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TF Financial Corporation Reports 2012 Results and Quarterly Cash Dividend

NEWTOWN, Pa., Jan. 24, 2013 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $5,383,000 ($1.97 per diluted share) for 2012, a 37% increase over $3,929,000 ($1.45 per diluted share) reported for 2011. Net income for the three month period ended December 31, 2012 was $1,506,000 ($0.55 per diluted share) compared with $1,532,000 ($0.57 per diluted share) during the comparable period of 2011. The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable February 15, 2013 to shareholders of record on February 8, 2013.

"We had a very satisfactory final quarter and full year, by the key measures of performance," said Kent C. Lufkin, President and Chief Executive Officer. "In the ongoing low interest rate environment and considering the numerous other tough challenges facing community banks of our size, we continue to deliver improving financial performance for the benefit of our shareholders. A 37% year over year increase in net income, combined with above-average capital levels via retained earnings have positioned our Company to move into 2013 with good momentum. Our net interest margin was a very respectable 3.90% for the year and overall asset quality reflected healthy improvement as both non-performing assets and nonperforming loans were significantly lower than the prior year."

Highlights for 2012 included:

  • Net income increased by $1,454,000 or 37% compared with 2011.
  • Net interest income increased by $410,000 or 1.7% compared with 2011. The Company's net interest margin was 3.90% for the year, an increase of 5 basis points compared with 2011. As was the case during 2011, low market interest rates resulted in an increase in mortgage prepayments with a resulting downward drift in loan yields. However, this negative effect was more than offset by the positive effect of lower deposit costs, the outcome of an improving deposit mix and the maturity of older high-rate CDs.
  • The Bank's regulatory capital ratios remain strong, with Tier 1 Leverage and Total Risk-Based ratios of 10.45% and 17.89% at year end.
  • During 2012, loans outstanding increased by $31.6 million or 6.3% to $534.3 million. Loan demand was strong during the year: loans originated for portfolio and loans originated for sale during 2012 were $132.3 million and $52.9 million, respectively, compared with $94.6 million and $26.5 million during 2011.
  • Deposits increased by $9.0 million or 1.6% to $560.3 million, and the deposit mix improved, driven by an $18.7 million or 5.0% increase in core checking, savings and money market balances. The migration of maturing high-rate CDs into lower cost core accounts was in large part responsible for the 34 basis point decrease in the average cost of deposits for 2012 compared to 2011.
  • Asset quality showed dramatic improvement during 2012. Non-performing assets were 2.20% of total assets at year end, down from 3.56% at year end 2011. Non-performing loans decreased by $4.2 million or 33.4% during the year. Also, foreclosed property decreased by $4.4 million or 37.9% during 2012.
  • The allowance for loan losses was $6.9 million and equaled 1.30% of gross loans and 82.8% of non-performing loans at year end. The loan loss provision was $2.4 million for 2012, and net charge-offs were $3.6 million.
  • Non-interest income increased by $466,000 or 12.9% to $4.1 million during 2012 when compared with 2011, driven by an $826,000 or 158% increase in gains on loans sold. Total non-interest expense was relatively unchanged for the year, and stood at $18.9 million.

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. Deposits at 3rd Fed Bank are insured up to the maximum amount by the Federal Deposit Insurance Corporation (FDIC). In addition, the Bank's website can be found at www.3rdfedbank.com. 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, 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 YEAR ENDED
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011 12/31/2012 12/31/2011
EARNINGS SUMMARY
Interest income $ 7,234 $ 7,395 $ 7,328 $ 7,263 $ 7,613 $ 29,220 $ 31,288
Interest expense 1,048 1,141 1,277 1,471 1,550 4,937 7,415
Net interest income 6,186 6,254 6,051 5,792 6,063 24,283 23,873
Loan loss provision 650 750 500 500 850 2,400 3,728
Non-interest income 1,196 914 739 1,237 1,395 4,086 3,620
Non-interest expense 4,690 4,466 4,649 5,056 4,565 18,861 18,817
Income before taxes 2,042 1,952 1,641 1,473 2,043 7,108 4,948
Income taxes 536 479 392 318 511 1,725 1,019
Net income $ 1,506 $ 1,473 $ 1,249 $ 1,155 $ 1,532 $ 5,383 $ 3,929
PER SHARE INFORMATION
Earnings per share, basic $ 0.55 $ 0.54 $ 0.46 $ 0.42 $ 0.57 $ 1.97 $ 1.45
Earnings per share, diluted $ 0.55 $ 0.54 $ 0.46 $ 0.42 $ 0.57 $ 1.97 $ 1.45
Weighted average basic shares (000's) 2,733 2,729 2,724 2,719 2,711 2,726 2,702
Weighted average diluted shares (000's) 2,734 2,732 2,728 2,722 2,711 2,730 2,703
Dividends paid $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.20 $ 0.20
FINANCIAL RATIOS
Annualized return on average assets 0.86% 0.84% 0.74% 0.68% 0.89% 0.78% 0.57%
Annualized return on average equity 7.21% 7.21% 6.31% 5.94% 7.75% 6.68% 5.17%
Efficiency ratio (1) 62.44% 60.24% 62.34% 70.55% 61.17% 63.78% 66.60%
REGULATORY CAPITAL RATIOS
Tier 1 leverage ratio 10.45% 10.47% 10.45% 10.21% 10.21%
Tier 1 risk-based capital ratio 16.63% 16.37% 16.13% 16.16% 17.31%
Total risk-based capital ratio 17.89% 17.62% 17.37% 17.41% 18.56%
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED YEAR ENDED
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011 12/31/2012 12/31/2011
AVERAGE BALANCES
Loans $ 530,026 $ 527,195 $ 501,757 $ 493,396 $ 497,258 $ 513,178 $ 500,095
Mortgage-backed securities 49,383 55,820 61,580 61,971 61,079 57,164 64,416
Investment securities 63,773 64,304 68,181 67,035 67,843 65,813 67,747
Other interest-earning assets 6,482 393 3,074 13,619 6,699 6,155 5,406
Total earning assets 649,664 647,712 634,592 636,021 632,879 642,310 637,664
Non-earning assets 46,985 46,168 48,329 50,557 52,263 47,726 50,390
Total assets 696,649 693,880 682,921 686,578 685,142 690,036 688,054
Deposits 539,653 538,637 550,040 554,523 551,964 545,677 550,019
FHLB advances and other borrowed money 66,223 66,740 46,785 47,387 48,109 56,837 55,274
Total interest bearing liabilities 605,876 605,377 596,825 601,910 600,073 602,514 605,293
Non-interest bearing liabilities 7,629 7,179 6,486 6,523 6,600 6,957 6,802
Stockholders' equity 83,144 81,324 79,610 78,145 78,469 80,565 75,959
Total liabilities & stockholders' equity $ 696,649 $ 693,880 $ 682,921 $ 686,578 $ 685,142 $ 690,036 $ 688,054
SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT)
Average yield on:
Loans 4.76% 4.86% 4.99% 5.05% 5.13% 4.91% 5.27%
Mortgage-backed securities 3.04% 3.23% 3.68% 3.50% 4.22% 3.38% 4.22%
Investment securities 4.37% 4.32% 4.31% 4.27% 4.15% 4.33% 4.26%
Other interest-earning assets 0.37% 0.00% 0.00% 0.06% 0.11% 0.13% 0.06%
Total interest-earning assets 4.55% 4.66% 4.77% 4.71% 4.88% 4.67% 5.02%
Average cost of:
Deposits 0.54% 0.59% 0.68% 0.77% 0.82% 0.65% 0.99%
FHLB advances and other borrowed money 1.87% 2.01% 3.02% 3.44% 3.39% 2.47% 3.52%
Total interest-bearing liabilities 0.69% 0.75% 0.86% 0.98% 1.02% 0.82% 1.23%
Interest rate spread 3.86% 3.91% 3.91% 3.73% 3.86% 3.85% 3.79%
Net interest margin 3.90% 3.96% 3.96% 3.78% 3.91% 3.90% 3.85%
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED YEAR ENDED
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011 12/31/2012 12/31/2011
INTEREST INCOME AND EXPENSE DETAIL
Interest income on:
Loans $ 6,341 $ 6,436 $ 6,231 $ 6,197 $ 6,427 $ 25,205 $ 26,373
Mortgage-backed securities 377 453 564 539 650 1,933 2,718
Investment securities 701 699 731 712 730 2,849 2,885
Other interest-earning assets 6 -- -- 2 2 8 3
Total interest-earning assets $ 7,425 $ 7,588 $ 7,526 $ 7,450 $ 7,809 $ 29,995 $ 31,979
Interest expense on:
Deposits $ 737 $ 803 $ 926 $ 1,066 $ 1,139 $ 3,532 $ 5,467
FHLB advances and other borrowed money 311 338 351 405 411 1,405 1,948
Total interest-bearing liabilities $ 1,048 $ 1,141 $ 1,277 $ 1,471 $ 1,550 $ 4,937 $ 7,415
Net interest income: tax equivalent basis $ 6,377 $ 6,447 $ 6,249 $ 5,979 $ 6,259 $ 25,058 $ 24,564
Tax equivalent adjustment on investment securities 191 193 198 187 196 775 691
Net interest income $ 6,186 $ 6,254 $ 6,051 $ 5,792 $ 6,063 $ 24,283 $ 23,873
NON-INTEREST INCOME DETAIL
Service fees, charges and other $ 484 $ 433 $ 448 $ 458 $ 478 $ 1,823 $ 1,837
Impairment adjustment to mortgage servicing rights 50 (53) (75) 39 (22) (39) (139)
Bank-owned life insurance 147 152 152 152 157 603 638
Gain on sale of investment securities 85 -- -- -- 550 85 760
Gain on sale of loans 430 382 214 324 232 1,350 524
Gain on disposition of real estate -- -- -- 264 -- 264 --
NON-INTEREST EXPENSE DETAIL
Compensation and benefits $ 2,760 $ 2,651 $ 2,697 $ 2,874 $ 2,573 $ 10,982 $ 10,525
Occupancy and equipment 727 686 672 710 719 2,795 2,972
Professional fees 410 349 174 351 266 1,284 1,331
Marketing and advertising 79 76 106 85 55 346 312
FDIC insurance premiums 149 146 150 151 149 596 675
Loss on foreclosed real estate 46 -- 246 179 206 471 460
Operating expenses on foreclosed real estate 60 78 94 108 102 340 345
Other operating 459 480 510 598 495 2,047 2,197
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) PERIOD ENDED
12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
DEPOSIT INFORMATION
Non-interest checking $ 52,433 $ 50,421 $ 47,826 $ 49,408 $ 43,910
Interest checking 76,370 70,797 74,925 69,195 65,677
Money market 153,827 153,351 151,375 154,417 155,010
Savings 106,268 106,693 107,924 108,219 105,617
CD's 171,417 152,011 164,990 180,962 181,074
OTHER INFORMATION
Per Share
Book value $ 29.27 $ 28.89 $ 28.25 $ 27.71 $ 27.33
Tangible book value $ 27.75 $ 27.37 $ 26.73 $ 26.18 $ 25.81
Closing market price $ 23.83 $ 23.79 $ 24.66 $ 24.20 $ 22.72
Balance Sheet
Loans $ 534,348 $ 541,610 $ 519,946 $ 498,357 $ 502,713
Cash and cash equivalents 31,137 3,712 4,367 22,340 14,928
Mortgage-backed securities 44,639 51,463 58,753 63,988 58,970
Investment securities 65,041 63,822 66,012 69,556 65,778
Total assets 712,000 697,056 685,387 693,421 681,929
Total deposits 560,315 533,273 547,040 562,201 551,288
FHLB advances and other borrowed money 60,656 75,156 51,084 46,685 46,908
Stockholders' equity 83,065 81,965 80,102 78,528 77,408
Asset Quality
Non-performing loans $ 8,359 $ 10,400 $ 12,566 $ 13,889 $ 12,541
Allowance for loan losses $ 6,922 $ 6,772 $ 6,163 $ 6,981 $ 8,100
Net charge-offs $ 500 $ 141 $ 1,318 $ 1,619 $ 2,337
Allowance for loan losses to non-performing loans 82.81% 65.12% 49.05% 50.26% 64.59%
Allowance for loan losses to gross loans 1.30% 1.25% 1.19% 1.40% 1.61%
Non-performing loans to gross loans 1.56% 1.92% 2.42% 2.79% 2.49%
Non-performing loans to total assets 1.17% 1.49% 1.83% 2.00% 1.84%
Foreclosed property $ 7,282 $ 7,619 $ 6,625 $ 10,247 $ 11,730
Foreclosed property to total assets 1.02% 1.09% 0.97% 1.48% 1.72%
Non-performing assets to total assets 2.20% 2.59% 2.80% 3.48% 3.56%
Statistical
Shares outstanding (000's) 2,838 2,837 2,835 2,834 2,832
Number of branch offices 13 14 14 14 14
Full time equivalent employees 167 167 171 176 168
(1) The efficiency ratio is non-interest expense excluding loss on foreclosed real estate 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, and gain on disposition of real estate.

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