NEWTOWN, Pa., Oct. 27, 2011 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,080,000 ($0.40 per diluted share) for the third quarter of 2011, compared with $699,000 ($0.26 per diluted share) for the second quarter of 2011 and $1,009,000 ($0.38 per diluted share) for the third quarter of 2010. Net income for the nine month period ended September 30, 2011 was $2,397,000 ($0.89 per diluted share) compared with $2,693,000 ($1.01 per diluted share) for the first nine months of 2010. The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable November 15, 2011 to shareholders of record on November 8, 2011.
"In a persistent difficult operating environment, we are pleased to report earnings for the third quarter that were 55% ahead of the linked second quarter of this year, and also slightly better than the third quarter a year ago. Our core earnings were consistent and the net interest margin remained solid over the first nine months of 2011, while non-performing loans declined to $17 million at September 30, 2011 compared to $19 million at the end of 2010," said Kent C. Lufkin, President and Chief Executive Officer. "We are maintaining our reserves for possible loan losses at a level that should enable us to continue to aggressively dispose of problem loans as we move through the balance of this year and into 2012. Concurrently, capital levels remain healthy and our dividend stream is uninterrupted."
Results for the current quarter included:
- Net interest income was $6,005,000 which was a $16,000 or 0.3% increase over the second quarter of 2011, and a $143,000 or 2.4% increase over the third quarter of 2010. Similarly, the Company's net interest margin was 3.83% compared with 3.88% during the second quarter of 2011, and 3.55% during the third quarter of 2010. While the yields on the Company's interest-earning assets fell by 2 basis points during the third quarter of 2011 compared with the third quarter of 2010, the cost of the Company's interest bearing liabilities decreased by 32 basis points since the third quarter of 2010, including a 23 basis point reduction in the cost of deposits, due in large part to the maturity of time deposits which had been originated during periods of higher market interest rates.
- The provision for loan losses was $528,000 and net charge-offs were $49,000 during the quarter, compared with a provision for loan losses of $1,180,000 and net charge-offs of $323,000 during the third quarter of 2010. The Company's allowance for loan losses was $9,586,000 or 1.86% of loans at quarter end, a 25.8% increase over the $7,606,000 balance at September 30, 2010.
- Non-interest income was $329,000 during the quarter compared with $927,000 during the third quarter of 2010. The difference was caused in part by a $254,000 loss attributable to both the sale of foreclosed property during the quarter and the adjustment downward of the expected net proceeds on foreclosed property held at September 30, 2011. In addition, there was a reduction of $228,000 in gains on sales of loans and a reduction of loan servicing fees due to an additional loan servicing rights impairment charge of $121,000 during the third quarter of 2011 quarter compared with the third quarter of 2010.
- Non-interest expenses increased by $185,000 compared with the third quarter of 2010. However, during the third quarter of 2010 the Company had suspended various bonus and incentive compensation programs for 2010. As a result, approximately $235,000 which had been expensed through June 30, 2010 was reversed out of compensation expense during the third quarter of 2010. During 2011 such plans have not been suspended, and $121,000 for these plans was included in compensation and benefits expense during the third quarter of 2011.
- Pre-tax income was $1,394,000 during the quarter, relatively unchanged from $1,382,000 reported for the third quarter of 2010.
- Non-performing loans were $17.1 million at September 30, 2011 compared with $19.0 million at December 31, 2010. Foreclosed property at September 30, 2011 was $8.9 million compared with $7.5 million at December 31, 2010. Total non-performing assets were 3.74% of total assets compared with 3.83% at year end 2010.
- Loans outstanding were $515.3 million, a $6.9 million or 1.4% increase during the quarter. Mortgage loans originated for sale were $8.7 million compared with $15.8 million during the third quarter of 2010.
- At September 30, 2011, total deposits were $551.7 million, compared with $550.1 million at December 31, 2010, and $552.6 million at September 30, 2010. Non-CD deposits were 66.4% of total deposits at quarter-end compared with 61.6% at September 30, 2010.
- Tangible common equity totaled $73.2 million at September 30, 2011 compared to $70.3 million at September 30, 2010 resulting in an increase in the ratio of tangible common equity to tangible assets to 9.87% at September 30, 2011 from 9.32% at September 30, 2010. This increase was due primarily to net income earned during the period. At September 30, 2011, the Company had a total risk-based capital ratio of 17.75%, a tier 1 risk-based capital ratio of 16.50% and a tier 1 leverage ratio of 9.87%.
TF Financial Corporation is a holding company whose principal subsidiary is Third Federal Bank, which operates 14 full service retail and commercial banking offices in Philadelphia and Bucks County, Pennsylvania and in Mercer County, New Jersey. Deposits at Third Federal Bank are insured up to the maximum amount by the Federal Deposit Insurance Corporation (FDIC). 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 | NINE MONTHS ENDED | |||||
| 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 9/30/2011 | 9/30/2010 | |
| EARNINGS SUMMARY | |||||||
| Interest income | $ 7,908 | $ 7,932 | $ 7,835 | $ 8,021 | $ 8,350 | $ 23,675 | $ 25,547 |
| Interest expense | 1,903 | 1,943 | 2,019 | 2,243 | 2,488 | 5,865 | 7,965 |
| Net interest income | 6,005 | 5,989 | 5,816 | 5,778 | 5,862 | 17,810 | 17,582 |
| Loan loss provision | 528 | 1,450 | 900 | 1,500 | 1,180 | 2,878 | 2,741 |
| Non-interest income | 329 | 892 | 750 | 1,143 | 927 | 1,971 | 2,140 |
| Non-interest expense | 4,412 | 4,610 | 4,976 | 4,591 | 4,227 | 13,998 | 13,410 |
| Income taxes | 314 | 122 | 72 | 171 | 373 | 508 | 878 |
| Net income | $ 1,080 | $ 699 | $ 618 | $ 659 | $ 1,009 | $ 2,397 | $ 2,693 |
| PER SHARE INFORMATION | |||||||
| Earnings per share, basic (2) | $ 0.40 | $ 0.26 | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.89 | $ 1.01 |
| Earnings per share, diluted (2) | $ 0.40 | $ 0.26 | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.89 | $ 1.01 |
| Weighted average basic shares (000's) (2) | 2,704 | 2,699 | 2,696 | 2,692 | 2,687 | 2,701 | 2,679 |
| Weighted average diluted shares (000's) (2) | 2,705 | 2,700 | 2,696 | 2,692 | 2,687 | 2,702 | 2,679 |
| Dividends paid (2) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.19 | $ 0.19 | $ 0.15 | $ 0.58 |
| FINANCIAL RATIOS | |||||||
| Annualized return on average assets | 0.62% | 0.41% | 0.36% | 0.37% | 0.56% | ||
| Annualized return on average equity | 5.63% | 3.74% | 3.38% | 3.48% | 5.41% | ||
| Efficiency ratio (1) | 69.66% | 67.00% | 75.78% | 66.33% | 62.26% | ||
| REGULATORY CAPITAL RATIOS | |||||||
| Tier 1 (Core) Capital Ratio | 9.87% | 9.78% | 9.79% | 9.56% | 9.32% | ||
| Total Risk-Based Capital Ratio | 17.76% | 17.61% | 17.45% | 17.47% | 16.83% | ||
| Tier 1 Risk-Based Capital Ratio | 16.51% | 16.36% | 16.20% | 16.22% | 15.58% | ||
| Tangible Equity Ratio | 9.87% | 9.78% | 9.79% | 9.56% | 9.32% | ||
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | QUARTER ENDED | NINE MONTHS ENDED | |||||
| 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 9/30/2011 | 9/30/2010 | |
| AVERAGE BALANCES | |||||||
| Loans | $ 502,574 | $ 499,024 | $ 501,543 | $ 510,997 | $ 522,181 | $ 501,052 | $ 524,734 |
| Mortgage-backed securities | 66,283 | 63,940 | 66,401 | 72,059 | 79,070 | 65,541 | 80,538 |
| Investment securities | 67,662 | 68,439 | 67,035 | 61,902 | 59,077 | 67,714 | 56,956 |
| Other interest-earning assets | 3,237 | 4,420 | 3,237 | 7,816 | 10,122 | 4,970 | 10,112 |
| Total earning assets | 639,756 | 635,823 | 638,216 | 652,774 | 670,450 | 639,277 | 672,340 |
| Non-earning assets | 53,907 | 50,346 | 48,984 | 45,242 | 42,716 | 49,759 | 42,050 |
| Total assets | 693,663 | 686,169 | 687,200 | 698,016 | 713,166 | 689,036 | 714,390 |
| Deposits | 555,713 | 546,215 | 546,055 | 550,484 | 556,314 | 549,364 | 554,259 |
| FHLB advances and other borrowed money | 54,709 | 57,972 | 60,446 | 65,678 | 75,130 | 57,688 | 78,684 |
| Total interest bearing liabilities | 610,422 | 604,187 | 606,501 | 616,162 | 631,444 | 607,052 | 632,943 |
| Non-interest bearing liabilities | 7,075 | 7,039 | 6,482 | 6,681 | 7,744 | 6,867 | 8,240 |
| Stockholders' equity | 76,166 | 74,943 | 74,217 | 75,173 | 73,978 | 75,117 | 73,207 |
| Total liabilities & stockholders' equity | $ 693,663 | $ 686,169 | $ 687,200 | $ 698,016 | $ 713,166 | $ 689,036 | $ 714,390 |
| SPREAD AND MARGIN ANALYSIS | |||||||
| Average yield on: | |||||||
| Loans | 5.26% | 5.38% | 5.32% | 5.23% | 5.33% | 5.32% | 5.47% |
| Mortgage-backed securities | 4.20% | 4.21% | 4.24% | 4.48% | 4.45% | 4.22% | 4.62% |
| Investment securities | 4.13% | 4.28% | 4.35% | 3.96% | 3.94% | 4.25% | 4.01% |
| Other interest-earning assets | 0.00% | 0.09% | 0.00% | 0.05% | 0.00% | 0.03% | 0.03% |
| Total interest-earning assets | 5.01% | 5.11% | 5.08% | 4.96% | 5.03% | 5.05% | 5.16% |
| Average cost of: | |||||||
| Deposits | 1.02% | 1.06% | 1.08% | 1.17% | 1.25% | 1.05% | 1.35% |
| FHLB advances and other borrowed money | 3.43% | 3.49% | 3.75% | 3.78% | 3.86% | 3.56% | 4.03% |
| Total interest-bearing liabilities | 1.24% | 1.29% | 1.35% | 1.44% | 1.56% | 1.29% | 1.68% |
| Interest rate spread | 3.77% | 3.82% | 3.73% | 3.52% | 3.47% | 3.76% | 3.48% |
| Net interest margin | 3.83% | 3.88% | 3.80% | 3.60% | 3.55% | 3.83% | 3.58% |
| NON-INTEREST INCOME DETAIL | |||||||
| Service fees, charges and other | $ 298 | $ 479 | $ 465 | $ 662 | $ 404 | $ 1,242 | $ 1,296 |
| Bank-owned life insurance | 160 | 164 | 157 | 169 | 170 | 481 | 509 |
| Gain/loss on sale investments | -- | 210 | -- | 13 | -- | 210 | 7 |
| Gain on sale of loans | 125 | 50 | 117 | 406 | 353 | 292 | 465 |
| Gain/(loss) on sale of foreclosed real estate | (254) | (11) | 11 | (107) | -- | (254) | (137) |
| NON-INTEREST EXPENSE DETAIL | |||||||
| Compensation and benefits | $ 2,584 | $ 2,622 | $ 2,746 | $ 2,569 | $ 2,269 | $ 7,952 | $ 7,636 |
| Occupancy and equipment | 699 | 736 | 818 | 747 | 774 | 2,253 | 2,256 |
| Professional fees | 263 | 324 | 478 | 383 | 196 | 1,065 | 680 |
| Marketing and advertising | 88 | 102 | 67 | 91 | 152 | 257 | 392 |
| FDIC insurance premiums | 142 | 151 | 233 | 229 | 233 | 526 | 686 |
| Other operating | 636 | 675 | 634 | 572 | 603 | 1,945 | 1,760 |
| T F FINANCIAL CORPORATION | ||||||||||
| UNAUDITED FINANCIAL INFORMATION | ||||||||||
| (dollars in thousands except per share data) | PERIOD ENDED | |||||||||
| 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | ||||||
| DEPOSIT INFORMATION | ||||||||||
| Non-interest checking | $ 46,591 | $ 44,817 | $ 41,920 | $ 40,389 | $ 41,012 | |||||
| Interest checking | 65,614 | 58,632 | 58,428 | 56,157 | 52,892 | |||||
| Money market | 150,142 | 149,852 | 148,713 | 149,744 | 149,355 | |||||
| Savings | 103,871 | 104,423 | 101,445 | 99,686 | 97,216 | |||||
| CD's | 185,460 | 194,380 | 197,247 | 204,159 | 212,087 | |||||
| OTHER INFORMATION | ||||||||||
| Per Share | ||||||||||
| Book value (2) | $ 27.44 | $ 26.69 | $ 26.32 | $ 26.02 | $ 26.49 | |||||
| Tangible book value (2) | 25.91 | 25.16 | 24.79 | 24.48 | 24.95 | |||||
| Closing market price (2) | 19.25 | 21.42 | 20.83 | 21.23 | 19.67 | |||||
| Balance Sheet | ||||||||||
| Loans | $ 515,318 | $ 508,371 | $ 507,785 | $ 509,986 | $ 528,058 | |||||
| Cash and cash equivalents | 14,475 | 8,786 | 10,668 | 7,437 | 6,916 | |||||
| Mortgage-backed securities | 63,029 | 67,520 | 61,476 | 69,660 | 74,768 | |||||
| Investment securities | 65,514 | 68,551 | 67,364 | 67,231 | 60,424 | |||||
| Total assets | 695,168 | 691,561 | 684,221 | 691,757 | 702,583 | |||||
| Total deposits | 551,678 | 552,104 | 547,753 | 550,135 | 552,562 | |||||
| FHLB advances and other borrowed money | 59,500 | 55,345 | 55,387 | 61,987 | 68,671 | |||||
| Stockholders' equity | 77,499 | 75,332 | 74,270 | 73,416 | 74,673 | |||||
| Asset Quality | ||||||||||
| Non-performing loans | $ 17,103 | $ 18,308 | $ 21,064 | $ 18,978 | $ 21,545 | |||||
| Allowance for loan losses | $ 9,586 | $ 9,108 | $ 8,906 | $ 8,328 | $ 7,606 | |||||
| Net charge-offs | $ 49 | $ 1,248 | $ 322 | $ 778 | $ 323 | |||||
| Allowance to gross loans | 1.86% | 1.79% | 1.75% | 1.63% | 1.44% | |||||
| Non-performing loans to gross loans | 3.32% | 3.60% | 4.15% | 3.72% | 4.08% | |||||
| Non-performing loans to total assets | 2.46% | 2.65% | 3.08% | 2.74% | 3.07% | |||||
| Foreclosed property | $ 8,909 | $ 9,245 | $ 8,002 | $ 7,482 | $ 2,153 | |||||
| Foreclosed property to total assets | 1.28% | 1.34% | 1.17% | 1.08% | 0.31% | |||||
| Non-performing assets to total assets | 3.74% | 3.98% | 4.25% | 3.83% | 3.37% | |||||
| Statistical | ||||||||||
| Shares outstanding (000's) (2) | 2,824 | 2,822 | 2,822 | 2,822 | 2,685 | |||||
| Number of branch offices | 14 | 14 | 14 | 14 | 14 | |||||
| Full time equivalent employees | 172 | 179 | 177 | 176 | 170 | |||||
| (1) The efficiency ratio is non-interest expense divided by net interest income plus non-interest income. | ||||||||||
| (2)Shares outstanding at 12/31/2010 and per share amounts at and prior to 12/31/2010 have been adjusted for a 5% stock dividend declared January 26, 2011, distributed on February 28, 2011 to shareholders of record February 15, 2011. | ||||||||||