May 2014
Dear Shareholder:
Enclosed is our latest earnings release, which includes results for the first quarter of 2014. As noted in the release, net income for the three-month period ended March 31, 2014 was $1,381,000 ($0.45 per diluted share) which was a 12.9% increase when compared with $1,223,000 ($0.45 per diluted share) reported for the comparable period of 2013. We also announced that the Board of Directors declared a quarterly dividend of $0.12 per share, payable May 15, 2014 to shareholders of record on May 8, 2014.
We turned in another consecutive solid quarter to start off the year, continuing the momentum achieved throughout 2013. As I noted in the remarks I made during our Annual Meeting, in 2013 we produced the highest level of net income since we were founded in 1921. Our balance sheet, income statement and stockholders’ equity have never been stronger.
Among the encouraging developments during the quarter was ongoing significant improvement in asset quality. Total non-performing assets declined to 0.38% of total assets at March 31, 2014, which is down from 1.00% at December 31, 2013. Non-performing loans totaled $3.2 million at March 31, 2014, down from $8.3 million at December 31, 2013.
Of special note is the fact that the loan loss provision was $0 during the first quarter of 2014, compared with $0.4 million during the first quarter of 2013. The Company’s allowance for loan losses was $4.1 million or 126.3% of non-performing loans at quarter-end, which is very healthy coverage when compared with 78.9% of non-performing loans at year end 2013. Largely influencing the reduction in non-performing loans was the resolution of two sizeable problem loans totaling $4.2 million, which were resolved by repayment in full of one loan, and partial repayment plus a $2.2 million charge-off of the remainder of the other loan.
Asset quality has steadily improved to levels that are comparable to or better than where we were pre-recession. In addition, we have successfully assimilated Roebling Financial Corp, Inc. and we are now largely focused on returning to the business of growth-oriented core banking. We have strengthened our commercial lending, consumer banking, mortgage origination and marketing teams with new leaders and other experienced people. As we closed out 2013, we launched a series of multi-faceted, franchise-wide loan promotions that continued in full force during the first quarter of 2014.
Now, as we move forward, we believe that we can deliver consistent, balanced organic growth and profitability over the coming quarters. We note that there has been substantial pipeline growth in commercial loan originations that should produce greater revenue in 2014.
On a lighter note, at the end of the year a variety of awards get presented to area banks for the coming year, based on the quality of their products, customer service, friendliness and popularity. This
3 PENNS TRAIL NEWTOWN, PA 18940 215-579-4000
information is gathered independently by various newspapers and other publications. As in past years, we scored well. Just to name a few, we were named:
2014 Best Bank in Bucks and Montgomery Counties by Bucks Happening Magazine
Best Workplaces by the Philadelphia Inquirer and Philly.com in 2014
2014 Best Work Place (Best Employer Based upon Work Atmosphere) by three publications: the Courier Times, Intelligencer, and Burlington County Times
We think it’s important to note that these awards represent an ongoing trend of awareness in our market areas of our superior customer service. We have also been recognized recently as a top local employer and workplace. Examples of such recognition include: Best Mid-Sized Company and One of Best Places to Work (2012), both presented by The Greater Philadelphia Media Group; Best Bank in Doylestown (2012) and Best Bank in Newtown - 2nd Place (2012), both presented by Patch.com. These are only a handful of more than a dozen such commendations received over the past few years. We think it’s a meaningful testimonial regarding the dedication of our people and the culture we have fostered in our Company.
On behalf of your board of directors, our management team and all of our loyal employees, we appreciate your support as we complete another successful year.
Cautionary Note Regarding Forward-Looking Statements
The foregoing material contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, concerning the financial condition, results of operations and business of TF Financial Corporation. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about events or results or otherwise are not statements of historical facts, including statements about delivering consistent, balanced organic growth and profitability over the coming quarters and our ability to produce greater revenue in 2014 as a result of substantial pipeline growth in commercial loan originations. Actual results and trends could differ materially from those set forth in such statements and there can be no assurances that we will deliver consistent, balanced organic growth and profitability over the coming quarters or that we will be able to produce greater revenue in 2014 as a result of substantial pipeline growth in commercial loan originations. We caution that such statements are subject to a number of uncertainties, including those detailed under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in TF Financial Corporation’s Form 10-K for the fiscal year ended December 31, 2013, Form 10-Q for the quarter ended March 31, 2014, and in other filings made pursuant to the Securities Exchange Act of 1934, as amended. Therefore, readers should not place undue reliance on any forward-looking statements. TF Financial Corporation does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
