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TFS Financial Corporation Finishes With Strong Quarter and Fiscal Year

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, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20221027006082/en/

Chairman and CEO Marc A. Stefanski (Photo: Business Wire)

Chairman and CEO Marc A. Stefanski (Photo: Business Wire)

Highlights - Fiscal Year 2022

  • Reported net income of $74.6 million
  • Generated over $1.7 billion of loan growth
  • Grew net interest income by 15% to $267.4 million
  • Expanded net interest margin by 22 basis points to 1.88%
  • Paid a $1.13 dividend per share

“Our efforts have given us a strong quarter and year of growth during a time of rate volatility,” said Chairman and CEO Marc A. Stefanski. “Our net interest income is up 15% from 2021, and while there are heavy interest rate pressures, our loan growth of $1.7 billion this year is a result of our aggressive pursuit of new mortgage customers and opportunities. We continue to meet the challenges of the current economic climate head on.”

The Company reported net income of $74.6 million for the fiscal year ended September 30, 2022, driven by an increase in net interest income. In total, there was a decrease from the prior year net income of $81.0 million, primarily due to an increase in credit loss provision required on the growing loan portfolio and a decrease in net gain on sale of loans.

Net income of $25.4 million was reported for the fourth quarter of fiscal 2022 compared to net income of $17.1 million for the third quarter. The increase mainly consisted of a $4.2 million increase in net interest income and a $4.0 million decrease in credit loss provision between the two periods.

Net interest income increased by $35.8 million, or 15%, to $267.4 million for the fiscal year ended September 30, 2022, compared to $231.6 million for the fiscal year ended September 30, 2021. The increase was driven by loan growth and a higher interest rate environment, partially offset by an increase in borrowed funds, year over year. The interest rate spread was 1.75% for the fiscal year ended September 30, 2022 compared to 1.52% for the fiscal year ended September 30, 2021. The net interest margin was 1.88% for fiscal year 2022 compared to 1.66% for the prior year.

The total provision for credit losses was $1.0 million for the fiscal year ended September 30, 2022 compared to a $9.0 million release of provision for the fiscal year ended September 30, 2021. Net loan recoveries continued to curtail provision requirements. The Company recorded $9.7 million of net loan recoveries during the fiscal year ended September 30, 2022 and $5.2 million of net loan recoveries during the fiscal year ended September 30, 2021.

The total allowance for credit losses was $99.9 million, or 0.70% of total loans receivable, at September 30, 2022 and $89.3 million, or 0.71% of total loans receivable, at September 30, 2021. The allowance for credit losses included $27.0 million and $25.0 million in liability for unfunded commitments at September 30, 2022 and September 30, 2021, respectively. Total loan delinquencies decreased $3.5 million to $21.2 million, or 0.15% of total loans receivable, at September 30, 2022 from $24.7 million, or 0.20% of total loans, at September 30, 2021. Non-accrual loans decreased $8.4 million to $35.6 million, or 0.25% of total loans, at September 30, 2022 from $44.0 million, or 0.35% of total loans, at September 30, 2021.

Total non-interest income for the fiscal year ended September 30, 2022 was $23.8 million compared to $55.3 million for the fiscal year ended September 30, 2021. The drop-off was due to a significant decrease in net gain on loan sales in the current fiscal year. Loan sales tapered as market pricing for loans was less favorable in the current fiscal year. During the fiscal year ended September 30, 2022, there was $128.1 million of loans sold compared to $762.3 million of loans sold during fiscal year 2021. Net gain on sale of loans was $1.1 million during the fiscal year ended September 30, 2022 compared to $33.1 million during fiscal year 2021.

Total non-interest expense for the fiscal year ended September 30, 2022 increased $2.3 million, or 1%, to $198.1 million as compared to fiscal year 2021, mainly due to an increase in marketing costs of $2.1 million.

Total assets increased by $1.73 billion, or 12%, to $15.79 billion at September 30, 2022 from $14.06 billion at September 30, 2021. The increase was mainly the result of new loan originations exceeding the total of loan sales and principal repayments.

Cash and cash equivalents decreased $118.7 million, or 24%, to $369.6 million at September 30, 2022 from $488.3 million at September 30, 2021. The decrease can be attributed to the reinvestment of liquid assets into loan products.

The amount of Federal Home Loan Bank stock owned increased $49.5 million, or 30%, to $212.3 million at September 30, 2022 from $162.8 million at September 30, 2021. The increase was a result of stock ownership requirements of the FHLB that are tied to the level of borrowing.

Loans held for investment, net of allowance and deferred loan expenses, increased $1.75 billion, or 14%, to $14.26 billion at September 30, 2022 from $12.51 billion at September 30, 2021, primarily due to the high level of loans originated and held in portfolio. The residential core mortgage loan portfolio increased $1.32 billion, to $11.54 billion, and home equity loans and lines of credit increased $419.6 million, to $2.63 billion, during the fiscal year. Loan originations, including first mortgages and equity loans and lines of credit, were $5.80 billion and $5.37 billion during the fiscal years ended September 30, 2022 and September 30, 2021.

Deposits decreased $72.6 million, or less than 1%, to $8.92 billion at September 30, 2022 from $8.99 billion at September 30, 2021. The decrease was the result of an $169.3 million decrease in certificates of deposit ("CDs") and an $82.3 million decrease in money market deposit accounts, partially offset by a $77.1 million increase in checking accounts and an $101.5 million increase in savings accounts.

Borrowed funds increased $1.70 billion, or 55%, to $4.79 billion at September 30, 2022 from $3.09 billion at September 30, 2021. The increase was primarily used to fund loan growth. The total balance of borrowed funds at September 30, 2022, mainly from FHLB, included $1.78 billion of overnight advances, $1.24 billion of term advances with a weighted average maturity of approximately 2.9 years, $1.55 billion of term advances, aligned with interest rate swap contracts, with a remaining weighted average effective maturity of approximately 2.7 years, and $225.0 million in fed fund purchases.

Total shareholders' equity increased $112.1 million, or 6.5%, to $1.84 billion at September 30, 2022 from $1.73 billion at September 30, 2021. Activity reflects $74.6 million of net income, a $91.0 million positive change in accumulated other comprehensive income and $9.8 million of positive adjustments related to our stock compensation and employee stock ownership plans, reduced by $58.2 million of quarterly dividends and $5.0 million in repurchases of common stock. 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, 2022, a total of 337,259 shares of our common stock were repurchased at an average cost of $14.97 per share. The Company's eighth stock repurchase program allows for a total of 10,000,000 shares to be repurchased, with 5,553,820 shares remaining to be repurchased at September 30, 2022.

The Company declared and paid a quarterly dividend of $0.2825 per share during each of the four quarters of fiscal year 2022. 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 12, 2022 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 12, 2023), including a total of up to $0.8475 during the three quarters ending December 31, 2022, March 31, 2023, and June 30, 2023. The MHC has conducted the member vote to approve the dividend waiver each of the past nine years under Federal Reserve regulations and for each of those nine years, approximately 97% of the votes cast were in favor of the waiver.

The Association 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, 2022 all of the Association's capital ratios substantially exceed the amounts required for the Association to be considered "well capitalized" for regulatory capital purposes. The Association’s Tier 1 leverage ratio was 10.33%, its Common Equity Tier 1 and Tier 1 ratios, as calculated under the fully phased-in Basel III Rules, were each 18.25% and its total capital ratio was 18.84%. Additionally, the Company's Tier 1 leverage ratio was 11.66%, its Common Equity Tier 1 and Tier 1 ratios were each 20.59% and its total capital ratio was 21.18%. The current capital ratios of the Association reflect the dilutive impact of $56.0 million of dividends that the Association paid to the Company, its sole shareholder, during the quarter ended December 31, 2021. Because of its intercompany nature, these dividends had no impact on the Company's capital ratios or its consolidated statement of condition.

Presentation slides as of September 30, 2022 will be available on the Company's website, www.thirdfederal.com, under the Investor Relations link within the "Recent Presentations" menu, beginning October 28, 2022. 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 80th anniversary in May, 2018. 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, five lending offices in Central and Southern Ohio, and 16 full service branches throughout Florida. As of September 30, 2022, the Company’s assets totaled $15.79 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, and regulatory and compliance risk;

our ability to access cost-effective funding;

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, and the possible short-term dilutive effect of potential acquisitions or de novo branches, if any;

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 and the FRS and changes in the level of government support of housing finance;

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, or compensation and benefit plans 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;

the effects of global or national war, conflict or acts of terrorism;

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)

 

 

 

 

 

September 30,

2022

 

September 30,

2021

ASSETS

 

 

 

Cash and due from banks

$

18,961

 

 

$

27,346

 

Other interest-earning cash equivalents

 

350,603

 

 

 

460,980

 

Cash and cash equivalents

 

369,564

 

 

 

488,326

 

Investment securities available for sale

 

457,908

 

 

 

421,783

 

Mortgage loans held for sale

 

9,661

 

 

 

8,848

 

Loans held for investment, net:

 

 

 

Mortgage loans

 

14,276,478

 

 

 

12,525,687

 

Other loans

 

3,263

 

 

 

2,778

 

Deferred loan expenses, net

 

50,221

 

 

 

44,859

 

Allowance for credit losses on loans

 

(72,895

)

 

 

(64,289

)

Loans, net

 

14,257,067

 

 

 

12,509,035

 

Mortgage loan servicing rights, net

 

7,943

 

 

 

8,941

 

Federal Home Loan Bank stock, at cost

 

212,290

 

 

 

162,783

 

Real estate owned, net

 

1,191

 

 

 

289

 

Premises, equipment, and software, net

 

34,531

 

 

 

37,420

 

Accrued interest receivable

 

40,256

 

 

 

31,107

 

Bank owned life insurance contracts

 

304,040

 

 

 

297,332

 

Other assets

 

95,747

 

 

 

91,586

 

TOTAL ASSETS

$

15,790,198

 

 

$

14,057,450

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Deposits

$

8,921,017

 

 

$

8,993,605

 

Borrowed funds

 

4,793,221

 

 

 

3,091,815

 

Borrowers’ advances for insurance and taxes

 

117,250

 

 

 

109,633

 

Principal, interest, and related escrow owed on loans serviced

 

29,913

 

 

 

41,476

 

Accrued expenses and other liabilities

 

84,458

 

 

 

88,641

 

Total liabilities

 

13,945,859

 

 

 

12,325,170

 

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

 

Paid-in capital

 

1,751,223

 

 

 

1,746,887

 

Treasury stock, at cost

 

(771,986

)

 

 

(768,035

)

Unallocated ESOP shares

 

(31,417

)

 

 

(35,751

)

Retained earnings—substantially restricted

 

870,047

 

 

 

853,657

 

Accumulated other comprehensive income (loss)

 

23,149

 

 

 

(67,801

)

Total shareholders’ equity

 

1,844,339

 

 

 

1,732,280

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

15,790,198

 

 

$

14,057,450

 

 

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,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

 

September 30,

2021

INTEREST AND DIVIDEND INCOME:

 

 

 

 

 

 

 

 

 

Loans, including fees

$

114,871

 

 

$

99,576

 

 

$

91,125

 

 

$

90,119

 

 

$

92,002

 

Investment securities available for sale

 

1,904

 

 

 

1,282

 

 

 

1,355

 

 

 

960

 

 

 

1,041

 

Other interest and dividend earning assets

 

4,236

 

 

 

1,913

 

 

 

981

 

 

 

1,011

 

 

 

1,033

 

Total interest and dividend income

 

121,011

 

 

 

102,771

 

 

 

93,461

 

 

 

92,090

 

 

 

94,076

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

Deposits

 

23,582

 

 

 

17,214

 

 

 

16,896

 

 

 

19,251

 

 

 

21,617

 

Borrowed funds

 

21,920

 

 

 

14,255

 

 

 

13,824

 

 

 

14,995

 

 

 

15,061

 

Total interest expense

 

45,502

 

 

 

31,469

 

 

 

30,720

 

 

 

34,246

 

 

 

36,678

 

NET INTEREST INCOME

 

75,509

 

 

 

71,302

 

 

 

62,741

 

 

 

57,844

 

 

 

57,398

 

PROVISION (RELEASE) FOR CREDIT LOSSES

 

 

 

 

4,000

 

 

 

(1,000

)

 

 

(2,000

)

 

 

(2,000

)

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

75,509

 

 

 

67,302

 

 

 

63,741

 

 

 

59,844

 

 

 

59,398

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

 

 

Fees and service charges, net of amortization

 

2,220

 

 

 

2,742

 

 

 

2,568

 

 

 

2,404

 

 

 

2,156

 

Net gain (loss) on the sale of loans

 

(1,113

)

 

 

(51

)

 

 

113

 

 

 

2,187

 

 

 

4,305

 

Increase in and death benefits from bank owned life insurance contracts

 

2,761

 

 

 

2,090

 

 

 

2,222

 

 

 

2,911

 

 

 

2,146

 

Other

 

514

 

 

 

896

 

 

 

688

 

 

 

652

 

 

 

74

 

Total non-interest income

 

4,382

 

 

 

5,677

 

 

 

5,591

 

 

 

8,154

 

 

 

8,681

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

27,206

 

 

 

28,756

 

 

 

26,862

 

 

 

26,515

 

 

 

26,912

 

Marketing services

 

4,256

 

 

 

4,830

 

 

 

6,551

 

 

 

5,626

 

 

 

4,043

 

Office property, equipment and software

 

6,558

 

 

 

6,762

 

 

 

6,824

 

 

 

6,639

 

 

 

6,453

 

Federal insurance premium and assessments

 

2,722

 

 

 

2,351

 

 

 

2,276

 

 

 

2,012

 

 

 

2,233

 

State franchise tax

 

1,201

 

 

 

1,197

 

 

 

1,237

 

 

 

1,224

 

 

 

1,202

 

Other expenses

 

6,799

 

 

 

7,860

 

 

 

6,225

 

 

 

5,657

 

 

 

6,603

 

Total non-interest expense

 

48,742

 

 

 

51,756

 

 

 

49,975

 

 

 

47,673

 

 

 

47,446

 

INCOME BEFORE INCOME TAXES

 

31,149

 

 

 

21,223

 

 

 

19,357

 

 

 

20,325

 

 

 

20,633

 

INCOME TAX EXPENSE

 

5,716

 

 

 

4,076

 

 

 

3,512

 

 

 

4,185

 

 

 

3,618

 

NET INCOME

$

25,433

 

 

$

17,147

 

 

$

15,845

 

 

$

16,140

 

 

$

17,015

 

Earnings per share - basic and diluted

$

0.09

 

 

$

0.06

 

 

$

0.06

 

 

$

0.06

 

 

$

0.06

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

277,383,038

 

 

 

277,453,439

 

 

 

277,423,493

 

 

 

277,225,121

 

 

 

276,982,904

 

Diluted

 

278,505,233

 

 

 

278,555,759

 

 

 

278,819,539

 

 

 

278,903,373

 

 

 

278,880,379

 

 

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except share and per share data)

 

 

 

For the Year Ended

 

September 30,

 

2022

 

2021

INTEREST AND DIVIDEND INCOME:

 

 

 

Loans, including fees

$

395,691

 

$

381,887

 

Investment securities available for sale

 

5,501

 

 

3,822

 

Other interest and dividend earning assets

 

8,141

 

 

3,642

 

Total interest and dividend income

 

409,333

 

 

389,351

 

INTEREST EXPENSE:

 

 

 

Deposits

 

76,943

 

 

97,319

 

Borrowed funds

 

64,994

 

 

60,402

 

Total interest expense

 

141,937

 

 

157,721

 

NET INTEREST INCOME

 

267,396

 

 

231,630

 

PROVISION (RELEASE) FOR CREDIT LOSSES

 

1,000

 

 

(9,000

)

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

266,396

 

 

240,630

 

NON-INTEREST INCOME:

 

 

 

Fees and service charges, net of amortization

 

9,934

 

 

9,602

 

Net gain on the sale of loans

 

1,136

 

 

33,082

 

Increase in and death benefits from bank owned life insurance contracts

 

9,984

 

 

9,961

 

Other

 

2,750

 

 

2,654

 

Total non-interest income

 

23,804

 

 

55,299

 

NON-INTEREST EXPENSE:

 

 

 

Salaries and employee benefits

 

109,339

 

 

108,867

 

Marketing services

 

21,263

 

 

19,174

 

Office property, equipment and software

 

26,783

 

 

25,710

 

Federal insurance premium and assessments

 

9,361

 

 

9,085

 

State franchise tax

 

4,859

 

 

4,663

 

Other expenses

 

26,541

 

 

28,336

 

Total non-interest expense

 

198,146

 

 

195,835

 

INCOME BEFORE INCOME TAXES

 

92,054

 

 

100,094

 

INCOME TAX EXPENSE

 

17,489

 

 

19,087

 

NET INCOME

$

74,565

 

$

81,007

 

Earnings per share - basic and diluted

$

0.26

 

$

0.29

 

Weighted average shares outstanding

 

 

 

Basic

 

277,370,762

 

 

276,694,594

 

Diluted

 

278,686,365

 

 

278,576,254

 

 

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCES AND YIELDS (unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Three Months Ended

 

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

 

 

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

 

$

370,138

 

 

$

2,118

 

 

2.29

%

 

$

337,551

 

 

$

709

 

 

0.84

%

 

$

570,903

 

 

$

221

 

 

0.15

%

Investment securities

 

 

3,758

 

 

 

11

 

 

1.17

%

 

 

3,836

 

 

 

12

 

 

1.25

%

 

 

 

 

 

 

 

%

Mortgage-backed securities

 

 

458,734

 

 

 

1,893

 

 

1.65

%

 

 

444,972

 

 

 

1,270

 

 

1.14

%

 

 

417,320

 

 

 

1,041

 

 

1.00

%

Loans (2)

 

 

14,108,190

 

 

 

114,871

 

 

3.26

%

 

 

13,497,362

 

 

 

99,576

 

 

2.95

%

 

 

12,544,760

 

 

 

92,002

 

 

2.93

%

Federal Home Loan Bank stock

 

 

198,306

 

 

 

2,118

 

 

4.27

%

 

 

170,155

 

 

 

1,204

 

 

2.83

%

 

 

162,783

 

 

 

812

 

 

2.00

%

Total interest-earning assets

 

 

15,139,126

 

 

 

121,011

 

 

3.20

%

 

 

14,453,876

 

 

 

102,771

 

 

2.84

%

 

 

13,695,766

 

 

 

94,076

 

 

2.75

%

Noninterest-earning assets

 

 

474,634

 

 

 

 

 

 

 

467,329

 

 

 

 

 

 

 

533,988

 

 

 

 

 

Total assets

 

$

15,613,760

 

 

 

 

 

 

$

14,921,205

 

 

 

 

 

 

$

14,229,754

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

1,387,365

 

 

 

2,670

 

 

0.77

%

 

$

1,475,586

 

 

 

958

 

 

0.26

%

 

$

1,117,897

 

 

 

263

 

 

0.09

%

Savings accounts

 

 

1,852,614

 

 

 

2,580

 

 

0.56

%

 

 

1,882,881

 

 

 

931

 

 

0.20

%

 

 

1,805,394

 

 

 

645

 

 

0.14

%

Certificates of deposit

 

 

5,861,011

 

 

 

18,332

 

 

1.25

%

 

 

5,711,412

 

 

 

15,325

 

 

1.07

%

 

 

6,144,461

 

 

 

20,709

 

 

1.35

%

Borrowed funds

 

 

4,453,039

 

 

 

21,920

 

 

1.97

%

 

 

3,774,204

 

 

 

14,255

 

 

1.51

%

 

 

3,146,515

 

 

 

15,061

 

 

1.91

%

Total interest-bearing liabilities

 

 

13,554,029

 

 

 

45,502

 

 

1.34

%

 

 

12,844,083

 

 

 

31,469

 

 

0.98

%

 

 

12,214,267

 

 

 

36,678

 

 

1.20

%

Noninterest-bearing liabilities

 

 

220,129

 

 

 

 

 

 

 

250,437

 

 

 

 

 

 

 

289,573

 

 

 

 

 

Total liabilities

 

 

13,774,158

 

 

 

 

 

 

 

13,094,520

 

 

 

 

 

 

 

12,503,840

 

 

 

 

 

Shareholders’ equity

 

 

1,839,602

 

 

 

 

 

 

 

1,826,685

 

 

 

 

 

 

 

1,725,914

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

15,613,760

 

 

 

 

 

 

$

14,921,205

 

 

 

 

 

 

$

14,229,754

 

 

 

 

 

Net interest income

 

 

 

$

75,509

 

 

 

 

 

 

$

71,302

 

 

 

 

 

 

$

57,398

 

 

 

Interest rate spread (1)(3)

 

 

 

 

 

1.86

%

 

 

 

 

 

1.86

%

 

 

 

 

 

1.55

%

Net interest-earning assets (4)

 

$

1,585,097

 

 

 

 

 

 

$

1,609,793

 

 

 

 

 

 

$

1,481,499

 

 

 

 

 

Net interest margin (1)(5)

 

 

 

 

2.00

%

 

 

 

 

 

 

1.97

%

 

 

 

 

 

 

1.68

%

 

 

Average interest-earning assets to average interest-bearing liabilities

 

 

111.69

%

 

 

 

 

 

 

112.53

%

 

 

 

 

 

 

112.13

%

 

 

 

 

Selected performance ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

 

 

0.65

%

 

 

 

 

 

 

0.46

%

 

 

 

 

 

 

0.48

%

 

 

Return on average equity (1)

 

 

 

 

5.53

%

 

 

 

 

 

 

3.75

%

 

 

 

 

 

 

3.94

%

 

 

Average equity to average assets

 

 

 

 

11.78

%

 

 

 

 

 

 

12.24

%

 

 

 

 

 

 

12.13

%

 

 

(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, 2022

 

September 30, 2021

 

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

Average

Balance

 

Interest

Income/

Expense

 

Yield/

Cost

 

 

(Dollars in thousands)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning cash equivalents

 

$

384,947

 

 

$

3,178

 

 

0.83

%

 

$

567,035

 

 

$

673

 

 

0.12

%

Investment securities

 

 

3,643

 

 

 

43

 

 

1.18

%

 

 

 

 

 

 

 

%

Mortgage-backed securities

 

 

439,269

 

 

 

5,458

 

 

1.24

%

 

 

428,590

 

 

 

3,822

 

 

0.89

%

Loans (1)

 

 

13,258,517

 

 

 

395,691

 

 

2.98

%

 

 

12,800,542

 

 

 

381,887

 

 

2.98

%

Federal Home Loan Bank stock

 

 

173,506

 

 

 

4,963

 

 

2.86

%

 

 

155,322

 

 

 

2,969

 

 

1.91

%

Total interest-earning assets

 

 

14,259,882

 

 

 

409,333

 

 

2.87

%

 

 

13,951,489

 

 

 

389,351

 

 

2.79

%

Noninterest-earning assets

 

 

482,501

 

 

 

 

 

 

 

532,786

 

 

 

 

 

Total assets

 

$

14,742,383

 

 

 

 

 

 

$

14,484,275

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

1,326,882

 

 

 

4,186

 

 

0.32

%

 

$

1,079,699

 

 

 

1,140

 

 

0.11

%

Savings accounts

 

 

1,859,990

 

 

 

4,553

 

 

0.24

%

 

 

1,742,042

 

 

 

2,992

 

 

0.17

%

Certificates of deposit

 

 

5,826,286

 

 

 

68,204

 

 

1.17

%

 

 

6,339,412

 

 

 

93,187

 

 

1.47

%

Borrowed funds

 

 

3,671,323

 

 

 

64,994

 

 

1.77

%

 

 

3,303,925

 

 

 

60,402

 

 

1.83

%

Total interest-bearing liabilities

 

 

12,684,481

 

 

 

141,937

 

 

1.12

%

 

 

12,465,078

 

 

 

157,721

 

 

1.27

%

Noninterest-bearing liabilities

 

 

255,388

 

 

 

 

 

 

 

321,958

 

 

 

 

 

Total liabilities

 

 

12,939,869

 

 

 

 

 

 

 

12,787,036

 

 

 

 

 

Shareholders’ equity

 

 

1,802,514

 

 

 

 

 

 

 

1,697,239

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

14,742,383

 

 

 

 

 

 

$

14,484,275

 

 

 

 

 

Net interest income

 

 

 

$

267,396

 

 

 

 

 

 

$

231,630

 

 

 

Interest rate spread (2)

 

 

 

 

 

1.75

%

 

 

 

 

 

1.52

%

Net interest-earning assets (3)

 

$

1,575,401

 

 

 

 

 

 

$

1,486,411

 

 

 

 

 

Net interest margin (4)

 

 

 

 

1.88

%

 

 

 

 

 

 

1.66

%

 

 

Average interest-earning assets to average interest-bearing liabilities

 

 

112.42

%

 

 

 

 

 

 

111.92

%

 

 

 

 

Selected performance ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

 

 

0.51

%

 

 

 

 

 

 

0.56

%

 

 

Return on average equity

 

 

 

 

4.14

%

 

 

 

 

 

 

4.77

%

 

 

Average equity to average assets

 

 

 

 

12.23

%

 

 

 

 

 

 

11.72

%

 

 

(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.

 

Contacts

TFS Financial Corporation

Jennifer Rosa (216) 429-5037

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