SPRINGFIELD, Ill., Aug. 1, 2012 /PRNewswire/ -- Town and Country Financial Corporation (TWCF) reported second-quarter 2012 net income of $693 thousand, or $0.25 per share, as compared to $746 thousand, or $0.27 per share in the second quarter of 2011. The second quarter of 2012 included a recovery of $0.02 per share from a trust preferred security redemption and charges of $0.07 per share due to an adjustment in the value of the mortgage servicing rights asset (MSA). Comparable events in the year ago quarter contributed $0.01 to earnings per share.
First half 2012 net income was $1.367 million, or $0.49 per share, compared to $1.353 million, or $0.48 per share, during the first half of 2011. Current year results include costs of $0.05 per share to acquire the customers and accounts of a banking office in Quincy, Illinois, a $0.07 per share negative adjustment to the MSA, and a $0.02 recovery from the security redemption. The first half of 2011 included a gain on sale of securities of $0.04 per share and $0.03 from a positive adjustment to the MSA.
Total revenue, excluding security gains, was $10.5 million and $1.8 million, or 20%, above the year ago on the strength of the Company's mortgage banking business and net interest income from lower funding costs. Partially offsetting the higher revenue were adjustments to the MSA that were $463 thousand higher in 2012 than the prior year. The net interest margin, under pressure from loan and security portfolio cash flows that are being invested in lower yielding instruments, declined 0.23% to 3.54%. Contributing too to the lower margin was the May 18, 2012 purchase of the loans and deposits of a banking office in Quincy, Illinois with excess cash invested in securities.
Non-interest expense was $8.1 million compared to $6.9 million in the first half of 2011, the change due to costs to acquire the Quincy banking office, costs related to new staff that support the mortgage business and the Company, including the new banking office, and other activity-based costs related to the mortgage banking volumes. Partially offsetting the higher expense in 2012 is a decline in FDIC insurance the cost of holding other real estate.Micah R. Bartlett, President and Chief Executive Officer, commented: "We are pleased to deliver another quarter of solid earnings, particularly as we continue to make significant investments in our future. Our revenue growth is an early indication of the return on our investments." Asset quality metrics remain good with nonperforming loans at 0.83% of total loans, while all other past due loans were 0.12% of total loans, as compared to 0.64% and 0.12%, respectively, at December 31, 2011. The allowance for loan loss to total non-performing loans was 142% on June 30, 2012 and 1.18% of total loans. The Company reported total assets of $435 million, net loans of $261 million, and deposits of $369 million at June 30 including the loans and deposits acquired at the Quincy banking office. Common equity capital was $35 million with a reported book value of $12.48 per common share compared to $11.90 per share on December 31, 2011. Tier 1 capital was 12.6% of average assets while total regulatory capital was estimated at 16.8% of risk-weighted assets. According to Bartlett, "The acquisition of the customers, accounts, and employees of our newest banking office in Quincy, Illinois was completed on May 18, 2012 and we couldn't be more pleased with the results. And, the icing on the cake was our success in hiring a talented and experienced group of commercial bankers who will extend our unique brand of banking to Quincy-area businesses. Although this new office was negative to earnings in the first half, we look forward to the growth and profitability of that market, as well as our existing markets, for years to come." The Board of Directors declared a $0.03 per share quarterly cash dividend payable on September 14, 2012 to stockholders of record September 3, 2012. Town and Country Financial Corporation is the parent holding company for Town and Country Bank with offices in Springfield, Mt. Zion, Forsyth, Decatur and Quincy, Town & Country Banc Mortgage Services, Inc., and Logan County Bank with offices in Lincoln and Buffalo. Peoples Prosperity Bank, a division of Town and County Bank, is the name used in Quincy. Town and Country Financial Corporation shares are quoted under the symbol TWCF. SOURCE Town and Country Financial Corporation