SPRINGFIELD, Ill., Feb. 2, 2013 /PRNewswire/ -- Town and Country Financial Corporation (TWCF) reported 2012 net income of $3.0 million, or $1.08 per share, on record recurring revenue of $22.4 million. Excluding security gains and losses, 2012 was a record year for profitability. Mortgage lending originations of $223 million were up 63% as compared to the year-ago while business loan balances increased to $209 million, up 12.4%. Trust revenues grew 27% as managed assets grew by 38%.
Town and Country Financial reported net income of $3.0 million, or $1.08 per share, up 10% from $2.7 million, or $0.98 per share, in 2011. Current year results include costs of $0.06 per share related to the second quarter acquisition of a banking office in Quincy Illinois, and $0.05 from the gain on sale of securities, both results reported after the effect of income taxes. 2011 net income included an after-tax gain on sale of securities of $0.04 per share.
Recurring net revenue was $22.4 million, an increase of $4.1 million, or 22%, compared with the prior year. Net interest income was $13.3 million, up $657 thousand, or 5%, due to lower funding costs and growth in loans outstanding. The net interest margin, however, declined to 3.41% from 3.76% in 2011 as higher earning assets continued to re-price at much lower rates. Moreover, the investment of excess cash from the second quarter acquisition of the Quincy banking office contributed to the lower margin. Noninterest revenue was $9.1 million, excluding gains on sale of securities, up $3.4 million, or 60%, due to higher mortgage fees on growth in retail originations, wider spreads, and an expanded correspondent business.
Non-interest expense was $17.2 million compared to $14.3 million in 2011. Costs to acquire the Quincy banking office, higher staffing levels that support the mortgage business and the new banking office, and other costs associated with higher mortgage volumes were factors that drove the year-over-year increase.The provision for loan losses was $700 thousand compared to no provision in 2011. Net charge-offs totaled $405 thousand, 0.16% of average loans, compared to a net loss of .01% in the prior year. The allowance for loan losses was 138% of nonperforming loans and 1.18% of total portfolio loans at September 30. And finally, nonperforming loans were 0.84% of total loans, while all other past due loans were 0.30% of total loans, as compared to 0.64% and 0.12%, respectively, at December 31, 2011. Micah R. Bartlett, President and CEO, commented on the financial results, "2012 was a productive year for Town and County in each of our lines of business. We expanded our market presence through a branch acquisition in Quincy Illinois adding approximately 3,500 customers and more than $60 million in deposits. A second consecutive year of strong business loan growth provided support to net interest income while mortgage volumes, fees, and expenses were at all time highs. And, we achieved significant growth in our trust and investment business while we also launched our new retail branch model." The Company reported total assets of $456 million, up 20% from year-end 2011, with net loans up 13% and deposits up 22%. The Quincy banking office acquisition and organic loan growth drove the balance sheet changes from the year ago. Common equity capital was $37 million with a reported book value of $13.20 per common share compared to $11.90 per share on December 31, 2011. Tier 1 capital was 10.7% of average assets while total regulatory capital was estimated at 15.5% of risk-weighted assets, each result well above regulatory standards for what is considered well-capitalized. Bartlett added, "Many question the ability of community banks such as ours to effectively compete against challenging market forces and increasing regulatory burden. And yet, we have experienced our most successful year ever. There is no doubt that we must work smarter and harder than we ever have to uncover opportunities, invest wisely, and spend cautiously. We are deeply grateful to the women and men in our company who contributed to our 2012 success. And we look forward to a challenging and rewarding 2013."