UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2014
TF Financial Corporation
(Exact name of registrant as specified in its charter)
Pennsylvania |
0-24168 |
74-2705050 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
3 Penns Trail Newtown, Pennsylvania |
18940 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (215) 579-4000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
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[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On July 29, 2014 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated July 29, 2014
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TF Financial Corporation |
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Date: July 29, 2014 | By: | /s/ KENT C. LUFKIN Kent C. Lufkin President and Chief Executive Officer (Duly Authorized Representative) |
EXHIBIT 99.1
NEWTOWN, Pa., July 29, 2014 (GLOBE NEWSWIRE) -- TF Financial Corporation (the "Company") (Nasdaq:THRD) today reported net income of $585,000 ($0.19 per diluted share) for the second quarter of 2014, compared with $1,381,000 ($0.45 per share) for the first quarter of 2014. Included in net income for the second quarter was $981,000 after tax ($0.31 per quarterly diluted share) of merger-related expenses incurred in connection with the Company's previously announced execution of an Agreement and Plan of Merger (the "Merger Agreement") with National Penn Bancshares, Inc. ("National Penn"). Excluding these expenses, adjusted net income for the second quarter of 2014 was $1,566,000 ($0.50 per diluted share).
Net income for the six month period ended June 30, 2014 was $1,966,000 ($0.63 per diluted share). Excluding the merger expenses of $981,000 after tax ($0.32 per year to date diluted share), adjusted net income for the first six months of 2014 was $2,947,000 ($0.95 per diluted share). The Company also announced that its Board of Directors declared a quarterly dividend of $0.12 per share, payable on August 15, 2014 to shareholders of record on August 8, 2014.
"As previously announced on June 4, the Boards of Directors of National Penn Bancshares, Inc. and TF Financial Corporation on June 3 entered into a definitive merger agreement whereby National Penn will acquire TF Financial and its wholly-owned subsidiary, 3rd Fed Bank. Upon completion of the merger, this should substantially enhance our ability to serve our customers with a broader range of products and services, locations, ATMs, etc." said Kent C. Lufkin, president and CEO of TF Financial. "The combined franchises expand National Penn's footprint into new attractive markets and our people look forward to joining this larger, dynamic, growth-oriented organization."
Results for the second quarter included:
About TF Financial Corporation
TF Financial Corporation is a holding company whose principal subsidiary is 3rd Fed Bank, which operates 18 full service retail and commercial banking offices in Philadelphia and Bucks Counties in Pennsylvania, and in Mercer, 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, the 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, 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.
Non-GAAP Financial Measures
Included in this release or the financial tables included herewith are references to pre-tax income, net income and diluted earnings per share determined by methods other than in accordance with Accounting Principles Generally Accepted in the United States of America ("GAAP"). We believe the presentation of pre-tax income, net income and diluted earnings per share excluding the following significant and non-recurring items provides the reader with a better understanding of operating results of the Company:
Additional Information About the Merger and Where to Find It
In connection with the proposed merger transaction, National Penn will file with the Securities and Exchange Commission a Registration Statement on Form S-4 that will include a Proxy Statement of the Company, and a Prospectus of National Penn, as well as other relevant documents concerning the proposed transaction. Shareholders are urged to read the Registration Statement and the Proxy Statement/Prospectus regarding the merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about National Penn and the Company, may be obtained at the SEC's Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from National Penn at www.nationalpennbancshares.com under the heading "Documents/SEC Filings" or from the Company by accessing the Company's website at www.3rdfedbank.com under the section "Investor Relations" and under the heading "SEC Filings."
National Penn and the Company and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company in connection with the proposed merger. Information about the directors and executive officers of National Penn is set forth in the proxy statement for National Penn's 2014 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 12, 2014. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company's 2014 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 26, 2014. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
T F FINANCIAL CORPORATION | |||||||
UNAUDITED FINANCIAL INFORMATION | |||||||
(dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
EARNINGS SUMMARY | |||||||
Interest income | $ 7,600 | $ 7,599 | $ 7,809 | $ 7,903 | $ 6,744 | $ 15,199 | $ 13,601 |
Interest expense | 961 | 959 | 988 | 1,018 | 938 | 1,920 | 1,917 |
Net interest income | 6,639 | 6,640 | 6,821 | 6,885 | 5,806 | 13,279 | 11,684 |
Loan loss provision | 100 | -- | -- | -- | 400 | 100 | 839 |
Non-interest income | 803 | 722 | 694 | 2,046 | 1,947 | 1,525 | 3,342 |
Non-interest expense | 6,257 | 5,490 | 5,157 | 6,782 | 5,132 | 11,747 | 10,162 |
Income before taxes | 1,085 | 1,872 | 2,358 | 2,149 | 2,221 | 2,957 | 4,025 |
Income taxes | 500 | 491 | 772 | 183 | 421 | 991 | 1,002 |
Net income | $ 585 | $ 1,381 | $ 1,586 | $ 1,966 | $ 1,800 | $ 1,966 | $ 3,023 |
PER SHARE INFORMATION | |||||||
Earnings per share, basic | $ 0.19 | $ 0.45 | $ 0.52 | $ 0.64 | $ 0.66 | $ 0.64 | $ 1.10 |
Earnings per share, diluted | $ 0.19 | $ 0.45 | $ 0.52 | $ 0.64 | $ 0.66 | $ 0.63 | $ 1.10 |
Weighted average basic shares (000's) | 3,066 | 3,062 | 3,056 | 3,053 | 2,743 | 3,064 | 2,741 |
Weighted average diluted shares (000's) | 3,115 | 3,081 | 3,068 | 3,053 | 2,743 | 3,098 | 2,741 |
Dividends paid | $ 0.12 | $ 0.12 | $ 0.10 | $ 0.10 | $ 0.05 | $ 0.24 | $ 0.10 |
RECONCILIATION OF NON-GAAP DISCLOSURES TO GAAP: | |||||||
Net income (GAAP) | $ 585 | $ 1,381 | $ 1,586 | $ 1,966 | $ 1,800 | $ 1,966 | $ 3,023 |
Deduct: | |||||||
Purchase gain associated with Roebling acquisition | -- | -- | 94 | (1,214) | -- | -- | -- |
Proceeds from bank-owned life insurance | -- | -- | -- | -- | (934) | -- | (934) |
Add back: | |||||||
Merger-related costs: | |||||||
Tax deductible | 257 | -- | 9 | 45 | -- | 257 | -- |
Income taxes (benefit) | (87) | -- | (3) | (15) | -- | (87) | -- |
Non tax deductible | 811 | -- | 12 | 57 | 295 | 811 | 615 |
Conversion costs: | |||||||
Tax deductible | -- | -- | 14 | 1,403 | -- | -- | -- |
Income taxes (benefit) | -- | -- | (5) | (477) | -- | -- | -- |
Adjusted net income (non-GAAP) | $ 1,566 | $ 1,381 | $ 1,707 | $ 1,765 | $ 1,161 | $ 2,947 | $ 2,704 |
Adjusted diluted earnings per share (non-GAAP) | $ 0.50 | $ 0.45 | $ 0.56 | $ 0.58 | $ 0.42 | $ 0.95 | $ 0.99 |
FINANCIAL RATIOS | |||||||
Annualized return on average assets | 0.28% | 0.67% | 0.75% | 0.92% | 1.01% | 0.47% | 0.86% |
Annualized return on average equity | 2.40% | 5.84% | 6.71% | 8.55% | 8.55% | 4.09% | 7.25% |
Efficiency ratio (1) | 67.97% | 72.74% | 65.81% | 66.15% | 68.07% | 71.91% | 67.97% |
REGULATORY CAPITAL RATIOS | |||||||
Tier 1 leverage ratio | 10.71% | 10.39% | 10.35% | 10.21% | 10.74% | ||
Total risk-based capital ratio | 17.45% | 16.93% | 17.46% | 17.50% | 18.77% | ||
Tier 1 risk-based capital ratio | 16.67% | 16.18% | 16.23% | 16.25% | 17.51% | ||
T F FINANCIAL CORPORATION | |||||||
UNAUDITED FINANCIAL INFORMATION | |||||||
(dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
AVERAGE BALANCES | |||||||
Loans | $ 610,880 | $ 610,590 | $ 619,498 | $ 622,416 | $ 524,728 | $ 610,736 | $ 525,000 |
Mortgage-backed securities | 56,004 | 48,185 | 47,568 | 50,737 | 37,523 | 52,116 | 39,744 |
Investment securities | 77,745 | 80,063 | 82,213 | 86,942 | 68,211 | 78,897 | 66,680 |
Other interest-earning assets | 45,432 | 46,666 | 36,694 | 35,294 | 39,111 | 46,045 | 34,022 |
Total earning assets | 790,061 | 785,504 | 785,973 | 795,389 | 669,573 | 787,794 | 665,446 |
Non-earning assets | 50,412 | 50,462 | 49,164 | 48,404 | 45,938 | 50,437 | 46,252 |
Total assets | 840,473 | 835,966 | 835,137 | 843,793 | 715,511 | 838,231 | 711,698 |
Deposits | 687,805 | 684,900 | 684,085 | 691,646 | 570,271 | 686,361 | 565,536 |
FHLB advances and other borrowed money | 47,627 | 48,872 | 50,259 | 55,358 | 53,303 | 48,246 | 54,701 |
Total interest bearing liabilities | 735,432 | 733,772 | 734,344 | 747,004 | 623,574 | 734,607 | 620,237 |
Non-interest bearing liabilities | 7,149 | 6,316 | 6,951 | 5,528 | 7,508 | 6,734 | 7,363 |
Stockholders' equity | 97,892 | 95,878 | 93,842 | 91,261 | 84,429 | 96,890 | 84,098 |
Total liabilities & stockholders' equity | $ 840,473 | $ 835,966 | $ 835,137 | $ 843,793 | $ 715,511 | $ 838,231 | $ 711,698 |
SPREAD AND MARGIN ANALYSIS (TAX EQUIVALENT) | |||||||
Average yield on: | |||||||
Loans | 4.36% | 4.43% | 4.41% | 4.43% | 4.56% | 4.40% | 4.62% |
Mortgage-backed securities | 2.49% | 2.60% | 2.38% | 2.52% | 2.63% | 2.54% | 2.63% |
Investment securities | 4.12% | 4.06% | 4.04% | 3.71% | 4.19% | 4.09% | 4.30% |
Other interest-earning assets | 0.04% | 0.03% | 0.04% | 0.06% | 0.14% | 0.03% | 0.11% |
Total interest-earning assets | 3.95% | 4.02% | 4.04% | 4.03% | 4.15% | 3.99% | 4.24% |
Average cost of: | |||||||
Deposits | 0.45% | 0.45% | 0.45% | 0.46% | 0.50% | 0.45% | 0.51% |
FHLB advances and other borrowed money | 1.57% | 1.60% | 1.62% | 1.57% | 1.70% | 1.59% | 1.75% |
Total interest-bearing liabilities | 0.52% | 0.53% | 0.53% | 0.54% | 0.60% | 0.53% | 0.62% |
Interest rate spread | 3.43% | 3.49% | 3.51% | 3.49% | 3.55% | 3.46% | 3.62% |
Net interest margin | 3.46% | 3.53% | 3.54% | 3.53% | 3.59% | 3.50% | 3.66% |
T F FINANCIAL CORPORATION | |||||||
UNAUDITED FINANCIAL INFORMATION | |||||||
(dollars in thousands except per share data) | QUARTER ENDED | SIX MONTHS ENDED | |||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | 6/30/2014 | 6/30/2013 | |
INTEREST INCOME AND EXPENSE DETAIL | |||||||
Interest income on: | |||||||
Loans | $ 6,636 | $ 6,677 | $ 6,882 | $ 6,947 | $ 5,963 | $ 13,313 | $ 12,029 |
Mortgage-backed securities | 348 | 309 | 285 | 322 | 246 | 657 | 519 |
Investment securities | 798 | 801 | 837 | 814 | 713 | 1,599 | 1,421 |
Other interest-earning assets | 4 | 3 | 4 | 5 | 14 | 7 | 18 |
Total interest-earning assets | $ 7,786 | $ 7,790 | $ 8,008 | $ 8,088 | $ 6,936 | $ 15,576 | $ 13,987 |
Interest expense on: | |||||||
Deposits | $ 774 | $ 766 | $ 783 | $ 799 | $ 712 | $ 1,540 | $ 1,443 |
FHLB advances and other borrowed money | 187 | 193 | 205 | 219 | 226 | 380 | 474 |
Total interest-bearing liabilities | $ 961 | $ 959 | $ 988 | $ 1,018 | $ 938 | $ 1,920 | $ 1,917 |
Net interest income: tax equivalent basis | $ 6,825 | $ 6,831 | $ 7,020 | $ 7,070 | $ 5,998 | $ 13,656 | $ 12,070 |
Tax equivalent adjustment on investment securities | 186 | 191 | 199 | 185 | 192 | 377 | 386 |
Net interest income | $ 6,639 | $ 6,640 | $ 6,821 | $ 6,885 | $ 5,806 | $ 13,279 | $ 11,684 |
NON-INTEREST INCOME DETAIL | |||||||
Service fees, charges and other | $ 558 | $ 511 | $ 560 | $ 560 | $ 454 | $ 1,069 | $ 951 |
Impairment adjustment to mortgage servicing rights | (6) | 5 | 19 | 32 | 196 | (1) | 229 |
Bank-owned life insurance | 134 | 131 | 135 | 136 | 137 | 265 | 280 |
Proceeds from bank-owned life insurance | -- | -- | -- | -- | 934 | -- | 934 |
Gain on sale of investment securities | 16 | 1 | 4 | -- | -- | 17 | -- |
Gain on sale of loans | 101 | 74 | 70 | 104 | 226 | 175 | 531 |
Gain on disposition of real estate | -- | -- | -- | -- | -- | -- | 417 |
Purchase gain associated with Roebling acquisition | -- | -- | (94) | 1,214 | -- | -- | -- |
NON-INTEREST EXPENSE DETAIL | |||||||
Compensation and benefits | $ 3,206 | $ 3,383 | $ 3,269 | $ 3,125 | $ 2,842 | 6,589 | 5,659 |
Occupancy and equipment | 829 | 907 | 833 | 867 | 709 | 1,736 | 1,406 |
Professional fees | 278 | 305 | 174 | 211 | 230 | 583 | 518 |
Merger-related costs | 1,068 | -- | 21 | 102 | 295 | 1,068 | 615 |
Marketing and advertising | 76 | 144 | 53 | 132 | 132 | 220 | 171 |
FDIC insurance premiums | 125 | 134 | 91 | 188 | 132 | 259 | 242 |
Loss (gain) on REO, net (2) | 11 | -- | (1) | 71 | 198 | 11 | 375 |
Operating expenses of REO (2) | 24 | 13 | 37 | 43 | 37 | 37 | 84 |
Other operating | 640 | 604 | 666 | 640 | 557 | 1,244 | 1,092 |
Conversion costs (3) | -- | -- | 14 | 1,403 | -- | -- | -- |
T F FINANCIAL CORPORATION | |||||||
UNAUDITED FINANCIAL INFORMATION | |||||||
(dollars in thousands except per share data) | PERIOD ENDED | ||||||
6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | 6/30/2013 | |||
DEPOSIT INFORMATION | |||||||
Non-interest checking | $ 75,458 | $ 70,197 | $ 68,133 | $ 69,157 | $ 58,697 | ||
Interest checking | 111,140 | 116,507 | 114,184 | 108,341 | 78,923 | ||
Money market | 187,495 | 186,028 | 180,215 | 179,612 | 159,015 | ||
Savings | 130,020 | 132,335 | 130,878 | 131,432 | 109,446 | ||
CD's | 181,875 | 187,143 | 190,492 | 193,283 | 165,331 | ||
OTHER INFORMATION | |||||||
Per Share | |||||||
Book value | $ 31.15 | $ 30.78 | $ 30.13 | $ 29.48 | $ 29.36 | ||
Tangible book value | $ 29.63 | $ 29.26 | $ 28.60 | $ 27.94 | $ 27.84 | ||
Closing market price | $ 42.78 | $ 29.85 | $ 28.16 | $ 27.88 | $ 25.40 | ||
Balance Sheet | |||||||
Loans, net of acquired loans | $ 522,734 | $ 517,114 | $ 527,207 | $ 532,045 | $ 531,464 | ||
Acquired loans | 87,492 | 91,923 | 93,885 | 97,667 | -- | ||
Cash and cash equivalents | 48,291 | 60,175 | 45,310 | 31,004 | 44,958 | ||
Mortgage-backed securities | 57,615 | 53,495 | 46,769 | 48,709 | 34,206 | ||
Investment securities | 76,955 | 80,111 | 82,103 | 85,330 | 68,459 | ||
Total assets | 839,566 | 846,016 | 835,689 | 833,334 | 714,781 | ||
Total deposits | 685,988 | 692,210 | 683,902 | 681,825 | 571,412 | ||
FHLB advances and other borrowed money | 47,120 | 48,311 | 49,605 | 50,990 | 52,534 | ||
Stockholders' equity | 98,175 | 96,958 | 94,875 | 92,811 | 83,453 | ||
Asset Quality | |||||||
Non-performing loans | $ 4,164 | $ 3,217 | $ 8,332 | $ 6,881 | $ 5,973 | ||
Allowance for loan losses | $ 4,148 | $ 4,062 | $ 6,575 | $ 6,691 | $ 6,916 | ||
Net charge-offs | $ 14 | $ 2,513 | $ 116 | $ 225 | $ 146 | ||
Allowance for loan losses to non-performing loans | 99.62% | 126.27% | 78.91% | 97.24% | 115.79% | ||
Allowance for loan losses to gross loans excluding acquired loans | 0.79% | 0.79% | 1.25% | 1.26% | 1.30% | ||
Non-performing loans to gross loans | 0.68% | 0.53% | 1.34% | 1.09% | 1.12% | ||
Non-performing loans to total assets | 0.50% | 0.38% | 1.00% | 0.83% | 0.84% | ||
REO (2) | $ 5,711 | $ 6,108 | $ 5,601 | $ 5,786 | $ 6,177 | ||
REO to total assets (2) | 0.68% | 0.72% | 0.67% | 0.69% | 0.86% | ||
Non-performing assets to total assets | 1.18% | 1.10% | 1.67% | 1.52% | 1.70% | ||
Statistical | |||||||
Shares outstanding (000's) | 3,152 | 3,150 | 3,149 | 3,148 | 2,842 | ||
Number of branch offices | 18 | 18 | 18 | 18 | 13 | ||
Full time equivalent employees | 205 | 204 | 203 | 206 | 166 | ||
(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) 579-4000