Town and Country Financial Corp. reported net income of $316,000, or $0.11 per share, in the first quarter of 2010. This was down slightly from the $343,000, or $0.12 per share, reported for the same quarter of 2009.

Despite the decrease in net income over last year, the company expressed optimism about the balance of 2010, but tempered the outlook with warnings on continued deterioration in asset quality and increased government regulations.

David Kirschner, the CEO of Town and Country Financial Corporation, said, “We are cautiously optimistic about 2010. While mortgage refinance revenue is off significantly from last year, our core profitability is improving. Risks of additional credit losses will remain a potential concern until economic trends improve further. Aggressive regulatory changes impacting even community banks presents increasing challenges to operations and profitability.”

Book value increased slightly on a sequential basis from $10.47 per share on December 31, 2009 to $10.66 in the quarter ending March 31, 2010. The bank also reported a strong capital position, and ended the quarter with Tier One capital of $38 million, or 10.4% of average assets.

Town and Country Financial Corporation is a bank holding company that owns two subsidiaries – the Town and Country Bank and Logan County Bank. The banks together have 9 branches and 10 ATM locations in Illinois, with total assets of $375 million.