OTCPINK: TDCB - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”), announced it recorded net income of $367,000 for the quarter ended March 31, 2022, or $0.31 per basic and diluted share, compared to net income of $414,000 for the quarter ended March 31, 2021, or $0.35 per basic and diluted share.

“Our first quarter 2022 growth continued to be significant for the company. In addition to a sub-debt capital raise of $10 million, our wholly owned subsidiary Mutual Savings Bank had significant balance sheet growth in normal operations,” stated David A. Coffey, President and CEO. “On the asset side of the balance sheet, our net loan balances increased nearly $7.2 million from year end 2021 due to strong commercial loan demand. On the liability side of the balance sheet, we saw deposit balance increase nearly $17.3 million from year end 2021 due to new account activity and existing customer balance growth.” Coffey concluded, “As the economic conditions continue to evolve this year, we continue to pursue our business strategy of quality growth and improved returns for our stockholders.”

For the quarter ended March 31, 2022, net income decreased $47,000, or 11.35%, to $367,000 as compared to $414,000 for the same period in the prior year. The decrease in net income for the three-month period ended March 31, 2022 was driven primarily as a result of the $198,000, or 28.62% decrease in non-interest income as compared to the same period in the prior year. The decrease in non-interest income was due primarily to a $180,000, or 47.27% decrease in the gains on the sale of one-to-four family residential mortgage loans sold to Freddie Mac, as a result of the rising interest rate environment. The decrease in non-interest income was partially offset by an increase in net interest income of $173,000, or 10.98%, which was the result of an increase of $156,000, or 8.69%, in interest income and a decrease of $17,000, or 7.76% in interest expense as compared to the same period in the prior year.

The increase in net interest income for the quarter ended March 31, 2022 was partially supported by the $45,000 decrease in the provision for loan losses compared to the same period in 2021. The decrease in provision expense was due to the improving economic conditions resulting from the COVID-19 pandemic. The Company had no net charge-offs during the quarters ended March 31, 2022 and March 31, 2021.

Total assets increased $20.0 million to $261.6 million at March 31, 2022 from $241.6 million at December 31, 2021, an increase of 8.31%. The increase was primarily due to a $7.7 million, or 9.10%, increase in investment securities, available-for-sale to $92.3 million and a $7.5 million, or 5.24%, increase in loans held-for-investment at March 31, 2022. These increases were primarily funded by a $17.3 million, or 8.05%, increase in total deposits, and the addition of $10.0 million in subordinated debt notes issued during the quarter. Total deposits were $231.9 million at March 31, 2022, up from $214.6 million as of December 31, 2021. Federal Home Loan Bank advances were $3.0 million at March 31, 2022 as compared to $5.0 million at December 31, 2021. At March 31, 2022, the weighted average rate of all Federal Home Loan Bank advances was 1.73% compared to 1.45% at December 31, 2021, and the weighted average maturity was 5.1 years at March 31, 2022 compared to 4.3 years at December 31, 2021. Total loans held-for-investment grew to $151.5 million at March 31, 2022 from $142.8 million at December 31, 2021, an increase of 5.24%.

The allowance for loan losses remained the same at $1.9 million at March 31, 2022 and at December 31, 2021. The allowance for loan losses totaled 1.24% of total loans as of March 31, 2022, as compared to 1.30% of total loans as of December 31, 2021. Nonperforming loans totaled $57,000 or 0.04%, of total loans as of March 31, 2022 as compared to $237,000 or 0.16%, of total loans as of December 31, 2021.

Stockholders’ equity was $16.5 million at March 31, 2022, down from $21.5 million at December 31, 2021. Stockholders’ equity decreased by $5.0 million during the quarter ended March 31, 2022 as a result of a change in net unrealized loss of $5.4 million of available-for-sale securities due to the increase in market interest rates, partially offset by net income of $367,000. The decrease in stockholders’ equity was also impacted by dividends of $105,000, repurchased stock of $40,000 and stock awards of $8,000. Equity as a percentage of assets decreased to 6.33% at March 31, 2022 compared to 8.91% at December 31, 2021.

During the quarter ended March 31, 2022, the Company repurchased 2,222 shares of common stock at an average cost of $18.00 per share pursuant to the Company’s stock repurchase program. At March 31, 2022, 14,422 shares of common stock have been repurchased by the Company through the stock repurchase program since its inception in January 2021.

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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