Corpor ate InformatIon

Town and Country Financial Corporation is the parent holding company for Town and Country Bank with offices in Buffalo, Decatur, Forsyth, Lincoln, Mt. Zion, Quincy and Springfield and Town & Country Banc Mortgage Services, Inc.

STOCK TRADINGTown 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

2013 SeCond Quarter

STATEMENT OF CONDITIONAS OF JUNE 30 (UNAUDITED) 2013 2012

ASSETSCash and due from banks $ 9,734,946 $ 9,417,863 Investments 123,522,855 142,020,791 Loans, net 311,748,476 261,087,902 Other assets 28,414,526 22,910,327 Total assets $ 473,420,803 $ 435,436,883

LIABILITIES & EQUITYDeposits $ 385,745,295 $ 369,152,497 Borrowed money 30,000,000 13,100,000 Other liabilities 2,832,286 1,819,256 Total liabilities 418,577,581 384,071,753 Trust preferred securities 11,500,000 11,500,000 SBLF preferred capital 5,000,000 5,000,000 Equity capital 38,343,222 34,865,130 Total liabilities & equity $ 473,420,803 $ 435,436,883

SIX MONTH PERIOD ENDED JUNE 30 (UNAUDITED)Interest income $ 7,852,120 7,979,835 Interest expense (1,101,204) (1,427,057)Net interest income $ 6,750,916 $ 6,552,778 Provision for loan losses (275,000) (390,000)Noninterest income 4,064,344 4,013,080 Gain on sale of securities 509,215 101,262 Writedown due to impairment of securities – – Noninterest expense (8,905,766) (8,196,881)Income before income taxes $ 2,143,709 $ 2,080,239 Income taxes (747,800) (712,900)Net income 1,395,909 1,367,339 Preferred dividend (25,000) (64,239)Net income available to common stockholders $ 1,370,909 $ 1,303,100

SElECTED FINANCIAl COMpARISONSIX MONTH PERIOD ENDED JUNE 30 (UNAUDITED)Basic earnings per share $ 0.49 $ 0.47 Book value per common share $ 13.73 $ 12.48 Net charge offs to average loans less HFS 0.03% 0.12%Net revenue (in millions) $ 11.3 $ 10.7 Net interest margin 3.15% 3.54%Net income from mortgage banking activities $ 416.6 $ 667.6 Fees from mortgage banking activities $ 2,629.6 $ 2,743.1 Return on common equity 7.17% 8.07%Return on assets 0.60% 0.69%

AS OF AS OF JUNE 30 DEcEMBER 31 (UNAUDITED) 2013 2012Tangible common leverage ratio 7.5% 7.4%Tier 1 leverage ratio 10.7% 10.8%Total risk-based capital ratio 15.8% 16.0%Nonperforming loans 0.73% 0.84%Delinquent loans, excluding nonperforming 0.23% 0.30%Allowance for loan loss 1.12% 1.16%Coverage ratio 153.2% 137.7%Mortgage loans sold with servicing retained (in millions) $ 390.7 $ 383.2 Trust assets under management (in millions) $ 111.2 $ 91.5

Lincoln’s Blood Drive

TP the Town for St. Martin de Porres

Springfield Chamber Corporate Cup

Quincy’s Financial

Scholars Ceremony

that our mortgage business model, designed to capture conventional and government purchase business, is appropriate for the times. also, we continue to seek expansion of our mortgage business by offering our services to other community banks that may be challenged to comply with new and complex regulations. We are seeking cost reductions that don’t impair the long-term value of the business and therefore, we anticipate further compression in mortgage banking earnings for the near term.

We are reasonably optimistic that net interest income will benefit from the current steep yield curve. We look forward to cash flow that is invested at higher rates even while our deposit cost structure remains generally unchanged. We are reasonably confident too that we will be able to maintain and even add additional growth to our loan and trust assets.

In short, we are committed to our build and grow strategy and we appreciate your continued support.

thank you and please come see us soon.

DEAR FEllOw ShAREhOlDERS,the spring and early summer months of 2013 produced results that expanded on recent trends — growth in balance sheet and trust assets accompanied by an unexpectedly hard drop in the mortgage refinance business. as a result, second quarter 2013 earnings were solid and yet give an indication of what we can expect during the remainder of the year. So let’s take a few moments to share the quarter and year-to-date financial and operational achievements and consider what lies ahead.

FINANCIAl RESulTStown and Country financial Corporation (tWCf) reported second-quarter net income of $710 thousand compared to $693 thousand in the second quarter of 2012. net income available to common shareholders was $0.25 per share compared to $0.24 per share in the year-ago period. the current quarter’s net income included a gain of $0.05 per share from the sale of securities compared to $0.02 in the year ago quarter while quarter-over-quarter income earned on mortgage activities declined by $0.02 per share.

first half 2013 net income was $1.4 million, up 2.1% from the prior year due to lower provision for loan loss and higher gain on the sale of securities, partially offset by a 37% decline in net income earned from mortgage banking activities. net income available to common shareholders was $0.49 per share compared to $0.47 per share in the first six months of 2012.

net revenue was $11.3 million compared with $10.7 million in the prior year. net interest income was up 3% from the first half of 2012 driven by higher loan balances and lower deposit costs. the net interest margin, however, declined to 3.15% compared to 3.54% in 2012. Security gains were $509 thousand compared to $101 thousand in the first half of 2012. non-interest income was up 1.3% despite mortgage loan fees that declined by 4.1% on the same year-over-year reduction in loans originated and processed. the provision for loan loss was $275 thousand and down from the prior year, partially due to lower net charge-offs that were 0.03% of average loans compared with 0.12% in 2012. non-interest expense was up 8.6% from costs associated with building the mortgage banking infrastructure designed to support future growth. the

remainder of the increase is due to six months of normal operating costs associated with our Quincy, Illinois offices that were acquired and staffed near the end of the second quarter of 2012.

Credit quality remained strong with the level of loans past due 30 days or more, including non-accrual loans, of 0.73% at June 30 compared with 0.84% at december 31, 2012. the allowance for loan loss to total non-performing loans was 153% and 1.12% of total loans compared with 138% and 1.16%, respectively, at the prior year-end.

at June 30 total assets were $473 million and total net loans were $312 million, up 19% from their balance on June 30, 2012. total deposits were $386 million and common equity capital was $38.3 million. the reported book value was $13.73 per common share compared to $13.20 per share on december 31, 2012. tier 1 capital was $50 million, or 10.7% of average assets, while total regulatory capital was $55 million, or an estimated 15.8% of risk-weighted assets.

the Board of directors declared a $0.03 per share quarterly cash dividend payable on September 13, 2013 to stockholders of record September 2, 2013.

OpERATING AChIEvEMENTSYou may remember that in the first quarter we significantly upgraded online and mobile banking functionality, which has been widely embraced by our customers. then, in march we merged our two banks together, improving customer service and simplifying our company’s structure. Building on the first quarter’s improved foundation, we began work in april on a major core technology upgrade. the new platform is scheduled for implementation in the fourth quarter of this year. during the quarter we also worked to forge banker teams to better engage and link our customers with specialized solutions. even as we realize the benefits of these and prior investments in the Quincy market and mortgage banking business, we also acknowledge the higher, operational costs of these efforts that have been embedded in our future earnings.

at town and Country we, like our customers, strive to balance long-term goals and short-term realities. We think the impact from the sudden slow-down in mortgage refinance activity will be more obvious in the next few quarters as fee income will drop faster than expenses. We feel confident

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

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