Tri-County Financial Group, Inc. Reports Fourth Quarter 2021 Financial Results

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Feb 01, 2022, 14:23 ET

MENDOTA, Ill., Feb. 1, 2022 /PRNewswire/ -- Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced financial results for the fourth quarter of 2021.

Net income for the fourth quarter of 2021 was $1.9 million ($0.79 per share), compared to $4.7 million ($1.91 per share) during the fourth quarter of 2020.

Net interest income was $10.8 million during the quarter ended December 31, 2021, compared to $10.5 million in the same period of 2020, an increase of $329,000. The net interest margin was 3.32% for the fourth quarter of 2021 compared to 3.43% in the same quarter a year ago.

Noninterest income was $5.9 million for the fourth quarter of 2021, a decrease of $7.7 million, or 57%, compared to $13.6 million during the same period a year ago. Mortgage production declined $163 million or 57% from the prior year's strong origination activity. For the full year 2021, total secondary mortgage loans closed declined $241 million or 25% reflecting a slowdown from the peak levels seen in 2020. First State Mortgage standalone earnings decreased by $2.4 million compared to the fourth quarter of 2020.

Noninterest expense was $13.7 million during the quarter ended December 31, 2021, compared to $16.2 million in the same quarter of 2020, a decrease of $2.5 million, or 15%. The decrease is primarily related to lower levels of mortgage production costs in 2021.

Total loans declined $29.0 million, or 3%, to $1.024 billion at December 31, 2021, down from $1.053 billion the prior year end. There were $2.7 million in Paycheck Protection Program (PPP) loans remaining in loan balances at December 31, 2021 compared to $30.1 million the prior year end, a decrease of $27.4 million. Loan demand which is normally slower in the fourth quarter rose modestly from the third quarter as business loan demand improved despite the forgiveness of PPP loans. Outstanding balances of mortgage balances and other consumer credit have faced growth challenges with secondary market refinancing due to attractive long-term rates for borrowers. Nonperforming loans as a percent of total loans were 0.31% as of December 31, 2021, down from 0.73% at December 31, 2020.

The provision for loan loss declined $1.1 million as asset quality continues to improve to historically low levels. The Company provided $450,000 during the fourth quarter of 2021 compared to $1.5 million in the prior year period. The allowance for loan loss ended at $16.1 million at December 31, 2021 and represented 1.57% of gross loans compared to 1.47% at December 31, 2020 reflecting quarterly net loan growth of $18.8 million.

Deposits increased $70.0 million, or 6%, year-over-year, with the majority of the growth due to CARES Act economic relief programs and PPP proceeds. Part of this excess liquidity was used to increase the investment portfolio which rose $37.3 million or 38% year over year and totaled $137 million at December 31, 2021.

The Company's capital levels remain solid as of December 31, 2021, with a Tier 1 leverage ratio of 9.26%, up from 9.00% last year.

On December 14, 2021, the Board of Directors declared a regular dividend of $0.20 per share and a special dividend of $0.10 per share payable January 13, 2022, to shareholders of record on December 31, 2021.

In announcing the results, President and CEO, Tim McConville, stated "Our fourth quarter numbers reflected the slowdown in mortgage activity that had supplemented our results the last year and a half. Mortgage activity remains an important part of our business and we expect continued earnings contributions from this line of business. Asset quality as measured by nonperforming loans to total loans is at record low levels as agricultural performance has been improving and household finances have strengthened during the pandemic. We believe that our diversified balance sheet and lines of business are well positioned in the event the Federal Reserve increases short term rates. In addition, as the various economies emerge from the lockdown and supply chain impacts, we expect loan demand returning to more normal levels in 2022."

Tri-County Financial Group, Inc. is the parent holding company for First State Bank, with offices in Mendota, Batavia, Bloomington, Geneva, LaMoille, McNabb, North Aurora, Ottawa, Peru, Princeton, Rochelle, Shabbona, St. Charles, Streator, Sycamore, Waterman and West Brooklyn. First State Bank is the parent company of First State Mortgage, LLC and First State Insurance. Tri-County Financial Group, Inc. shares are quoted under the symbol TYFG and traded on OTCQX.

TRI COUNTY FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DEC 31ST
(000s omitted, except share data)

	2021	2020

Interest Income	$ 12,036	$ 12,633
Interest Expense	1,203	2,129
Net Interest Income	10,833	10,504
Provision for Loan Losses	450	1,500
Net Interest Income After Provision for Loan Losses	10,383	9,004

Other Income	5,890	13,635
FDIC Assessments	73	150
Other Expenses	13,649	16,019
Income Before Income Taxes	2,551	6,470

Applicable Income Taxes	608	1,741
Security Gains (Losses)	-	-
Net Income (Loss)	$ 1,943	$ 4,729

Basic Net Income Per Share	$ 0.79	$ 1.91
Weighted Average Shares Outstanding	2,474,226	2,470,298

** Certain reclassifications have been made to preserve consistency between the periods presented.

TRI-COUNTY FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000s omitted, except share data)

ASSETS	12/31/2021	12/31/2020
Cash and Due from Banks	$ 172,804	$ 84,047
Federal Funds Sold	13,097	25,934
Investment Securities	136,719	99,437
Loans and Leases	1,023,940	1,052,701
Less: Reserve for Loan Losses	(16,121)	(15,508)
Loans, Net	1,007,819	1,037,193
Bank Premises & Equipment	27,014	27,926
Intangibles	8,817	8,426
Other Real Estate Owned	2,117	2,648
Accrued Interest Receivable	4,674	5,147
Other Assets	31,514	39,591

TOTAL ASSETS	$ 1,404,575	$ 1,330,349

LIABILITIES
Demand Deposits	177,943	180,247
Interest-bearing Demand Deposits	413,694	344,670
Savings Deposits	276,528	230,164
Time Deposits	339,541	382,967
Total Deposits	1,207,706	1,138,048
Repurchase Agreements	26,401	21,059
Fed Funds Purchased	0	0
FHLB and Other Borrowings	5,000	4,000
Interest Payable	76	240
Subordinated Debt	9,761	15,696
Total Repos & Borrowings	41,238	40,995
Other Liabilities	18,238	23,560
Dividends Payable	752	751
TOTAL LIABILITIES	$ 1,267,934	$ 1,203,354

CAPITAL
Common Stock	2,476	2,476
Surplus	25,518	25,675
Preferred Stock	0	0
Retained Earnings	106,664	95,300
FASB 115 Adjustment	1,983	3,544
TOTAL CAPITAL	136,641	126,995

TOTAL LIABILITIES AND CAPITAL	$ 1,404,575	$ 1,330,349

Book Value Per Share	$ 55.17	$ 51.29
Tangible Book Value Per Share	$ 51.61	$ 47.89
Bid Price	$ 48.59	$ 35.25
Period End Outstanding Shares	2,476,553	2,476,083