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 $113,000 for the quarter ended March 31, 2012, or $0.09 per share. This compares with net income of $51,000 for the quarter ended March 31, 2011, or $0.04 per share.

The improvement of $62,000 in net income resulted from several positive factors. Non-interest income increased $51,000 to $252,000 from $201,000 while non-interest expense decreased $66,000 to $1.1 million for the three months ended March 31, 2012 from $1.2 million for the three months ended March 31, 2011. The increase in non-interest income primarily resulted from the sale of real estate owned by the Bank for a gain of $68,000 in excess of its recorded book value. The reduction in non-interest expense was due to a decrease of $59,000 in salaries and employee benefits to $600,000 from $659,000.

The provision for loan losses decreased $42,000 to $31,000 from $73,000. Management considers factors such as delinquency trends, portfolio composition, past loss experience and other factors such as general economic conditions. For the quarter ended March 31, 2012, Mutual Savings Bank charged-off loans, net of recoveries, of $19,000. Comparatively, for the quarter ended March 31, 2011, Mutual Savings Bank recorded recoveries in excess of charged-off loans of $43,000, which represents an increase in the level of charge offs of $62,000, or 142.98%. At March 31, 2012, non-performing assets totaled $8.5 million, or 6.89% of total assets, and included $7.6 million of non-performing loans. At March 31, 2011, non-performing assets totaled $9.5 million, or 7.70% of total assets, and included $8.5 million of non-performing loans. The decrease in non-performing loans was a result of increased collection efforts with delinquent borrowers prior to loans becoming non-performing. Loans are considered non-performing when one or more of the following occur: (i) borrowers fail to make scheduled payments causing loans to become delinquent by 90 days or more; (ii) borrowers default on original loan terms and the Bank restructures such loans; or, (iii) Management classifies loans as “doubtful” in regards to full repayment according to loan agreements.

Total assets increased $4.7 million to $123.6 million at March 31, 2012 from $118.9 million at December 31, 2011, an increase of 3.94%. The increase in assets was primarily the result of an increase in cash and cash equivalents of $4.2 million to $10.2 million from $6.0 million. The primary contributors to this increase in cash and cash equivalents were increases of $3.5 million in deposits and $1.0 million in advances from the Federal Home Loan Bank.

Deposits increased $3.5 million to $92.4 million at March 31, 2012 from $89.0 million at December 31, 2011. Savings, NOW and money market savings deposits increased $2.1 million, or 4.44%, to $49.3 million and demand deposits increased $1.6 million to $14.1 million at March 31, 2012.

Federal Home Loan Bank advances and other borrowings increased $1.0 million, or 6.90%, to $15.5 million at March 31, 2012 from $14.5 million at December 31, 2011. At March 31, 2012 the weighted average rate of all Federal Home Loan Bank advances was 2.88% and the weighted average maturity was 2.3 years compared with a weighted average rate of 2.98% and a weighted average maturity of 2.4 years at December 31, 2011.

Stockholders’ equity increased $114,000 to $15.3 million at March 31, 2012 from $15.2 million at December 31, 2011. Equity as a percentage of assets increased 0.28% to 12.38% at March 31, 2012 compared to 12.10% at December 31, 2011. The Company previously announced that the Board of Directors has suspended quarterly dividend payments until the Company achieves an acceptable and sustained 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, 2012 2011 Selected Consolidated Financial Condition Data: (In Thousands) Assets $ 123,552 $ 118,869 Loans receivable-net 95,793 95,411 Cash and cash equivalents 10,228 6,025 Interest-earning time deposits 2,484 2,985 Investment securities 7,431 6,495 Deposits 92,421 88,928 FHLB advances and other borrowings 15,500 14,500 Stockholders’ equity-net 15,299 15,185   For the Three Months Ended March 31, 2012 2011 (Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 1,316 $ 1,445 Total interest expense   215     283   Net interest income 1,101 1,162 Provision of losses on loans   31     73   Net interest income after provision for losses on loans 1,070 1,089 Total other income 252 201 General, administrative and other expenses 1,132 1,198 Income tax expense   77     41   Net income   113     51   Earnings per share basic $ 0.09 $ 0.04 Earnings per share diluted $ 0.09 $ 0.04   Selected Financial Ratios and Other Data: Interest rate spread during period 3.65 % 3.69 % Net yield on interest-earning assets 3.84 3.99 Return on average assets 0.38 0.17 Return on average equity 2.97 1.36 Equity to assets 12.38 12.10

Average interest-earning assets to average interest-bearing liabilities

125.52 131.20 Non-performing assets to total assets 6.89 7.70 Allowance for loan losses to total loans outstanding 2.60 3.80 Allowance for loan losses to non-performing loans 33.47 42.42 Net charge-offs (recoveries) to average total loans outstanding 0.02 (0.04 ) General, administrative and other expense to average assets 0.94 0.98 Effective income tax rate 40.53 44.57   Number of full service offices 6 6 Tangible book value per share $ 10.78 $ 10.54 Market closing price at end of quarter $ 2.25 $ 2.75 Price as a percentage of tangible book value 20.88 % 26.04 %