NEWTOWN, Pa., Oct. 28, 2010 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,009,000 ($0.39 per diluted share) for the third quarter of 2010, compared with $967,000 ($0.38 per diluted share) for the second quarter of 2010 and $1,112,000 ($0.44 per diluted share) for the third quarter of 2009. Net income for the nine month period ended September 30, 2010 was $2,693,000 ($1.06 per diluted share) compared with $3,354,000 ($1.33 per diluted share) for the first nine months of 2009. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share, payable November 15, 2010 to shareholders of record on November 8, 2010.
Highlights for the third quarter of 2010 included:
- Net income increased by 4.3% compared to the second quarter of 2010, and decreased by 9.3% compared with the third quarter of 2009.
- The Company's net interest income was $5,862,000 during the third quarter of 2010, a $26,000 decrease over the second quarter of 2010, but a $123,000 increase over the third quarter of 2009.
- The Company's net interest margin was 3.55% during the third quarter of 2010, down 3 basis points from the second quarter of 2010, but up 13 basis points from the third quarter of 2009.
- Loans outstanding were $528.1 million at quarter end, a $1.1 million or 0.2% increase during the quarter. Mortgage loans originated for sale and sold were $15.8 million compared with $6.2 million during the third quarter of 2009, and the corresponding gain on the sale of originated loans was $353,000 compared with $127,000 during the third quarter of 2009.
- Total deposits were $552.6 million at quarter end, a decrease of 1.2% from the second quarter of 2010, but an increase of $20.6 million or 3.9% from the end of the third quarter of 2009.
- Non-performing assets were 3.37% of total assets compared with 2.40% and 1.34% at June 30, 2010 and December 31, 2009, respectively.
- During the third quarter of 2010, the Company recorded a provision for loan losses of $1,180,000 compared with $650,000 during the third quarter of 2009. The total allowance for loan losses at quarter end was $7.6 million, up from $5.2 million and $4.3 million at December 31, 2009 and September 30, 2009, respectively. At quarter end the allowance stood at 1.44% of loans, up from 0.97% and 0.80% at December 31, 2009 and September 30, 2009, respectively.
- During the quarter the Company 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. And when combined with the absence of any such expenses during the third quarter of 2010, there was a reduction of compensation expense of $348,000 and $319,000 compared to the second quarter of 2010 and the third quarter of 2009, respectively.
- The Bank's capital ratios have improved, with Tier 1 Core and Total Risk-Based ratios of 9.32% and 16.83% at quarter end, compared with 8.80% and 16.00% at September 30, 2009.
"We clearly recognize that we are carefully working our way through a prolonged economic recession and a business environment where competition remains intense. Demand for our products and services, especially high quality loans, is subject to an increasingly cautious attitude from our various customer segments, especially small and middle-market business borrowers that fuel our profitability. As this operating environment continues to play out, we do not see any particularly encouraging signs that positive factors are going to emerge in the foreseeable future," said Kent C. Lufkin, president and chief executive officer.
"As a result, we understand that it is our responsibility to take decisive steps internally, which any prudently managed organization should be doing to quickly contain expenses, to deploy qualified resources to understand and resolve credit quality issues, and in turn to ultimately focus intensively on retaining our most valuable existing customers. Our diligent employees know how critical it is to execute on their assignments as we move through this cycle. As we address all of these issues, we are encouraged to have reported a profit for this quarter, we returned dividends to our shareholders, and we have maintained capital levels above peer averages among local competitors," said Lufkin.
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. 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 | |||||
| 9/30/2010 | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 9/30/2010 | 9/30/2009 | |
| EARNINGS SUMMARY | |||||||
| Interest income | $ 8,350 | $ 8,522 | $ 8,675 | $ 8,932 | $ 9,120 | $ 25,547 | $ 27,665 |
| Interest expense | 2,488 | 2,634 | 2,843 | 3,153 | 3,381 | 7,965 | 10,828 |
| Net interest income | 5,862 | 5,888 | 5,832 | 5,779 | 5,739 | 17,582 | 16,837 |
| Loan loss provision | 1,180 | 600 | 961 | 1,025 | 650 | 2,741 | 1,905 |
| Non-interest income | 927 | 597 | 616 | 1,240 | 796 | 2,140 | 3,170 |
| Non-interest expense | 4,227 | 4,591 | 4,592 | 4,465 | 4,420 | 13,410 | 13,620 |
| Income taxes | 373 | 327 | 178 | 369 | 353 | 878 | 1,128 |
| Net income | $ 1,009 | $ 967 | $ 717 | $ 1,160 | $ 1,112 | $ 2,693 | $ 3,354 |
| PER SHARE INFORMATION | |||||||
| Earnings per share, basic | $ 0.39 | $ 0.38 | $ 0.28 | $ 0.46 | $ 0.44 | $ 1.06 | $ 1.33 |
| Earnings per share, diluted | $ 0.39 | $ 0.38 | $ 0.28 | $ 0.46 | $ 0.44 | $ 1.06 | $ 1.33 |
| Weighted average basic shares (000's) | 2,559 | 2,553 | 2,542 | 2,530 | 2,523 | 2,551 | 2,520 |
| Weighted average diluted shares (000's) | 2,559 | 2,553 | 2,542 | 2,530 | 2,523 | 2,551 | 2,520 |
| Dividends paid | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.60 | $ 0.60 |
| FINANCIAL RATIOS | |||||||
| Annualized return on average assets | 0.56% | 0.54% | 0.41% | 0.64% | 0.62% | 0.50% | 0.62% |
| Annualized return on average equity | 5.41% | 5.30% | 4.01% | 6.61% | 6.28% | 4.92% | 6.48% |
| Efficiency ratio (1) | 62.26% | 70.79% | 71.22% | 63.61% | 67.64% | 68.00% | 68.08% |
| CAPITAL RATIOS | |||||||
| Tier 1 (Core) Capital Ratio | 9.32% | 8.97% | 8.92% | 8.94% | 8.80% | ||
| Total Risk-Based Capital Ratio | 16.83% | 16.55% | 16.24% | 16.28% | 16.00% | ||
| Tier 1 Risk-Based Capital Ratio | 15.58% | 15.30% | 15.10% | 15.17% | 14.97% | ||
| Tangible Equity Ratio | 9.32% | 8.97% | 8.92% | 8.94% | 8.80% | ||
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | QUARTER ENDED | NINE MONTHS ENDED | |||||
| 9/30/2010 | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | 9/30/2010 | 9/30/2009 | |
| AVERAGE BALANCES | |||||||
| Loans | $ 522,181 | $ 522,289 | $ 529,817 | $ 532,190 | $ 535,358 | $ 524,734 | $ 540,972 |
| Mortgage-backed securities | 79,070 | 80,735 | 81,839 | 90,434 | 100,482 | 80,538 | 104,752 |
| Investment securities | 59,077 | 58,446 | 53,282 | 45,996 | 41,849 | 56,956 | 39,798 |
| Other interest-earning assets | 10,122 | 13,451 | 6,728 | 10,358 | 2,027 | 10,112 | 1,519 |
| Total earning assets | 670,450 | 674,921 | 671,666 | 678,978 | 679,716 | 672,340 | 687,041 |
| Non-earning assets | 42,716 | 42,210 | 41,204 | 37,440 | 37,463 | 42,050 | 37,092 |
| Total assets | 713,166 | 717,131 | 712,870 | 716,418 | 717,179 | 714,390 | 724,133 |
| Deposits | 556,314 | 557,128 | 549,257 | 548,436 | 530,064 | 554,259 | 514,614 |
| FHLB advances and other borrowed money | 75,130 | 78,469 | 82,536 | 89,126 | 107,746 | 78,684 | 131,248 |
| Total interest bearing liabilities | 631,444 | 635,597 | 631,793 | 637,562 | 637,810 | 632,943 | 645,862 |
| Non-interest bearing liabilities | 7,744 | 8,373 | 8,611 | 9,213 | 9,065 | 8,240 | 9,033 |
| Stockholders' equity | 73,978 | 73,161 | 72,466 | 69,643 | 70,304 | 73,207 | 69,238 |
| Total liabilities & stockholders' equity | $ 713,166 | $ 717,131 | $ 712,870 | $ 716,418 | $ 717,179 | $ 714,390 | $ 724,133 |
| SPREAD AND MARGIN ANALYSIS | |||||||
| Average yield on: | |||||||
| Loans | 5.33% | 5.49% | 5.59% | 5.57% | 5.66% | 5.49% | 5.69% |
| Mortgage-backed securities | 4.45% | 4.62% | 4.79% | 4.90% | 4.62% | 4.63% | 4.93% |
| Investment securities | 3.94% | 3.99% | 4.12% | 4.00% | 4.08% | 4.02% | 4.01% |
| Other interest-earning assets | 0.00% | 0.03% | 0.06% | 0.08% | 0.20% | 0.03% | 0.09% |
| Total interest-earning assets | 5.03% | 5.15% | 5.32% | 5.29% | 5.39% | 5.18% | 5.46% |
| Average cost of: | |||||||
| Deposits | 1.25% | 1.33% | 1.47% | 1.61% | 1.79% | 1.35% | 1.91% |
| FHLB advances and other borrowed money | 3.86% | 4.05% | 4.17% | 4.16% | 3.64% | 4.04% | 3.56% |
| Total interest-bearing liabilities | 1.56% | 1.66% | 1.82% | 1.96% | 2.10% | 1.69% | 2.25% |
| Interest rate spread | 3.47% | 3.49% | 3.50% | 3.33% | 3.29% | 3.49% | 3.21% |
| Net interest margin | 3.55% | 3.58% | 3.60% | 3.45% | 3.42% | 3.59% | 3.35% |
| NON-INTEREST INCOME DETAIL | |||||||
| Service fees, charges and other | $ 404 | $ 363 | $ 529 | $ 480 | $ 464 | $ 1,296 | $ 1,498 |
| Bank-owned life insurance | 170 | 167 | 172 | 175 | 171 | 509 | 501 |
| Gain/loss on sale investments | -- | 7 | -- | 456 | -- | 7 | 306 |
| Gain on sale of loans | 353 | 52 | 60 | 129 | 127 | 465 | 528 |
| Gain/(loss) on sale of foreclosed real estate | -- | 8 | (145) | -- | 34 | (137) | 337 |
| NON-INTEREST EXPENSE DETAIL | |||||||
| Compensation and benefits | $ 2,269 | $ 2,667 | $ 2,700 | $ 2,725 | $ 2,601 | $ 7,636 | $ 7,917 |
| Occupancy and equipment | 774 | 723 | 759 | 696 | 756 | 2,256 | 2,174 |
| Professional fees | 196 | 256 | 228 | 205 | 195 | 680 | 651 |
| Marketing and advertising | 152 | 120 | 120 | 87 | 118 | 392 | 382 |
| FDIC insurance premiums | 233 | 259 | 194 | 206 | 182 | 686 | 714 |
| Other operating | 603 | 566 | 591 | 546 | 568 | 1,760 | 1,782 |
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | PERIOD ENDED | ||||||
| 9/30/2010 | 6/30/2010 | 3/31/2010 | 12/31/2009 | 9/30/2009 | |||
| DEPOSIT INFORMATION | |||||||
| Non-interest checking | $ 41,012 | $ 45,022 | $ 41,757 | $ 37,288 | $ 38,100 | ||
| Interest checking | 52,892 | 55,166 | 51,991 | 52,988 | 47,377 | ||
| Money market | 149,355 | 145,735 | 142,791 | 141,286 | 131,197 | ||
| Savings | 97,216 | 100,321 | 98,948 | 96,061 | 97,795 | ||
| CD's | 212,087 | 213,146 | 217,938 | 225,093 | 217,480 | ||
| OTHER INFORMATION | |||||||
| Per Share | |||||||
| Book value | $ 27.81 | $ 27.31 | $ 27.04 | $ 26.89 | $ 26.86 | ||
| Tangible book value | $ 26.20 | $ 25.70 | $ 25.43 | $ 25.27 | $ 25.23 | ||
| Closing market price | $ 20.65 | $ 21.80 | $ 19.09 | $ 18.97 | $ 18.75 | ||
| Balance Sheet | |||||||
| Loans | $ 528,058 | $ 526,947 | $ 531,137 | $ 535,949 | $ 535,645 | ||
| Cash and cash equivalents | 6,916 | 19,965 | 16,339 | 12,801 | 4,401 | ||
| Mortgage-backed securities | 74,768 | 82,169 | 78,412 | 81,931 | 98,188 | ||
| Investment securities | 60,424 | 59,659 | 57,837 | 50,749 | 44,348 | ||
| Total assets | 702,583 | 720,768 | 715,948 | 714,090 | 711,849 | ||
| Total deposits | 552,562 | 559,390 | 553,425 | 552,716 | 531,949 | ||
| FHLB advances and other borrowed money | 68,671 | 79,929 | 81,738 | 80,241 | 99,744 | ||
| Stockholders' equity | 74,673 | 73,321 | 72,422 | 71,874 | 71,550 | ||
| Asset Quality | |||||||
| Non-performing loans | $ 21,545 | $ 15,828 | $ 14,174 | $ 8,285 | $ 3,098 | ||
| Allowance for loan losses | $ 7,606 | $ 6,749 | $ 6,165 | $ 5,215 | $ 4,292 | ||
| Net charge-offs | $ 323 | $ 16 | $ 11 | $ 102 | $ 1,328 | ||
| Allowance to gross loans | 1.44% | 1.28% | 1.16% | 0.97% | 0.80% | ||
| Non-performing loans to gross loans | 4.08% | 3.00% | 2.67% | 1.55% | 0.58% | ||
| Non-performing loans to total assets | 3.07% | 2.20% | 1.98% | 1.16% | 0.44% | ||
| Foreclosed property | $ 2,153 | $ 1,448 | $ 1,150 | $ 1,279 | $ 999 | ||
| Foreclosed property to total assets | 0.31% | 0.20% | 0.16% | 0.18% | 0.14% | ||
| Non-performing assets to total assets | 3.37% | 2.40% | 2.14% | 1.34% | 0.58% | ||
| Statistical | |||||||
| Shares outstanding (000's) | 2,685 | 2,685 | 2,678 | 2,673 | 2,664 | ||
| Number of branch offices | 14 | 14 | 14 | 14 | 14 | ||
| Full time equivalent employees | 170 | 177 | 177 | 177 | 172 | ||
| (1) The efficiency ratio is non-interest expense divided by net interest income plus non-interest income. | |||||||