Mutual Holding Company for TFS Financial Corporation To Seek Member Approval for Dividend Waivers

Rhea-AI Summary

TFS Financial (Nasdaq: TFSL), the parent company of Third Federal Savings and Loan Association of Cleveland, announced a special meeting on July 9, 2024. The mutual holding company (MHC) that owns 80.9% of TFS Financial’s common stock will seek member approval to waive its right to receive dividends totaling up to $1.13 per share for the next 12 months. This waiver requires annual approval from members as per Federal Reserve Regulation MM. Failure to obtain the waiver could reduce dividends paid to public stockholders. Chairman and CEO Marc A. Stefanski emphasized the importance of the waiver in supporting the company's mission and stability.

Positive

• Potential dividend waiver could allow TFS Financial to retain more capital for growth and stability.
• Company assets totaled $17.02 billion as of March 31, 2024.
• Consistent member support for dividend waivers since 2014.
• Third Federal operates in 26 states and the District of Columbia with competitive rates and outstanding service.

Negative

• Uncertainty in obtaining member approval for the dividend waiver.
• Potential Federal Reserve objection to the dividend waiver.
• Failure to obtain the waiver may result in reduced dividends for public stockholders.

CLEVELAND--(BUSINESS WIRE)-- TFS Financial Corporation (Nasdaq: TFSL), (the “Company”), the holding company for Third Federal Savings and Loan Association of Cleveland, announced that Third Federal Savings and Loan Association of Cleveland, MHC, (the “MHC”), the mutual holding company that owns 80.9% of the Company’s outstanding common stock, will hold a special meeting of its members. The meeting will include a vote on a proposal to waive the MHC’s right to receive quarterly dividends totaling up to $1.13 per share that may be declared by the Company during the 12-month period following the member vote. All dividends on the Company’s common stock are declared at the discretion of the Company’s Board of Directors. The special meeting will be held on July 9, 2024.

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

Federal Reserve Regulation MM, 12 C.F.R. Part 239, of the Board of Governors of the Federal Reserve System (the “Federal Reserve”) require that the MHC annually solicit the vote of its members to approve the proposed dividend waivers by the MHC every 12 months. The MHC previously received the approval of its members at a July 11, 2023 meeting to waive the MHC’s right to receive quarterly dividends declared by the Company during the 12-month period ending July 11, 2024.

"When my parents started Third Federal in 1938, they did so with the mission of helping people achieve the American Dream of homeownership and financial security, and to support the communities we serve," said Chairman and CEO Marc A. Stefanski. "For more than 85 years, we have been unwavering in that mission – determined to help our customers succeed, and to continue to keep Third Federal strong, stable, and safe. We appreciate the overwhelming support from our members since 2014, and we are again asking them to vote FOR the dividend waiver, since we believe waiving the dividend is in the best interest of our customers, our shareholders, and the company.”

There can be no assurance that the members will approve the dividend waivers or that the Federal Reserve will not object to the waivers even if it is approved by members at the special meeting. A failure to obtain the waiver will likely result in a reduction in the dividend expected to be paid to public stockholders.

Third Federal 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. Third Federal, which lends in 26 states and the District of Columbia, is dedicated to serving consumers with competitive rates and outstanding service. Third Federal, an equal housing lender, has 21 full service branches in Northeast Ohio, two lending offices in Central and Southern Ohio, and 16 full service branches throughout Florida. As of March 31, 2024, the Company’s assets totaled $17.02 billion.

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, the Company's plans regarding its dividends. These forward-looking statements involve risks and uncertainties that could cause the Company's results to differ materially from management's current expectations. The Company's risks and uncertainties are detailed in its filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. Forward-looking statements are based on the beliefs and assumptions of our management and on currently available information. The Company undertakes no responsibility to publicly update or revise any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240530012821/en/

Jennifer Rosa

(216) 429-5037

Source: Third Federal Savings and Loan

FAQ

What is the special meeting announced by TFS Financial ?

The special meeting, scheduled for July 9, 2024, will seek member approval to waive the MHC’s right to receive dividends totaling up to $1.13 per share for the next 12 months.

What happens if the dividend waiver is not approved by members?

Failure to obtain the waiver could result in a reduction in the dividends expected to be paid to public stockholders.

How much of TFS Financial 's stock is owned by the MHC?

The mutual holding company (MHC) owns 80.9% of TFS Financial ’s outstanding common stock.

What regulatory requirement mandates the annual solicitation for dividend waiver approval?

Federal Reserve Regulation MM requires the MHC to annually seek member approval for the proposed dividend waivers.

When was the last member approval for the dividend waiver obtained?

The previous member approval for the dividend waiver was obtained at a meeting held on July 11, 2023.