TF Financial Corporation Reports Second Quarter 2011 Results and Quarterly Dividend
July 28 2011 - 8:25AM
TF Financial Corporation (Nasdaq:THRD) today reported net income of
$699,000 ($0.26 per diluted share) for the second quarter of 2011,
compared with $618,000 ($0.23 per diluted share) for the first
quarter of 2011 and $967,000 ($0.36 per diluted share) for the
second quarter of 2010. Net income for the six month period ended
June 30, 2011 was $1,317,000 ($0.49 per diluted share) compared
with $1,684,000 ($0.63 per diluted share) for the first six months
of 2010. The Company also announced that its Board of Directors
declared a quarterly dividend of $0.05 per share, payable August
15, 2011 to shareholders of record on August 8, 2011.
"Considering the ongoing softness and uncertainty about where
the economy is headed, both nationally and within our local
markets, we are pleased to be maintaining consistent profitability
for an institution of our size," said Kent C. Lufkin, president and
chief executive officer. "Loan demand from higher quality borrowers
has improved but still remains too inconsistent to constitute a
trend, while our efforts to grow core deposits are producing solid
results. During these challenging times our capital position
remains healthy and continues to improve with stockholders' equity
at $75.3 million or 10.9% of total assets."
"Net interest income was ahead of both the first quarter of this
year and the comparable second quarter of last year and our net
interest margin improved to 3.88% in the second quarter as our cost
of funds declined. The resolution of problem assets is our ongoing
top priority and although our loan loss provision remains elevated
along with nonperforming assets, we are beginning to observe
indications that our credit quality trends should be gradually
moving in a positive direction from this point forward. We will
continue to intensively focus on the resolution and disposal of
problem loans while we ride out this cycle."
Results for the current quarter included:
- Pre-tax income was $821,000 during the quarter, down $473,000
from the second quarter of 2010, mainly the result of an $850,000
increase in the loan loss provision, described in more detail
below. The other broad components of pre-tax earnings were similar
to, or an improvement from, the second quarter of 2010: net
interest income was up $101,000, non-interest income was up
$295,000 largely due to a $203,000 increase in gains on the sale of
investment securities, and non-interest expenses were roughly the
same.
- Net interest income was $5,989,000 which was a $173,000 or 3.0%
increase over the first quarter of 2011, and a $101,000 or 1.7%
increase over the second quarter of 2010. Similarly, the Company's
net interest margin expanded to 3.88% compared with 3.80% during
the first quarter of 2011, and 3.58% during the second quarter of
2010. While the yields on the Company's interest-earning assets
fell by 4 basis points during the second quarter of 2011 compared
with the second quarter of 2010, the cost of the Company's interest
bearing liabilities decreased by 37 basis points since the second
quarter of 2010, mainly the result of a 27 basis point reduction in
the cost of deposits, due in large part to the maturity of time
deposits, which had been originated during periods of higher market
interest rates, into lower current market interest rates.
- The provision for loan losses was $1,450,000 and net
charge-offs were $1,248,000 during the quarter, compared with a
provision for loan losses of $600,000 and net charge-offs of
$16,000 during the second quarter of 2010. The Company's allowance
for loan losses was $9,108,000 or 1.79% of loans at quarter end, a
35.0% increase over the $6,749,000 balance at June 30, 2010.
- Non-performing loans were $18.3 million at quarter end compared
with $19.0 million at December 31, 2010. Foreclosed property at
June 30, 2011 was $9.4 million compared with $7.5 million at
December 31, 2010. Total non-performing assets were 3.98% of total
assets compared with 3.83% at year end 2010. During the quarter the
Company booked $1.6 million in foreclosed property, while recording
sales of $0.3 million.
- Loans outstanding were $508.4 million, a $0.6 million or 0.1%
increase during the quarter. Mortgage loans originated for sale
were $2.6 million compared with $5.2 million during the second
quarter of 2010.
- At quarter end, total deposits were $552.1 million, compared
with $550.1 million at December 31, 2010, and $559.4 million at
June 30, 2010.
TF Financial Corporation is a holding company whose principal
subsidiary is Third Federal Bank, which operates 14 full service
retail and commercial banking offices in Philadelphia and Bucks
County, Pennsylvania and in Mercer County, New Jersey. Deposits at
Third Federal 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.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 |
SIX MONTHS
ENDED |
|
6/30/2011 |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
6/30/2011 |
6/30/2010 |
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|
EARNINGS SUMMARY |
|
|
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|
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|
|
|
|
|
|
Interest income |
$ 7,932 |
$ 7,835 |
$ 8,021 |
$ 8,350 |
$ 8,522 |
$ 15,767 |
$ 17,197 |
Interest expense |
1,943 |
2,019 |
2,243 |
2,488 |
2,634 |
3,962 |
5,477 |
Net interest income |
5,989 |
5,816 |
5,778 |
5,862 |
5,888 |
11,805 |
11,720 |
Loan loss provision |
1,450 |
900 |
1,500 |
1,180 |
600 |
2,350 |
1,561 |
Non-interest income |
892 |
750 |
1,143 |
927 |
597 |
1,642 |
1,213 |
Non-interest expense |
4,610 |
4,976 |
4,591 |
4,227 |
4,591 |
9,586 |
9,183 |
Income taxes |
122 |
72 |
171 |
373 |
327 |
194 |
505 |
Net income |
$ 699 |
$ 618 |
$ 659 |
$ 1,009 |
$ 967 |
$ 1,317 |
$ 1,684 |
|
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|
PER SHARE INFORMATION |
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|
|
Earnings per share, basic (2) |
$ 0.26 |
$ 0.23 |
$ 0.24 |
$ 0.38 |
$ 0.36 |
$ 0.49 |
$ 0.63 |
Earnings per share, diluted (2) |
$ 0.26 |
$ 0.23 |
$ 0.24 |
$ 0.38 |
$ 0.36 |
$ 0.49 |
$ 0.63 |
|
|
|
|
|
|
|
|
Weighted average basic shares
(000's) (2) |
2,705 |
2,703 |
2,692 |
2,687 |
2,680 |
2,703 |
2,675 |
Weighted average diluted shares (000's)
(2) |
2,706 |
2,704 |
2,692 |
2,687 |
2,680 |
2,704 |
2,675 |
|
|
|
|
|
|
|
|
Dividends paid (2) |
$ 0.05 |
$ 0.05 |
$ 0.19 |
$ 0.19 |
$ 0.19 |
$ 0.10 |
$ 0.38 |
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FINANCIAL RATIOS |
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|
Annualized return on average assets |
0.41% |
0.36% |
0.37% |
0.56% |
0.54% |
|
|
Annualized return on average equity |
3.74% |
3.38% |
3.48% |
5.41% |
5.30% |
|
|
Efficiency ratio (1) |
67.00% |
75.78% |
66.33% |
62.26% |
70.79% |
|
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|
REGULATORY CAPITAL
RATIOS |
|
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|
|
|
|
Tier 1 (Core) Capital Ratio |
9.78% |
9.79% |
9.56% |
9.32% |
8.97% |
|
|
Total Risk-Based Capital Ratio |
17.61% |
17.45% |
17.47% |
16.83% |
16.55% |
|
|
Tier 1 Risk-Based Capital Ratio |
16.36% |
16.20% |
16.22% |
15.58% |
15.30% |
|
|
Tangible Equity Ratio |
9.78% |
9.79% |
9.56% |
9.32% |
8.97% |
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|
T F FINANCIAL
CORPORATION |
UNAUDITED FINANCIAL
INFORMATION |
(dollars in thousands except per share
data) |
QUARTER
ENDED |
SIX MONTHS
ENDED |
|
6/30/2011 |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
6/30/2011 |
6/30/2010 |
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ 499,024 |
$ 501,543 |
$ 510,997 |
$ 522,181 |
$ 522,289 |
$ 500,277 |
$ 526,032 |
Mortgage-backed securities |
63,940 |
66,401 |
72,059 |
79,070 |
80,735 |
65,164 |
81,284 |
Investment securities |
68,439 |
67,035 |
61,902 |
59,077 |
58,446 |
67,742 |
55,878 |
Other interest-earning assets |
4,420 |
3,237 |
7,816 |
10,122 |
13,451 |
3,831 |
10,108 |
Total earning assets |
635,823 |
638,216 |
652,774 |
670,450 |
674,921 |
637,014 |
673,302 |
Non-earning assets |
50,346 |
48,984 |
45,242 |
42,716 |
42,210 |
49,667 |
41,711 |
Total assets |
686,169 |
687,200 |
698,016 |
713,166 |
717,131 |
686,681 |
715,013 |
|
|
|
|
|
|
|
|
Deposits |
546,215 |
546,055 |
550,484 |
556,314 |
557,128 |
546,136 |
553,214 |
FHLB advances and other borrowed
money |
57,972 |
60,446 |
65,678 |
75,130 |
78,469 |
59,202 |
80,491 |
Total interest bearing liabilities |
604,187 |
606,501 |
616,162 |
631,444 |
635,597 |
605,338 |
633,705 |
Non-interest bearing liabilities |
7,039 |
6,482 |
6,681 |
7,744 |
8,373 |
6,762 |
8,493 |
Stockholders' equity |
74,943 |
74,217 |
75,173 |
73,978 |
73,161 |
74,582 |
72,815 |
Total liabilities & stockholders'
equity |
$ 686,169 |
$ 687,200 |
$ 698,016 |
$ 713,166 |
$ 717,131 |
$ 686,682 |
$ 715,013 |
|
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|
SPREAD AND MARGIN
ANALYSIS |
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Average yield on: |
|
|
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|
|
|
|
Loans |
5.38% |
5.32% |
5.23% |
5.33% |
5.49% |
5.37% |
5.56% |
Mortgage-backed securities |
4.21% |
4.24% |
4.48% |
4.45% |
4.62% |
4.24% |
4.72% |
Investment securities |
4.28% |
4.35% |
3.96% |
3.94% |
3.99% |
4.33% |
4.06% |
Other interest-earning assets |
0.09% |
0.00% |
0.05% |
0.02% |
0.03% |
0.05% |
0.04% |
Total interest-earning assets |
5.11% |
5.08% |
4.96% |
5.03% |
5.15% |
5.11% |
5.25% |
|
|
|
|
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|
|
Average cost of: |
|
|
|
|
|
|
|
Deposits |
1.06% |
1.08% |
1.17% |
1.25% |
1.33% |
1.07% |
1.40% |
FHLB advances and other borrowed
money |
3.49% |
3.75% |
3.78% |
3.86% |
4.05% |
3.63% |
4.12% |
Total interest-bearing liabilities |
1.29% |
1.35% |
1.44% |
1.56% |
1.66% |
1.32% |
1.75% |
|
|
|
|
|
|
|
|
Interest rate spread |
3.82% |
3.73% |
3.52% |
3.47% |
3.49% |
3.79% |
3.50% |
Net interest margin |
3.88% |
3.80% |
3.60% |
3.55% |
3.58% |
3.85% |
3.60% |
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|
NON-INTEREST INCOME
DETAIL |
|
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|
|
|
Service fees, charges and other |
$ 479 |
$ 465 |
$ 662 |
$ 404 |
$ 363 |
$ 944 |
$ 892 |
Bank-owned life insurance |
164 |
157 |
169 |
170 |
167 |
321 |
339 |
Gain/loss on sale investments |
210 |
-- |
13 |
-- |
7 |
210 |
7 |
Gain on sale of loans |
50 |
117 |
406 |
353 |
52 |
167 |
112 |
Gain/(loss) on sale of foreclosed real
estate |
(11) |
11 |
(107) |
-- |
8 |
-- |
(137) |
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|
NON-INTEREST EXPENSE
DETAIL |
|
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Compensation and benefits |
$ 2,622 |
$ 2,746 |
$ 2,569 |
$ 2,269 |
$ 2,667 |
$ 5,368 |
$ 5,367 |
Occupancy and equipment |
736 |
818 |
747 |
774 |
723 |
1,554 |
1,482 |
Professional fees |
324 |
478 |
383 |
196 |
256 |
802 |
484 |
Marketing and advertising |
102 |
67 |
91 |
152 |
120 |
169 |
240 |
FDIC insurance premiums |
151 |
233 |
229 |
233 |
259 |
384 |
453 |
Other operating |
675 |
634 |
572 |
603 |
566 |
1,309 |
1,157 |
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|
T F FINANCIAL
CORPORATION |
UNAUDITED FINANCIAL
INFORMATION |
(dollars in thousands except per share
data) |
PERIOD
ENDED |
|
|
|
6/30/2011 |
3/31/2011 |
12/31/2010 |
9/30/2010 |
6/30/2010 |
|
|
DEPOSIT INFORMATION |
|
|
|
|
|
|
|
|
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|
|
Non-interest checking |
$ 44,817 |
$ 41,920 |
$ 40,389 |
$ 41,012 |
$ 45,022 |
|
|
Interest checking |
58,632 |
58,428 |
56,157 |
52,892 |
55,166 |
|
|
Money market |
149,852 |
148,713 |
149,744 |
149,355 |
145,735 |
|
|
Savings |
104,423 |
101,445 |
99,686 |
97,216 |
100,321 |
|
|
CD's |
194,380 |
197,247 |
204,159 |
212,087 |
213,146 |
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|
OTHER INFORMATION |
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Per Share |
|
|
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|
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|
|
|
Book value (2) |
$ 26.69 |
$ 26.32 |
$ 26.02 |
$ 26.49 |
$ 26.01 |
|
|
Tangible book value (2) |
$ 25.16 |
$ 24.79 |
$ 24.48 |
$ 24.95 |
$ 24.47 |
|
|
Closing market price (2) |
$ 21.42 |
$ 20.83 |
$ 21.23 |
$ 19.67 |
$ 20.76 |
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|
Balance Sheet |
|
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|
|
Loans |
$ 508,371 |
$ 507,785 |
$ 509,986 |
$ 528,058 |
$ 526,947 |
|
|
Cash and cash equivalents |
8,786 |
10,668 |
7,437 |
6,916 |
19,965 |
|
|
Mortgage-backed securities |
67,520 |
61,476 |
69,660 |
74,768 |
82,169 |
|
|
Investment securities |
68,551 |
67,364 |
67,231 |
60,424 |
59,659 |
|
|
Total assets |
691,561 |
684,221 |
691,757 |
702,583 |
720,768 |
|
|
Total deposits |
552,104 |
547,753 |
550,135 |
552,562 |
559,390 |
|
|
FHLB advances and other borrowed
money |
55,345 |
55,387 |
61,987 |
68,671 |
79,929 |
|
|
Stockholders' equity |
75,332 |
74,270 |
73,416 |
74,673 |
73,321 |
|
|
|
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
$ 18,308 |
$ 21,064 |
$ 18,978 |
$ 21,545 |
$ 15,828 |
|
|
Allowance for loan losses |
$ 9,108 |
$ 8,906 |
$ 8,328 |
$ 7,606 |
$ 6,749 |
|
|
Net charge-offs |
$ 1,248 |
$ 322 |
$ 778 |
$ 323 |
$ 16 |
|
|
Allowance to gross loans |
1.79% |
1.75% |
1.63% |
1.44% |
1.28% |
|
|
Non-performing loans to gross loans |
3.60% |
4.15% |
3.72% |
4.08% |
3.00% |
|
|
Non-performing loans to total assets |
2.65% |
3.08% |
2.74% |
3.07% |
2.20% |
|
|
Foreclosed property |
$ 9,245 |
$ 8,002 |
$ 7,482 |
$ 2,153 |
$ 1,448 |
|
|
Foreclosed property to total assets |
1.35% |
1.17% |
1.08% |
0.31% |
0.20% |
|
|
Non-performing assets to total
assets |
3.98% |
4.25% |
3.83% |
3.37% |
2.40% |
|
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Statistical |
|
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|
|
Shares outstanding (000's) (2) |
2,822 |
2,822 |
2,822 |
2,685 |
2,685 |
|
|
Number of branch offices |
14 |
14 |
14 |
14 |
14 |
|
|
Full time equivalent employees |
179 |
177 |
176 |
170 |
177 |
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|
(1) The efficiency ratio is non-interest
expense divided by net interest income plus non-interest
income. |
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|
(2) Shares outstanding at 12/31/2010 and
per share amounts at and prior to 12/31/2010 have been adjusted for
a 5% stock dividend declared January 26, 2011, distributed on
February 28, 2011 to shareholders of record February 15, 2011. |
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|
CONTACT: Dennis R. Stewart, EVP/CFO
(215) 579-4000
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