Business & Finance
Business and Finance
Business and Finance
Thu, October 28, 2010
Wed, October 27, 2010 
FRANKLIN, Ind.--([ BUSINESS WIRE ])--Third Century Bancorp (OTCBB: TDCB) (aCompanya), the holding company for Mutual Savings Bank (aBanka) announced net income of $87,000 for the quarter ended September 30, 2010, compared to net income of $64,000 for the quarter ended September 30, 2009. For the nine months ended September 30, 2010, the Company recorded a loss of $1.5 million compared to net income of $270,000 for the nine months ended September 30, 2009. The year-to-date net loss reflects higher provisions for loan losses of $2.2 million and other non-interest loss resulting from the closure of the Banka™s Franklin Central branch of $487,000.
For the three months ended September 30, 2010, the provision for loan losses decreased $127,000 to $15,000 from $142,000 for the three months ended September 30, 2009. For the nine months ended September 30, 2010, the provision for loan losses increased $2.0 million to $2.2 million from $206,000 for the nine months ended September 30, 2009. 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 September 30, 2010, Mutual Savings Bank charged-off loans, net of recoveries, of $1.2 million compared to $10,000 for the three months ended September 30, 2009. For the nine months ended September 30, 2010 and 2009, the Bank charged-off loans, net of recoveries, of $1.3 million and $69,000, respectively. At September 30, 2010, management classified approximately $4.7 million in loans as impaired in the calculation of the allowance for loan losses compared to $3.2 million identified as of September 30, 2009. At September 30, 2010 and 2009, the Banka™s nonperforming assets as a percentage of total assets was 5.35% and 3.33%, respectively.
General, administrative and other expenses decreased $87,000 to $1.3 million for the three months ended September 30, 2010. In July 2010, approximately 60,264 shares out of 66,125 shares awarded to employees under the Companya™s Recognition and Retention Program (aRRPa) were fully amortized. As a result, the related benefit expense recorded by the Bank decreased by $42,000, or 94.10%, to $3,000 from $44,000 for the three months ended September 30, 2010 and decreased $40,000, or 32.55%, to $84,000 from $124,000 for the nine months ended September 30, 2010.
On July 23, 2010, the board of directors for both the Company and the Bank resolved to freeze and terminate the Employee Stock Option Plan (aESOPa), subject to receipt of a favorable determination letter from the Internal Revenue Service. The resolution resulted from ongoing concerns regarding the cost of the ESOP and how it could negatively affect the future financial performance of the Company and the Bank. The freezing of the ESOP plan resulted in a decrease of $13,000 in ESOP expense to $1,000 for the three months ended September 30, 2010 from $14,000 for the same respective period in 2009. For the nine months ended September 30, 2010 and 2009, the ESOP expense decreased $19,000 to $29,000 from $48,000.
For the nine months ended September 30, 2010, general administrative and other expenses increased $351,000 to $4.3 million. This increase was primarily due to the write-off of the Franklin Central Branch for $487,000 in the second quarter of 2010.
Total assets decreased $5.9 million at September 30, 2010 to $122.9 million from $128.8 million at December 31, 2009. Loans receivable-net decreased $10.1 million, or 9.41%, to $97.4 million at September 30, 2010. The decrease in the loans receivable-net was primarily due to the net decrease of $7.8 million in commercial construction and land development loans. The resulting proceeds contributed to increases of $1.5 million in cash and cash equivalents, $2.5 million in interest-earning time deposits and a $2.5 million decrease in borrowings.
Deposits decreased to $92.0 million at September 30, 2010 from $94.0 million at December 31, 2009. Demand deposits increased $1.3 million to $13.1 million while time deposits decreased $4.0 million to $32.1 million for the nine months ended September 30, 2010.
Federal Home Loan Bank advances and other borrowings decreased $2.5 million, or 14.29%, to $15.0 million at September 30, 2010 from $17.5 million at December 31, 2009. During the first nine months of 2010, Mutual Savings Bank repaid $2.5 million in Federal Home Loan Bank borrowings.
Stockholdersa™ equity decreased by $1.4 million or 8.35% to $15.6 million at September 30, 2010 from $17.0 million at December 31, 2009. The Company previously announced that the board of directors suspended quarterly dividend payments until the Company achieves an acceptable level of earnings performance.
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.
Selected Consolidated Financial Data | ||||||
| At September 30, | At December 31, | |||||
2010 | 2009 | |||||
| Selected Consolidated Financial Condition Data: | (In Thousands) | |||||
| Assets | $ | 122,897 | $ | 128,820 | ||
| Loans receivable-net | 97,436 | 107,559 | ||||
| Cash and cash equivalents | 8,192 | 6,670 | ||||
| Interest earning time deposits | 4,229 | 1,744 | ||||
| Investment securities | 2,996 | 3,337 | ||||
| Deposits | 91,981 | 94,002 | ||||
| FHLB advances and other borrowings | 15,000 | 17,500 | ||||
| Stockholdersa™ equity-net | 15,564 | 16,982 | ||||
| For the Three Months Ended September 30, | ||||||
2010 | 2009 | |||||
| (Dollars In Thousands, Except Share Data) | ||||||
| Selected Consolidated Earnings Data: | ||||||
| Total interest income | $ | 1,520 | $ | 1,744 | ||
| Total interest expense | 358 | 504 | ||||
| Net interest income | 1,162 | 1,240 | ||||
| Provision for losses on loans | 15 | 142 | ||||
| Net interest income after provision for losses on loans | 1,147 | 1,098 | ||||
| Total other income | 265 | 344 | ||||
| General, administrative and other expenses | 1,251 | 1,338 | ||||
| Income tax expense | 74 | 40 | ||||
| Net income | $ | 87 | $ | 64 | ||
| Selected Financial Ratios and Other Data: | ||||||
| Interest rate spread during period | 3.53 | % | 3.44 | % | ||
| Net yield on interest-earning assets | 3.86 | 3.85 | ||||
| Return on average assets | 0.28 | 0.19 | ||||
| Return on average equity | 2.25 | 1.47 | ||||
| Equity to assets | 12.66 | 13.36 | ||||
| Average interest-earning assets to average interest-bearing liabilities | 128.05 | 126.73 | ||||
| Non-performing assets to total assets | 5.35 | 3.33 | ||||
| Allowance for loan losses to total loans outstanding | 2.96 | 1.43 | ||||
| Net charge-offs to average total loans outstanding | 1.27 | 0.06 | ||||
| General, administrative and other expense to average assets | 1.00 | 0.99 | ||||
| Effective income tax rate | 45.96 | 38.46 | ||||
| Number of full service offices | 6 | 7 | ||||
| Book value per share | $ | 10.82 | $ | 12.14 | ||
Market closing price at end of quarter1 | $ | 2.41 | $ | 5.00 | ||
| Price-to-book value | 22 | % | 41 | % | ||
1 Per Yahoo Finance Historical Prices for Third Century Bancorp as of September 30, 2010 close of trading.
| For the Nine Months Ended September 30, | ||||||
2010 | 2009 | |||||
| (Dollars In Thousands, Except Share Data) | ||||||
| Selected Consolidated Earnings Data: | ||||||
| Total interest income | $ | 4,638 | $ | 5,301 | ||
| Total interest expense | 1,171 | 1,588 | ||||
| Net interest income | 3,467 | 3,713 | ||||
| Provision for losses on loans | 2,203 | 206 | ||||
| Net interest income after provision for losses on loans | 1,264 | 3,507 | ||||
| Total other income | 643 | 987 | ||||
| General, administrative and other expenses | 4,399 | 4,048 | ||||
| Income tax expense (benefit) | (968 | ) | 176 | |||
| Net income (loss) | $ | (1,524 | ) | $ | 270 | |
| Selected Financial Ratios and Other Data: | ||||||
| Interest rate spread during period | 3.42 | % | 3.43 | % | ||
| Net yield on interest-earning assets | 3.76 | 3.87 | ||||
| Return (loss) on average assets | (1.58 | ) | 0.27 | |||
| Return (loss) on average equity | (12.41 | ) | 2.09 | |||
| Equity to assets | 12.66 | 13.36 | ||||
| Average interest-earning assets to average interest-bearing liabilities | 127.03 | 126.25 | ||||
| Non-performing assets to total assets | 5.35 | 3.33 | ||||
| Allowance for loan losses to total loans outstanding | 2.96 | 1.43 | ||||
| Net charge-offs to average total loans outstanding | 1.27 | 0.06 | ||||
| General, administrative and other expense to average assets | 3.43 | 3.01 | ||||
| Effective income tax rate | 38.84 | 39.46 | ||||
| Number of full service offices | 6 | 7 | ||||
| Book value per share | $ | 10.82 | $ | 12.14 | ||
Market closing price at end of quarter2 | $ | 2.41 | $ | 5.00 | ||
| Price-to-book value | 22 | % | 41 | % | ||
2 Per Yahoo Finance Historical Prices for Third Century Bancorp as of September 30, 2010 close of trading.
