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 fiscal year ended September 30, 2023.
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the full release here:
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Chairman and CEO Marc A. Stefanski
(Photo: Business Wire)
“While increases in interest rates have been a challenge during
the last two quarters, we are well-positioned for rate
uncertainties in our industry,” said Chairman and CEO Marc A
Stefanski. “We have seen modest growth in our loan portfolio, as
well as increases in deposits each quarter during our fiscal year.
Our Tier 1 capital ratio remains strong at 11 percent – more than
double the regulatory requirement. Like we have been for the past
85 years, we remain strong, stable and safe.”
Highlights - Fourth Quarter Fiscal 2023
- Reported net income of $19.5 million
- Added $540 million of new residential mortgage loans with an
average yield of 6.32%
- Increased total deposits by $381 million
- Paid a $0.2825 dividend per share
The Company reported net income of $19.5 million for the quarter
ended September 30, 2023, an increase of $1.9 million from $17.6
million for the quarter ended June 30, 2023. Results improved
quarter over quarter primarily due to an increase in net interest
income and a decrease in non-interest expenses.
Net interest income increased $1.6 million to $70.4 million for
the quarter ended September 30, 2023 from $68.8 million for the
quarter ended June 30, 2023. The increase was primarily the result
of an increase in the average balance and yield on loans, partially
offset by an increase in the cost of funding. The interest rate
spread was 1.46% for the quarter ended September 30, 2023 compared
to 1.50% for the quarter ended June 30, 2023. The net interest
margin was 1.74% for the quarter ended September 30, 2023 compared
to 1.75% for the prior quarter.
During the quarter ended September 30, 2023, there was a $0.5
million provision for credit losses compared to no provision for
the quarter ended June 30, 2023. The total allowance for credit
losses increased $2.2 million, to $104.8 million, or 0.69% of total
loans receivable, primarily due to growth in the home equity loans
and lines of credit portfolios. There was $1.8 million in net loan
recoveries during the quarter ended September 30, 2023.
Total non-interest expense decreased $1.4 million to $51.5
million for the quarter ended September 30, 2023, from $52.9
million for the quarter ended June 30, 2023. The decrease consisted
mainly of a $3.1 million decrease in marketing costs and a $1.3
million decrease in other operating expenses, partially offset by a
$3.4 million increase in salaries and employee benefits. The
decrease in other operating expenses was mainly due to a combined
decrease in third party loan origination costs and expenses for
public relations and events related to the Association's 85th
anniversary celebrations. Salaries and employee benefits returned
to a normalized level after a one-time adjustment to incentive
accruals during the previous quarter.
Total assets increased by $322.7 million, or 2%, to $16.92
billion at September 30, 2023 from $16.59 billion at June 30, 2023.
The increase was mainly the result of new loan originations
exceeding the total of loan sales and principal repayments.
Loans held for investment, net of allowance and deferred loan
expenses, increased $282.1 million, or 2%, to $15.17 billion at
September 30, 2023 from $14.88 billion at June 30, 2023.
Compared to June 30, 2023, deposits increased by $380.7 million
to $9.45 billion at September 30, 2023, consisting of a $562.7
million increase in certificates of deposit and a $187.7 million
decrease in savings and checking accounts combined.
Borrowed funds decreased $178.6 million to $5.27 billion at
September 30, 2023 from $5.45 billion at June 30, 2023.
Highlights - Fiscal Year 2023
- Reported net income of $75.3 million
- Added $1.86 billion of new residential mortgage loans with
weighted average yield of 5.55%
- Grew net interest income by 6% compared to fiscal year
2022
- Remained well capitalized, with a Tier 1 leverage ratio of
10.96%
- Paid a $1.13 dividend per share
The Company reported net income of $75.3 million for the fiscal
year ended September 30, 2023 compared to net income of $74.6
million for the fiscal year ended September 30, 2022. The $0.7
million increase was mainly due to an increase in net interest
income offset by an increase in non-interest expenses.
Net interest income increased by $16.2 million, or 6.0%, to
$283.6 million for the fiscal year ended September 30, 2023,
compared to $267.4 million for the fiscal year ended September 30,
2022, driven by loan growth and a higher interest rate environment
for all categories of interest-earning assets. The weighted average
cost of funding also increased, resulting in an 18 basis point
decrease in the interest rate spread, to 1.57% for the fiscal year
ended September 30, 2023 from 1.75% for the fiscal year ended
September 30, 2022. The net interest margin was 1.80% for the
fiscal year ended September 30, 2023 compared to 1.88% for the
prior year period.
During the fiscal year ended September 30, 2023, there was a
$1.5 million release of provision for credit losses compared to
$1.0 million of provision expense for the fiscal year ended
September 30, 2022. Net loan recoveries totaled $6.4 million during
the fiscal year ended September 30, 2023 and $9.7 million during
the prior year. The total allowance for credit losses at September
30, 2023 was $104.8 million, or 0.69% of total loans receivable,
compared to $99.9 million, or 0.70% of total loans receivable, at
September 30, 2022. The allowance for credit losses included $27.5
million and $27.0 million in liabilities for unfunded commitments
at September 30, 2023 and September 30, 2022, respectively.
Total loan delinquencies increased $2.2 million to $23.4
million, or 0.15% of total loans receivable, at September 30, 2023
from $21.2 million, or 0.15% of total loans receivable, at
September 30, 2022. Non-accrual loans decreased $3.7 million to
$31.9 million, or 0.21% of total loans receivable, at September 30,
2023 from $35.6 million, or 0.25% of total loans receivable, at
September 30, 2022.
Total non-interest income decreased $2.4 million, or 10.1%, to
$21.4 million for the fiscal year ended September 30, 2023 from
$23.8 million for the fiscal year ended September 30, 2022. The
decrease consisted mainly of a $2.1 million decrease in loan fees
and service charges and a $0.6 million decrease in each of net gain
on the sale of loans and income and death benefits from life
insurance contracts. The decrease in fees and service charges was
primarily due to a decrease in income from title company
partnerships related to a slowing in refinance activity.
Total non-interest expenses increased $15.0 million, or 7.6%, to
$213.1 million for the fiscal year ended September 30, 2023, from
$198.1 million for the fiscal year ended September 30, 2022 and
included increases of $3.5 million in salaries and employee
benefits, $4.0 million in marketing costs, $0.9 million in office
property, equipment and software expenses, $4.1 million in federal
("FDIC") insurance premiums and assessments and $2.5 million in
other operating expenses. The increase in other operating expenses
was mainly due to public relations and event costs for the
Association's 85th anniversary celebration during fiscal 2023 and
an increase in pension expense related to net actuarial gains and
losses that are reassessed annually. 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.
Total assets increased by $1.13 billion, or 7%, to $16.92
billion at September 30, 2023 from $15.79 billion at September 30,
2022. The increase was mainly the result of new loan originations
exceeding the total of loan sales and principal repayments, along
with increases in cash and cash equivalents and investment
securities available for sale.
Cash and cash equivalents increased $97.1 million, or 26%, to
$466.7 million at September 30, 2023 from $369.6 million at
September 30, 2022 due to normal fluctuations and liquidity
management.
Investment securities available for sale increased $50.4
million, or 11%, to $508.3 million at September 30, 2023 from
$457.9 million at September 30, 2022. During the year, $59.5
million of U.S. Treasury notes were purchased and pledged as
collateral for initial margin requirements on swap contracts. The
increase was partially offset by $9.7 million of additional
unrealized losses on the investment securities portfolio.
Loans held for investment, net of allowance and deferred loan
expenses, increased $908.7 million, or 6%, to $15.17 billion at
September 30, 2023 from $14.26 billion at September 30, 2022. The
residential mortgage loan portfolio increased $538.3 million, to
$12.08 billion, and home equity loans and lines of credit increased
$396.6 million, to $3.03 billion. Loan originations and purchases
during the fiscal year ended September 30, 2023 included $1.86
billion of residential mortgage loans and $1.70 billion of equity
loans and lines of credit compared to $3.65 billion of residential
mortgage loans and $2.16 billion of equity loans and lines of
credit originated or purchased during the fiscal year ended
September 30, 2022. The decrease in loan originations was primarily
due to a generally increasing interest rate environment, resulting
in minimal refinance activity. New mortgage loans included 89%
purchases and 34% adjustable rate loans during the fiscal year
ended September 30, 2023.
Deposits increased $528.8 million, or 6%, to $9.45 billion at
September 30, 2023 from $8.92 billion at September 30, 2022. The
increase was the result of a $786.7 million increase in
certificates of deposit ("CDs") and a $95.4 million increase in
savings accounts, partially offset by a $134.8 million decrease in
money market deposit accounts and a $226.6 million decrease in
checking accounts. There were $1.16 billion in brokered deposits at
September 30, 2023 compared to $575.2 million at September 30,
2022. At September 30, 2023, brokered deposits included $665.0
million of three-month certificates of deposit accounts aligned
with pay-fixed interest rate swap contracts, with a remaining
weighted average effective maturity of approximately 4.1 years.
Borrowed funds increased $480.4 million, or 10%, to $5.27
billion at September 30, 2023 from $4.79 billion at September 30,
2022. The increase was primarily used to fund loan growth. The
total balance of borrowed funds at September 30, 2023, all from the
FHLB, included $592.0 million of overnight advances, $1.51 billion
of term advances with a weighted average maturity of approximately
2.1 years, and $3.15 billion of term advances, aligned with
interest rate swap contracts, with a remaining weighted average
effective maturity of approximately 3.7 years. Additional borrowing
capacity at the FHLB was $1.38 billion at September 30, 2023.
Total shareholders' equity increased $83.0 million, or 4.5%, to
$1.93 billion at September 30, 2023 from $1.84 billion at September
30, 2022. Activity reflects $75.3 million of net income and a $62.1
million net increase in accumulated other comprehensive income,
reduced by $58.3 million for dividends paid and $5.0 million in
repurchases of common stock. Additionally, there was $9.0 million
of net positive adjustments related to our stock compensation and
employee stock ownership plans. The change in accumulated other
comprehensive income is primarily due to a net positive change in
unrealized gains and losses on swap contracts. During the fiscal
year ended September 30, 2023, a total of 361,869 shares of our
common stock were repurchased at an average cost of $13.82 per
share. The Company's eighth stock repurchase program allows for a
total of 10,000,000 shares to be repurchased, with 5,191,951 shares
remaining to be repurchased at September 30, 2023.
The Company declared and paid a quarterly dividend of $0.2825
per share during each of the quarters of fiscal year 2023. 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 11,
2023 member vote and the subsequent non-objection of the Federal
Reserve, 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 11, 2024), including a total of up to
$0.8475 remaining. The MHC has conducted the member vote to approve
the dividend waiver each of the past ten years under Federal
Reserve regulations and for each of those ten 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 September 30, 2023
all of the Company's capital ratios substantially exceed the
amounts required for the Company to be considered "well
capitalized" for regulatory capital purposes. The Company's Tier 1
leverage ratio was 10.96%, its Common Equity Tier 1 and Tier 1
ratios were each 19.13% and its total capital ratio was 19.85%.
On October 26, 2023, the Board of Directors of TFS Financial
Corporation approved certain leadership changes to be effective as
of January 1, 2024. The Board appointed Timothy W. Mulhern, who
currently serves as the Company’s Chief Financial Officer, to the
roles of Chief Innovation Officer of Third Federal Savings and Loan
and Vice President of the Company. Additionally, the Board
appointed Meredith S. Weil as the Company’s Chief Financial
Officer. Ms. Weil currently serves as the Chief Operating Officer
and Secretary of the Company and as Chief Operating Officer of the
Association. She will continue to serve as the Company’s Secretary.
Effective with these changes, Ms. Weil and other key officers of
the respective entities will absorb responsibilities formerly
performed by the Chief Operating Officer.
“I am very pleased to announce these changes that strengthen the
capacity of our executive team to confront current economic
challenges,” said Mr. Stefanski. “The diverse backgrounds and
business acumen of Ms. Weil and Mr. Mulhern have prepared them well
to serve in these new roles.”
Ms. Weil, age 57, has served as the Company’s Chief Operating
Officer since 2018. Ms. Weil joined Third Federal Savings and Loan
in 1999 and has served as Chief Operating Officer of the
Association since 2012. Ms. Weil has served on the Company’s Board
of Directors since 2014 and has been the Company’s Secretary since
2021. She has worked in the banking industry since 1992.
Mr. Mulhern, age 57, was named the Chief Financial Officer of
the Company in January 2022. Mr. Mulhern joined Third Federal
Savings and Loan in 2003 and has held several key roles in
management including IT and Servicing. He was named the Chief
Credit Officer in August 2018 and Director of Internal Audit in
June 2019.
Presentation slides as of September 30, 2023 will be available
on the Company's website, www.thirdfederal.com, under the Investor
Relations link within the "Recent Presentations" menu, beginning
October 27, 2023. 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 25 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, four lending
offices in Central and Southern Ohio, and 16 full service branches
throughout Florida. As of September 30, 2023, the Company’s assets
totaled $16.92 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;
- 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 Financial Accounting Standards Board or the Public Company
Accounting Oversight Board;
- 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;
- 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)
September 30,
2023
June 30, 2023
September 30,
2022
ASSETS
Cash and due from banks
$
29,134
$
23,278
$
18,961
Other interest-earning cash
equivalents
437,612
412,937
350,603
Cash and cash equivalents
466,746
436,215
369,564
Investment securities available for
sale
508,324
513,303
457,908
Mortgage loans held for sale
3,260
595
9,661
Loans held for investment, net:
Mortgage loans
15,177,844
14,897,681
14,276,478
Other loans
4,411
4,022
3,263
Deferred loan expenses, net
60,807
56,780
50,221
Allowance for credit losses on loans
(77,315
)
(74,803
)
(72,895
)
Loans, net
15,165,747
14,883,680
14,257,067
Mortgage loan servicing rights, net
7,400
7,545
7,943
Federal Home Loan Bank stock, at cost
247,098
247,098
212,290
Real estate owned, net
1,444
1,400
1,191
Premises, equipment, and software, net
34,708
34,901
34,531
Accrued interest receivable
53,910
49,837
40,256
Bank owned life insurance contracts
312,072
310,498
304,040
Other assets
117,017
109,916
95,428
TOTAL ASSETS
$
16,917,726
$
16,594,988
$
15,789,879
LIABILITIES AND SHAREHOLDERS’
EQUITY
Deposits
$
9,449,820
$
9,069,069
$
8,921,017
Borrowed funds
5,273,637
5,452,228
4,793,221
Borrowers’ advances for insurance and
taxes
124,417
74,359
117,250
Principal, interest, and related escrow
owed on loans serviced
29,811
16,510
29,913
Accrued expenses and other liabilities
112,680
96,698
84,139
Total liabilities
14,990,365
14,708,864
13,945,540
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
1,755,027
1,753,801
1,751,223
Treasury stock, at cost
(776,101
)
(775,852
)
(771,986
)
Unallocated ESOP shares
(27,084
)
(28,167
)
(31,417
)
Retained earnings—substantially
restricted
886,984
882,034
870,047
Accumulated other comprehensive income
85,212
50,985
23,149
Total shareholders’ equity
1,927,361
1,886,124
1,844,339
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
16,917,726
$
16,594,988
$
15,789,879
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except share and per
share data)
For the three months
ended
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
154,763
$
144,347
$
136,835
$
129,665
$
114,871
Investment securities available for
sale
4,141
3,712
3,455
3,062
1,904
Other interest and dividend earning
assets
9,836
8,598
7,262
6,243
4,236
Total interest and dividend income
168,740
156,657
147,552
138,970
121,011
INTEREST EXPENSE:
Deposits
55,565
48,905
39,876
29,855
23,582
Borrowed funds
42,812
38,973
38,408
33,958
21,920
Total interest expense
98,377
87,878
78,284
63,813
45,502
NET INTEREST INCOME
70,363
68,779
69,268
75,157
75,509
PROVISION (RELEASE) FOR CREDIT LOSSES
500
—
(1,000
)
(1,000
)
—
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES
69,863
68,779
70,268
76,157
75,509
NON-INTEREST INCOME:
Fees and service charges, net of
amortization
2,061
1,919
1,924
1,936
2,220
Net gain (loss) on the sale of loans
(119
)
21
579
17
(1,113
)
Increase in and death benefits from bank
owned life insurance contracts
2,204
2,790
2,123
2,238
2,761
Other
954
1,113
703
966
514
Total non-interest income
5,100
5,843
5,329
5,157
4,382
NON-INTEREST EXPENSE:
Salaries and employee benefits
28,660
25,332
30,390
28,403
27,206
Marketing services
3,881
7,023
6,671
7,713
4,256
Office property, equipment and
software
6,886
7,246
6,802
6,800
6,558
Federal insurance premium and
assessments
3,629
3,574
3,488
2,761
2,722
State franchise tax
1,185
1,230
1,268
1,208
1,201
Other expenses
7,243
8,472
6,955
6,309
6,799
Total non-interest expense
51,484
52,877
55,574
53,194
48,742
INCOME BEFORE INCOME TAXES
23,479
21,745
20,023
28,120
31,149
INCOME TAX EXPENSE
3,933
4,142
4,115
5,927
5,716
NET INCOME
$
19,546
$
17,603
$
15,908
$
22,193
$
25,433
Earnings per share - basic and diluted
$
0.07
$
0.06
$
0.06
$
0.08
$
0.06
Weighted average shares outstanding
Basic
277,589,775
277,472,312
277,361,293
277,320,904
277,383,038
Diluted
278,826,441
278,590,810
278,499,145
278,462,937
278,505,233
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except share and per
share data)
For the Year Ended
September 30,
2023
2022
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
565,610
$
395,691
Investment securities available for
sale
14,370
5,501
Other interest and dividend earning
assets
31,939
8,141
Total interest and dividend income
611,919
409,333
INTEREST EXPENSE:
Deposits
174,201
76,943
Borrowed funds
154,151
64,994
Total interest expense
328,352
141,937
NET INTEREST INCOME
283,567
267,396
PROVISION (RELEASE) FOR CREDIT LOSSES
(1,500
)
1,000
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES
285,067
266,396
NON-INTEREST INCOME:
Fees and service charges, net of
amortization
7,840
9,934
Net gain on the sale of loans
498
1,136
Increase in and death benefits from bank
owned life insurance contracts
9,355
9,984
Other
3,736
2,750
Total non-interest income
21,429
23,804
NON-INTEREST EXPENSE:
Salaries and employee benefits
112,785
109,339
Marketing services
25,288
21,263
Office property, equipment and
software
27,734
26,783
Federal insurance premium and
assessments
13,452
9,361
State franchise tax
4,891
4,859
Other expenses
28,979
26,541
Total non-interest expense
213,129
198,146
INCOME BEFORE INCOME TAXES
93,367
92,054
INCOME TAX EXPENSE
18,117
17,489
NET INCOME
$
75,250
$
74,565
Earnings per share
Basic
$
0.27
$
0.26
Diluted
$
0.26
$
0.26
Weighted average shares outstanding
Basic
277,436,382
277,370,762
Diluted
278,583,454
278,686,365
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(unaudited)
Three Months Ended
Three Months Ended
Three Months Ended
September 30, 2023
June 30, 2023
September 30, 2022
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
$
370,577
$
5,149
5.56
%
$
350,574
$
4,481
5.11
%
$
370,138
$
2,118
2.29
%
Investment securities
63,231
781
4.94
%
24,046
320
5.32
%
3,758
11
1.17
%
Mortgage-backed securities
449,351
3,360
2.99
%
470,457
3,392
2.88
%
458,734
1,893
1.65
%
Loans (2)
15,037,776
154,763
4.12
%
14,676,829
144,347
3.93
%
14,108,190
114,871
3.26
%
Federal Home Loan Bank stock
247,098
4,687
7.59
%
235,177
4,117
7.00
%
198,306
2,118
4.27
%
Total interest-earning assets
16,168,033
168,740
4.17
%
15,757,083
156,657
3.98
%
15,139,126
121,011
3.20
%
Noninterest-earning assets
503,865
543,310
474,634
Total assets
$
16,671,898
$
16,300,393
$
15,613,760
Interest-bearing liabilities:
Checking accounts
$
993,952
125
0.05
%
$
1,064,738
1,317
0.49
%
$
1,387,365
2,670
0.77
%
Savings accounts
1,869,756
7,864
1.68
%
1,890,427
8,087
1.71
%
1,852,614
2,580
0.56
%
Certificates of deposit
6,369,734
47,576
2.99
%
6,042,798
39,501
2.61
%
5,861,011
18,332
1.25
%
Borrowed funds
5,294,285
42,812
3.23
%
5,175,982
38,973
3.01
%
4,453,039
21,920
1.97
%
Total interest-bearing liabilities
14,527,727
98,377
2.71
%
14,173,945
87,878
2.48
%
13,554,029
45,502
1.34
%
Noninterest-bearing liabilities
226,083
264,952
220,129
Total liabilities
14,753,810
14,438,897
13,774,158
Shareholders’ equity
1,918,088
1,861,496
1,839,602
Total liabilities and shareholders’
equity
$
16,671,898
$
16,300,393
$
15,613,760
Net interest income
$
70,363
$
68,779
$
75,509
Interest rate spread (1)(3)
1.46
%
1.50
%
1.86
%
Net interest-earning assets (4)
$
1,640,306
$
1,583,138
$
1,585,097
Net interest margin (1)(5)
1.74
%
1.75
%
2.00
%
Average interest-earning assets to average
interest-bearing liabilities
111.29
%
111.17
%
111.69
%
Selected performance ratios:
Return on average assets (1)
0.47
%
0.43
%
0.65
%
Return on average equity (1)
4.08
%
3.78
%
5.53
%
Average equity to average assets
11.50
%
11.42
%
11.78
%
(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)
Year Ended
Year Ended
September 30, 2023
September 30, 2022
Average
Balance
Interest
Income/
Expense
Yield/
Cost
Average
Balance
Interest
Income/
Expense
Yield/
Cost
(Dollars in thousands)
Interest-earning assets:
Interest-earning cash equivalents
$
356,450
$
16,826
4.72
%
$
384,947
$
3,178
0.83
%
Investment securities
23,636
1,123
4.75
%
3,643
43
1.18
%
Mortgage-backed securities
464,919
13,247
2.85
%
439,269
5,458
1.24
%
Loans (1)
14,657,265
565,610
3.86
%
13,258,517
395,691
2.98
%
Federal Home Loan Bank stock
233,013
15,113
6.49
%
173,506
4,963
2.86
%
Total interest-earning assets
15,735,283
611,919
3.89
%
14,259,882
409,333
2.87
%
Noninterest-earning assets
515,123
482,501
Total assets
$
16,250,406
$
14,742,383
Interest-bearing liabilities:
Checking accounts
$
1,093,036
6,081
0.56
%
$
1,326,882
4,186
0.32
%
Savings accounts
1,798,663
24,686
1.37
%
1,859,990
4,553
0.24
%
Certificates of deposit
6,123,979
143,434
2.34
%
5,826,286
68,204
1.17
%
Borrowed funds
5,114,045
154,151
3.01
%
3,671,323
64,994
1.77
%
Total interest-bearing liabilities
14,129,723
328,352
2.32
%
12,684,481
141,937
1.12
%
Noninterest-bearing liabilities
239,387
255,388
Total liabilities
14,369,110
12,939,869
Shareholders’ equity
1,881,296
1,802,514
Total liabilities and shareholders’
equity
$
16,250,406
$
14,742,383
Net interest income
$
283,567
$
267,396
Interest rate spread (2)
1.57
%
1.75
%
Net interest-earning assets (3)
$
1,605,560
$
1,575,401
Net interest margin (4)
1.80
%
1.88
%
Average interest-earning assets to average
interest-bearing liabilities
111.36
%
112.42
%
Selected performance ratios:
Return on average assets
0.46
%
0.51
%
Return on average equity
4.00
%
4.14
%
Average equity to average assets
11.58
%
12.23
%
(1)
Loans include both mortgage loans held for
sale and loans held for investment.
(2)
Interest rate spread represents the
difference between the yield on average interest-earning assets and
the cost of average interest-bearing liabilities.
(3)
Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(4)
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/20231026462702/en/
TFS Financial Corporation Jennifer Rosa (216) 429-5037
TFS Financial (NASDAQ:TFSL)
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