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| 8-K - FORM 8-K FILING DOCUMENT - TF FINANCIAL CORP | document.htm |
EXHIBIT 99.1
TF Financial Corporation Reports Second Quarter 2011 Results and Quarterly Dividend
NEWTOWN, Pa., July 28, 2011 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $699,000 ($0.26 per diluted share) for the second quarter of 2011, compared with $618,000 ($0.23 per diluted share) for the first quarter of 2011 and $967,000 ($0.36 per diluted share) for the second quarter of 2010. Net income for the six month period ended June 30, 2011 was $1,317,000 ($0.49 per diluted share) compared with $1,684,000 ($0.63 per diluted share) for the first six months of 2010. The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable August 15, 2011 to shareholders of record on August 8, 2011.
"Considering the ongoing softness and uncertainty about where the economy is headed, both nationally and within our local markets, we are pleased to be maintaining consistent profitability for an institution of our size," said Kent C. Lufkin, president and chief executive officer. "Loan demand from higher quality borrowers has improved but still remains too inconsistent to constitute a trend, while our efforts to grow core deposits are producing solid results. During these challenging times our capital position remains healthy and continues to improve with stockholders' equity at $75.3 million or 10.9% of total assets."
"Net interest income was ahead of both the first quarter of this year and the comparable second quarter of last year and our net interest margin improved to 3.88% in the second quarter as our cost of funds declined. The resolution of problem assets is our ongoing top priority and although our loan loss provision remains elevated along with nonperforming assets, we are beginning to observe indications that our credit quality trends should be gradually moving in a positive direction from this point forward. We will continue to intensively focus on the resolution and disposal of problem loans while we ride out this cycle."
Results for the current quarter included:
- Pre-tax income was $821,000 during the quarter, down $473,000 from the second quarter of 2010, mainly the result of an $850,000 increase in the loan loss provision, described in more detail below. The other broad components of pre-tax earnings were similar to, or an improvement from, the second quarter of 2010: net interest income was up $101,000, non-interest income was up $295,000 largely due to a $203,000 increase in gains on the sale of investment securities, and non-interest expenses were roughly the same.
- Net interest income was $5,989,000 which was a $173,000 or 3.0% increase over the first quarter of 2011, and a $101,000 or 1.7% increase over the second quarter of 2010. Similarly, the Company's net interest margin expanded to 3.88% compared with 3.80% during the first quarter of 2011, and 3.58% during the second quarter of 2010. While the yields on the Company's interest-earning assets fell by 4 basis points during the second quarter of 2011 compared with the second quarter of 2010, the cost of the Company's interest bearing liabilities decreased by 37 basis points since the second quarter of 2010, mainly the result of a 27 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 $1,450,000 and net charge-offs were $1,248,000 during the quarter, compared with a provision for loan losses of $600,000 and net charge-offs of $16,000 during the second quarter of 2010. The Company's allowance for loan losses was $9,108,000 or 1.79% of loans at quarter end, a 35.0% increase over the $6,749,000 balance at June 30, 2010.
- Non-performing loans were $18.3 million at quarter end compared with $19.0 million at December 31, 2010. Foreclosed property at June 30, 2011 was $9.4 million compared with $7.5 million at December 31, 2010. Total non-performing assets were 3.98% of total assets compared with 3.83% at year end 2010. During the quarter the Company booked $1.6 million in foreclosed property, while recording sales of $0.3 million.
- Loans outstanding were $508.4 million, a $0.6 million or 0.1% increase during the quarter. Mortgage loans originated for sale were $2.6 million compared with $5.2 million during the second quarter of 2010.
- At quarter end, total deposits were $552.1 million, compared with $550.1 million at December 31, 2010, and $559.4 million at June 30, 2010.
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 | SIX MONTHS ENDED | |||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 6/30/2011 | 6/30/2010 | |
| EARNINGS SUMMARY | |||||||
| Interest income | $ 7,932 | $ 7,835 | $ 8,021 | $ 8,350 | $ 8,522 | $ 15,767 | $ 17,197 |
| Interest expense | 1,943 | 2,019 | 2,243 | 2,488 | 2,634 | 3,962 | 5,477 |
| Net interest income | 5,989 | 5,816 | 5,778 | 5,862 | 5,888 | 11,805 | 11,720 |
| Loan loss provision | 1,450 | 900 | 1,500 | 1,180 | 600 | 2,350 | 1,561 |
| Non-interest income | 892 | 750 | 1,143 | 927 | 597 | 1,642 | 1,213 |
| Non-interest expense | 4,610 | 4,976 | 4,591 | 4,227 | 4,591 | 9,586 | 9,183 |
| Income taxes | 122 | 72 | 171 | 373 | 327 | 194 | 505 |
| Net income | $ 699 | $ 618 | $ 659 | $ 1,009 | $ 967 | $ 1,317 | $ 1,684 |
| PER SHARE INFORMATION | |||||||
| Earnings per share, basic (2) | $ 0.26 | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.36 | $ 0.49 | $ 0.63 |
| Earnings per share, diluted (2) | $ 0.26 | $ 0.23 | $ 0.24 | $ 0.38 | $ 0.36 | $ 0.49 | $ 0.63 |
| Weighted average basic shares (000's) (2) | 2,705 | 2,703 | 2,692 | 2,687 | 2,680 | 2,703 | 2,675 |
| Weighted average diluted shares (000's) (2) | 2,706 | 2,704 | 2,692 | 2,687 | 2,680 | 2,704 | 2,675 |
| Dividends paid (2) | $ 0.05 | $ 0.05 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.10 | $ 0.38 |
| FINANCIAL RATIOS | |||||||
| Annualized return on average assets | 0.41% | 0.36% | 0.37% | 0.56% | 0.54% | ||
| Annualized return on average equity | 3.74% | 3.38% | 3.48% | 5.41% | 5.30% | ||
| Efficiency ratio (1) | 67.00% | 75.78% | 66.33% | 62.26% | 70.79% | ||
| REGULATORY CAPITAL RATIOS | |||||||
| Tier 1 (Core) Capital Ratio | 9.78% | 9.79% | 9.56% | 9.32% | 8.97% | ||
| Total Risk-Based Capital Ratio | 17.61% | 17.45% | 17.47% | 16.83% | 16.55% | ||
| Tier 1 Risk-Based Capital Ratio | 16.36% | 16.20% | 16.22% | 15.58% | 15.30% | ||
| Tangible Equity Ratio | 9.78% | 9.79% | 9.56% | 9.32% | 8.97% | ||
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | 6/30/2011 | 6/30/2010 | |
| AVERAGE BALANCES | |||||||
| Loans | $ 499,024 | $ 501,543 | $ 510,997 | $ 522,181 | $ 522,289 | $ 500,277 | $ 526,032 |
| Mortgage-backed securities | 63,940 | 66,401 | 72,059 | 79,070 | 80,735 | 65,164 | 81,284 |
| Investment securities | 68,439 | 67,035 | 61,902 | 59,077 | 58,446 | 67,742 | 55,878 |
| Other interest-earning assets | 4,420 | 3,237 | 7,816 | 10,122 | 13,451 | 3,831 | 10,108 |
| Total earning assets | 635,823 | 638,216 | 652,774 | 670,450 | 674,921 | 637,014 | 673,302 |
| Non-earning assets | 50,346 | 48,984 | 45,242 | 42,716 | 42,210 | 49,667 | 41,711 |
| Total assets | 686,169 | 687,200 | 698,016 | 713,166 | 717,131 | 686,681 | 715,013 |
| Deposits | 546,215 | 546,055 | 550,484 | 556,314 | 557,128 | 546,136 | 553,214 |
| FHLB advances and other borrowed money | 57,972 | 60,446 | 65,678 | 75,130 | 78,469 | 59,202 | 80,491 |
| Total interest bearing liabilities | 604,187 | 606,501 | 616,162 | 631,444 | 635,597 | 605,338 | 633,705 |
| Non-interest bearing liabilities | 7,039 | 6,482 | 6,681 | 7,744 | 8,373 | 6,762 | 8,493 |
| Stockholders' equity | 74,943 | 74,217 | 75,173 | 73,978 | 73,161 | 74,582 | 72,815 |
| Total liabilities & stockholders' equity | $ 686,169 | $ 687,200 | $ 698,016 | $ 713,166 | $ 717,131 | $ 686,682 | $ 715,013 |
| SPREAD AND MARGIN ANALYSIS | |||||||
| Average yield on: | |||||||
| Loans | 5.38% | 5.32% | 5.23% | 5.33% | 5.49% | 5.37% | 5.56% |
| Mortgage-backed securities | 4.21% | 4.24% | 4.48% | 4.45% | 4.62% | 4.24% | 4.72% |
| Investment securities | 4.28% | 4.35% | 3.96% | 3.94% | 3.99% | 4.33% | 4.06% |
| Other interest-earning assets | 0.09% | 0.00% | 0.05% | 0.02% | 0.03% | 0.05% | 0.04% |
| Total interest-earning assets | 5.11% | 5.08% | 4.96% | 5.03% | 5.15% | 5.11% | 5.25% |
| Average cost of: | |||||||
| Deposits | 1.06% | 1.08% | 1.17% | 1.25% | 1.33% | 1.07% | 1.40% |
| FHLB advances and other borrowed money | 3.49% | 3.75% | 3.78% | 3.86% | 4.05% | 3.63% | 4.12% |
| Total interest-bearing liabilities | 1.29% | 1.35% | 1.44% | 1.56% | 1.66% | 1.32% | 1.75% |
| Interest rate spread | 3.82% | 3.73% | 3.52% | 3.47% | 3.49% | 3.79% | 3.50% |
| Net interest margin | 3.88% | 3.80% | 3.60% | 3.55% | 3.58% | 3.85% | 3.60% |
| NON-INTEREST INCOME DETAIL | |||||||
| Service fees, charges and other | $ 479 | $ 465 | $ 662 | $ 404 | $ 363 | $ 944 | $ 892 |
| Bank-owned life insurance | 164 | 157 | 169 | 170 | 167 | 321 | 339 |
| Gain/loss on sale investments | 210 | -- | 13 | -- | 7 | 210 | 7 |
| Gain on sale of loans | 50 | 117 | 406 | 353 | 52 | 167 | 112 |
| Gain/(loss) on sale of foreclosed real estate | (11) | 11 | (107) | -- | 8 | -- | (137) |
| NON-INTEREST EXPENSE DETAIL | |||||||
| Compensation and benefits | $ 2,622 | $ 2,746 | $ 2,569 | $ 2,269 | $ 2,667 | $ 5,368 | $ 5,367 |
| Occupancy and equipment | 736 | 818 | 747 | 774 | 723 | 1,554 | 1,482 |
| Professional fees | 324 | 478 | 383 | 196 | 256 | 802 | 484 |
| Marketing and advertising | 102 | 67 | 91 | 152 | 120 | 169 | 240 |
| FDIC insurance premiums | 151 | 233 | 229 | 233 | 259 | 384 | 453 |
| Other operating | 675 | 634 | 572 | 603 | 566 | 1,309 | 1,157 |
| T F FINANCIAL CORPORATION | |||||||
| UNAUDITED FINANCIAL INFORMATION | |||||||
| (dollars in thousands except per share data) | PERIOD ENDED | ||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||
| DEPOSIT INFORMATION | |||||||
| Non-interest checking | $ 44,817 | $ 41,920 | $ 40,389 | $ 41,012 | $ 45,022 | ||
| Interest checking | 58,632 | 58,428 | 56,157 | 52,892 | 55,166 | ||
| Money market | 149,852 | 148,713 | 149,744 | 149,355 | 145,735 | ||
| Savings | 104,423 | 101,445 | 99,686 | 97,216 | 100,321 | ||
| CD's | 194,380 | 197,247 | 204,159 | 212,087 | 213,146 | ||
| OTHER INFORMATION | |||||||
| Per Share | |||||||
| Book value (2) | $ 26.69 | $ 26.32 | $ 26.02 | $ 26.49 | $ 26.01 | ||
| Tangible book value (2) | $ 25.16 | $ 24.79 | $ 24.48 | $ 24.95 | $ 24.47 | ||
| Closing market price (2) | $ 21.42 | $ 20.83 | $ 21.23 | $ 19.67 | $ 20.76 | ||
| Balance Sheet | |||||||
| Loans | $ 508,371 | $ 507,785 | $ 509,986 | $ 528,058 | $ 526,947 | ||
| Cash and cash equivalents | 8,786 | 10,668 | 7,437 | 6,916 | 19,965 | ||
| Mortgage-backed securities | 67,520 | 61,476 | 69,660 | 74,768 | 82,169 | ||
| Investment securities | 68,551 | 67,364 | 67,231 | 60,424 | 59,659 | ||
| Total assets | 691,561 | 684,221 | 691,757 | 702,583 | 720,768 | ||
| Total deposits | 552,104 | 547,753 | 550,135 | 552,562 | 559,390 | ||
| FHLB advances and other borrowed money | 55,345 | 55,387 | 61,987 | 68,671 | 79,929 | ||
| Stockholders' equity | 75,332 | 74,270 | 73,416 | 74,673 | 73,321 | ||
| Asset Quality | |||||||
| Non-performing loans | $ 18,308 | $ 21,064 | $ 18,978 | $ 21,545 | $ 15,828 | ||
| Allowance for loan losses | $ 9,108 | $ 8,906 | $ 8,328 | $ 7,606 | $ 6,749 | ||
| Net charge-offs | $ 1,248 | $ 322 | $ 778 | $ 323 | $ 16 | ||
| Allowance to gross loans | 1.79% | 1.75% | 1.63% | 1.44% | 1.28% | ||
| Non-performing loans to gross loans | 3.60% | 4.15% | 3.72% | 4.08% | 3.00% | ||
| Non-performing loans to total assets | 2.65% | 3.08% | 2.74% | 3.07% | 2.20% | ||
| Foreclosed property | $ 9,245 | $ 8,002 | $ 7,482 | $ 2,153 | $ 1,448 | ||
| Foreclosed property to total assets | 1.35% | 1.17% | 1.08% | 0.31% | 0.20% | ||
| Non-performing assets to total assets | 3.98% | 4.25% | 3.83% | 3.37% | 2.40% | ||
| Statistical | |||||||
| Shares outstanding (000's) (2) | 2,822 | 2,822 | 2,822 | 2,685 | 2,685 | ||
| Number of branch offices | 14 | 14 | 14 | 14 | 14 | ||
| Full time equivalent employees | 179 | 177 | 176 | 170 | 177 | ||
| (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. | |||||||
CONTACT: Dennis R. Stewart, EVP/CFO
(215) 579-4000