EXHIBIT 99.1
TF Financial Corporation Reports Second Quarter 2007 Results and Quarterly Dividend
NEWTOWN, Pa., July 26, 2007 (PRIME NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,037,000 ($0.38 per diluted share) for the second quarter of 2007, compared with $1,392,000 ($0.51 per diluted share) for the second quarter of 2006. Net income for the six month period ended June 30, 2007 was $2,435,000 ($0.89 per diluted share) compared with $2,647,000 ($0.98 per diluted share) for the first six months of 2006. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share, payable August 15, 2007 to shareholders of record on August 8, 2007.
Highlights for the current quarter included:
* Interest income decreased by 2.2% compared to the second quarter of 2006, consistent with the 2.8% decrease in average loans. However at quarter's end, total loans had surpassed $500.0 million, up 3.2% from year end 2006, and the Company continues to replace the loan payoffs that occurred after loans peaked at a record high of $517.9 million at June 30, 2006. In addition, interest income during the second quarter of 2007 was negatively impacted by a $111,000 addition to a reserve for delinquent loan interest as compared with the year earlier quarter. * Total retail deposits, which exclude broker CD's, increased by 2.1% to $483.1 million from $473.0 million at March 31, 2007 and by 3.2% from $468.0 million at June 30, 2006. However, retail deposit growth is not without its cost, as deposit interest expense increased by 65 basis points during the second quarter of 2007 compared with the year earlier quarter, and by 10 basis points as compared with the first quarter of 2007. * The Company's net interest margin was 3.25% during the quarter ended June 30, 2007 compared with 3.63% during the second quarter of 2006 and 3.37% during the first quarter of 2007, with the decreases reflecting mainly the increase in deposit interest cost. * Non-performing loans increased by $2.2 million during the quarter mainly due to the addition of two real estate secured credits. One of these credits for $0.8 million was brought current subsequent to the end of the quarter. The Company is diligently working on each of the remaining non-performing loans at June 30, 2007, all of which are real estate secured, to resolve the individual situations. * Fee income increased by $105,000, and operating expenses decreased by $33,000 during the quarter compared with the prior year period. * Dividends paid in the quarter were $0.20 per share, up 5.3% from the $0.19 per share paid during the second quarter of 2006.
Commenting on the performance of the company, President Kent C. Lufkin stated that, "At the risk of repeating myself, these are challenging times for the Company and community banks as a whole. We continue to endure a flat or inverted yield curve which contributes to the pressure on our net interest margin. This environment is exacerbated by an overly competitive frenzy for deposits resulting in rising funding costs. To combat these conditions Third Federal continues to introduce new products such as our investment services program and cash management sweep, while aggressively exploring cost savings and reductions. We are not standing still, waiting for change to occur, we are adapting in order to perform our best in the current environment."
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 6/30/2007 6/30/2006 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 9,415 $ 9,627 -2.2% Interest expense 4,472 3,948 13.3% Net interest income 4,943 5,679 -13.0% Loan loss provision 0 60 -100.0% Non-interest income 730 625 16.8% Non-interest expense 4,268 4,301 -0.8% Income taxes 368 551 -33.2% Net income $ 1,037 $ 1,392 -25.5% PER SHARE INFORMATION Earnings per share, basic $ 0.38 $ 0.52 -26.9% Earnings per share, diluted $ 0.38 $ 0.51 -25.5% Dividends paid $ 0.20 $ 0.19 5.3% FINANCIAL RATIOS Annualized return on average assets 0.63% 0.83% -24.1% Annualized return on average equity 6.39% 8.95% -28.6% Efficiency ratio 75.23% 68.88% 9.2% AVERAGE BALANCES Loans $ 498,321 $ 512,542 -2.8% Mortgage-backed securities 86,619 82,311 5.2% Investment securities 37,474 41,703 -10.1% Other interest-earning assets 1,194 1,375 -13.2% Total earning assets 623,608 637,931 -2.2% Non-earning assets 34,033 35,381 -3.8% Total assets 657,641 673,312 -2.3% Deposits 481,084 467,570 2.9% FHLB advances 103,182 135,399 -23.8% Total interest bearing liabilities 584,266 602,969 -3.1% Non-interest bearing liabilities 8,260 7,963 3.7% Stockholders' equity 65,115 62,380 4.4% Total liabilities & stockholders' equity $ 657,641 $ 673,312 -2.3% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.43% 6.39% Mortgage-backed securities 4.66% 4.66% Investment securities 5.48% 5.61% Other interest-earning assets 6.38% 4.08% Average cost of: Deposits 2.85% 2.20% FHLB advances 4.10% 4.11% Interest rate spread 3.06% 3.49% Net interest margin 3.25% 3.63% NON-INTEREST INCOME DETAIL Service fees, charges and other $ 514 $ 521 -1.3% Bank-owned life insurance $ 153 $ 126 21.4% Gain on sale of loans $ 63 $ 29 117.2% Gain (loss) on sales of securities $ -- $ (51) -100.0% NON-INTEREST EXPENSE DETAIL Salaries and benefits 2,680 2,683 -0.1% Occupancy 712 694 2.6% Professional fees 133 135 -1.5% Advertising 163 175 -6.9% Other 580 614 -5.5% SIX MONTHS ---------- INC 6/30/2007 6/30/2006 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 18,628 $ 18,730 -0.5% Interest expense 8,681 7,544 15.1% Net interest income 9,947 11,186 -11.1% Loan loss provision 0 150 -100.0% Non-interest income 2,256 1,306 72.7% Non-interest expense 8,858 8,671 2.2% Income taxes 910 1,024 -11.1% Net income $ 2,435 $ 2,647 -8.0% PER SHARE INFORMATION Earnings per share, basic $ 0.89 $ 0.98 -9.2% Earnings per share, diluted $ 0.89 $ 0.98 -9.2% Dividends paid $ 0.40 $ 0.38 5.3% FINANCIAL RATIOS Annualized return on average assets 0.75% 0.80% -6.3% Annualized return on average equity 7.48% 8.55% -12.5% Efficiency ratio 72.59% 70.26% 3.3% AVERAGE BALANCES Loans $ 493,038 $ 505,475 -2.5% Mortgage-backed securities 83,644 86,868 -3.7% Investment securities 39,368 41,670 -5.5% Other interest-earning assets 3,571 1,017 251.1% Total earning assets 619,621 635,030 -2.4% Non-earning assets 34,091 34,470 -1.1% Total assets 653,712 669,500 -2.4% Deposits 478,742 464,156 3.1% FHLB advances 101,237 135,656 -25.4% Total interest bearing liabilities 579,979 599,812 -3.3% Non-interest bearing liabilities 8,103 7,256 11.7% Stockholders' equity 65,630 62,432 5.1% Total liabilities & stockholders' equity $ 653,712 $ 669,500 -2.4% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.47% 6.32% Mortgage-backed securities 4.69% 4.57% Investment securities 5.42% 5.27% Other interest-earning assets 4.87% 4.36% Average cost of: Deposits 2.81% 2.09% FHLB advances 4.06% 4.07% Interest rate spread 3.12% 3.47% Net interest margin 3.32% 3.61% NON-INTEREST INCOME DETAIL Service fees, charges and other $ 1,838 $ 1,071 71.6% Bank-owned life insurance $ 301 $ 248 21.4% Gain on sale of loans $ 117 $ 38 207.9% Gain (loss) on sales of securities $ -- $ (51) -100.0% NON-INTEREST EXPENSE DETAIL Salaries and benefits 5,348 5,322 0.5% Occupancy 1,404 1,398 0.4% Professional fees 357 347 2.9% Advertising 326 352 -7.4% Other 1,423 1,252 13.7% AT INC -- ---- 6/30/2007 12/31/2006 (DEC) --------- ---------- --- DEPOSIT INFORMATION Non-interest checking $ 40,146 $ 36,991 8.5% Interest checking 49,277 51,272 -3.9% Money market 70,942 62,914 12.8% Savings 133,504 131,359 1.6% CD's,retail 189,234 183,847 2.9% CD's,broker 6,475 11,704 -44.7% OTHER INFORMATION Per Share Book value (a) $ 24.35 $ 24.28 Tangible book value (a) $ 22.76 $ 22.68 Closing market price $ 30.25 $ 31.00 Balance sheet Loans, net $ 500,028 $ 484,539 3.2% Cash and cash equivalents 5,826 12,364 -52.9% Mortgage-backed securities 89,139 82,035 8.7% Investment securities 35,849 42,371 -15.4% Total assets 664,032 652,603 1.8% Total deposits 489,578 478,087 2.4% FHLB advances and other 100,110 101,701 -1.6% Stockholders' equity 66,199 65,639 0.9% Asset Quality Non-performing loans 4,965 2,110 135.3% Loan loss reserves 2,850 2,865 -0.5% Reserves to gross loans 0.57% 0.59% -3.4% Non-performing loans to gross loans 0.99% 0.43% 130.2% Non-performing loans to total assets 0.75% 0.32% 134.4% Foreclosed property -- -- 0.0% Foreclosed property to total assets 0.00% 0.00% 0.0% Non-performing assets to total assets 0.75% 0.32% 134.4% Statistical Shares outstanding (000's) (a) 2,719 2,703 Number of branch offices 15 15 Full time equivalent employees 196 189 (a) Excludes 166,000 and 171,000 unallocated employee stock ownership plan shares at June 30, 2007 and December 31, 2006, respectively.
CONTACT: TF Financial Corporation Dennis R. Stewart, EVP/CFO (215) 579-4000