News Release
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October 27, 2005 Contact: Dennis R. Stewart, EVP/CFO
FOR IMMEDIATE RELEASE (215) 579-4000
TF Financial Corporation Announces Third Quarter Results
And Quarterly Dividend
Newtown, Pennsylvania: TF Financial Corporation (Nasdaq National Market - THRD)
today reported net income of $1,545,000 ($0.55 per diluted share) for the third
quarter of 2005, compared with $1,714,000 ($0.61 per diluted share) during the
third quarter of 2004. Net income for the nine month period ended September 30,
2005 was $4,626,000 ($1.64 per diluted share) compared with $4,979,000 ($1.77
per diluted share) during the first nine months of 2004. The Company also
announced that its Board of Directors declared a quarterly dividend of $0.18 per
share, payable November 15, 2005 to shareholders of record on November 7.
Quarter and year to date highlights for 2005 include:
o Net interest income during the third quarter was virtually unchanged
from the second quarter, and on a year to date basis was down only
0.4% compared to the first nine months of 2004, despite eleven 25
basis point increases in interest rates by the Federal Reserve during
the period June 30, 2004 through September 30, 2005.
o The net interest margin remains healthy at 3.67% for the third quarter
of 2005 and 3.76% for the first nine months of 2005.
o Loan growth for the first nine months of 2005 was (annualized) 9.1%.
The loan to deposit ratio was nearly 102% at September 30.
o Asset quality remains high with non-performing loans at record low
levels of 0.12% of total loans and 0.09% of total assets.
o Return on assets and return on equity were a strong 0.95% and 10.21%,
respectively, during the third quarter of 2005.
Commenting on the Company's performance during the third quarter, President Kent
C. Lufkin said that "we continued to make progress in quite a few areas that are
important to the Company's long-term success. We opened our 15th branch office,
in Philadelphia, and also opened a loan production office in New Hope,
Pennsylvania. Our loan originations were strong and we expect that we will
achieve record commercial real estate loan production by the end of the year. In
addition, our brand recognition continues to grow. All of our efforts have
combined to produce operating results that rival those of our top performing
peers."
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, 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)
UNAUDITED UNAUDITED
THREE MONTHS NINE MONTHS
------------ INC ----------- INC
9/30/05 9/30/04 (DEC) 9/30/05 9/30/04 (DEC)
------- ------- ------- -------
EARNINGS SUMMARY
Interest Income $ 8,570 $ 7,868 8.9% $ 25,038 $ 23,373 7.1%
Interest expense 2,987 2,214 34.9% 8,251 6,517 26.6%
Net interest income 5,583 5,654 -1.3% 16,787 16,856 -0.4%
Loan loss provision 150 150 0.0% 450 450 0.0%
Non-interest income 742 595 24.7% 2,081 1,985 4.8%
Non-interest expense 4,084 3,743 9.1% 12,158 11,529 5.5%
Income taxes 546 642 -15.0% 1,634 1,883 -13.2%
Net income $ 1,545 $ 1,714 -9.9% $ 4,626 $ 4,979 -7.1%
PER SHARE INFORMATION
Earnings per share, basic $ 0.57 $ 0.64 -10.9% $ 1.69 $ 1.86 -9.1%
Earnings per share, diluted $ 0.55 $ 0.61 -9.8% $ 1.64 $ 1.77 -7.3%
Dividends paid $ 0.18 $ 0.17 5.9% $ 0.54 $ 0.49 10.2%
FINANCIAL RATIOS
Annualized return on average assets 0.95% 1.09% -12.8% 0.97% 1.08% -10.2%
Annualized return on average equity 10.21% 11.89% -14.1% 10.29% 11.87% -13.3%
Efficiency ratio 66.14% 61.37% 7.8% 66.01% 62.69% 5.3%
AVERAGE BALANCES
Loans $465,712 $426,686 9.1% $456,596 $418,765 9.0%
Mortgage-backed securities 104,148 129,715 -19.7% 111,914 130,835 -14.5%
Investment securities 39,553 31,117 27.1% 36,041 30,563 17.9%
Other interest-earning assets 2,631 685 284.1% 2,050 1,299 57.8%
Total earning assets 612,044 588,203 4.1% 606,601 581,462 4.3%
Non-earning assets 33,179 36,358 -8.7% 34,313 34,841 -1.5%
Total assets 645,223 624,561 3.3% 640,914 616,303 4.0%
Deposits 473,801 465,782 1.7% 465,333 467,304 -0.4%
FHLB advances 104,918 96,090 9.2% 109,487 87,494 25.1%
Total interest bearing liabilities 578,719 561,872 3.0% 574,820 554,798 3.6%
Non-interest bearing liabilities 6,469 5,327 21.4% 5,961 5,453 9.3%
Stockholders' equity 60,035 57,362 4.7% 60,133 56,052 7.3%
Total liabilities & stockholders' $645,223 $624,561 3.3% $640,914 $616,303 4.0%
equity
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 5.99% 5.68% 5.92% 5.76%
Mortgage-backed securities 4.32% 4.57% 4.46% 4.57%
Investment securities 4.67% 4.35% 4.77% 4.37%
Other interest-earning assets 3.02% 2.32% 2.74% 1.13%
Average cost of:
Deposits 1.72% 1.24% 1.56% 1.27%
FHLB advances 3.54% 3.14% 3.46% 3.17%
Interest rate spread 3.56% 3.80% 3.65% 3.84%
Net interest margin 3.67% 3.87% 3.76% 3.91%
T F FINANCIAL CORPORATION
FINANCIAL INFORMATION
(dollars in thousands except per share data)
UNAUDITED UNAUDITED
THREE MONTHS NINE MONTHS
------------ INC ----------- INC
9/30/05 9/30/04 (DEC) 9/30/05 9/30/04 (DEC)
------- ------- ------- -------
NON-INTEREST INCOME
Retail banking fees $ 632 $ 595 6.2% $ 1,941 $ 1,985 -2.2%
Gain on sale of loans $ 110 $ - 0.0% $ 140 $ - 0.0%
Gain (loss) on sales of securities - - 0.0% - - 0.0%
NON-INTEREST EXPENSE
Salaries and benefits 2,322 2,160 7.5% 7,016 6,681 5.0%
Occupancy 651 613 6.2% 1,952 1,852 5.4%
Deposit insurance 15 17 -11.8% 48 53 -9.4%
Professional fees 211 121 74.4% 648 459 41.2%
Deposit intangible amortization 34 41 -17.1% 102 121 -15.7%
Advertising 191 164 16.5% 553 490 12.9%
Other 660 627 5.3% 1,839 1,873 -1.8%
INC
9/30/05 12/31/04 (DEC)
------- -------- -----
DEPOSIT INFORMATION
Non-interest checking $ 35,071 $ 32,636 7.5%
Interest checking 49,854 54,887 -9.2%
Money market 79,700 42,496 87.5%
Savings 161,976 182,945 -11.5%
CD's 138,285 146,939 -5.9%
OTHER PERIOD ENDING INFORMATION
Per Share
Book value (a) $ 22.83 $ 22.30
Tangible book value (a) $ 21.13 $ 20.57
Closing market price $ 28.10 $ 32.00
Balance sheet
Loans,net $472,120 $442,195 6.8%
Cash and cash equivalents 5,642 7,900 -28.6%
Mortgage-backed securities 98,875 118,510 -16.6%
Investment securities 41,559 32,150 29.3%
Total assets 647,716 628,966 3.0%
Deposits 464,886 459,903 1.1%
FHLB advances and other 114,310 102,747 11.3%
Stockholders' equity 62,412 61,155 2.1%
ASSET QUALITY
Non-performing loans 570 960 -40.6%
Loan loss reserves 2,508 2,307 8.7%
Reserves to gross loans 0.53% 0.52% 1.9%
Non-performing loans to gross loans 0.12% 0.22% -45.5%
Non-performing loans to total assets 0.09% 0.15% -40.0%
Foreclosed property 700 700 0.0%
Foreclosed property to total assets 0.11% 0.11% 0.0%
Non-performing assets to total assets 0.20% 0.26% -23.1%
OTHER STATISTICAL INFORMATION
Shares outstanding (000's) (a) 2,734 2,742
Number of branch offices 15 14
Full time equivalent employees 174 175
(a) Excludes 189,000 and 202,000 employee stock ownership plan shares at
September 30, 2005 and December 31, 2004, respectively.