News Release
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January 27, 2005 Contact: Dennis R. Stewart, EVP/CFO
FOR IMMEDIATE RELEASE (215) 579-4000
TF Financial Corporation Announces Record Earnings for 2004
and 6% Increase in Quarterly Dividend
Newtown, Pennsylvania: TF Financial Corporation (Nasdaq National Market - THRD)
today reported record net income of $6,567,000 ($2.33 per diluted share) for
2004, compared with a net loss of $5,834,000 ($2.30 per diluted share) during
2003. Earnings for 2003 included the $9,334,000 ($3.35 per diluted share)
after-tax net cost of the Corporation's debt refinancing transaction completed
during the third quarter of 2003. Excluding this transaction, the Corporation's
net income was $3,500,000 ($1.27 per diluted share) for 2003. During the fourth
quarter of 2004 net income was $1,588,000 ($0.56 per diluted share) compared
with $1,516,000 ($0.54 per diluted share) during the fourth quarter of 2003.
The Corporation also announced that its Board of Directors had declared a
quarterly cash dividend of $0.18 per share, payable February 15, 2005 to
shareholders of record on February 7, 2005. This dividend is a 6% increase over
the amount paid during the fourth quarter of 2004.
Results for 2004 represent the highest level of core earnings since the
Corporation became a public company in 1994, and fulfills our objective
announced during the third quarter of 2003 to significantly improve earnings as
a result of the debt refinancing that occurred in the third quarter of 2003.
Other highlights for 2004 include a 9.3% increase in net loans outstanding, a
9.3% increase in loan loss reserves, and a 60% decrease in non-performing loans.
Return on assets and return on equity were 1.01% and 10.78%, respectively,
during the fourth quarter of 2004. When these ratios are combined with our net
interest margin of 3.73% for the fourth quarter of 2004, our operating
performance compares very favorably to other top performing community bank
holding companies.
Kent C. Lufkin, President and CEO stated that "we are extremely pleased with our
strong earnings and other achievements during 2004. In addition, we are very
excited about the many initiatives planned for 2005. These include a bold new
look and slogan, innovative products and delivery methods, as well as a new
branch later in the year. All of these efforts are designed to differentiate us
from our competition, grow the Bank, and further ensure our long term success."
TF Financial Corporation is a holding company whose principal subsidiary is
Third Federal 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
Corporation 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
Corporation.
T F FINANCIAL CORPORATION
FINANCIAL INFORMATION
(dollars in thousands except per share data)
THREE MONTHS INC TWELVE MONTHS INC
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12/31/04 12/31/03 (DEC) 12/31/04 12/31/03 (DEC)
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EARNINGS SUMMARY
Interest Income $ 7,848 $ 7,729 1.5% $ 31,221 $ 32,377 -3.6%
Interest expense 2,349 2,188 7.4% 8,866 15,252 -41.9%
Net interest income 5,499 5,541 -0.8% 22,355 17,125 30.5%
Loan loss provision 150 60 150.0% 600 330 81.8%
Non-interest income 623 636 -2.0% 2,608 2,690 -3.0%
Non-interest expense 3,800 3,887 -2.2% 15,329 28,703 -46.6%
Income taxes (benefit) 584 714 -18.2% 2,467 (3,384) n. m.
Net income (loss) $ 1,588 $ 1,516 4.7% $ 6,567 $ (5,834) n. m.
Pro forma net income (b) $ 1,588 $ 1,516 4.7% $ 6,567 $ 3,500 87.6%
PER SHARE INFORMATION
Earnings (loss) per share, basic $ 0.58 $ 0.59 -1.7% $ 2.44 $ (2.30) n. m.
Earnings (loss) per share, diluted $ 0.56 $ 0.54 3.7% $ 2.33 $ (2.30) n. m.
Pro forma earnings per share, basic (b) $ 0.58 $ 0.59 -1.7% $ 2.44 $ 1.38 76.8%
Pro forma earnings per share, diluted (b) $ 0.56 $ 0.54 3.7% $ 2.33 $ 1.27 83.5%
Dividends paid $ 0.17 $ 0.15 13.3% $ 0.66 $ 0.60 10.0%
FINANCIAL RATIOS
Annualized return on average assets (b) 1.01% 0.45% 124.4% 1.06% 0.38% 178.9%
Annualized return on average equity (b) 10.78% 4.82% 123.7% 11.58% 4.20% 175.7%
Efficiency ratio (b) 63.63% 78.53% -19.0% 62.92% 80.40% -21.7%
AVERAGE BALANCES
Loans $ 437,530 $ 401,769 8.9% $ 423,482 $ 378,414 11.9%
Mortgage-backed securities 122,574 128,090 -4.3% 128,759 154,721 -16.8%
Investment securities 32,177 31,935 0.8% 30,969 62,747 -50.6%
Other interest-earning assets 617 3,181 -80.6% 1,127 45,590 -24.0%
Total earning assets 592,898 564,975 4.9% 584,337 641,472 -8.9%
Non-earning assets 34,062 36,416 -6.5% 34,645 33,839 2.4%
Total assets 626,960 601,391 4.3% 618,982 675,311 -8.3%
Deposits 458,522 458,458 0.0% 465,097 449,925 3.4%
FHLB advances 104,066 83,020 25.4% 91,660 160,325 -42.8%
Total interest bearing liabilities 562,588 541,478 3.9% 556,757 610,250 -8.8%
Non-interest bearing liabilities 5,786 5,903 -2.0% 5,536 4,195 32.0%
Stockholders' equity 58,586 54,010 8.5% 56,689 60,866 -6.9%
Total liabilities & stockholders' $ 626,960 $ 601,391 4.3% $ 618,982 $ 675,311 -8.3%
equity
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 5.74% 5.96% 5.75% 6.18%
Mortgage-backed securities 3.95% 4.36% 4.42% 4.35%
Investment securities 4.65% 3.68% 4.45% 3.13%
Other interest-earning assets 1.93% 1.37% 1.24% 1.04%
Average cost of:
Deposits 1.29% 1.33% 1.27% 1.57%
FHLB advances 3.30% 3.11% 3.21% 5.12%
Interest rate spread 3.65% 3.84% 3.79% 2.57%
Net interest margin 3.73% 3.91% 3.86% 2.69%
T F FINANCIAL CORPORATION
FINANCIAL INFORMATION
(dollars in thousands except per share data)
THREE MONTHS INC TWELVE MONTHS INC
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12/31/04 12/31/03 (DEC) 12/31/04 12/31/03 (DEC)
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NON-INTEREST INCOME
Retail banking fees $ 615 $ 636 -3.3% $ 2,600 $ 2,372 9.6%
Gain on sale of loans 8 - 0.0% 8 - 0.0%
Gain (loss) on sales of securities - - 0.0% - 208 -100.0%
Gain on sale of real estate - - 0.0% - 110 -100.0%
NON-INTEREST EXPENSE
Salaries and benefits 2,088 2,130 -2.0% 8,769 8,186 7.1%
Occupancy 666 583 14.2% 2,518 2,488 1.2%
Deposit insurance 17 17 0.0% 70 72 -2.8%
Professional fees 156 181 -13.8% 615 609 1.0%
Deposit intangible amortization 34 40 -15.0% 155 185 -16.2%
Advertising 165 138 19.6% 655 551 18.9%
Other 674 798 -15.5% 2,547 2,847 -10.5%
Debt prepayment fee - - 0.0% - 13,765 -100.0%
INC
12/31/04 12/31/03 (DEC)
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DEPOSIT INFORMATION
Non-interest checking $ 32,636 $ 26,375 23.7%
Interest checking 54,887 52,647 4.3%
Money market 42,496 44,688 -4.9%
Savings 182,945 188,673 -3.0%
CD's 146,939 146,960 0.0%
OTHER PERIOD ENDING INFORMATION
PER SHARE
Book value (a) $ 20.80 $ 21.37
Tangible book value (a) $ 19.26 $ 19.56
Closing market price $ 32.00 $ 34.20
BALANCE SHEET
Loans,net $ 442,195 $ 404,649 9.3%
Cash and cash equivalents 7,900 8,241 -4.1%
Mortgage-backed securities 118,510 130,404 -9.1%
Investment securities 32,150 31,802 1.1%
Total assets 628,976 606,752 3.7%
FHLB advances and other 102,747 86,853 18.3%
Stockholders' equity 61,225 55,480 10.4%
ASSET QUALITY
Non-performing loans 960 2,282 -57.9%
Loan loss reserves 2,307 2,111 9.3%
Reserves to gross loans 0.52% 0.52% 0.0%
Non-performing loans to gross loans 0.22% 0.56% -60.7%
Non-performing loans to total assets 0.15% 0.38% -60.5%
Foreclosed property 700 868 -19.4%
Foreclosed property to total assets 0.11% 0.14% -21.4%
Non-performing assets to total assets 0.26% 0.52% -50.0%
OTHER STATISTICAL INFORMATION
Shares outstanding (000's) (a) 2,742 2,596
Number of branch offices 14 14
Full time equivalent employees 175 171
(a) excludes 202,000 and 220,000 employee stock ownership plan shares at
December 31, 2004 and 2003, respectively.
(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