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, 2002
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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
TF FINANCIAL CORPORATION
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(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
incorporation or organization) identification no.)
3 Penns Trail, Newtown, Pennsylvania 18940
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 215-579-4000
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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 30, 2002
------------------
Class Outstanding
---------------------------- -----------------
$.10 par value common stock 2,715,588 shares
TF FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 1O-Q
FOR THE QUARTER ENDED MARCH 31, 2002
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
TF FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
Unaudited Audited
March 31, December 31,
2002 2001
------------ ------------
Assets
Cash and cash equivalents $71,165 $69,139
Certificates of deposit in other financial institutions 194 194
Investment securities available for sale - at fair value 22,513 22,671
Investment securities held to maturity (fair value of $16,529 and $9,830, 16,670 9,866
respectively)
Mortgage-backed securities available for sale - at fair value 123,367 99,763
Mortgage-backed securities held to maturity (fair value of $81,513 and 80,160 93,367
$94,735, respectively)
Loans receivable, net 368,551 377,635
Federal Home Loan Bank stock - at cost 11,118 11,368
Accrued interest receivable 4,278 4,154
Core deposit intangible 717 775
Goodwill 4,213 4,324
Premises and equipment, net 7,259 7,484
Other assets 10,607 10,464
-------- --------
Total assets $720,812 $711,204
======== ========
Liabilities and stockholders' equity
Liabilities
Deposits $432,285 $422,052
Advances from the Federal Home Loan Bank 222,359 222,359
Advances from borrowers for taxes and insurance 1,054 1,241
Accrued interest payable 4,287 3,762
Other liabilities 2,605 3,815
-------- --------
Total liabilities 662,590 653,229
-------- --------
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; 2,465,525 and 2,465,986 shares outstanding
at March 31, 2002 and December 31, 2001, net of
treasury shares of 2,575,212 and 2,571,712, respectively. 529 529
Retained earnings 57,203 56,370
Additional paid-in capital 51,623 51,652
Unearned ESOP shares (2,492) (2,523)
Treasury stock - at cost (48,943) (48,838)
Accumulated other comprehensive income 302 785
-------- --------
Total stockholders' equity 58,222 57,975
-------- --------
Total liabilities and stockholders' equity $720,812 $711,204
======== ========
3
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
For Three Months
Ended March 31,
--------------------
2002 2001
-------- --------
Interest income
Loans $6,731 $7,166
Mortgage-backed securities 3,060 3,780
Investment securities 587 1,239
Interest bearing deposits and other 209 145
------- -------
Total interest income 10,587 12,330
------- -------
Interest expense
Deposits 2,830 3,591
Advances from the Federal Home Loan Bank and other borrowings 3,037 3,500
------- -------
Total interest expense 5,867 7,091
------- -------
Net interest income 4,720 5,239
Provision for loan losses 150 125
------- -------
Net interest income after provision for loan losses 4,570 5,114
------- -------
Non-interest income
Service fees, charges and other operating income 407 415
Bank-owned life insurance 133 -
Loss on sale of loans and mortgage-backed securities available for sale - (15)
------- -------
Total non-interest income 540 400
------- -------
Non-interest expense
Compensation and benefits 1,928 1,938
Occupancy and equipment 578 645
Federal deposit insurance premium 19 21
Professional fees 80 156
Amortization of core deposit intangible 58 69
Amortization of goodwill 111 111
Advertising 110 126
Other operating 647 745
------- -------
Total non-interest expense 3,531 3,811
------- -------
Income before income taxes 1,579 1,703
Income taxes 376 445
------- -------
Net income $1,203 $1,258
======= =======
Basic earnings per share $0.49 $0.51
Diluted earnings per share $0.44 $0.48
Weighted average number of shares outstanding - basic 2,463 2,482
Weighted average number of shares outstanding - diluted 2,716 2,637
See notes to consolidated financial statements
4
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the three months
ended
March 31,
---------------------
2002 2001
-------- --------
Cash flows from operating activities
Net Income $1,203 $1,258
Adjustments to reconcile net income to net cash provided by operating activities:
Mortgage loan servicing rights 3 3
Deferred loan origination fees (63) (52)
Premiums and discounts on investment securities, net 35 (8)
Premiums and discounts on mortgage-backed securities and loans, net (123) (113)
Amortization of goodwill and core deposit intangible 169 181
Provision for loan losses 150 125
Depreciation of premises and equipment 252 206
Recognition of ESOP and MSBP expenses 67 58
Loss on sale of loans and mortgage-backed securities available for sale - 15
Increase in value of bank-owned life insurance (133) -
(Increase) decrease in:
Accrued interest receivable (124) 1,243
Other assets 155 260
Increase (decrease) in:
Accrued interest payable 525 601
Other liabilities (960) (955)
------ -------
Net cash provided by operating activities 1,156 2,822
------ -------
Cash flows from investing activities
Loan originations and principal payments on loans, net 23,573 6,493
Purchases of loans (14,767) (3,792)
Proceeds from loan sales - 1,227
Proceeds from sale of mortgage-backed securities available for sale - 4,309
Purchases of mortgage-backed securities available for sale (33,770) -
Purchase of investment securities held to maturity (6,821) -
Proceeds from maturities of investment securities held to maturity - 45,014
Proceeds from maturities of investment securities available for sale - 1,000
Principal repayments from mortgage-backed securities held to maturity 13,265 7,071
Principal repayments from mortgage-backed securities available for sale 9,643 2,709
Purchases and redemptions of Federal Home Loan Bank stock, net 250 -
Proceeds from sales of real estate acquired through foreclosure 18 -
Purchase of premises and equipment (27) (20)
------ -------
Net cash provided by (used in) investing activities (8,636) 64,011
------ -------
See notes to consolidated financial statements
5
TF FINANCIAL CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
For the three months
ended
March 31,
-----------------------
2002 2001
------- -------
Cash flows from financing activities
Net increase in deposits 10,233 2,118
Net decrease in advances from Federal Home Loan Bank - (12,500)
Net decrease in other borrowings - (14,962)
Net decrease in advances from borrowers for taxes and insurance (187) -
Exercise of stock options 100 21
Purchase of treasury stock, net (270) (730)
Common stock cash dividend (370) (385)
------- -------
Net cash provided by (used in) financing activities 9,506 (26,438)
------- -------
Net increase in cash and cash equivalents 2,026 40,395
Cash and cash equivalents at beginning of period 69,139 10,618
------- -------
Cash and cash equivalents at end of period $71,165 $51,013
======= =======
Supplemental disclosure of cash flow information
Cash paid for
Interest on deposits and advances $ 5,342 $ 6,490
Income taxes $ 700 $ 610
Non-cash transactions
Transfers from loans to real estate acquired through foreclosure $ 185 $ -
See notes to consolidated financial statements
6
TF FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements as of March 31, 2002 (unaudited) and
December 31, 2001 and for the three-month periods ended March 31, 2002 and
2001 (unaudited) include the accounts of TF Financial Corporation (the
"Company") and its wholly owned subsidiaries Third Federal Savings Bank
(the "Bank"), TF Investments Corporation, Penns Trail Development
Corporation and Teragon Financial Corporation. The Company's business is
conducted principally through the 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 accounting
principles generally accepted in the United States of America. 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, 2002 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, 2001.
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
on investment securities and mortgage-backed securities available for sale.
Total comprehensive income for the three-month periods ended March 31, 2002
and 2001 was $720,000 and $2,041,000, net of applicable income tax of
$127,000 and $849,000, respectively.
NOTE 5- RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current
period presentation.
NOTE 6- NEW ACCOUNTING PRONOUNCEMENTS
On January 1, 2002, the Company adopted Financial Accounting Standards
Board Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations", SFAS No. 142, "Goodwill and Intangible Assets", and SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets". The
adoption of these statements did not have a material impact on the
financial condition or results of operations of the Company.
On January 1, 2002, the Company also adopted Statement of Position (SOP)
01-6, "Accounting by Certain Entities That Lend to or Finance the
Activities of Others", which reconciles and conforms existing differences
in the accounting and financial reporting guidance in the AICPA Audit and
Accounting Guides, Banks and Savings Institutions, Audits of Credit Unions,
and Audits of Finance Companies. It also carries forward accounting
guidance for practices deemed to be unique to certain financial
institutions. The adoption of this SOP had no impact on the Company's
financial position or results of operations.
7
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, 2002 and December 31, 2001 were $720.8
million and $711.2 million, respectively, an increase of $9.6 million, or 1.3%,
during the three-month period. The increase in total assets was the direct
result of the deployment of deposit growth into various earning asset
categories. Cash and cash equivalents increased by $2.0 million. Investment
securities held to maturity increased by $6.8 million due to the purchases of
such securities. Mortgage-backed securities available for sale increased by
$23.6 million as $33.8 million in purchases of such securities more than off-set
the principal paydowns received from these securities. Mortgage-backed
securities held to maturity decreased by $13.2 million due to the high rate of
prepayments of the mortgages underlying these pass-through securities.
Similarly, high prepayments of existing mortgages in the loans receivable
portfolio more than off-set new loans closed and purchased, causing a net
decrease of $9.1 million in loans receivable.
Total liabilities increased by $9.4 million due to $10.2 million in deposit
growth. Non-interest bearing demand deposits grew by $3.0 million while savings
and money market accounts grew by $9.7 million. Certificates of deposit
decreased by $1.4 million and interest-bearing checking accounts decreased by
$1.1 million.
8
Total consolidated stockholders' equity of the Company was $58.2 million or
8.08% of assets at March 31, 2002, compared to $54.1 million or 7.74% of assets
at March 31, 2001. During the first quarter of 2002 the Company repurchased
12,200 shares of its common stock and issued 8,700 shares pursuant to the
exercise of stock options. As of March 31, 2002, there were approximately
118,800 shares available for repurchase under the previously announced share
repurchase plan, and the Company will continue to repurchase shares as share
availability and market conditions permit.
Asset Quality
Subsequent to the first quarter of 2002, the Company placed a portion of its
purchased lease portfolio on non-performing status because it had ceased
receiving the payments to which it was entitled. At the present time the Company
believes that the collectibility of approximately $600,000 of these payments may
be in doubt. Because all of the facts surrounding this matter are still being
developed and are not known, the Company cannot estimate at this time the amount
or timing of eventual loss, if any. The ultimate resolution of this issue may
result in an increase in the allowance for loan and lease losses in future
periods and impact the Company's earnings. Other than the foregoing, the Company
has not experienced any significant deterioration in its asset quality during
the first quarter of 2002.
The following table sets forth information regarding the Company's asset quality
(dollars in thousands):
March 31, December 31, March 31,
--------- ------------ ---------
2002 2001 2001
--------- ------------ ---------
Non-performing loans $3,904 $3,776 $1,302
Ratio of non-performing loans to gross loans 1.05% 0.99% 0.36%
Ratio of non-performing loans to total assets 0.54% 0.53% 0.19%
Foreclosed property $198 $40 $176
Foreclosed property to total assets 0.03% 0.01% 0.03%
Ratio of total non-performing assets to total assets 0.57% 0.54% 0.21%
Management maintains an allowance for loan and lease 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 and
lease portfolios will not exceed the allowance. The following table sets forth
the activity in the allowance for loan and lease losses during the periods
indicated (in thousands):
2002 2001
------ ------
Beginning balance, January 1, $1,972 $1,714
Provision 150 125
Less: charge-off's (recoveries), net 66 62
------ ------
Ending balance, March 31, $2,056 $1,777
====== ======
9
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
Net Income. The Company recorded net income of $1,203,000, or $0.44 per diluted
share, for the three months ended March 31, 2002 as compared to $1,258,000, or
$0.48 per diluted share, for the three months ended March 31, 2001.
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 daily balance of interest-earning
assets or interest-bearing liabilities, respectively, for the periods indicated.
Three months ended March 31,
Three Months Ended March,
2002 2001
------------------------------ -----------------------------
Average Average Average Average
Balance Interest Yld/Cost Balance Interest Yld/Cost
--------- -------- -------- --------- -------- --------
(dollars in thousands)
Assets:
Interest-earning assets:
Loans receivable (1)....................... $372,490 $6,731 7.33% $362,020 $7,166 8.03%
Mortgage-backed securities................. 201,796 3,060 6.15% 232,319 3,780 6.60%
Investment securities...................... 47,792 587 4.99% 83,824 1,239 5.99%
Other interest-earning assets(2)........... 53,966 209 1.56% 10,687 145 5.50%
-------- ------- -------- -------
Total interest-earning assets............ 676,044 10,587 6.35% 688,850 12,330 7.26%
------- -------
Non interest-earning assets.................... 34,928 28,503
-------- --------
Total assets............................. 710,972 717,353
======== ========
Liabilities and stockholders' equity:
Interest-bearing liabilities
Deposits................................... 423,239 2,830 2.71% 404,512 3,591 3.60%
Advances from the FHLB and other
Borrowings...................... 222,359 3,037 5.54% 251,405 3,500 5.65%
-------- ------- -------- -------
Total interest-bearing liabilities....... 645,598 5,867 3.69% 655,917 7,091 4.39%
------- -------
Non interest-bearing liabilities............... 7,394 7,859
-------- --------
Total liabilities.......................... 652,992 663,776
Stockholders' equity........................... 57,980 53,517
-------- --------
Total liabilities and stockholders' equity.... $710,972 $717,353
======== ========
Net interest income............................ $4,720 $5,239
====== ======
Interest rate spread (3)....................... 2.66% 2.87%
Net yield on interest-earning assets (4)....... 2.83% 3.08%
Ratio of average interest-earning assets to
average interest bearing liabilities........... 105% 105%
(1) 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.
(2) Includes interest-bearing deposits in other banks.
(3) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net yield on interest-earning assets represents net interest income as a
percentage of average interest
10
(5) 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.
Three months ended
March 31,
2002 vs. 2001
-------------------------------
Increase (decrease)
due to
-------------------------------
Volume Rate Net
-------------------------------
Interest income:
Loans receivable, net $1,154 (1,589) ($435)
Mortgage-backed securities (474) (246) (720)
Investment securities (468) (184) (652)
Other interest-earning assets 769 (705) 64
-------------------------------
Total interest-earning assets 981 (2,724) (1,743)
===============================
Interest expense:
Deposits 1,015 (1,776) (761)
Advances from the FHLB and other borrowings (398) (65) (463)
-------------------------------
Total interest-bearing liabilities 617 (1,841) (1,224)
===============================
Net change in net interest income $364 (883) ($519)
===============================
Total Interest Income. Total interest income decreased by $1.7 million or 14.1%
to $10.6 million for the three months ended March 31, 2002 compared with the
first quarter of 2001 primarily because of the consequences of a substantial
decrease in market interest rates. Since the beginning of the first quarter of
2001, the Federal Reserve Board lowered the federal funds rate eleven times from
6.50% to 1.75%. Longer term market interest rates also decreased significantly.
As a result the Company's callable investment securities were called, higher
coupon mortgage-related securities were paid down at an accelerated rate, and
loans receivable were refinanced by borrowers at lower rates, or away from the
Bank, resulting in large paydowns of higher yielding loans. In addition, the
interest rates on the Company's adjustable rate loans adjusted downward. Thus,
each component of the Company's earning assets produced less interest income
because of declining market interest rates. In addition, the Company's cash and
cash equivalents were significantly higher during the 2002 period, while the
rate earned on these assets, the federal funds rate minus 25 basis points, was
substantially lower during the 2002 period. At March 31, 2002 cash and cash
equivalents totaled $71.2 million.
Total Interest Expense. Total interest expense decreased by $1.2 million to $5.9
million for the three-month period ended March 31, 2002. The increase in the
average balance of deposits was more than offset by lower market interest rates
during the period and the lower rates paid on the Company's renewing
certificates of deposit that had been originated when market interest rates were
higher. In addition, during the fourth quarter of 2001 and the first quarter of
2002, the Company lowered the interest rates paid on several of its other
deposit products in order to keep them in line with short term market interest
rates, mainly the federal funds rate.
11
Non-interest income. Total non-interest income was $540,000 for the three-month
period ended March 31, 2002 compared with $400,000 for the same period in 2001.
The increase is due to the increase in the cash surrender value of bank-owned
life insurance which was purchased during the third quarter of 2001.
Non-interest expense. Total non-interest expense decreased by $280,000 to $3.5
million for the three months ended March 31, 2002 compared to the same period in
2001. Compensation and benefits expense would have been slightly higher except
for a $93,000 reduction in pension expense caused by participants who had very
high balances leaving the plan. Occupancy and equipment expense decreased in
part because the Company sold one of its branch offices during the fourth
quarter of 2001, and also because maintenance expenses were unusually high
during the first quarter of 2001 due to inclement weather. Professional fees
were lower during the first quarter of 2002 compared to the year earlier period
mainly due to $60,000 of costs incurred during the first quarter of 2001
associated with the implementation of in-house item processing and statement
rendering capabilities. The Company's effective tax rate during the first
quarter of 2002 was 23.8% compared with 26.1% during the first quarter of 2001.
The decrease is due to the purchase of bank-owned life insurance during the
third quarter of 2001.
12
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, 2002 in the ability of the Company and its subsidiaries to fund their
operations.
At March 31, 2002, the Company had commitments outstanding under letters of
credit of $1.6 million, commitments to originate loans of $12.1 million, and
commitments to fund undisbursed balances of closed loans and unused lines of
credit of $27.6 million.
Capital Requirements
The Bank is in compliance with all of its capital requirements as of March 31,
2002.
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, 2002.
13
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 24, 2002. There were outstanding and entitled to vote at the
Meeting 2,727,994 shares of Common Stock of the Company. There were present at
the meeting or by proxy the holders of 2,375,554 shares of Common Stock
representing 87.08% of the total eligible votes to be cast. Proposal 1 was to
elect one director of the Company. The result of the voting at the Meeting is as
follows (percentages in terms of votes cast):
Proposal 1
John R. Stranford FOR: 2,177,233 PERCENT FOR: 91.65%
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
On April 24, 2002 the Company filed a Form 8-K wherein the
Company disclosed that it had adopted Amended and Restated
Bylaws in order to add sections which impose additional
qualifications for Directors of the Company.
14
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: May 14, 2002 /s/ John R. Stranford
-------------------------------------------
John R. Stranford
President and CEO
(Principal Executive Officer)
Date: May 14, 2002 /s/ Dennis R. Stewart
-------------------------------------------
Dennis R. Stewart
Senior Vice President and
Chief Financial Officer
(Principal Financial & Accounting Officer)
15