Growth in Loan Originations, Strong Borrower Credit Highlight Successful Year for TFS Financial Corporation
TFS Financial Corporation (NASDAQ: TFSL) reported a net income of $17.0 million for the quarter and $81.0 million for the fiscal year ended September 30, 2021. This reflects a year-over-year increase from $13.6 million and a decrease from $83.3 million, respectively. Loan originations rose by 20%, totaling $3.63 billion. Net interest income decreased by 4.4% to $231.6 million due to lower yields. The allowance for credit losses increased, indicating improved credit profiles. Total assets decreased by 4.0% to $14.06 billion.
- Net income increased to $17.0 million from $13.6 million year-over-year.
- Loan origination volumes rose 20% to $3.63 billion for the fiscal year.
- Total shareholders' equity increased by $60.4 million, or 3.6%, to $1.73 billion.
- Net income for the fiscal year decreased from $83.3 million to $81.0 million.
- Net interest income decreased by $10.7 million, or 4.4%, from the previous fiscal year.
- Total assets decreased by $584.8 million, or 4.0%, to $14.06 billion.
Chairman and CEO
The Company reported net income of
“Even after a year of unprecedented loan activity in 2020, our originations in 2021 were up 20 percent,” said Chairman and CEO,
Loan origination volumes remained high, as there were
Net interest income increased
During the quarter ended
Total loan delinquencies decreased
At
Non-interest income decreased
Total non-interest expense decreased
Total assets decreased by
The combination of loans held for investment, net of allowance and deferred loan expenses, and mortgage loans held for sale decreased
Total bank owned life insurance contracts increased
Deposits decreased
Borrowed funds, all from the FHLB, decreased
Total shareholders' equity increased
The Company declared and paid a quarterly dividend of
The Association operates under the capital requirements for the standardized approach of the Basel III capital framework for
Presentation slides as of
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:
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:
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) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Cash and due from banks |
$ |
27,346 |
|
|
$ |
25,270 |
|
Other interest-earning cash equivalents |
460,980 |
|
|
472,763 |
|
||
Cash and cash equivalents |
488,326 |
|
|
498,033 |
|
||
Investment securities available for sale (amortized cost |
421,783 |
|
|
453,438 |
|
||
Mortgage loans held for sale ( |
8,848 |
|
|
36,871 |
|
||
Loans held for investment, net: |
|
|
|
||||
Mortgage loans |
12,525,687 |
|
|
13,104,959 |
|
||
Other loans |
2,778 |
|
|
2,581 |
|
||
Deferred loan expenses, net |
44,859 |
|
|
42,459 |
|
||
Allowance for credit losses on loans |
(64,289 |
) |
|
(46,937 |
) |
||
Loans, net |
12,509,035 |
|
|
13,103,062 |
|
||
Mortgage loan servicing rights, net |
8,941 |
|
|
7,860 |
|
||
|
162,783 |
|
|
136,793 |
|
||
Real estate owned, net |
289 |
|
|
185 |
|
||
Premises, equipment, and software, net |
37,420 |
|
|
41,594 |
|
||
Accrued interest receivable |
31,107 |
|
|
36,634 |
|
||
Bank owned life insurance contracts |
297,332 |
|
|
222,919 |
|
||
Other assets |
91,586 |
|
|
104,832 |
|
||
TOTAL ASSETS |
$ |
14,057,450 |
|
|
$ |
14,642,221 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Deposits |
$ |
8,993,605 |
|
|
$ |
9,225,554 |
|
Borrowed funds |
3,091,815 |
|
|
3,521,745 |
|
||
Borrowers’ advances for insurance and taxes |
109,633 |
|
|
111,536 |
|
||
Principal, interest, and related escrow owed on loans serviced |
41,476 |
|
|
45,895 |
|
||
Accrued expenses and other liabilities |
88,641 |
|
|
65,638 |
|
||
Total liabilities |
12,325,170 |
|
|
12,970,368 |
|
||
Commitments and contingent liabilities |
|
|
|
||||
Preferred stock, |
— |
|
|
— |
|
||
Common stock, |
3,323 |
|
|
3,323 |
|
||
Paid-in capital |
1,746,887 |
|
|
1,742,714 |
|
||
|
(768,035 |
) |
|
(767,649 |
) |
||
Unallocated ESOP shares |
(35,751 |
) |
|
(40,084 |
) |
||
Retained earnings—substantially restricted |
853,657 |
|
|
865,514 |
|
||
Accumulated other comprehensive loss |
(67,801 |
) |
|
(131,965 |
) |
||
Total shareholders’ equity |
1,732,280 |
|
|
1,671,853 |
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
14,057,450 |
|
|
$ |
14,642,221 |
|
TFS FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited) (In thousands, except share and per share data) |
|||||||||||||||
|
For the Three Months Ended |
|
For the Year Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
||||||||
Loans, including fees |
$ |
92,002 |
|
|
$ |
103,430 |
|
|
$ |
381,887 |
|
|
$ |
440,697 |
|
Investment securities available for sale |
1,041 |
|
|
1,535 |
|
|
3,822 |
|
|
9,707 |
|
||||
Other interest and dividend earning assets |
1,033 |
|
|
797 |
|
|
3,642 |
|
|
4,894 |
|
||||
Total interest and dividend income |
94,076 |
|
|
105,762 |
|
|
389,351 |
|
|
455,298 |
|
||||
INTEREST EXPENSE: |
|
|
|
|
|
|
|
||||||||
Deposits |
21,617 |
|
|
31,379 |
|
|
97,319 |
|
|
140,242 |
|
||||
Borrowed funds |
15,061 |
|
|
24,217 |
|
|
60,402 |
|
|
72,788 |
|
||||
Total interest expense |
36,678 |
|
|
55,596 |
|
|
157,721 |
|
|
213,030 |
|
||||
NET INTEREST INCOME |
57,398 |
|
|
50,166 |
|
|
231,630 |
|
|
242,268 |
|
||||
PROVISION (RELEASE) FOR CREDIT LOSSES |
(2,000 |
) |
|
— |
|
|
(9,000 |
) |
|
3,000 |
|
||||
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES |
59,398 |
|
|
50,166 |
|
|
240,630 |
|
|
239,268 |
|
||||
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
||||||||
Fees and service charges, net of amortization |
2,156 |
|
|
2,363 |
|
|
9,602 |
|
|
8,798 |
|
||||
Net gain on the sale of loans |
4,305 |
|
|
11,536 |
|
|
33,082 |
|
|
28,443 |
|
||||
Increase in and death benefits from bank owned life insurance contracts |
2,146 |
|
|
1,572 |
|
|
9,961 |
|
|
7,153 |
|
||||
Other |
74 |
|
|
1,581 |
|
|
2,654 |
|
|
8,857 |
|
||||
Total non-interest income |
8,681 |
|
|
17,052 |
|
|
55,299 |
|
|
53,251 |
|
||||
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
||||||||
Salaries and employee benefits |
26,912 |
|
|
25,967 |
|
|
108,867 |
|
|
104,008 |
|
||||
Marketing services |
4,043 |
|
|
4,349 |
|
|
19,174 |
|
|
16,512 |
|
||||
Office property, equipment and software |
6,453 |
|
|
6,439 |
|
|
25,710 |
|
|
25,296 |
|
||||
Federal insurance premium and assessments |
2,233 |
|
|
2,438 |
|
|
9,085 |
|
|
10,625 |
|
||||
State franchise tax |
1,202 |
|
|
1,176 |
|
|
4,663 |
|
|
4,690 |
|
||||
Other expenses |
6,603 |
|
|
10,194 |
|
|
28,336 |
|
|
31,143 |
|
||||
Total non-interest expense |
47,446 |
|
|
50,563 |
|
|
195,835 |
|
|
192,274 |
|
||||
INCOME BEFORE INCOME TAXES |
20,633 |
|
|
16,655 |
|
|
100,094 |
|
|
100,245 |
|
||||
INCOME TAX EXPENSE |
3,618 |
|
|
3,077 |
|
|
19,087 |
|
|
16,928 |
|
||||
NET INCOME |
$ |
17,015 |
|
|
$ |
13,578 |
|
|
$ |
81,007 |
|
|
$ |
83,317 |
|
Earnings per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.06 |
|
|
$ |
0.05 |
|
|
$ |
0.29 |
|
|
$ |
0.30 |
|
Diluted |
$ |
0.06 |
|
|
$ |
0.05 |
|
|
$ |
0.29 |
|
|
$ |
0.29 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
||||||||
Basic |
276,982,904 |
|
|
276,069,983 |
|
|
276,694,594 |
|
|
275,859,660 |
|
||||
Diluted |
278,880,379 |
|
|
277,704,691 |
|
|
278,576,254 |
|
|
277,803,058 |
|
TFS FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCES AND YIELDS (unaudited) |
||||||||||||||||||||||
|
|
Three Months Ended |
|
Three Months Ended |
||||||||||||||||||
|
|
|
|
|
||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Yield/
|
|
Average
|
|
Interest
|
|
Yield/
|
||||||||||
|
|
(Dollars in thousands) |
||||||||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning cash equivalents |
|
$ |
570,903 |
|
|
$ |
221 |
|
|
0.15 |
% |
|
$ |
466,487 |
|
|
$ |
118 |
|
|
0.10 |
% |
Mortgage-backed securities |
|
417,320 |
|
|
1,041 |
|
|
1.00 |
% |
|
484,596 |
|
|
1,535 |
|
|
1.27 |
% |
||||
Loans (2) |
|
12,544,760 |
|
|
92,002 |
|
|
2.93 |
% |
|
13,265,564 |
|
|
103,430 |
|
|
3.12 |
% |
||||
|
|
162,783 |
|
|
812 |
|
|
2.00 |
% |
|
136,793 |
|
|
679 |
|
|
1.99 |
% |
||||
Total interest-earning assets |
|
13,695,766 |
|
|
94,076 |
|
|
2.75 |
% |
|
14,353,440 |
|
|
105,762 |
|
|
2.95 |
% |
||||
Noninterest-earning assets |
|
533,988 |
|
|
|
|
|
|
580,574 |
|
|
|
|
|
||||||||
Total assets |
|
$ |
14,229,754 |
|
|
|
|
|
|
$ |
14,934,014 |
|
|
|
|
|
||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Checking accounts |
|
$ |
1,117,897 |
|
|
263 |
|
|
0.09 |
% |
|
$ |
981,012 |
|
|
310 |
|
|
0.13 |
% |
||
Savings accounts |
|
1,805,394 |
|
|
645 |
|
|
0.14 |
% |
|
1,588,923 |
|
|
1,019 |
|
|
0.26 |
% |
||||
Certificates of deposit |
|
6,144,461 |
|
|
20,709 |
|
|
1.35 |
% |
|
6,681,372 |
|
|
30,050 |
|
|
1.80 |
% |
||||
Borrowed funds |
|
3,146,515 |
|
|
15,061 |
|
|
1.91 |
% |
|
3,657,533 |
|
|
24,217 |
|
|
2.65 |
% |
||||
Total interest-bearing liabilities |
|
12,214,267 |
|
|
36,678 |
|
|
1.20 |
% |
|
12,908,840 |
|
|
55,596 |
|
|
1.72 |
% |
||||
Noninterest-bearing liabilities |
|
289,573 |
|
|
|
|
|
|
337,437 |
|
|
|
|
|
||||||||
Total liabilities |
|
12,503,840 |
|
|
|
|
|
|
13,246,277 |
|
|
|
|
|
||||||||
Shareholders’ equity |
|
1,725,914 |
|
|
|
|
|
|
1,687,737 |
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity |
|
$ |
14,229,754 |
|
|
|
|
|
|
$ |
14,934,014 |
|
|
|
|
|
||||||
Net interest income |
|
|
|
$ |
57,398 |
|
|
|
|
|
|
$ |
50,166 |
|
|
|
||||||
Interest rate spread (1)(3) |
|
|
|
|
|
1.55 |
% |
|
|
|
|
|
1.23 |
% |
||||||||
Net interest-earning assets (4) |
|
$ |
1,481,499 |
|
|
|
|
|
|
$ |
1,444,600 |
|
|
|
|
|
||||||
Net interest margin (1)(5) |
|
|
|
1.68 |
% |
|
|
|
|
|
1.40 |
% |
|
|
||||||||
Average interest-earning assets to average interest-bearing liabilities |
|
112.13 |
% |
|
|
|
|
|
111.19 |
% |
|
|
|
|
||||||||
Selected performance ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets (1) |
|
|
|
0.48 |
% |
|
|
|
|
|
0.36 |
% |
|
|
||||||||
Return on average equity (1) |
|
|
|
3.94 |
% |
|
|
|
|
|
3.22 |
% |
|
|
||||||||
Average equity to average assets |
|
|
|
12.13 |
% |
|
|
|
|
|
11.30 |
% |
|
|
(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 |
||||||||||||||||||
|
|
|
|
|
||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Yield/
|
|
Average
|
|
Interest
|
|
Yield/
|
||||||||||
|
|
(Dollars in thousands) |
||||||||||||||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning cash equivalents |
|
$ |
567,035 |
|
|
$ |
673 |
|
|
0.12 |
% |
|
$ |
307,902 |
|
|
$ |
1,909 |
|
|
0.62 |
% |
Mortgage-backed securities |
|
428,590 |
|
|
3,822 |
|
|
0.89 |
% |
|
527,195 |
|
|
9,707 |
|
|
1.84 |
% |
||||
Loans (1) |
|
12,800,542 |
|
|
381,887 |
|
|
2.98 |
% |
|
13,366,447 |
|
|
440,697 |
|
|
3.30 |
% |
||||
|
|
155,322 |
|
|
2,969 |
|
|
1.91 |
% |
|
120,011 |
|
|
2,985 |
|
|
2.49 |
% |
||||
Total interest-earning assets |
|
13,951,489 |
|
|
389,351 |
|
|
2.79 |
% |
|
14,321,555 |
|
|
455,298 |
|
|
3.18 |
% |
||||
Noninterest-earning assets |
|
532,786 |
|
|
|
|
|
|
540,421 |
|
|
|
|
|
||||||||
Total assets |
|
$ |
14,484,275 |
|
|
|
|
|
|
$ |
14,861,976 |
|
|
|
|
|
||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Checking accounts |
|
$ |
1,079,699 |
|
|
1,140 |
|
|
0.11 |
% |
|
$ |
917,552 |
|
|
1,477 |
|
|
0.16 |
% |
||
Savings accounts |
|
1,742,042 |
|
|
2,992 |
|
|
0.17 |
% |
|
1,530,977 |
|
|
7,775 |
|
|
0.51 |
% |
||||
Certificates of deposit |
|
6,339,412 |
|
|
93,187 |
|
|
1.47 |
% |
|
6,621,289 |
|
|
130,990 |
|
|
1.98 |
% |
||||
Borrowed funds |
|
3,303,925 |
|
|
60,402 |
|
|
1.83 |
% |
|
3,785,026 |
|
|
72,788 |
|
|
1.92 |
% |
||||
Total interest-bearing liabilities |
|
12,465,078 |
|
|
157,721 |
|
|
1.27 |
% |
|
12,854,844 |
|
|
213,030 |
|
|
1.66 |
% |
||||
Noninterest-bearing liabilities |
|
321,958 |
|
|
|
|
|
|
298,520 |
|
|
|
|
|
||||||||
Total liabilities |
|
12,787,036 |
|
|
|
|
|
|
13,153,364 |
|
|
|
|
|
||||||||
Shareholders’ equity |
|
1,697,239 |
|
|
|
|
|
|
1,708,612 |
|
|
|
|
|
||||||||
Total liabilities and shareholders’ equity |
|
$ |
14,484,275 |
|
|
|
|
|
|
$ |
14,861,976 |
|
|
|
|
|
||||||
Net interest income |
|
|
|
$ |
231,630 |
|
|
|
|
|
|
$ |
242,268 |
|
|
|
||||||
Interest rate spread (2) |
|
|
|
|
|
1.52 |
% |
|
|
|
|
|
1.52 |
% |
||||||||
Net interest-earning assets (3) |
|
$ |
1,486,411 |
|
|
|
|
|
|
$ |
1,466,711 |
|
|
|
|
|
||||||
Net interest margin (4) |
|
|
|
1.66 |
% |
|
|
|
|
|
1.69 |
% |
|
|
||||||||
Average interest-earning assets to average interest-bearing liabilities |
|
111.92 |
% |
|
|
|
|
|
111.41 |
% |
|
|
|
|
||||||||
Selected performance ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets |
|
|
|
0.56 |
% |
|
|
|
|
|
0.56 |
% |
|
|
||||||||
Return on average equity |
|
|
|
4.77 |
% |
|
|
|
|
|
4.88 |
% |
|
|
||||||||
Average equity to average assets |
|
|
|
11.72 |
% |
|
|
|
|
|
11.50 |
% |
|
|
(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/20211028006198/en/
(216) 429-5037
Source: Third Federal Savings and Loan
FAQ
What were TFS Financial's net income results for the quarter ended September 30, 2021?
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