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TF Financial Corporation Reports First Quarter 2014 Results and Quarterly Dividend

NEWTOWN, Pa., April 24, 2014 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported that net income for the three-month period ended March 31, 2014 was $1,381,000 ($0.45 per diluted share), which was a 12.9% increase when compared with $1,223,000 ($0.45 per diluted share) reported for the comparable period of 2013. The Company also announced that its Board of Directors declared a quarterly dividend of $0.12 per share, payable May 15, 2014 to shareholders of record on May 8, 2014.

"We produced a solid consistent quarter, continuing a trend of improved results," said Kent C. Lufkin, President and Chief Executive Officer. "Importantly, we again drove nonperforming loans down significantly on the commercial side, having sold our largest nonperforming loan during the quarter. In addition, our largest REO is now under contract for disposal from the balance sheet. Thus, we are very pleased with our ongoing progress to restore loan quality to pre-recession levels."

"On the growth side of our business, we are completing the final components of the consolidation of our Roebling Financial acquisition and are very encouraged about the value and accretion that has been added from the transaction. Across the Company, there has been steady pipeline growth with respect to commercial loan originations that should fuel revenue production in 2014. We have expanded our commercial lending staff accordingly with the addition of three new seasoned lenders. Augmenting this personnel growth initiative is a very aggressive, complementary, integrated print-TV-direct mail- telemarketing outreach campaign underway to help raise our general visibility and better position us in specific sub-markets to capture share and grow loans. We enter 2014 with optimism about our markets and the strength of this Company," said Lufkin.

Highlights for the first quarter of 2014:

  • Net interest income was $6.6 million, a 13% increase compared with $5.9 million during the first quarter of 2013. This result is largely due to an 18.8% increase in average earning assets between the two periods, the result of the acquisition of Roebling Financial Corp, Inc. ("Roebling") and its wholly-owned subsidiary, Roebling Bank. As a result of this merger which closed July 2, 2013, the Company acquired approximately $144.6 million in total assets, $102.0 million in loans receivable, and $127.8 million in total deposits contained in Roebling's five branches. Since the Roebling acquisition at the beginning of the third quarter of 2013, the Company's quarterly net interest margin has been approximately 3.53%, as it was during the first quarter of 2014.
  • Asset quality showed significant improvement during the first quarter of 2014, with total non-performing loans at 0.38% of total assets at March 31, 2014, which is down from 1.00% at December 31, 2013. Non-performing loans totaled $3.2 million at March 31, 2014, down from $8.3 million at December 31, 2013.
  • There was no loan loss provision during the first quarter of 2014 compared with $0.4 million during the first quarter of 2013. The Company's allowance for loan losses was $4.1 million or 126.3% of non-performing loans at quarter-end, compared with 78.9% of non-performing loans at year end 2013. Largely influencing the reduction in non-performing loans was the resolution of two, large problem loans totaling $4.2 million, which were resolved by repayment in full of one loan, and partial repayment plus a $2.2 million charge-off of the remainder of the other loan.
  • Total loans were $609.0 million at March 31, 2014 compared with $621.1 million at December 31, 2013. Part of the decrease was due to the resolution of the two non-performing loans mentioned above. In addition, portfolio loan closings were weak during the first quarter of 2014, due in part to the poor weather in the Company's markets. Loans originated for sale were similarly weak, with loans sold during the first quarter of 2014 totaling $3.5 million, producing gains on sale of $74,000, compared with loans sales of $11.9 million, producing gains of $305,000 during the first quarter of 2013. However, by quarter-end the Company's pipeline of loan applications and closed but unfunded loans had improved.
  • Total deposits were $692.2 million at March 31, 2014, compared with $683.9 million at December 31, 2013. Checking, savings, and money market accounts totaled $505.1 million or 73.0% of total deposits at March 31, 2014, compared with $493.4 million or 72.1% of total deposits at year end 2013.
  • Capital measures continue to be strong. Book value per share and tangible book value per share increased to $30.78 and $29.26, respectively, at March 31, 2014, compared with $30.13 and $28.60, respectively, at December 31, 2013. Regulatory capital comprised Tier 1 Leverage and Total Risk-Based ratios of 10.39% and 17.03%, respectively, at March 31, 2014, compared with 10.35% and 17.46%, respectively, at December 31, 2013. Capital levels are well above the regulatory minimums required to be considered well-capitalized.

About TF Financial Corporation

TF Financial Corporation is a bank 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 challenges of retaining key employees, our ability to generate increasing, yet balanced, loan growth in 2014 or 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.

TF FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED
3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
EARNINGS SUMMARY
Interest income $ 7,599 $ 7,809 $ 7,903 $ 6,744 $ 6,857
Interest expense 959 988 1,018 938 979
Net interest income 6,640 6,821 6,885 5,806 5,878
Loan loss provision -- -- -- 400 439
Non-interest income 722 694 2,046 1,947 1,395
Non-interest expense 5,490 5,157 6,782 5,132 5,030
Income before taxes 1,872 2,358 2,149 2,221 1,804
Income taxes 491 772 183 421 581
Net income $ 1,381 $ 1,586 $ 1,966 $ 1,800 $ 1,223
PER SHARE INFORMATION
Earnings per share, basic $ 0.45 $ 0.52 $ 0.64 $ 0.66 $ 0.45
Earnings per share, diluted $ 0.45 $ 0.52 $ 0.64 $ 0.66 $ 0.45
Weighted average basic shares (000's) 3,062 3,056 3,053 2,743 2,738
Weighted average diluted shares (000's) 3,081 3,068 3,053 2,743 2,742
Dividends paid $ 0.12 $ 0.10 $ 0.10 $ 0.05 $ 0.05
FINANCIAL RATIOS
Annualized return on average assets 0.67% 0.75% 0.92% 1.01% 0.70%
Annualized return on average equity 5.84% 6.71% 8.55% 8.55% 5.92%
Efficiency ratio (1) 72.74% 65.81% 66.15% 68.07% 64.56%
REGULATORY CAPITAL RATIOS
Tier 1 leverage ratio 10.39% 10.35% 10.21% 10.74% 10.50%
Total risk-based capital ratio 17.03% 17.46% 17.50% 18.77% 17.90%
Tier 1 risk-based capital ratio 16.27% 16.23% 16.25% 17.51% 16.65%
TF FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED
3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
AVERAGE BALANCES
Loans $ 610,590 $ 619,498 $ 622,416 $ 524,728 $ 525,275
Mortgage-backed securities 48,185 47,568 50,737 37,523 41,988
Investment securities 80,063 82,213 86,942 68,211 65,131
Other interest-earning assets 46,666 36,694 35,294 39,111 28,877
Total earning assets 785,504 785,973 795,389 669,573 661,271
Non-earning assets 50,462 49,164 48,404 45,938 46,572
Total assets 835,966 835,137 843,793 715,511 707,843
Deposits 684,900 684,085 691,646 570,271 560,750
FHLB advances and other borrowed money 48,872 50,259 55,358 53,303 56,114
Total interest bearing liabilities 733,772 734,344 747,004 623,574 616,864
Non-interest bearing liabilities 6,316 6,951 5,528 7,508 7,216
Stockholders' equity 95,878 93,842 91,261 84,429 83,763
Total liabilities & stockholders' equity $ 835,966 $ 835,137 $ 843,793 $ 715,511 $ 707,843
SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT)
Average yield on:
Loans 4.43% 4.41% 4.43% 4.56% 4.68%
Mortgage-backed securities 2.60% 2.38% 2.52% 2.63% 2.64%
Investment securities 4.06% 4.04% 3.71% 4.19% 4.43%
Other interest-earning assets 0.03% 0.04% 0.06% 0.14% 0.06%
Total interest-earning assets 4.02% 4.04% 4.03% 4.15% 4.33%
Average cost of:
Deposits 0.45% 0.45% 0.46% 0.50% 0.53%
FHLB advances and other borrowed money 1.60% 1.62% 1.57% 1.70% 1.79%
Total interest-bearing liabilities 0.53% 0.53% 0.54% 0.60% 0.64%
Interest rate spread 3.49% 3.51% 3.49% 3.55% 3.68%
Net interest margin 3.53% 3.54% 3.53% 3.59% 3.73%
TF FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED
3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
INTEREST INCOME AND EXPENSE DETAIL
Interest income on:
Loans $ 6,677 $ 6,882 $ 6,947 $ 5,963 $ 6,066
Mortgage-backed securities 309 285 322 246 273
Investment securities 801 837 814 713 711
Other interest-earning assets 3 4 5 14 4
Total interest-earning assets $ 7,790 $ 8,008 $ 8,088 $ 6,936 $ 7,054
Interest expense on:
Deposits $ 766 $ 783 $ 799 $ 712 $ 731
FHLB advances and other borrowed money 193 205 219 226 248
Total interest-bearing liabilities $ 959 $ 988 $ 1,018 $ 938 $ 979
Net interest income: tax equivalent basis $ 6,831 $ 7,020 $ 7,070 $ 5,998 $ 6,075
Tax equivalent adjustment on investment securities 191 199 185 192 197
Net interest income $ 6,640 $ 6,821 $ 6,885 $ 5,806 $ 5,878
NON-INTEREST INCOME DETAIL
Service fees, charges and other $ 511 $ 560 $ 560 $ 454 $ 497
Impairment adjustment to mortgage servicing rights 5 19 32 196 33
Bank-owned life insurance 131 135 136 137 143
Proceeds from bank-owned life insurance -- -- -- 934 --
Gain on sale of investment securities 1 4 -- -- --
Gain on sale of loans 74 70 104 226 305
Gain on disposition of real estate -- -- -- -- 417
Purchase gain associated with Roebling acquisition -- (94) 1,214 -- --
NON-INTEREST EXPENSE DETAIL
Compensation and benefits $ 3,383 $ 3,269 $ 3,125 $ 2,842 $ 2,817
Occupancy and equipment 907 833 867 709 697
Professional fees 305 174 211 230 288
Merger-related costs -- 21 102 295 320
Marketing and advertising 144 53 132 132 39
FDIC insurance premiums 134 91 188 132 110
Loss (gain) on REO, net (2) -- (1) 71 198 178
Operating expenses of REO (2) 13 37 43 37 46
Other operating 604 666 640 557 535
Conversion costs (3) -- 14 1,403 -- --
TF FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) PERIOD ENDED
3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
DEPOSIT INFORMATION
Non-interest checking $ 70,197 $ 68,133 $ 69,157 $ 58,697 $ 57,422
Interest checking 116,507 114,184 108,341 78,923 78,263
Money market 186,028 180,215 179,612 159,015 156,736
Savings 132,335 130,878 131,432 109,446 108,554
CD's 187,143 190,492 193,283 165,331 170,355
OTHER INFORMATION
Per Share
Book value $ 30.78 $ 30.13 $ 29.48 $ 29.36 $ 29.37
Tangible book value $ 29.26 $ 28.60 $ 27.94 $ 27.84 $ 27.85
Closing market price $ 29.85 $ 28.16 $ 27.88 $ 25.40 $ 25.15
Balance Sheet
Loans, net of acquired loans $ 517,114 $ 527,207 $ 532,045 $ 531,464 $ 528,229
Acquired loans 91,923 93,885 97,667 -- --
Cash and cash equivalents 60,175 45,310 31,004 44,958 48,690
Mortgage-backed securities 53,495 46,769 48,709 34,206 38,320
Investment securities 80,111 82,103 85,330 68,459 63,987
Total assets 846,016 835,689 833,334 714,781 716,002
Total deposits 692,210 683,902 681,825 571,412 571,330
FHLB advances and other borrowed money 48,311 49,605 50,990 52,534 54,151
Stockholders' equity 96,958 94,875 92,811 83,453 83,408
Asset Quality
Non-performing loans $ 3,217 $ 8,332 $ 6,881 $ 5,973 $ 7,647
Allowance for loan losses $ 4,062 $ 6,575 $ 6,691 $ 6,916 $ 6,662
Net charge-offs $ 2,514 $ 116 $ 225 $ 146 $ 699
Allowance for loan losses to non-performing loans 126.27% 78.91% 97.24% 115.79% 87.12%
Allowance for loan losses to gross loans excluding acquired loans 0.79% 1.25% 1.26% 1.30% 1.26%
Non-performing loans to gross loans 0.53% 1.34% 1.09% 1.12% 1.45%
Non-performing loans to total assets 0.38% 1.00% 0.83% 0.84% 1.07%
REO (2) $ 6,108 $ 5,601 $ 5,786 $ 6,177 $ 7,170
REO to total assets (2) 0.72% 0.67% 0.69% 0.86% 1.00%
Non-performing assets to total assets 1.10% 1.67% 1.52% 1.70% 2.07%
Statistical
Shares outstanding (000's) 3,150 3,149 3,148 2,842 2,840
Number of branch offices 18 18 18 13 13
Full time equivalent employees 204 203 206 166 165
(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