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Third Century Bancorp Releases Second Quarter Results

^{Published on 2010-07-29 08:10:54 - Market Wire}
 

FRANKLIN, Ind.--([ BUSINESS WIRE ])--Third Century Bancorp (aCompanya) (OTCBB: TDCB), the holding company for Mutual Savings Bank (aBanka) announced a loss of $1.0 million for the quarter ended June 30, 2010, compared to net income of $119,000 for the quarter ended June 30, 2009. For the six months ended June 30, 2010, the Bank recorded a loss of $1.6 million compared to net income of $206,000 for the six months ended June 30, 2009. The net loss reflects higher provisions for loan losses and other non-interest loss resulting from the closure of the Banka™s Franklin Central branch.

For the three months ended June 30, 2010, the provision for loan losses increased to $1.1 million from $44,000 for the three months ended June 30, 2009. For the six months ended June 30, 2010, the provision for loan losses increased $2.1 million to $2.2 million from $65,000 for the six months ended June 30, 2009. Based on a review of the Banka™s loan portfolio as of June 30, 2010, management specifically reserved for commercial loans secured by real estate which have been negatively impacted by the severe recession in the local commercial real estate market. In evaluating the adequacy of loan loss allowances, management considers factors such as delinquency trends, portfolio composition, past loss experience and other factors such as general economic conditions. For the three months ended June 30, 2010, Mutual Savings Bank charged-off loans, net of recoveries, of $18,000, which represented a decrease of $52,000, or 73.75%, from the three months ended June 30, 2009. For the six months ended June 30, 2010, the charged-off loans, net of recoveries, increased $96,000, or 162.25%, to $156,000 from $59,000. At June 30, 2010 and 2009, the Banka™s nonperforming assets as a percentage of total assets was 6.16% and 3.41%, respectively.

For the three months ended June 30, 2010, other loss was $312,000 compared with other income of $369,000 for the three months ended June 30, 2009. For the six months ended June 30, 2010, other loss was $110,000 compared with other income of $643,000 for the six months ended June 30, 2009. The losses in this category resulted from the write-down of the carrying value of the Franklin Central branch of $487,000 following the closure of the branch on June 26, 2010.

Total assets decreased $2.7 million at June 30, 2010 to $126.1 million from $128.8 million at December 31, 2009. Loans receivable-net decreased $8.8 million, or 8.21%, to $98.7 million at June 30, 2010. The decrease in the loans receivable-net was primarily due to the net decrease of $6.8 million in loans secured by 1-4 family real estate. The resulting proceeds contributed to increases of $2.9 million in cash and cash equivalents, $2.5 million in interest-earning time deposits and $1.1 million in investments held to maturity.

Deposits decreased to $93.8 million at June 30, 2010 from $94.0 million at December 31, 2009. Demand deposits increased $1.1 million to $12.8 million and savings, money market, and NOW deposits increased $900,000 to $47.1 million, while time deposits decreased $2.2 million to $33.8 million for the six months ended June 30, 2010.

Federal Home Loan Bank advances and other borrowings decreased $1.0 million, or 5.71%, to $16.5 million at June 30, 2010 from $17.5 million at December 31, 2009. During the first six months of 2010, Mutual Savings Bank repaid $1.0 million in Federal Home Loan Bank borrowings.

Stockholdersa™ equity decreased by $1.5 million or 8.86% to $15.5 million at June 30, 2010 from $17.0 million at December 31, 2009. The Company previously announced that the board of directors has suspended quarterly dividend payments until the Company achieves an acceptable level of earnings performance.

Commenting on the earnings results for the first six months of 2010, President Robert Heuchan states, aCertainly we continue to be impacted negatively by the recession and problems with commercial real estate lending. Not only statewide, but nationally many community banks are having to work through similar issues. We believe we have identified those loans which bear monitoring and continue to maintain a conservative approach in identifying and reserving for these problem loans. Taking a loss as a result of the write-down of the now-closed Franklin Central Branch was a necessary step. While there is no assurance as to the timing for significant improvement in the economic cycle, we are confident these steps will prove favorable to the Bank in the months ahead. We will continue to work diligently and position the bank for a return to profitability.a

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 Edinburgh, Nineveh and Trafalgar, Indiana.