TDCB Third Century Bancorp (PK)

OTCBB “TDCB” - Third Century Bancorp (“Company”), the holding company for Mutual Savings Bank (“Bank”) announced it had net income of $65,000 for the quarter ended June 30, 2014, or $0.05 per share, compared to net income of $156,000 for the quarter ended June 30, 2013, or $0.12 per share. For the six months ended June 30, 2014, the Company recorded net income of $120,000, or $0.09 per share, compared to net income of $216,000 for the six months ended June 30, 2013, or $0.17 per share.

For the three months ended June 30, 2014, net income decreased $91,000, or 58.33%, to $65,000 and for the six months ended June 30, 2014, net income decreased $96,000, or 44.44% to $120,000, primarily due to decreases in net interest income and noninterest income and an increase in noninterest expense. Net interest income was $995,000 for the second quarter of 2014 compared to $1.0 million for the second quarter of 2013 and $2.0 million for the six months ended June 30, 2014 compared to $2.1 million for the six months ended June 30, 2013. The decrease in net interest income was primarily due to a decrease of $213,000 or 25.68%, in interest income on commercial real estate mortgages to $615,000 for the six months ended June 30, 2014 compared to $828,000 for the six months ended June 30, 2013.

Total noninterest income decreased $32,000 to $209,000 for the three months ended June 30, 2014 from $241,000 for the three months ended June 30, 2013 and decreased $34,000 to $383,000 for the six months ended June 30, 2014 from $417,000 for the six months ended June 30, 2014. For both the three month and six month periods ended June 30, 2014, the decreases were primarily due to the decrease in the net gains on loan sales. Net gains on loan sales decreased $59,000 to $1,000 for the three months ended June 30, 2014 and $60,000 to $20,000 for the six months ended June 30, 2014.

Noninterest expenses for the second quarter of 2014 was $1.1 million compared to $1.0 million for the second quarter of 2013 and $2.2 million for the six months ended June 30, 2014 compared to $2.1 million for the six months ended June 30, 2013. The increase in noninterest expense for the three and six month periods ended June 30, 2014 compared to the three and six months ended June 30, 2013 was primarily due to increases in salaries and employee benefits.

Total assets decreased $1.8 million to $121.9 million at June 30, 2014 from $123.7 million at December 31, 2013, a decrease of 1.45%. The decrease was primarily due to the repayment of $3.0 million of Federal Home Loan Bank borrowings.

Deposits increased $1.1 million to $91.5 million at June 30, 2014 from $90.4 million at December 31, 2013. Savings, money market and NOW accounts increased $1.8 million, or 3.93%, to $48.7 million at June 30, 2014 from $46.9 million at December 31, 2013 and demand deposits increased $299,000, or 1.84%, to $16.6 million at June 30, 2014 from $16.3 million at December 31, 2013. Time deposits decreased $1.0 million, or 3.84% to $26.2 million at June 30, 2014 from $27.3 million at December 31, 2013.

Federal Home Loan Bank advances and other borrowings decreased $3.0 million, or 17.14%, to $14.5 million at June 30, 2014 from $17.5 million at December 31, 2013 due to the repayment of $3.0 million in Federal Home Loan Bank advances which matured during the first quarter of 2014. At June 30, 2014 the weighted average rate of all Federal Home Loan Bank advances was 1.52% compared to 1.85% at December 31, 2013 and the weighted average maturity was 3.25 years at June 30, 2014 compared with 3.2 years at December 31, 2013.

Stockholders’ equity was $15.5 million at June 30, 2014 and December 31, 2013. Stockholders’ equity decreased due to cash dividends paid of $115,000 offset in part by net income of $120,000 for the six months ended June 30, 2014. Equity as a percentage of assets increased 0.19% to 12.70% at June 30, 2014 compared to 12.51% at December 31, 2013.

Founded in 1890, Mutual Savings Bank is a full-service financial institution based in Johnson County, Indiana. In addition to its main office at 80 East Jefferson Street, Franklin, Indiana, the bank operates branches in Franklin at 1124 North Main Street and the Franklin United Methodist Community, as well as in Edinburgh, Nineveh and Trafalgar, Indiana.

    Selected Consolidated Financial Data (unaudited)   At June 30, At December 31, 2014 2013 Selected Consolidated Financial Condition Data: (In Thousands) Assets $ 121,881 $ 123,674 Loans receivable-net 94,219 96,045 Cash and cash equivalents 9,054 6,561 Interest-earning time deposits 6,176 7,169 Investment securities 6,364 7,154 Deposits 91,526 90,431 FHLB advances and other borrowings 14,500 17,500 Stockholders’ equity-net 15,476 15,469   For the Three Months Ended June 30, 2014 2013 (Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 1,114 $ 1,217 Total interest expense   119     176   Net interest income 995 1,041

Provision (credit) for losses on loans

  (1 )   1  

Net interest income after provision for losses on loans

996 1,040 Noninterest income 209 241 Noninterest expense 1,097 1,022 Income tax expense   43     103   Net income   65     156   Earnings per share basic $ 0.05 $ 0.12 Earnings per share diluted $ 0.05 $ 0.12   Selected Financial Ratios and Other Data: Interest rate spread during period 3.17 % 3.22 % Net yield on interest-earning assets 3.34 3.41 Return on average assets 0.21 0.49 Return on average equity 1.68 4.07 Equity to assets 12.70 11.94

Average interest-earning assets to average interest-bearing liabilities

136.62 132.87 Non-performing assets to total assets 4.18 4.43

Allowance for loan losses to total loans outstanding

1.95 2.20

Allowance for loan losses to non-performing loans

37.78 43.71

Net charge-offs to average total loans outstanding

0.12 0.04 Noninterest expense to average assets 0.90 0.81 Effective income tax rate 39.81 39.77   Number of full service offices 6 6 Tangible book value per share $ 12.15 $ 12.12 Market closing price at end of quarter $ 7.62 $ 6.40 Price-to-tangible book value 62.70 % 52.80 %     For the Six Months Ended June 30, 2014   2013 (Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 2,250 $ 2,427 Total interest expense   263     356   Net interest income 1,987 2,071 Provision for losses on loans   2     10  

Net interest income after provision for losses on loans

1,985 2,061 Noninterest income 383 417 Noninterest expense 2,170 2,119 Income tax expense   78     143   Net income $ 120   $ 216   Earnings per share basic $ 0.09 $ 0.17 Earnings per share diluted $ 0.09 $ 0.17   Selected Financial Ratios and Other Data: Interest rate spread during period 3.31 % 3.24 % Net yield on interest-earning assets 3.50 3.41 Return on average assets 0.19 0.34 Return on average equity 1.57 2.83 Equity to assets 12.70 11.92

Average interest-earning assets to average interest-bearing liabilities

131.23 128.77 Non-performing assets to total assets 4.18 4.43

Allowance for loan losses to total loans outstanding

1.95 2.20

Allowance for loan losses to non-performing loans

37.78 43.71

Net charge-offs to average total loans outstanding

0.12 0.04 Noninterest expense to average assets 1.76 1.68 Effective income tax rate 39.39 39.83   Number of full service offices 6 6 Tangible book value per share $ 12.15 $ 12.12 Market closing price at end of quarter $ 7.62 $ 5.15 Price-to-tangible book value 62.70 % 42.48 %

Third Century BancorpRobert D. Heuchan, President and CEODavid A. Coffey, Executive Vice President, CFO and COOTel. 317-736-7151Fax 317-736-1726