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| 8-K - FORM 8-K FILING DOCUMENT - TF FINANCIAL CORP | document.htm |
EXHIBIT 99.1
TF Financial Corporation Reports Third Quarter 2012 Results and Quarterly Dividend
NEWTOWN, Pa., Oct. 25, 2012 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,473,000 ($0.54 per diluted share) for the third quarter of 2012, a 36% increase over the $1,080,000 ($0.40 per diluted share) reported for the third quarter of 2011. On a sequential linked-quarter basis, net income advanced 18% over the $1,249,000 or $0.46 per share reported for the second quarter of 2012.
Net income for the nine-month period ended September 30, 2012 was $3,877,000 ($1.42 per diluted share) compared with $2,397,000 ($0.89 per diluted share) for the first nine months of 2011. The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable November 15, 2012 to shareholders of record on November 8, 2012.
"We produced a good strong quarter with solid improvement in all measures of financial performance," said Kent C. Lufkin, president and chief executive officer. "With the exception of the fourth quarter of 2011, in which we booked some opportunistic securities gains, this was the best quarter since late 2005. Our net interest margin remained quite healthy at 3.96%, up from 3.83% a year earlier. On an encouraging note, non-performing assets declined to 2.59% of total assets at quarter-end, compared to 3.74% a year ago, as we diligently continued to work out troubled loans and move them off the balance sheet. We will continue to work tirelessly to achieve consistent future profitability as we move through this latter stage of a very tough banking cycle."
Results for the current quarter included:
- Pre-tax income was $1,952,000 during the quarter, compared with $1,394,000 during the third quarter of 2011. The Company's operating performance has improved in nearly every area since the third quarter of 2011: net interest income increased by $249,000 or 4.1%; non-interest income increased by $331,000 or 56.8%; and non-interest expenses decreased by $200,000 or 4.3%. This trend was also evident on a linked-quarter basis compared with the second quarter of 2012: net interest income increased by $203,000 or 3.4%; non-interest income increased by $175,000 or 23.7%; and non-interest expenses decreased by $183,000 or 3.9%.
- Net interest income was $6,254,000 compared with $6,051,000 for the linked second quarter of 2012, and $6,005,000 during the third quarter of 2011. The Company's net interest margin was unchanged at 3.96% compared with second quarter of 2012, and improved by 13 basis points when compared with 3.83% during the third quarter of 2011. Yields on the Company's interest-earning assets fell by 35 basis points during the third quarter of 2012 compared with the year-ago third quarter of 2011. However, the cost of the Company's interest bearing liabilities decreased by 49 basis points compared to the third quarter of 2011, mainly the result of a 43 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, and which were converted into accounts bearing much lower current market interest rates.
- Overall, asset quality continued to show improving trends with total non-performing assets at 2.59% of total assets at September 30, 2012, which is down from 3.56% at year end 2011 and 3.74% at September 30, 2011. Non-performing loans were $10.4 million at quarter-end compared with $12.5 million at December 31, 2011. In addition, foreclosed property showed a substantial reduction during the year due to sales of properties, totaling $7.6 million at September 30, 2012 compared with $11.7 million at December 31, 2011.
- The provision for loan losses was $750,000 and net charge-offs were $141,000 during the third quarter of 2012, compared with a provision for loan losses of $528,000 and net charge-offs of $49,000 during the third quarter of 2011. The Company's allowance for loan losses was $6,772,000 or 65.1% of non-performing loans at quarter end, compared with $9,586,000 or 56.1% of non-performing loans at September 30, 2011.
- Total loans were $541.6 million at September 30, 2012, a $21.7 million or 4.2% increase during the quarter. Mortgage loans originated for sale were $12.7 million compared with $8.8 million during the third quarter of 2011. The corresponding gain on sale of loans was $382,000 during the quarter, compared with $125,000 during the third quarter of 2011.
- At quarter end, total deposits were $533.3 million, compared with $551.3 million at December 31, 2011, and $551.7 million at September 30, 2011. Deposit decreases can be traced to the maturity of a large amount of maturing CDs which had been issued 3 to 4 years ago when market interest rates were substantially higher. These funds either were withdrawn from the Bank, or were transferred into other deposit products. Core checking, savings, and money market accounts increased by $11.0 million during 2012, and were 71.5% of total deposits at September 30, 2012 compared with 67.2% at December 31, 2011, and 66.4% at September 30, 2011.
- Capital ratios continue to be strong, with Tier 1 Leverage and Total Risk-Based ratios of 10.47% and 17.62% at September 30, 2012. Capital levels are well above the regulatory minimums to be considered well-capitalized.
TF Financial Corporation is a holding company whose principal subsidiary is 3rd Fed 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 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.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 | ||||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 9/30/2012 | 9/30/2011 | ||
| EARNINGS SUMMARY | ||||||||
| Interest income | $ 7,395 | $ 7,328 | $ 7,263 | $ 7,613 | $ 7,908 | $ 21,986 | $ 23,675 | |
| Interest expense | 1,141 | 1,277 | 1,471 | 1,550 | 1,903 | 3,889 | 5,865 | |
| Net interest income | 6,254 | 6,051 | 5,792 | 6,063 | 6,005 | 18,097 | 17,810 | |
| Loan loss provision | 750 | 500 | 500 | 850 | 528 | 1,750 | 2,878 | |
| Non-interest income | 914 | 739 | 1,237 | 1,395 | 583 | 2,890 | 2,225 | |
| Non-interest expense | 4,466 | 4,649 | 5,056 | 4,565 | 4,666 | 14,171 | 14,252 | |
| Income before taxes | 1,952 | 1,641 | 1,473 | 2,043 | 1,394 | 5,066 | 2,905 | |
| Income taxes | 479 | 392 | 318 | 511 | 314 | 1,189 | 508 | |
| Net income | $ 1,473 | $ 1,249 | $ 1,155 | $ 1,532 | $ 1,080 | $ 3,877 | $ 2,397 | |
| PER SHARE INFORMATION | ||||||||
| Earnings per share, basic | $ 0.54 | $ 0.46 | $ 0.42 | $ 0.57 | $ 0.40 | $ 1.42 | $ 0.89 | |
| Earnings per share, diluted | $ 0.54 | $ 0.46 | $ 0.42 | $ 0.57 | $ 0.40 | $ 1.42 | $ 0.89 | |
| Weighted average basic shares (000's) | 2,729 | 2,724 | 2,719 | 2,711 | 2,703 | 2,724 | 2,701 | |
| Weighted average diluted shares (000's) | 2,732 | 2,728 | 2,722 | 2,711 | 2,704 | 2,727 | 2,702 | |
| Dividends paid | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.15 | $ 0.15 | |
| FINANCIAL RATIOS | ||||||||
| Annualized return on average assets | 0.84% | 0.74% | 0.68% | 0.89% | 0.62% | 1.68% | 1.03% | |
| Annualized return on average equity | 7.21% | 6.31% | 5.94% | 7.75% | 5.63% | 14.49% | 9.47% | |
| Efficiency ratio (1) | 60.24% | 62.34% | 70.55% | 60.06% | 63.65% | 64.23% | 68.49% | |
| REGULATORY CAPITAL RATIOS | ||||||||
| Tier 1 leverage ratio | 10.47% | 10.45% | 10.21% | 10.21% | 9.87% | |||
| Total risk-based capital ratio | 17.62% | 17.37% | 17.41% | 18.56% | 17.76% | |||
| Tier 1 risk-based capital ratio | 16.37% | 16.13% | 16.16% | 17.31% | 16.51% | |||
| T F FINANCIAL CORPORATION | ||||||||
| UNAUDITED FINANCIAL INFORMATION | ||||||||
| (dollars in thousands except per share data) | QUARTER ENDED | NINE MONTHS ENDED | ||||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 9/30/2012 | 9/30/2011 | ||
| AVERAGE BALANCES | ||||||||
| Loans | $ 527,195 | $ 501,757 | $ 493,396 | $ 497,258 | $ 502,574 | $ 507,521 | $ 501,052 | |
| Mortgage-backed securities | 55,820 | 61,580 | 61,971 | 61,079 | 66,283 | 59,776 | 65,541 | |
| Investment securities | 64,304 | 68,181 | 67,035 | 67,843 | 67,662 | 66,498 | 67,714 | |
| Other interest-earning assets | 393 | 3,074 | 13,619 | 6,699 | 3,237 | 5,676 | 4,970 | |
| Total earning assets | 647,712 | 634,592 | 636,021 | 632,879 | 639,756 | 639,471 | 639,277 | |
| Non-earning assets | 46,168 | 48,329 | 50,557 | 52,263 | 53,907 | 48,345 | 49,759 | |
| Total assets | 693,880 | 682,921 | 686,578 | 685,142 | 693,663 | 687,816 | 689,036 | |
| Deposits | 538,637 | 550,040 | 554,523 | 551,964 | 555,713 | 547,700 | 549,364 | |
| FHLB advances and other borrowed money | 66,740 | 46,785 | 47,387 | 48,109 | 54,709 | 53,685 | 57,688 | |
| Total interest bearing liabilities | 605,377 | 596,825 | 601,910 | 600,073 | 610,422 | 601,385 | 607,052 | |
| Non-interest bearing liabilities | 7,179 | 6,486 | 6,523 | 6,600 | 7,075 | 6,732 | 6,867 | |
| Stockholders' equity | 81,324 | 79,610 | 78,145 | 78,469 | 76,166 | 79,699 | 75,117 | |
| Total liabilities & stockholders' | $ 693,880 | $ 682,921 | $ 686,578 | $ 685,142 | $ 693,663 | $ 687,816 | $ 689,036 | |
| equity | ||||||||
| SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT) | ||||||||
| Average yield on: | ||||||||
| Loans | 4.86% | 4.99% | 5.05% | 5.13% | 5.26% | 4.96% | 5.32% | |
| Mortgage-backed securities | 3.23% | 3.68% | 3.50% | 4.22% | 4.20% | 3.48% | 4.22% | |
| Investment securities | 4.32% | 4.31% | 4.27% | 4.15% | 4.13% | 4.33% | 4.25% | |
| Other interest-earning assets | 0.00% | 0.00% | 0.06% | 0.11% | 0.00% | 0.05% | 0.03% | |
| Total interest-earning assets | 4.66% | 4.77% | 4.71% | 4.88% | 5.01% | 4.72% | 5.05% | |
| Average cost of: | ||||||||
| Deposits | 0.59% | 0.68% | 0.77% | 0.82% | 1.02% | 0.68% | 1.05% | |
| FHLB advances and other borrowed money | 2.01% | 3.02% | 3.44% | 3.39% | 3.43% | 2.72% | 3.56% | |
| Total interest-bearing liabilities | 0.75% | 0.86% | 0.98% | 1.02% | 1.24% | 0.86% | 1.29% | |
| Interest rate spread | 3.91% | 3.91% | 3.73% | 3.86% | 3.77% | 3.85% | 3.76% | |
| Net interest margin | 3.96% | 3.96% | 3.78% | 3.91% | 3.83% | 3.90% | 3.83% | |
| T F FINANCIAL CORPORATION | ||||||||
| UNAUDITED FINANCIAL INFORMATION | ||||||||
| (dollars in thousands except per share data) | QUARTER ENDED | NINE MONTHS ENDED | ||||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 9/30/2012 | 9/30/2011 | ||
| INTEREST INCOME AND EXPENSE DETAIL | ||||||||
| Interest income on: | ||||||||
| Loans | $ 6,436 | $ 6,231 | $ 6,197 | $ 6,427 | $ 6,667 | $ 18,864 | $ 19,946 | |
| Mortgage-backed securities | 453 | 564 | 539 | 650 | 702 | 1,556 | 2,068 | |
| Investment securities | 699 | 731 | 712 | 730 | 705 | 2,154 | 2,155 | |
| Other interest-earning assets | -- | -- | 2 | 2 | -- | 2 | 1 | |
| Total interest-earning assets | $ 7,588 | $ 7,526 | $ 7,450 | $ 7,809 | $ 8,074 | $ 22,576 | $ 24,170 | |
| Interest expense on: | ||||||||
| Deposits | $ 803 | $ 926 | $ 1,066 | $ 1,139 | $ 1,430 | $ 2,795 | $ 4,328 | |
| FHLB advances and other borrowed money | 338 | 351 | 405 | 411 | 473 | 1,094 | 1,537 | |
| Total interest-bearing liabilities | $ 1,141 | $ 1,277 | $ 1,471 | $ 1,550 | $ 1,903 | $ 3,889 | $ 5,865 | |
| Net interest income: tax equivalent basis | $ 6,447 | $ 6,249 | $ 5,979 | $ 6,259 | $ 6,171 | $ 18,687 | $ 18,305 | |
| Tax equivalent adjustment on investment securities | 193 | 198 | 187 | 196 | 166 | 590 | 495 | |
| Net interest income | $ 6,254 | $ 6,051 | $ 5,792 | $ 6,063 | $ 6,005 | $ 18,097 | $ 17,810 | |
| NON-INTEREST INCOME DETAIL | ||||||||
| Service fees, charges and other | $ 433 | $ 448 | $ 458 | $ 478 | $ 476 | $ 1,339 | $ 1,359 | |
| Impairment adjustment to mortgage servicing rights | (53) | (75) | 39 | (22) | (178) | (89) | (117) | |
| Bank-owned life insurance | 152 | 152 | 152 | 157 | 160 | 456 | 481 | |
| Gain on sale of investment securities | -- | -- | -- | 550 | -- | -- | 210 | |
| Gain on sale of loans | 382 | 214 | 324 | 232 | 125 | 920 | 292 | |
| Gain on disposition of real estate | -- | -- | 264 | -- | -- | 264 | -- | |
| NON-INTEREST EXPENSE DETAIL | ||||||||
| Compensation and benefits | $ 2,651 | $ 2,697 | $ 2,874 | $ 2,573 | $ 2,584 | $ 8,222 | $ 7,952 | |
| Occupancy and equipment | 686 | 672 | 710 | 719 | 699 | 2,068 | 2,253 | |
| Professional fees | 349 | 174 | 351 | 266 | 263 | 874 | 1,065 | |
| Marketing and advertising | 76 | 106 | 85 | 55 | 88 | 267 | 257 | |
| FDIC insurance premiums | 146 | 150 | 151 | 149 | 142 | 447 | 526 | |
| Loss on foreclosed real estate | -- | 246 | 179 | 285 | 254 | 425 | 254 | |
| Operating expenses on foreclosed real estate | 78 | 94 | 108 | 23 | 63 | 280 | 243 | |
| Other operating | 480 | 510 | 598 | 495 | 573 | 1,588 | 1,702 | |
| T F FINANCIAL CORPORATION | ||||||||
| UNAUDITED FINANCIAL INFORMATION | ||||||||
| (dollars in thousands except per share data) | PERIOD ENDED | |||||||
| 9/30/2012 | 6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | ||||
| DEPOSIT INFORMATION | ||||||||
| Non-interest checking | $ 50,421 | $ 47,826 | $ 49,408 | $ 43,910 | $ 46,591 | |||
| Interest checking | 70,797 | 74,925 | 69,195 | 65,677 | 65,614 | |||
| Money market | 153,351 | 151,375 | 154,417 | 155,010 | 150,142 | |||
| Savings | 106,693 | 107,924 | 108,219 | 105,617 | 103,871 | |||
| CDs | 152,011 | 164,990 | 180,962 | 181,074 | 185,460 | |||
| OTHER INFORMATION | ||||||||
| Per Share | ||||||||
| Book value | $ 28.89 | $ 28.25 | $ 27.71 | $ 27.33 | $ 27.44 | |||
| Tangible book value | $ 27.37 | $ 26.73 | $ 26.18 | $ 25.81 | $ 25.91 | |||
| Closing market price | $ 23.79 | $ 24.66 | $ 24.20 | $ 22.72 | $ 19.25 | |||
| Balance Sheet | ||||||||
| Loans | $ 541,610 | $ 519,946 | $ 498,357 | $ 502,713 | $ 515,318 | |||
| Cash and cash equivalents | 3,712 | 4,367 | 22,340 | 14,928 | 14,475 | |||
| Mortgage-backed securities | 51,463 | 58,753 | 63,988 | 58,970 | 63,029 | |||
| Investment securities | 63,822 | 66,012 | 69,556 | 65,778 | 65,514 | |||
| Total assets | 697,056 | 685,387 | 693,421 | 681,929 | 695,168 | |||
| Total deposits | 533,273 | 547,040 | 562,201 | 551,288 | 551,678 | |||
| FHLB advances and other borrowed money | 75,156 | 51,084 | 46,685 | 46,908 | 59,500 | |||
| Stockholders' equity | 81,965 | 80,102 | 78,528 | 77,408 | 77,499 | |||
| Asset Quality | ||||||||
| Non-performing loans | $ 10,400 | $ 12,566 | $ 13,889 | $ 12,541 | $ 17,103 | |||
| Allowance for loan losses | $ 6,772 | $ 6,163 | $ 6,981 | $ 8,100 | $ 9,586 | |||
| Net charge-offs | $ 141 | $ 1,318 | $ 1,619 | $ 2,337 | $ 49 | |||
| Allowance for loan losses to non-performing loans | 65.12% | 49.05% | 50.26% | 64.59% | 56.05% | |||
| Allowance for loan losses to gross loans | 1.25% | 1.19% | 1.40% | 1.61% | 1.86% | |||
| Non-performing loans to gross loans | 1.92% | 2.42% | 2.79% | 2.49% | 3.32% | |||
| Non-performing loans to total assets | 1.49% | 1.83% | 2.00% | 1.84% | 2.46% | |||
| Foreclosed property | $ 7,619 | $ 6,625 | $ 10,247 | $ 11,730 | $ 8,909 | |||
| Foreclosed property to total assets | 1.09% | 0.97% | 1.48% | 1.72% | 1.28% | |||
| Non-performing assets to total assets | 2.59% | 2.80% | 3.48% | 3.56% | 3.74% | |||
| Statistical | ||||||||
| Shares outstanding (000's) | 2,837 | 2,835 | 2,834 | 2,832 | 2,824 | |||
| Number of branch offices | 14 | 14 | 14 | 14 | 14 | |||
| Full time equivalent employees | 167 | 171 | 176 | 168 | 172 | |||
| (1) The efficiency ratio is non-interest expense excluding loss on foreclosed real estate 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, and gain on disposition of real estate. | ||||||||
CONTACT: Dennis R. Stewart, EVP/CFO
(215) 579-4000