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Third Century Bancorp Releases Earnings for the Quarter Ended June 30, 2024

(OTCPINK: TDCB) - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded unaudited net income of $228,000 for the quarter ended June 30, 2024, or $0.19 per basic and diluted share, compared to net income of $175,000 for the quarter ended June 30, 2023, or $0.15 per basic and diluted share.

“We were pleased to see our second quarter June 30, 2024 earnings level improve over the same period from a year earlier”, noted David A. Coffey, President and CEO. Coffey continued, “Several factors contributed to this improvement. Of particular importance is the return of residential mortgage loan activity, which helps generate loan sale fee income. In addition, our loan portfolio yield continues to improve due to new loans being booked at current higher interest rates and adjustable-rate loans are adjusting at higher rates. Finally, we continue to see the impact of being mindful of our non-interest expense as we make every effort to operate efficiently.” Coffey concluded, “The key to a successful year will be to continue to focus on improving our net interest margin.”

For the quarter ended June 30, 2024, net income increased $53,000, or 30.07%, to $228,000 as compared to $175,000 for the same period in the prior year. Net interest income decreased to $1.9 million for the three months ended June 30,2024 due to an increase in total interest expense of $603,000, or 44.14%, to $1,968,000 for the three-month period ended June 30, 2024, as compared to $1,365,000 for the same period for the prior year. The increase in total interest expense was due to the increase in funding costs of both retail deposits and wholesale funding. Offsetting the increase in total interest expense was an increase in total interest income of $468,000, or 13.85% to $3,848,000 for the three-month period ended June 30, 2024, compared to $3,380,000 for the same period for the prior year. The increase in total interest income was the result of higher average yields on interest earning assets and higher average loan balances. The provision for credit losses during the current quarter was $0, compared to $146,000 for the same quarter last year due to the ongoing strength of our credit quality and zero non-performing loans for the last several quarters. Non-interest income increased by $18,000, or 5.76%, to $333,000 for the quarter ended June 30, 2024, as compared to $315,000 for the same period in the prior year. The increase in non-interest income occurred due to a slightly higher volume of residential loan sales compared to the same period for the prior year. Non-interest expense decreased by $38,000, or 1.82%, to $2,031,000 for the quarter ended June 30, 2024, as compared to $2,069,000 for the same period in the prior year due to cost savings in personnel and advertising expenses.

For the six-months ended June 30, 2024, net income increased $64,000, or 12.88%, to $558,000 as compared to $494,000 for the same period in the prior year. Net interest income decreased to $3.8 million for the six-months ended June 30,2024 due to an increase in total interest expense of $1,442,000, or 60.22%, to $3,836,000 for the six-month period ended June 30, 2024, as compared to $2,394,000 for the same period for the prior year. The increase in total interest expense was due to the increase in funding costs of both retail deposits and wholesale funding. Offsetting the increase in total interest expense was an increase in total interest income of $1,235,000, or 19.17% to $7,679,000 for the six-month period ended June 30, 2024, compared to $6,444,000 for the same period for the prior year. The increase in total interest income was the result of higher average yields on interest earning assets and higher average loan balances. The provision for credit losses during the first half of 2024 was $2,000 compared to $176,000 for the same period last year due to the ongoing strength of our credit quality and zero non-performing loans for the last several quarters. Non-interest expense decreased by $70,000, or 1.71%, to $3,996,000 for the six-months ended June 30, 2024, as compared to $4,066,000 for the same period in the prior year due to cost savings in personnel, outside consultant fees, and advertising expenses. Non-interest income increased by $57,000, or 9.41%, to $664,000 for the six-months ended June 30, 2024, as compared to $607,000 for the same period in the prior year. The increase in non-interest income occurred due to a higher volume of residential loan sales, increased service fee income, and income on other assets as compared to the same period for the prior year. Non-interest income for the current six-months was also offset by a total of $42,000 in security sale losses due to balance sheet restructuring.

Total assets rose to $316.5 million at June 30, 2024 compared to $312.9 million at December 31, 2023. This increase was primarily due to a $4.7 million, or 34.93%, increase in cash and due from banks to $18.2 million at June 30, 2024. Loans held for investment increased to $199.0 million as of June 30, 2024, which is an increase of 1.14% compared to $196.7 million at December 31,2023. Total investments decreased $4.1 million, or 4.92% to $79.2 million at June 30, 2024 compared to $83.3 million at December 31, 2023. Total deposits were $242.5 million at June 30, 2024, down from $246.1 million as of December 31, 2023. As of June 30, 2023, 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 June 30, 2024 compared to $46.5 million at December 31, 2023.

Stockholders’ equity was $9.43 million at June 30, 2024, up from $8.58 million at June 30, 2023 and down from $9.51 million at December 31, 2023. Stockholders’ equity decreased during the six-months ended June 30, 2024, largely due to dividend payouts but increased over the twelve-month period since June 30, 2023 due to continued earnings and lower net unrealized losses in the available-for-sale-securities portfolio. The available-for-sale securities are 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 2.64% at June 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

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

 

2024

 

2024

 

2023

 

2024

 

2023

Selected Consolidated Earnings Data:          
Total Interest Income  

$

3,848

 

 

$

3,831

 

 

$

3,380

 

 

$

7,679

 

 

$

6,444

 

Total Interest Expense  

 

1,968

 

 

 

1,868

 

 

 

1,365

 

 

 

3,836

 

 

 

2,394

 

Net Interest Income  

 

1,881

 

 

 

1,963

 

 

 

2,015

 

 

 

3,844

 

 

 

4,050

 

Provision for Losses on Loans  

 

-

 

 

 

2

 

 

 

146

 

 

 

2

 

 

 

176

 

Net Interest Income after Provision for Losses on Loans  

 

1,881

 

 

 

1,961

 

 

 

1,869

 

 

 

3,842

 

 

 

3,874

 

Non-Interest Income  

 

333

 

 

 

331

 

 

 

315

 

 

 

664

 

 

 

607

 

Non-Interest Expense  

 

2,031

 

 

 

1,965

 

 

 

2,069

 

 

 

3,996

 

 

 

4,066

 

Income Tax Expense  

 

(45

)

 

 

(3

)

 

 

(60

)

 

 

(48

)

 

 

(79

)

Net Income  

$

228

 

 

$

330

 

 

$

175

 

 

$

558

 

 

$

494

 

           
Earnings Per Share - basic  

$

0.19

 

 

$

0.28

 

 

$

0.15

 

 

$

0.47

 

 

$

0.42

 

Earnings Per Share - diluted  

$

0.19

 

 

$

0.28

 

 

$

0.15

 

 

$

0.47

 

 

$

0.42

 

           
           

Condensed Consolidated Balance Sheet

(Unaudited)

In thousands, except per share data

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

June 30,

 

 

 

 

 

 

2024

 

2023

 

2023

 

 

 

 

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

$

18,174

 

 

$

13,470

 

 

$

16,019

 

   
Investment Securities, Available-for-Sale, at Fair Value  

 

76,270

 

 

 

80,367

 

 

 

80,848

 

   
Investment Securities, Held-to-Maturity  

 

2,950

 

 

 

2,950

 

 

 

2,950

 

   
Loans Held-for-Sale  

 

690

 

 

 

552

 

 

 

-

 

   
Loans Held-for-Investment  

 

198,961

 

 

 

196,722

 

 

 

188,319

 

   
Allowance for Credit Losses  

 

2,976

 

 

 

2,972

 

 

 

2,904

 

   
Net Loans  

 

195,985

 

 

 

194,302

 

 

 

185,415

 

   
Accrued Interest Receivable  

 

1,528

 

 

 

1,547

 

 

 

1,347

 

   
Other Assets  

 

20,874

 

 

 

20,269

 

 

 

19,619

 

   
Total Assets  

$

316,471

 

 

$

312,905

 

 

$

306,198

 

   
           
Liabilities          
Noninterest-Bearing Deposits  

$

39,895

 

 

$

43,692

 

 

$

43,167

 

   
Interest-Bearing Deposits  

 

202,624

 

 

 

202,426

 

 

 

194,502

 

   
Total Deposits  

 

242,520

 

 

 

246,118

 

 

 

237,669

 

   
FHLB Advances and Other Borrowings  

 

53,500

 

 

 

46,500

 

 

 

49,500

 

   
Subordinated Notes, Net of Issuances Costs  

 

9,771

 

 

 

9,758

 

 

 

9,744

 

   
Accrued Interest Payable  

 

773

 

 

 

485

 

 

 

445

 

   
Accrued Expenses and Other Liabilities  

 

478

 

 

 

536

 

 

 

261

 

   
Total Liabilities  

 

307,042

 

 

 

303,397

 

 

 

297,619

 

   
Stockholders' Equity          
Common Stock  

 

11,505

 

 

 

11,480

 

 

 

11,573

 

   
Retained Earnings  

 

10,838

 

 

 

10,338

 

 

 

10,008

 

   
Accumulated Other Comprehensive Loss  

 

(12,915

)

 

 

(12,310

)

 

 

(13,002

)

   
Total Stockholders' Equity  

 

9,428

 

 

 

9,508

 

 

 

8,579

 

   
Total Liabilities and Stockholders' Equity  

$

316,471

 

 

$

312,905

 

 

$

306,198

 

   
           
           
 

Three Months Ended

 

Six Months Ended

 

dollar figures are in thousands, except per share data

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

2024

 

2024

 

2023

 

2024

 

2023

Selected Financial Ratios and Other Data (Unaudited):          
Interest Rate Spread During Period  

 

2.09

%

 

 

2.14

%

 

 

2.46

%

 

 

2.12

%

 

 

2.50

%

Net Yield on Interest-Earning Assets  

 

5.19

%

 

 

5.04

%

 

 

4.72

%

 

 

5.12

%

 

 

4.55

%

Non-Interest Expense, Annualized, to Average Assets  

 

2.60

%

 

 

2.49

%

 

 

2.81

%

 

 

2.53

%

 

 

2.84

%

Return on Average Assets, Annualized  

 

0.29

%

 

 

0.42

%

 

 

0.24

%

 

 

0.35

%

 

 

0.34

%

Return on Average Equity, Annualized  

 

11.03

%

 

 

16.01

%

 

 

8.49

%

 

 

12.78

%

 

 

11.17

%

Average Equity to Assets  

 

2.64

%

 

 

2.61

%

 

 

2.80

%

 

 

2.76

%

 

 

3.08

%

           
Average Net Loans  

$

195,685

 

 

$

194,173

 

 

$

186,542

 

 

$

194,776

 

 

$

182,593

 

Average Net Securities  

 

78,971

 

 

 

82,413

 

 

 

84,335

 

 

 

80,692

 

 

 

86,855

 

Average Other Interest-Earning Assets  

 

22,009

 

 

 

27,430

 

 

 

15,743

 

 

 

24,719

 

 

 

13,872

 

Total Average Interest-Earning Assets  

 

296,665

 

 

 

304,015

 

 

 

286,620

 

 

 

300,188

 

 

 

283,320

 

Average Total Assets  

 

312,570

 

 

 

316,113

 

 

 

294,192

 

 

 

315,998

 

 

 

286,660

 

           
Average Noninterest-Bearing Deposits  

$

40,568

 

 

$

42,188

 

 

$

43,472

 

 

$

41,371

 

 

$

43,457

 

Average Interest-Bearing Deposits  

 

205,295

 

 

 

206,220

 

 

 

191,787

 

 

 

205,758

 

 

 

195,237

 

Average Total Deposits  

 

245,863

 

 

 

248,408

 

 

 

235,259

 

 

 

247,128

 

 

 

238,694

 

Average Wholesale Funding  

 

48,764

 

 

 

51,104

 

 

 

49,693

 

 

 

49,934

 

 

 

38,755

 

Average Interest-Bearing Liabilities  

 

254,059

 

 

 

257,325

 

 

 

241,480

 

 

 

255,692

 

 

 

233,992

 

           
Avg. Interest-Earnings Assets to Avg. Interest-Bearings Liabilities  

 

116.77

%

 

 

118.14

%

 

 

118.69

%

 

 

117.40

%

 

 

121.08

%

Average equity  

$

8,253.62

 

 

$

8,245.26

 

 

$

8,219.00

 

 

$

8,725.74

 

 

$

8,842.00

 

Non-Performing Loans to Total Loans  

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Allowance for Credit Losses to Total Loans Outstanding  

 

1.49

%

 

 

1.51

%

 

 

1.54

%

 

 

1.49

%

 

 

1.54

%

Allowance for Credit Losses to Non-Performing Loans  

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Loan Chargeoffs/(Recoveries) to Avg. Total Loans Outstanding  

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Effective Income Tax Rate  

 

-24.85

%

 

 

-0.92

%

 

 

-52.17

%

 

 

-24.85

%

 

 

-19.04

%

Tangible Book Value Per Share  

$

8.02

 

 

$

7.75

 

 

$

7.21

 

 

$

8.02

 

 

$

7.21

 

Market Closing Price at the End of Quarter  

$

6.94

 

 

$

6.98

 

 

$

7.55

 

 

$

6.94

 

 

$

7.55

 

Price-to-Tangible Book Value  

 

86.59

%

 

 

90.02

%

 

 

104.68

%

 

 

86.59

%

 

 

104.68

%

 

Contacts

David A. Coffey, President and CEO

S. Paul Arab, SVP and CFO

Tel. 317-736-7151

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