Third Century Bancorp Releases Unaudited Earnings for the Quarter and Six-months Ended June 30, 2022

(OTCPINK: TDCB)--Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $574,000 for the quarter ended June 30, 2022, or $0.50 per basic share and $0.49 per diluted share, compared to net income of $508,000 for the quarter ended June 30, 2021, or $0.43 per basic and diluted share.

David A. Coffey, President and CEO stated, “We often note that when one area of loan demand slows, other areas increase. This is what continued to occur during the last three months. Commercial loan activity was terrific.” Coffey continued, “While we continue to see strong growth, our overall strong capital levels position us to continue to take advantage of opportunities in our market.”

For the quarter ended June 30, 2022, net income increased $66,000, or 12.99%, to $574,000 as compared to $508,000 for the same period in the prior year. The increase in net income for the three-month period ended June 30, 2022 was driven primarily as a result of the $306,000, or 18.50%, increase in net interest income as compared to the same period in the prior year. The increase in net interest income was due primarily to a $386,000, or 20.73%, increase in interest income as compared to the same period in the prior year due to growth in average assets. The increase in interest income was partially offset by an $80,000, or 38.46%, increase in interest expense as compared to the same period in the prior year.

The increase in net income for the quarter ended June 30, 2022 was partially supported by the $45,000 decrease in the provision for loan losses compared to the same period in 2021. The decrease in provision expense was due to the improving economic conditions since the beginning of the COVID-19 pandemic. The Company had net charge-offs during the quarter ended June 30, 2022 of $2,000 and a net recovery during the quarter ended June 30, 2021 of $2,000.

For the six-months ended June 30, 2022, net income increased $19,000, or 2.06%, to $941,000 as compared to $922,000 for the six-months ended June 30, 2021. The increase in net income for the six-month period ended June 30, 2022 was driven primarily as a result of the $479,000, or 14.83%, increase in net interest income as compared to the same six-month period in the prior year. The increase in net interest income was driven primarily by a $542,000, or 14.82%, increase in interest income as compared to the same six-month period in the prior year due to growth in average assets. This was partially offset by a $63,000, or 14.75%, increase in interest expense as compared to the same six-month period in the prior year. The increase in net income for the six-month period ended June 30, 2022 was partially offset by a $302,000, or 22.16%, decrease in non-interest income as compared to the same six-month period ended in the prior year. The decrease in non-interest income was primarily due to a $285,000, or 42.40%, decrease in the gain on sale of one-to-four family mortgages sold to Freddie Mac, as compared to the same six-month period in the prior year. Net income was also impacted by a $264,000, or 7.55%, increase in non-interest expense as compared to the same six-month period in the prior year. In addition, the provision for loan losses decreased $90,000, or 100.00%, for the six-month period ended June 30, 2022 as compared to the same six-month period in the prior year due to improving economic conditions.

The increase in net income for the six-months ended June 30, 2022 was also partially supported by a $16,000 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 6.55% for the six-months ended June 30, 2022 from 8.14% for the same period in the prior year.

Total assets increased $31.1 million to $272.7 million at June 30, 2022 from $241.6 million at December 31, 2021, an increase of 12.90%. The increase was primarily due to a $22.2 million, or 15.42%, increase in loans held-for-investment to $166.1 million at June 30, 2022. This increase was primarily funded by a $21.5 million, or 10.06%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the year. Total deposits were $236.2 million at June 30, 2022, up from $214.7 million as of December 31, 2021. Federal Home Loan Bank advances were $17.5 million at June 30, 2022 as compared to $5.0 million at December 31, 2021. At June 30, 2022, the weighted average rate of all Federal Home Loan Bank advances was 1.81% compared to 1.45% at December 31, 2021, and the weighted average maturity was 0.1 years at June 30, 2022 compared to 4.3 years at December 31, 2021.

The allowance for loan losses remained the same at $1.9 million at June 30, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.13% of total loans as of June 30, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $46,000, or 0.03%, of total loans as of June 30, 2022 as compared to $237,000 or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $8.7 million at June 30, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $12.7 million during the six-months ended June 30, 2022 as a result of an increase in net unrealized loss of $13.5 million of available-for-sale securities due to the significant increase in market interest rates, partially offset by net income of $941,000. The decrease in stockholders’ equity was also impacted by repurchased stock of $176,000 and stock awards of $3,000. Equity as a percentage of assets decreased to 3.18% at June 30, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended June 30, 2022, the Company repurchased 10,000 shares of common stock at an average cost of $17.51 per share pursuant to the Company’s stock repurchase program. At June 30, 2022, 24,422 shares of common stock have been repurchased by the Company through the stock repurchase program since its inception in January 2021.

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, inflation, 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.

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