Third Century Bancorp Announces Plan to Repurchase Stock and Releases Earnings for Quarter Ended and Year to Date September 30, 2015

FRANKLIN, Ind.--()--Third Century Bancorp (“Company”) (OTC Pink:TDCB), the holding company for Mutual Savings Bank (“Bank”) announced it had net income of $142,000 for the quarter ended September 30, 2015, or $0.11 per common and diluted share, compared to net income of $101,000 for the quarter ended September 30, 2014, or $0.08 per common and diluted share. The period over period increase was $41,000, or 40.2%. For the nine months ended September 30, 2015, the Company recorded net income of $381,000, or $0.30 per common and diluted share, compared to net income of $221,000 for the nine months ended September 30, 2014, or $0.17 per common and diluted share. The period over period increase was $160,000, or 72.2%.

For the three months ended September 30, 2015, net income increased $41,000, or 40.2%, to $142,000 as compared to $101,000 for the same period in the prior year. The increase in net income for the three month period ended September 30, 2015 was primarily a result of a $402,000 improvement in provision for loan losses as the Company recorded a $401,000 provision credit (negative expense) for loan losses, and related reduction in the allowance for loan loss reserves, due to improvements in asset quality within the loan portfolio. Also contributing to the increase in net income was an increase of $50,000 in net interest income and a decrease of $9,000 in income tax expense, partially offset by a $23,000 decline in noninterest income and a $397,000 increase in noninterest expense. Net interest income increased due to a $35,000 increase in interest income and a $15,000 decrease in interest expense. Interest income increased due to an increase of $19,000 in interest income on loans and an increase of $16,000 in interest income on investment securities and other interest earning assets. Each increase in interest income was due to higher average balances compared to the same time period in the prior year. The decrease in interest expense for the three month period ended September 30, 2015 was comprised of a $7,000 decline in interest expense on deposits and an $8,000 reduction in interest expense on FHLB advances. Each decrease in interest expense was primarily due to declining average interest rates within the deposit and FHLB advance portfolios. The decrease in noninterest income was due to a decrease in trust income. The increase in noninterest expense was due to $303,000 of charges taken to write down two parcels of real estate owned to the current fair market values along with $99,000 related to a software contract cancellation charge related to system changes within the Company.

For the nine month period ended September 30, 2015, net income increased $160,000, or 72.2% to $381,000 as compared to $221,000 for the same period in the prior year. The increase in net income for the 2015 nine month period was primarily a result of a $403,000 decline in provision for loan losses and an increase of $87,000 in net interest income, partially offset by a $23,000 decline in noninterest income, a $286,000 increase in noninterest expense and a $20,000 increase in income tax expense. The increase in net interest income was the result of a $27,000 increase in interest income and a $60,000 decrease in interest expense. Noninterest income declined in the 2015 nine month period compared to the prior year period due to lower trust income. Noninterest expenses for the nine month period increased for the same reasons as the quarterly noninterest expense amounts discussed previously in this release.

Total assets increased $2.9 million to $126.0 million at September 30, 2015 from $123.1 million at December 31, 2014, an increase of 2.4%. The increase was primarily due to a $5.5 million increase in loans net of allowance for loan losses, a $1.1 million increase in investment securities, a $496,000 increase in interest earning time deposits with other banks, partially offset by a $4.6 million decline in cash and cash equivalents. The increase in assets was funded by a $778,000 increase in deposits and a $1.5 million increase in Federal Home Loan Bank borrowings.

Deposits increased $823,000, or 0.9%, to $94.5 million at September 30, 2015 from $93.7 million at December 31, 2014. Federal Home Loan Bank advances increased $1.5 million, or 11.1%, to $15.0 million at September 30, 2015 from $13.5 million at December 31, 2014. At September 30, 2015 the weighted average rate of all Federal Home Loan Bank advances was 1.38% compared to 1.57% at December 31, 2014 and the weighted average maturity of such advances was 2.25 years at September 30, 2015 compared with 2.9 years at December 31, 2014.

Stockholders’ equity was $15.9 million at September 30, 2015 compared with $15.7 million at December 31, 2014. Stockholders’ equity increased due to net income of $381,000 for the nine months ended September 30, 2015, partially offset by cash dividends paid of $115,000. Equity as a percentage of assets decreased to 12.64% at September 30, 2015 compared to 12.73% at December 31, 2014 due to the growth in total assets.

Third Century Bancorp today announced that its Board of Directors has authorized the repurchase of up to 10% of its outstanding shares of common stock, or 127,270 shares, commencing on November 15, 2015. It is the Company’s intention that all shares repurchased be completed prior to the end of the calendar year 2016.

The repurchase program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to a trading plan. Repurchases will be made at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. Open market purchases will be conducted in accordance with applicable legal requirements.

The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares.

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 and the Franklin United Methodist Community, as well as in Nineveh and Trafalgar, 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 changes in the interest rate environment, changes in general economic conditions, 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.

   
Selected Consolidated Financial Data
(unaudited)
 
At September 30, At December 31,

2015

2014

Selected Consolidated Financial Condition Data: (Dollars in thousands, except per share data)
Assets $ 126,033 $ 123,132
Loans receivable-net 99,155 93,616
Cash and cash equivalents 4,952 9,517
Interest-earning time deposits in other banks 5,208 4,712
Investment securities 10,926 9,867
Deposits 94,538 93,715
FHLB advances and other borrowings 15,000 13,500
Stockholders’ equity-net 15,936 15,679
 
Non-performing assets to total assets 0.61 % 0.56 %

Allowance for loan losses to total loans outstanding

1.23 1.62
Allowance for loan losses to non-performing loans 161.43 222.18
Number of full service offices 5 5
Tangible book value per share $ 12.52 $ 12.22
Market closing price at end of quarter $ 8.82 $ 8.00
Price-to-tangible book value 70.44 % 65.45 %
 
For the Three Months Ended September 30,

2015

2014

(Dollars In Thousands, Except Share Data)
Selected Consolidated Earnings Data:
Total interest income $ 1,158 $ 1,123
Total interest expense   102     117  
Net interest income 1,056 1,006
Provision (credit) for loan losses   (401 )   1  
Net interest income after provision for loan losses 1,457 1,005
Noninterest income 199 222
Noninterest expenses 1,455 1,058
Income tax expense   59     68  
Net income $ 142   $ 101  
Earnings per share basic $ 0.11 $ 0.08
Earnings per share diluted $ 0.11 $ 0.08
 
Selected Financial Ratios and Other Data:
Interest rate spread during period 3.41 % 3.25 %
Net yield on interest-earning assets 3.55 3.39
Return on average assets 0.46 0.33
Return on average equity 3.58 2.61

Average interest-earning assets to average interest-bearing liabilities

139.04 136.78
 
 
 
For the Nine Months Ended September 30,

2015

2014

(Dollars In Thousands, Except Share Data)
Selected Consolidated Earnings Data:
Total interest income $ 3,404 $ 3,377
Total interest expense   320     380  
Net interest income 3,084 2,997
Provision (credit) for loan losses   (400 )   3  
Net interest income after provision for loans losses 3,484 2,994
Noninterest income 578 601
Noninterest expenses 3,513 3,227
Income tax expense   167     147  
Net income $ 381   $ 221  
Earnings per share – basic $ 0.30 $ 0.17
Earnings per share - diluted $ 0.30 $ 0.17
 
Selected Financial Ratios and Other Data:
Interest rate spread during period 3.28 % 3.22 %
Net yield on interest-earning assets 3.42 3.37
Return on average assets 0.41 0.24
Return on average equity 3.22 1.90

Average interest-earning assets to average interest-bearing liabilities

138.81 136.52
 

Contacts

Third Century Bancorp
Robert D. Heuchan, President and CEO
David A. Coffey, Executive Vice President, CFO and COO
Tel. 317-736-7151 Fax 317-736-1726

Contacts

Third Century Bancorp
Robert D. Heuchan, President and CEO
David A. Coffey, Executive Vice President, CFO and COO
Tel. 317-736-7151 Fax 317-736-1726