TFS Financial Corporation (NASDAQ: TFSL) (the "Company"), the
holding company for Third Federal Savings and Loan Association of
Cleveland (the "Association"), today announced results for the
quarter and nine months ended June 30, 2024.
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Chairman and CEO Marc A. Stefanski
(Photo: Business Wire)
The Company reported net income of $20.0 million for the quarter
ended June 30, 2024 compared to $20.7 million of net income for the
quarter ended March 31, 2024. The change in net income included
decreases in net interest income and release of provision for
credit losses partially offset by a decrease in non-interest
expense.
“Despite higher interest rates and economic uncertainty, our
earnings are more than 10% higher this year than last year,” said
Chairman and CEO Marc A. Stefanski. “Retail deposit growth of 6% in
the last three months is a result of our strong CD product
offerings. Our $2.2 billion in loan originations have an average
yield of 7.31%, and our ongoing expense management resulted in a 5%
reduction from 2023. All of our capital ratios continue to exceed
the amounts required to be well capitalized, including a Tier I
capital ratio of nearly 11%, further showing that we are strong,
stable, and safe.”
Net interest income decreased $2.1 million, or 3%, to $69.3
million for the quarter ended June 30, 2024 from $71.4 million for
the quarter ended March 31, 2024. Net interest income was lower as
the weighted average cost of interest-bearing liabilities
increased. Certificates of deposit and borrowings that were
obtained in a lower interest rate environment matured during the
quarter and were replaced by instruments with higher costs. The
weighted average yield of interest-earning assets, primarily loans,
increased during the quarter. The interest rate spread was 1.36%
for the quarter ended June 30, 2024 compared to 1.43% for the
quarter ended March 31, 2024. The net interest margin was 1.67% for
the quarter ended June 30, 2024 compared to 1.71% for the prior
quarter.
During the quarter ended June 30, 2024, there was a $0.5 million
release of provision for credit losses compared to a $1.0 million
release of provision for the quarter ended March 31, 2024.
Continued recoveries of loan amounts previously charged off and low
levels of current loan charge-offs resulted in the release of
provision. Net recoveries were $1.4 million for the quarter ended
June 30, 2024 compared to $1.3 million for the previous quarter.
The total allowance for credit losses increased $0.9 million during
the quarter ended June 30, 2024 to $95.7 million, or 0.63% of total
loans receivable from $94.8 million, or 0.63% of total loans
receivable, at March 31, 2024. The increase was mainly due to an
increase in off- balance sheet commitments related to commitments
to originate and undrawn portions of home equity lines of credit.
The total allowance for credit losses included a liability for
unfunded commitments of $28.2 million and $26.7 million at June 30,
2024 and March 31, 2024, respectively.
Total non-interest expense decreased $1.4 million, or 3%, to
$50.8 million for the quarter ended June 30, 2024 from $52.2
million for the quarter ended March 31, 2024. There was a decrease
of $0.7 million in both salaries and employee benefits and federal
("FDIC") insurance premium. Contributing to the decrease in
salaries and employee benefits was a decrease in expense recognized
for the Company's equity incentive plan, as certain grants fully
vested during the previous quarter, and an increase in salary
deferrals related to loan origination activities during the
quarter. The decrease in FDIC premium was primarily due to an
amendment to the FDIC's risk-based assessment that incorporated
recent changes in accounting for and measurement of troubled debt
restructurings ("TDRs").
Total assets increased by $17.8 million, or less than 1%, to
$17.03 billion at June 30, 2024 from $17.02 billion at March 31,
2024. The increase was mainly due to increases in loans held for
sale and loans held for investment partially offset by decreases in
cash and cash equivalents and Federal Home Loan Bank ("FHLB")
stock.
Cash and cash equivalents decreased $33.9 million, or less than
1%, to $560.4 million at June 30, 2024 from $594.3 million at March
31, 2024 due to normal fluctuations and liquidity management.
FHLB stock decreased $8.3 million to $232.1 million at June 30,
2024 from $240.4 million at March 31, 2024. The decrease is a
result of stock redemptions by the FHLB related to a decrease in
the balance of FHLB advances. The FHLB has collateral requirements
on funds borrowed that dictate the minimum amount of stock owned at
any given time.
Loans held for sale increased $20.7 million, or 213%, to $30.4
million at June 30, 2024 from $9.7 million at March 31, 2024 due to
an increase in both loans committed to forward sales and loans
identified for future sale.
Loans held for investment, net of allowance and deferred loan
expenses, increased $40.3 million, or less than 1%, to $15.19
billion at June 30, 2024 from $15.15 billion at March 31, 2024.
During the quarter ended June 30, 2024, the home equity loans and
lines of credit portfolio increased $269.2 million and residential
core mortgage loans decreased $225.3 million. Repayments and sales
of residential mortgage loans held for investment outpaced
originations during the quarter ended June 30, 2024. The volume of
mortgage loan originations remains low due to a relatively high
interest rate environment, resulting in minimal refinance
activity.
Deposits increased by $90.3 million to $10.03 billion at June
30, 2024, compared to $9.94 billion at March 31, 2024, consisting
of a $226.4 million increase in certificates of deposit ("CDs") and
decreases of $79.8 million in savings accounts, $31.5 million in
money market deposit accounts, and $25.6 million in checking
accounts.
Borrowed funds decreased $126.1 million to $4.83 billion at June
30, 2024 from $4.96 billion at March 31, 2024, as maturing
borrowings were paid off with cash and partially replaced with
retail deposits.
Fiscal Year-To-Date 2024
The Company reported net income of $61.4 million for the nine
months ended June 30, 2024, an increase of $5.7 million compared to
net income of $55.7 million for the nine months ended June 30,
2023. The change was primarily due to a decrease in non-interest
expense and an increase in the release of provision for credit
losses, partially offset by a decrease in net interest income.
Net interest income decreased $3.5 million, or 1.64%, to $209.7
million for the nine months ended June 30, 2024 compared to $213.2
million for the nine months ended June 30, 2023. The decrease in
net interest income was primarily due to an increase in the
weighted average cost of interest-bearing liabilities, mainly
certificates of deposit. The weighted average cost of certificates
of deposit increased 141 basis points between the two periods as
balances migrated from savings and checking accounts to higher
yielding certificates of deposits and accounts established in a
lower interest rate environment repriced to higher yields at
maturity. The weighted average yield of interest-earning assets,
primarily loans, increased between the periods. The interest rate
spread was 1.39% for the nine months ended June 30, 2024, a 21
basis point decrease from 1.60% for the nine months ended June 30,
2023. The net interest margin was 1.69% for the nine months ended
June 30, 2024 compared to 1.82% for the prior year period.
During the nine months ended June 30, 2024, there was a $2.5
million release of provision for credit losses compared to a
release of $2.0 million for the nine months ended June 30, 2023.
Continued recoveries of loan amounts previously charged off and low
levels of current loan charge-offs resulted in the release of
provision. Net loan recoveries totaled $3.6 million for the nine
months ended June 30, 2024 and $4.6 million for the same period in
the prior year.
The total allowance for credit losses at June 30, 2024 was $95.7
million, or 0.63% of total loans receivable, compared to $104.8
million, or 0.69% of total loans receivable, at September 30, 2023.
The decrease was almost entirely due to the adoption of recently
issued accounting guidance related to the accounting for troubled
debt restructurings, which resulted in a $10.2 million reduction to
the allowance and a $7.9 million adjustment to retained earnings,
net of tax. The allowance for credit losses included $28.2 million
and $27.5 million in liabilities for unfunded commitments at June
30, 2024 and September 30, 2023, respectively. Total loan
delinquencies increased to $28.6 million, or 0.19% of total loans
receivable, at June 30, 2024 from $28.3 million, or 0.19% of totals
loans receivable, at March 31, 2024 and $23.4 million, or 0.15% of
total loans receivable, at September 30, 2023. Non-accrual loans
increased to $35.4 million, or 0.23% of total loans receivable, at
June 30, 2024 from $35.3 million, or 0.23% of total loans
receivable, at March 31, 2024 and $31.9 million, or 0.21% of total
loans receivable, at September 30, 2023.
Total non-interest expense decreased $8.3 million, or 5%, to
$153.3 million for the nine months ended June 30, 2024, from $161.6
million for the nine months ended June 30, 2023 and included
decreases of $7.0 million in marketing costs and $2.6 million in
salaries and employee benefits, partially offset by an increase of
$1.2 million in federal ("FDIC") insurance premiums. The decrease
in salaries and employee benefits was primarily related to
decreases in staffing and accruals for discretionary incentive
payments. FDIC premiums increased due to growth in deposits and a
two basis point increase in FDIC assessment rates that went into
effect on January 1, 2023, partially offset by a decrease during
the third fiscal quarter of 2024 related to recent changes in
accounting for TDRs.
Total assets increased by $117.0 million, or 1%, to $17.03
billion at June 30, 2024 from $16.92 billion at September 30, 2023.
The increase was mainly the result of increases in cash and cash
equivalents, loans held for sale and loans held for investment,
partially offset by a decrease in other assets.
Cash and cash equivalents increased $93.7 million, or 20%, to
$560.4 million at June 30, 2024 from $466.7 million at September
30, 2023 due to normal fluctuations and liquidity management.
Loans held for sale increased $27.1 million, or 821%, to $30.4
million at June 30, 2024 from $3.3 million at June 30, 2023 due to
an increase in both loans committed to forward sales and loans
identified for future sale.
Loans held for investment, net of allowance and deferred loan
expenses, increased $24.2 million, or less than 1%, to $15.19
billion at June 30, 2024 from $15.17 billion at September 30, 2023.
Home equity loans and lines of credit increased $558.3 million to
$3.59 billion and the residential mortgage loan portfolio decreased
$532.6 million to $11.55 billion. Loans originated and purchased
during the nine months ended June 30, 2024 included $598.7 million
of residential mortgage loans and $1.62 billion of equity loans and
lines of credit compared to $1.31 billion of residential mortgage
loans and $1.24 billion of equity loans and lines of credit
originated or purchased during the nine months ended June 30, 2023.
The decrease in mortgage loan originations was primarily due to a
relatively high interest rate environment, resulting in minimal
refinance activity. New mortgage loans included 93% purchases and
22% adjustable rate loans during the nine months ended June 30,
2024. There were $190.7 million of residential mortgage loans,
primarily long-term fixed-rate loans, sold during the nine months
ended June 30, 2024, including those in contracts pending
settlement at the end of the period, with a net gain on sale of
$1.6 million. During the nine months ended June 30, 2023, $58.1
million of residential mortgage loans were sold with a net gain on
sale of $0.6 million.
Other assets decreased $34.2 million, or 29.16%, to $83.1
million at June 30, 2024 from $117.3 million at September 30, 2023.
The decrease was mainly due to a decrease in the swap margin
receivable related to changes in market values of swap instruments
and the impact of those changes on daily settlement
transactions.
Deposits increased $576.2 million, or 6%, to $10.03 billion at
June 30, 2024 from $9.45 billion at September 30, 2023. The
increase was the result of a $1.09 billion increase in certificates
of deposit, partially offset by a $274.0 million decrease in
savings accounts, a $138.1 million decrease in money market deposit
accounts and a $118.0 million decrease in checking accounts. There
was $1.21 billion in brokered deposits at June 30, 2024 compared to
$1.16 billion at September 30, 2023. At June 30, 2024, brokered
deposits included $725.0 million of three-month certificates of
deposit accounts, aligned with interest rate swap contracts, with a
remaining weighted average effective maturity of approximately 2.8
years.
Borrowed funds decreased $444.3 million, or 8%, to $4.83 billion
at June 30, 2024 from $5.27 billion at September 30, 2023. The
decrease was primarily due to borrowings paid off at maturity. The
total balance of borrowed funds at June 30, 2024, all from the
FHLB, included $1.81 billion of term advances with a weighted
average maturity of approximately 2.0 years, and $3.00 billion of
term advances, aligned with interest rate swap contracts, with a
remaining weighted average effective maturity of approximately 3.2
years. Additional borrowing capacity at the FHLB was $2.68 billion
at June 30, 2024.
Borrowers’ advances for insurance and taxes decreased $57.7
million, or 46%, to $66.8 million at June 30, 2024 from $124.4
million at September 30, 2023. This decrease was primarily related
to the timing of real estate tax payments that are collected from
borrowers and remitted to various taxing agencies when due.
Accrued expenses and other liabilities increased $68.0 million,
or 60%, to $180.9 million at June 30, 2024 from $112.9 million at
September 30, 2023. This increase was mainly due to in-transit real
estate tax payments that had not yet cleared at the reporting date,
slightly offset by a decrease in deferred tax liability.
Total shareholders' equity decreased $12.3 million, or 1%, to
$1.92 billion at June 30, 2024 from $1.93 billion at September 30,
2023. Activity reflects $61.4 million of net income, a $7.9 million
adjustment to retained earnings related to a change in accounting
principle described above with respect to changes in the allowance
for credit losses, a $42.6 million net decrease in accumulated
other comprehensive income, dividends paid of $44.2 million and net
positive adjustments of $5.2 million related to our stock
compensation and employee stock ownership plans. The change in
accumulated other comprehensive income was primarily due to a net
decrease in unrealized gains and losses on swap contracts. There
were no stock repurchases during the nine months ended June 30,
2024. The Company's eighth stock repurchase program allows for a
total of 10,000,000 shares to be repurchased, with 5,191,951 shares
authorized for repurchase at June 30, 2024.
The Company declared and paid a quarterly dividend of $0.2825
per share during each of the first, second and third quarters of
fiscal year 2024. As a result of a mutual member vote, Third
Federal Savings and Loan Association of Cleveland, MHC (the "MHC"),
the mutual holding company that owns approximately 81% of the
outstanding stock of the Company, was able to waive its receipt of
its share of the dividend paid. Under Federal Reserve regulations,
the MHC is required to obtain the approval of its members every 12
months for the MHC to waive its right to receive dividends. As a
result of a July 9, 2024 member vote, the MHC has the approval to
waive receipt of up to $1.13 per share of possible dividends to be
declared on the Company’s common stock during the twelve months
subsequent to the members’ approval (i.e., through July 9, 2025).
The MHC has filed a notice with, and a request for non-objection
from, the Federal Reserve Bank of Cleveland for the proposed
dividend waiver. Both the non-objection from the Federal Reserve
Bank and the timing of the non-objection are unknown at this point.
The MHC has conducted the member vote to approve the dividend
waiver each of the past eleven years under Federal Reserve
regulations and for each of those eleven years, approximately 97%
of the votes cast were in favor of the waiver.
The Company operates under the capital requirements for the
standardized approach of the Basel III capital framework for U.S.
banking organizations (“Basel III Rules”). At June 30, 2024 all of
the Company's capital ratios exceed the amounts required for the
Company to be considered "well capitalized" for regulatory capital
purposes. The Company's Tier 1 leverage ratio was 10.82%, its
Common Equity Tier 1 and Tier 1 ratios were each 18.82% and its
total capital ratio was 19.55%.
Presentation slides as of June 30, 2024 will be available on the
Company's website, www.thirdfederal.com, under the Investor
Relations link within the "Recent Presentations" menu, beginning
July 31, 2024. The Company will not be hosting a conference call to
discuss its operating results.
Third Federal Savings and Loan Association is a leading provider
of savings and mortgage products, and operates under the values of
love, trust, respect, a commitment to excellence and fun. Founded
in Cleveland in 1938 as a mutual association by Ben and Gerome
Stefanski, Third Federal’s mission is to help people achieve the
dream of home ownership and financial security. It became part of a
public company in 2007 and celebrated its 85th anniversary in May
2023. Third Federal, which lends in 26 states and the District of
Columbia, is dedicated to serving consumers with competitive rates
and outstanding service. Third Federal, an equal housing lender,
has 21 full service branches in Northeast Ohio, two lending offices
in Central and Southern Ohio, and 16 full service branches
throughout Florida. As of June 30, 2024, the Company’s assets
totaled $17.03 billion.
Forward Looking Statements
This report contains forward-looking
statements, which can be identified by the use of such words as
estimate, project, believe, intend, anticipate, plan, seek, expect
and similar expressions. These forward-looking statements include,
among other things:
●
statements of our goals, intentions and
expectations;
●
statements regarding our business plans
and prospects and growth and operating strategies;
●
statements concerning trends in our
provision for credit losses and charge-offs on loans and
off-balance sheet exposures;
●
statements regarding the trends in factors
affecting our financial condition and results of operations,
including credit quality of our loan and investment portfolios;
and
●
estimates of our risks and future costs
and benefits.
These forward-looking statements are
subject to significant risks, assumptions and uncertainties,
including, among other things, the following important factors that
could affect the actual outcome of future events:
●
significantly increased competition among
depository and other financial institutions, including with respect
to our ability to charge overdraft fees;
●
inflation and changes in the interest rate
environment that reduce our interest margins or reduce the fair
value of financial instruments, or our ability to originate
loans;
●
general economic conditions, either
globally, nationally or in our market areas, including employment
prospects, real estate values and conditions that are worse than
expected;
●
the strength or weakness of the real
estate markets and of the consumer and commercial credit sectors
and its impact on the credit quality of our loans and other assets,
and changes in estimates of the allowance for credit losses;
●
decreased demand for our products and
services and lower revenue and earnings because of a recession or
other events;
●
changes in consumer spending, borrowing
and savings habits, including repayment speeds on loans;
●
adverse changes and volatility in the
securities markets, credit markets or real estate markets;
●
our ability to manage market risk, credit
risk, liquidity risk, reputational risk, regulatory risk and
compliance risk;
●
our ability to access cost-effective
funding;
●
changes in liquidity, including the size
and composition of our deposit portfolio and the percentage of
uninsured deposits in the portfolio;
●
legislative or regulatory changes that
adversely affect our business, including changes in regulatory
costs and capital requirements and changes related to our ability
to pay dividends and the ability of Third Federal Savings, MHC to
waive dividends;
●
changes in accounting policies and
practices, as may be adopted by the bank regulatory agencies, the
FASB or the PCAOB;
●
the adoption of implementing regulations
by a number of different regulatory bodies, and uncertainty in the
exact nature, extent and timing of such regulations and the impact
they will have on us;
●
our ability to enter new markets
successfully and take advantage of growth opportunities;
●
our ability to retain key employees;
●
future adverse developments concerning
Fannie Mae or Freddie Mac;
●
changes in monetary and fiscal policy of
the U.S. Government, including policies of the U.S. Treasury, the
Federal Reserve System, Fannie Mae, the OCC, FDIC, and others;
●
the continuing governmental efforts to
restructure the U.S. financial and regulatory system;
●
the ability of the U.S. Government to
remain open, function properly and manage federal debt limits;
●
changes in policy and/or assessment rates
of taxing authorities that adversely affect us or our
customers;
●
changes in accounting and tax
estimates;
●
changes in our organization and changes in
expense trends, including but not limited to trends affecting
non-performing assets, charge-offs and provisions for credit
losses;
●
the inability of third-party providers to
perform their obligations to us;
●
our ability to retain key employees;
●
civil unrest;
●
cyber-attacks, computer viruses and other
technological risks that may breach the security of our websites or
other systems to obtain unauthorized access to confidential
information, destroy data or disable our systems; and
●
the impact of wide-spread pandemic,
including COVID-19, and related government action, on our business
and the economy.
Because of these and other uncertainties,
our actual future results may be materially different from the
results indicated by any forward-looking statements. Any
forward-looking statement made by us in this report speaks only as
of the date on which it is made. We undertake no obligation to
publicly update any forward-looking statements, whether as a result
of new information, future developments or otherwise, except as may
be required by law.
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(unaudited)
(In thousands, except share
data)
June 30, 2024
March 31, 2024
September 30,
2023
ASSETS
Cash and due from banks
$
29,411
$
27,381
$
29,134
Other interest-earning cash
equivalents
531,024
566,953
437,612
Cash and cash equivalents
560,435
594,334
466,746
Investment securities available for
sale
522,967
520,172
508,324
Mortgage loans held for sale
30,391
9,698
3,260
Loans held for investment, net:
Mortgage loans
15,189,683
15,152,032
15,177,844
Other loans
5,070
4,709
4,411
Deferred loan expenses, net
62,738
61,047
60,807
Allowance for credit losses on loans
(67,529
)
(68,169
)
(77,315
)
Loans, net
15,189,962
15,149,619
15,165,747
Mortgage loan servicing rights, net
7,591
7,547
7,400
Federal Home Loan Bank stock, at cost
232,083
240,365
247,098
Real estate owned, net
431
230
1,444
Premises, equipment, and software, net
33,665
33,885
34,708
Accrued interest receivable
58,615
56,887
53,910
Bank owned life insurance contracts
315,710
313,458
312,072
Other assets
83,090
90,955
117,270
TOTAL ASSETS
$
17,034,940
$
17,017,150
$
16,917,979
LIABILITIES AND SHAREHOLDERS’
EQUITY
Deposits
$
10,025,977
$
9,935,631
$
9,449,820
Borrowed funds
4,829,365
4,955,438
5,273,637
Borrowers’ advances for insurance and
taxes
66,757
99,492
124,417
Principal, interest, and related escrow
owed on loans serviced
16,867
25,946
29,811
Accrued expenses and other liabilities
180,910
93,146
112,933
Total liabilities
15,119,876
15,109,653
14,990,618
Commitments and contingent liabilities
Preferred stock, $0.01 par value,
100,000,000 shares authorized, none issued and outstanding
—
—
—
Common stock, $0.01 par value, 700,000,000
shares authorized; 332,318,750 shares issued
3,323
3,323
3,323
Paid-in capital
1,753,074
1,751,960
1,755,027
Treasury stock, at cost
(772,195
)
(772,195
)
(776,101
)
Unallocated ESOP shares
(23,834
)
(24,917
)
(27,084
)
Retained earnings—substantially
restricted
912,082
906,908
886,984
Accumulated other comprehensive income
42,614
42,418
85,212
Total shareholders’ equity
1,915,064
1,907,497
1,927,361
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
17,034,940
$
17,017,150
$
16,917,979
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except share and per
share data)
For the three months
ended
June 30, 2024
March 31, 2024
December 31,
2023
September 30,
2023
June 30, 2023
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
166,268
$
162,970
$
162,035
$
154,763
$
144,347
Investment securities available for
sale
4,663
4,476
4,395
4,141
3,712
Other interest and dividend earning
assets
13,975
16,047
10,729
9,836
8,598
Total interest and dividend income
184,906
183,493
177,159
168,740
156,657
INTEREST EXPENSE:
Deposits
75,521
72,685
64,326
55,565
48,905
Borrowed funds
40,112
39,430
43,741
42,812
38,973
Total interest expense
115,633
112,115
108,067
98,377
87,878
NET INTEREST INCOME
69,273
71,378
69,092
70,363
68,779
PROVISION (RELEASE) FOR CREDIT LOSSES
(500
)
(1,000
)
(1,000
)
500
—
NET INTEREST INCOME AFTER PROVISION
(RELEASE) FOR CREDIT LOSSES
69,773
72,378
70,092
69,863
68,779
NON-INTEREST INCOME:
Fees and service charges, net of
amortization
2,097
1,845
1,748
2,061
1,919
Net gain (loss) on the sale of loans
723
442
481
(119
)
21
Increase in and death benefits from bank
owned life insurance contracts
2,254
2,193
3,191
2,204
2,790
Other
1,171
1,242
895
954
1,113
Total non-interest income
6,245
5,722
6,315
5,100
5,843
NON-INTEREST EXPENSE:
Salaries and employee benefits
26,845
27,501
27,116
28,660
25,332
Marketing services
4,867
5,099
4,431
3,881
7,023
Office property, equipment and
software
7,008
7,303
6,845
6,886
7,246
Federal insurance premium and
assessments
3,258
4,013
3,778
3,629
3,574
State franchise tax
1,244
1,238
1,176
1,185
1,230
Other expenses
7,566
7,044
6,931
7,243
8,472
Total non-interest expense
50,788
52,198
50,277
51,484
52,877
INCOME BEFORE INCOME TAXES
25,230
25,902
26,130
23,479
21,745
INCOME TAX EXPENSE
5,277
5,189
5,423
3,933
4,142
NET INCOME
$
19,953
$
20,713
$
20,707
$
19,546
$
17,603
Earnings per share - basic and diluted
$
0.07
$
0.07
$
0.07
$
0.07
$
0.06
Weighted average shares outstanding
Basic
278,291,376
278,183,041
277,841,526
277,589,775
277,472,312
Diluted
279,221,360
279,046,837
279,001,898
278,826,441
278,590,810
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except share and per
share data)
For the Nine Months
Ended
June 30,
2024
2023
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
491,273
$
410,847
Investment securities available for
sale
13,534
10,229
Other interest and dividend earning
assets
40,751
22,103
Total interest and dividend income
545,558
443,179
INTEREST EXPENSE:
Deposits
212,532
118,636
Borrowed funds
123,283
111,339
Total interest expense
335,815
229,975
NET INTEREST INCOME
209,743
213,204
PROVISION (RELEASE) FOR CREDIT LOSSES
(2,500
)
(2,000
)
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES
212,243
215,204
NON-INTEREST INCOME:
Fees and service charges, net of
amortization
5,690
5,779
Net gain on the sale of loans
1,646
617
Increase in and death benefits from bank
owned life insurance contracts
7,638
7,151
Other
3,308
2,782
Total non-interest income
18,282
16,329
NON-INTEREST EXPENSE:
Salaries and employee benefits
81,462
84,125
Marketing services
14,397
21,407
Office property, equipment and
software
21,156
20,848
Federal insurance premium and
assessments
11,049
9,823
State franchise tax
3,658
3,706
Other expenses
21,541
21,736
Total non-interest expense
153,263
161,645
INCOME BEFORE INCOME TAXES
77,262
69,888
INCOME TAX EXPENSE
15,889
14,184
NET INCOME
$
61,373
$
55,704
Earnings per share - basic and diluted
$
0.22
$
0.20
Weighted average shares outstanding
Basic
278,104,352
277,384,689
Diluted
279,072,087
278,507,602
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(unaudited)
Three Months Ended
Three Months Ended
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
Average Balance
Interest Income/
Expense
Yield/ Cost (1)
Average Balance
Interest Income/
Expense
Yield/ Cost (1)
Average Balance
Interest Income/
Expense
Yield/ Cost (1)
(Dollars in thousands)
Interest-earning assets:
Interest-earning cash equivalents
$
618,986
$
8,500
5.49
%
$
720,657
$
9,919
5.51
%
$
350,574
$
4,481
5.11
%
Investment securities
72,161
906
5.02
%
72,091
907
5.03
%
24,046
320
5.32
%
Mortgage-backed securities
452,224
3,757
3.32
%
448,653
3,569
3.18
%
470,457
3,392
2.88
%
Loans (2)
15,175,535
166,268
4.38
%
15,163,185
162,970
4.30
%
14,676,829
144,347
3.93
%
Federal Home Loan Bank stock
235,755
5,475
9.29
%
244,560
6,128
10.02
%
235,177
4,117
7.00
%
Total interest-earning assets
16,554,661
184,906
4.47
%
16,649,146
183,493
4.41
%
15,757,083
156,657
3.98
%
Noninterest-earning assets
513,931
505,145
543,310
Total assets
$
17,068,592
$
17,154,291
$
16,300,393
Interest-bearing liabilities:
Checking accounts
$
866,170
94
0.04
%
$
887,584
98
0.04
%
$
1,064,738
1,317
0.49
%
Savings accounts
1,437,406
4,967
1.38
%
1,561,331
5,598
1.43
%
1,890,427
8,087
1.71
%
Certificates of deposit
7,654,612
70,460
3.68
%
7,548,314
66,989
3.55
%
6,042,798
39,501
2.61
%
Borrowed funds
4,892,621
40,112
3.28
%
5,033,253
39,430
3.13
%
5,175,982
38,973
3.01
%
Total interest-bearing liabilities
14,850,809
115,633
3.11
%
15,030,482
112,115
2.98
%
14,173,945
87,878
2.48
%
Noninterest-bearing liabilities
261,741
212,206
264,952
Total liabilities
15,112,550
15,242,688
14,438,897
Shareholders’ equity
1,956,042
1,911,603
1,861,496
Total liabilities and shareholders’
equity
$
17,068,592
$
17,154,291
$
16,300,393
Net interest income
$
69,273
$
71,378
$
68,779
Interest rate spread (1)(3)
1.36
%
1.43
%
1.50
%
Net interest-earning assets (4)
$
1,703,852
$
1,618,664
$
1,583,138
Net interest margin (1)(5)
1.67
%
1.71
%
1.75
%
Average interest-earning assets to average
interest-bearing liabilities
111.47
%
110.77
%
111.17
%
Selected performance ratios:
Return on average assets (1)
0.47
%
0.48
%
0.43
%
Return on average equity (1)
4.08
%
4.33
%
3.78
%
Average equity to average assets
11.46
%
11.14
%
11.42
%
(1)
Annualized.
(2)
Loans include both mortgage loans held for
sale and loans held for investment.
(3)
Interest rate spread represents the
difference between the yield on average interest-earning assets and
the cost of average interest-bearing liabilities.
(4)
Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(5)
Net interest margin represents net
interest income divided by total interest-earning assets.
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(unaudited)
Nine Months Ended
Nine Months Ended
June 30, 2024
June 30, 2023
Average
Balance
Interest
Income/
Expense
Yield/
Cost (1)
Average
Balance
Interest
Income/
Expense
Yield/
Cost (1)
(Dollars in thousands)
Interest-earning assets:
Interest-earning cash equivalents
$
579,383
$
23,543
5.42
%
$
351,742
$
11,677
4.43
%
Investment securities
69,677
2,663
5.10
%
10,438
342
4.37
%
Mortgage-backed securities
448,429
10,871
3.23
%
470,108
9,887
2.80
%
Loans (2)
15,190,356
491,273
4.31
%
14,530,428
410,847
3.77
%
Federal Home Loan Bank stock
250,285
17,208
9.17
%
228,318
10,426
6.09
%
Total interest-earning assets
16,538,130
545,558
4.40
%
15,591,034
443,179
3.79
%
Noninterest-earning assets
524,179
518,875
Total assets
$
17,062,309
$
16,109,909
Interest-bearing liabilities:
Checking accounts
$
897,190
310
0.05
%
$
1,126,064
5,956
0.71
%
Savings accounts
1,573,401
17,477
1.48
%
1,774,965
16,822
1.26
%
Certificates of deposit
7,350,136
194,745
3.53
%
6,042,061
95,858
2.12
%
Borrowed funds
5,051,371
123,283
3.25
%
5,053,965
111,339
2.94
%
Total interest-bearing liabilities
14,872,098
335,815
3.01
%
13,997,055
229,975
2.19
%
Noninterest-bearing liabilities
250,916
243,823
Total liabilities
15,123,014
14,240,878
Shareholders’ equity
1,939,295
1,869,031
Total liabilities and shareholders’
equity
$
17,062,309
$
16,109,909
Net interest income
$
209,743
$
213,204
Interest rate spread (1)(3)
1.39
%
1.60
%
Net interest-earning assets (4)
$
1,666,032
$
1,593,979
Net interest margin (1)(5)
1.69
%
1.82
%
Average interest-earning assets to average
interest-bearing liabilities
111.20
%
111.39
%
Selected performance ratios:
Return on average assets (1)
0.48
%
0.46
%
Return on average equity (1)
4.22
%
3.97
%
Average equity to average assets
11.37
%
11.60
%
(1)
Annualized
(2)
Loans include both mortgage loans held for
sale and loans held for investment.
(3)
Interest rate spread represents the
difference between the yield on average interest-earning assets and
the cost of average interest-bearing liabilities.
(4)
Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(5)
Net interest margin represents net
interest income divided by total interest-earning assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730559233/en/
Jennifer Rosa (216) 429-5037
TFS Financial (NASDAQ:TFSL)
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TFS Financial (NASDAQ:TFSL)
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