NEWS RELEASE
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July 28, 2005 Contact: Dennis R. Stewart, EVP/CFO
FOR IMMEDIATE RELEASE (215) 579-4000
TF FINANCIAL CORPORATION ANNOUNCES SECOND QUARTER RESULTS
AND QUARTERLY DIVIDEND
Newtown, Pennsylvania: TF Financial Corporation (Nasdaq National Market - THRD)
today reported net income of $1,605,000 ($0.57 per diluted share) for the second
quarter of 2005, compared with $1,656,000 ($0.58 per diluted share) during the
second quarter of 2004. Net income for the six month period ended June 30, 2005
was $3,081,000 ($1.09 per diluted share) compared with $3,265,000 ($1.15 per
diluted share) during the first six months of 2004. The Company also announced
that its Board of Directors declared a quarterly dividend of $0.18 per share,
payable August 15, 2005 to shareholders of record on August 8.
Year to date highlights for 2005 include:
o Net interest income was virtually unchanged compared to the first six
months of 2004, despite nine 25 basis point increases in interest
rates by the Federal Reserve during the period June 30, 2004 through
June 30, 2005.
o The net interest margin remains healthy at 3.73% for the second
quarter of 2005 and 3.80% for the first six months of 2005.
o Diluted earnings per share during the second quarter of 2005 increased
by 9.6% to $0.57 compared with $0.52 during the first quarter of 2005.
o Loan and deposit growth for the first six months of 2005 were
(annualized) 10.0% and 8.6%, respectively. The loan to deposit ratio
was in excess of 97% at June 30.
o Asset quality remains high with non-performing loans at record low
levels of 0.16% of total loans and 0.11% of total assets.
o Return on assets and return on equity were a strong 1.00% and 10.71%,
respectively, during the second quarter of 2005, up from the first
quarter.
"The Company continued making great progress during the second quarter on a
variety of important initiatives" noted Kent C. Lufkin, President and CEO. "We
will soon be opening our fifteenth office, in Northeast Philadelphia, and we
have recently strengthened our small business lending capabilities by adding SBA
lending to the product array. In addition, while the interest rate environment
and related competitive pressures remain challenging, they also presented us
with an opportunity to offer some highly successful and innovative deposit
products during the first six months of 2005. Finally, community awareness of
the Company continues to broaden as we deploy our "Go Green" marketing strategy
and involve each and every employee in the communities that we serve."
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
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 SIX MONTHS INC
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6/30/2005 6/30/2004 (DEC) 6/30/2005 6/30/2004 (DEC)
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EARNINGS SUMMARY
Interest Income $ 8,371 $ 7,775 7.7% $ 16,468 $ 15,505 6.2%
Interest expense 2,797 2,151 30.0% 5,264 4,303 22.3%
Net interest income 5,574 5,624 -0.9% 11,204 11,202 0.0%
Loan loss provision 150 150 0.0% 300 300 0.0%
Non-interest income 677 681 -0.6% 1,339 1,390 -3.7%
Non-interest expense 3,943 3,869 1.9% 8,074 7,786 3.7%
Income taxes 553 630 -12.2% 1,088 1,241 -12.3%
Net income $ 1,605 $ 1,656 -3.1% $ 3,081 $ 3,265 -5.6%
PER SHARE INFORMATION
Earnings per share, basic $ 0.59 $ 0.62 -4.8% $ 1.12 $ 1.23 -8.9%
Earnings per share, diluted $ 0.57 $ 0.58 -1.7% $ 1.09 $ 1.15 -5.2%
Dividends paid $ 0.18 $ 0.17 5.9% $ 0.36 $ 0.32 12.5%
FINANCIAL RATIOS
Annualized return on average assets 1.00% 1.08% -7.4% 0.97% 1.07% -9.3%
Annualized return on average equity 10.71% 11.44% -6.4% 10.32% 11.43% -9.7%
Efficiency ratio 64.63% 62.86% 2.8% 65.95% 63.34% 4.1%
AVERAGE BALANCES
Loans $457,289 $418,545 9.3% $451,983 $414,761 9.0%
Mortgage-backed securities 112,939 132,144 -14.5% 115,861 131,400 -11.8%
Investment securities 35,635 30,111 18.3% 34,256 30,282 13.1%
Other interest-earning assets 2,368 1,648 43.7% 1,755 1,609 9.1%
Total earning assets 608,231 582,448 4.4% 603,855 578,052 4.5%
Non-earning assets 36,599 35,974 1.7% 34,870 36,133 -3.5%
Total assets 644,830 618,422 4.3% 638,725 614,185 4.0%
Deposits 466,679 471,402 -1.0% 461,028 468,073 -1.5%
FHLB advances 111,734 82,984 34.6% 111,810 83,149 34.5%
Total interest bearing liabilities 578,413 554,386 4.3% 572,838 551,222 3.9%
Non-interest bearing liabilities 6,331 5,801 9.1% 5,703 5,517 3.4%
Stockholders' equity 60,086 58,235 3.2% 60,184 57,446 4.8%
Total liabilities & stockholders' $644,830 $618,422 4.3% $638,725 $614,185 4.0%
equity
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 5.88% 5.73% 5.88% 5.79%
Mortgage-backed securities 4.59% 4.66% 4.52% 4.57%
Investment securities 4.96% 4.46% 4.83% 4.40%
Other interest-earning assets 2.03% 0.98% 2.53% 0.87%
Average cost of:
Deposits 1.57% 1.26% 1.47% 1.28%
FHLB advances 3.47% 3.26% 3.42% 3.19%
Interest rate spread 3.63% 3.85% 3.69% 3.86%
Net interest margin 3.73% 3.92% 3.80% 3.93%
T F FINANCIAL CORPORATION
FINANCIAL INFORMATION
(dollars in thousands except per share data)
THREE MONTHS INC SIX MONTHS INC
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6/30/2005 6/30/2004 (DEC) 6/30/2005 6/30/2004 (DEC)
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NON-INTEREST INCOME
Retail banking fees $ 669 $ 681 -1.8% $ 1,309 $ 1,390 -5.8%
Gain on sale of loans 8 - 0.0% 30 - 0.0%
NON-INTEREST EXPENSE
Salaries and benefits 2,303 2,247 2.5% 4,694 4,521 3.8%
Occupancy 640 644 -0.6% 1,301 1,239 5.0%
Deposit insurance 16 18 -11.1% 33 36 -8.3%
Professional fees 211 132 59.8% 437 338 29.3%
Deposit intangible amortization 34 40 -15.0% 68 80 -15.0%
Advertising 186 163 14.1% 362 326 11.0%
Other 553 625 -11.5% 1,179 1,246 -5.4%
INC
6/30/2005 12/31/2004 (DEC)
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DEPOSIT INFORMATION
Non-interest checking $ 35,410 $ 32,636 8.5%
Interest checking 54,288 54,887 -1.1%
Money market 73,798 42,496 73.7%
Savings 169,323 182,945 -7.4%
CD's 146,760 146,939 -0.1%
OTHER PERIOD ENDING INFORMATION
Per Share
Book value (a) $ 22.83 $ 22.30
Tangible book value (a) $ 21.11 $ 20.57
Closing market price $ 28.01 $ 32.00
Balance sheet
Loans,net $464,382 $442,195 5.0%
Cash and cash equivalents 10,970 7,900 38.9%
Mortgage-backed securities 108,105 118,510 -8.8%
Investment securities 37,509 32,150 16.7%
Total assets 649,833 628,966 3.3%
Deposits 479,579 459,903 4.3%
FHLB advances and other 101,130 102,747 -1.6%
Stockholders' equity 62,346 61,155 1.9%
ASSET QUALITY
Non-performing loans 724 960 -24.6%
Loan loss reserves 2,460 2,307 6.6%
Reserves to gross loans 0.53% 0.52% 1.9%
Non-performing loans to gross loans 0.16% 0.22% -27.3%
Non-performing loans to total assets 0.11% 0.15% -26.7%
Foreclosed property 700 700 0.0%
Foreclosed property to total assets 0.11% 0.11% 0.0%
Non-performing assets to total assets 0.22% 0.26% -15.4%
OTHER STATISTICAL INFORMATION
Shares outstanding (000's) (a) 2,731 2,742
Number of branch offices 14 14
Full time equivalent employees 183 175
(a) Excludes 193,000 and 202,000 employee stock ownership plan shares at June 30, 2005 and December 31, 2004, respectively.