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Third Century Bancorp Releases Earnings for Quarter Ended June 30, 2018

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(OTC:TDCB) - Third Century Bancorp ("Company"), the holding company
for Mutual Savings Bank ("Bank") announced it had net income of $251,000
for the quarter ended June 30, 2018, or $0.21 per basic and diluted
share, compared to net income of $172,000 for the quarter ended June 30,
2017, or $0.14 per basic and diluted share. The improvement in net
income was primarily driven by an increase of $130,000 in net interest
income. For the six months ended June 30, 2018, the Company recorded net
income of $449,000, or $0.38 per basic and diluted share, compared to
net income of $339,000 for the six months ended June 30, 2017, or $0.28
per basic and diluted share. The improvement in net income for the 2018
six-month period was primarily due to a $203,000 increase in net
interest income.

For the quarter ended June 30, 2018, net income increased $79,000, or
45.93%, to $251,000 as compared to $172,000 for the same period in the
prior year. The increase in net income for the three-month period ended
June 30, 2018 was primarily a result of a $130,000 increase in net
interest income, which was achieved through an increase in interest
income of $199,000 partially offset by a $69,000 increase in interest
expense. The increase in interest income was due to an increase in the
average yield on interest-earning assets, along with higher average loan
balances. The increase in interest expense was primarily due to higher
average balances of interest-bearing liabilities and a higher average
rate paid on interest-bearing liabilities.

The increase in net interest income for the quarter ended June 30, 2018
was partially offset by a $27,000 increase in provision for loan losses
compared to the same period in 2017. The increase in provision for loan
losses was primarily driven by growth of the loan portfolio as well as
credit quality factors. Changes to the allowance included net loan
recoveries of $3,000 during the quarter ended June 30, 2018 compared to
net loan charge offs of $11,000 for the same period in 2017.

The increase in net income for the three-month period ended June 30,
2018 was also impacted by a $134,000 increase in noninterest income, a
$167,000 increase in noninterest expense and a $9,000 decrease in income
tax expense. The increase in noninterest income was due to increases in
gains on sales of loans, trust income, and deposit fee and service
charge income for the three-month period ended June 30, 2018 as compared
to the prior year period. The increase in noninterest expense for the
quarter ended June 30, 2018 compared to the same period in the prior
year was primarily due to increases in wages and benefits, advertising
expenses, and data processing expenses. This was offset by decreases in
tax expense from lower effective tax rates in 2018.

For the six-month period ended June 30, 2018, net income increased
$110,000 or 32.45% to $449,000 from $339,000 for the six-month period
ended June 30, 2017. The increase in net income for the six-month period
ended June 30, 2018 was primarily due to an increase in net interest
income of $203,000 or 8.52% to $2,585,000 from $2,382,000 for the
six-month period ended June 30, 2017. The increase in net interest
income for the six-month-period ended June 30, 2018 was due to a
$342,000 or 12.94% increase in interest income partially offset by a
$139,000 or 53.46% increase in interest expense. The increase in
interest income was due to an increase in the average yield on
interest-earning assets, along with higher average loan balances. The
increase in interest expense was primarily due to higher average
balances of interest-bearing liabilities and a higher average rate paid
on interest-bearing liabilities.

The increase in net interest income for the six-months ended June 30,
2018 was partially offset by a $58,000 increase in provision for loan
losses compared to the same period in 2017. The increase in provision
for loan losses was primarily driven by growth in the loan portfolio and
credit quality factors. Changes to the allowance included net loan
charge offs of $12,000 during the six months ended June 30, 2018
compared to net loan charge offs of $258,000 for the same period in 2017.

The increase in net income for the six-month period ended June 30, 2018
was also impacted by a $209,000 increase in noninterest income, a
$271,000 increase in noninterest expense and a $27,000 decrease in
income tax expense. The increase in noninterest income was due to
increases in gains on sales of loans, trust income, and deposit fee and
service charge income for the six-month period ended June 30, 2018 as
compared to the same period in the prior year. The increase in
noninterest expense for the six months ended June 30, 2018 compared to
the same period in the prior year was primarily due to increases in
wages and benefits, advertising expenses, and data processing expenses.

Total assets increased $4.3 million to $155.3 million at June 30, 2018
from $151.0 million at December 31, 2017, an increase of 2.8%. The
increase was primarily due to a $7.9 million or 6.6% increase in loans,
primarily funded by a $6.6 million or 5.9% increase in total deposits,
less a decrease of $3.0 million or 13.9% in FHLB advances. At June 30,
2018, the weighted average rate of all Federal Home Loan Bank advances
was 1.45% compared to 1.44% at December 31, 2017, and the weighted
average maturity remained at 4.3 years at June 30, 2018 compared to 4.3
years at December 31, 2017.

The allowance for loan losses increased by $109,000 or 9.9% to
$1,211,000 at June 30, 2018 compared to $1,102,000 at December 31, 2017.
The increase was the result of provision for loan losses of $121,000
during the six months ended June 30, 2018 and was partially offset by
net loan charge offs of $12,000. The allowance for loan losses totaled
24,220.00% of non-performing loans and 0.94% of total loans as of June
30, 2018. Nonperforming loans totaled $5,000 or 0.01% of total loans as
of June 30, 2018.

Stockholders' equity increased to $16.2 million at June 30, 2018 from
$15.9 million at December 31, 2017. Stockholders' equity increased by
$308,000 during the six-month period ended June 30, 2018 due to net
income of $449,000, which was partially offset by cash dividends paid of
$141,000. Equity as a percentage of assets decreased to 10.43% at June
30, 2018 compared to 10.52% at December 31, 2017.

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 Otterbein
Franklin SeniorLife 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 June 30, At December 31,
2018 2017
Selected Consolidated Financial Condition Data: (Dollars in thousands, except per share data)
Total Assets $ 155,279 $ 150,988
Loans receivable-net of allowance for loan losses of $1,211 and
$1,102
127,253 119,311
Loans held for sale 0 76
Cash and cash equivalents 4,481 8,319
Interest-earning time deposits in other banks 992 1,984
Investment securities 15,318 13,544
Deposits 119,996 113,300
FHLB advances and other borrowings 18,500 21,500
Interest payable and other liabilities 620 303
Stockholders' equity-net 16,193 15,885
 
Equity to assets ratio at quarter end 10.43 % 10.52 %
Non-performing loans to total loans 0.01 0.89

Allowance for loan losses to total loans outstanding

0.94 0.91
Allowance for loan losses to non-performing loans 24,220.00 103.37
Number of full service offices 5 5
Tangible book value per share $ 13.72 $ 13.46
Market closing price at end of quarter $ 13.95 $ 12.80
Price-to-tangible book value 101.68 % 95.10 %
 
 
For the Three Months Ended June 30,
2018 2017
(Dollars In Thousands, Except Share Data)
Selected Consolidated Earnings Data:
Total interest income $ 1,546 $ 1,347
Total interest expense   207     138  
Net interest income 1,339 1,209
Provision for losses on loans   59     32  

Net interest income after provision for losses on loans

1,280 1,177
Noninterest income 331 197
Noninterest expense 1,291 1,124
Income tax expense   69     78  
Net income $ 251   $ 172  
Earnings per basic and diluted share $ 0.21 $ 0.14
 
Selected Financial Ratios and Other Data:
Interest rate spread during period 3.63 % 3.60 %
Net yield on interest-earning assets 4.20 3.72
Noninterest expense, annualized, to average assets 3.41 3.16
Return on average assets (annualized) 0.66 0.49
Return on average equity (annualized) 6.34 4.34
Average equity to assets 10.43 11.19

Average interest-earning assets to average interest-bearing
liabilities

111.09 129.31

Net charge-offs/(recoveries) to average total loans outstanding

(0.01 ) 0.01
Effective income tax rate 21.68 31.07
 
 
For the Six Months Ended June 30,
2018 2017
(Dollars in thousands, except per share data)
Selected Consolidated Earnings Data:
Total interest income $ 2,984 $ 2,642
Total interest expense   399     260  
Net interest income 2,585 2,382
Provision for losses on loans   121     63  

Net interest income after provision for losses on loans

2,464 2,319
Noninterest income 618 409
Noninterest expense 2,508 2,237
Income tax expense   125     152  
Net income $ 449   $ 339  
Earnings per basic and diluted share $ 0.38 $ 0.28
 
Selected Financial Ratios and Other Data:
Interest rate spread during period 3.56 % 3.61 %
Net yield on interest-earning assets 4.11 3.73
Noninterest expense to average assets 3.34 3.22
Return on average assets (annualized) 0.60 0.49
Return on average equity (annualized) 5.71 4.28
Average equity to average assets 10.49 11.40

Average interest-earning assets to average interest-bearing
liabilities

102.28 129.20

Net charge-offs/(recoveries) to average total loans outstanding

0.01 0.23
Effective income tax rate 21.69 31.00

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