(Cleveland, OH - July 27, 2023) - 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, 2023.
“This year, we are celebrating our 85th year in business. Since 1938, we have seen many changes in the economy, but we are built to last, and are still seeing positives in our business,” said Chairman and CEO Marc A. Stefanski. “Our loan portfolio grew by more than $320 million this quarter, despite rising interest rates. The average credit score of our borrowers this fiscal year increased to 774, and 97 percent of our deposits are FDIC insured. Our 11 percent Tier 1 capital leverage ratio remains more than double the regulatory requirement, and we continue to find opportunities to expand our business and our product offerings.”
Highlights - Third Quarter Fiscal 2023
•Reported net income of $17.6 million
•Added $490 million of residential mortgage loans with an average yield of 5.69%
•Increased total deposits by $66 million
•Paid a $0.2825 dividend per share
The Company reported net income of $17.6 million for the quarter ended June 30, 2023, an increase of $1.7 million from $15.9 million for the quarter ended March 31, 2023. Results improved quarter over quarter primarily due to a decrease in non-interest expenses.
Net interest income decreased $0.5 million to $68.8 million for the quarter ended June 30, 2023 from $69.3 million for the quarter ended March 31, 2023. During the quarter, balances and yields on interest-earning assets increased, but were more than offset by an increase in the cost of funding. The interest rate spread was 1.50% for the quarter ended June 30, 2023 compared to 1.56% for the quarter ended March 31, 2023. The net interest margin was 1.75% for the quarter ended June 30, 2023 compared to 1.78% for the prior quarter.
During the quarter ended June 30, 2023, there was no provision for credit losses compared to a $1.0 million release of provision for the quarter ended March 31, 2023. The total allowance for credit losses increased $1.8 million, to $102.6 million, or 0.69% of total loans receivable, primarily due to an increase in loans held for investment. There was $1.8 million in net loan recoveries during the quarter ended June 30, 2023.
Total non-interest expense decreased $2.7 million to $52.9 million for the quarter ended June 30, 2023, from $55.6 million for the quarter ended March 31, 2023. The decrease consisted mainly of a $5.1 million decrease in salaries and employee benefits, partially offset by a $1.5 million increase in other expenses and $0.4 million increases in both marketing and property, equipment and software expenses. The decrease in salaries and employee benefits was primarily due to a reassessment and reduction of the accrual for discretionary incentive payments as well as a decrease in associate count due to natural attrition. The increase in other expenses related primarily to one-time public relations and event costs for the Association's 85th anniversary celebration and increases in appraisal and other loan-related expenses.
Total assets increased by $333.3 million, or 2%, to $16.59 billion at June 30, 2023 from $16.26 billion at March 31, 2023. The increase was mainly the result of new loan originations exceeding the total of loan sales and principal repayments and an increase in investment securities available for sale, partially offset by a decrease in other assets.
Investment securities available for sale increased $30.7 million, or 6%, to $513.3 million at June 30, 2023 from $482.6 million at March 31, 2023. During the quarter, $59.5 million of U.S. Treasury notes were purchased and pledged as collateral for initial margin requirements on swap contracts. This increase was partially offset by a $20.8 million decrease from principal repayments, net of purchases and premium or discount amortization, and a $7.9 million increase in unrealized losses on the investment securities portfolio.
Loans held for investment, net of allowance and deferred loan expenses, increased $320.4 million, or 2%, to $14.88 billion at June 30, 2023 from $14.56 billion at March 31, 2023.
Other assets decreased $49.4 million, or 31%, to $109.9 million at June 30, 2023 from $159.3 million at March 31, 2023. The decrease was primarily due to a decrease of $38.4 million in receivables for initial margin requirement on swap contracts.
Additionally, there was a $13.4 million decrease in net deferred taxes, partially offset by a $2.9 million increase in interest receivable on swap contracts.
Compared to March 31, 2023, deposits increased by $66.2 million to $9.07 billion at June 30, 2023, which consists of brokered deposit increases of $111.1 million and retail deposits decreases of $44.9 million, or less than 1%, to $8.40 billion.
Borrowed funds increased $247.3 million to $5.45 billion at June 30, 2023 from $5.20 billion at March 31, 2023. The increase was primarily used to fund loan growth.
Highlights - Fiscal Year-To-Date 2023
•Reported net income of $55.7 million
•Added $1.3 billion of new residential mortgage loans with weighted average yield of 5.23%
•Grew net interest income by 11% compared to the same period in fiscal 2022
•Remained well capitalized, with a Tier 1 leverage ratio of 11.18%
•Paid a $0.8475 dividend per share
The Company reported net income of $55.7 million for the nine months ended June 30, 2023 compared to net income of $49.1 million for the nine months ended June 30, 2022. The $6.6 million increase was primarily due to an increase in net interest income and a decrease in provisions for credit losses offset by a decrease in non-interest income and an increase in non-interest expenses.
Net interest income increased by $21.3 million, or 11.1%, to $213.2 million for the nine months ended June 30, 2023, compared to $191.9 million for the nine months ended June 30, 2022, driven by loan growth and a higher interest rate environment. The interest rate spread was 1.60% for the nine months ended June 30, 2023 compared to 1.71% for the nine months ended June 30, 2022. The net interest margin was 1.82% for the nine months ended June 30, 2023 compared to 1.83% for the prior year period.
During the nine months ended June 30, 2023, there was a $2.0 million release of provision for credit losses compared to $1.0 million of provision expense for the nine months ended June 30, 2022. Net loan recoveries totaled $4.6 million during the nine months ended June 30, 2023 and $7.3 million during the prior year period. The total allowance for credit losses at June 30, 2023 was $102.6 million, or 0.69% of total loans receivable, compared to $99.9 million, or 0.70% of total loans receivable, at September 30, 2022 and $97.6 million, or 0.70% of total loans receivable, at June 30, 2022. The allowance for credit losses included $27.8 million, $27.0 million, and $28.1 million in liabilities for unfunded commitments at June 30, 2023, September 30, 2022 and June 30, 2022, respectively.
Total loan delinquencies increased $1.6 million to $22.8 million, or 0.15% of total loans receivable, at June 30, 2023 from $21.2 million, or 0.16% of total loans, at September 30, 2022. Non-accrual loans decreased $5.1 million to $30.5 million, or 0.20% of total loans, at June 30, 2023 from $35.6 million, or 0.25% of total loans, at September 30, 2022.
Total non-interest income decreased $3.1 million, or 16.0%, to $16.3 million for the nine months ended June 30, 2023 from $19.4 million for the nine months ended June 30, 2022. The decrease consisted mainly of a $1.9 million decrease in fees and service charges and a $1.6 million decrease in net gain on the sale of loans. The decrease in net gain on the sale of loans was the result of less favorable secondary market pricing and a lower volume of loans sold. The decrease in fees and service charges was primarily due to a decrease in partnership income.
Total non-interest expenses increased $12.2 million, or 8.2%, to $161.6 million for the nine months ended June 30, 2023, from $149.4 million for the nine months ended June 30, 2022 and included increases of $2.0 million in salaries and employee benefits, $4.4 million in marketing costs, and $3.2 million in federal ("FDIC") insurance premiums and assessments. Additionally, there was a $1.2 million increase in pension expense, reported in other expenses, related to net actuarial gains and losses that are reassessed each year. 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 $805.1 million, or 5%, to $16.59 billion at June 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, a $55.4 million increase in investment securities available for sale and an increase in cash and cash equivalents.
Cash and cash equivalents increased $66.6 million, or 18%, to $436.2 million at June 30, 2023 from $369.6 million at September 30, 2022.
Loans held for investment, net of allowance and deferred loan expenses, increased $626.6 million, or 4%, to $14.88 billion at June 30, 2023 from $14.26 billion at September 30, 2022. The residential mortgage loan portfolio increased $405.9 million, to $11.95 billion, and home equity loans and lines of credit increased $232.3 million, to $2.87 billion. Loan originations during the nine months ended June 30, 2023 included $1.31 billion of residential mortgage loans and $1.24 billion of equity loans and lines of credit compared to $2.91 billion of residential mortgage loans and $1.60 billion of equity loans and lines of credit originated during the nine months ended June 30, 2022. Total originations include residential mortgage loans acquired from strategic partners. The decrease in originations was primarily due to a generally increasing interest rate environment, resulting in minimal refinance activity. Mortgage loan originations included 89% purchases and 36% adjustable rate loans for the nine months ended June 30, 2023.
Deposits increased $148.1 million, or 2%, to $9.07 billion at June 30, 2023 from $8.92 billion at September 30, 2022. The increase was the result of a $224.0 million increase in certificates of deposit ("CDs") and a $150.8 million increase in savings accounts, partially offset by a $70.3 million decrease in money market deposit accounts and a $158.9 million decrease in checking accounts. There were $667.8 million in brokered deposits at June 30, 2023 compared to $575.2 million at September 30, 2022.
Borrowed funds increased $659.0 million, or 14%, to $5.45 billion at June 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 June 30, 2023, all from the FHLB, included $243.1 million of overnight advances, $1.58 billion of term advances with a weighted average maturity of approximately 2.3 years, and $3.60 billion of term advances, aligned with interest rate swap contracts, with a remaining weighted average effective maturity of approximately 3.9 years. Additional borrowing capacity at the FHLB was $3.25 billion at June 30, 2023.
Total shareholders' equity increased $41.8 million, or 2.3%, to $1.89 billion at June 30, 2023 from $1.84 billion at September 30, 2022. Activity reflects $55.7 million of net income and a $27.8 million net increase in accumulated other comprehensive income, reduced by $43.7 million for dividends paid and $5.0 million in repurchases of common stock. Additionally, there was $7.0 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 nine months ended June 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 June 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, 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). 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 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 June 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 11.18%, its Common Equity Tier 1 and Tier 1 ratios were each 20.01% and its total capital ratio was 20.75%.
Presentation slides as of June 30, 2023 will be available on the Company's website, www.thirdfederal.com, under the Investor Relations link within the "Recent Presentations" menu, beginning July 28, 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 June 30, 2023, the Company’s assets totaled $16.59 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;
●
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, 2023
March 31, 2023
September 30, 2022
ASSETS
Cash and due from banks
$
23,278
$
28,468
$
18,961
Other interest-earning cash equivalents
412,937
392,660
350,603
Cash and cash equivalents
436,215
421,128
369,564
Investment securities available for sale
513,303
482,576
457,908
Mortgage loans held for sale
595
4,398
9,661
Loans held for investment, net:
Mortgage loans
14,897,681
14,580,410
14,276,478
Other loans
4,022
3,868
3,263
Deferred loan expenses, net
56,780
53,183
50,221
Allowance for credit losses on loans
(74,803)
(74,138)
(72,895)
Loans, net
14,883,680
14,563,323
14,257,067
Mortgage loan servicing rights, net
7,545
7,669
7,943
Federal Home Loan Bank stock, at cost
247,098
232,855
212,290
Real estate owned, net
1,400
1,165
1,191
Premises, equipment, and software, net
34,901
34,529
34,531
Accrued interest receivable
49,837
46,399
40,256
Bank owned life insurance contracts
310,498
308,339
304,040
Other assets
109,916
159,299
95,428
TOTAL ASSETS
$
16,594,988
$
16,261,680
$
15,789,879
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
$
9,069,069
$
9,002,867
$
8,921,017
Borrowed funds
5,452,228
5,204,964
4,793,221
Borrowers’ advances for insurance and taxes
74,359
102,888
117,250
Principal, interest, and related escrow owed on loans serviced
16,510
27,166
29,913
Accrued expenses and other liabilities
96,698
89,319
84,139
Total liabilities
14,708,864
14,427,204
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
1,753,801
1,752,508
1,751,223
Treasury stock, at cost
(775,852)
(775,852)
(771,986)
Unallocated ESOP shares
(28,167)
(29,250)
(31,417)
Retained earnings—substantially restricted
882,034
879,046
870,047
Accumulated other comprehensive income
50,985
4,701
23,149
Total shareholders’ equity
1,886,124
1,834,476
1,844,339
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
16,594,988
$
16,261,680
$
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
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
144,347
$
136,835
$
129,665
$
114,871
$
99,576
Investment securities available for sale
3,712
3,455
3,062
1,904
1,282
Other interest and dividend earning assets
8,598
7,262
6,243
4,236
1,913
Total interest and dividend income
156,657
147,552
138,970
121,011
102,771
INTEREST EXPENSE:
Deposits
48,905
39,876
29,855
23,582
17,214
Borrowed funds
38,973
38,408
33,958
21,920
14,255
Total interest expense
87,878
78,284
63,813
45,502
31,469
NET INTEREST INCOME
68,779
69,268
75,157
75,509
71,302
PROVISION (RELEASE) FOR CREDIT LOSSES
—
(1,000)
(1,000)
—
4,000
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
68,779
70,268
76,157
75,509
67,302
NON-INTEREST INCOME:
Fees and service charges, net of amortization
1,919
1,924
1,936
2,220
2,742
Net gain (loss) on the sale of loans
21
579
17
(1,113)
(51)
Increase in and death benefits from bank owned life insurance contracts
2,790
2,123
2,238
2,761
2,090
Other
1,113
703
966
514
896
Total non-interest income
5,843
5,329
5,157
4,382
5,677
NON-INTEREST EXPENSE:
Salaries and employee benefits
25,332
30,390
28,403
27,206
28,756
Marketing services
7,023
6,671
7,713
4,256
4,830
Office property, equipment and software
7,246
6,802
6,800
6,558
6,762
Federal insurance premium and assessments
3,574
3,488
2,761
2,722
2,351
State franchise tax
1,230
1,268
1,208
1,201
1,197
Other expenses
8,472
6,955
6,309
6,799
7,860
Total non-interest expense
52,877
55,574
53,194
48,742
51,756
INCOME BEFORE INCOME TAXES
21,745
20,023
28,120
31,149
21,223
INCOME TAX EXPENSE
4,142
4,115
5,927
5,716
4,076
NET INCOME
$
17,603
$
15,908
$
22,193
$
25,433
$
17,147
Earnings per share - basic and diluted
$
0.06
$
0.06
$
0.08
$
0.09
$
0.06
Weighted average shares outstanding
Basic
277,472,312
277,361,293
277,320,904
277,383,038
277,453,439
Diluted
278,590,810
278,499,145
278,462,937
278,505,233
278,555,759
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,
2023
2022
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
410,847
$
280,820
Investment securities available for sale
10,229
3,597
Other interest and dividend earning assets
22,103
3,905
Total interest and dividend income
443,179
288,322
INTEREST EXPENSE:
Deposits
118,636
53,361
Borrowed funds
111,339
43,074
Total interest expense
229,975
96,435
NET INTEREST INCOME
213,204
191,887
PROVISION (RELEASE) FOR CREDIT LOSSES
(2,000)
1,000
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
215,204
190,887
NON-INTEREST INCOME:
Fees and service charges, net of amortization
5,779
7,714
Net gain on the sale of loans
617
2,249
Increase in and death benefits from bank owned life insurance contracts
7,151
7,223
Other
2,782
2,236
Total non-interest income
16,329
19,422
NON-INTEREST EXPENSE:
Salaries and employee benefits
84,125
82,133
Marketing services
21,407
17,007
Office property, equipment and software
20,848
20,225
Federal insurance premium and assessments
9,823
6,639
State franchise tax
3,706
3,658
Other expenses
21,736
19,742
Total non-interest expense
161,645
149,404
INCOME BEFORE INCOME TAXES
69,888
60,905
INCOME TAX EXPENSE
14,184
11,773
NET INCOME
$
55,704
$
49,132
Earnings per share - basic and diluted
$
0.20
$
0.17
Weighted average shares outstanding
Basic
277,384,689
277,366,624
Diluted
278,507,602
278,767,989
TFS FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES AND YIELDS (unaudited)
Three Months Ended
Three Months Ended
Three Months Ended
June 30, 2023
March 31, 2023
June 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
$
350,574
$
4,481
5.11
%
$
350,437
$
3,947
4.51
%
$
337,551
$
709
0.84
%
Investment securities
24,046
320
5.32
%
3,649
11
1.21
%
3,836
12
1.25
%
Mortgage-backed securities
470,457
3,392
2.88
%
475,902
3,444
2.89
%
444,972
1,270
1.14
%
Loans (2)
14,676,829
144,347
3.93
%
14,517,771
136,835
3.77
%
13,497,362
99,576
2.95
%
Federal Home Loan Bank stock
235,177
4,117
7.00
%
230,496
3,315
5.75
%
170,155
1,204
2.83
%
Total interest-earning assets
15,757,083
156,657
3.98
%
15,578,255
147,552
3.79
%
14,453,876
102,771
2.84
%
Noninterest-earning assets
543,310
527,935
467,329
Total assets
$
16,300,393
$
16,106,190
$
14,921,205
Interest-bearing liabilities:
Checking accounts
$
1,064,738
1,317
0.49
%
$
1,128,560
2,229
0.79
%
$
1,475,586
958
0.26
%
Savings accounts
1,890,427
8,087
1.71
%
1,668,115
5,028
1.21
%
1,882,881
931
0.20
%
Certificates of deposit
6,042,798
39,501
2.61
%
6,110,460
32,619
2.14
%
5,711,412
15,325
1.07
%
Borrowed funds
5,175,982
38,973
3.01
%
5,112,767
38,408
3.00
%
3,774,204
14,255
1.51
%
Total interest-bearing liabilities
14,173,945
87,878
2.48
%
14,019,902
78,284
2.23
%
12,844,083
31,469
0.98
%
Noninterest-bearing liabilities
264,952
209,161
250,437
Total liabilities
14,438,897
14,229,063
13,094,520
Shareholders’ equity
1,861,496
1,877,127
1,826,685
Total liabilities and shareholders’ equity
$
16,300,393
$
16,106,190
$
14,921,205
Net interest income
$
68,779
$
69,268
$
71,302
Interest rate spread (1)(3)
1.50
%
1.56
%
1.86
%
Net interest-earning assets (4)
$
1,583,138
$
1,558,353
$
1,609,793
Net interest margin (1)(5)
1.75
%
1.78
%
1.97
%
Average interest-earning assets to average interest-bearing liabilities
111.17
%
111.12
%
112.53
%
Selected performance ratios:
Return on average assets (1)
0.43
%
0.40
%
0.46
%
Return on average equity (1)
3.78
%
3.39
%
3.75
%
Average equity to average assets
11.42
%
11.65
%
12.24
%
(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, 2023
June 30, 2022
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
$
351,742
$
11,677
4.43
%
$
389,884
$
1,060
0.36
%
Investment securities
10,438
342
4.37
%
3,604
32
1.18
%
Mortgage-backed securities
470,108
9,887
2.80
%
432,781
3,565
1.10
%
Loans (1)
14,530,428
410,847
3.77
%
12,975,292
280,820
2.89
%
Federal Home Loan Bank stock
228,318
10,426
6.09
%
165,240
2,845
2.30
%
Total interest-earning assets
15,591,034
443,179
3.79
%
13,966,801
288,322
2.75
%
Noninterest-earning assets
518,875
485,123
Total assets
$
16,109,909
$
14,451,924
Interest-bearing liabilities:
Checking accounts
$
1,126,064
5,956
0.71
%
$
1,306,720
1,516
0.15
%
Savings accounts
1,774,965
16,822
1.26
%
1,862,449
1,973
0.14
%
Certificates of deposit
6,042,061
95,858
2.12
%
5,814,710
49,872
1.14
%
Borrowed funds
5,053,965
111,339
2.94
%
3,410,751
43,074
1.68
%
Total interest-bearing liabilities
13,997,055
229,975
2.19
%
12,394,630
96,435
1.04
%
Noninterest-bearing liabilities
243,823
267,142
Total liabilities
14,240,878
12,661,772
Shareholders’ equity
1,869,031
1,790,152
Total liabilities and shareholders’ equity
$
16,109,909
$
14,451,924
Net interest income
$
213,204
$
191,887
Interest rate spread (1)(2)
1.60
%
1.71
%
Net interest-earning assets (3)
$
1,593,979
$
1,572,171
Net interest margin (1)(4)
1.82
%
1.83
%
Average interest-earning assets to average interest-bearing liabilities
111.39
%
112.68
%
Selected performance ratios:
Return on average assets (1)
0.46
%
0.45
%
Return on average equity (1)
3.97
%
3.66
%
Average equity to average assets
11.60
%
12.39
%
(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.
