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TF Financial Corporation Reports Improved First Quarter 2013 Results And Quarterly Dividend

NEWTOWN, Pa., April 25, 2013 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,223,000 ($0.45 per diluted share) for the first quarter of 2013, a 5.9% increase when compared with $1,155,000 ($0.42 per diluted share) for the first quarter of 2012. The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable May 15, 2013, to shareholders of record on May 8, 2013.

"We produced another consistent, profitable quarter in which there was excellent progress in reducing problem assets," said Kent C. Lufkin, President and Chief Executive Officer. "Nonperforming loans declined to $7.6 million or 1.45% of total loans at quarter end, down from $13.9 million or 2.79% of total loans at quarter-end a year ago. Notably, foreclosed properties were reduced by $3.1 million year-over-year to $7.2 million at March 31, 2013."

"Encouragingly, the local economy continues to improve and good, well-qualified borrowers are stepping up both consumer and commercial loan demand as they re-enter the marketplace. Our commercial loan pipelines are currently stronger than at any point of the past 24 months," Lufkin said.

Results for the first quarter included:

  • Pre-tax income was $1,804,000 for the quarter, an increase of $331,000 over the first quarter of 2012. The key drivers of this increase were an $86,000 increase in net interest income, a $61,000 decrease in the provision for loan losses and a $158,000 increase in non-interest income, mainly the result of a $417,000 gain related to an eminent domain matter affecting a parcel of Company property, a $153,000 increase over the amount recorded in 2012 related to the same matter, which is now finalized. Weighing on operating results during the first quarter of 2013 compared with the first quarter of 2012 were $320,000 of merger costs, treated as non-deductible for tax purposes at this time, related to the previously-announced agreement for the acquisition of Roebling Financial Corp, Inc. by the Company. These expenses were largely the cause of the increase in the Company's effective tax rate to 32.2% during the first quarter of 2013 from 21.6% during the first quarter of 2012.
  • Net interest income was $5,878,000 which was an $86,000 or 1.5% increase when compared with the first quarter of 2012, driven by a $25.3 million increase in average earning assets, while the Company's net interest margin decreased by a modest 5 basis points to 3.73% from 3.78%. The yields on the Company's interest-earning assets fell by 38 basis points for the first quarter of 2013 compared with the first quarter of 2012, mainly due to the consequences of record-low market interest rates which have existed since the first quarter of 2012, causing mortgage loan borrowers to refinance their higher rate loans into those with lower rates and the resulting downward drift in the Company's loan and mortgage-backed securities yields. However, the cost of the Company's interest bearing liabilities improved by 34 basis points since the first quarter of 2012, primarily the result of a 24 basis point or 31.2% improvement in the cost of deposits, due to a favorable change in the deposit pricing and mix, and the maturity of time deposits which had been originated during periods of higher market interest rates.
  • The provision for loan losses was $439,000 for the quarter compared with $500,000 for the first quarter of 2012. The allowance for loan losses stood at approximately $6.7 million at March 31, 2013. Charge-offs during the first quarter of 2013 were $699,000 compared with $1.6 million during the first quarter of 2012. The allowance for loan losses was 1.26% of total loans and 87.12% of non-performing loans at March 31, 2013.
  • Asset quality continued to show improvement with total non-performing assets at 2.07% of total assets, down from 2.20% at year end 2012 and 3.48% at March 31, 2012. Non-performing loans were $7.6 million or 1.45% of total loans at quarter end compared with $8.4 million or 1.56% of total loans at December 31, 2012 and $13.9 million or 2.79% of total loans at March 31, 2012. Foreclosed property at March 31, 2013 was $7.2 million compared with $7.3 million at December 31, 2012 and $10.2 million at March 31, 2012.
  • Loans totaled were $528.2 million, a $29.9 million or 6.0% increase since the end of the first quarter of 2012. Mortgage loans originated for sale were $11.7 million compared with $15.9 million for the first quarter of 2012.
  • At quarter end, total deposits were $571.3 million, an $11.0 million or 2.0% increase when compared with December 31, 2012, led by a $5.0 million increase in non-interest bearing checking accounts.
  • Non-interest expenses were $26,000 lower in the first quarter of 2013 compared to the first quarter of 2012. However, excluding merger-related expenses, total non-interest expenses were $346,000 lower during the first quarter of 2013 compared with the first quarter of 2012, with each category of expenses showing improvement. The Company's efficiency ratio, which excludes certain non-operating items, was 64.56% during the first quarter of 2013 compared with 70.55% during the first quarter of 2012.

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. 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
  3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
           
EARNINGS SUMMARY          
           
Interest income  $ 6,857  $ 7,234  $ 7,395  $ 7,328  $ 7,263
Interest expense 979 1,048 1,141 1,277 1,471
Net interest income 5,878 6,186 6,254 6,051 5,792
Loan loss provision 439 650 750 500 500
Non-interest income 1,395 1,196 914 739 1,237
Non-interest expense 5,030 4,690 4,466 4,649 5,056
Income before taxes  1,804 2,042 1,952 1,641 1,473
Income taxes 581 536 479 392 318
Net income  $ 1,223  $ 1,506  $ 1,473  $ 1,249  $ 1,155
           
PER SHARE INFORMATION          
           
Earnings per share, basic   $ 0.45  $ 0.55  $ 0.54  $ 0.46  $ 0.42
Earnings per share, diluted   $ 0.45  $ 0.55  $ 0.54  $ 0.46  $ 0.42
           
Weighted average basic shares (000's)  2,738  2,733  2,729  2,724  2,719
Weighted average diluted shares (000's)   2,742  2,734  2,732  2,728  2,722
           
Dividends paid   $ 0.05  $ 0.05  $ 0.05  $ 0.05  $ 0.05
           
FINANCIAL RATIOS          
           
Annualized return on average assets 0.70% 0.86% 0.84% 0.74% 0.68%
Annualized return on average equity 5.92% 7.21% 7.21% 6.31% 5.94%
Efficiency ratio (1) 64.56% 60.98% 60.24% 62.34% 70.55%
           
REGULATORY CAPITAL RATIOS          
Tier 1 leverage ratio 10.50% 10.45% 10.47% 10.45% 10.21%
Total risk-based capital ratio 17.90% 17.89% 17.62% 17.37% 17.41%
Tier 1 risk-based capital ratio 16.65% 16.63% 16.37% 16.13% 16.16%
           
T F FINANCIAL CORPORATION          
UNAUDITED FINANCIAL INFORMATION          
(dollars in thousands except per share data) QUARTER ENDED
  3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
AVERAGE BALANCES          
           
Loans  $ 525,275  $ 530,026  $ 527,195  $ 501,757  $ 493,396
Mortgage-backed securities 41,988 49,383 55,820 61,580 61,971
Investment securities 65,131 63,773 64,304 68,181 67,035
Other interest-earning assets 28,877 6,482 393 3,074 13,619
Total earning assets 661,271 649,664 647,712 634,592 636,021
Non-earning assets 46,572 46,985 46,168 48,329 50,557
Total assets 707,843 696,649 693,880 682,921 686,578
           
Deposits 560,750 539,653 538,637 550,040 554,523
FHLB advances and other borrowed money 56,114 66,223 66,740 46,785 47,387
Total interest bearing liabilities 616,864 605,876 605,377 596,825 601,910
Non-interest bearing liabilities 7,216 7,629 7,179 6,486 6,523
Stockholders' equity 83,763 83,144 81,324 79,610 78,145
Total liabilities & stockholders' equity  $ 707,843  $ 696,649  $ 693,880  $ 682,921  $ 686,578
           
SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT)          
           
Average yield on:          
Loans 4.68% 4.76% 4.86% 4.99% 5.05%
Mortgage-backed securities 2.64% 3.04% 3.23% 3.68% 3.50%
Investment securities 4.43% 4.37% 4.32% 4.31% 4.27%
Other interest-earning assets 0.06% 0.37% 0.00% 0.00% 0.06%
Total interest-earning assets 4.33% 4.55% 4.66% 4.77% 4.71%
           
Average cost of:          
Deposits 0.53% 0.54% 0.59% 0.68% 0.77%
FHLB advances and other borrowed money 1.79% 1.87% 2.01% 3.02% 3.44%
Total interest-bearing liabilities 0.64% 0.69% 0.75% 0.86% 0.98%
           
Interest rate spread 3.68% 3.86% 3.91% 3.91% 3.73%
Net interest margin 3.73% 3.90% 3.96% 3.96% 3.78%
           
T F FINANCIAL CORPORATION          
UNAUDITED FINANCIAL INFORMATION          
(dollars in thousands except per share data) QUARTER ENDED
  3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
INTEREST INCOME AND EXPENSE DETAIL          
           
Interest income on:          
Loans  $ 6,066  $ 6,341  $ 6,436  $ 6,231  $ 6,197
Mortgage-backed securities  273  377  453  564  539
Investment securities  711  701  699  731  712
Other interest-earning assets  4  6  --   --   2
Total interest-earning assets  $ 7,054  $ 7,425  $ 7,588  $ 7,526  $ 7,450
           
Interest expense on:          
Deposits  $ 731  $ 737  $ 803  $ 926  $ 1,066
FHLB advances and other borrowed money  248  311  338  351  405
Total interest-bearing liabilities  $ 979  $ 1,048  $ 1,141  $ 1,277  $ 1,471
           
Net interest income: tax equivalent basis  $ 6,075  $ 6,377  $ 6,447  $ 6,249  $ 5,979
Tax equivalent adjustment on investment securities  197  191  193  198  187
Net interest income  $ 5,878  $ 6,186  $ 6,254  $ 6,051  $ 5,792
           
NON-INTEREST INCOME DETAIL          
           
Service fees, charges and other  $ 497  $ 484  $ 433  $ 448  $ 458
Impairment adjustment to mortgage servicing rights  33  50  (53)  (75)  39
Bank-owned life insurance  143  147  152  152  152
Gain on sale of investment securities  --   85  --   --   -- 
Gain on sale of loans  305  430  382  214  324
Gain on disposition of real estate  417  --   --   --   264
           
NON-INTEREST EXPENSE DETAIL          
           
Compensation and benefits  $ 2,817  $ 2,760  $ 2,651  $ 2,697  $ 2,874
Occupancy and equipment  697  727  686  672  710
Professional fees  288  302  349  174  351
Merger-related costs  320  108  --   --   -- 
Marketing and advertising  39  79  76  106  85
FDIC insurance premiums  110  149  146  150  151
Loss on foreclosed real estate   178  46  --   246  179
Operating expenses on foreclosed real estate  46  60  78  94  108
Other operating  535  459  480  510  598
           
T F FINANCIAL CORPORATION          
UNAUDITED FINANCIAL INFORMATION          
(dollars in thousands except per share data) PERIOD ENDED
  3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
DEPOSIT INFORMATION          
           
Non-interest checking  $ 57,422  $ 52,433  $ 50,421  $ 47,826  $ 49,408
Interest checking 78,263 76,370 70,797 74,925 69,195
Money market 156,736 153,827 153,351 151,375 154,417
Savings 108,554 106,268 106,693 107,924 108,219
CD's 170,355 171,417 152,011 164,990 180,962
           
OTHER INFORMATION          
           
Per Share          
           
Book value   $ 29.37  $ 29.23  $ 28.89  $ 28.25  $ 27.71
Tangible book value   $ 27.85  $ 27.70  $ 27.37  $ 26.73  $ 26.18
Closing market price  $ 25.15  $ 23.83  $ 23.79  $ 24.66  $ 24.20
           
Balance Sheet          
           
Loans  $ 528,229  $ 534,348  $ 541,610  $ 519,946  $ 498,357
Cash and cash equivalents 48,690 31,137 3,712 4,367 22,340
Mortgage-backed securities 38,320 44,639 51,463 58,753 63,988
Investment securities 63,987 65,041 63,822 66,012 69,556
Total assets 716,002 711,836 697,056 685,387 693,421
Total deposits 571,330 560,315 533,273 547,040 562,201
FHLB advances and other borrowed money 54,151 60,656 75,156 51,084 46,685
Stockholders' equity 83,408 82,945 81,965 80,102 78,528
           
Asset Quality          
           
Non-performing loans  $ 7,647  $ 8,359  $ 10,400  $ 12,566  $ 13,889
Allowance for loan losses   $ 6,662  $ 6,922  $ 6,772  $ 6,163  $ 6,981
Net charge-offs   $ 699  $ 500  $ 141  $ 1,318  $ 1,619
Allowance for loan losses to non-performing loans 87.12% 82.81% 65.12% 49.05% 50.26%
Allowance for loan losses to gross loans 1.26% 1.30% 1.25% 1.19% 1.40%
Non-performing loans to gross loans 1.45% 1.56% 1.92% 2.42% 2.79%
Non-performing loans to total assets 1.07% 1.17% 1.49% 1.83% 2.00%
Foreclosed property  $ 7,170  $ 7,282  $ 7,619  $ 6,625  $ 10,247
Foreclosed property to total assets 1.00% 1.02% 1.09% 0.97% 1.48%
Non-performing assets to total assets 2.07% 2.20% 2.59% 2.80% 3.48%
           
Statistical          
           
Shares outstanding (000's)  2,840  2,838  2,837  2,835  2,834
Number of branch offices  13  13  14  14  14
Full time equivalent employees  165  167  167  171  176
           
(1) The efficiency ratio is non-interest expense excluding merger-related costs and 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

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