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Town and Country Financial Corporation Reports Fourth Quarter 2021 Financial Results
Town and Country Financial Corporation (the “Company”) (OTC Pink: TWCF) today announced financial results for the fourth quarter of 2021 and record 2021 net income and earnings per share.
Key highlights included:
- Fourth quarter 2021 net income of $2.67 million, including $406 thousand ($290 thousand after-tax) in Paycheck Protection Program (“PPP”) fee income and a negative $600 thousand ($429 thousand after-tax) provision for loan losses bringing the total provision for loan losses for the year to zero.
- Mortgage banking fees of $2.5 million in the fourth quarter of 2021, partially reduced due to retaining $15.6 million in the fourth quarter 2021 production, forgoing the gain on sale.
- Return on Tangible Common Equity (ROTCE) of 13.63% for the quarter-to-date period ending December 31, 2021 and 15.23% for the year.
- Record full-year 2021 net income of $11.2 million ($3.95 per share), compared to $7.1 million ($2.49 per share) in 2020.
Micah R. Bartlett, President and Chief Executive Officer, noted, “We are pleased to report strong fourth quarter results culminating in a record 2021 earnings performance. While PPP fees certainly helped our earnings like many banks, we are proud that our core performance exceeded our plans for the year. Throughout the year, we were proactive in managing our cost of funds and balance sheet to improve performance while also positioning ourselves for possible future economic scenarios. We continue to execute well in our areas of core focus, with increased commercial loan demand in the second half of the year and another good year in the mortgage business, albeit off the highs of 2020. We also finished the year with solid asset quality successfully weathering the disruption from COVID and its aftermath. For the year, we are pleased to have delivered strong results to our shareholders with a 14% increase in tangible book value per share in addition to our increased dividend. We achieved a 15.23% Return on Tangible Common Equity representing the sixth year in a row we have achieved a ROTCE in excess of 10%.”
The Company’s fourth quarter 2021 net income of $2.7 million ($0.94 per share), compared to $2.9 million ($1.03 per share) in the fourth quarter of 2020. Fourth quarter 2021 net income was lower due to lower mortgage income. Net income for the year ending December 31, 2021 was $11.2 million, compared to $7.1 million in the year ending December 31, 2020.
Total assets at December 31, 2021 were $907.0 million, up $9.3 million, when compared to $897.7 million as of December 31, 2020. The increase was due to a $53.0 million increase in deposits, partially offset by a $50.3 million reduction in wholesale funding. PPP loans outstanding totaled $6.7 million as of December 31, 2021 with the remaining loans attributed to the second round of PPP. Excluding PPP forgiveness, total commercial loans outstanding have contracted $34.5 million since December 31, 2020.
Total deposits were $780.0 million at December 31, 2021, an increase of $53.0 million from December 31, 2020 and an increase of $124.9 million when compared to December 31, 2019 (pre-COVID levels). The increase was driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. Total Borrowed Money was $21.9 million at December 31, 2021 compared to $70.6 million at December 31, 2020. This reduction was primarily due to the paydown of Federal Home Loan Bank advances as a result of liquidity.
Net interest income was $6.9 million for the quarter ending December 31, 2021, unchanged from $6.9 million for the quarter ending December 31, 2020. The net interest margin for the quarter ending December 31, 2021 was 3.36% compared to 3.43%, in the fourth quarter of 2020, reflecting the lower yields on the short-term liquid assets. For the twelve months ended December 31, 2021 the net interest margin was 3.45% compared to 3.34% in the twelve months ended December 31, 2020.
Noninterest income was $3.4 million in the fourth quarter of 2021, a decrease when compared to $5.7 million in the fourth quarter of 2020. The decrease was primarily a result of lower mortgage volumes and mortgage banking fees compared to the fourth quarter 2020. During the fourth quarter of 2021, the bank retained $15.6 million of mortgage production for its own balance sheet, thereby forgoing the gain on the sale of the loans. For the twelve months ended December 31, 2021 noninterest income was $16.7 million, down from $17.4 million in 2020 reflecting a decrease in mortgage volumes and mortgage banking fees from the record refinancing levels experienced in 2020.
The fourth quarter 2021 noninterest expense of $7.4 million was down when compared to $7.7 million for the fourth quarter of 2020, due to mortgage related expenses. For the twelve months ended December 31, 2021 noninterest expense was $29.2 million, slightly lower than the $29.3 million reported in 2020.
The Company’s nonperforming loans as a percentage of total loans were 0.87% as of December 31, 2021 compared to 0.93% as of December 31, 2020. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.36% as of December 31, 2021 and 0.50% as of December 31, 2020.
Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 10.07% and a total risk-based ratio of 14.69% as of December 31, 2021. The tier 1 leverage ratio was 9.36% and the total risked-based ratio was 13.51% as of December 31, 2020.
On January 27, 2022, the board of directors declared a $0.14 per share cash dividend payable March 15, 2022, to shareholders of record as of March 1, 2022. The company’s book value per share was $29.93 at December 31, 2021, up from $26.62 as of December 31, 2020. Tangible book value per share was $27.60 at December 31, 2021, compared to $24.20 at December 31, 2020, a 14% increase.
The Company also announced that as of April 29, 2022, it will be consolidating the Buffalo and Mt. Zion offices into other existing locations.
Town and Country Financial Corporation, headquartered in Springfield, Illinois, operates as the parent holding company for Town and Country Bank including the Bank's subsidiary, Town and Country Banc Mortgage Services, Inc. (TCBMSI), with locations throughout the central, west-central, and metro-east areas of Illinois. While the Company specializes in commercial banking and mortgage lending, additional products and services offered through its 12 branch offices include retail banking, affordable housing finance options, Small Business Administration 504 and 7(a) loan programs, trust and investments, and agricultural banking. The Company, under TCBMSI, operates Community Mortgage Partners as a third-party provider for residential mortgages to other financial institutions throughout the United States. Town and Country Financial Corporation shares are quoted under the symbol TWCF.
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