Third Century Bancorp Releases Earnings for the Quarter Ended September 30, 2024

OTCPINK: TDCB - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded unaudited net income of $262,000 for the quarter ended September 30, 2024, or $0.22 per basic and diluted share, compared to net income of $271,000 for the quarter ended September 30, 2023, or $0.23 per basic and diluted share.

“Our Third Century Bancorp financial performance for 2024 is on track with where we planned. We anticipated continued pressure on the net interest margin due to higher funding costs,” stated David A. Coffey, President and CEO. “With the FED action to lower the FED Funds target, we anticipate this translating in a positive way to our income statement.” Coffey concluded, “The Johnson County market is very competitive and has always been. However, as the only community bank located in Johnson County, Indiana, we feel our growth opportunities for the remainder of 2024 are pretty solid and will provide a positive outlook for the remainder of the year.”

For the quarter ended September 30, 2024, net income decreased $9,000, or 3.39%, to $262,000 as compared to $271,000 for the same period in the prior year. Net interest income increased to $2.0 million for the three months ended September 30, 2024, due to an increase in total interest income of $529,000, or 15.14%, to $4,021,000 for the three-month period ended September 30, 2024, as compared to $3,492,000 for the same period for the prior year. The increase in total interest income was due to an increase in average loan balances as well as higher average yields on interest earning assets. Offsetting the increase in total interest income was an increase in total interest expense of $511,000, or 33.44%, to $2,040,000 for the three-month period ended September 30, 2024, compared to $1,529,000 for the same period for the prior year. The increase in total interest expense was the result of higher fundings costs of retail deposits. The provision reversal for credit losses during the current quarter was ($52,000) compared to a provision of $35,000 for the same quarter last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model. Non-interest income increased by $40,000, or 11.57%, to $386,000 for the quarter ended September 30, 2024, as compared to $346,000 for the same period in the prior year. The increase in non-interest income occurred due to higher fee income on deposit accounts and a slightly higher volume of residential loan sales compared to the same period for the prior year. Non-interest expense increased by $136,000, or 6.78%, to $2,146,000 for the quarter ended September 30, 2024, as compared to $2,010,000 for the same period in the prior year due primarily to increased software service provider expenses.

For the nine-months ended September 30, 2024, net income increased $53,000, or 6.98%, to $819,000 as compared to $766,000 for the same period in the prior year. Net interest income increased to $5.9 million for the nine-months ended September 30, 2024, due to an increase in total interest income of $2,223,000, or 23.46%, to $11,700,000 for the nine-month period ended September 30, 2024, as compared to $9,477,000 for the same period for the prior year. The increase in total interest income resulted from higher average yields on interest earning assets and higher average loan balances. Offsetting the increase in total interest income was an increase in total interest expense of $1,952,000, or 49.74% to $5,876,000 for the nine-month period ended September 30, 2024, compared to $3,924,000 for the same period of the prior year. The increase in total interest expense was due to the increase in funding costs of both retail deposits and wholesale funding. The provision reversal for credit losses during the first nine months of 2024 was ($50,000) compared to a provision of $211,000 for the same period last year due to the overall credit quality and updates to the qualitative factors of the current expected credit loss model.

For the nine-month period ended September 30, 2024, the allowance for credit losses totaled 163% of non-performing loans and 1.41% of total loans. For the same period last year, there were no nonperforming loans. As of September 30, 2024, nonperforming loans totaled $1,800,000, comprised of one commercial real estate participation loan. Our credit administration practices require loans to be placed on non-accrual if they are 90 days or more past due. This was the case for this one loan during the third quarter. Since that time, the loan has been brought current but remains on non-accrual. In addition, an evaluation was performed of the collateral securing the loan, and no specific allocation to the allowance for credit losses was required.

Non-interest income decreased by $364,000, or 25.73%, to $1,050,000 for the nine-months ended September 30, 2024, as compared to $1,414,000 for the same period in the prior year. The decrease in non-interest income occurred due to a year-to-date total of $48,000 in securities sale losses from balance sheet restructuring and lower loan fee income compared to the same period in the prior year. Non-interest expense increased by $67,000, or 1.10%, to $6,143,000 for the nine-months ended September 30, 2024, as compared to $6,076,000 for the same period in the prior year due to increased utilities and maintenance, software services, depreciation, and public relations costs.

Total assets rose to $324.5 million at September 30, 2024 compared to $312.9 million at December 31, 2023. This increase was partly due to a $5.8 million, or 43.66%, increase in cash and due from banks to $19.4 million at September 30, 2024. Loans held for investment also increased to $203.4 million as of September 30, 2024, which is an increase of 4.66% compared to net loans of $194.3 million at December 31, 2023. Total investment securities decreased $4.24 million, or 5.08% to $79.1 million at September 30, 2024 compared to $83.3 million at December 31, 2023. Total deposits were $248.1 million at September 30, 2024, up from $246.1 million as of December 31, 2023. As of September 30, 2024, the weighted average rate of all FHLB advances was 3.93% compared to 3.72% at December 31, 2023, and total FHLB advance balances were down $3.0 million, or 6.45% to $43.5 million at September 30, 2024 compared to $46.5 million at December 31, 2023.

Stockholders’ equity was $11.42 million at September 30, 2024, up from $9.51 million at December 31, 2023. Stockholders’ equity increased during the nine-months ended September 30, 2024, largely due to improvement in unrealized losses on available for sale securities as well as ongoing earnings. The available-for-sale securities portfolio consists of investments in government sponsored mortgage-backed securities as well as investments in municipal bonds, which provide cash flow for business purposes. Average equity as a percentage of assets was 3.09% at September 30, 2024 compared to 2.74% at December 31, 2023.

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, Trafalgar and Greenwood, Indiana.

This press release contains certain forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include inflation, changes in the interest rate environment, changes in general economic conditions, geopolitical conflicts, public health issues, legislative and regulatory changes that adversely affect the business of the Company and the Bank, and changes in the securities markets. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in belief, expectations, or events.

Condensed Consolidated Statements of Income

(Unaudited)
In thousands, except per share data
 
Three Months Ended Nine Months Ended
September 30, June 30, September 30, Sept 30, Sept 30,

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Selected Consolidated Earnings Data:
Total Interest Income

$

4,021

 

$

3,848

 

$

3,492

 

$

11,700

 

$

9,477

 

Total Interest Expense

 

2,040

 

 

1,968

 

 

1,529

 

 

5,876

 

 

3,924

 

Net Interest Income

 

1,980

 

 

1,881

 

 

1,963

 

 

5,824

 

 

5,553

 

Provision/(Credit) for Losses on Loans

 

(52

)

 

-

 

 

35

 

 

(50

)

 

211

 

Net Interest Income after Provision for Losses on Loans

 

2,032

 

 

1,881

 

 

1,928

 

 

5,874

 

 

5,342

 

Non-Interest Income

 

386

 

 

333

 

 

346

 

 

1,050

 

 

1,414

 

Non-Interest Expense

 

2,146

 

 

2,031

 

 

2,010

 

 

6,143

 

 

6,076

 

Income Tax Expense

 

10

 

 

(45

)

 

(7

)

 

(38

)

 

(86

)

Net Income

$

262

 

$

228

 

$

271

 

$

819

 

$

766

 

 
Earnings Per Share - basic

$

0.22

 

$

0.19

 

$

0.23

 

$

0.70

 

$

0.66

 

Earnings Per Share - diluted

$

0.22

 

$

0.19

 

$

0.23

 

$

0.70

 

$

0.65

 

Condensed Consolidated Balance Sheet

(Unaudited)
In thousands, except per share data
September 30, December 31, September 30,

 

2024

 

 

2023

 

 

2023

 

Selected Consolidated Balance Sheet Data:
Assets
Cash and Due from Banks

$

19,351

 

$

13,470

 

$

8,068

 

Investment Securities, Available-for-Sale, at Fair Value

 

76,132

 

 

80,367

 

 

76,842

 

Investment Securities, Held-to-Maturity

 

2,950

 

 

2,950

 

 

2,950

 

Loans Held-for-Sale

 

834

 

 

552

 

 

-

 

Loans Held-for-Investment

 

206,293

 

 

196,722

 

 

191,968

 

Allowance for Credit Losses

 

2,928

 

 

2,972

 

 

2,947

 

Net Loans

 

203,365

 

 

194,302

 

 

189,021

 

Accrued Interest Receivable

 

1,385

 

 

1,547

 

 

1,298

 

Other Assets

 

20,451

 

 

20,269

 

 

21,083

 

Total Assets

$

324,468

 

$

312,905

 

$

299,262

 

Liabilities
Noninterest-Bearing Deposits

$

40,739

 

$

43,692

 

$

43,003

 

Interest-Bearing Deposits

 

207,341

 

 

202,426

 

 

187,492

 

Total Deposits

 

248,080

 

 

246,118

 

 

230,495

 

FHLB Advances and Other Borrowings

 

53,500

 

 

46,500

 

 

51,500

 

Subordinated Notes, Net of Issuances Costs

 

9,778

 

 

9,758

 

 

9,751

 

Accrued Interest Payable

 

793

 

 

485

 

 

364

 

Accrued Expenses and Other Liabilities

 

893

 

 

536

 

 

1,105

 

Total Liabilities

 

313,044

 

 

303,397

 

 

293,215

 

Stockholders' Equity
Common Stock

 

11,510

 

 

11,480

 

 

11,467

 

Retained Earnings

 

11,042

 

 

10,338

 

 

10,143

 

Accumulated Other Comprehensive Gain/(Loss)

 

(11,128

)

 

(12,310

)

 

(15,563

)

Total Stockholders' Equity

 

11,423

 

 

9,508

 

 

6,047

 

Total Liabilities and Stockholders' Equity

$

324,468

 

$

312,905

 

$

299,262

 

Three Months Ended Nine Months Ended
dollar figures are in thousands, except per share data
September 30, June 30, September 30, September 30, September 30,

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Selected Financial Ratios and Other Data (Unaudited):
Interest Rate Spread During Period

 

2.13

%

 

2.09

%

 

2.34

%

 

2.12

%

 

2.20

%

Net Yield on Interest-Earning Assets

 

5.30

%

 

5.19

%

 

4.78

%

 

5.18

%

 

4.38

%

Non-Interest Expense, Annualized, to Average Assets

 

2.69

%

 

2.60

%

 

2.66

%

 

2.58

%

 

2.78

%

Return on Average Assets, Annualized

 

0.33

%

 

0.29

%

 

0.36

%

 

0.34

%

 

0.35

%

Return on Average Equity, Annualized

 

10.61

%

 

11.03

%

 

13.15

%

 

11.99

%

 

11.55

%

Average Equity to Assets

 

3.09

%

 

2.64

%

 

2.73

%

 

2.87

%

 

3.03

%

 
Average Net Loans

$

199,422

 

$

195,685

 

$

189,897

 

$

196,336

 

$

185,054

 

Average Net Securities

 

79,135

 

 

78,971

 

 

82,795

 

 

80,169

 

 

87,603

 

Average Other Interest-Earning Assets

 

24,987

 

 

22,009

 

 

19,314

 

 

24,809

 

 

15,610

 

Total Average Interest-Earning Assets

 

303,544

 

 

296,665

 

 

292,006

 

 

301,314

 

 

288,267

 

Average Total Assets

 

319,355

 

 

312,570

 

 

302,142

 

 

317,125

 

 

291,877

 

 
Average Noninterest-Bearing Deposits

$

40,366

 

$

40,568

 

$

42,464

 

$

41,033

 

$

43,122

 

Average Interest-Bearing Deposits

 

204,469

 

 

205,295

 

 

190,553

 

 

205,325

 

 

193,659

 

Average Total Deposits

 

244,834

 

 

245,863

 

 

233,017

 

 

246,358

 

 

236,781

 

Average Wholesale Funding

 

53,500

 

 

48,764

 

 

59,670

 

 

51,131

 

 

45,804

 

Average Interest-Bearing Liabilities

 

257,969

 

 

254,059

 

 

250,223

 

 

256,456

 

 

239,463

 

 
Avg. Interest-Earnings Assets to Avg. Interest-Bearings Liabilities

 

117.67

%

 

116.77

%

 

116.70

%

 

117.49

%

 

120.38

%

Average equity

$

9,866.80

 

$

8,253.62

 

$

8,243.00

 

$

9,108.87

 

$

8,842.00

 

Non-Performing Loans to Total Loans

 

0.87

%

 

0.00

%

 

0.00

%

 

0.87

%

 

0.00

%

Allowance for Credit Losses to Total Loans Outstanding

 

1.41

%

 

1.49

%

 

1.54

%

 

1.41

%

 

1.54

%

Allowance for Credit Losses to Non-Performing Loans

 

162.68

%

 

-

 

 

-

 

 

162.68

%

 

-

 

Net Loan Chargeoffs/(Recoveries) to Avg. Total Loans Outstanding

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Effective Income Tax Rate

 

3.71

%

 

-24.85

%

 

-2.65

%

 

-4.89

%

 

-12.65

%

Tangible Book Value Per Share

$

9.71

 

$

8.02

 

$

5.11

 

$

9.71

 

$

5.11

 

Market Closing Price at the End of Quarter

$

7.32

 

$

6.94

 

$

7.75

 

$

7.32

 

$

7.75

 

Price-to-Tangible Book Value

 

75.38

%

 

86.59

%

 

151.71

%

 

75.38

%

 

151.71

%

 

Contacts

David A. Coffey, President and CEO

S. Paul Arab, SVP and CFO

Tel. 317-736-7151

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