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

Rhea-AI Summary

TFS Financial Corporation (Nasdaq: TFSL) announced a special meeting for members of its mutual holding company to vote on waiving the right to receive up to $1.13 per share in quarterly dividends over the next year. This meeting will take place on July 12, 2022. The waiver is proposed as a measure to benefit customers and shareholders, reflecting the company’s commitment to financial stability. However, approval from both members and the Federal Reserve is required to proceed; failure to obtain this waiver could lead to reduced dividends for public stockholders.

Positive

• Proposal to waive quarterly dividends reflects a strategic move aimed at benefiting customers and shareholders.
• TFS Financial Corporation maintains a strong asset base with total assets of $14.6 billion as of March 31, 2022.

Negative

• Failure to obtain member approval for the dividend waiver may lead to reduced dividends for public stockholders.
• The Federal Reserve may still object to the waivers even if approved by members, introducing uncertainty.

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 12, 2022.

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”) requires 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 13, 2021 meeting to waive the MHC’s right to receive quarterly dividends declared by the Company during the 12-month period ending July 13, 2022.

"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 84 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 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 March 31, 2022, the Company’s assets totaled $14.6 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, 2021. 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/20220601006161/en/

Jennifer Rosa (216) 429-5037

Source: Third Federal Savings and Loan

FAQ

What is the dividend amount TFS Financial Corporation plans to waive?

TFS Financial Corporation is proposing to waive quarterly dividends totaling up to $1.13 per share.

When is the special meeting for voting on the dividend waiver?

The special meeting will be held on July 12, 2022.

What are the implications if the dividend waiver is not approved?

If the waiver is not approved, it may result in a reduction of dividends expected to be paid to public stockholders.

How much are TFS Financial Corporation's total assets?

As of March 31, 2022, TFS Financial Corporation's total assets amounted to $14.6 billion.