SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM l0-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
-------------------------------------------------
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ---------------------
Commission file number 0-24168
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TF FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 74-2705050
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
3 Penns Trail, Newtown, Pennsylvania 18940
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 215-579-4000
------------------
N/A
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Former name, former address and former fiscal year,
if changed since last report.
Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date: April 28, 2000
--------------
Class Outstanding
--------------------------- ----------------
$.10 par value common stock 2,823,574 shares
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 1O-Q
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
Page
Number
------
PART I - CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 13
PART II- OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
2
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
<TABLE>
<CAPTION>
Unaudited Audited Unaudited
March 31, December 31, March 31,
2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Assets
Cash and cash equivalents $16,661 $16,715 $35,795
Certificates of deposit in other financial institutions 547 847 2,038
Investment securities available for sale - at fair value 22,534 21,930 5,016
Investment securities held to maturity (fair value of $59,514, $64,538 and 61,798 66,760 96,651
$96,478, respectively)
Mortgage-backed securities available for sale - at fair value 139,557 132,515 69,682
Mortgage-backed securities held to maturity (fair value of $148,796, 154,345 159,888 191,321
$154,188, and $191,819, respectively)
Loans receivable, net 294,715 287,979 302,083
Federal Home Loan Bank stock - at cost 13,042 13,042 12,668
Accrued interest receivable 4,789 4,958 4,420
Real estate held for investment -- -- 2,348
Goodwill and other intangible assets 6,376 6,570 7,181
Premises and equipment, net 9,260 9,177 8,924
Other assets 2,810 1,493 1,290
-------- --------- --------
Total assets $726,434 $721,874 $739,417
======== ========= ========
Liabilities and stockholders' equity
Liabilities
Deposits $408,597 $401,698 $424,869
Advances from the Federal Home Loan Bank 223,359 248,533 253,359
Other borrowings 36,530 15,766 --
Advances from borrowers for taxes and insurance 1,124 1,198 1,111
Accrued interest payable 5,081 3,749 5,557
Other liabilities 3,292 2,483 3,256
-------- -------- -----
Total liabilities 677,983 673,427 688,152
-------- -------- -------
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value; 2,000,000 shares authorized
and none issued
Common stock, $0.10 par value; 10,000,000 shares authorized, 5,290,000
issued; 2,553,599, 2,576,160, and 2,755,279 shares outstanding
at March 31, 2000, December 31, 1999 and March 31, 1999, net of
treasury shares of 2,462,826, 2,437,226, and 2,248,990, respectively. 529 529 529
Retained earnings 49,154 48,760 46,392
Additional paid-in capital 52,098 52,076 51,988
Unearned ESOP shares (2,736) (2,766) (2,857)
Shares acquired by MSBP (55) (71) (362)
Treasury stock - at cost (47,143) (46,996) (44,311)
Accumulated other comprehensive income (loss) (3,396) (3,085) (114)
-------- -------- --------
Total stockholders' equity 48,451 48,447 51,265
-------- -------- --------
Total liabilities and stockholders' equity $726,434 $721,874 $739,417
======== ========= ========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
<TABLE>
<CAPTION>
For Three Months
Ended March 31,
---------------
2000 1999
---- ----
<S> <C> <C>
Interest income
Loans $ 5,556 $ 5,089
Mortgage-backed securities 4,870 4,097
Investment securities 1,531 1,581
Interest bearing deposits and other 72 326
------- -------
Total interest income 12,029 11,093
------- -------
Interest expense
Deposits 3,576 3,857
Advances from the Federal Home Loan Bank and other borrowings 3,603 2,775
------- -------
Total interest expense 7,179 6,632
------- -------
Net interest income 4,850 4,461
Provision for loan losses 44 30
------- -------
Net interest income after provision for loan losses 4,806 4,431
------- -------
Non-interest income
Service fees, charges and other operating income 374 324
------- -------
Total non-interest income 374 324
------- -------
Non-interest expense
Compensation and benefits 1,827 1,640
Occupancy and equipment 626 494
Federal deposit insurance premium 22 68
Professional fees 187 165
Amortization of goodwill and other intangible assets 194 209
Advertising 170 90
Other operating 598 554
------- -------
Total non-interest expense 3,624 3,220
------- -------
Income before income taxes 1,556 1,535
Income taxes 527 551
------- -------
Net income $ 1,029 $ 984
======= =======
Basic earnings per share $0.40 $0.35
Diluted earnings per share $0.39 $0.33
Weighted average number of shares outstanding - basic 2,569 2,822
Weighted average number of shares outstanding - diluted 2,654 2,996
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the three months ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities
Net Income $ 1,029 $ 984
Adjustments to reconcile net income to net cash provided by operating activities:
Mortgage loan servicing rights 3 3
Deferred loan origination fees (1) (25)
Premiums and discounts on investment securities, net 5 23
Premiums and discounts on mortgage-backed securities and loans, net 27 230
Amortization of goodwill and other intangible assets 111 209
Provision for loan losses 44 30
Depreciation of premises and equipment 248 231
Recognition of ESOP and MSBP expenses 68 167
Gain on sale of real estate acquired through foreclosure 3 (12)
(Increase) decrease in:
Accrued interest receivable 169 138
Other assets (1,469) (167)
Increase (decrease) in:
Accrued interest payable 1,332 1,391
Other liabilities 808 (2,222)
--------- ---------
Net cash provided by operating activities 2,377 980
--------- ---------
Cash flows from investing activities
Loan origination and principal payments on loans, net (953) 15,253
Purchases of loans (5,855) (76,553)
Proceeds from loan sales -- --
Maturities of certificates of deposit in other financial institutions, net 300 200
Purchases of investment securities available for sale (429) --
Purchases of investment securities held to maturity -- (102,576)
Purchases of mortgage-backed securities available for sale (9,843) (2,346)
Purchase of mortgage-backed securities held to maturity (353) (41,632)
Proceeds from maturities of investment securities held to maturity 4,895 89,140
Proceeds from maturities of investment securities available for sale -- 2,000
Principal repayments from mortgage-backed securities held to maturity 5,865 31,162
Principal repayments from mortgage-backed securities available for sale 2,493 7,458
Purchases and redemption of Federal Home Loan Bank Stock, net -- (3,500)
Proceeds from sales of real estate acquired through foreclosure 146 60
Purchase of premises and equipment (331) (138)
--------- ---------
Net cash used in investing activities (4,065) (81,472)
--------- ---------
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
<TABLE>
<CAPTION>
For the three months ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Cash flows from financing activities
Net increase (decrease ) in deposits 6,899 (14,044)
Net increase (decrease) in advances from Federal Home Loan Bank (25,174) 90,000
Net increase in other borrowings 20,764 --
Net decrease in advances from borrowers for taxes and insurance (74) (93)
Exercise of stock options 437 34
Purchase of treasury stock, net (879) (1,970)
Common stock cash dividend (339) (343)
-------- --------
Net cash provided by financing activities 1,634 73,584
-------- --------
Net decrease in cash and cash equivalents (54) (6,908)
Cash and cash equivalents at beginning of period 16,715 42,703
-------- --------
Cash and cash equivalents at end of period $ 16,661 $ 35,795
======== ========
Supplemental disclosure of cash flow information
Cash paid for
Interest on deposits and advances $ 5,947 $ 5,241
Income taxes $ 2,538 $ 512
Non-cash transactions
Transfers from loans to real estate acquired through foreclosure $ -- $ 13
</TABLE>
See notes to consolidated financial statements
6
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements as of March 31, 2000, December
31, 1999, March 31, 1999 and for the three-month periods ended March
31, 2000 and 1999 include the accounts of TF Financial Corporation (the
"Company") and its wholly owned subsidiaries Third Federal Savings Bank
(the "Savings Bank"), TF Investments Corporation, Penns Trail
Development Corporation and Teragon Financial Corporation. The
Company's business is conducted principally through the Savings Bank.
All significant intercompany accounts and transactions have been
eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-Q and, therefore,
do not include all of the disclosures or footnotes required by
generally accepted accounting principles. In the opinion of management,
all adjustments, consisting of normal recurring accruals, necessary for
fair presentation of the consolidated financial statements have been
included. The results of operations for the period ended March 31, 2000
are not necessarily indicative of the results which may be expected for
the entire fiscal year or any other period. For further information,
refer to consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999.
NOTE 3 - CONTINGENCIES
The Company, from time to time, is a party to routine litigation that
arises in the normal course of business. In the opinion of management,
the resolution of this litigation, if any, would not have a material
adverse effect on the Company's consolidated financial condition or
results of operations.
NOTE 4 - OTHER COMPREHENSIVE INCOME (LOSS)
The Company's other comprehensive income consists of net unrealized
gains (losses) on investment securities and mortgage-backed securities
available for sale. Total comprehensive income for the three-month
periods ended March 31, 2000 and 1999 was $718,000 and $716,000, net of
applicable income tax of $367,000 and $172,000, respectively.
NOTE 5- RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the
current period presentation.
7
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
TF Financial Corporation may from time to time make written or oral
"forward-looking statements", including statements contained in the Company's
filings with the Securities and Exchange Commission (including this Quarterly
Report on Form 10-Q and the exhibits thereto), in its reports to stockholders
and in other communications by the Company, which are made in good faith by the
Company pursuant to the "Safe Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effects of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate, market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes, acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks involved
in the foregoing.
The Company cautions that the foregoing list of important factors is not
exclusive. 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.
Financial Condition
The Company's total assets at March 31, 2000 and December 31, 1999 totaled
$726.4 million and $721.9 million, respectively, an increase of $4.5 million, or
0.6%, during the three-month period. This increase was primarily the result of a
$6.7 million increase in loans receivable. The increase in loans receivable was
primarily funded by a $6.9 million increase in deposits.
Total liabilities increased by $4.6 million during the first three months of
2000 primarily as a result of a $6.9 million increase in deposits.
8
<PAGE>
Total consolidated stockholders' equity of the Company was $48.5 million at
March 31, 2000, relatively unchanged from December 31, 1999. During the first
quarter of 2000, the net increase in retained earnings, which is net income less
dividends paid, was partially offset by the net cost of treasury shares
purchased plus the decrease in accumulated other comprehensive income. During
January of 2000 management announced that the Company's board of directors had
authorized the purchase of up to 142,368 additional shares of the Company's
stock in the open market during the subsequent twelve months. As of March 31,
2000, there were approximately 116,500 shares available for repurchase under
this plan.
Asset Quality
Management of the Company believes that there has been no material adverse
change in the Company's asset quality during the three-month period ended March
31, 2000. The increase in non-performing loans is largely attributable to one
loan with a balance of $547,000, secured by four residential condominium units.
The Savings Bank is presently working with the borrower to resolve the
situation, and one of the units representing approximately 40% of the
non-performing balance is under contract of sale. Non-performing loans also
include $338,000 in student loans that are guaranteed by the United States
Department of Education, through the Pennsylvania Higher Education Assistance
Association, unless the Savings Bank is notified that it has failed to perform
all the necessary procedures to preserve the guarantee. In such a situation, the
Savings Bank would attempt to have the guarantee reinstated; if unsuccessful,
these loans become unsecured loans that the Savings Bank will attempt to collect
or charge-off.
The following table sets forth information regarding the Company's asset
quality (dollars in thousands):
<TABLE>
<CAPTION>
March 31, December 31, March 31,
--------- ------------ ---------
2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Non-performing loans $2,183 $1,356 $1,561
Ratio of non-performing loans to gross loans 0.74% 0.47% 0.51%
Ratio of non-performing loans to total assets 0.30% 0.19% 0.21%
Foreclosed property $321 $546 $274
Foreclosed property to total assets 0.04% 0.08% 0.04%
Ratio of total non-performing assets to total assets 0.34% 0.26% 0.25%
</TABLE>
Management maintains an allowance for loan losses at levels that are believed to
be adequate; however, there can be no assurances that further additions will not
be necessary or that losses inherent in the existing loan portfolios will not
exceed the allowance. The following table sets forth the activity in the
allowance for loan losses during the periods indicated (in thousands):
2000 1999
---- ----
Beginning balance, January 1, $1,970 $1,909
Provision 44 30
Less: charge-off's (recoveries), net
127 --
------ ------
Ending balance, March 31, $1,887 $1,939
====== ======
9
<PAGE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Net Income. The Company recorded net income of $1,029,000, or $0.39 per diluted
share, for the three months ended March 31, 2000 as compared to $984,000, or
$0.33 per diluted share, for the three months ended March 31, 1999.
Average Balance Sheet
The following table sets forth information relating to the Company's average
balance sheet and reflects the average yield on assets and average cost of
liabilities for the periods indicated. The yields and costs are computed by
dividing income or expense by the average balance of interest-earning assets or
interest-bearing liabilities, respectively for the periods indicated.
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
2000 1999
---------------------------------- ----------------------------------
Average Average Average Average
Balance Interest Yld/Cost Balance Interest Yld/Cost
------- -------- -------- ------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans receivable (4)....................... $289,660 $5,556 7.71% $282,072 $5,089 7.22%
Mortgage-backed securities................. 292,754 4,870 6.69% 261,124 4,097 6.28%
Investment securities...................... 101,928 1,531 6.04% 113,605 1,581 5.57%
Other interest-earning assets(1)........... 7,454 72 3.88% 34,181 326 3.81%
------- ------ -------- -------
Total interest-earning assets............ 691,796 12,029 6.99% 690,982 11,093 6.42%
------ -------
Non interest-earning assets.................... 27,622 24,562
------- -------
Total assets............................. 719,418 715,544
======= =======
Liabilities and stockholders' equity:
Interest-bearing liabilities
Deposits................................... 404,091 3,576 3.56% 430,115 3,857 3.59%
Advances from the FHLB and other
borrowings...................... 259,676 3,603 5.58% 223,359 2,775 4.97%
------- ------ ------- ------
Total interest-bearing liabilities....... 663,767 7,179 4.35% 653,474 6,632 4.06%
------ ------
Non interest-bearing liabilities............... 7,840 9,964
------- -------
Total liabilities.......................... 671,607 663,438
Stockholders' equity........................... 47,811 52,106
------- -------
Total liabilities and stockholders' equity.... $719,418 $715,544
======== ========
Net interest income............................ $4,850 $4,461
====== ======
Interest rate spread (2)....................... 2.64% 2.36%
Net yield on interest-earning assets (3)....... 2.82% 2.58%
Ratio of average interest-earning assets to
average interest bearing liabilities........... 104% 106%
</TABLE>
(1) Includes interest-bearing deposits in other banks.
(2) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(3) Net yield on interest-earning assets represents net interest income as a
percentage of average interest-earning assets.
(4) Nonaccrual loans have been included in the appropriate average loan balance
category, but interest on nonaccrual loans has not been included for
purposes of determining interest income.
10
<PAGE>
Rate/Volume Analysis
The following table presents, for the periods indicated, the change in interest
income and interest expense (in thousands) attributed to (i) changes in volume
(changes in the weighted average balance of the total interest earning asset and
interest bearing liability portfolios multiplied by the prior year rate), and
(ii) changes in rate (changes in rate multiplied by prior year volume). Changes
attributable to the combined impact of volume and rate have been allocated
proportionately based on the absolute value of changes due to volume and changes
due to rate.
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 vs. 1999
-------------------------------------------
Increase (decrease)
due to
-------------------------------------------
Volume Rate Net
-------------------------------------------
Interest income:
<S> <C> <C> <C>
Loans receivable, net $133 $334 $467
Mortgage-backed securities 502 271 773
Investment securities (614) 564 (50)
Other interest-earning assets (295) 41 (254)
-------------------------------------------
Total interest-earning assets (274) 1,210 936
===========================================
Interest expense:
Deposits (247) (34) (281)
Advances from the FHLB and other borrowings 472 356 828
-------------------------------------------
Total interest-bearing liabilities 225 322 547
===========================================
Net change in net interest income $(499) $888 $389
===========================================
</TABLE>
Total Interest Income. Total interest income increased by $936,000 or 8.4% to
$12.0 million for the three months ended March 31, 2000 compared with the first
quarter of 1999 primarily because of increases in the rates earned on average
interest-earning assets. The increase in the rate earned on loans receivable
occurred for two reasons: first, the Company purchased $76.6 million in loans
receivable late in the first quarter of 1999 at yields that were higher than the
current portfolio yields. Second, market interest rates rose steadily from the
first quarter of 1999 through year-end 1999.
The increase in interest earned on mortgage-backed securities also occurred as a
result of purchases, throughout the last three quarters of 1999, with yields
higher than the existing portfolio because of higher market interest rates.
Total Interest Expense. Total interest expense increased to $7.2 million for the
three-month period ended March 31, 2000 from $6.6 million for the same period in
1999 primarily due to increased advances from the Federal Home Loan Bank and
other borrowings which were used to fund asset growth and deposit outflows. The
average rate paid on Federal Home Loan Bank advances and other borrowings
increased due to the effect of higher interest rates on new borrowings.
Interest expense on deposits decreased during the first quarter of 2000
compared to the first quarter of 1999 because the average balance of deposits
decreased $26.0 million or 6.1%, from $430.0 million to $404.1 million. The
decrease in the average balance of deposits resulted from management's efforts
to price deposits at lower interest rates.
11
<PAGE>
Non-interest income. Total non-interest income was $374,000 for the three-month
period ended March 31, 2000 compared with $323,000 for the same period in 1999.
The increase is due in part to $33,000 of non-recurring loan prepayment fees
received during the first quarter of 2000.
Non-interest expense. Total non-interest expense increased by $404,000 to $3.6
million for the three months ended March 31, 2000 compared to the same period in
1999. Compensation and benefits expenses increased by $187,000 during the first
quarter of 2000 compared to the year earlier period due in large part to the
increase in full time equivalent employees from 144 at March 31, 1999 to 167 at
March 31, 2000. These additional employees were related to the two additional
branch offices open during the first quarter of 2000 compared to the first
quarter of 1999, and additional staff in the lending areas of the Company.
In addition, these additional branch offices are largely the cause of the
increases in occupancy and equipment and other operating expenses. The increase
in advertising expense is the result of a planned increase in the Company's
advertising expenses in order to attract new retail banking customers.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company's liquidity is a measure of its ability to fund loans, pay
withdrawals of deposits, and other cash outflows in an efficient, cost-effective
manner. The Company's short-term sources of liquidity include maturity,
repayment and sales of assets, excess cash and cash equivalents, new deposits,
broker deposits, other borrowings, and new advances from the Federal Home Loan
Bank. There has been no material adverse change during three-month period ended
March 31, 2000 in the ability of the Company and its subsidiaries to fund their
operations.
The Savings Bank is required under federal regulations to maintain certain
specified levels of "liquid investments", which include certain United States
government obligations and other approved investments. Current regulations
require the Savings Bank to maintain liquid assets of not less than 4% of its
net withdrawable accounts plus short term borrowings. Short-term liquid assets
must consist of not less than 1% of such accounts and borrowings, which amount
is also included within the 4% requirement. These levels may be changed from
time to time by the regulators to reflect current economic conditions. The
Savings Bank had regulatory liquidity ratios of 18.9% and 27.8% at March 31,
2000 and 1999, respectively.
At March 31, 2000, the Company had commitments outstanding under letters of
credit of $3.7 million, commitments to originate loans of $4.2 million, and
commitments to fund undisbursed balances of closed loans and unused lines of
credit of $43.1 million.
Capital Requirements
The Savings Bank is in compliance with all of its capital requirements as of
March 31, 2000.
YEAR 2000
Risk Assessment
There has been no information that has come to the Company's attention during
the three-months ended March 31, 2000 to indicate that there are any adverse
consequences that might affect the Company in the future related to the year
2000 problem.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Asset and Liability Management
The Company's market risk exposure is predominately caused by interest rate
risk, which is defined as the sensitivity of the Company's current and future
earnings, the values of its assets and liabilities, and the value of its capital
to changes in the level of market interest rates. Management of the Company
believes that there has not been a material adverse change in market risk during
the three months ended March 31, 2000.
13
<PAGE>
TF FINANCIAL CORPORATION AND SUBSIDIARIES
PART II
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders (the "Meeting") of the Company was
held on April 26, 2000. There were outstanding and entitled to vote at the
Meeting 2,843,874 shares of Common Stock of the Company. There were present
at the meeting or by proxy the holders of 2,443,390 shares of Common Stock
representing 85.92% of the total eligible votes to be cast. Proposal 1 was
to elect two directors of the Company. Proposal 2 was a shareholder
proposal to repeal or amend various provisions of the Company's Certificate
of Incorporation and by-laws. Proposal 3 was a shareholder proposal
recommending that the Board of Directors take certain action to initiate a
possible sale of the Company. The results of the voting at the Meeting are
as follows (percentages in terms of votes cast):
Proposal 1
Carl F. Gregory FOR: 2,097,880 PERCENT FOR: 85.86%
Robert N. Dusek FOR: 2,064,022 PERCENT FOR: 84.47%
Proposal 2 FOR: 675,702 PERCENT FOR: 33.27%
AGAINST: 1,331,816 PERCENT AGAINST: 65.57%
ABSTAIN: 23,405 PERCENT ABSTAIN: 1.16%
Proposal 3 FOR: 563,233 PERCENT FOR: 27.73%
AGAINST: 1,445,420 PERCENT AGAINST: 71.17%
ABSTAIN: 22,270 PERCENT ABSTAIN: 1.10%
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial data schedule
(in electronic filing only)
(b) Reports on Form 8-K
During the quarter ended March 31, 2000, the Registrant filed a Current
Report on Form 8-K dated January 19, 2000 (Items 5 and 7) to report that it
intended to repurchase in the open market up to 5% or 142,368 shares of its
outstanding common stock. The repurchases will be made from time to time
over the subsequent twelve months, subject to the availability of stock.
14
<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
/s/ John R. Stranford
---------------------
Date: May 5, 2000 John R. Stranford
-------------------
President and CEO
(Principal Executive Officer)
/s/ Dennis R. Stewart
---------------------
Date: May 5, 2000 Dennis R. Stewart
------------------
Senior Vice President and
Chief Financial Officer
(Principal Financial & Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 16,661
<INT-BEARING-DEPOSITS> 547
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 162,091
<INVESTMENTS-CARRYING> 378,234
<INVESTMENTS-MARKET> 370,401
<LOANS> 296,602
<ALLOWANCE> 1,887
<TOTAL-ASSETS> 726,434
<DEPOSITS> 408,597
<SHORT-TERM> 51,882
<LIABILITIES-OTHER> 9,497
<LONG-TERM> 208,007
0
0
<COMMON> 529
<OTHER-SE> 47,922
<TOTAL-LIABILITIES-AND-EQUITY> 726,434
<INTEREST-LOAN> 5,556
<INTEREST-INVEST> 6,401
<INTEREST-OTHER> 72
<INTEREST-TOTAL> 12,029
<INTEREST-DEPOSIT> 3,576
<INTEREST-EXPENSE> 7,179
<INTEREST-INCOME-NET> 4,850
<LOAN-LOSSES> 44
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,624
<INCOME-PRETAX> 1,556
<INCOME-PRE-EXTRAORDINARY> 1,556
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,029
<EPS-BASIC> .40
<EPS-DILUTED> .39
<YIELD-ACTUAL> 2.82
<LOANS-NON> 0
<LOANS-PAST> 2,183
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,970
<CHARGE-OFFS> 132
<RECOVERIES> (5)
<ALLOWANCE-CLOSE> 1,887
<ALLOWANCE-DOMESTIC> 1,887
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,887
</TABLE>
