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