Tri-County Financial Group, In – GuruFocus.com

MENDOTA, Ill., Nov. 14, 2022

MENDOTA, Ill., Nov. 14, 2022 /PRNewswire/ — Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced financial results for the third quarter of 2022.

Net income for the third quarter of 2022 was $5.6 million ($2.27 per share), compared to $4.1 million ($1.64 per share) during the third quarter of 2021.

Net interest income was $11.8 million during the quarter ended September 30, 2022, compared to $11.2 million in the same period of 2021, an increase of 5%. The net interest margin was 3.34% for the third quarter of 2022, compared to 3.42% for the third quarter of 2021.

Noninterest income was $2.9 million for the quarter ended September 30, 2022, a decrease of $2.1 million, or 42%, compared to $5.0 million during the quarter ended September 30, 2021. The decrease can be primarily attributed to lower mortgage volume from the prior year. First State Mortgage had a net loss of $1.2 million as of the third quarter of 2022, compared to net income of $3.2 million at September 30, 2021.

Noninterest expense was $10.8 million during the quarter ended September 30, 2022, compared to $10.3 million for the third quarter of 2021, an increase of $0.5 million, or 5%.

Total loans increased $132.6 million, or 13%, to $1.14 billion at September 30, 2022, from $1.01 billion at September 30, 2021. Commercial real estate and agricultural lending activity increased compared to the prior year. Nonperforming loans as a percent of total loans were 0.24% as of September 30, 2022, down from 0.45% at September 30, 2021.

The provision for loan loss had a negative provision of $3.85 million during the quarter ended September 30, 2022. The allowance for loan loss ended at $13.13 million at September 30, 2022 and represented 1.17% of gross loans compared to 1.62% at September 30, 2021. During the beginning of COVID, the provision was increased to account for potential losses and an increase in default payments. However, asset quality continues to remain strong over two years later and a $4 million negative provision was made in the third quarter to account for the excess in our reserve and as we prepare for the Current Expected Credit Losses (CECL) new accounting standards that will be effective January 1, 2023.

Deposits decreased $26.7 million, or 2%, year-over-year. The investment portfolio rose $107.7 million or 79% year over year and totaled $244.3 million at September 30, 2022.

The Company’s capital levels remain solid as of September 30, 2022, with a Tier 1 leverage ratio of 9.76%, down from 10.13% last year.

On September 13, 2022, the Board of Directors declared a regular dividend of $0.20 per share payable October 13, 2022, to shareholders of record on September 30, 2022.

In announcing the results, President and CEO, Tim McConville, stated “Our third quarter numbers again represented strong earnings performance that we are experiencing in 2022. Asset quality as measured by nonperforming loans to total loans is stable as we continue to see strong performance and good liquidity with our borrowers. Our commercial and agricultural loan demands have continued to be strong. We continue to monitor the impact of inflationary pressures, supply chain issues, and staffing shortages on our businesses and consumers. Overall, we anticipate loan demand to remain strong, and we look forward to supporting the credit needs of our businesses and communities.”

Tri-County Financial Group, Inc. is the parent holding company for First State Bank, with offices in Mendota, Batavia, Bloomington, Champaign, 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

QUARTER ENDED SEPTEMBER 30TH

(000s omitted, except share data)

2022

2021

Interest Income

$ 13,716

$ 12,739

Interest Expense

1,964

1,499

Net Interest Income

11,752

11,240

Provision for Loan Losses

(3,850)

450

Net Interest Income After Provision for Loan Losses

15,602

10,790

Other Income

2,904

5,018

FDIC Assessments

123

90

Other Expenses

10,686

10,177

Income Before Income Taxes

7,697

5,541

Applicable Income Taxes

2,071

1,476

Security Gains (Losses)

Net Income (Loss)

$ 5,626

$ 4,065

Basic Net Income Per Share

$ 2.27

$ 1.64

Weighted Average Shares Outstanding

2,474,140

2,474,043

** 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

9/30/2022

9/30/2021

Cash and Due from Banks

$ 28,286

$ 159,009

Federal Funds Sold

1,513

17,441

Investment Securities

244,338

136,591

Loans and Leases

1,137,763

1,005,156

Less: Reserve for Loan Losses

(13,133)

(16,265)

Loans, Net

1,124,630

988,891

Bank Premises & Equipment

27,210

27,247

Intangibles

8,773

8,375

Other Real Estate Owned

145

2,623

Accrued Interest Receivable

6,404

5,893

Other Assets

37,605

33,265

TOTAL ASSETS

$ 1,478,904

$ 1,379,335

LIABILITIES

Demand Deposits

177,797

166,487

Interest-bearing Demand Deposits

413,281

386,930

Savings Deposits

269,428

277,082

Time Deposits

290,691

347,375

Total Deposits

1,151,197

1,177,874

Repurchase Agreements

27,899

24,272

Fed Funds Purchased

0

0

FHLB and Other Borrowings

149,000

5,000

Interest Payable

160

520

Subordinated Debt

9,779

15,736

Total Repos & Borrowings

186,838

45,528

Other Liabilities

11,056

19,475

Dividends Payable

505

380

TOTAL LIABILITIES

$ 1,349,596

$ 1,243,257

CAPITAL

Common Stock

2,474

2,470

Surplus

25,082

25,133

Preferred Stock

0

0

Retained Earnings

115,130

105,464

FASB 115 Adjustment

(13,378)

3,011

TOTAL CAPITAL

129,308

136,078

TOTAL LIABILITIES AND CAPITAL

$ 1,478,904

$ 1,379,335

Book Value Per Share

$ 52.27

$ 55.10

Tangible Book Value Per Share

$ 48.72

$ 51.71

Bid Price

$ 48.75

$ 46.85

Period End Outstanding Shares

2,473,798

2,469,798

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SOURCE Tri-County Financial Group, Inc.

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