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

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Tri-County Financial Group (TYFG) reported second-quarter 2021 net income of $3.6 million ($1.44 per share), down from $5.1 million ($2.08 per share) year-over-year. Net interest income rose 18% to $10.6 million, with a net interest margin of 3.31%. However, noninterest income fell 43% to $9.7 million, primarily due to reduced mortgage volume. Total loans decreased 3% to $1.02 billion, and the provision for loan loss dropped to $450,000. Deposits grew 9%, bolstered by economic relief programs.

Positive

• Net interest income increased by 18% to $10.6 million.
• Deposits rose by $94.9 million (9%) due to CARES Act programs.
• Nonperforming loans as a percentage of total loans improved to 0.43%.

Negative

• Net income decreased from $5.1 million in Q2 2020 to $3.6 million in Q2 2021.
• Noninterest income declined 43% to $9.7 million, attributed to lower mortgage activity.
• Total loans fell by $34 million (3%) to $1.02 billion.

MENDOTA, Ill., Aug. 9, 2021 /PRNewswire/ -- Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced financial results for the second quarter of 2021.

Net income for the second quarter of 2021 was $3.6 million ($1.44 per share), compared to $5.1 million ($2.08 per share) during the second quarter of 2020.

Net interest income was $10.6 million during the quarter ended June 30, 2021, compared to $9.0 million in the same period of 2020, an increase of 18%. The net interest margin was 3.31% for the second quarter of 2021, and 3.14% in the second quarter of 2020.

Noninterest income was $9.7 million for the quarter ended June 30, 2021, a decrease of $7.3 million, or 43%, compared to $17.1 million during the quarter ended June 30, 2020. The decrease can be primarily attributed to lower mortgage volume from the prior year record level. First State Mortgage net income decreased by $1.4 million compared to the second quarter of 2020.

Noninterest expense was $15.1 million during the quarter ended June 30, 2021, compared to $17.9 million for the second quarter of 2020, a decrease of $2.8 million, or 16%. The decrease is related primarily to variable expenses resulting from lower mortgage activity.

Total loans declined $34.0 million, or 3%, to $1.02 billion from $1.05 billion at June 30, 2020. There were $30.8 million in Paycheck Protection Program (PPP) loans included in loan balances at June 30, 2021 compared to $51.6 million the prior year quarter end, a decrease of $20.7 million. Non-agricultural business loan demand continues to be weak due to the pandemic and supply chain impacts, while portfolio mortgage and home equity loan balances were refinanced into the secondary market due to historically low rates. Offsetting some of the decline was an increase in agricultural lending activity at June 30, 2021 compared to the prior year. Nonperforming loans as a percent of total loans were 0.43% as of June 30, 2021, down from 0.81% at June 30, 2020.

The provision for loan loss decreased $1.1 million as asset quality continues to improve. The Company provided $450,000 during the second quarter of 2021 compared to $1,500,000 in the prior year period. The allowance for loan loss ended at $15.8 million at June 30, 2021 and represented 1.56% of gross loans compared to 1.39% at June 30, 2020.

Deposits increased $94.9 million, or 9%, year-over-year, with the majority of the growth due to CARES Act economic relief programs and PPP proceeds.  The investment portfolio rose $28.5 million or 29% year over year and totaled $127 million at June 30, 2021 due to the significant increase in liquidity from net loan runoff and direct deposit of government relief funds.

The Company's capital levels remain solid as of June 30, 2021, with a Tier 1 leverage ratio of 8.96%, up from 8.51% last year.

On June 8, 2021, the Board of Directors declared a regular dividend of $0.15 per share payable July 15, 2021, to shareholders of record on June 30, 2021.

In announcing the results, President and CEO, Tim McConville, stated "Our second quarter numbers, although down from a record quarter a year ago, represented strong earnings performance from a peak refinance period last year.  Mortgage activity continues to positively contribute to earnings. Total mortgage production this year totaled $436 million, up from $390 million in 2020, but $83 million less in the second quarter only.  Asset quality as measured by nonperforming loans to total loans is stable as we continue to monitor the pandemic impact. As staffing shortages improve and supply chains normalize, we expect overall loan demand to return to more normal levels allowing us to put excess liquidity back to work."

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 STATEMENT OF INCOME
QUARTER ENDED JUNE 30th
(000s omitted, except share data)
			2021		2020
Interest Income			$    12,367		$    11,967
Interest Expense			1,733		2,934
Net Interest Income			10,634		9,033
Provision for Loan Losses			450		1,500
Net Interest Income After Provision for Loan Losses			10,184		7,533
Other Income			9,739		17,069
FDIC Assessments			60		99
Other Expenses			15,027		17,788
Income Before Income Taxes			4,836		6,715
Applicable Income Taxes			1,264		1,934
Security Gains (Losses)			-		355
Net Income (Loss)			$      3,572		$      5,136
Basic Net Income Per Share			$        1.44		$        2.08
Weighted Average Shares Outstanding			2,482,675		2,467,374

 

TRI-COUNTY FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(000s omitted, except share data)
ASSETS		6/30/2021		6/30/2020
Cash and Due from Banks		$           140,677		$             38,742
Federal Funds Sold		26,179		9,721
Investment Securities		127,108		98,609
Loans and Leases		1,016,719		1,050,726
Less:  Reserve for Loan Losses		(15,837)		(14,649)
Loans, Net		1,000,882		1,036,077
Bank Premises & Equipment		27,323		26,861
Intangibles		8,392		8,390
Other Real Estate Owned		2,968		2,621
Accrued Interest Receivable		4,821		6,567
Other Assets		34,254		31,437
TOTAL ASSETS		$        1,372,604		$        1,259,025
LIABILITIES
Demand Deposits		170,055		158,375
Interest-bearing Demand Deposits		388,595		313,309
Savings Deposits		270,274		202,459
Time Deposits		351,637		411,520
Total Deposits		1,180,561		1,085,663
Repurchase Agreements		17,816		15,094
Fed Funds Purchased		0		0
FHLB and Other Borrowings		5,000		4,001
Interest Payable		240		240
Subordinated Debt		15,723		15,670
Total Repos & Borrowings		38,779		35,005
Other Liabilities		20,011		21,749
Dividends Payable		382		379
TOTAL LIABILITIES		$        1,239,733		$        1,142,796
CAPITAL
Common Stock		2,485		2,467
Surplus		25,871		25,232
Preferred Stock		0		0
Retained Earnings		101,770		84,944
FASB 115 Adjustment		2,745		3,586
TOTAL CAPITAL		132,871		116,229
TOTAL LIABILITIES AND CAPITAL		$        1,372,604		$        1,259,025
Book Value Per Share		$               53.52		$               47.11
Tangible Book Value Per Share		$               50.14		$               43.71
Bid Price		$               45.60		$               33.75
Period End Outstanding Shares		2,482,675		2,467,374

 

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SOURCE Tri-County Financial Group, Inc.

FAQ

What were Tri-County Financial Group's Q2 2021 financial results?

Tri-County Financial Group reported a net income of $3.6 million ($1.44 per share) for Q2 2021, down from $5.1 million ($2.08 per share) in Q2 2020.

How did Tri-County Financial Group's net interest income perform in Q2 2021?

The company's net interest income increased by 18% to $10.6 million in Q2 2021.

What caused the decline in noninterest income for Tri-County Financial Group?

The decline in noninterest income by 43% to $9.7 million was primarily due to lower mortgage volume compared to the previous year.

How much did total loans decrease for Tri-County Financial Group?

Total loans decreased by $34 million (3%) to $1.02 billion as of June 30, 2021.

What is the current status of nonperforming loans for Tri-County Financial Group?

Nonperforming loans were at 0.43% of total loans as of June 30, 2021, down from 0.81% the previous year.