Town and Country Financial Corporation Reports Record First Quarter 2021 Financial Results

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Town and Country Financial Corporation (the 'Company') (OTC Pink: TWCF) today announced record financial results for the first quarter of 2021.

Key highlights included:

• Record first quarter 2021 net income of $2.8 million, after a quarterly provision for loan losses of $600 thousand and Paycheck Protection Program ('PPP') fee income of $534 thousand.
• Net revenue of $11.4 million, driven primarily by strong mortgage volumes in addition to continued growth in net interest income.
• Mortgage banking fees of $3.6 million in the first quarter of 2021.
• Tangible book value per share of $25.11 at March 31, 2021.
• Announced transition of Bloomington/Normal loan production office to full-service branch.

Micah R. Bartlett, President and Chief Executive Officer, noted, 'We are pleased to report our strongest first quarter in history. Our employees continue to work hard to take care of our customers and each other during this still-challenging operating environment. Helping customers purchase homes and refinance, our mortgage originations were up 44% as compared to the first quarter of 2020. Our commercial banking team has been busy processing PPP forgiveness for round one loans and originating new PPP loans for round two. We are continuing to engage deeply with our customers to provide other accommodations where necessary to alleviate the financial impact of the pandemic and Illinois' Stay at Home order.'

Bartlett continued, 'Even without the positive impact of PPP fees, our revenue and profits achieved record levels for the first quarter. These results translated into solid shareholder returns with an annualized return on equity ratio of 14.84% and an increase in our tangible book value per share to $25.11 at March 31, 2021. We continue to strengthen our balance sheet and capital ratios. We further increased our allowance for loan losses due to continued uncertainty of the long-term implications of the pandemic. Our allowance balance is now approximately $10.8 million. '

The Company reported a record first quarter 2021 net income of $2.8 million ($0.99 per share), compared to $1.0 million ($0.36 per share) in the first quarter of 2020. The company posted record pre-tax, pre-provision profits of $4.4 milion compared to $1.7 million in the first quarter of 2020.

The Company recorded $600 thousand in provision for loan losses in the first quarter 2021 compared to $500 thousand in the first quarter 2020. The additional provision increased the allowance for loan losses to $10.8 million as of March 31, 2021 and was in response to the possible impact of the economic environment surrounding the COVID-19 pandemic.

Total assets at March 31, 2021 were $880.2 million, up $35 million (4.2%), when compared to $845 million as of March 31, 2020. The increase, in part, was due to loan portfolio growth of $21.4 million (3.5%) over that period of time, driven by commercial and PPP loans. PPP loans totaled $41.8 million as of March 31, 2021, $17.9 million of that total was attributed to the second round of PPP.

Total deposits were $737.7 million at March 31, 2021, an increase of $60.0 million from March 31, 2020 and an increase of $10.7 million when compared to December 31, 2020. The increases over those time periods were driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. Total Borrowed Money was $42 million at March 31, 2021 compared to $79 million at March 31, 2020. This reduction was primarily due to the paydown of Federal Home Loan Bank advances.

Net interest income was $6.7 million for the quarter ending March 31, 2021, compared to $6.1 million for the quarter ending March 31, 2020, and includes $534 thousand in PPP fees. The net interest margin for the quarter ending March 31, 2021 was 3.36% a slight increase compared to 3.33% in the first quarter of 2020.

Noninterest income was $4.7 million in the first quarter of 2021, an increase of $2.7 million (134.1%) compared to $2.0 million in the first quarter of 2020. The primary reason for this increase was higher fees on mortgage banking activities which totaled $3.6 million for the first quarter of 2021 compared to $852 thousand in the first quarter of 2020. The Company is continuing to experience strong mortgage loan volumes due to the low interest rate environment, which impacted noninterest income and noninterest expense numbers. The first quarter 2021 noninterest expense of $7.1 million was elevated compared to $6.3 million for the first quarter of 2020.

The Company's nonperforming loans as a percentage of total loans were 1.03% as of March 31, 2021 compared to 0.74% as of March 31, 2020. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.49% as of March 31, 2021 and 0.42% as of March 31, 2020.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 9.50% and a total risk-based ratio of 14.19% as of March 31, 2021. The tier 1 leverage ratio was 9.36% and the total risked-based ratio was 13.51% as of December 31, 200.

On April 29, 2021, the board of directors declared a $0.10 per share cash dividend payable June 15, 2021, to shareholders of record as of June 1, 2021. The company's book value per share was $27.50 at March 3, 2021 up from $26.62 as of December 31, 2020 and $23.15 as of March 31, 2020. Tangible book value per share increased nearly 21% to $25.11 per share at March 31, 2021 compared to $20.76 at March 31, 2021.

The company announced that it completed the transition of its loan production office in Bloomington/Normal to a full-service branch as of March 1, 2021.

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. The Quincy branch operates under the name of Peoples Prosperity Bank. Town and Country Financial Corporation shares are quoted under the symbol TWCF.

Denise Skiles
Vice President and Controller
[email protected]
(217) 321-3425

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