AP NEWS

Town and Country Financial Corporation Reports Second-Quarter 2018 Net Income; Announces 25% Cash Dividend Increase

August 3, 2018

SPRINGFIELD, Ill., Aug. 03, 2018 (GLOBE NEWSWIRE) -- 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.

Contact: Doug CheathamExecutive Vice President and Chief Financial Officerdcheatham@townandcountrybank.com (217) 321-3424

CONSOLIDATED STATEMENT OF CONDITION As of the dates indicated: June 30, 2018 December 31, June 30, 2017 (unaudited) 2017 (unaudited) ---------------------------------------------- --------------- --------------- --------------- ASSETS Cash and due from banks $ 9,461,448 $ 13,841,349 $ 11,708,179 Investments 171,764,889 172,388,738 185,011,720 Loans, net 534,178,378 501,874,302 484,883,633 Other assets 57,499,574 61,133,775 62,864,923 Total assets $ 772,904,289 $ 749,238,164 $ 744,468,455 ---------------------------------------------- - ----------- - - ----------- - - ----------- - LIABILITIES & EQUITY Deposits $ 611,483,002 $ 592,385,016 $ 589,673,490 Borrowed money 86,700,000 81,625,000 85,050,000 Other liabilities 4,726,046 7,890,784 5,207,101 ---------------------------------------------- - ----------- - - ----------- - - ----------- - Total liabilities $ 702,909,048 $ 681,900,800 $ 679,930,591 Trust preferred securities 13,502,980 13,476,627 13,450,275 Equity capital 56,492,261 53,860,737 51,087,589 Total liabilities & equity $ 772,904,289 $ 749,238,164 $ 744,468,455 ---------------------------------------------- - ----------- - - ----------- - - ----------- - SUMMARY INCOME STATEMENT Three Months Ended June 30, Six Months Ended June 30, ---------------------------------------------- ------------------------------- ------------------------------ (Unaudited) 2018 2017 2018 2017 ---------------------------------------------- ----------- - - ----------- - ----------- - - ---------- - Interest income $ 7,112,004 $ 6,460,237 $ 13,773,227 $ 12,698,251 Interest expense 1,236,390 953,232 2,332,496 1,866,240 ---------------------------------------------- - ----------- - - ----------- - - ----------- - - ---------- - Net interest income $ 5,875,614 $ 5,507,005 $ 11,440,731 $ 10,832,011 Provision for loan losses 550,000 257,500 660,000 415,000 Noninterest income 2,760,859 2,782,636 5,035,129 5,137,775 Noninterest expense 6,478,142 6,282,542 12,715,003 12,246,975 ---------------------------------------------- - ----------- - - ----------- - - ----------- - - ---------- - Income before income taxes $ 1,608,331 $ 1,749,599 $ 3,100,857 $ 3,307,811 Income taxes 246,391 544,447 510,423 890,969 ---------------------------------------------- - ----------- - - ----------- - - ----------- - - ---------- - Core Net Income 1,361,940 1,205,152 2,590,434 2,416,842 Non-Core items after tax 11,468 16,719 192,591 242,298 Net income $ 1,373,408 $ 1,221,871 $ 2,783,025 $ 2,659,140 ---------------------------------------------- - ----------- - - ----------- - - ----------- - - ---------- - Selected Highlights: Three Months Ended June 30, Six Months Ended June 30, ------------------------------- ------------------------------ (Unaudited) 2018 2017 2018 2017 ---------------------------------------------- - ----------- - - ----------- - - ----------- - - ---------- - Basic earnings per share $ 0.48 $ 0.43 $ 0.97 $ 0.93 Net charge offs to average loans less HFS 0.09 % 0.09 % 0.05 % 0.09 % Net revenue (in 000s) $ 8,636 $ 8,290 $ 16,476 $ 15,970 Net interest margin 3.47 % 3.35 % 3.44 % 3.31 % Fees from mortgage banking activities (in $ 1,604 $ 1,766 $ 2,848 $ 3,131 000s) Return on common equity 9.85 % 10.01 % 10.03 % 10.95 % Return on assets 0.73 % 0.66 % 0.74 % 0.72 % Balance Sheet Ratios As of the dates indicated: June 30, 2018 December 31, June 30, 2017 (unaudited) 2017 (unaudited) ---------------------------------------------- --------------- --------------- --------------- Book value per common share 19.66 18.85 17.96 Tier 1 leverage ratio (TCB only per Basel III) 9.06 % 8.70 % 8.48 % Total risk-based capital ratio (TCB only per 12.67 % 12.72 % 12.60 % Basel III) Nonperforming loans 0.90 % 0.46 % 0.35 % Delinquent loans, excluding nonperforming 0.46 % 0.27 % 0.31 % Allowance for loan loss 1.07 % 1.07 % 1.07 % Coverage ratio (allowance to NPLs) 120 % 235 % 309 % Mortgage loans sold with servicing retained $ 648,730 $ 623,058 $ 599,758 (in 000s) Trust assets under management (in 000s) $ 164,547 $ 155,950 $ 150,748 HOLDING COMPANY ONLY As of the dates indicated: June 30, 2018 December 31, June 30, 2017 (unaudited) 2017 (unaudited) ---------------------------------------------- --------------- --------------- --------------- ASSETS Cash and other assets $ 6,329,227 $ 6,529,046 $ 5,800,643 Investment in TCB 75,573,837 73,990,037 72,546,007 Total assets $ 81,903,064 $ 80,519,083 $ 78,346,650 ---------------------------------------------- - ----------- - - ----------- - - ----------- - LIABILITIES & EQUITY Other liabilities $ 1,032,823 $ 981,719 $ 1,008,786 Borrowings 10,875,000 12,200,000 12,800,000 Trust preferred securities 13,502,980 13,476,627 13,450,275 Equity capital 56,492,261 53,860,737 51,087,589 Total liabilities & equity $ 81,903,064 $ 80,519,083 $ 78,346,650 ---------------------------------------------- - ----------- - - ----------- - - ----------- -

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