TDCB - Third Century Bancorp Releases Earnings for the 4th Quarter 2021 and Record Earnings for the Year Ended December 31 2021

(OTCPINK: TDCB) - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $634,000 for the quarter ended December 31, 2021, or $0.54 per basic and diluted share, compared to net income of $311,000 for the quarter ended December 31, 2020, or $0.26 per basic and diluted share. For the year ended December 31, 2021, net income increased $570,000, or 32.17%, to a record $2.3 million, or $2.00 per basic share and $1.99 per diluted share, as compared to $1.7 million, or $1.49 per basic and diluted share, for the year ended December 31, 2020.

David A. Coffey, President and CEO, stated, “We have had another great year in the history of our bank. Our growth was the result of continued focus on quality relationships that has helped us remain a trusted member of the communities we serve.” Coffey further commented, “Our record earnings were accomplished by taking advantage of opportunities that were made available to us over the course of the year. There is no doubt that we can only accomplish such results with a dedicated staff and board of directors.” Coffey concluded, “While we anticipate a different economic environment over the next twelve months, we will look forward to continued success in 2022.”

For the quarter ended December 31, 2021, net income increased $323,000, or 103.86%, to $634,000 as compared to $311,000 for the same period in the prior year. The increase in net income for the three-month period ended December 31, 2021 was driven primarily as a result of the $219,000, or 13.83%, increase in net interest income and a $92,000, or 11.73%, increase in non-interest income as compared to the same period in the prior year. The increase in net interest income was due to a combination of an increase in interest income and a decrease in interest expense due to increases in average assets largely due to an increase in the average balance of investment securities and decreases in average rates paid on interest-bearing liabilities primarily as a result of a decrease in average rates paid on deposits in the current low interest rate environment. Non-interest income increased as a result of a $262,000, or 590.93%, increase in net gains on investment sales for the quarter ended December 31, 2021 as compared to the same period in the prior year. In addition, the increase in net income was supported by a decrease of $60,000, or 100.00%, in provision for loan losses as compared to the same period in the prior year. The increase in net income was partially offset by a $57,000, or 135.71%, increase in income tax expense as compared to the same period in the prior year as a result of the increase in income before income tax expense.

The $60,000 decrease in the provision for loan losses compared to the same period in 2020 was due to the improving economic conditions resulting from the current COVID-19 pandemic. The Company had $3,000 in net charge-offs during the quarter ended December 31, 2021 compared no net charge-offs for the same period in 2020.

For the year ended December 31, 2021, net income increased $570,000, or 32.17%, to a record $2.3 million, or $2.00 per basic share and $1.99 per diluted share, as compared to $1.7 million, or $1.49 per basic and diluted share, for the year ended December 31, 2020. The increase in net income for the year ended December 31, 2021 was driven primarily as a result of the $440,000, or 6.33%, increase in net interest income. The increase in net interest income was due to a combination of an increase in interest income and a decrease in interest expense due to increases in average assets largely due to an increase in the average balance of investment securities and decreases in average rates paid on interest-bearing liabilities primarily as a result of a decrease in average rates paid on deposits in the current low interest rate environment. The increase in net interest income for the year ended December 31, 2021 was partially offset by a decrease in non-interest income of $92,000, or 3.68% as compared to the prior year. This decrease was partially offset by a $454,000 or 370.18%, increase in gains on the sale of investment securities, available-for-sale, as compared to the prior year. In addition, the provision for loan losses decreased $245,000, or 73.13%, for the year ended December 31, 2021 as compared to the prior year.

The increase in net income for the year ended December 31, 2021 was offset by a $11,000 or 3.08% increase in income tax expense as compared to the prior year. The increase in income tax expense was due to an increase in pre-tax income for the year ended December 31, 2021 as compared to the prior year. The increase in pre-tax income was partially offset by a decrease in the effective income tax rate to 13.58% for the year ended December 31, 2021 from 20.88% for the prior year.

Total assets increased $31.9 million to $241.6 million at December 31, 2021 from $209.6 million at December 31, 2020, an increase of 15.23%. The increase was primarily due to a $25.4 million, or 42.79%, increase in investment securities, available-for-sale to $84.7 million at December 31, 2021, primarily funded by a $37.5 million, or 21.19%, increase in total deposits. Total deposits were $214.7 million at December 31, 2021, up from $177.1 million as of December 31, 2020. Federal Home Loan Bank advances were $5.0 million at December 31, 2021 as compared to $11.7 million at December 31, 2020. At December 31, 2021, the weighted average rate of all Federal Home Loan Bank advances was 1.45% compared to 1.21% at December 31, 2020, and the weighted average maturity was 4.3 years at December 31, 2021 compared to 3.5 years at December 31, 2020. Total loans held-for-investment grew to $143.9 million at December 31, 2021 from $138.8 million at December 31, 2020, an increase of 3.67%.

The increase in total loan balances was partially the result of loans originated through the Small Business Administration’s Paycheck Protection Program (“PPP”) in which the Company participated. The Company originated $8.6 million of PPP loans in the program in 2020, of which $224,000 remained on the Company’s balance sheet as of December 31, 2021. The Company originated $4.6 million of PPP loans in the program in 2021, of which $611,000 remained on the Company’s balance sheet as of December 31, 2021. As of December 31, 2021, a total of $835,000 of PPP loans remained on the Company’s balance sheet with the remaining amount expected to be forgiven by the Small Business Administration in the first quarter of 2022.

The allowance for loan losses increased by $90,000, or 5.03%, to $1.9 million at December 31, 2021 from $1.8 million at December 31, 2020. The increase was primarily due to the provision for loan losses of $90,000 during the year ended December 31, 2021 due to the economic conditions resulting from the COVID-19 pandemic. The allowance for loan losses totaled 1.30% of total loans as of December 31, 2021 as compared to 1.29% of total loans as of December 31, 2020. Nonperforming loans totaled $237,000 or 0.16%, of total loans as of December 31, 2021 as compared to $111,000 or 0.08%, of total loans as of December 31, 2020.

Stockholders’ equity was $21.5 million at December 31, 2021, up from $20.5 million at December 31, 2020. Stockholders’ equity increased by $1.0 million during the year ended December 31, 2021 as a result of net income of $2.3 million, offset by a decrease in net unrealized gain of $717,000 of available-for-sale securities due to the sale of investment securities, available-for-sale, as well as an increase in market interest rates. The increase in stockholders’ equity was also offset by dividends of $409,000, repurchased stock of $190,000 and stock awards of $32,000. Equity as a percentage of assets decreased to 8.91% at December 31, 2021 compared to 9.76% at December 31, 2020.

During the year ended December 31, 2021, the Company repurchased 12,200 shares of common stock at an average cost of $15.52 per share pursuant to the Company’ stock repurchase program. At December 31, 2021, 37,800 shares of common stock remain available for future repurchase by the Company through the stock repurchase program.

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 the COVID-19 pandemic, changes in the interest rate environment, changes in general economic conditions, inflation, 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.

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David A. Coffey, President and CEO
Ryan W. Cook, Senior Vice President and CFO
Tel. 317-736-7151
Fax 317-736-1726