TDCB Third Century Bancorp (PK)

Robert D. Heuchan, President and CEO of Third Century Bancorp (OTCBB: TDCB), the holding company of Mutual Savings Bank, announced net income of $51,000 for the quarter ended March 31, 2011 compared to a net loss of $583,000, for the quarter ended March 31, 2010.

Net income for the first quarter of 2011 as compared to the loss for the quarter ended March 31, 2010 was primarily due to the decrease of $927,000 in the provision for loan losses to $73,000 for the three months ended March 31, 2011 from $1.0 million for the three months ended March 31, 2010. In evaluating the adequacy of loan loss allowances, management considers factors such as delinquency trends, portfolio composition, past loss experience and other factors such as general economic conditions, which deteriorated dramatically during the fourth quarter of 2008 and continued to deteriorate throughout the first half of 2010. For the three months ended March 31, 2011, Mutual Savings Bank recorded recoveries in excess of charged-off loans of $43,000, which represents a change of $181,000, or 131.34%, from $138,000 in charged-off loans, net of recoveries, recorded for the three months ended March 31, 2010. At March 31, 2011, management classified approximately $10.2 million in loans as impaired in the calculation of the allowance for loan losses compared to $6.3 million identified as of March 31, 2010. At March 31, 2011 and 2010, the Bank’s nonperforming assets as a percentage of total assets was 8.29% and 4.79%, respectively. At December 31, 2010, the Bank’s nonperforming assets as a percentage of total assets was 11.18%

Total assets increased $5.7 million at March 31, 2011 to $123.8 million from $118.1 million at December 31, 2010. Cash and cash equivalents increased $7.7 million, or 122.22%, to $14.1 million while loans receivable-net decreased $3.7 million, or 3.89%, to $91.2 million at March 31, 2011. The increase in cash and cash equivalents was largely attributed to an increase in savings, money market and NOW accounts. The decrease in the loans receivable-net was primarily due to a decrease of $3.3 million or 33.45% in commercial construction and land development loans to $6.5 million at March 31, 2011 from $9.8 million at December 31, 2010.

Deposits increased $5.5 million or 6.23% to $94.5 million at March 31, 2011 from $89.0 million at December 31, 2010. Demand deposits increased $3.5 million to $16.3 million at March 31, 2011 from $12.8 million at December 31, 2010 and savings, money market, and NOW deposits increased $2.2 million to $48.2 million at March 31, 2011 from $46.0 million at December 31, 2010.

Federal Home Loan Bank advances and other borrowings were $14.0 million at March 31, 2011 and December 31, 2010.

Stockholders’ equity increased by $52,000 or 0.35% to $15.0 million at March 31, 2011 from $14.9 million at December 31, 2010. The Company previously announced that the board of directors has suspended quarterly dividend payments until the Company achieves an acceptable level of earnings performance.

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 and the Franklin United Methodist Community, as well as in Edinburgh, Nineveh and Trafalgar, Indiana.

Selected Consolidated Financial Data

  At March 31, At December 31,

2011

2010

Selected Consolidated Financial Condition Data: (In Thousands) Assets $ 123,823 $ 118,180 Loans receivable-net 91,230 94,919 Cash and cash equivalents 14,084 6,338 Interest earning time deposits 3,735 3,483 Investment securities 6,038 4,447 Deposits 94,501 88,956 FHLB advances and other borrowings 14,000 14,000 Stockholders’ equity-net 14,981 14,929   For the Three Months Ended March 31,

2011

2010

(Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 1,445 $ 1,615 Total interest expense   283     425   Net interest income 1,162 1,190 Provision of losses on loans   73     1,048   Net interest income after provision for losses

on loans

1,089 142 Total other income 201 201 General, administrative and other expenses 1,198 1,299 Income tax expense (benefit)   41     (373 ) Net income (loss)   51     (583 ) Earnings (loss) per share – basic $ 0.04 $ (0.44 ) Earnings (loss) per share - diluted $ 0.04 $ (0.44 )   Selected Financial Ratios and Other Data: Interest rate spread during period 3.69 % 3.49 % Net yield on interest-earning assets 3.99 3.85 Return on average assets 0.17 (1.79 ) Return on average equity 1.36 (13.56 ) Equity to assets 12.10 12.61 Average interest-earning assets to average interest-bearing liabilities 131.20 126.47 Non-performing assets to total assets 8.29 4.79 Allowance for loan losses to total loans outstanding 3.80 2.87 Allowance for loan losses to non-performing loans 39.06 52.09 Net charge-offs (recoveries) to average total loans outstanding (0.04 ) 0.13 General, administrative and other expense to average assets 0.98 1.00 Effective income tax rate 44.57 39.02 Number of full service offices 6 7 Book value per share $ 10.54 $ 11.45 Market closing price at end of quarter $ 2.75 $ 5.00 Price-to-book value 26 % 44 %