updated 1/28/2011 8:46:14 AM ET 2011-01-28T13:46:14

NEWTOWN, Pa., Jan. 28, 2011 (GLOBE NEWSWIRE) -- TF Financial Corporation (Nasdaq:THRD) today reported net income of $3,352,000 ($1.25 per diluted share) for 2010, compared with $4,514,000 ($1.70 per diluted share) for 2009. Net income for the three month period ended December 31, 2010 was $659,000 ($0.24 per diluted share) compared with $1,160,000 ($0.44 per diluted share) during the comparable period of 2009.

The Company also announced that its Board of Directors declared a quarterly dividend of $0.05 per share, payable February 15, 2011 to shareholders of record on February 8, 2011, a reduction from the previous quarterly dividend of $0.20 per share. In addition, the Board of Directors declared a 5% stock dividend, payable February 28, 2011 to shareholders of record on February 15, 2011, with shareholders receiving cash in lieu of fractional shares.

"We are proactively managing our way through a very tough operating environment for community banks that continues to persist over several quarters. At this stage of the prolonged cycle, even the resilient markets with the best demographics that are within our footprint are showing strain," said Kent C. Lufkin, president and chief executive officer.

"We maintained our profitability throughout 2010, albeit lower than the prior year. We grew net interest margin to a respectable 3.59% (up 21 basis points), net interest income advanced over the prior year, and we set aside a substantially larger allowance for possible loan losses. In addition, we previously eliminated bonus and incentive compensation for 2010. However, in view of, among other things, the increase in our loan loss allowance, the continuing weakness in the commercial real estate market and the increase in non-performing assets, discussed below, the Board of Directors decided it was prudent to reduce our dividend at this time to conserve capital in the future. However, in view of the Board's confidence in the Company's future prospects, a stock dividend was also declared. As noted below, capital ratios for 2010 remain strong and were meaningfully improved over 2009."

Highlights for 2010 included:

  • Net income decreased by $1,162,000 compared with 2009. On a pre-tax basis, income was $1,610,000 lower in 2010 than in 2009. Contributing to the pre-tax difference were several significant items: the loan loss provision was $1,311,000 greater in 2010 than 2009; gains on the sale of securities were $742,000 lower in 2010 when compared to 2009; and there was a loss of $244,000 on the sale of foreclosed real estate during 2010 compared to a gain of $337,000 during 2009.
  • Net interest income increased by $744,000 or 3.3% compared with 2009. The Company's net interest margin was 3.59% for the year, an increase of 21 basis points compared with 2009.
  • The Bank's capital ratios have improved, with Tier 1 Core and Total Risk-Based ratios of 9.56% and 17.53% at year end, compared with 8.94% and 16.28% at December 31, 2009.
  • During 2010, loans outstanding decreased by $26.0 million or 4.8% to $510.0 million. While mortgage loan demand was strong during the year, commercial and consumer loan demand was weak. The average yield on loans decreased by 23 basis points to 5.43% during 2010 when compared to 2009, the combined result of a high level of mortgage loan refinancing due to the historically low level of mortgage loan rates during much of the year, and the increased level of non-performing loans during the year.
  • Deposits decreased by $2.6 million or 0.5% to $550.1 million, and while the overall change was relatively small, there was a $20.9 million or 9.3% decrease in certificates of deposit balances, and an $18.4 million or 5.6% increase in core checking, savings and money market balances. The migration of maturing high-rate CD's into lower cost core accounts was in large part responsible for the 54 basis point decrease in the average cost of deposits for 2010 compared to 2009.
  • Non-performing assets were 3.83% of total assets at year end, up from 1.34% at year end 2009. Non-performing loans, virtually all real estate secured, increased during the year by $10.7 million to $19.0 million or 2.74% of total assets at year end. In addition, the Company holds $7.5 million or 1.08% of total assets in foreclosed property at year end. Most of the increase in foreclosed property is attributable to one piece of real estate in Philadelphia being carried on the Bank's books at $5.4 million.
  • The allowance for loan losses was $8.3 million, an increase of $3.1 million during the year, and stood at 1.63% of gross loans and 43.9% of non-performing loans at year end. The loan loss provision was $4.2 million for 2010, and net charge-offs were $1.1 million. The increased provision was due in part to continuing weakness in commercial real estate values in the Company's lending markets throughout the Philadelphia region.
  • Non-interest income decreased by $1.1 million to $3.3 million during 2010 when compared with 2009, the result of a $742,000 decrease in gains from sales of securities, and a $581,000 decrease in net gains and losses booked as a result of sales of foreclosed real estate. Total non-interest expense was relatively unchanged when compared with 2009; however, there was a $437,000 decrease in compensation expense largely caused by the elimination of bonus and incentive compensation for 2010.

TF Financial Corporation is a holding company whose principal subsidiary is 3rd Federal Bank, which operates 14 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 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
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009 12/31/2010 12/31/2009
               
               
EARNINGS SUMMARY              
               
Interest income  $ 8,021  $ 8,350  $ 8,522  $ 8,675  $ 8,932  $ 33,568  $ 36,597
Interest expense 2,243 2,488 2,634 2,843 3,153 10,208 13,981
Net interest income 5,778 5,862 5,888 5,832 5,779 23,360 22,616
Loan loss provision 1,500 1,180 600 961 1,025 4,241 2,930
Non-interest income 1,143 927 597 616 1,240 3,283 4,410
Non-interest expense 4,591 4,227 4,591 4,592 4,465 18,001 18,085
Income taxes 171 373 327 178 369 1,049 1,497
Net income  $ 659  $ 1,009  $ 967  $ 717  $ 1,160  $ 3,352  $ 4,514
               
               
PER SHARE INFORMATION              
               
Earnings per share, basic (2)  $ 0.24  $ 0.38  $ 0.36  $ 0.27  $ 0.44  $ 1.25  $ 1.70
Earnings per share, diluted (2)  $ 0.24  $ 0.38  $ 0.36  $ 0.27  $ 0.44  $ 1.25  $ 1.70
               
Weighted average basic shares (000's) (2)  2,692  2,687  2,680  2,669  2,657  2,682  2,649
Weighted average diluted shares (000's) (2)  2,692  2,687  2,680  2,669  2,657  2,682  2,649
               
Dividends paid (2)  $ 0.19  $ 0.19  $ 0.19  $ 0.19  $ 0.19  $ 0.76  $ 0.76
               
               
FINANCIAL RATIOS              
               
Annualized return on average assets 0.37% 0.56% 0.54% 0.41% 0.64% 0.47% 0.63%
Annualized return on average equity 3.48% 5.41% 5.30% 4.01% 6.61% 4.55% 6.63%
Efficiency ratio (1) 66.33% 62.26% 70.79% 71.22% 63.61% 67.56% 66.92%
               
               
CAPITAL RATIOS              
               
Tier 1 (Core) Capital Ratio 9.56% 9.32% 8.97% 8.92% 8.94%    
Total Risk-Based Capital Ratio 17.53% 16.83% 16.55% 16.24% 16.28%    
Tier 1 Risk-Based Capital Ratio 16.28% 15.58% 15.30% 15.10% 15.17%    
Tangible Equity Ratio 9.56% 9.32% 8.97% 8.92% 8.94%    
 
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) QUARTER ENDED YEAR ENDED
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009 12/31/2010 12/31/2009
AVERAGE BALANCES              
               
Loans  $ 510,997  $ 522,181  $ 522,289  $ 529,817  $ 532,190  $ 521,272  $ 538,759
Mortgage-backed securities 72,059 79,070 80,735 81,839 90,434 78,401 101,142
Investment securities 61,902 59,077 58,446 53,282 45,996 58,204 41,360
Other interest-earning assets 7,816 10,122 13,451 6,728 10,358 9,534 3,747
Total earning assets 652,774 670,450 674,921 671,666 678,978 667,411 685,008
Non-earning assets 45,242 42,716 42,210 41,204 37,440 42,850 37,170
Total assets 698,016 713,166 717,131 712,870 716,418 710,261 722,178
               
Deposits 550,484 556,314 557,128 549,257 548,436 553,307 524,431
FHLB advances and other borrowed money 65,678 75,130 78,469 82,536 89,126 75,410 120,631
Total interest bearing liabilities 616,162 631,444 635,597 631,793 637,562 628,717 645,062
Non-interest bearing liabilities 6,681 7,744 8,373 8,611 9,213 7,843 9,081
Stockholders' equity 75,173 73,978 73,161 72,466 69,643 73,701 68,035
Total liabilities & stockholders' equity  $ 698,016  $ 713,166  $ 717,131  $ 712,870  $ 716,418  $ 710,261  $ 722,178
               
               
SPREAD AND MARGIN ANALYSIS              
               
Average yield on:              
Loans 5.23% 5.33% 5.49% 5.59% 5.57% 5.43% 5.66%
Mortgage-backed securities 4.48% 4.45% 4.62% 4.79% 4.90% 4.60% 4.92%
Investment securities 3.96% 3.94% 3.99% 4.12% 4.00% 4.01% 4.01%
Other interest-earning assets 0.05% 0.02% 0.03% 0.06% 0.08% 0.06% 0.08%
Total interest-earning assets 4.96% 5.03% 5.15% 5.32% 5.29% 5.13% 5.42%
               
Average cost of:              
Deposits 1.17% 1.25% 1.33% 1.47% 1.61% 1.31% 1.83%
FHLB advances and other borrowed money 3.78% 3.86% 4.05% 4.17% 4.16% 3.99% 3.67%
Total interest-bearing liabilities 1.44% 1.56% 1.66% 1.82% 1.96% 1.63% 2.17%
               
Interest rate spread 3.52% 3.47% 3.49% 3.50% 3.33% 3.50% 3.25%
Net interest margin 3.60% 3.55% 3.58% 3.60% 3.45% 3.59% 3.38%
               
               
NON-INTEREST INCOME DETAIL              
               
Service fees, charges and other  $ 662  $ 404  $ 363  $ 529  $ 480  $ 1,958  $ 1,978
Bank-owned life insurance  169  170  167  172  175  678  676
Gain/loss on sale investments  13  --   7  --   456  20  762
Gain on sale of loans  406  353  52  60  129  871  657
Gain/(loss) on sale of foreclosed real estate   (107)  --   8  (145)  --   (244)  337
               
NON-INTEREST EXPENSE DETAIL              
               
Compensation and benefits  $ 2,569  $ 2,269  $ 2,667  $ 2,700  $ 2,725  $ 10,205  $ 10,642
Occupancy and equipment  747  774  723  759  696  3,003  2,870
Professional fees  383  196  256  228  205  1,063  856
Marketing and advertising  91  152  120  120  87  483  920
FDIC insurance premiums  229  233  259  194  206  915  920
Other operating  572  603  566  591  546  2,332  2,328
 
T F FINANCIAL CORPORATION
UNAUDITED FINANCIAL INFORMATION
(dollars in thousands except per share data) PERIOD ENDED
  12/31/2010 9/30/2010 6/30/2010 3/31/2010 12/31/2009
DEPOSIT INFORMATION          
           
Non-interest checking  $ 40,389  $ 41,012  $ 45,022  $ 41,757  $ 37,288
Interest checking 56,157 52,892 55,166 51,991 52,988
Money market 149,744 149,355 145,735 142,791 141,286
Savings 99,686 97,216 100,321 98,948 96,061
CD's 204,159 212,087 213,146 217,938 225,093
           
OTHER INFORMATION          
           
Per Share          
           
Book value (2)  $ 26.11  $ 26.49  $ 26.01  $ 25.76  $ 25.61
Tangible book value (2)  $ 24.58  $ 24.95  $ 24.47  $ 24.22  $ 24.07
Closing market price (2)  $ 21.23  $ 19.67  $ 20.76  $ 18.18  $ 18.07
           
Balance Sheet          
           
Loans  $ 509,986  $ 528,058  $ 526,947  $ 531,137  $ 535,949
Cash and cash equivalents 7,437 6,916 19,965 16,339 12,801
Mortgage-backed securities 69,660 74,768 82,169 78,412 81,931
Investment securities 67,231 60,424 59,659 57,837 50,749
Total assets 691,757 702,583 720,768 715,948 714,090
Total deposits 550,135 552,562 559,390 553,425 552,716
FHLB advances and other borrowed money 61,987 68,671 79,929 81,738 80,241
Stockholders' equity 73,700 74,673 73,321 72,422 71,874
           
Asset Quality          
           
Non-performing loans  $ 18,978  $ 21,545  $ 15,828  $ 14,174  $ 8,284
Allowance for loan losses   $ 8,328  $ 7,606  $ 6,749  $ 6,165  $ 5,215
Net charge-offs   $ 778  $ 323  $ 16  $ 11  $ 102
Allowance to gross loans 1.63% 1.44% 1.28% 1.16% 0.97%
Non-performing loans to gross loans 3.72% 4.08% 3.00% 2.67% 1.55%
Non-performing loans to total assets 2.74% 3.07% 2.20% 1.98% 1.16%
Foreclosed property  $ 7,482  $ 2,153  $ 1,448  $ 1,150  $ 1,279
Foreclosed property to total assets 1.08% 0.31% 0.20% 0.16% 0.18%
Non-performing assets to total assets 3.83% 3.37% 2.40% 2.14% 1.34%
           
Statistical          
           
Shares outstanding (000's) (2)  2,823  2,685  2,685  2,678  2,673
Number of branch offices  14  14  14  14  14
Full time equivalent employees  176  170  177  177  177
(1) The efficiency ratio is non-interest expense divided by

net interest income plus non-interest income.
(2) Amounts adjusted for 5% stock dividend declared

January 26, 2011, to be distributed on February 28, 2011

to shareholders of record February 15, 2011.
CONTACT: Dennis R. Stewart, EVP/CFO
         (215) 579-4000

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

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