Town and Country Financial Corporation Reports Record Third Quarter 2021 Financial Results; Increases Quarterly Dividend 40%

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Town and Country Financial Corporation (the "Company") (OTC Pink: TWCF) today announced record financial results for the third quarter of 2021.

Key highlights included:

• Record third quarter 2021 net income of $2.9 million, including $820 thousand ($586 thousand after-tax) in Paycheck Protection Program ("PPP") fee income and no provision for loan losses.
• Quarterly net revenue of $11.5 million, driven by continued growth in net interest income and strong mortgage volumes.
• Mortgage banking fees of $3.1 million in the third quarter of 2021.
• Return on Tangible Common Equity of 15.54% for the quarter-to-date period ending September 30, 2021.

Micah R. Bartlett, President and Chief Executive Officer, noted, "We are pleased to report yet another strong quarter. We continue to be proactive in managing our cost of funds and margins in this difficult rate environment. Nevertheless, the level of monetary supply and excess liquidity in the banking industry, coupled with lower commercial loan demand continues to present challenges for our bank and the industry overall. We continued to experience good mortgage volumes in the third quarter, although demand is down this year compared to last year's record activity. Our employees have been working hard on PPP forgiveness for the benefit of our commercial customers, now having completed the forgiveness applications for round one of PPP lending. We are pleased to have delivered increased value to our shareholders through a 16% increase in our tangible book value per share over the last 12 months, a 15.81% Return on Tangible Common Equity ratio so far in 2021, and a 40% increase to our upcoming quarterly dividend. The increased dividend is based on our strong profitability and capital position."

The Company reported a record third quarter 2021 net income of $2.9 million ($1.04 per share), compared to $2.1 million ($0.73 per share) in the third quarter of 2020. Third quarter 2021 net income included no provision for loan losses or MSR valuation adjustment while the same period in 2020 reflected a $1.5 million provision for loan losses and a $900 thousand negative MSR valuation adjustment as a result of the economic implications of the pandemic. The company posted pre-tax, pre-provision profits of $4.0 million compared to $4.2 million in the third quarter of 2021.

Total assets at September 30, 2021 were $892.6 million, up $19.6 million, when compared to $873.0 million as of September 30, 2020. The increase was due to a $65.8 million increase in deposits, partially offset by a $50.3 million reduction in wholesale funding. PPP loans outstanding totaled $13.6 million as of September 30, 2021 with the remaining loans attributed to the second round of PPP. Including PPP forgiveness, total commercial loans outstanding have contracted $57.9 million since September 30, 2020.

Total deposits were $767.6 million at September 30, 2021, an increase of $65.8 million from September 30, 2020 and an increase of $40.7 million when compared to December 31, 2020. The increases over those time periods were driven by deposit growth in demand, money market and savings deposits, partially offset by reductions in time and brokered deposits. Total Borrowed Money was $21.3 million at September 30, 2021 compared to $71.6 million at September 30, 2020. This reduction was primarily due to the paydown of Federal Home Loan Bank advances as a result of liquidity.

Net interest income was $7.1 million for the quarter ending September 30, 2021, compared to $6.6 million for the quarter ending September 30, 2020, and includes $820 thousand in PPP fees. The net interest margin for the quarter ending September 30, 2021 was 3.53% an increase compared to 3.35%, in the third quarter of 2020.

Noninterest income was $4.4 million in the third quarter of 2021, a decrease when compared to $5.5 million in the third quarter of 2020. The decrease was primarily a result of lower mortgage volumes compared to the third quarter 2020. The third quarter 2021 noninterest expense of $7.5 million was down when compared to $7.9 million for the third quarter of 2020, also due to mortgage related expenses.

The Company's nonperforming loans as a percentage of total loans were 0.91% as of September 30, 2021 compared to 0.99% as of September 30, 2020. When these ratios are adjusted for nonperforming loans that have a government guarantee, the ratios are 0.41% as of September 30, 2021 and 0.63% as of September 30, 2020.

Town and Country Bank maintains solid capital levels, with a tier 1 leverage ratio of 10.17% and a total risk-based ratio of 15.29% as of September 30, 2021. The tier 1 leverage ratio was 9.36% and the total risked-based ratio was 13.51% as of December 31, 2020.

On October 28, 2021, the board of directors declared a $0.14 per share cash dividend payable December 15, 2021, to shareholders of record as of December 1, 2021. This is a 40% increase from the prior quarterly dividend of $0.10. The company's book value per share was $29.35 at September 30, 2021, up from $26.62 as of December 31, 2020 and $25.67 as of September 30, 2020. Tangible book value per share was $27.00 per share at September 30, 2021, compared to $23.22 at September 30, 2020, a 16% increase.

Town and Country Financial Corporation, headquartered in Springfield, Illinois, operates as the parent holding company for Town and Country Bank including the Bank's subsidiary, Town and Country Banc Mortgage Services, Inc. (TCBMSI), with locations throughout the central, west-central, and metro-east areas of Illinois. While the Company specializes in commercial banking and mortgage lending, additional products and services offered through its 12 branch offices include retail banking, affordable housing finance options, Small Business Administration 504 and 7(a) loan programs, trust and investments, and agricultural banking. The Company, under TCBMSI, operates Community Mortgage Partners as a third-party provider for residential mortgages to other financial institutions throughout the United States. Town and Country Financial Corporation shares are quoted under the symbol TWCF.

Denise Skiles
Vice President and Controller
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