EXHIBIT 99.1
TF Financial Corporation Reports Third Quarter 2006 Results and Quarterly Dividend
NEWTOWN, Pa., Oct. 26, 2006 (PRIMEZONE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,412,000 ($0.52 per diluted share) for the third quarter of 2006, compared with $1,545,000 ($0.55 per diluted share) during the third quarter of 2005. Net income for the nine month period ended September 30, 2006 was $4,059,000 ($1.49 per diluted share) compared with $4,626,000 ($1.64 per diluted share) during the first nine months of 2005. The Company also announced that its Board of Directors declared a quarterly dividend of $0.19 per share, payable November 15, 2006 to shareholders of record on November 8.
Highlights for the current quarter included:
-- Interest income increased by 12% compared to the third quarter of 2005 mainly due to strong loan growth since the year-ago period. -- Total deposits decreased by $9.3 million during the quarter and are essentially flat for the year. The Company's net interest margin was 3.59% during the quarter compared with 3.63% during the second quarter of 2006, and 3.67% during the third quarter of 2005. Thus, the Company has experienced minimal spread compression compared to that experienced by many community banks. -- Affecting year to year comparability, operating results for the third quarter of 2006 contained $188,000 of stock-based compensation expense due in part to the adoption during the first quarter of 2006 of a new accounting principle requiring the expensing of the value of stock options. -- Dividends paid in the quarter were $0.19 per share, up 5.6% from the $0.18 per share paid during the third quarter of 2005.
Commenting on the performance of the company, President Kent C. Lufkin stated, "Through the third quarter of 2006, we continued to face the challenge of protecting our net interest margin in an extremely competitive deposit/funding environment. Third Federal responded to this challenge by offering a variety of new deposit products, attractively priced, in order to manage potential deposit attrition without entirely repricing existing products, and to offer these new products to potential customers. Loan originations, while still above expectations, have begun to slow as demand has lessened and borrowing rates have increased. Simultaneously, we continue to aggressively investigate opportunities to reduce operating expenses and will introduce several new fee income generating services during the fourth quarter of this year."
TF Financial Corporation is a holding company whose principal subsidiary is Third Federal Bank, which operates 15 full service retail and commercial banking offices in Philadelphia and Bucks County, Pennsylvania and in Mercer County, New Jersey. In addition, the Bank's website can be found at www.thirdfedbank.com. Interested parties can find a wealth of financial information on the website by selecting the "Investor Relations" option.
Statements contained in this news release, which 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 FINANCIAL INFORMATION (dollars in thousands except per share data) THREE MONTHS ------------ INC 9/30/2006 9/30/2005 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 9,611 $ 8,570 12.1% Interest expense 4,093 2,987 37.0% Net interest income 5,518 5,583 -1.2% Loan loss provision 0 150 -100.0% Non-interest income 813 742 9.6% Non-interest expense 4,370 4,084 7.0% Income taxes 549 546 0.5% Net income $ 1,412 $ 1,545 -8.6% PER SHARE INFORMATION Earnings per share, basic $ 0.52 $ 0.57 -8.8% Earnings per share, diluted $ 0.52 $ 0.55 -5.5% Dividends paid $ 0.19 $ 0.18 5.6% FINANCIAL RATIOS Annualized return on average assets 0.85% 0.95% -10.5% Annualized return on average equity 8.79% 10.21% -13.9% Efficiency ratio 69.03% 66.14% 4.4% AVERAGE BALANCES Loans $501,012 $465,712 7.6% Mortgage-backed securities 75,620 104,148 -27.4% Investment securities 41,957 39,553 6.1% Other interest-earning assets 2,987 2,631 13.5% Total earning assets 621,576 612,044 1.6% Non-earning assets 35,058 33,179 5.7% Total assets 656,634 645,223 1.8% Deposits 471,556 473,801 -0.5% FHLB advances 114,070 104,918 8.7% Total interest bearing liabilities 585,626 578,719 1.2% Non-interest bearing liabilities 7,297 6,469 12.8% Stockholders' equity 63,711 60,035 6.1% Total liabilities & stockholders' equity $656,634 $645,223 1.8% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.53% 5.99% Mortgage-backed securities 4.57% 4.32% Investment securities 5.25% 4.67% Other interest-earning assets 5.71% 3.02% Average cost of: Deposits 2.48% 1.72% FHLB advances 3.98% 3.54% Interest rate spread 3.43% 3.56% Net interest margin 3.59% 3.67% NON-INTEREST INCOME DETAIL Retail banking fees $ 661 $ 632 4.6% Gain on sale of loans $ 152 $ 110 38.2% Gain (loss) on sales of securities 0 0 0.0% NON-INTEREST EXPENSE DETAIL Salaries and benefits 2,505 2,322 7.9% Stock-based compensation 188 0 n/a Occupancy 772 651 18.6% Deposit insurance 15 15 0.0% Professional fees 128 211 -39.3% Deposit intangible amortization 27 34 -20.6% Advertising 176 191 -7.9% Other 559 660 -15.3% T F FINANCIAL CORPORATION FINANCIAL INFORMATION (dollars in thousands except per share data) NINE MONTHS ----------- INC 9/30/2006 9/30/2005 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 28,341 $ 25,038 13.2% Interest expense 11,637 8,251 41.0% Net interest income 16,704 16,787 -0.5% Loan loss provision 150 450 -66.7% Non-interest income 2,119 2,081 1.8% Non-interest expense 13,041 12,158 7.3% Income taxes 1,573 1,634 -3.7% Net income $ 4,059 $ 4,626 -12.3% PER SHARE INFORMATION Earnings per share, basic $ 1.50 $ 1.69 -11.2% Earnings per share, diluted $ 1.49 $ 1.64 -9.1% Dividends paid $ 0.57 $ 0.54 5.6% FINANCIAL RATIOS Annualized return on average assets 0.82% 0.97% -15.5% Annualized return on average equity 8.63% 10.29% -16.1% Efficiency ratio 69.84% 66.01% 5.8% AVERAGE BALANCES Loans $ 503,971 $ 456,596 10.4% Mortgage-backed securities 83,107 111,914 -25.7% Investment securities 41,767 36,041 15.9% Other interest-earning assets 1,469 2,050 -28.3% Total earning assets 630,314 606,601 3.9% Non-earning assets 34,851 34,313 1.6% Total assets 665,165 640,914 3.8% Deposits 466,652 465,333 0.3% FHLB advances 128,381 109,487 17.3% Total interest bearing liabilities 595,033 574,820 3.5% Non-interest bearing liabilities 7,269 5,961 21.9% Stockholders' equity 62,863 60,133 4.5% Total liabilities & stockholders' equity $ 665,165 $ 640,914 3.8% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.39% 5.92% Mortgage-backed securities 4.57% 4.46% Investment securities 5.26% 4.77% Other interest-earning assets 5.92% 2.74% Average cost of: Deposits 2.22% 1.56% FHLB advances 4.04% 3.46% Interest rate spread 3.46% 3.65% Net interest margin 3.60% 3.76% NON-INTEREST INCOME DETAIL Retail banking fees $ 1,980 $ 1,941 2.0% Gain on sale of loans $ 190 $ 140 35.7% Gain (loss) on sales of securities (51) 0 n/a NON-INTEREST EXPENSE DETAIL Salaries and benefits 7,457 7,016 6.3% Stock-based compensation 558 0 n/a Occupancy 2,170 1,952 11.2% Deposit insurance 45 48 -6.3% Professional fees 475 648 -26.7% Deposit intangible amortization 83 102 -18.6% Advertising 528 553 -4.5% Other 1,725 1,839 -6.2% T F FINANCIAL CORPORATION FINANCIAL INFORMATION (dollars in thousands except per share data) PERIOD ENDING ------------- INC 9/30/2006 12/31/2005 (DEC) --------- ---------- DEPOSIT DETAIL Non-interest checking $ 34,761 $ 37,138 -6.4% Interest checking 47,751 52,319 -8.7% Money market 58,886 79,666 -26.1% Savings 136,071 151,725 -10.3% CD's, retail 181,233 149,673 21.1% CD's, broker 11,696 0 n/a OTHER INFORMATION Per Share Book value (a) $ 24.22 $ 23.08 Tangible book value (a) $ 22.62 $ 21.46 Closing market price $ 30.64 $ 28.45 Balance Sheet Loans,net $500,029 $490,959 1.8% Cash and cash equivalents 6,492 3,821 69.9% Mortgage-backed securities 74,652 93,688 -20.3% Investment securities 43,721 42,563 2.7% Total assets 654,777 660,839 -0.9% Total deposits 470,398 470,521 0.0% FHLB advances and other 111,366 121,260 -8.2% Stockholders' equity 65,387 62,648 4.4% Asset Quality Non-performing loans 1,131 1,588 -28.8% Loan loss reserves 2,810 2,641 6.4% Reserves to gross loans 0.56% 0.54% 3.7% Non-performing loans to gross loans 0.22% 0.32% -31.3% Non-performing loans to total assets 0.17% 0.24% -29.2% Foreclosed property 0 700 -100.0% Foreclosed property to total assets 0.00% 0.11% -100.0% Non-performing assets to total assets 0.17% 0.35% -51.4% Statistical Shares outstanding (000's) (a) 2,700 2,714 Number of branch offices 15 15 Full time equivalent employees 183 172 (a) Excludes 171,000 and 185,000 employee stock ownership plan shares at September 30, 2006 and December 31, 2005, respectively
CONTACT: TF Financial Corporation Dennis R. Stewart, EVP/CFO (215) 579-4000