EXHIBIT 99.1
TF Financial Corporation Reports Third Quarter 2007 Results and Quarterly Dividend
NEWTOWN, Pa., Oct. 25, 2007 (PRIME NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,188,000 ($0.44 per diluted share) for the third quarter of 2007, compared with $1,412,000 ($0.52 per diluted share) for the third quarter of 2006. Net income for the nine month period ended September 30, 2007 was $3,623,000 ($1.32 per diluted share) compared with $4,059,000 ($1.49 per diluted share) for the first nine months of 2006. The Company also announced that its Board of Directors declared a quarterly dividend of $0.20 per share, payable November 15, 2007 to shareholders of record on November 8, 2007.
Highlights for the current quarter included:
-- Interest income was essentially unchanged from the third quarter of 2006, but increased by $305,000 or 3.2% from the second quarter of 2007. Total loans were $511.2 million at September 30, 2007 a 2.2% increase compared with $500.0 million at June 30, 2007 and a 5.5% increase compared with $484.5 million at the beginning of 2007. The Company continues to experience good loan demand, and is essentially untouched by the recent issues related to subprime lending. -- Total retail deposits, which exclude broker CD's, decreased by 2.2% to $472.5 million from $483.1 million at June 30, 2007 but are still up by 1.3% from $466.4 million at the beginning of 2007. However, intense competition and the persistently flat yield curve during the majority of the period continued to adversely affect the cost of deposits, as deposit interest expense increased by 46 basis points during the third quarter of 2007 compared with the year earlier quarter and by 9 basis points as compared with the second quarter of 2007. -- The Company's net interest margin was 3.20% during the quarter ended September 30, 2007 compared with 3.59% during the third quarter of 2006 and 3.25% during the second quarter of 2007, with the decreases predominately attributable to the increase in deposit interest cost. -- Non-performing loans decreased by $2.2 million during the quarter due to two real estate secured credits which were returned to performing status. -- Non-interest income decreased by $105,000 compared with the third quarter of 2006 mainly due to lower gains on sale of loans. Operating expenses decreased by $313,000 during the quarter compared with the prior year period mainly due to a reduction in advertising expenses. -- Dividends paid in the quarter were $0.20 per share, up 5.3% from the $0.19 per share paid during the third quarter of 2006.
Commenting on the performance of the company, President Kent C. Lufkin stated that, "We continue to feel the impact of the margin-compression that has occurred over the past 18 months. Managing our earnings and asset quality during this challenging time is our top priority. Recognizing that our ability to influence interest rates is limited, we have taken proactive steps to further control and reduce operating expenses as well as generate a growing stream of non-interest income."
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.
TF FINANCIAL CORPORATION UNAUDITED FINANCIAL INFORMATION (dollars in thousands except per share data) THREE MONTHS ------------ INC 9/30/2007 9/30/2006 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 9,720 $ 9,611 1.1% Interest expense 4,741 4,093 15.8% Net interest income 4,979 5,518 -9.8% Loan loss provision 0 0 0.0% Non-interest income 708 813 -12.9% Non-interest expense 4,057 4,370 -7.2% Income taxes 442 549 -19.5% Net income $ 1,188 $ 1,412 -15.9% PER SHARE INFORMATION Earnings per share, basic $ 0.44 $ 0.52 -15.4% Earnings per share, diluted $ 0.44 $ 0.52 -15.4% Dividends paid $ 0.20 $ 0.19 5.3% FINANCIAL RATIOS Annualized return on average assets 0.71% 0.85% -16.5% Annualized return on average equity 7.08% 8.79% -19.5% Efficiency ratio 71.34% 69.03% 3.3% AVERAGE BALANCES Loans $506,471 $501,012 1.1% Mortgage-backed securities 87,723 75,620 16.0% Investment securities 36,039 41,957 -14.1% Other interest-earning assets 901 3,432 -73.7% Total earning assets 631,134 622,021 1.5% Non-earning assets 35,964 34,613 3.9% Total assets 667,098 656,634 1.6% Deposits 476,021 471,556 0.9% FHLB advances 113,630 114,070 -0.4% Total interest bearing liabilities 589,651 585,626 0.7% Non-interest bearing liabilities 10,893 7,297 49.3% Stockholders' equity 66,554 63,711 4.5% Total liabilities & stockholders' equity $667,098 $656,634 1.6% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.47% 6.53% Mortgage-backed securities 4.77% 4.57% Investment securities 5.50% 5.25% Other interest-earning assets 4.84% 4.97% Average cost of: Deposits 2.94% 2.48% FHLB advances 4.23% 3.98% Interest rate spread 2.99% 3.43% Net interest margin 3.20% 3.59% NON-INTEREST INCOME DETAIL Service fees, charges and other $ 503 $ 535 -6.0% Bank-owned life insurance 153 126 21.4% Gain on sale of loans 52 152 -65.8% NON-INTEREST EXPENSE DETAIL Salaries and benefits 2,598 2,693 -3.5% Occupancy 729 772 -5.6% Professional fees 146 128 14.1% Advertising -- 176 -100.0% Other 584 601 -2.8% TF FINANCIAL CORPORATION UNAUDITED FINANCIAL INFORMATION (dollars in thousands except per share data) NINE MONTHS ----------- INC 9/30/2007 9/30/2006 (DEC) --------- --------- EARNINGS SUMMARY Interest income $ 28,348 $ 28,341 0.0% Interest expense 13,422 11,637 15.3% Net interest income 14,926 16,704 -10.6% Loan loss provision 0 150 -100.0% Non-interest income 2,964 2,119 39.9% Non-interest expense 12,915 13,041 -1.0% Income taxes 1,352 1,573 -14.0% Net income $ 3,623 $ 4,059 -10.7% PER SHARE INFORMATION Earnings per share, basic $ 1.32 $ 1.50 -12.0% Earnings per share, diluted $ 1.32 $ 1.49 -11.4% Dividends paid $ 0.60 $ 0.57 5.3% FINANCIAL RATIOS Annualized return on average assets 0.74% 0.82% -9.8% Annualized return on average equity 7.27% 8.63% -15.8% Efficiency ratio 72.19% 69.84% 3.4% AVERAGE BALANCES Loans $497,565 $503,971 -1.3% Mortgage-backed securities 85,018 83,107 2.3% Investment securities 38,227 41,767 -8.5% Other interest-earning assets 2,502 1,831 36.6% Total earning assets 623,312 630,676 -1.2% Non-earning assets 34,847 34,489 1.0% Total assets 658,159 665,165 -1.1% Deposits 478,790 466,652 2.6% FHLB advances 105,413 128,381 -17.9% Total interest bearing liabilities 584,203 595,033 -1.8% Non-interest bearing liabilities 7,293 7,269 0.3% Stockholders' equity 66,663 62,863 6.0% Total liabilities & stockholders' equity $658,159 $665,165 -1.1% SPREAD AND MARGIN ANALYSIS Average yield on: Loans 6.47% 6.39% Mortgage-backed securities 4.72% 4.57% Investment securities 5.45% 5.26% Other interest-earning assets 5.20% 4.75% Average cost of: Deposits 2.85% 2.22% FHLB advances 4.13% 4.04% Interest rate spread 3.09% 3.46% Net interest margin 3.28% 3.60% NON-INTEREST INCOME DETAIL Service fees, charges and other $ 2,341 $ 1,606 45.8% Bank-owned life insurance 454 374 21.4% Gain on sale of loans 169 190 -11.1% Gain (loss) on sales of securities -- (51) -100.0% NON-INTEREST EXPENSE DETAIL Salaries and benefits 7,946 8,015 -0.9% Occupancy 2,133 2,170 -1.7% Professional fees 503 475 5.9% Advertising 326 528 -38.3% Other 2,007 1,853 8.3% TF FINANCIAL CORPORATION FINANCIAL INFORMATION AT (dollars in thousands except per -- share data) INC --- 9/30/2007 12/31/2006 (DEC) -------- --------- ---- (unaudited) DEPOSIT INFORMATION Non-interest checking $ 38,089 $ 36,991 3.0% Interest checking 44,777 51,272 -12.7% Money market 73,671 62,914 17.1% Savings 132,243 131,359 0.7% CD's, retail 183,752 183,847 -0.1% CD's, broker 0 11,704 -100.0% OTHER INFORMATION Per Share Book value (a) $ 25.03 $ 24.28 Tangible book value (a) $ 23.44 $ 22.68 Closing market price $ 27.60 $ 31.00 Balance sheet Loans,net $511,176 $484,539 5.5% Cash and cash equivalents 4,863 12,364 -60.7% Mortgage-backed securities 86,730 82,035 5.7% Investment securities 37,169 42,371 -12.3% Total assets 672,793 652,603 3.1% Total deposits 472,532 478,087 -1.2% FHLB advances and other 124,272 101,701 22.2% Stockholders' equity 67,880 65,639 3.4% Asset Quality Non-performing loans $ 2,780 $ 2,110 31.8% Loan loss reserves 2,849 2,865 -0.6% Reserves to gross loans 0.55% 0.59% -6.8% Non-performing loans to gross loans 0.54% 0.43% 25.6% Non-performing loans to total assets 0.41% 0.32% 28.1% Foreclosed property -- -- 0.0% Foreclosed property to total assets 0.00% 0.00% 0.0% Non-performing assets to total assets 0.41% 0.32% 28.1% Statistical Shares outstanding (000's) (a) 2,712 2,703 Number of branch offices 15 15 Full time equivalent employees 197 189 (a)Excludes 163,000 and 171,000 unallocated employee stock ownership plan shares at September 30, 2007 and December 31, 2006, respectively.
CONTACT: TF Financial Corporation Dennis R. Stewart, EVP/CFO (215) 579-4000