NEWTOWN, Pa., Jan. 29, 2009 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $4,236,000 ($1.61 per diluted share) for 2008, compared with $4,845,000 ($1.78 per diluted share) for 2007. Net income for the three month period ended December 31, 2008 was $521,000 ($0.20 per diluted share) compared with $1,250,000 ($0.47 per diluted share) during the comparable period of 2007. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share, payable February 17, 2009 to shareholders of record on February 10, 2009.
Highlights for 2008 included:
* Net interest income increased by $988,000 or 5.0% compared with 2007, the combined effect of a $704,000 increase in interest income and a $284,000 decrease in interest expense. The Company's net interest margin was 3.09% for the year, a decrease of 12 basis points compared with 2007. The increase in interest income occurred because of a $56.2 million increase in average earning assets throughout the year, more than offsetting a 40 basis point decrease in the average yield on earning assets. Loan yields decreased by 43 basis points to 6.01% largely due to a 400 basis point decrease in the prime rate during the year, which resulted in lower interest yields on the Company's prime rate-based construction, commercial, and home equity loans. During 2008, net loans outstanding increased by $27.9 million or 5.4% to $546.0, and mortgage-backed securities increased by $7.7 million or 7.3% to $112.0 million. * Deposits increased by $17.5 million or 3.7% to $489.9 million. The average cost of deposits decreased by 42 basis points during 2008, mainly due to the decrease in short-term interest rates throughout 2008. However, the Company's deposit mix experienced a shift away from lower cost savings and passbook accounts and toward higher cost money market accounts and certificates of deposit. Federal Home Loan Bank advances and other borrowings increased by $14.9 million or 9.7% to $168.1 million. The average cost of these borrowings decreased by 26 basis points, mainly due to the substantial decrease in the cost of short-term borrowings. * Non-performing assets were 0.72% of total assets at year end, down slightly from 0.76% at year end 2007. The Company has no foreclosed property on its books, and non-performing loans decreased by $79,000 to $5.3 million at year end 2008. * The allowance for loan losses was $3.9 million or 0.70% of gross loans at year end, an increase of more than $1.0 million during the year. The loan loss provision was $1.5 million for 2008, and net charge-offs were approximately $0.5 million. The increased provision was due in part to the broad decline in real estate activity that has occurred throughout the Philadelphia region that may adversely affect the collateral supporting the Company's real estate loans. In addition, raw land development has declined dramatically, and some of these customers of the Company may be susceptible to cash flow constraints, as was the case during the fourth quarter of 2008, causing the majority of the $2.7 million increase in non-performing loans during the fourth quarter and necessitating a large portion of the $1.0 million loan loss provision during the quarter. * Non-interest income increased by $139,000 to $3.9 million during 2008 when compared with 2007. Non-interest expense increased by $529,000 to $17.4 million. * Dividends for the year were $0.80 per share, as they were during 2007.
Commenting on the performance of the Company, President Kent C. Lufkin stated that, "Despite the harsh economic climate throughout 2008, the Company and Third Federal Bank performed well over the last year. We continued to achieve steady deposit and loan growth while carefully managing our cost of funds and net interest margin. We did not get drawn into making high-risk loans or paying exorbitant rates to attract deposits. We do recognize that 2009 will present many risks and challenges, and we are working hard to be prepared for them as evidenced by our prudent additions to our loan loss reserve, cost control measures, and comprehensive oversight of our loan and security portfolios."
TF Financial Corporation is a holding company whose principal subsidiary is Third Federal Bank, which operates 15 full service retail and commercial banking offices in Philadelphia and Bucks County, Pennsylvania and in Mercer County, New Jersey. In addition, the Bank's website can be found at www.thirdfedbank.com. Statements contained in this news release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by TF Financial Corporation with the Securities and Exchange Commission from time to time. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data)
QUARTER ENDED PERCENT CHANGE
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4Q08- 4Q08-
12/31/2008 9/30/2008 12/31/2007 3Q08 4Q07
--------------------------------------------
EARNINGS SUMMARY
Interest income $ 9,618 $ 9,725 $ 9,780 -1.1% -1.7%
Interest expense 4,308 4,348 4,933 -0.9% -12.7%
Net interest income 5,310 5,377 4,847 -1.2% 9.6%
Loan loss provision 1,010 150 -- 573.3% n.m.
Non-interest income 927 699 772 32.6% 20.1%
Non-interest expense 4,623 4,214 3,987 9.7% 16.0%
Income taxes 83 462 410 -82.0% -79.8%
Net income $ 521 $ 1,250 $ 1,222 -58.3% -57.4%
PER SHARE INFORMATION
Earnings per share,
basic $ 0.20 $ 0.47 $ 0.45 -57.4% -55.6%
Earnings per share,
diluted $ 0.20 $ 0.47 $ 0.45 -57.4% -55.6%
Dividends paid $ 0.20 $ 0.20 $ 0.20 0.0% 0.0%
FINANCIAL RATIOS
Annualized return
on average assets 0.28% 0.69% 0.71% -59.4% -60.6%
Annualized return
on average equity 3.00% 7.14% 7.15% -58.0% -58.0%
Efficiency ratio 88.44% 71.11% 70.96% 24.4% 24.6%
AVERAGE BALANCES
Loans $547,128 $547,748 $511,635 -0.1% 6.9%
Mortgage-backed
securities 109,284 93,100 92,149 17.4% 18.6%
Investment securities 39,996 40,862 39,968 -2.1% 0.1%
Other interest-earning
assets 629 1,102 765 -42.9% -17.8%
Total earning assets 697,037 682,812 644,517 2.1% 8.1%
Non-earning assets 36,611 36,301 37,361 0.9% -2.0%
Total assets 733,648 719,113 681,878 2.0% 7.6%
Deposits 491,283 482,521 472,875 1.8% 3.9%
FHLB advances and other
borrowed money 165,101 158,385 132,643 4.2% 24.5%
Total interest bearing
liabilities 656,384 640,906 605,518 2.4% 8.4%
Non-interest bearing
liabilities 8,271 8,552 8,573 -3.3% -3.5%
Stockholders' equity 68,993 69,655 67,787 -1.0% 1.8%
Total liabilities &
stockholders' equity $733,648 $719,113 $681,878 2.0% 7.6%
SPREAD AND MARGIN
ANALYSIS
Average yield on:
Loans 5.83% 6.00% 6.39%
Mortgage-backed
securities 4.79% 4.61% 4.71%
Investment securities 3.84% 4.76% 5.37%
Other interest-earning
assets 0.63% 2.17% 4.15%
Total interest-earning
assets 5.55% 5.73% 6.09%
Average cost of:
Deposits 2.32% 2.29% 2.95%
FHLB advances and other
borrowed money 3.48% 3.96% 4.25%
Total interest-bearing
liabilities 2.61% 2.70% 3.24%
Interest rate spread 2.94% 3.03% 2.85%
Net interest margin 3.09% 3.19% 3.05%
NON-INTEREST INCOME
DETAIL
Service fees, charges
and other $ 595 $ 504 $ 574 18.1% 3.7%
Bank-owned life
insurance 164 155 153 5.8% 7.2%
Gain on sale of loans 72 40 45 80.0% 60.0%
Gain on sale of
real estate 96 -- -- n.m. n.m.
NON-INTEREST EXPENSE
DETAIL
Salaries and benefits 2,775 2,648 2,444 4.8% 13.5%
Occupancy 722 691 679 4.5% 6.3%
Professional fees 232 142 195 63.4% 19.0%
Advertising 181 144 93 25.7% n.m.
Other 713 589 576 21.1% 23.8%
TF FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per
share data) TWELVE MONTHS ENDED
---------------------- %
12/31/2008 12/31/2007 CHANGE
---------- ---------- ----------
EARNINGS SUMMARY
Interest income $ 38,832 $ 38,128 1.8%
Interest expense 18,071 18,355 -1.5%
Net interest income 20,761 19,773 5.0%
Loan loss provision 1,500 -- n.m.
Non-interest income 3,875 3,736 3.7%
Non-interest expense 17,431 16,902 3.1%
Income taxes 1,469 1,762 -16.6%
Net income $ 4,236 $ 4,845 -12.6%
PER SHARE INFORMATION
Earnings per share, basic $ 1.61 $ 1.78 -9.6%
Earnings per share, diluted $ 1.61 $ 1.78 -9.6%
Dividends paid $ 0.80 $ 0.80 0.0%
FINANCIAL RATIOS
Annualized return on average
assets 0.59% 0.73% -19.2%
Annualized return on average
equity 6.12% 7.24% -15.5%
Efficiency ratio 75.34% 71.90% 4.8%
AVERAGE BALANCES
Loans $ 542,452 $ 501,112 8.2%
Mortgage-backed securities 100,505 86,816 15.8%
Investment securities 41,137 38,666 6.4%
Other interest-earning assets 842 2,180 -61.4%
Total earning assets 684,936 628,774 8.9%
Non-earning assets 35,841 35,937 -0.3%
Total assets 720,777 664,711 8.4%
Deposits 483,220 477,299 1.2%
FHLB advances and other borrowed
money 159,565 112,277 42.1%
Total interest bearing
liabilities 642,785 589,576 9.0%
Non-interest bearing liabilities 8,785 8,189 7.3%
Stockholders' equity 69,207 66,946 3.4%
Total liabilities & stockholders'
equity $ 720,777 $ 664,711 8.4%
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 6.01% 6.44%
Mortgage-backed securities 4.73% 4.71%
Investment securities 4.53% 5.42%
Other interest-earning assets 2.02% 4.82%
Total interest-earning assets 5.73% 6.13%
Average cost of:
Deposits 2.45% 2.87%
FHLB advances and other borrowed
money 3.90% 4.16%
Total interest-bearing
liabilities 2.81% 3.11%
Interest rate spread 2.92% 3.02%
Net interest margin 3.09% 3.21%
NON-INTEREST INCOME DETAIL
Service fees, charges and other $ 2,533 $ 2,915 -13.1%
Bank-owned life insurance 633 607 4.3%
Gain on sale of loans 271 214 26.6%
Gain on sale of real estate 438 -- n.m.
NON-INTEREST EXPENSE DETAIL
Salaries and benefits 10,638 10,390 2.4%
Occupancy 2,881 2,812 2.5%
Professional fees 795 698 13.9%
Advertising 614 419 46.5%
Other 2,503 2,583 -3.1%
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data)
PERCENT CHANGE
--------------
PERIOD ENDED 12/31/2008 vs
------------ 9/30/ 12/31/
12/31/2008 9/30/2008 12/31/2007 2008 2007
-------- -------- -------- ------ ------
DEPOSIT INFORMATION
Non-interest checking $ 36,871 $ 40,204 $ 35,904 -8.3% 2.7%
Interest checking 46,907 46,013 46,543 1.9% 0.8%
Money market 88,609 80,328 79,267 10.3% 11.8%
Savings 111,591 116,485 130,423 -4.2% -14.4%
CD's, retail 205,872 209,505 180,257 -1.7% 14.2%
OTHER INFORMATION
Per Share
Book value (a) $ 27.39 $ 26.28 $ 25.40
Tangible book value (a) $ 25.67 $ 24.65 $ 23.78
Closing market price $ 19.30 $ 21.50 $ 24.64
Balance Sheet
Loans, net $545,989 $548,263 $518,067 -0.4% 5.4%
Cash and cash
equivalents 2,719 4,562 5,680 -40.4% -52.1%
Mortgage-backed
securities 111,991 92,979 104,338 20.4% 7.3%
Investment securities 41,515 39,818 41,389 4.3% 0.3%
Total assets 735,532 718,113 701,673 2.4% 4.8%
Total deposits 489,850 492,535 472,394 -0.5% 3.7%
FHLB advances and other
borrowed money 168,148 148,341 153,221 13.4% 9.7%
Stockholders' equity 68,892 69,412 67,843 -0.7% 1.5%
Asset Quality
Non-performing loans 5,279 2,615 5,358 101.9% -1.5%
Loan loss reserves 3,855 2,996 2,842 28.7% 35.6%
Reserves to gross loans 0.70% 0.54% 0.55% 29.6% 27.3%
Non-performing loans
to gross loans 0.96% 0.47% 1.03% 104.3% -6.8%
Non-performing loans
to total assets 0.72% 0.36% 0.76% 100.0% -5.3%
Foreclosed property -- 306 -- -100.0% n.m.
Foreclosed property
to total assets 0.00% 0.04% 0.00% -100.0% n.m.
Non-performing assets
to total assets 0.72% 0.41% 0.76% 75.6% -5.3%
Statistical
Shares outstanding
(000's) (a) 2,515 2,641 2,671
Number of branch offices 14 14 15
Full time equivalent
employees 181 173 181
(a) Excludes 147,000, 150,000 and 159,000 unallocated employee
stock ownership plan shares at December 31, 2008,
September 30, 2008, and December 31, 2007, respectively.
n.m. not meaningful