Profit fell at Third Century Bancorp (TDCB) after the Franklin, Ind., company boosted its provision for loan losses.
The $128 million-asset bank said Friday that last year it earned $242,000, or 18 cents a share, down 3% from 2011, as its provision for loan losses rose 90%, to $196,000. The higher provision for bad loans was appropriate given concerns about the company's portfolio of commercial loans, it said in the news release.
Overall, chargeoffs declined 43%, to $598,000, for the year. Nonperforming loans make up 5.4% of the company's assets.
Third Century's net interest income fell 3%, to $4.4 million, as declining interest revenue outpaced a dip in interest expense, and its net interest margin narrowed by 20 basis points, to 3.70%.
Noninterest income rose 17%, to $906,000, on increased gains from loan and real estate sales. Noninterest expense fell 4%, to $4.5 million, largely due to the termination of an employee stock ownership plan.
Third Century is the parent company of Mutual Savings Bank, which has six branches in Johnson County, Ind.
