TDCB Third Century Bancorp (PK)

Third Century Bancorp (“Company”) (OTCBB: TDCB), the holding company for Mutual Savings Bank (“Bank”) announced net income of $87,000 for the quarter ended September 30, 2011. This is the same amount as was earned during the quarter ended September 30, 2010. For the nine months ended September 30, 2011, the Company recorded net income of $205,000 compared to a net loss of $1.5 million for the nine months ended September 30, 2010.

For the nine months ended September 30, 2011, the amount contributed to the provision for loan losses decreased $2.1 million, or 95.32%, to $103,000 from $2.2 million for the nine months ended September 30, 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. During the first nine months of 2011, the Bank charged-off loans which had been specifically provided for in the allowance for loan losses in a previous period. At September 30, 2011, the Bank’s allowance for loan losses totaled $2.7 million compared with $3.5 million at December 31, 2010. For the nine months ended September 30, 2011, the Bank recorded charged-off loans, net of recoveries, of $863,000, which represents a decrease of $464,000, or 34.95%, from $1.3 million in charged-off loans, net of recoveries, recorded for the nine months ended September 30, 2010.

At September 30, 2011, non-performing assets totaled $9.4 million, or 8.02% of total assets, and included $1.0 million of non-accrual loans, $3.1 million in loans considered troubled debt restructurings, $4.3 million of impaired loans, and $983,000 of other real estate. The increase in non-performing assets is attributable to our troubled debt restructurings of $3.1 million, all of which are performing in accordance with their revised terms. In comparison, at September 30, 2010, non-performing assets totaled $6.6 million, or 5.35% of total assets, and included $1.0 million of non-accrual loans, $4.7 million of impaired loans, and $934,000 of other real estate. The Bank had no troubled debt restructurings in 2010.

For the nine months ended September 30, 2011, noninterest expense decreased $900,000 or 20.46% to $3.5 million from $4.4 million for the nine months ended September 30, 2010. Other expenses for the nine months ended September 30, 2011 decreased $650,000 or 55.79% to $515,000 from $1.2 million for the nine months ended September 30, 2010. During the second quarter of 2010, the Bank recorded a write-down of the carrying value of the Franklin Central branch of $487,000 following the closure of the branch on June 26, 2010.

Total assets decreased $1.5 million at September 30, 2011 to $116.6 million from $118.1 million at December 31, 2010. Investment securities increased $2.6 million, or 58.74%, to $7.1 million, while loans receivable-net decreased $4.5 million, or 4.71%, to $90.4 million at September 30, 2011. The decrease in the loans receivable-net was primarily due to decreases of $1.7 million or 17.20% in commercial construction and land development loans to $8.0 million at September 30, 2011 from $9.8 million at December 31, 2010 and of $1.5 million or 4.29% in commercial real estate loans to $33.0 million from $34.5 million for the respective reporting dates.

Deposits outstanding were $89.0 million at September 30, 2011 and December 31, 2010. Savings, money market, and NOW deposits increased $1.1 million to $47.0 at September 30, 2011 million while time deposits decreased $1.3 million to $28.8 million at September 30, 2011.

Federal Home Loan Bank advances and other borrowings decreased $2.0 million to $12.0 million at September 30, 2011 from $14.0 million at December 31, 2010. The $2.0 million decrease was due to the repayment of advances that matured during the second and third quarters of 2011.

Stockholders’ equity increased by $209,000 or 1.40% to $15.1 million at September 30, 2011 from $14.9 million at December 31, 2010. At September 30, 2011, the Bank was in compliance with its regulatory capital requirements.

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 September 30, At December 31,

2011

2010

Selected Consolidated Financial Condition Data: (In Thousands) Assets $ 116,626 $ 118,180 Loans receivable-net 90,446 94,919 Cash and cash equivalents 6,749 6,338 Interest earning time deposits 4,226 3,483 Investment securities 7,059 4,447 Deposits 89,090 88,956 FHLB advances and other borrowings 12,000 14,000 Stockholders’ equity-net 15,138 14,929   For the Three Months Ended September 30,

2011

2010

(Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 1,339 $ 1,520 Total interest expense   245     358   Net interest income 1,094 1,162 Provision of losses on loans   3     15   Net interest income after provision for losses on loans 1,091 1,147 Total other income 185 266 General, administrative and other expenses 1,125 1,252 Income tax expense   64     74   Net income $ 87   $ 87   Earnings per share – basic $ 0.07 $ 0.07 Earnings per share - diluted $ 0.07 $ 0.07   Selected Financial Ratios and Other Data: Interest rate spread during period 3.64 % 3.53 % Net yield on interest-earning assets 3.89 3.86 Return on average assets 0.30 0.28 Return on average equity 2.31 2.25 Equity to assets 12.98 12.66 Average interest-earning assets to average interest-bearing liabilities 129.36 128.05 Non-performing assets to total assets 8.02 5.35 Allowance for loan losses to total loans outstanding 2.93 2.96 Allowance for loan losses to non-performing loans 32.56 52.70 Net charge-offs to average total loans outstanding 0.91 1.27 General, administrative and other expense to average assets 0.95 1.00 Effective income tax rate 42.38 45.96   Number of full service offices 6 6 Book value per share $ 10.66 $ 10.82 Market closing price at end of quarter $ 2.10 $ 2.41 Price-to-book value 20 % 22 %   For the Nine Months Ended September 30,

2011

2010

(Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 4,142 $ 4,638 Total interest expense   799     1,171   Net interest income 3,343 3,467 Provision of losses on loans   103     2,203   Net interest income after provision for losses on loans 3,240 1,264 Total other income 620 643 General, administrative and other expenses 3,499 4,399 Income tax expense (benefit)   156     (968 ) Net income (loss) $ 205   $ (1,524 ) Earnings (loss) per share – basic $ 0.15 $ (1.16 ) Earnings (loss) per share - diluted $ 0.15 $ (1.16 )   Selected Financial Ratios and Other Data: Interest rate spread during period 3.58 % 3.42 % Net yield on interest-earning assets 3.86 3.76 Return (loss) on average assets 0.23 (1.58 ) Return (loss) on average equity 1.82 (12.41 ) Equity to assets 12.98 12.66 Average interest-earning assets to average interest-bearing liabilities 130.84 127.03 Non-performing assets to total assets 8.02 5.35 Allowance for loan losses to total loans outstanding 2.93 2.96 Allowance for loan losses to non-performing loans 32.56 52.70 Net charge-offs to average total loans outstanding 0.91 1.27 General, administrative and other expense to average assets 2.90 3.43 Effective income tax rate 43.21 38.84   Number of full service offices 6 6 Book value per share $ 10.66 $ 10.82 Market closing price at end of quarter $ 2.10 $ 2.41 Price-to-book value 20 % 22 %