TF Financial Corporation Reports Third Quarter 2013 Results and Quarterly Dividend

NEWTOWN, Pa., Oct. 24, 2013 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $1,966,000 ($0.64 per diluted share) for the third quarter of 2013, a 33.5% increase over the $1,473,000 ($0.54 per diluted share) reported for the third quarter of 2012. In addition, net income increased 9.2% when compared with net income of $1,800,000 reported for the second quarter of 2013.

Net income for the nine-month period ended September 30, 2013 was $4,989,000 ($1.75 per diluted share) a 28.7% increase when compared with $3,877,000 ($1.42 per diluted share) reported for the first nine months of 2012. The Company also announced that its Board of Directors declared a quarterly dividend of $0.10 per share, payable November 15, 2013 to shareholders of record on November 8, 2013.

"We are pleased to have closed our acquisition of Roebling Financial Corp, Inc. ("Roebling") in early July. Throughout the third quarter our merger integration team worked diligently to convert the Roebling's former operating systems and customer accounts to 3rd Fed Bank's platform. That complex process, along with the changeover in branch signage, was successfully completed during the third quarter. We believe that this strategic expansion of our franchise will help us to create value for our shareholders over time," said Kent C. Lufkin, President and Chief Executive Officer. "Also during the quarter, we continued to focus intensively on asset quality, working to reduce total nonperforming loans (excluding those acquired via the Roebling transaction) and real estate owned to pre-recession levels. Economic conditions are gradually improving across our footprint and accordingly we have added several new business development and commercial lending personnel to help grow our share of that business."

Results for the third quarter included:

  • On July 2, 2013 the Company completed the acquisition of Roebling and its wholly owned subsidiary, Roebling Bank. The Company issued 306,873 shares of its common stock and paid $7.3 million in cash for Roebling, and acquired approximately $148.5 million in total assets, $102.7 million in loans receivable, and $127.3 million in total deposits contained in Roebling's five branches. On September 28, 2013 the Company completed the computer systems and other operations integration of the former Roebling Bank offices into 3rd Fed Bank. The significant non-recurring impacts on the Company's third quarter 2013 operating results were a purchase accounting gain, both before and after tax, of $1.2 million and conversion costs, before tax, of $1.4 million. Much of the remaining operating results comparisons described below are driven by the inclusion of Roebling beginning on July 3, 2013.
  • Net interest income was $6,885,000 compared with $5,806,000 for the second quarter of 2013. The Company's net interest margin was 3.53% compared with 3.59% during the second quarter of 2013.
  • Asset quality showed improvement, with total non-performing assets at 1.52% of total assets at September 30, 2013, which is down from 1.70% at June 30, 2013. Non-performing loans were $6.9 million at quarter-end compared with $6.0 million at June 30, 2013 due to the inclusion in the third quarter of non-performing loans obtained in the Roebling acquisition. Foreclosed property was $5.8 million at September 30, 2013 compared with $6.2 million at June 30, 2013.
  • There was no provision for loan losses and net charge-offs were $225,000 during the third quarter of 2013. The Company's allowance for loan losses was $6,691,000 or 97.2% of non-performing loans at quarter end.
  • Total loans were $623.0 million at September 30, 2013 compared with $531.5 million at June 30, 2013. Total deposits were $681.8 million, compared with $571.4 million at June 30, 2013. Checking, savings, and money market accounts totaled $488.5 million or 71.6% of total deposits at September 30, 2013, compared with $406.1 million or 71.1% of total deposits at June 30, 2013.
  • Capital ratios were minimally impacted by the Roebling acquisition. Book value per share and tangible book value per share were $29.48 and $27.94, respectively, at September 30, 2013, compared with $29.36 and $27.84, respectively, at June 30, 2013. Regulatory capital comprised Tier 1 Leverage and Total Risk-Based ratios of 10.21% and 17.64%, respectively, at September 30, 2013, compared with 10.74% and 18.77%, respectively, at June 30, 2013. Capital levels are well above the regulatory minimums required to be considered well-capitalized.

About TF Financial Corporation

TF Financial Corporation is a holding company whose principal subsidiary is 3rd Fed Bank, which operates 13 full service retail and commercial banking offices in Philadelphia and Bucks County, Pennsylvania and in Mercer County, New Jersey, and with the acquisition of Roebling Bank on July 2, 2013, also operates five additional full service branches in Burlington and Ocean Counties in New Jersey. Deposits at 3rd Fed Bank are insured up to the maximum amount by the Federal Deposit Insurance Corporation (FDIC). In addition, 3rd Fed Bank's website can be found at www.3rdfedbank.com.

Forward Looking Statements

Statements contained in this news release that 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, the possibility that any remaining integration of Roebling's business and operations with those of 3rd Fed Bank may be more difficult and/or take longer than anticipated, may be more costly than anticipated and may have unanticipated adverse results relating to the existing business of the Company, the challenges of integrating and retaining key employees, our ability to reduce total nonperforming loans and real estate owned, as well as 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
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED NINE MONTHS ENDED
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012 9/30/2013 9/30/2012
EARNINGS SUMMARY
Interest income $ 7,903 $ 6,744 $ 6,857 $ 7,234 $ 7,395 $ 21,504 $ 21,986
Interest expense 1,018 938 979 1,048 1,141 2,935 3,889
Net interest income 6,885 5,806 5,878 6,186 6,254 18,569 18,097
Loan loss provision 0 400 439 650 750 839 1,750
Non-interest income 2,046 1,947 1,395 1,196 914 5,388 2,890
Non-interest expense 6,782 5,132 5,030 4,690 4,466 16,944 14,171
Income before taxes 2,149 2,221 1,804 2,042 1,952 6,174 5,066
Income taxes 183 421 581 536 479 1,185 1,189
Net income $ 1,966 $ 1,800 $ 1,223 $ 1,506 $ 1,473 $ 4,989 $ 3,877
PER SHARE INFORMATION
Earnings per share, basic $ 0.64 $ 0.66 $ 0.45 $ 0.55 $ 0.54 $ 1.75 $ 1.42
Earnings per share, diluted $ 0.64 $ 0.66 $ 0.45 $ 0.55 $ 0.54 $ 1.75 $ 1.42
Weighted average basic shares (000's) 3,053 2,743 2,738 2,733 2,729 2,884 2,724
Weighted average diluted shares (000's) 3,053 2,743 2,742 2,734 2,732 2,884 2,727
Dividends paid $ 0.10 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.20 $ 0.15
FINANCIAL RATIOS
Annualized return on average assets 0.92% 1.01% 0.70% 0.86% 0.84% 0.88% 0.75%
Annualized return on average equity 8.55% 8.55% 5.92% 7.21% 7.21% 7.85% 6.50%
Efficiency ratio (1) 67.42% 68.07% 64.56% 60.98% 60.24% 66.72% 67.02%
REGULATORY CAPITAL RATIOS
Tier 1 leverage ratio 10.21% 10.74% 10.50% 10.45% 10.47%
Total risk-based capital ratio 17.64% 18.77% 17.90% 17.89% 17.62%
Tier 1 risk-based capital ratio 16.39% 17.51% 16.65% 16.63% 16.37%
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED NINE MONTHS ENDED
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012 9/30/2013 9/30/2012
AVERAGE BALANCES
Loans $ 622,416 $ 524,728 $ 525,275 $ 530,026 $ 527,195 $ 557,829 $ 507,521
Mortgage-backed securities 50,737 37,523 41,988 49,383 55,820 43,448 59,776
Investment securities 86,942 68,211 65,131 63,773 64,304 73,508 66,498
Other interest-earning assets 35,294 39,111 28,877 6,482 393 34,451 5,676
Total earning assets 795,389 669,573 661,271 649,664 647,712 709,236 639,471
Non-earning assets 48,404 45,938 46,572 46,985 46,168 46,974 48,345
Total assets 843,793 715,511 707,843 696,649 693,880 756,209 687,816
Deposits 691,646 570,271 560,750 539,653 538,637 609,531 547,700
FHLB advances and other borrowed money 55,358 53,303 56,114 66,223 66,740 54,922 53,685
Total interest bearing liabilities 747,004 623,574 616,864 605,876 605,377 664,453 601,385
Non-interest bearing liabilities 5,528 7,508 7,216 7,629 7,179 6,745 6,732
Stockholders' equity 91,261 84,429 83,763 83,144 81,324 85,011 79,699
Total liabilities & stockholders' equity $ 843,793 $ 715,511 $ 707,843 $ 696,649 $ 693,880 $ 756,209 $ 687,816
SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT)
Average yield on:
Loans 4.43% 4.56% 4.68% 4.76% 4.86% 4.55% 4.96%
Mortgage-backed securities 2.52% 2.63% 2.64% 3.04% 3.23% 2.59% 3.48%
Investment securities 3.71% 4.19% 4.43% 4.37% 4.32% 4.05% 4.33%
Other interest-earning assets 0.06% 0.14% 0.06% 0.37% 0.00% 0.09% 0.05%
Total interest-earning assets 4.03% 4.15% 4.33% 4.55% 4.66% 4.16% 4.72%
Average cost of:
Deposits 0.46% 0.50% 0.53% 0.54% 0.59% 0.49% 0.68%
FHLB advances and other borrowed money 1.57% 1.70% 1.79% 1.87% 2.01% 1.69% 2.72%
Total interest-bearing liabilities 0.54% 0.60% 0.64% 0.69% 0.75% 0.59% 0.86%
Interest rate spread 3.49% 3.55% 3.68% 3.86% 3.91% 3.57% 3.85%
Net interest margin 3.53% 3.59% 3.73% 3.90% 3.96% 3.61% 3.90%
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED NINE MONTHS ENDED
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012 9/30/2013 9/30/2012
INTEREST INCOME AND EXPENSE DETAIL
Interest income on:
Loans $ 6,947 $ 5,963 $ 6,066 $ 6,341 $ 6,436 $ 18,976 $ 18,864
Mortgage-backed securities 322 246 273 377 453 841 1,556
Investment securities 814 713 711 701 699 2,229 2,154
Other interest-earning assets 5 14 4 6 -- 23 2
Total interest-earning assets $ 8,088 $ 6,936 $ 7,054 $ 7,425 $ 7,588 $ 22,069 $ 22,576
Interest expense on:
Deposits $ 799 $ 712 $ 731 $ 737 $ 803 $ 2,242 $ 2,795
FHLB advances and other borrowed money 219 226 248 311 338 693 1,094
Total interest-bearing liabilities $ 1,018 $ 938 $ 979 $ 1,048 $ 1,141 $ 2,935 $ 3,889
Net interest income: tax equivalent basis $ 7,070 $ 5,998 $ 6,075 $ 6,377 $ 6,447 $ 19,134 $ 18,687
Tax equivalent adjustment on investment securities 185 192 197 191 193 565 590
Net interest income $ 6,885 $ 5,806 $ 5,878 $ 6,186 $ 6,254 $ 18,569 $ 18,097
NON-INTEREST INCOME DETAIL
Service fees, charges and other $ 560 $ 454 $ 497 $ 484 $ 433 $ 1,512 $ 1,339
Impairment adjustment to mortgage servicing rights 32 196 33 50 (53) 260 (89)
Bank-owned life insurance 136 137 143 147 152 416 456
Proceeds from bank-owned life insurance -- 934 -- -- -- 934 --
Gain on sale of investment securities -- -- -- 85 -- -- --
Gain on sale of loans 104 226 305 430 382 635 920
Gain on disposition of real estate -- -- 417 -- -- 417 264
Purchase gain associated with Roebling acquisition 1,214 -- -- -- -- 1,214 --
NON-INTEREST EXPENSE DETAIL
Compensation and benefits $ 3,125 $ 2,842 $ 2,817 $ 2,760 $ 2,651 $ 8,784 $ 8,222
Occupancy and equipment 867 709 697 727 686 2,273 2,068
Professional fees 311 230 288 302 349 829 874
Merger-related costs 2 295 320 108 -- 617 --
Marketing and advertising 132 132 39 79 76 303 267
FDIC insurance premiums 188 132 110 149 146 430 447
Loss on REO (2) 71 198 178 46 -- 447 425
Operating expenses of REO (2) 43 37 46 60 78 126 280
Other operating 640 557 535 459 480 1,732 1,588
Conversion costs (3) 1,403 -- -- -- -- 1,403 --
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) PERIOD ENDED
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
DEPOSIT INFORMATION
Non-interest checking $ 69,157 $ 58,697 $ 57,422 $ 52,433 $ 50,421
Interest checking 108,341 78,923 78,263 76,370 70,797
Money market 179,612 159,015 156,736 153,827 153,351
Savings 131,432 109,446 108,554 106,268 106,693
CD's 193,283 165,331 170,355 171,417 152,011
OTHER INFORMATION
Per Share
Book value $ 29.48 $ 29.36 $ 29.37 $ 29.23 $ 28.89
Tangible book value $ 27.94 $ 27.84 $ 27.85 $ 27.70 $ 27.37
Closing market price $ 27.88 $ 25.40 $ 25.15 $ 23.83 $ 23.79
Balance Sheet
Loans $ 623,021 $ 531,464 $ 528,229 $ 534,348 $ 541,610
Cash and cash equivalents 31,004 44,958 48,690 31,137 3,712
Mortgage-backed securities 48,709 34,206 38,320 44,639 51,463
Investment securities 85,330 68,459 63,987 65,041 63,822
Total assets 833,334 714,781 716,002 711,836 697,056
Total deposits 681,825 571,412 571,330 560,315 533,273
FHLB advances and other borrowed money 50,990 52,534 54,151 60,656 75,156
Stockholders' equity 92,811 83,453 83,408 82,945 81,965
Asset Quality
Non-performing loans $ 6,881 $ 5,973 $ 7,647 $ 8,359 $ 10,400
Allowance for loan losses $ 6,691 $ 6,916 $ 6,662 $ 6,922 $ 6,772
Net charge-offs $ 225 $ 146 $ 699 $ 500 $ 141
Allowance for loan losses to non-performing loans 97.24% 115.79% 87.12% 82.81% 65.12%
Allowance for loan losses to gross loans 1.07% 1.30% 1.26% 1.30% 1.25%
Non-performing loans to gross loans 1.10% 1.12% 1.45% 1.56% 1.92%
Non-performing loans to total assets 0.83% 0.84% 1.07% 1.17% 1.49%
REO (2) $ 5,786 $ 6,177 $ 7,170 $ 7,282 $ 7,619
REO to total assets (2) 0.69% 0.86% 1.00% 1.02% 1.09%
Non-performing assets to total assets 1.52% 1.70% 2.07% 2.20% 2.59%
Statistical
Shares outstanding (000's) 3,148 2,842 2,840 2,838 2,837
Number of branch offices 18 13 13 13 14
Full time equivalent employees 206 166 165 167 167
(1) The efficiency ratio is non-interest expense excluding merger-related and conversion costs and loss on REO divided by net interest income on a tax equivalent basis plus non-interest income excluding impairment adjustment to mortgage servicing rights, gain on sale of investment securities, proceeds from bank owned life insurance and gain on disposition of real estate and purchase gain associated with Roebling Bank acquisition.
(2) REO is real estate acquired through foreclosure.
(3) Conversion costs are mainly retention and severance payments paid to transition employees, and amounts paid to terminate various data processing contracts.

CONTACT: Dennis R. Stewart, EVP/CFO (215) 579-4000Source:TF Financial Corporation