News Release
October 19, 2004 Contact: Dennis R. Stewart, EVP/CFO
(215) 579-4000
FOR IMMEDIATE RELEASE
TF Financial Corporation Announces Third Quarter Results
And Quarterly Dividend
Newtown, Pennsylvania: TF Financial Corporation (Nasdaq National Market
- - THRD) today reported net income of $1,714,000 ($0.61 per diluted share) for
the third quarter of 2004, compared with a net loss of $8,565,000 ($3.33 per
diluted share) during the third quarter of 2003. Net income for the nine month
period ended September 30, 2004 was $4,979,000 ($1.77 per diluted share)
compared with a net loss of $7,350,000 ($2.91 per diluted share) during the
first nine months of 2003. The 2003 amounts include the $9,334,000 ($3.35 per
diluted share) net cost of the Company's debt refinancing transaction executed
during September 2003. Excluding this transaction, the Company's proforma
earnings were $769,000 ($0.28 per diluted share) for the third quarter of 2003,
and $1,984,000 ($0.72 per diluted share) for the first nine months of 2003. The
Company also announced that its Board of Directors declared a quarterly dividend
of $0.17 per share, payable November 15, 2004 to shareholders of record on
November 5.
Highlights for 2004 include:
* Net income for the quarter increased by 123% compared with proforma
net income for the third quarter of 2003, and increased by 3.5%
compared to net income reported for the second quarter of 2004.
* Net income increased by 151% for the first nine months of 2004
compared to proforma net income for the first nine months of 2003.
* Diluted earnings per share for the third quarter of 2004 increased by
118% compared to proforma diluted earnings per share for the third
quarter of 2003.
* Loans receivable have grown by 7.5% during the year.
* Net interest income during the third quarter of 2004 increased by 37%
compared to the third quarter of 2003.
* During the third quarter, return on assets was 1.09%; return on equity
was 11.89%; and the net interest margin for the quarter was 3.87%.
"We've had our fourth consecutive quarter of record core earnings. We
are also seeing a significant increase in the name recognition of the Bank as a
result of our substantially enhanced participation in business and community
events throughout the region" commented Kent C. Lufkin, President and CEO.
TF Financial Corporation is a holding company whose principal
subsidiary is Third Federal Savings Bank, which operates 14 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, 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 NINE MONTHS INC
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9/30/04 9/30/03 (DEC) 9/30/04 9/30/03 (DEC)
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EARNINGS SUMMARY
Interest Income $ 7,868 $ 7,835 0.4% $ 23,373 $ 24,648 -5.2%
Interest expense 2,214 3,716 -40.4% 6,517 13,064 -50.1%
Net interest income 5,654 4,119 37.3% 16,856 11,584 45.5%
Loan loss provision 150 90 66.7% 450 270 66.7%
Non-interest income 595 322 84.8% 1,985 2,054 -3.4%
Non-interest expense 3,743 17,478 -78.6% 11,529 24,816 -53.5%
Income taxes 642 (4,562) n. m. 1,883 (4,098) n. m.
Net income $ 1,714 $ (8,565) n. m. $ 4,979 $ (7,350) n. m.
Pro forma net income (b) $ 1,714 769 122.9% $ 4,979 1,984 151.0%
PER SHARE INFORMATION
Earnings per share, basic $ 0.64 $ (3.33) n. m. $ 1.86 $ (2.91) n. m.
Earnings per share, diluted $ 0.61 $ (3.33) n. m. $ 1.77 $ (2.91) n. m.
Pro forma earnings per share, basic (b) $ 0.64 $ 0.30 113.3% $ 1.86 $ 0.79 135.4%
Pro forma earnings per share, diluted (b) $ 0.61 $ 0.28 117.9% $ 1.77 $ 0.72 145.8%
Dividends paid $ 0.17 $ 0.15 13.3% $ 0.49 $ 0.45 8.9%
FINANCIAL RATIOS
Annualized return on average assets (b) 1.09% 0.45% 142.2% 1.08% 0.38% 184.2%
Annualized return on average equity (b) 11.89% 4.82% 146.7% 11.87% 4.20% 182.6%
Efficiency ratio (b) 61.37% 78.53% -21.9% 62.69% 80.40% -22.0%
AVERAGE BALANCES
Loans $426,686 $381,005 12.0% $418,765 $370,543 13.0%
Mortgage-backed securities 129,715 155,260 -16.5% 130,835 163,697 -20.1%
Investment securities 31,117 85,847 -63.8% 30,563 73,131 -58.2%
Other interest-earning assets 685 21,685 -96.8% 1,299 59,882 -97.8%
Total earning assets 588,203 643,797 -8.6% 581,462 667,253 -12.9%
Non-earning assets 36,358 33,670 8.0% 34,841 34,789 0.1%
Total assets 624,561 677,467 -7.8% 616,303 702,042 -12.2%
Deposits 465,782 452,145 3.0% 467,304 447,049 4.5%
FHLB advances 96,090 158,357 -39.3% 87,494 186,377 -53.1%
Total interest bearing liabilities 561,872 610,502 -8.0% 554,798 633,426 -12.4%
Non-interest bearing liabilities 5,327 3,661 45.5% 5,453 5,439 0.3%
Stockholders' equity 57,362 63,304 -9.4% 56,052 63,177 -11.3%
Total liabilities & stockholders' $624,561 $677,467 -7.8% $616,303 $702,042 -12.2%
equity
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 5.68% 5.89% 5.76% 6.26%
Mortgage-backed securities 4.57% 4.14% 4.57% 4.34%
Investment securities 4.35% 2.55% 4.37% 3.01%
Other interest-earning assets 2.32% 0.90% 1.13% 1.03%
Average cost of:
Deposits 1.24% 1.44% 1.27% 1.65%
FHLB advances 3.14% 5.21% 3.17% 5.42%
Interest rate spread 3.80% 2.44% 3.84% 2.20%
Net interest margin 3.87% 2.57% 3.91% 2.34%
THREE MONTHS INC NINE MONTHS INC
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9/30/04 9/30/03 (DEC) 9/30/04 9/30/03 (DEC)
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NON-INTEREST INCOME
Retail banking fees $ 595 $ 589 1.0% $ 1,985 $ 1,736 14.3%
Gain (loss) on sales of securities - (377) -100.0% - 208 -100.0%
Gain on sale of real estate - 110 -100.0% - 110 -100.0%
NON-INTEREST EXPENSE
Salaries and benefits 2,160 1,996 8.2% 6,681 6,056 10.3%
Occupancy 613 675 -9.2% 1,852 1,905 -2.8%
Deposit insurance 17 18 -5.6% 53 55 -3.6%
Professional fees 121 110 10.0% 459 428 7.2%
Deposit intangible amortization 41 49 -16.3% 121 145 -16.6%
Advertising 164 138 18.8% 490 413 18.6%
Other 627 727 -13.8% 1,873 2,049 -8.6%
Debt prepayment fee - 13,765 -100.0% - 13,765 -100.0%
INC
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9/30/04 12/31/03 (DEC)
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DEPOSIT INFORMATION
Non-interest checking $ 32,035 $ 26,375 21.5%
Interest checking 51,690 52,647 -1.8%
Money market 43,998 44,688 -1.5%
Savings 183,762 188,673 -2.6%
CD's 146,407 146,960 -0.4%
OTHER PERIOD ENDING INFORMATION
Per Share
Book value (a) $ 21.53 $ 21.37
Tangible book value (a) $ 19.84 $ 19.56
Closing market price $ 28.25 $ 34.20
Balance sheet
Loans,net $435,174 $404,649 7.5%
Cash and cash equivalents 6,650 8,241 -19.3%
Mortgage-backed securities 125,889 130,404 -3.5%
Investment securities 32,286 31,802 1.5%
Total assets 629,457 606,752 3.7%
FHLB advances and other 108,078 86,853 24.4%
Stockholders' equity 58,175 55,480 4.9%
ASSET QUALITY
Non-performing loans 1,813 2,282 -20.6%
Loan loss reserves 2,185 2,111 3.5%
Reserves to gross loans 0.50% 0.52% -3.8%
Non-performing loans to gross loans 0.41% 0.56% -26.8%
Non-performing loans to total assets 0.29% 0.38% -23.7%
Foreclosed property 807 868 -7.0%
Foreclosed property to total assets 0.13% 0.14% -7.1%
Non-performing assets to total assets 0.42% 0.52% -19.2%
OTHER STATISTICAL INFORMATION
Shares outstanding (000's) (a) 2,702 2,596
Number of branch offices 14 14
Full time equivalent employees 167 171
(a) excludes 206,000 employee stock ownership plan shares.
(b) excludes $14,142,000 pre-tax and $9,334,000 after tax cost
attributable to the debt refinancing transaction of 2003.
n.m. not meaningful