NEWTOWN, Pa., July 25, 2013 (GLOBE NEWSWIRE) -- TF Financial Corporation (the "Company") (Nasdaq:THRD) today reported net income of $1,800,000 ($0.66 per diluted share) for the second quarter of 2013, a 44% increase over the $1,249,000 ($0.46 per diluted share) reported for the second quarter of 2012. In addition, net income advanced 47% over the first quarter of 2013.
Net income for the six month period ended June 30, 2013 was $3,023,000 ($1.10 per diluted share) compared with $2,404,000 ($0.88 per diluted share) for the first six months of 2012. The Company also announced that its Board of Directors declared a quarterly dividend of $0.10 per share, up from the previous rate of $0.05 per share, payable on August 15, 2013 to shareholders of record on August 8, 2013.
"Second quarter net income increased both year over year and as measured against the first quarter of 2013, reflecting solid momentum as we move through the year's halfway mark," said Kent C. Lufkin, president and chief executive officer. "As nonperforming assets and real estate owned are steadily returning to pre-recession levels, we have been expanding our commercial lending staff to pursue increasing opportunities to grow loan portfolios across our footprint. On an important related note, we closed on July 2 our acquisition of $156 million-asset Roebling Financial Corp, Inc. and its subsidiary Roebling Bank, which operated five branches in Burlington and Ocean Counties in New Jersey. Through Roebling, we are able to quickly enter a promising new contiguous market. We anticipate this will continue to accelerate our growth momentum for the balance of the year. Of additional note, the Board approved an increase in the dividend. Our dividend payout ratio is 15% for the current quarter, and produces an annual yield of 1.6% based on the closing price of our stock on June 30, 2013."
Results for the second quarter included:
- Pre-tax income was $2,221,000 during the quarter, a $580,000 increase over the $1,641,000 reported for the second quarter of 2012. Key non-interest differences included: bank-owned life insurance claims of $934,000 recorded only during the second quarter of 2013, income from the adjustment of the value of loan servicing rights which increased by $271,000 during the second quarter of 2013 when compared with the second quarter of 2012, and merger-related expenses of $295,000 recorded only during the second quarter of 2013.
- Net interest income was $5,806,000, a 1.2% decrease from the first quarter of 2013, and a 4.0% decrease from the second quarter of 2012. Similarly, the Company's net interest margin was 3.59% compared with 3.73% during the first quarter of 2013, and 3.96% during the second quarter of 2012. Yields on the Company's interest-earning assets fell by 18 basis points compared with the first quarter of 2013, and by 62 basis points compared with the second quarter of 2012. Partially offsetting these decreases, the cost of the Company's interest bearing liabilities fell by 4 basis points compared with the first quarter of 2013, and by 26 basis points compared to the second quarter of 2012. Margin compression has impacted the Company and was caused largely by the early repayment of higher rate residential mortgages, and repayments and rate reductions in the commercial mortgage portfolio, while competitive pressures continue to make it difficult for the Company to manage its cost of deposits towards lower levels. Also weighing on the Company's margin was a relatively large balance in other interest-earning assets, largely cash, averaging $39.1 million during the quarter ended June 30, 2013 which accumulated from loan repayments and deposit growth.
- Asset quality showed steady and significant improvement, with total non-performing assets at 1.70% of total assets at June 30, 2013, down from 2.20% at year-end 2012 and 2.80% at June 30, 2012, respectively. Non-performing loans were $6.0 million at quarter-end compared with $8.4 million at December 31, 2012 and $12.6 million at June 30, 2012. Similarly, real estate acquired through foreclosure was reduced to $6.2 million at June 30, 2013 compared with $7.3 million at December 31, 2012 and $6.6 million at June 30, 2012.
- The provision for loan losses was $400,000 and net charge-offs were $146,000 during the quarter, compared with a provision for loan losses of $500,000 and net charge-offs of $1,318,000 during the second quarter of 2012. The Company's allowance for loan losses was $6,916,000 or 115.8% of non-performing loans at quarter end, compared with $6,163,000 or 49.1% of non-performing loans at June 30, 2012.
- Loans outstanding were $531.5 million, a $3.2 million or 0.6% increase during the quarter. Mortgage loans originated for sale were $9.9 million compared with $10.9 million during the second quarter of 2012. The corresponding gain on sale of loans was $226,000 during the quarter, compared with $214,000 during the second quarter of 2012.
- At quarter end, total deposits were $571.4 million, compared with $560.3 million at December 31, 2012, and $547.0 million at June 30, 2012. The steady growth in deposits has been highlighted by a 22.7% increase in non-interest checking deposits since June 30, 2012. In addition, the deposit mix continues to improve: at June 30, 2013 core checking, savings, and money market accounts were 71.1% of total deposits compared with 69.4% at December 31, 2012, and 69.8% at June 30, 2012.
- At June 30, 2013, the Company had a total risk-based capital ratio of 18.77%, a tier 1 risk-based capital ratio of 17.51% and a tier 1 leverage ratio of 10.74%.
TF Financial Corporation is a holding company whose principal subsidiary is 3rd Fed Bank, which operates 13 full service retail and commercial banking offices in Philadelphia and Bucks County, Pennsylvania and in Mercer County, New Jersey, and with the acquisition of Roebling Bank on July 2, 2013, also operates five additional full service branches in Burlington and Ocean Counties in New Jersey. Deposits at 3rd Fed 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.3rdfedbank.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 | SIX MONTHS ENDED | |||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 6/30/2013 | 6/30/2012 | |
| EARNINGS SUMMARY | |||||||
| Interest income | $ 6,744 | $ 6,857 | $ 7,234 | $ 7,395 | $ 7,328 | $ 13,601 | $ 14,591 |
| Interest expense | 938 | 979 | 1,048 | 1,141 | 1,277 | 1,917 | 2,748 |
| Net interest income | 5,806 | 5,878 | 6,186 | 6,254 | 6,051 | 11,684 | 11,843 |
| Loan loss provision | 400 | 439 | 650 | 750 | 500 | 839 | 1,000 |
| Non-interest income | 1,947 | 1,395 | 1,196 | 914 | 739 | 3,342 | 1,976 |
| Non-interest expense | 5,132 | 5,030 | 4,690 | 4,466 | 4,649 | 10,162 | 9,705 |
| Income before taxes | 2,221 | 1,804 | 2,042 | 1,952 | 1,641 | 4,025 | 3,114 |
| Income taxes | 421 | 581 | 536 | 479 | 392 | 1,002 | 710 |
| Net income | $ 1,800 | $ 1,223 | $ 1,506 | $ 1,473 | $ 1,249 | $ 3,023 | $ 2,404 |
| PER SHARE INFORMATION | |||||||
| Earnings per share, basic | $ 0.66 | $ 0.45 | $ 0.55 | $ 0.54 | $ 0.46 | $ 1.10 | $ 0.88 |
| Earnings per share, diluted | $ 0.66 | $ 0.45 | $ 0.55 | $ 0.54 | $ 0.46 | $ 1.10 | $ 0.88 |
| Weighted average basic shares (000's) | 2,743 | 2,738 | 2,733 | 2,729 | 2,724 | 2,741 | 2,721 |
| Weighted average diluted shares (000's) | 2,743 | 2,742 | 2,734 | 2,732 | 2,728 | 2,741 | 2,725 |
| Dividends paid | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.10 | $ 0.10 |
| FINANCIAL RATIOS | |||||||
| Annualized return on average assets | 1.01% | 0.70% | 0.86% | 0.84% | 0.74% | 0.84% | 0.70% |
| Annualized return on average equity | 8.55% | 5.92% | 7.21% | 7.21% | 6.31% | 7.15% | 6.10% |
| Efficiency ratio (1) | 68.07% | 64.56% | 60.98% | 60.24% | 62.34% | 66.30% | 66.34% |
| REGULATORY CAPITAL RATIOS | |||||||
| Tier 1 leverage ratio | 10.74% | 10.50% | 10.45% | 10.47% | 10.45% | ||
| Total risk-based capital ratio | 18.77% | 17.90% | 17.89% | 17.62% | 17.37% | ||
| Tier 1 risk-based capital ratio | 17.51% | 16.65% | 16.63% | 16.37% | 16.13% | ||
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 6/30/2013 | 6/30/2012 | |
| AVERAGE BALANCES | |||||||
| Loans | $ 524,728 | $ 525,275 | $ 530,026 | $ 527,195 | $ 501,757 | $ 525,000 | $ 497,576 |
| Mortgage-backed securities | 37,523 | 41,988 | 49,383 | 55,820 | 61,580 | 39,744 | 61,776 |
| Investment securities | 68,211 | 65,131 | 63,773 | 64,304 | 68,181 | 66,680 | 67,608 |
| Other interest-earning assets | 39,111 | 28,877 | 6,482 | 393 | 3,074 | 34,022 | 8,347 |
| Total earning assets | 669,573 | 661,271 | 649,664 | 647,712 | 634,592 | 665,446 | 635,307 |
| Non-earning assets | 45,938 | 46,572 | 46,985 | 46,168 | 48,329 | 46,252 | 49,443 |
| Total assets | 715,511 | 707,843 | 696,649 | 693,880 | 682,921 | 711,698 | 684,750 |
| Deposits | 570,271 | 560,750 | 539,653 | 538,637 | 550,040 | 565,536 | 552,282 |
| FHLB advances and other borrowed money | 53,303 | 56,114 | 66,223 | 66,740 | 46,785 | 54,701 | 47,086 |
| Total interest bearing liabilities | 623,574 | 616,864 | 605,876 | 605,377 | 596,825 | 620,237 | 599,368 |
| Non-interest bearing liabilities | 7,508 | 7,216 | 7,629 | 7,179 | 6,486 | 7,363 | 6,504 |
| Stockholders' equity | 84,429 | 83,763 | 83,144 | 81,324 | 79,610 | 84,098 | 78,878 |
| Total liabilities & stockholders' equity | $ 715,511 | $ 707,843 | $ 696,649 | $ 693,880 | $ 682,921 | $ 711,698 | $ 684,750 |
| SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT) | |||||||
| Average yield on: | |||||||
| Loans | 4.56% | 4.68% | 4.76% | 4.86% | 4.99% | 4.62% | 5.02% |
| Mortgage-backed securities | 2.63% | 2.64% | 3.04% | 3.23% | 3.68% | 2.63% | 3.59% |
| Investment securities | 4.19% | 4.43% | 4.37% | 4.32% | 4.31% | 4.30% | 4.33% |
| Other interest-earning assets | 0.14% | 0.06% | 0.37% | 0.00% | 0.00% | 0.11% | 0.05% |
| Total interest-earning assets | 4.15% | 4.33% | 4.55% | 4.66% | 4.77% | 4.24% | 4.74% |
| Average cost of: | |||||||
| Deposits | 0.50% | 0.53% | 0.54% | 0.59% | 0.68% | 0.51% | 0.73% |
| FHLB advances and other borrowed money | 1.70% | 1.79% | 1.87% | 2.01% | 3.02% | 1.75% | 3.23% |
| Total interest-bearing liabilities | 0.60% | 0.64% | 0.69% | 0.75% | 0.86% | 0.62% | 0.92% |
| Interest rate spread | 3.55% | 3.68% | 3.86% | 3.91% | 3.91% | 3.62% | 3.82% |
| Net interest margin | 3.59% | 3.73% | 3.90% | 3.96% | 3.96% | 3.66% | 3.87% |
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | 6/30/2013 | 6/30/2012 | |
| INTEREST INCOME AND EXPENSE DETAIL | |||||||
| Interest income on: | |||||||
| Loans | $ 5,963 | $ 6,066 | $ 6,341 | $ 6,436 | $ 6,231 | $ 12,029 | $ 12,428 |
| Mortgage-backed securities | 246 | 273 | 377 | 453 | 564 | 519 | 1,103 |
| Investment securities | 713 | 711 | 701 | 699 | 731 | 1,421 | 1,455 |
| Other interest-earning assets | 14 | 4 | 6 | -- | -- | 18 | 2 |
| Total interest-earning assets | $ 6,936 | $ 7,054 | $ 7,425 | $ 7,588 | $ 7,526 | $ 13,987 | $ 14,988 |
| Interest expense on: | |||||||
| Deposits | $ 712 | $ 731 | $ 737 | $ 803 | $ 926 | $ 1,443 | $ 1,992 |
| FHLB advances and other borrowed money | 226 | 248 | 311 | 338 | 351 | 474 | 756 |
| Total interest-bearing liabilities | $ 938 | $ 979 | $ 1,048 | $ 1,141 | $ 1,277 | $ 1,917 | $ 2,748 |
| Net interest income: tax equivalent basis | $ 5,998 | $ 6,075 | $ 6,377 | $ 6,447 | $ 6,249 | $ 12,070 | $ 12,240 |
| Tax equivalent adjustment on investment securities | 192 | 197 | 191 | 193 | 198 | 386 | 397 |
| Net interest income | $ 5,806 | $ 5,878 | $ 6,186 | $ 6,254 | $ 6,051 | $ 11,684 | $ 11,843 |
| NON-INTEREST INCOME DETAIL | |||||||
| Service fees, charges and other | $ 454 | $ 497 | $ 484 | $ 433 | $ 448 | $ 951 | $ 906 |
| Impairment adjustment to mortgage servicing rights | 196 | 33 | 50 | (53) | (75) | 229 | (36) |
| Bank-owned life insurance | 137 | 143 | 147 | 152 | 152 | 280 | 304 |
| Proceeds from bank-owned life insurance | 934 | -- | -- | -- | -- | 934 | -- |
| Gain on sale of investment securities | -- | -- | 85 | -- | -- | -- | -- |
| Gain on sale of loans | 226 | 305 | 430 | 382 | 214 | 531 | 538 |
| Gain on disposition of real estate | -- | 417 | -- | -- | -- | 417 | 264 |
| NON-INTEREST EXPENSE DETAIL | |||||||
| Compensation and benefits | $ 2,842 | $ 2,817 | $ 2,760 | $ 2,651 | $ 2,697 | $ 5,659 | $ 5,571 |
| Occupancy and equipment | 709 | 697 | 727 | 686 | 672 | 1,406 | 1,382 |
| Professional fees | 230 | 288 | 302 | 349 | 174 | 518 | 525 |
| Merger-related costs | 295 | 320 | 108 | -- | -- | 615 | -- |
| Marketing and advertising | 132 | 39 | 79 | 76 | 106 | 171 | 191 |
| FDIC insurance premiums | 132 | 110 | 149 | 146 | 150 | 242 | 301 |
| Loss on REO (2) | 198 | 178 | 46 | -- | 246 | 376 | 425 |
| Operating expenses of REO (2) | 37 | 46 | 60 | 78 | 94 | 83 | 202 |
| Other operating | 557 | 535 | 459 | 480 | 510 | 1,092 | 1,108 |
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | PERIOD ENDED | ||||||
| 6/30/2013 | 3/31/2013 | 12/31/2012 | 9/30/2012 | 6/30/2012 | |||
| DEPOSIT INFORMATION | |||||||
| Non-interest checking | $ 58,697 | $ 57,422 | $ 52,433 | $ 50,421 | $ 47,826 | ||
| Interest checking | 78,923 | 78,263 | 76,370 | 70,797 | 74,925 | ||
| Money market | 159,015 | 156,736 | 153,827 | 153,351 | 151,375 | ||
| Savings | 109,446 | 108,554 | 106,268 | 106,693 | 107,924 | ||
| CD's | 165,331 | 170,355 | 171,417 | 152,011 | 164,990 | ||
| OTHER INFORMATION | |||||||
| Per Share | |||||||
| Book value | $ 29.36 | $ 29.37 | $ 29.23 | $ 28.89 | $ 28.25 | ||
| Tangible book value | $ 27.84 | $ 27.85 | $ 27.70 | $ 27.37 | $ 26.73 | ||
| Closing market price | $ 25.40 | $ 25.15 | $ 23.83 | $ 23.79 | $ 24.66 | ||
| Balance Sheet | |||||||
| Loans | $ 531,464 | $ 528,229 | $ 534,348 | $ 541,610 | $ 519,946 | ||
| Cash and cash equivalents | 44,958 | 48,690 | 31,137 | 3,712 | 4,367 | ||
| Mortgage-backed securities | 34,206 | 38,320 | 44,639 | 51,463 | 58,753 | ||
| Investment securities | 68,459 | 63,987 | 65,041 | 63,822 | 66,012 | ||
| Total assets | 714,781 | 716,002 | 711,836 | 697,056 | 685,387 | ||
| Total deposits | 571,412 | 571,330 | 560,315 | 533,273 | 547,040 | ||
| FHLB advances and other borrowed money | 52,534 | 54,151 | 60,656 | 75,156 | 51,084 | ||
| Stockholders' equity | 83,453 | 83,408 | 82,945 | 81,965 | 80,102 | ||
| Asset Quality | |||||||
| Non-performing loans | $ 5,973 | $ 7,647 | $ 8,359 | $ 10,400 | $ 12,566 | ||
| Allowance for loan losses | $ 6,916 | $ 6,662 | $ 6,922 | $ 6,772 | $ 6,163 | ||
| Net charge-offs | $ 146 | $ 699 | $ 500 | $ 141 | $ 1,318 | ||
| Allowance for loan losses to non-performing loans | 115.79% | 87.12% | 82.81% | 65.12% | 49.05% | ||
| Allowance for loan losses to gross loans | 1.30% | 1.26% | 1.30% | 1.25% | 1.19% | ||
| Non-performing loans to gross loans | 1.12% | 1.45% | 1.56% | 1.92% | 2.42% | ||
| Non-performing loans to total assets | 0.84% | 1.07% | 1.17% | 1.49% | 1.83% | ||
| REO (2) | $ 6,177 | $ 7,170 | $ 7,282 | $ 7,619 | $ 6,625 | ||
| REO to total assets (2) | 0.86% | 1.00% | 1.02% | 1.09% | 0.97% | ||
| Non-performing assets to total assets | 1.70% | 2.07% | 2.20% | 2.59% | 2.80% | ||
| Statistical | |||||||
| Shares outstanding (000's) | 2,842 | 2,840 | 2,838 | 2,837 | 2,835 | ||
| Number of branch offices | 13 | 13 | 13 | 14 | 14 | ||
| Full time equivalent employees | 166 | 165 | 167 | 167 | 171 | ||
| (1) The efficiency ratio is non-interest expense excluding merger-related costs and loss on REO divided by net interest income on a tax equivalent basis plus non-interest income excluding impairment adjustment to mortgage servicing rights, gain on sale of investment securities, proceeds from bank owned life insurance and gain on disposition of real estate. | |||||||
| (2) REO is real estate acquired through foreclosure. | |||||||