SPRINGFIELD, Ill., May 5, 2015 /PRNewswire/ — Town and Country Financial Corporation (OTC Pink: TWCF) reported first-quarter core net income of $741 thousand, up 32.1% from core net income in the first quarter 2014. Including the dividend paid on preferred stock and income from security gains, net income available to common shareholders was $729 thousand, or $0.26 per share, compared with $0.21 per share in the year-ago period.
President and Chief Executive Officer, Micah R. Bartlett commented, “We were pleased with the sound first quarter results driven by core and mortgage banking profits, both higher as compared to the first quarter of 2014. Core banking profits were up 6% on average loans that were up 3%, stable fee income, and smart expense management. Improved mortgage profits were driven by a 51% increase in mortgage volumes, the increase driven more by purchase transactions than refinance transactions. We are also happy to report that bank capital levels under the newly applied Basel III standard transition rules remained strong.”
Discussion of First Quarter Results
Net revenue was $5.4 million, an increase of 9.7% over the year ago quarter driven by a 3.2% increase in net interest income and a 53% increase in revenue from mortgage banking activities. In the quarter, lower interest rates drove refinance transactions that were nearly double their year-ago level. Refinance transactions represented 44% of total mortgage volumes as compared with 39% in the first quarter of 2014. Partially offsetting the higher revenue components was the absence of security gains in 2015 compared with $74 thousand in the first quarter of 2014.
The tax equivalent net interest margin was 3.35% in the current quarter compared with 3.31% in the year-ago quarter.
Noninterest expense increased by 1.1% to $4.2 million, primarily due to expenses associated with higher levels of mortgage lending transactions. The company took actions in the late part of the fourth quarter of 2014 and into the first quarter of 2015 to consolidate the number of branches from 12 to 9. As a result, certain expense reductions are now being realized, particularly occupancy and delivery charges. In addition, expenses declined due to the disposition of commercial assets referred to as other real estate owned.
The provision for loan loss was $125 thousand compared to no provision in the first quarter of 2014. Net charge offs were 0.01% of average loans compared with 0.05% in 2014.
Loans that were past due 30 days or more, including non-accrual loans, totaled 2.4% of loans outstanding at March 31, 2015 compared with 0.50% at December 31, 2014. The allowance for loan loss was 519% of total non-performing loans and 1.08% of total loans, excluding held for sale, compared with 577% and 1.03%, respectively, at the prior year-end.
At March 31, 2015 total assets were $496 million and total net loans were $337 million compared with $499 million and $354 million, respectively, at December 31, 2014. Total deposits were $404 million and common equity capital was $43.6 million. The reported book value was $15.62 per common share compared with $15.44 per share at December 31, 2014. Town and Country Financial Corporation is considered a small bank holding company and therefore Basel III capital standards do not apply. Town and Country Bank’s capital levels remained strong in the quarter under the Basel III transitional standardized approach with common equity tier 1 capital of $47 million, or 12.51%, and total regulatory capital of $53 million, or 14.07%, both stated as a percentage of risk-weighted assets.
The Board of Directors declared a $0.03 per share quarterly cash dividend payable on June 15, 2015 to stockholders of record June 1, 2015.
Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town & Country Banc Mortgage Services, Inc. with offices in Buffalo, Decatur, Lincoln, Mt. Zion, Quincy, and Springfield. Town and Country Financial Corporation shares are quoted under the symbol TWCF.
SOURCE Town and Country Financial Corporation