% to $43.5 million at September 30, 2024 compared to $46.5 million at December 31, 2023.
Stockholders’ equity was $11.42 million at September 30, 2024, up from $9.51 million at December 31, 2023. Stockholders’ equity increased during the nine-months ended September 30, 2024, largely due to improvement in unrealized losses on available for sale securities as well as ongoing earnings. The available-for-sale securities portfolio consists of investments in government sponsored mortgage-backed securities as well as investments in municipal bonds, which provide cash flow for business purposes. Average equity as a percentage of assets was 3.09% at September 30, 2024 compared to 2.74% at December 31, 2023.
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 inflation, changes in the interest rate environment, changes in general economic conditions, geopolitical conflicts, public health issues, 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) | ||||||||||||||||||||
| In thousands, except per share data | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | Sept 30, | Sept 30, | ||||||||||||||||
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
| Selected Consolidated Earnings Data: | ||||||||||||||||||||
| Total Interest Income | $ |
4,021 |
|
$ |
3,848 |
|
$ |
3,492 |
|
$ |
11,700 |
|
$ |
9,477 |
|
|||||
| Total Interest Expense |
|
2,040 |
|
|
1,968 |
|
|
1,529 |
|
|
5,876 |
|
|
3,924 |
|
|||||
| Net Interest Income |
|
1,980 |
|
|
1,881 |
|
|
1,963 |
|
|
5,824 |
|
|
5,553 |
|
|||||
| Provision/(Credit) for Losses on Loans |
|
(52 |
) |
|
- |
|
|
35 |
|
|
(50 |
) |
|
211 |
|
|||||
| Net Interest Income after Provision for Losses on Loans |
|
2,032 |
|
|
1,881 |
|
|
1,928 |
|
|
5,874 |
|
|
5,342 |
|
|||||
| Non-Interest Income |
|
386 |
|
|
333 |
|
|
346 |
|
|
1,050 |
|
|
1,414 |
|
|||||
| Non-Interest Expense |
|
2,146 |
|
|
2,031 |
|
|
2,010 |
|
|
6,143 |
|
|
6,076 |
|
|||||
| Income Tax Expense |
|
10 |
|
|
(45 |
) |
|
(7 |
) |
|
(38 |
) |
|
(86 |
) |
|||||
| Net Income | $ |
262 |
|
$ |
228 |
|
$ |
271 |
|
$ |
819 |
|
$ |
766 |
|
|||||
| Earnings Per Share - basic | $ |
0.22 |
|
$ |
0.19 |
|
$ |
0.23 |
|
$ |
0.70 |
|
$ |
0.66 |
|
|||||
| Earnings Per Share - diluted | $ |
0.22 |
|
$ |
0.19 |
|
$ |
0.23 |
|
$ |
0.70 |
|
$ |
0.65 |
|
|||||
Condensed Consolidated Balance Sheet |
|||||||||||||
| (Unaudited) | |||||||||||||
| In thousands, except per share data | |||||||||||||
| September 30, | December 31, | September 30, | |||||||||||
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||||
| Selected Consolidated Balance Sheet Data: | |||||||||||||
| Assets | |||||||||||||
| Cash and Due from Banks | $ |
19,351 |
|
$ |
13,470 |
|
$ |
8,068 |
|
||||
| Investment Securities, Available-for-Sale, at Fair Value |
|
76,132 |
|
|
80,367 |
|
|
76,842 |
|
||||
| Investment Securities, Held-to-Maturity |
|
2,950 |
|
|
2,950 |
|
|
2,950 |
|
||||
| Loans Held-for-Sale |
|
834 |
|
|
552 |
|
|
- |
|
||||
| Loans Held-for-Investment |
|
206,293 |
|
|
196,722 |
|
|
191,968 |
|
||||
| Allowance for Credit Losses |
|
2,928 |
|
|
2,972 |
|
|
2,947 |
|
||||
| Net Loans |
|
203,365 |
|
|
194,302 |
|
|
189,021 |
|
||||
| Accrued Interest Receivable |
|
1,385 |
|
|
1,547 |
|
|
1,298 |
|
||||
| Other Assets |
|
20,451 |
|
|
20,269 |
|
|
21,083 |
|
||||
| Total Assets | $ |
324,468 |
|
$ |
312,905 |
|
$ |
299,262 |
|
||||
| Liabilities | |||||||||||||
| Noninterest-Bearing Deposits | $ |
40,739 |
|
$ |
43,692 |
|
$ |
43,003 |
|
||||
| Interest-Bearing Deposits |
|
207,341 |
|
|
202,426 |
|
|
187,492 |
|
||||
| Total Deposits |
|
248,080 |
|
|
246,118 |
|
|
230,495 |
|
||||
| FHLB Advances and Other Borrowings |
|
53,500 |
|
|
46,500 |
|
|
51,500 |
|
||||
| Subordinated Notes, Net of Issuances Costs |
|
9,778 |
|
|
9,758 |
|
|
9,751 |
|
||||
| Accrued Interest Payable |
|
793 |
|
|
485 |
|
|
364 |
|
||||
| Accrued Expenses and Other Liabilities |
|
893 |
|
|
536 |
|
|
1,105 |
|
||||
| Total Liabilities |
|
313,044 |
|
|
303,397 |
|
|
293,215 |
|
||||
| Stockholders' Equity | |||||||||||||
| Common Stock |
|
11,510 |
|
|
11,480 |
|
|
11,467 |
|
||||
| Retained Earnings |
|
11,042 |
|
|
10,338 |
|
|
10,143 |
|
||||
| Accumulated Other Comprehensive Gain/(Loss) |
|
(11,128 |
) |
|
(12,310 |
) |
|
(15,563 |
) |
||||
| Total Stockholders' Equity |
|
11,423 |
|
|
9,508 |
|
|
6,047 |
|
||||
| Total Liabilities and Stockholders' Equity | $ |
324,468 |
|
$ |
312,905 |
|
$ |
299,262 |
|
||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| dollar figures are in thousands, except per share data | ||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||||||||
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
| Selected Financial Ratios and Other Data (Unaudited): | ||||||||||||||||||||
| Interest Rate Spread During Period |
|
2.13 |
% |
|
2.09 |
% |
|
2.34 |
% |
|
2.12 |
% |
|
2.20 |
% |
|||||
| Net Yield on Interest-Earning Assets |
|
5.30 |
% |
|
5.19 |
% |
|
4.78 |
% |
|
5.18 |
% |
|
4.38 |
% |
|||||
| Non-Interest Expense, Annualized, to Average Assets |
|
2.69 |
% |
|
2.60 |
% |
|
2.66 |
% |
|
2.58 |
% |
|
2.78 |
% |
|||||
| Return on Average Assets, Annualized |
|
0.33 |
% |
|
0.29 |
% |
|
0.36 |
% |
|
0.34 |
% |
|
0.35 |
% |
|||||
| Return on Average Equity, Annualized |
|
10.61 |
% |
|
11.03 |
% |
|
13.15 |
% |
|
11.99 |
% |
|
11.55 |
% |
|||||
| Average Equity to Assets |
|
3.09 |
% |
|
2.64 |
% |
|
2.73 |
% |
|
2.87 |
% |
|
3.03 |
% |
|||||
| Average Net Loans | $ |
199,422 |
|
$ |
195,685 |
|
$ |
189,897 |
|
$ |
196,336 |
|
$ |
185,054 |
|
|||||
| Average Net Securities |
|
79,135 |
|
|
78,971 |
|
|
82,795 |
|
|
80,169 |
|
|
87,603 |
|
|||||
| Average Other Interest-Earning Assets |
|
24,987 |
|
|
22,009 |
|
|
19,314 |
|
|
24,809 |
|
|
15,610 |
|
|||||
| Total Average Interest-Earning Assets |
|
303,544 |
|
|
296,665 |
|
|
292,006 |
|
|
301,314 |
|
|
288,267 |
|
|||||
| Average Total Assets |
|
319,355 |
|
|
312,570 |
|
|
302,142 |
|
|
317,125 |
|
|
291,877 |
|
|||||
| Average Noninterest-Bearing Deposits | $ |
40,366 |
|
$ |
40,568 |
|
$ |
42,464 |
|
$ |
41,033 |
|
$ |
43,122 |
|
|||||
| Average Interest-Bearing Deposits |
|
204,469 |
|
|
205,295 |
|
|
190,553 |
|
|
205,325 |
|
|
193,659 |
|
|||||
| Average Total Deposits |
|
244,834 |
|
|
245,863 |
|
|
233,017 |
|
|
246,358 |
|
|
236,781 |
|
|||||
| Average Wholesale Funding |
|
53,500 |
|
|
48,764 |
|
|
59,670 |
|
|
51,131 |
|
|
45,804 |
|
|||||
| Average Interest-Bearing Liabilities |
|
257,969 |
|
|
254,059 |
|
|
250,223 |
|
|
256,456 |
|
|
239,463 |
|
|||||
| Avg. Interest-Earnings Assets to Avg. Interest-Bearings Liabilities |
|
117.67 |
% |
|
116.77 |
% |
|
116.70 |
% |
|
117.49 |
% |
|
120.38 |
% |
|||||
| Average equity | $ |
9,866.80 |
|
$ |
8,253.62 |
|
$ |
8,243.00 |
|
$ |
9,108.87 |
|
$ |
8,842.00 |
|
|||||
| Non-Performing Loans to Total Loans |
|
0.87 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.87 |
% |
|
0.00 |
% |
|||||
| Allowance for Credit Losses to Total Loans Outstanding |
|
1.41 |
% |
|
1.49 |
% |
|
1.54 |
% |
|
1.41 |
% |
|
1.54 |
% |
|||||
| Allowance for Credit Losses to Non-Performing Loans |
|
162.68 |
% |
|
- |
|
|
- |
|
|
162.68 |
% |
|
- |
|
|||||
| Net Loan Chargeoffs/(Recoveries) to Avg. Total Loans Outstanding |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
| Effective Income Tax Rate |
|
3.71 |
% |
|
-24.85 |
% |
|
-2.65 |
% |
|
-4.89 |
% |
|
-12.65 |
% |
|||||
| Tangible Book Value Per Share | $ |
9.71 |
|
$ |
8.02 |
|
$ |
5.11 |
|
$ |
9.71 |
|
$ |
5.11 |
|
|||||
| Market Closing Price at the End of Quarter | $ |
7.32 |
|
$ |
6.94 |
|
$ |
7.75 |
|
$ |
7.32 |
|
$ |
7.75 |
|
|||||
| Price-to-Tangible Book Value |
|
75.38 |
% |
|
86.59 |
% |
|
151.71 |
% |
|
75.38 |
% |
|
151.71 |
% |
|||||