EXHIBIT 99.1
TF Financial Corporation Announces 2006 Results and an Increased Quarterly Dividend
NEWTOWN, Pa., Jan. 25, 2007 (PRIME NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $5,514,000 ($2.03 per diluted share) for 2006, compared with $6,153,000 ($2.20 per diluted share) for 2005. Net income for the three month period ended December 31, 2006 was $1,455,000 ($0.53 per diluted share) compared with $1,527,000 ($0.55 per diluted share) during the comparable period of 2005. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share, payable February 15, 2007 to shareholders of record on February 8, 2007. This dividend is a 5.3% increase over the amount paid during the fourth quarter of 2006.
Highlights for 2006 include: * Net interest income decreased by a modest 1.2% during 2006 despite four 25 basis point increases in the federal funds rate by the Federal Reserve during the year, which typically results in higher short-term market interest rates and drives up the cost of the Company's core deposits. In addition, the Company operates in some highly competitive deposit markets, and needed to respond by offering several new products with very attractive interest rates. * The net interest margin was 3.60% during 2006, a 13 basis point decrease from 2005. Nevertheless, this net interest margin places us in the top quartile of our savings bank peers. * Loans decreased by $6.4 million or 1.3% to $485 million. However, this decrease includes a one-time loan sale of $16.3 million during July, and a $15 million net decrease during the fourth quarter due to a large number of unscheduled loan repayments. Still, the loans to deposits ratio was over 101% at December 31 and the Company produced strong loan volume throughout the year. * Return on assets and return on equity were a strong 0.83% and 8.68%, respectively, during the year. * Affecting year to year comparability, operating results for 2006 absorbed $747,000 of stock-based compensation expense due in part to a new accounting principle, adopted during the first quarter of 2006, requiring the expensing of the value of stock options. * Dividends for the year were $0.76 per share, up 5.6% from the $0.72 paid during 2005.
Commenting on the state of the Company, President Kent C. Lufkin said that "we have spent the last three years creating a highly recognizable brand and image in our markets through marketing, community involvement, and customer service. We feel that these efforts produced meaningful returns for shareholders during 2006 as evidenced by the strong loan production we were able to maintain in a softening real estate market, and the relatively stable level of our deposits in a very challenging deposit market."
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. 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) THREE MONTHS ---------------------- INC 12/31/2006 12/31/2005 (DEC) ---------- ---------- ------ EARNINGS SUMMARY Interest income $ 9,678 $ 8,927 8.4% Interest expense 4,224 3,281 28.7% Net interest income 5,454 5,646 -3.4% Loan loss provision 0 90 -100.0% Non-interest income 691 647 6.8% Non-interest expense 4,127 4,010 2.9% Income taxes 563 666 -15.5% Net income $ 1,455 $ 1,527 -4.7% PER SHARE INFORMATION Earnings per share, basic $ 0.54 $ 0.56 -3.6% Earnings per share, diluted $ 0.53 $ 0.55 -3.6% Dividends paid $ 0.19 $ 0.18 5.6% FINANCIAL RATIOS Annualized return on average assets 0.88% 0.93% -5.4% Annualized return on average equity 8.80% 9.80% -10.2% Efficiency ratio 67.16% 64.65% 3.9% AVERAGE BALANCES Loans $496,343 $479,580 3.5% Mortgage-backed securities 77,725 96,502 -19.5% Investment securities 42,628 41,261 3.3% Other interest-earning assets 2,198 1,493 47.2% Total earning assets 618,894 618,836 0.0% Non-earning assets 35,639 33,923 5.1% Total assets 654,533 652,759 0.3% Deposits 475,707 466,081 2.1% FHLB advances 105,727 117,980 -10.4% Total interest bearing liabilities 581,434 584,061 -0.4% Non-interest bearing liabilities 7,515 6,904 8.8% Stockholders' equity 65,584 61,794 6.1% Total liabilities & stockholders' equity $654,533 $652,759 0.3% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.60% 6.09% Mortgage-backed securities 4.50% 4.71% Investment securities 5.81% 4.69% Other interest-earning assets 5.23% 4.52% Average cost of: Deposits 2.64% 1.86% FHLB advances 3.97% 3.70% Interest rate spread 3.40% 3.55% Net interest margin 3.57% 3.68% NON-INTEREST INCOME DETAIL Retail banking fees $ 643 $ 629 2.2% Gain on sale of loans $ 48 $ 18 166.7% NON-INTEREST EXPENSE DETAIL Salaries and benefits 2,432 2,233 8.9% Stock-based compensation 189 -- 0.0% Occupancy 664 693 -4.2% Deposit insurance 15 16 -6.3% Professional fees 264 166 59.0% Deposit intangible amortization -- 28 -100.0% Advertising (28) 220 -112.7% Other 591 654 -9.6% T F FINANCIAL CORPORATION UNAUDITED FINANCIAL INFORMATION (dollars in thousands except per share data) TWELVE MONTHS ---------------------- INC 12/31/2006 12/31/2005 (DEC) ---------- ---------- ------ EARNINGS SUMMARY Interest income $ 38,019 $ 33,965 11.9% Interest expense 15,861 11,532 37.5% Net interest income 22,158 22,433 -1.2% Loan loss provision 150 540 -72.2% Non-interest income 2,810 2,728 3.0% Non-interest expense 17,168 16,168 6.2% Income taxes 2,136 2,300 -7.1% Net income $ 5,514 $ 6,153 -10.4% PER SHARE INFORMATION Earnings per share, basic $ 2.04 $ 2.25 -9.3% Earnings per share, diluted $ 2.03 $ 2.20 -7.7% Dividends paid $ 0.76 $ 0.72 5.6% FINANCIAL RATIOS Annualized return on average assets 0.83% 0.96% -13.5% Annualized return on average equity 8.68% 10.16% -14.6% Efficiency ratio 69.18% 65.67% 5.3% AVERAGE BALANCES Loans $502,048 $462,389 8.6% Mortgage-backed securities 81,750 108,029 -24.3% Investment securities 41,984 37,357 12.4% Other interest-earning assets 1,653 1,910 -13.5% Total earning assets 627,435 609,685 2.9% Non-earning assets 35,050 34,215 2.4% Total assets 662,485 643,900 2.9% Deposits 468,933 465,521 0.7% FHLB advances 122,671 111,628 9.9% Total interest bearing liabilities 591,604 577,149 2.5% Non-interest bearing liabilities 7,332 6,199 18.3% Stockholders' equity 63,549 60,552 4.9% Total liabilities & stockholders' equity $662,485 $643,900 2.9% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.44% 5.96% Mortgage-backed securities 4.55% 4.51% Investment securities 5.47% 4.75% Other interest-earning assets 5.69% 3.09% Average cost of: Deposits 2.33% 1.63% FHLB advances 4.03% 3.52% Interest rate spread 3.45% 3.62% Net interest margin 3.60% 3.73% NON-INTEREST INCOME DETAIL Retail banking fees $ 2,623 $ 2,570 2.1% Gain on sale of loans $ 238 $ 158 50.6% Gain (loss) on sales of securities (51) -- 0.0% NON-INTEREST EXPENSE DETAIL Salaries and benefits 9,889 9,249 6.9% Stock-based compensation 747 -- 0.0% Occupancy 2,834 2,645 7.1% Deposit insurance 60 64 -6.3% Professional fees 739 814 -9.2% Deposit intangible amortization 83 130 -36.2% Advertising 500 773 -35.3% Other 2,316 2,493 -7.1% T F FINANCIAL CORPORATION UNAUDITED FINANCIAL INFORMATION (dollars in thousands except per share data) AT DECEMBER 31, -------------------- INC 2006 2005 (DEC) -------- -------- ----- DEPOSIT INFORMATION Non-interest checking $ 36,991 $ 37,138 -0.4% Interest checking 51,272 52,319 -2.0% Money market 62,914 79,666 -21.0% Savings 131,359 151,725 -13.4% CD's,retail 183,847 149,673 22.8% CD's,broker 11,704 -- 0.0% OTHER INFORMATION Per Share Book value (a) $ 24.55 $ 23.08 Tangible book value (a) $ 22.95 $ 21.46 Closing market price $ 31.00 $ 28.45 Balance Sheet Loans,net $484,539 $490,959 -1.3% Cash and cash equivalents 12,364 3,821 223.6% Mortgage-backed securities 82,035 93,688 -12.4% Investment securities 42,371 42,563 -0.5% Total assets 653,641 660,839 -1.1% Total deposits 478,087 470,521 1.6% FHLB advances and other 101,701 121,260 -16.1% Stockholders' equity 66,352 62,648 5.9% Asset Quality Non-performing loans 2,110 1,588 32.9% Loan loss reserves 2,865 2,641 8.5% Reserves to gross loans 0.59% 0.54% 9.3% Non-performing loans to gross loans 0.43% 0.32% 34.4% Non-performing loans to total assets 0.32% 0.24% 33.3% Foreclosed property -- 700 -100.0% Foreclosed property to total assets 0.00% 0.11% -100.0% Non-performing assets to total assets 0.32% 0.35% -8.6% Statistical Shares outstanding (000's) (a) 2,703 2,714 Number of branch offices 15 15 Full time equivalent employees 189 172 (a) Excludes 171,000 and 185,000 unallocated employee stock ownership plan shares at December 31, 2006 and December 31, 2005, respectively.
CONTACT: TF Financial Corporation Dennis R. Stewart, EVP/CFO (215) 579-4000