TDCB Third Century Bancorp (PK)

Third Century Bancorp (OTCBB: TDCB), the holding company of Mutual Savings Bank, announced net income of $55,000 for the quarter ended March 31, 2014, or $0.04 per share, compared to net income of $60,000 for the quarter ended March 31, 2013, or $0.05 per share. The primary reason for the $5,000 decrease in net income was a decrease of $35,000, or 3.40%, in net interest income to $994,000 partially offset by a decrease of $22,000, or 2.01%, in noninterest expense to $1.1 million for the quarter ended March 31, 2014 compared to the quarter ended March 31, 2013.

Net interest income was $994,000 for the first quarter of 2014 compared to $1.0 million for the first quarter of 2013. The decrease in net interest income was primarily due to a decrease of $112,000, or 26.43%, in interest income on commercial real estate mortgages to $312,000 for the three months ended March 31, 2014 compared to $424,000 for the three months ended March 31, 2013. The Bank’s average balance of commercial real estate mortgages decreased approximately $1.3 million during the first quarter of 2014 and the average yield decreased to 4.85% from 5.64% as compared to the prior year period.

Noninterest expense decreased $22,000 to $1.1 million for the three months ended March 31, 2014 as compared to the same period in 2013. The decrease of $22,000 was the cumulative effect of cost reduction measures implemented in various general and administrative expense categories such as office supplies, advertising, membership fees and subscriptions. In addition, expenses incurred for real estate owned by the Bank decreased by $7,000, or 77.78%, to $2,000 for the three months ended March 31, 2014 from $9,000 for the three months ended March 31, 2013.

The provision for loan losses decreased $6,000 to $3,000 for the three months ended March 31, 2014 from $9,000 for the three months ended March 31, 2013. Management considers factors such as delinquency trends, portfolio composition, past loss experience and other factors such as general economic conditions when determining the provision for loan losses. Mutual Savings Bank charged-off loans of $6,000 and collected $7,000 in recoveries for the quarter ended March 31, 2014 compared to charged-off loans, net of recoveries, of $268,000 for the quarter ended March 31, 2013, which represented a decrease in the level of charge offs of $269,000, or 100.39%. At March 31, 2014, non-performing assets totaled $5.1 million, or 4.22% of total assets, and included $4.4 million of non-performing loans. At December 31, 2013, non-performing assets totaled $4.6 million, or 3.76% of total assets, and included $4.0 million of non-performing loans. The Bank continues to work proactively with delinquent borrowers prior to loans becoming non-performing. Loans are considered non-performing when one or more of the following occur: borrowers fail to make scheduled payments causing loans to become delinquent by 90 days or more; borrowers default on original loan terms and the Bank restructures such loans; or Management classifies loans as “substandard” in regards to full repayment according to loan agreements.

Total assets decreased $1.7 million to $122.0 million at March 31, 2014 from $123.7 million at December 31, 2013, a decrease of 1.37%. The decrease in assets was primarily due to a decrease of $2.2 million in net loans receivable and a decrease of $696,000 in investment securities held to maturity. The decrease in net loans receivable was primarily due to a decrease in commercial real estate mortgages of $1.3 million, or 3.70%, to $34.7 million at March 31, 2014 from $36.0 million at December 31, 2013.

Deposits increased $1.2 million to $91.7 million at March 31, 2014 from $90.4 million at December 31, 2013. Demand deposits increased $1.4 million, or 8.56%, to $17.6 million and savings, NOW and money market savings deposits increased $510,000, or 1.09%, to $47.4 million at March 31, 2014. Time deposits decreased $657,000, or 2.41%, to $26.6 million at March 31, 2014.

Federal Home Loan Bank advances and other borrowings decreased $3.0 million, or 17.14%, to $14.5 million at March 31, 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 March 31, 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 3.50 years at March 31, 2014 compared with 3.2 years at December 31, 2013.

Stockholders’ equity decreased $59,000 to $15.4 million at March 31, 2014 from $15.5 million at December 31, 2013. Stockholders’ equity decreased due to cash dividends paid of $115,000 offset in part by net income of $55,000 for the three months ended March 31, 2014. Equity as a percentage of assets increased 0.12% to 12.63% at March 31, 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 March 31, At December 31, 2014 2013 Selected Consolidated Financial Condition Data: (In Thousands) Assets $ 121,984 $ 123,674 Loans receivable-net 93,821 96,045 Cash and cash equivalents 8,890 6,561 Interest-earning time deposits 6,176 7,169 Investment securities 6,458 7,154 Deposits 91,675 90,431 FHLB advances and other borrowings 14,500 17,500 Stockholders’ equity-net 15,410 15,469   For the Three Months Ended March 31, 2014 2013 (Dollars In Thousands, Except Share Data) Selected Consolidated Earnings Data: Total interest income $ 1,137 $ 1,210 Total interest expense   143     181   Net interest income 994 1,029 Provision for losses on loans   3     9  

Net interest income after provision for losses on loans

991 1,020 Total other income 172 175 Noninterest expense 1,073 1,095 Income tax expense   35     40   Net income   55     60   Earnings per share basic $ 0.04 $ 0.05 Earnings per share diluted $ 0.04 $ 0.05   Selected Financial Ratios and Other Data: Interest rate spread during period 3.18 % 3.22 % Net yield on interest-earning assets 3.33 3.41 Return on average assets 0.18 0.19 Return on average equity 1.41 1.57 Equity to assets 12.63 12.23

Average interest-earning assets to average interest-bearing liabilities

130.92 131.71 Non-performing assets to total assets 4.22 5.15

Allowance for loan losses to total loans outstanding

2.08 2.21 Allowance for loan losses to non-performing loans 45.11 38.61

Net charge-offs to average total loans outstanding

0.00 0.07 Noninterest expense to average assets 0.85 0.87 Effective income tax rate 38.89 40.00   Number of full service offices 6 6 Tangible book value per share $ 12.10 $ 12.00 Market closing price at end of quarter $ 8.00 $ 2.25 Price-to-tangible book value 66.12 % 18.75 %

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