MENDOTA, III., November 10, 2021 / PRNewswire / – Tri-County Financial Group, Inc. (The Company) (OTCQX: TYFG) today announced its financial results for the third quarter of 2021.

The net result for the third quarter of 2021 amounts to $ 4.1 million ($ 1.64 per share), compared to $ 7.1 million ($ 2.87 per share) during the third quarter of 2020.

Net interest income was $ 11.2 million during the quarter ended September 30, 2021, compared to $ 8.9 million in the same period of 2020, an increase of 26%. The net interest margin was 3.42% for the third quarter of 2021, compared to 2.96% in the same quarter a year ago, in part due to higher PPP loan balances in 2020 combined with related costs accounted for when submitting in 2021.

Non-interest income was $ 8.8 million for the quarter ended September 30, 2021, a decrease in $ 10.1 million, or 53%, compared to $ 18.9 million during the quarter ended September 30, 2020. The decrease can be mainly attributed to a 46% drop in mortgage lending volume from the previous year’s highs. First State Mortgage continues to make a positive contribution to income, although their self-sustaining net income has declined by $ 4.0 million compared to the record third quarter of 2020 where nearly $ 300 million loans have been initiated.

Non-interest charges were $ 14.0 million during the quarter ended September 30, 2021, compared to $ 16.7 million for the third quarter of 2020, a decrease of $ 2.7 million, or 16%. The decrease is mainly related to the fall in mortgage production costs in 2021.

Total loans decreased $ 49.0 million, or 5%, to $ 1.005 billion To September 30, 2021, of $ 1.054 billion To September 30, 2020. There was $ 13.5 million in Paycheck Protection Program (PPP) loans included in payout loan balances September 30, 2021 compared to $ 52.5 million at the end of the quarter of the previous fiscal year, a decrease of $ 38.9 million. Demand for non-farm business loans continues to be weak due to supply chain impacts, while mortgage and home equity loan balances continue to be refinanced in the secondary market due to interest rates. historically low and rising home valuations. NPLs as a percentage of total loans were 0.45% at September 30, 2021, compared to 1.25% at September 30, 2020.

The allowance for loan losses decreased $ 1.1 million as asset quality continues to improve. The Company provided $ 450,000 in the third quarter of 2021 compared to $ 1,500,000 in the period of the previous year. The allowance for loan losses ended at $ 16.3 million To September 30, 2021 and represent 1.62% of gross loans against 1.41% at September 30, 2020.

Deposits increased $ 51.0 million, or 5%, year over year, with most of the growth coming from CARES economic assistance programs and PPP products. The investment portfolio has grown $ 34.7 million or 34% year over year and totaled $ 137 million To September 30, 2021 due to the significant increase in liquidity from net loan flow and direct deposit of government relief funds.

The Company’s capital levels remain strong in the September 30, 2021, with a Tier 1 leverage ratio of 9.11%, compared to 8.34% last year.

At September 14, 2021, the board of directors declared a regular dividend of $ 0.15 per payable share October 7, 2021, to shareholders of record on September 30, 2021.

By announcing the results, the President and Chief Executive Officer, Tim mcconville, said: “Our third quarter numbers, although down from a record quarter a year ago, represent a respectable earnings performance relative to last year’s volume. Mortgage activity continues to make a positive contribution to earnings. Total mortgage loan production this year totaled $ 581 million, below $ 659 million in 2020. The asset quality as measured by NPLs to total loans is very good as we see strong agricultural performance and good liquidity with our borrowers. We continue to monitor the impact of supply chain issues and staff shortages on our businesses and consumers. Overall, we expect loan demand to return to more normal levels in 2022 and we look forward to meeting the credit needs of our businesses and communities. “

After the end of the quarter, Tri-County Financial Group completed a private placement of $ 10 million in total capital of 3.50% of fixed and variable rate subordinated bonds maturing in 2031 (the “Notes”). The Company intends to use the proceeds for general corporate purposes, including supporting organic growth plans, supporting bank-level capital ratios or redeeming a portion of the subordinated notes. of the Company’s existing 7.00% variable rate fixed rate, maturing in 2026. The Notes will initially bear interest at a fixed interest rate of 3.50% up to October 15, 2026, after which the interest rate will be reset quarterly to an annual interest rate equal to the three-month Guaranteed Overnight Funding Rate (SOFR) then in effect increased by 266 basis points until maturity of the tickets on October 15, 2031. The Notes are redeemable by the Company, in whole or in part, on or after October 15, 2026 and at any time when certain events occur. The Notes have been structured to qualify as Tier 2 principal for the Company for regulatory purposes. “We are delighted to refinance our subordinated notes at such an attractive rate and to provide a form of non-dilutive capital to provide shareholder value,” said McConville. Raymond James & Associates, Inc. acted as placement agent for the transaction and the company was represented by the law firm of Howard & Howard.

The Notes have not been registered under the Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in United States lack of registration or an applicable exemption from registration requirements.

Tri-County Financial Group, Inc. is the parent company of First State Bank, with offices in Mendota, Batavia, Bloomington, Geneva, LaMoille, McNabb, Northern Lights, Ottawa, Peru, Princeton, Rochelle, Chabbana, Saint-Charles, Streactor, Sycamore, Boatman and Brooklyn West. First State Bank is the parent company of First State Mortgage, LLC and First State Insurance. The shares of Tri-County Financial Group, Inc. are listed under the symbol TYFG and traded on OTCQX.

SOURCE Tri-County Financial Group, Inc.