News Release
April 28, 2006 Contact: Dennis R. Stewart, EVP/CFO
FOR IMMEDIATE RELEASE (215) 579-4000
TF Financial Corporation Reports First Quarter 2006
Results and Quarterly Dividend
Newtown, Pennsylvania: TF Financial Corporation (Nasdaq National Market - THRD)
today reported net income of $1,255,000 ($0.46 per diluted share) for the first
quarter of 2006, compared with $1,476,000 ($0.52 per diluted share) for the
first quarter of 2005. The Company also announced that its Board of Directors
had declared a quarterly dividend of $0.19 per share, payable May 15, 2006 to
shareholders of record on May 8, 2006.
Highlights for the current quarter included:
o Interest income increased by over 12% compared to the first quarter of
2005, and is up 2% compared with the fourth quarter of 2005,
reflecting continued strong loan growth since the year-ago and
year-end periods.
o The deposit environment was extremely competitive. Total deposits
decreased from $470.5 million at December 31, 2005 to $464.3 million
at March 31, 2006. In addition, the Company increased the interest
rates paid on its deposits and offered attractively priced new deposit
products as part of its efforts to stem deposit attrition and attract
new deposit relationships.
o The interest rate environment continued to be challenging. The
Company's net interest margin, while still very respectable, was 3.60%
during the quarter ended March 31, 2006 compared with 3.68% during the
fourth quarter of 2005, and 3.85% during the first quarter of 2005. As
a result, net interest income was down $139,000 and $123,000 during
the first quarter of 2006 compared with the fourth quarter and first
quarter of 2005, respectively.
o Operating results for the first quarter of 2006 contained $200,000 of
stock compensation expense, reflecting both a stock and stock option
grant during the fourth quarter of 2005 and the adoption during the
first quarter of 2006 of a new accounting principle requiring the
expensing of the value of stock options.
o Operating results during the first quarter of 2006 contained
approximately $84,000 of direct expense related to a new branch office
opened during the third quarter of 2005.
o Dividends paid in the quarter were $0.19 per share, up 5.6% from the
$0.18 per share paid during the first quarter of 2005.
Commenting on the performance of the Company, President Kent C. Lufkin noted
that "in the face of a sustained flat yield curve and the fever-pitch
competition for new deposits, I believe that the Company has performed well by
carefully managing the pricing of both its loan and deposit products,
controlling expenses, developing creative new products and continuing to
effectively market our "green" theme. We will continue to carefully manage all
areas of our operations throughout this challenging period."
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.
Interested parties can find a wealth of financial information on the website by
selecting "About Us" on the home page, then selecting the "Investor Relations"
option.
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
3/31/2006 3/31/2005 (DEC)
--------- --------- -----
EARNINGS SUMMARY
Interest Income $ 9,103 $ 8,097 12.4%
Interest expense 3,596 2,467 45.8%
Net interest income 5,507 5,630 -2.2%
Loan loss provision 90 150 -40.0%
Non-interest income 681 662 2.9%
Non-interest expense 4,370 4,131 5.8%
Income taxes 473 535 -11.6%
Net income $ 1,255 $ 1,476 -15.0%
PER SHARE INFORMATION
Earnings per share, basic $ 0.47 $ 0.54 -13.0%
Earnings per share, diluted $ 0.46 $ 0.52 -11.5%
Dividends paid $ 0.19 $ 0.18 5.6%
FINANCIAL RATIOS
Annualized return on average assets 0.76% 0.95% -20.0%
Annualized return on average equity 8.15% 9.93% -17.9%
Efficiency ratio 71.66% 67.26% 6.5%
AVERAGE BALANCES
Loans $ 498,329 $ 446,618 11.6%
Mortgage-backed securities 91,476 118,816 -23.0%
Investment securities 41,638 32,861 26.7%
Other interest-earning assets 781 1,135 -31.2%
Total earning assets 632,224 599,430 5.5%
Non-earning assets 33,424 33,211 0.6%
Total assets 665,648 632,641 5.2%
Deposits 460,705 455,316 1.2%
FHLB advances 135,916 111,888 21.5%
Total interest bearing liabilities 596,621 567,204 5.2%
Non-interest bearing liabilities 6,542 5,155 26.9%
Stockholders' equity 62,485 60,282 3.7%
Total liabilities & stockholders' $ 665,648 $ 632,641 5.2%
equity
SPREAD AND MARGIN ANALYSIS
Average yield on:
Loans 6.24% 5.88%
Mortgage-backed securities 4.49% 4.45%
Investment securities 5.02% 4.68%
Other interest-earning assets 4.15% 3.57%
Average cost of:
Deposits 1.98% 1.37%
FHLB advances 4.02% 3.37%
Interest rate spread 3.46% 3.76%
Net interest margin 3.60% 3.85%
T F FINANCIAL CORPORATION
FINANCIAL INFORMATION
(dollars in thousands except per share data)
THREE MONTHS
------------ INC
3/31/2006 3/31/2005 (DEC)
--------- --------- -----
NON-INTEREST INCOME
Retail banking fees $ 672 $ 640 5.0%
Gain on sale of loans 9 22 -59.1%
NON-INTEREST EXPENSE
Salaries and benefits 2,439 2,391 2.0%
Stock-based compensation 200 - 0.0%
Occupancy 704 661 6.5%
Deposit insurance 15 17 -11.8%
Professional fees 212 226 -6.2%
Deposit intangible amortization 28 34 -17.6%
Advertising 177 176 0.6%
Other 595 626 -5.0%
3/31/2006 12/31/2005
--------- ----------
DEPOSIT INFORMATION
Non-interest checking $ 39,649 $ 37,138
Interest checking 51,691 52,319
Money market 68,031 79,666
Savings 147,079 151,725
CD's 157,808 149,673
OTHER PERIOD ENDING INFORMATION
Per Share
Book value (a) $ 23.07 $ 23.08
Tangible book value (a) $ 21.44 $ 21.46
Closing market price $ 30.00 $ 28.45
Balance sheet
Loans,net $ 508,526 $ 490,959
Cash and cash equivalents 4,415 3,821
Mortgage-backed securities 88,176 93,688
Investment securities 41,365 42,563
Total assets 672,980 660,839
FHLB advances and other 139,620 121,260
Stockholders' equity 62,047 62,648
ASSET QUALITY
Non-performing loans 1,569 1,588
Loan loss reserves 2,718 2,641
Reserves to gross loans 0.53% 0.54%
Non-performing loans to gross loans 0.31% 0.32%
Non-performing loans to total assets 0.23% 0.24%
Foreclosed property 700 700
Foreclosed property to total assets 0.10% 0.11%
Non-performing assets to total assets 0.34% 0.35%
OTHER STATISTICAL INFORMATION
Shares outstanding (000's) (a) 2,690 2,714
Number of branch offices 15 15
Full time equivalent employees 178 172
(a) Excludes 180,000 and 185,000 employee stock ownership plan shares at
March 31, 2006 and December 31, 2005, respectively.