SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A NO. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
September 20, 1996
TF FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Delaware 0-24168 742705050
- ----------------------------- -------------- ----------------------------
(State or other jurisdiction (SEC File No.) (IRS Employer
of incorporation) Identification
Number)
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)
<PAGE>
TF FINANCIAL CORPORATION
INFORMATION TO BE INCLUDED IN REPORT
------------------------------------
Item 7. Financial Statements and Exhibits.
- -------------------------------------------
(a) Financial statements of businesses acquired.
--------------------------------------------
The audited statement of assets acquired and liabilities assumed, and
related notes thereto, is incorporated herein by reference to Exhibit 99.2
hereto. Statements of income and cash flows are not available to the Registrant
without unreasonable effort and expense and, pursuant to SEC Rule 12b-21, are
not included herein. Further, due to the insufficient continuity of the acquired
branches' operations prior to and after the acquisition, including the lending
and investment activities of the acquired branches, statements of income and
cash flows are not relevant and are not applicable. Management's Discussion and
Analysis of Financial Condition and Results of Operations as of June 30, 1996,
is also incorporated herein by reference to Exhibit 99.2 hereto.
(b) Pro forma financial information.
--------------------------------
An unaudited pro forma combined condensed balance sheet as of June 30,
1996, and unaudited pro forma combined condensed statements of income for the
six months ended June 30, 1996, and for the fiscal year ended December 31, 1995,
are incorporated herein by reference to Exhibit 99.3 hereto. The unaudited pro
forma combined condensed balance sheet reflects the historical balance sheet of
the Registrant as of June 30, 1996, and the assets acquired and liabilities
assumed as of September 20, 1996, after giving effect to the acquisition on a
purchase accounting basis as if it had occurred on June 30, 1996. The unaudited
pro forma combined condensed statements of income reflect the historical
statements of income of the Registrant and the results of operations of the
assets acquired and the liabilities assumed (based on the assumptions set forth
in the notes thereto), after giving effect to the acquisition on a purchase
accounting basis as if it had occurred at the beginning of the reporting
periods.
The pro forma financial information is provided for informational
purposes only. The pro forma financial information presented is not necessarily
indicative of actual results that would have been achieved had the acquisition
been consummated on June 30, 1996, or at the beginning of the periods presented,
and is not indicative of future results. The pro forma financial information
should be read in conjunction with the audited financial statements and the
notes thereto of the Registrant included in the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, and the unaudited interim
financial statements and the notes thereto of the Registrant included in the
Registrant's Quarterly Reports on Form 10-Q for the first and second quarters of
1996, each of which has been previously filed with the Commission. Management of
the Registrant believes that such unaudited quarterly financial information
<PAGE>
includes all adjustments (which consist solely of recurring accruals) necessary
for a fair presentation of such results for such interim period. Results
presented for the interim period are not necessarily indicative of results that
may be expected for any other interim period of for the full year.
(c) Exhibits.
---------
2.1 - Agreement dated June 7, 1996, between the Bank and Cenlar,
relating to Cenlar branches. (Incorporated by reference to Exhibit 99.1 to the
Registrant's Current Report on Form 8-K dated June 7, 1996).
23 - Consent of Grant Thornton LLP.
99.1 - Press Release dated June 7, 1996, of TF Financial Corporation
(Incorporated by reference to Exhibit 99.2 to the Registrant's Current Report in
Form 8-K, dated June 7, 1996).
99.2 - Statement of Assets Acquired and Liabilities Assumed as of
September 20, 1996, related notes thereto, report of independent certified
public accountants thereon, and Management's Discussion and Analysis of
Financial Condition and Results of Operations.
99.3 - Pro Forma Financial Information.
99.4 - Press Release dated September 23, 1996, of TF Financial
Corporation announcing consummation of Cenlar branch acquisition. (Incorporated
by reference to Exhibit 99.4 to the Registrant's Amendment No. 1 to the Current
Report on Form 8-K, dated September 20, 1996).
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
2.1 Agreement dated June 7, 1996 between the
Bank and Cenlar relating to Cenlar branches
(Incorporated by reference 99.1 to the
Registrant's Current Report on Form 8-K
dated June 7, 1996).
23 Consent of Grant Thornton LLP.
99.1 Press Release dated June 7, 1996, of
Registrant (Incorporated by reference to
Exhibit 99.2 to the Registrant's Current
Report on Form 8-K dated
June 7, 1996).
99.2 Statement of Assets Acquired and Liabilities
Assumed as of September 20, 1996, related
notes thereto, report of independent
certified public accountants thereon, and
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.
99.3 Pro Forma Financial Information.
99.4 Press Release dated September 23, 1996, of TF
Financial Corporation announcing consummation
of Cenlar branch acquisition (Incorporated by
reference to Exhibit 99.4 to the Registrant's
Amendment No. 1 to the Current Report on Form
8-K, dated September 20, 1996).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TF FINANCIAL CORPORATION
Date: November 19, 1996 By: /s/ John R. Stranford
------------------- ---------------------
John R. Stranford
President and Chief
Executive Officer
Consent of Independent Certified Public Accountants
---------------------------------------------------
We have issued our report dated November 1, 1996, accompanying the statement of
assets acquired and liabilities assumed included in Amendment No. 2 to the
Report on Form 8-K dated September 20, 1996 of TF Financial Corporation. We
hereby consent to the incorporation by reference of said report in the
Registration Statements of TF Financial Corporation and Subsidiaries on Form S-8
(File No. 33-87176, effective December 7, 1994 and File No. 333-09235, effective
July 31, 1996).
GRANT THORNTON LLP
/s/Grant Thornton LLP
Philadelphia, Pennsylvania
November 15, 1996
EXHIBIT 99.2
<PAGE>
Report of Independent Certified Public Accountants
--------------------------------------------------
Board of Directors
TF Financial Corporation
We have audited the accompanying statement of assets acquired and
liabilities assumed of the Branches of Cenlar Federal Savings Bank by Third
Federal Savings Bank (a wholly-owned subsidiary of TF Financial Corporation) as
of September 20, 1996. The statement of assets acquired and liabilities assumed
is the responsibility of Third Federal Savings Bank's management. Our
responsibility is to express an opinion on the statement of assets acquired and
liabilities assumed based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets acquired and
liabilities assumed is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of assets acquired and liabilities assumed. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit of the statement of assets acquired and liabilities
assumed provides a reasonable basis for our opinion.
The accompanying statement was prepared to present the assets acquired
and liabilities assumed of the Branches of Cenlar Federal Savings Bank by Third
Federal Savings Bank as of September 20, 1996, pursuant to the Branch Purchase
and Deposit Assumption Agreements described in note A1, and is not intended to
be a complete presentation of Cenlar Federal Savings Bank's assets and
liabilities.
In our opinion, the accompanying statement of assets acquired and
liabilities assumed presents fairly, in all material respects, the assets
acquired and liabilities assumed of the Branches of Cenlar Federal Savings Bank
by Third Federal Savings Bank as of September 20, 1996, pursuant to the Branch
Purchase and Deposit Assumption Agreements, in conformity with generally
accepted accounting principles.
Philadelphia, Pennsylvania
November 1, 1996
<PAGE>
Branches of Cenlar Federal Savings Bank
STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
September 20, 1996
(dollars in thousands)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and due from banks $ 126,969
Loans 159
Premises and equipment, net 1,325
Other assets 27
-----------
Total assets $ 128,480
===========
LIABILITIES AND EXCESS OF LIABILITIES OVER ASSETS ACQUIRED
LIABILITIES
Deposits
Non-interest bearing $ 26,421
Interest bearing (includes certificates of deposit in excess of $100
in the amount of $2,547) 111,315
-----------
Total deposits 137,736
Interest accrued and unpaid on deposits 1
Expenses payable 219
-----------
Total liabilities 137,956
EXCESS OF LIABILITIES ASSUMED OVER ASSETS ACQUIRED (9,476)
-----------
Total liabilities and excess of liabilities over assets acquired $ 128,480
===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
Branches of Cenlar Federal Savings Bank
NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
September 20, 1996
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Acquisition of Branches
-----------------------
On September 20, 1996, Third Federal Savings Bank (TF Bank), a wholly-owned
banking subsidiary of TF Financial Corporation, acquired three branches of
Cenlar Federal Savings Bank (CF Bank), a federally chartered savings
association, pursuant to Branch Purchase and Deposit Assumption Agreements
between TF Bank and CF Bank on June 7, 1996. Through the acquisition, TF
Bank assumed $137.9 million of liabilities, primarily consisting of
deposits, in exchange for cash of $127 million and other assets with a
deemed fair market value of $1.5 million. Subsequent to the acquisition, the
branch offices will be operated as TF Bank branch offices. The statement of
assets acquired and liabilities assumed presented herein includes the
accounts of the branches acquired on an historical cost basis as of
September 20, 1996 adjusted for the application of purchase accounting as
required by Accounting Principles Board Opinion No. 16, "Business
Combinations," and Statement of Financial Accounting Standards (SFAS) No.
72, "Accounting for Certain Acquisitions of Banking or Thrift Institutions."
2. Financial Instruments
---------------------
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires all entities to disclose the estimated fair value of their assets
and liabilities considered to be financial instruments. Financial
instruments requiring disclosure consist primarily of cash and due from
banks, loans and deposit liabilities.
NOTE B - LEASE COMMITMENTS
In connection with the acquisition of the CF Bank branches, TF Bank assumed
the lease of one facility. The lease is accounted for as an operating lease.
Future obligations for minimum rentals under a noncancellable lease with
initial or remaining terms in excess of one year at September 20, 1996 are
as follows (in thousands):
Minimum
Year ending September 20, rentals
------------------------- -------
1997 $ 42
1998 45
1999 45
2000 38
-------------
$ 170
=============
<PAGE>
Branches of Cenlar Federal Savings Bank
NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED - CONTINUED
September 20, 1996
NOTE C - FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107 requires disclosure about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate
that value. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In
that regard, the derived fair value estimates are subjective in nature and
cannot be substantiated by comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument. SFAS
No. 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts presented herein represent previously negotiated amounts,
and therefore, may not necessarily represent the underlying fair value of
the assets acquired and the liabilities assumed from CF Bank at the
transaction date.
Fair value estimates are based on existing on- and off-balance sheet
financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities that are
not considered financial instruments. Assets and liabilities acquired from
CF Bank that are not considered financial assets or liabilities include
premises and equipment.
1. Cash and Due From Banks
-----------------------
The fair value of cash and due from banks is equal to their carrying amount
due to the nature of the financial instruments.
2. Deposits
--------
Under SFAS No. 107, the fair value of deposits with no stated maturity, such
as non-interest bearing demand deposits, interest checking, and money market
and savings accounts, is equal to the amount payable on demand at September
20, 1996. The fair value of time deposits is based on the discounted values
of contractual cash flows. The discount rate is estimated using the rates
currently offered for deposits of similar remaining maturities. The
contractual interest rates of the time deposits acquired from CF Bank are
not significantly different from current market interest rates; therefore,
the fair value for these financial instruments is considered to approximate
the carrying value in all material respects.
<PAGE>
BRANCHES OF CENLAR FEDERAL SAVINGS BANK
Management's Discussion and Analysis of Financial Condition September 20, 1996
On September 20, 1996, Third Federal Savings Bank (the "Bank"), the wholly-owned
subsidiary of TF Financial Corporation (the "Registrant"), acquired certain
assets and assumed certain liabilities of three branch offices of Cenlar Federal
Savings Bank, Trenton, New Jersey ("Cenlar"). In this purchase and assumption
transaction, the Bank assumed approximately $138 million in deposits (including
accrued interest), and acquired certain assets consisting principally of owned
real estate (branches), banking equipment, and deposit-related loans in the
principal amount of approximately $159,000. The Bank assumed the real estate
leases for the leased branch. Cenlar paid cash to the Bank equal to the amount
of the deposits (including accrued interest) assumed, net of a $9.3 million
deposit premium. Additionally, the Bank paid approximately $1.3 million to
Cenlar for the owned real estate, banking equipment, and other assets purchased.
The Bank's source of funds was cash on hand. The purchase price was determined
through negotiation with Cenlar. The acquisition was accounted for under the
purchase method of accounting. Subsequent to the acquisition, the acquired
branches are being operated by the Bank as branch banking offices used in its
banking business.
The following discussion is intended to complement the audited statement of
assets acquired and liabilities assumed and footnotes and should be read in
conjunction therewith. Due to the unavailability of statements of income and
statements of cash flow of the branches and the lack of continuity of the
acquired operations of the branches prior to and after the acquisition including
the lending and investment activities of the acquired branches, this discussion
will not include an analysis of the results of operations of the branches prior
to the acquisition.
Securities Act Guide 3: Statistical Disclosure by Savings and Loan Holding
Companies
DEPOSITS
Average balances and the average rate paid on deposits which are in excess of
10% of the total deposits is not available as the acquisition consists of three
branches of Cenlar, and such data required under Guide 3 is not calculable from
Cenlar's financial records.
Deposits totalled approximately $138 million at September 20, 1996 and included
certificates of deposits and savings, money market, and demand deposit accounts.
At September 20, 1996, time certificates of deposit in amounts of $100,000 or
more were approximately $2.5 million. The following is a remaining maturity
schedule of these deposits:
<TABLE>
<CAPTION>
Over 6 months
Three months or Over 3 months through 12
less through 6 months months Over 12 months Total
- ----------------------- ----------------------- ----------------------- ----------------------- ----------------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
$929 $207 $1,109 $302 $2,547
</TABLE>
<PAGE>
Other Guide 3 Information
All other information required by Guide 3, Statistical Disclosure by Savings and
Loan Holding Companies, is either inapplicable (no investment securities were
acquired, and no loans were acquired other than an immaterial amount of
deposit-related loans) or not calculable from Cenlar's financial records (due to
the acquisition consisting of certain branches).
EXHIBIT 99.3
<PAGE>
TF Financial Corporation
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
June 30, 1996
(dollars in thousands)
<TABLE>
<CAPTION>
Branches of
Cenlar
TF Federal
Financial Savings Pro forma Combined
ASSETS Corporation Bank adjustments pro forma
------ ----------- ---- ----------- ---------
<S> <C> <C> <C> <C>
Cash and due from banks $ 24,850 $ 136,445 $ (9,476)(1) $ 151,819
Investment securities, federal funds sold and
interest bearing deposits in banks 187,065 - - 187,065
Loans and leases, net of unearned discount 307,790 159 - 307,949
Less allowance for possible loan and lease losses 1,566 - - 1,566
----------- ----------- --------- -----------
Net loans and leases 306,224 159 - 306,383
Premises and equipment, net 6,353 1,325 - 7,678
Goodwill and other intangibles - - 9,476(1) 9,476
Other assets 4,418 27 - 4,445
----------- ----------- --------- -----------
Total assets $ 528,910 $ 137,956 $ - $ 666,866
=========== =========== ========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Non-interest bearing $ 3,368 $ 26,421 $ - $ 29,789
Interest bearing 338,504 111,315 - 449,819
----------- ----------- --------- -----------
Total deposits 341,872 137,736 - 479,608
Liabilities for borrowed money 103,359 - - 103,359
Other liabilities 8,557 220 - 8,777
----------- ----------- --------- -----------
Total liabilities 453,788 137,956 - 591,744
----------- ----------- --------- -----------
SHAREHOLDERS' EQUITY
Common stock 529 - - 529
Additional paid-in capital 51,545 - - 51,545
Net unrealized loss on investment
securities available for sale (384) - - (384)
Unearned ESOP shares (3,337) - - (3,337)
Shares acquired by MSBP (1,515) - - (1,515)
Treasury stock, at cost (11,116) - - (11,116)
Retained earnings 39,400 - - 39,400
----------- ----------- --------- -----------
Total shareholders' equity 75,122 - - 75,122
----------- ----------- --------- -----------
Total liabilities and shareholders' equity $ 528,910 $ 137,956 $ - $ 666,866
=========== =========== ========= ===========
</TABLE>
(1) Deposit premium paid to Cenlar Federal Savings Bank, representing core
deposit intangible and goodwill to be amortized over periods ranging up to
15 years, using accelerated and straight-line methods, respectively.
<PAGE>
TF Financial Corporation
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Six months ended June 30, 1996
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Branches of
Cenlar
TF Federal
Financial Savings Pro forma Combined
Corporation Bank * adjustments pro forma
----------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Interest income $ 18,073 $ - $ 3,873(1) $ 21,946
Interest expense 9,320 - 2,961(2) 12,281
------------ -------------- ------------- ------------
Net interest income 8,753 - 912 9,665
Provision for loan losses 90 - - 90
------------ -------------- ------------- ------------
Net interest income after provision for
loan losses 8,663 - 912 9,575
Other income 994 - - (3) 994
Other expense 5,403 - 689(4) 6,575
483(5)
------------ -------------- ------------- ------------
Income (loss) before income taxes (benefit) 4,254 - (260) 3,994
Income taxes (benefit) 1,758 - (104)(6) 1,654
------------ -------------- ------------- ------------
NET INCOME $ 2,496 $ - $ (156) $ 2,340
============= ============== ============== =============
Income per share of common stock and
common stock equivalent $ 0.58 $ - $ - $ 0.54
Weighted average shares outstanding 4,301,000 - - 4,301,000
</TABLE>
*Due to the nature of the transaction, historical figures are not available nor
relevant.
See accompanying Notes to Unaudited ProForma Combined Condensed Statement of
Income
<PAGE>
TF Financial Corporation
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
June 30, 1996
(1) Cash received of $126,969,000 invested at an annual earnings rate of 6.1%
which represents the yield on investment securities purchased in
anticipation of the transaction
(2) Deposits assumed of $137,736,000 at an average interest cost of 4.3%
representing the current historic average rate of the deposits acquired
(3) Fee income generated from demand deposits not material
(4) Annual cost of operating acquired branches, including FDIC insurance, based
on average deposit balances
(5) Amortization of core deposit intangible and goodwill of $9,476,000 over
periods ranging up to 15 years, using accelerated and straight-line
methods, respectively
(6) Federal and state income taxes at 40% incremental rate for TF Financial
Corporation
<PAGE>
TF Financial Corporation
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Year ended December 31, 1995
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Branches of
Cenlar
TF Federal
Financial Savings Pro forma Combined
Corporation Bank * adjustments pro forma
----------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Interest income $ 29,630 $ - $ 7,364(1) $ 36,994
Interest expense 14,403 - 5,923(2) 20,326
------------ ------------- ------------- ------------
Net interest income 15,227 - 1,441 16,668
Provision for loan losses 72 - - 72
------------ ------------- ------------- ------------
Net interest income after provision for
loan losses 15,155 - 1,441 16,596
Other income 1,161 - - (3) 1,161
Other expense 9,975 - 1,377(4) 12,317
965(5)
------------ ------------- ------------- ------------
Income (loss) before income taxes (benefit) 6,341 - (901) 5,440
Income taxes (benefit) 2,470 - (360)(6) 2,110
------------ ------------- ------------- ------------
NET INCOME $ 3,871 $ - $ (541) $ 3,330
============= ============= ============== =============
Income per share of common stock and
common stock equivalents $ 0.83 $ - $ - $ 0.72
Weighted average shares outstanding 4,638,000 - - 4,638,000
</TABLE>
* Due to the nature of the transaction, historical figures are not available
nor relevant.
See accompanying Notes to Unaudited Pro Forma Combined Condensed Statement of
Income
<PAGE>
TF Financial Corporation
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
December 31, 1995
(1) Cash received of $126,969,000 invested at an annual earnings rate of 5.8%
which represents the yield on investment securities purchased in
anticipation of the transaction
(2) Deposits assumed of $137,736,000 at an average interest cost of 4.3%
representing the current historic average rate of the deposits acquired
(3) Fee income generated from demand deposits not material
(4) Annual cost of operating acquired branches, including FDIC insurance, based
on average deposit balances
(5) Amortization of core deposit intangible and goodwill of $9,476,000 over
periods ranging up to 15 years, using accelerated and straight-line
methods, respectively
(6) Federal and state income taxes at 40% incremental rate for TF Financial
Corporation
