Corpor ate InformatIon

town and Country financial Corporation is the parent holding company for town and Country Bank with offices in Springfield, mt. Zion, forsyth, Decatur and Quincy, town & Country Banc mortgage Services, Inc., and Logan County Bank with offices in Lincoln and Buffalo. town and Country financial Corporation shares are traded under the symbol tWCf.

TRANSFER AGENTtown and Country financial Corporation acts as its own transfer agent. Contact us by calling 866.770.3100 with questions on registrations or stock transfer instructions. mail requests to our Corporate office at the following address:

town and Country financial Corporation3601 Wabash aveSpringfield, IL 62711www.townandcountrybank.com

Statement of Condition

2012 thIrD Quarter

STATEMENT OF CONDITIONAS OF September 30 (UNAUDIteD) 2012 2011

ASSetSCash and due from banks $ 15,548,611 $ 12,302,154 Investments 134,958,536 102,028,575 Loans, net 282,201,470 242,227,044 Other assets 23,953,845 20,062,514 Total assets $ 456,662,462 $ 376,620,287

LIAbILItIeS & eQUItYDeposits $ 371,336,276 $ 308,376,967 Borrowed money 30,500,000 18,198,810 Other liabilities 2,464,013 961,047 Total liabilities 404,300,289 327,536,824 Trust preferred securities 11,500,000 11,500,000 SBLF preferred capital 5,000,000 5,000,000 Equity capital 35,862,173 32,583,463 Total liabilities & equity $ 456,662,462 $ 376,620,287

NINe mONtH perIOD eNDeD September 30 (UNAUDIteD)Interest income $ 12,061,594 $ 11,992,224 Interest expense (2,075,935) (2,481,717)Net interest income $ 9,985,659 $ 9,510,507 Provision for loan losses (515,000) – Noninterest income 6,575,916 3,789,370 Gain on sale of securities 118,116 195,856 Writedown due to impairment of securities – – Noninterest expense (12,817,441) (10,395,099)

Income before income taxes $ 3,347,250 $ 3,100,634 Income taxes (1,155,300) (1,039,500)Net income $ 2,191,950 $ 2,061,134

SElECTED FINANCIAl COMpARISON:NINe mONtH perIOD eNDeD September 30 (UNAUDIteD) 2012 2011

Net income before nonrecurring items per share $ 0.76 $ 0.70 Net income from nonrecurring items per share $ 0.03 $ 0.04Basic earnings per share $ 0.78 $ 0.74 Book value per common share $ 12.84 $ 11.67 Net charge offs to average loans less HFS 0.15% -0.03%Basic surplus (liquidity) 16.5% 14.4%Net revenue excluding nonrecurring (in millions) $ 16.6 $ 13.3 Net interest margin 3.46% 3.76%Return on common equity 8.54% 8.46%Return on assets 0.71% 0.75%

AS OF AS OF September 30 December 31 UNAUDIteD 2012 2011

Tangible common leverage ratio 9.5% 10.5%Tier 1 leverage ratio 10.8% 12.8%Total risk-based capital ratio 15.2% 16.9%Nonperforming loans 0.79% 0.64%Delinquent loans, excluding nonperforming 0.44% 0.12%Allowance for loan loss 1.13% 1.21%Coverage ratio 143.8% 186.1%Mortgage loans sold with servicing retained (in millions) $ 374.4 $ 357.2 Trust assets under management (in millions) $ 81.4 $ 75.3

CAAR Golf Outing

Quincy’s “Get Carried Away” event

DEAR FEllOw ShAREhOlDERS,

the summer and early fall have been rewarding as we began and completed the effort to redesign one of our banking offices to reflect our unique approach to banking. We hope you were able to join us on october 26 when we welcomed about 1,000 friends, family and neighbors and unveiled our remodeled bank at 3601 W. Wabash. Warm, comfortable, and inviting are just a few words that describe our space and our colleagues. It would be our pleasure to welcome you and your friends so that you may also experience banking the town and Country way.

as always, we also spend a fair amount of time and attention on our operational and financial results. We’re pleased to report third-quarter 2012 net income of $825 thousand, or $0.30 per share, as compared to $708 thousand, or $0.25 per share in the third quarter of 2011. the quarter’s results were marked by record revenue, excluding security gains, largely due to strong mort gage production from historic low rates, expansion of third-party mortgage processing, and wider margins on loans sold.

Year-to-date net income was $2.2 million, or $0.78 per share, compared to $2.1 million, or $0.74 per share, during the comparable year-ago period. Current year results include provision for loan loss of $0.11 per share, costs of $0.05 per share related to the second quarter acquisition of our banking office in Quincy Illinois,

and $0.02 from security gains, all results reported after the effect of income taxes. 2011 net income included an after-tax gain on the sale of securities of $0.04 per share and no provision.

total revenue, excluding security gains, was $16.6 million and $3.3 million, or 24.5%, above the year ago on the strength of the Company’s mortgage banking business and net interest income from lower funding costs and growth in loans outstanding. But despite a 5% year-over-year increase in net interest income, the net interest margin was 3.46% and down from 3.76% in 2011. Sustained low interest rates and excess cash invested as a result of the second quarter acquisition of the Quincy banking office were leading factors.

non-interest expense was $12.8 million compared to $10.4 million in the first three quarters of 2011, the change due to costs to acquire the Quincy banking office, higher staffing levels that support the mortgage business and the new banking office, and other mortgage-related expense.

the year-to-date provision for loan losses was $515 thou-sand compared to no provision in 2011. net charge-offs totaled 0.15% of average loans compared to a net recovery of .03% in the prior year. the allowance for loan losses was 144% of nonperforming loans and 1.13% of total portfolio loans at September 30. and finally, nonperforming loans were 0.79% of total loans, while all other past due loans were 0.44% of total loans, as compared to 0.64% and 0.12%, respectively, at December 31, 2011.

the Company reported total assets of $457 million, net loans of $282 million, and deposits of $371 million. the Quincy banking office acquisition and organic growth drove the balance sheet changes from the year ago. Common equity capital was $36 million with a reported book value of $12.84 per common share compared to $11.90 per share on December 31, 2011. tier 1 capital was 10.8% of average assets while total regulatory capital was 15.2% of risk-weighted assets.

In summary, we are particularly pleased that strong third quarter and year-to-date results are emerging from virtually every line of business. Loan growth of 16.5% from the year ago more than offset the negative impact from the sustained low interest rate environment. at the same time, momentum from foundations that we began laying in our trust and mortgage businesses several years ago resulted in record levels of non-interest income, excluding security gains, in the quarter and the year-to-date.

and finally, the Board of Directors declared a $0.03 per share quarterly cash dividend payable on December 14, 2012 to stockholders of record December 3, 2012.

thank you and please, come see us soon.

Sincerely,

micah r. Bartlett David e. KirschnerPresident and CEO Executive Chairman

Micah R. Bartlett (L) and David E. Kirschner