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| 8-K - FORM 8-K FILING DOCUMENT - TF FINANCIAL CORP | document.htm |
EXHIBIT 99.1
TF Financial Corporation Reports First Quarter 2011 Results and Quarterly Dividend
NEWTOWN, Pa., April 28, 2011 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $618,000 ($0.23 per diluted share) for the first quarter of 2011, compared with $717,000 ($0.27 per diluted share) for the first quarter of 2010. The Company also announced that its Board of Directors had declared a quarterly dividend of $0.05 per share, payable May 16, 2011 to shareholders of record on May 9, 2011.
"We produced a profitable quarter under continuing tough economic circumstances," said Kent C. Lufkin, president and chief executive officer. "For an institution of our size, in this very challenging operating environment, we believe our ongoing performance remains respectable and consistent. We intend to continue to conservatively manage the Company with the fundamentals of good community banking in mind, and we are confident that the strength of our Company and management team will see us through this unprecedented cycle."
"Our capital position is solid, we continued to improve the net interest margin to 3.80% at quarter-end, we set aside a substantial provision for possible credit losses (down from the fourth quarter and about even with a year ago), reserve coverage of problem credits should compare favorably to peers, and we remain focused on prudent expense control --- all elements of our plan and goal to execute effectively on fundamentals to drive us successfully through the forthcoming year."
Results for the current quarter included:
- Pre-tax income was $690,000 during the quarter, down $205,000 from the first quarter of 2010, mainly the result of the $384,000 increase in non-interest expense, described in more detail below. The other broad components of pre-tax earnings were similar to, or an improvement from, 2010: net interest income was roughly the same, there was a slight decrease in the provision for loan losses, and there was a modest improvement in non-interest income.
- Net interest income was $5,816,000 which was a $38,000 or 0.7% increase over the fourth quarter of 2010, and a $16,000 or 0.3% decrease over the first quarter of 2010. Similarly, the Company's net interest margin expanded to 3.80% compared with 3.60% during the fourth quarter of 2010, and 3.60% during the first quarter of 2010. The yields on the Company's interest-earning assets fell by 24 basis points during the first quarter of 2011 compared with the first quarter of 2010, with about one half of the decrease due to the increase in non-performing loans, and the remainder due to the effect of mortgage loan refinancing and repayments that have occurred since the first quarter of 2010, the result of low market interest rates, causing borrowers to refinance at lower rates. The cost of the Company's interest-bearing liabilities decreased by 47 basis points since the first quarter of 2010, mainly the result of a 39 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, into lower current market interest rates.
- The provision for loan losses was $900,000 during the quarter compared with $1,500,000 during the fourth quarter of 2010 and $961,000 during the first quarter of 2010. The Company has steadily increased its allowance for loan losses to $8,906,000 or 1.75% of loans at quarter end, a 44.5% increase over the $6,165,000 balance at March 31, 2010.
- Non-performing loans were $21,064,000 at quarter end compared with $18,978,000 at December 31, 2010. This increase was mainly caused by loans put on non-accrual status while the borrowers attempt to market the property. Foreclosed property at March 31, 2011 was $8.0 million compared with $7.5 million at December 31, 2010 mainly due to the addition of one single-family residence. Total non-performing assets were 4.25% of total assets compared with 3.83% at year end 2010.
- Loans outstanding were $507.8 million, a $2.2 million or 0.4% decrease during the quarter. Mortgage loans originated for sale were $5.7 million compared with $6.1 million during the first quarter of 2010.
- At quarter end, total deposits were $547.8 million, compared with $550.1 million at December 31, 2010, and $553.4 million at March 31, 2010.
- Non-interest expenses were $384,000 higher in the first quarter of 2011 compared to the first quarter of 2010. The majority of this increase is due to increased professional fees resulting from, among other things, legal and other costs incurred in connection with the Company's reincorporation in Pennsylvania, the cost of distributing a 5% stock dividend in the first quarter, and a $169,000 increase in legal and professional fees incurred in connection with loan workout and foreclosure matters.
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 | ||||
| 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | |
| EARNINGS SUMMARY | |||||
| Interest income | $ 7,835 | $ 8,021 | $ 8,350 | $ 8,522 | $ 8,675 |
| Interest expense | 2,019 | 2,243 | 2,488 | 2,634 | 2,843 |
| Net interest income | 5,816 | 5,778 | 5,862 | 5,888 | 5,832 |
| Loan loss provision | 900 | 1,500 | 1,180 | 600 | 961 |
| Non-interest income | 750 | 1,143 | 927 | 597 | 616 |
| Non-interest expense | 4,976 | 4,591 | 4,227 | 4,591 | 4,592 |
| Income taxes | 72 | 171 | 373 | 327 | 178 |
| Net income | $ 618 | $ 659 | $ 1,009 | $ 967 | $ 717 |
| PER SHARE INFORMATION | |||||
| Earnings per share, basic (2) | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.36 | $ 0.27 |
| Earnings per share, diluted (2) | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.36 | $ 0.27 |
| Weighted average basic shares (000's) (2) | 2,703 | 2,692 | 2,687 | 2,680 | 2,669 |
| Weighted average diluted shares (000's) (2) | 2,703 | 2,692 | 2,687 | 2,680 | 2,669 |
| Dividends paid (2) | $ 0.05 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 |
| FINANCIAL RATIOS | |||||
| Annualized return on average assets | 0.36% | 0.37% | 0.56% | 0.54% | 0.41% |
| Annualized return on average equity | 3.38% | 3.48% | 5.41% | 5.30% | 4.01% |
| Efficiency ratio (1) | 75.78% | 66.33% | 62.26% | 70.79% | 71.22% |
| CAPITAL RATIOS | |||||
| Tier 1 (Core) Capital Ratio | 9.79% | 9.56% | 9.32% | 8.97% | 8.92% |
| Total Risk-Based Capital Ratio | 18.00% | 17.47% | 16.83% | 16.55% | 16.24% |
| Tier 1 Risk-Based Capital Ratio | 16.75% | 16.22% | 15.58% | 15.30% | 15.10% |
| Tangible Equity Ratio | 9.79% | 9.56% | 9.32% | 8.97% | 8.92% |
| T F FINANCIAL CORPORATION | |||||
| UNAUDITED FINANCIAL INFORMATION | |||||
| (dollars in thousands except per share data) | QUARTER ENDED | ||||
| 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | |
| AVERAGE BALANCES | |||||
| Loans | $ 501,543 | $ 510,997 | $ 522,181 | $ 522,289 | $ 529,817 |
| Mortgage-backed securities | 66,401 | 72,059 | 79,070 | 80,735 | 81,839 |
| Investment securities | 67,035 | 61,902 | 59,077 | 58,446 | 53,282 |
| Other interest-earning assets | 3,237 | 7,816 | 10,122 | 13,451 | 6,728 |
| Total earning assets | 638,216 | 652,774 | 670,450 | 674,921 | 671,666 |
| Non-earning assets | 48,984 | 45,242 | 42,716 | 42,210 | 41,204 |
| Total assets | 687,200 | 698,016 | 713,166 | 717,131 | 712,870 |
| Deposits | 546,055 | 550,484 | 556,314 | 557,128 | 549,257 |
| FHLB advances and other borrowed money | 60,446 | 65,678 | 75,130 | 78,469 | 82,536 |
| Total interest-bearing liabilities | 606,501 | 616,162 | 631,444 | 635,597 | 631,793 |
| Non interest-bearing liabilities | 6,482 | 6,681 | 7,744 | 8,373 | 8,611 |
| Stockholders' equity | 74,217 | 75,173 | 73,978 | 73,161 | 72,466 |
| Total liabilities & stockholders' equity | $ 687,200 | $ 698,016 | $ 713,166 | $ 717,131 | $ 712,870 |
| SPREAD AND MARGIN ANALYSIS | |||||
| Average yield on: | |||||
| Loans | 5.32% | 5.23% | 5.33% | 5.49% | 5.59% |
| Mortgage-backed securities | 4.24% | 4.48% | 4.45% | 4.62% | 4.79% |
| Investment securities | 4.35% | 3.96% | 3.94% | 3.99% | 4.12% |
| Other interest-earning assets | 0.00% | 0.05% | 0.02% | 0.03% | 0.06% |
| Total interest-earning assets | 5.08% | 4.96% | 5.03% | 5.15% | 5.32% |
| Average cost of: | |||||
| Deposits | 1.08% | 1.17% | 1.25% | 1.33% | 1.47% |
| FHLB advances and other borrowed money | 3.75% | 3.78% | 3.86% | 4.05% | 4.17% |
| Total interest-bearing liabilities | 1.35% | 1.44% | 1.56% | 1.66% | 1.82% |
| Interest rate spread | 3.73% | 3.52% | 3.47% | 3.49% | 3.50% |
| Net interest margin | 3.80% | 3.60% | 3.55% | 3.58% | 3.60% |
| NON-INTEREST INCOME DETAIL | |||||
| Service fees, charges and other | $ 465 | $ 662 | $ 404 | $ 363 | $ 529 |
| Bank-owned life insurance | 157 | 169 | 170 | 167 | 172 |
| Gain/loss on sale investments | -- | 13 | -- | 7 | -- |
| Gain on sale of loans | 117 | 406 | 353 | 52 | 60 |
| Gain/(loss) on sale of foreclosed real estate | 11 | (107) | -- | 8 | (145) |
| NON-INTEREST EXPENSE DETAIL | |||||
| Compensation and benefits | $ 2,746 | $ 2,569 | $ 2,269 | $ 2,667 | $ 2,700 |
| Occupancy and equipment | 818 | 747 | 774 | 723 | 759 |
| Professional fees | 478 | 383 | 196 | 256 | 228 |
| Marketing and advertising | 67 | 91 | 152 | 120 | 120 |
| FDIC insurance premiums | 233 | 229 | 233 | 259 | 194 |
| Other operating | 634 | 572 | 603 | 566 | 591 |
| T F FINANCIAL CORPORATION | |||||
| UNAUDITED FINANCIAL INFORMATION | |||||
| (dollars in thousands except per share data) | PERIOD ENDED | ||||
| 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 3/31/2010 | |
| DEPOSIT INFORMATION | |||||
| Non-interest checking | $ 41,920 | $ 40,389 | $ 41,012 | $ 45,022 | $ 41,757 |
| Interest checking | 58,428 | 56,157 | 52,892 | 55,166 | 51,991 |
| Money market | 148,713 | 149,744 | 149,355 | 145,735 | 142,791 |
| Savings | 101,445 | 99,686 | 97,216 | 100,321 | 98,948 |
| CD's | 197,247 | 204,159 | 212,087 | 213,146 | 217,938 |
| OTHER INFORMATION | |||||
| Per Share | |||||
| Book value (2) | $ 26.32 | $ 26.02 | $ 26.49 | $ 26.01 | $ 25.76 |
| Tangible book value (2) | $ 24.79 | $ 24.48 | $ 24.95 | $ 24.47 | $ 24.22 |
| Closing market price (2) | $ 20.83 | $ 21.23 | $ 19.67 | $ 20.76 | $ 18.18 |
| Balance Sheet | |||||
| Loans | $ 507,785 | $ 509,986 | $ 528,058 | $ 526,947 | $ 531,137 |
| Cash and cash equivalents | 10,668 | 7,437 | 6,916 | 19,965 | 16,339 |
| Mortgage-backed securities | 61,476 | 69,660 | 74,768 | 82,169 | 78,412 |
| Investment securities | 67,364 | 67,231 | 60,424 | 59,659 | 57,837 |
| Total assets | 684,221 | 691,757 | 702,583 | 720,768 | 715,948 |
| Total deposits | 547,753 | 550,135 | 552,562 | 559,390 | 553,425 |
| FHLB advances and other borrowed money | 55,387 | 61,987 | 68,671 | 79,929 | 81,738 |
| Stockholders' equity | 74,270 | 73,416 | 74,673 | 73,321 | 72,422 |
| Asset Quality | |||||
| Non-performing loans | $ 21,064 | $ 18,978 | $ 21,545 | $ 15,828 | $ 14,174 |
| Allowance for loan losses | $ 8,906 | $ 8,328 | $ 7,606 | $ 6,749 | $ 6,165 |
| Net charge-offs | $ 322 | $ 778 | $ 323 | $ 16 | $ 11 |
| Allowance to gross loans | 1.75% | 1.63% | 1.44% | 1.28% | 1.16% |
| Non-performing loans to gross loans | 4.15% | 3.72% | 4.08% | 3.00% | 2.67% |
| Non-performing loans to total assets | 3.08% | 2.74% | 3.07% | 2.20% | 1.98% |
| Foreclosed property | $ 8,002 | $ 7,482 | $ 2,153 | $ 1,448 | $ 1,150 |
| Foreclosed property to total assets | 1.17% | 1.08% | 0.31% | 0.20% | 0.16% |
| Non-performing assets to total assets | 4.25% | 3.83% | 3.37% | 2.40% | 2.14% |
| Statistical | |||||
| Shares outstanding (000's) (2) | 2,822 | 2,822 | 2,685 | 2,685 | 2,678 |
| Number of branch offices | 14 | 14 | 14 | 14 | 14 |
| Full time equivalent employees | 177 | 176 | 170 | 177 | 177 |
| (1) The efficiency ratio is non-interest expense divided by net interest income plus non-interest income. | |||||
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(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. |
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CONTACT: Dennis R. Stewart, EVP/CFO
(215) 579-4000