Town and Country Financial Corporation (the “Company”), (OTC Pink: TWCF), reported core net income of $1.36 million in the second quarter of 2018, compared to $1.20 million in the second quarter of 2017, an increase of 13%. This brings core net income to $2.59 million for the first half of 2018, compared to $2.42 million in the first half of 2017.
Net income, including non-core items, was $1.37 million in the second quarter of 2018 ($0.48 per share), compared to $1.22 million ($0.43 per share) in the second quarter of 2017. Net income was $2.78 million ($0.97 per share) in the first half of 2018, compared to $2.66 million ($0.93 per share) in the first half of 2017.
President and Chief Executive Officer, Micah R. Bartlett, commented, “We are pleased with yet another quarter of solid growth in our commercial banking business, evidenced by 12.2% annualized growth in our commercial loan portfolio during the quarter, along with continued improvements in overall core revenue and profitability. We continue to realize improved operating leverage from the strategic investments we made in growing our teams in our new markets last year. And our strategic focus on the home purchase business in our mortgage banking unit delivered sold results during the quarter despite an otherwise challenging interest rate environment.”
Net interest income was $5.88 million in the second quarter of 2018, and $11.44 million for the six months ended June 30, 2018. By comparison, net interest income was $5.51 million in the second quarter of 2017, and $10.83 million in the six months ended June 30, 2017. The increases in net interest income are related to a larger loan portfolio, and an increase in the net interest margin from 3.31% in the first half of 2017, to 3.44% in the first half of 2018.
For the first six months of 2018, core revenue was $16.48 million, compared to $15.97 million in the first half of 2017. The increase in core revenue was driven by net interest income, which increased $609,000 over the first half of 2017.
Noninterest expenses were higher in the first half of 2018 than in the first half of 2017. This was due to investment in expansion in the second half of 2017, which carried over to the first half 2018, but had not occurred in the first half of 2017. The increase of $468,000 has resulted in increased revenue and customer acquisition.
Assets grew to $773 million at June 30, 2018 from $744 million a year earlier, and total deposits grew $22 million to $611 million. Loans grew to $534 million at June 30, 2018, from $485 million a year earlier. Nonperforming loans were 0.90% of net loans at quarter-end compared to 0.35% a year earlier. The allowance for loan loss remained stable, at 1.07% at June 30, 2018 and June 30, 2017.
Town and Country Bank’s capital levels remained strong in the quarter, with a Tier 1 leverage ratio of 9.06% and a total risked-based ratio of 12.67%. These ratios compare to 8.48% and 12.60% a year earlier. Equity capital grew to $56.5 million at June 30, 2018, from $51.1 million at June 30, 2017. Book value was $19.66 per common share compared with $17.96 per share at June 30, 2017, an increase of 9.5%.
The holding company reported an investment in Town and Country Bank of $75.6 million at June 30, 2018, compared with $72.5 million as of June 30, 2017. Borrowings were $10.9 million and trust preferred securities were $13.5 million at quarter-end, as compared with $12.8 million in borrowings and $13.5 million in trust preferred securities as of June 30, 2017.
The Board of Directors declared a $0.05 per share quarterly cash dividend payable on Friday, September 14, 2018 to holders of record on Tuesday, September 4, 2018. This is a 25% increase over the previous dividend amount of $0.04 per share.
Town and Country Financial Corporation is the parent holding company for Town and Country Bank and Town and Country Banc Mortgage Services, Inc. with offices in Bloomington, Buffalo, Decatur, Edwardsville, Fairview Heights, Jacksonville, Lincoln, Mt. Zion, Springfield, and Quincy. Quincy operates under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.