Town and Country Financial Corporation Reports Third-Quarter 2018 Financial Results

Town and Country Financial Corporation (the “Company”), (OTC Pink: TWCF), today announced financial results for the third quarter of 2018.

Key highlights included:

  • Core net income of $1.9 Million, compared to $1.3 million in the third quarter of 2017;
  • For the nine months ended September 30, 2018, core net income of $4.4 Million, compared to
    $3.7 million in the nine months ended September 30, 2017;
  • Net interest margin increase of 6 basis points, to 3.41%, from 3.35% in the third quarter of 2017;
    and
  • Commercial loan growth of $40 million in the nine months ended September 30, 2018.

Reported net income, including securities gains and losses and other non‐core items, was $1.9 million ($0.65 per share) in the third quarter of 2018 and $1.3 million ($0.44 per share) in the third quarter of 2017. For the nine months ended September 30, 2018, reported net income was $4.6 million ($1.61 per share), compared to $3.9 million ($1.38 per share) for the nine months ended September 30, 2017, an increase of 17%.

President and Chief Executive Officer, Micah R. Bartlett, commented, “We are very pleased to announce record core net income in the quarter. We grew the commercial loan portfolio by an annualized 14% so far this year and the mortgage banking unit delivered solid results. While our strategic focus on commercial banking and mortgage lending has been effective in growing revenue, our team also has remained disciplined in holding the line on costs. The ensuing operating leverage places the Company in an excellent position for future profitability.”

Commercial loan growth was funded in part by a reduction in investment securities, which constituted a reallocation of earning assets to higher yields. It also led to an overall increase in earning assets, from $507 million as of December 31, 2017, to $541 million as of September 30, 2018. This contributed to an increase in net interest income.

Net interest income was $5.9 million in the third quarter of 2018, and $17.3 million for the nine months ended September 30, 2018. By comparison, net interest income was $5.5 million in the third quarter of 2017, and $16.3 million in the nine months ended September 30, 2017.

Noninterest income was $3.1 million in the third quarter of 2018, compared to $2.5 million in the third quarter of 2017. For the first nine months of the year, noninterest income was $8.2 million in 2018 and $7.6 million in 2017. For both the quarter and the year to date period, mortgage banking income constituted the majority of the increase.

Noninterest expenses were higher in the first nine months of 2018 than in the first nine months of 2017 due to investment in expansion in 2017, which affected part of 2017 and was fully in place in 2018.

Noninterest expenses were $6.6 million in the three months ended September 30, 2018, and $6.2 million in the third quarter of 2017. Noninterest expenses were $19.3 million in the nine months ended September 30, 2018, and $18.5 million in the first nine months of 2017.

Assets grew to $769 million at September 30, 2018, from $746 million a year earlier, and total deposits grew to $612 million as of September 30, 2018, from $590 million a year earlier. Loans grew to $536 million at September 30, 2018, from $488 million a year earlier. Nonperforming loans were 0.72% of net loans at quarter‐end compared to 0.45% a year earlier. The allowance for loan loss remained stable, at 1.07% at September 30, 2018, and September 30, 2017.

Town and Country Bank’s capital levels remained strong at quarter‐end, with a Tier 1 leverage ratio of 9.14% and a total risked‐based ratio of 13.03%. These ratios compare to 8.60% and 12.58% a year earlier. Consolidated equity capital grew to $58 million at September 30, 2018, from $52.3 million at September 30, 2017. Book value was $20.23 per common share compared with $18.31 per share on September 30, 2017, an increase of 10.5%.

The holding company reported an investment in Town and Country Bank of $76.6 million on September 30, 2018, compared with $73.0 million as of September 30, 2017. Borrowings were $9.6 million and trust preferred securities were $13.5 million at quarter‐end, as compared with $12.5 million in borrowings and $13.5 million in trust preferred securities as of September 30, 2017.

The Board of Directors declared a $0.05 per share quarterly cash dividend payable on December 14, 2018, to holders of record on December 3, 2018.

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. The Quincy branch operates under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.

Contact: Doug Cheatham

Executive Vice President and Chief Financial Officer

dcheatham@townandcountrybank.com

(217) 321‐3424