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
three months and six months ended March 31, 2021.
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Chairman and CEO Marc A. Stefanski
(Photo: Business Wire)
The Company reported net income of $23.0 million for the quarter
ended March 31, 2021 compared to net income of $17.3 million for
the quarter ended March 31, 2020. Net income of $48.0 million was
reported for the six months ended March 31, 2021 compared to net
income of $42.9 million for the six months ended March 31, 2020.
The increase in net income for the quarter and six month periods is
primarily the result of higher net gain on the sale of loans and
releases from the allowance for credit losses, partially offset by
a decrease in net interest income and an increased income tax
provision. Other changes include a decrease in other non-interest
income and an increase in general and administrative expenses when
comparing the fiscal year-to-date periods.
“At Third Federal, we’re seeing sunshine and blue skies ahead as
our nation begins to emerge from the pandemic,” said Chairman and
CEO Marc A. Stefanski. “Our loan pipeline is strong with
refinances, home equities, and the signs of a hot home buying
season, while forbearances are half of what they were at
year-end.”
Loan originations, mainly refinances, continued at an active
pace. We sold, or committed to sell, $517.5 million of fixed-rate
loans and recorded related gains of $25.4 million during the six
months ended March 31, 2021, as we took advantage of the high
origination levels, low interest rates and attractive Fannie Mae
loan sale prices, while also managing our interest rate risk.
Net interest income was $58.4 million for the quarter ended
March 31, 2021 compared to $58.7 million for the quarter ended
December 31, 2020 and $65.0 million for the quarter ended March 31,
2020. Net interest income decreased by $12.0 million, or 9.29%, to
$117.2 million, for the six months ended March 31, 2021 from $129.2
million for the six months ended March 31, 2020. The interest rate
spread was 1.54% for the quarter ended March 31, 2021 compared to
1.51% for the quarter ended December 31, 2020 and 1.64% for the
quarter ended March 31, 2020. Funding costs were lowered through a
reduction in the average balance of borrowed funds, including the
early termination of above-market priced Federal Home Loan Bank
("FHLB") advances and their related swap contracts during the
quarter ended September 30, 2020; through the repricing of
certificates of deposit to market rates of interest, as they
mature; and through the migration from certificates of deposit to
lower-priced non-maturity deposit accounts. The interest rate
spread was 1.53% for the six months ended March 31, 2021 compared
to 1.63% for the six months ended March 31, 2020. The net interest
margin was 1.67% for both the quarter and six months ended March
31, 2021, respectively, compared to 1.81% for the quarter and six
months ended March 31, 2020, respectively.
A credit of $4.0 million was recorded to the allowance for
credit losses during the quarter ended March 31, 2021 compared to a
provision of $6.0 million for the quarter ended March 31, 2020 and
a credit of $6.0 million was recorded for the six months ended
March 31, 2021 compared to a provision of $3.0 million for the six
months ended March 31, 2020. Releases from the allowance for credit
losses during the current year reflected improvements in the
economic trends and forecasts used to estimate losses for the
reasonable and supportable period and decreases in pandemic
forbearance balances. On October 1, 2020, the Company adopted the
Current Expected Credit Loss ("CECL") methodology and recognized a
$46.2 million increase to the allowance for credit losses and a
related $35.8 million reduction to retained earnings, net of tax.
The Company recorded $1.4 million and $2.6 million of net loan
recoveries for the quarter and six months ended March 31, 2021,
respectively, compared to $1.1 million and $2.5 million of net loan
recoveries for the quarter and six months ended March 31, 2020,
respectively. Gross loan charge-offs were $1.4 million for the
quarter ended March 31, 2021 and $1.3 million for the quarter ended
March 31, 2020, while loan recoveries were $2.7 million in the
current quarter and $2.4 million in the prior year quarter. The
allowance for credit losses was $89.7 million, or 0.70% of total
loans receivable, at March 31, 2021, compared to $92.3 million, or
0.71% of total loans receivable, at December 31, 2020 and $46.9
million, or 0.36% of total loans receivable, at September 30, 2020.
The allowance for credits losses at both March 31, 2021 and
December 31, 2020 included a $22.0 million liability for unfunded
commitments, primarily undrawn equity line of credit
commitments.
Total loan delinquencies decreased $1.2 million to $27.0
million, or 0.21% of total loans receivable, at March 31, 2021 from
$28.2 million, or 0.21% of total loans receivable, at September 30,
2020. Delinquencies at March 31, 2021 included a $0.6 million
decrease in delinquencies on core residential mortgages, a $0.8
million decrease on home today residential mortgages and a $0.2
million increase on home equity loans and lines of credit when
compared to September 30, 2020. Non-accrual loans decreased $0.8
million to $52.6 million, or 0.41% of total loans, at March 31,
2021 from $53.4 million, or 0.41% of total loans, at September 30,
2020.
At March 31, 2021, there were $64.2 million, or 0.50% of total
loans receivable, in COVID-19 forbearance plans compared to $165.6
million, or 1.26% of total loans receivable, at September 30, 2020.
These forbearance plans allow borrowers experiencing temporary
financial hardships related to COVID-19 to defer a limited number
of payments to a later point in time and catch up missed payments
through a variety of repayment options. In accordance with
regulatory guidance and the Coronavirus Aid, Relief, and Economic
Security ("CARES") Act, the delinquency and accrual status of
accounts in COVID-19 forbearance plans are generally frozen as of a
specific date prior to entering a forbearance plan. The majority of
our forbearance plans were current at the measurement date with
interest income accruing throughout the term of their forbearance
and, therefore, are not included in reported delinquency or
non-accrual totals.
Total troubled debt restructurings decreased $6.6 million, to
$134.7 million at March 31, 2021, from $141.3 million at September
30, 2020. COVID-19 forbearance plans are not generally classified
as troubled debt restructurings.
Non-interest income increased $6.8 million to $15.7 million for
the quarter ended March 31, 2021 from $8.9 million for the quarter
ended March 31, 2020 and increased $16.3 million to $37.2 million
for the six months ended March 31, 2021 from $20.9 million for the
six months ended March 31, 2020. The changes included higher net
gain on the sale of loans, which increased $5.8 million, to $8.9
million for the quarter ended March 31, 2021, from $3.1 million
during the quarter ended March 31, 2020 and increased $19.3
million, to $25.4 million during the six months ended March 31,
2021, from $6.1 million during the six months ended March 31, 2020.
Additionally, the cash surrender value and death benefits from bank
owned life insurance increased $1.3 million, to $3.8 million during
the quarter ended March 31, 2021, from $2.5 million during the
quarter ended March 31, 2020 and increased $1.4 million, to $5.4
million from $4.0 million for the six months ended March 31, 2021
and March 31, 2020, respectively. A $4.3 million net gain on the
sale of commercial property recognized during the six months ended
March 31, 2020 created further variance when comparing the two
fiscal year-to-date periods.
Total non-interest expense decreased $0.8 million to $48.8
million for the quarter ended March 31, 2021 from $49.6 million for
the quarter ended March 31, 2020 and increased $3.6 million to
$100.5 million for the six months ended March 31, 2021 from $96.9
million for the six months ended March 31, 2020. The increase, when
comparing the fiscal year-to-date periods, included a $1.9 million
increase in salaries and employee benefits and a $2.6 million
increase in marketing expense, partially offset by a $0.7 million
decrease in federal insurance premiums. The majority of the
increase in salaries and benefits was the result of a one-time
$1,500 after-tax bonus paid to each associate during the first
quarter of the current fiscal year, in recognition of special
efforts made during the pandemic crisis. The increase in marketing
expense was more timing related, as some marketing efforts were
delayed during the previous fiscal year, in response to
COVID-19.
Total income tax expense increased $5.1 million to $6.3 million
for the quarter ended March 31, 2021 from $1.2 million for the
quarter ended March 31, 2020 and increased $4.5 million to $11.8
million for the six months ended March 31, 2021 from $7.3 million
for the six months ended March 31, 2020. The change was primarily
due to the impact of a CARES Act provision which permitted a carry
back of net tax operating losses to years taxed at higher rates and
resulted in a tax benefit of $2.8 million during the six months
ended March 31, 2020.
Total assets decreased by $177.4 million, or 1.21%, to $14.46
billion at March 31, 2021 from $14.64 billion at September 30,
2020. This change was mainly due to the combination of loan sales
and principal repayments on loans exceeding the total of new loan
originations, the impact of adopting CECL, and a decrease in
investment securities available for sale, partially offset by
increases in cash and cash equivalents, FHLB stock and bank owned
life insurance contracts.
The combination of cash and cash equivalents increased $167.4
million, or 33.61%, to $665.4 million at March 31, 2021 from $498.0
million at September 30, 2020. This increase is the result of cash
flows from maturing investment securities and loan sales in the
secondary market which are retained for reinvestment in investment
securities and/or loan products that fit within the Company's
growth and interest rate risk strategies.
Investment securities available for sale decreased $32.4
million, or 7.15% to $421.0 million at March 31, 2021 from $453.4
million at September 30, 2020. This decrease is a result of cash
flows from security repayments and maturities exceeding purchases
during the fiscal year. Pay downs on mortgage-backed securities
increased due to the historically low mortgage interest rates.
The combination of loans held for investment, net of allowance
and deferred loan expenses, and mortgage loans held for sale
decreased $394.9 million, or 3.01%, to $12.75 billion at March 31,
2021 from $13.14 billion at September 30, 2020, reflecting the
impact of increased loan sales during the year. The home equity
loans and lines of credit portfolio decreased $91.1 million and the
residential core mortgage loan portfolio, including loans held for
sale, decreased $279.3 million during the six months ended March
31, 2021. Commitments originated for home equity loans and lines of
credit were $823.7 million for the six months ended March 31, 2021
and $733.3 million for the six months ended March 31, 2020. Total
first mortgage loan originations were $2.06 billion for the six
months ended March 31, 2021, of which 33% were adjustable-rate
mortgages and 18% were fixed-rate mortgages with terms of 10 years
or less. Total first mortgage loan originations were $1.33 billion
for the six months ended March 31, 2020, of which 45% were
adjustable-rate mortgages and 9% were fixed-rate mortgages with
terms of 10 years or less. During the six months ended March 31,
2021, $517.5 million of fixed-rate loans were sold or committed for
sale compared to $323.2 million of fixed-rate loans sold during the
six months ended March 31, 2020.
The amount of Federal Home Loan Bank stock owned increased $26.0
million to $162.8 million at March 31, 2021 from $136.8 million at
September 30, 2020, as a result of stock ownership requirements of
the FHLB.
Total bank owned life insurance contracts increased $71.1
million, to $294.0 million at March 31, 2021, from $222.9 million
at December 31, 2020, primarily due to $70 million of additional
premiums placed during the quarter.
Prepaid expenses and other assets decreased $10.2 million to
$94.6 million at March 31, 2021 from $104.8 million at September
30, 2020. The decrease related primarily to a $6.3 million decrease
in margin requirements on matured and terminated swap contracts and
a $4.4 million decrease in current and deferred federal income tax
assets.
Deposits increased $12.9 million, or less than 1%, to $9.24
billion at March 31, 2021 from $9.23 billion at September 30, 2020.
The increase was the result of a $115.8 million increase in our
checking accounts, an $89.5 million increase in our savings
accounts and $43.2 million of growth in our money market deposit
accounts, partially offset by a $234.7 million decrease in our
certificates of deposit ("CDs") for the six months ended March 31,
2021. Total deposits included $572.4 million and $553.9 million of
brokered CDs at March 31, 2021 and September 30, 2020,
respectively.
Borrowed funds, all from the FHLB, decreased $228.0 million, or
6.47%, to $3.29 billion at March 31, 2021 from $3.52 billion at
September 30, 2020. Included in the decrease were $225.0 million of
90 day advances that were utilized for longer term interest rate
swap contracts and $2.8 million of long term advances that reached
maturity during the six-month period and were not replaced.
Borrowers' advances for insurance and taxes decreased by $17.4
million to $94.1 million at March 31, 2021 from $111.5 million at
September 30, 2020. This change primarily reflects the cyclical
nature of real estate tax payments that have been collected from
borrowers and will be remitted to various taxing agencies.
Accrued expenses and other liabilities increased by $23.4
million to $89.0 million at March 31, 2021 from $65.6 million at
September 30, 2020. The change was mainly due to a $22.0 million
increase in the liability for off-balance sheet exposures on
commitments to originate new loans and to fund undrawn equity lines
of credit and construction loan balances upon the October 1, 2020
adoption of CECL.
Total shareholders' equity increased $31.6 million, or 1.89%, to
$1.70 billion at March 31, 2021 from $1.67 billion at September 30,
2020. Activity reflects $48.0 million of net income and a $44.4
million decrease in accumulated other comprehensive loss, reduced
by a $35.8 million provision to the allowance for credit losses,
net of tax, with the adoption of CECL, $28.4 million of quarterly
dividends and $3.4 million of adjustments related to our stock
compensation and employee stock ownership plans. The decrease in
accumulated other comprehensive loss is primarily due to a net
positive change in unrealized gains and losses on swap contracts.
No shares of our common stock were repurchased during the six
months ended March 31, 2021.
The Company declared and paid a quarterly dividend of $0.28 per
share during each of the fourth fiscal quarter of 2020 and the
first and second fiscal quarters of 2021. 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 receipt of its share of each dividend paid. Under current
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 14, 2020 member
vote and the subsequent non-objection of the Federal Reserve, the
MHC has the approval to waive the receipt of up to $1.12 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 14, 2021), including a total of up to $0.28 during the
quarter ending June 30, 2021. The MHC has conducted the member vote
to approve the dividend waiver each of the past seven years under
Federal Reserve regulations and for each of those seven 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 March 31, 2021 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 10.65%, its Common Equity Tier 1 and Tier 1 ratios, as
calculated under the fully phased-in Basel III Rules, were each
19.75% and its total capital ratio was 20.33%. Additionally, the
Company's Tier 1 leverage ratio was 12.33%, its Common Equity Tier
1 and Tier 1 ratios were each 22.88% and its total capital ratio
was 23.45%. The current capital ratios of the Association reflect
the dilutive impact of $55.0 million of dividends that the
Association paid to the Company, its sole shareholder, during the
quarter ended December 31, 2020. Because of its intercompany
nature, these dividends had no impact on the Company's capital
ratios or its consolidated statement of condition.
Anna Maria Motta, the Chief Information Officer of the
Association, has announced that she will be retiring from
employment at the end of September 2021. Andrew Rubino, who has
been with the Association since 2000 and has served in various
leadership positions, including Information Security Officer, and
as a manager in the loan production, customer service, internet
services, operations support and marketing groups, and has served
as the Chief Marketing Officer since 2020, will become the new
Chief Information Officer at that time. “Anna has been an integral
part of our organization for 32 years, serving in almost every
aspect of the organization and leading our technology initiatives
while in her role as the Chief Information Officer since 2014,”
said Chairman and CEO Marc A. Stefanski. “On behalf of our Board,
our management team and our associates, I thank her and wish her
the best in her retirement. We welcome Andy into his new
responsibilities, and have confidence that his background and his
extensive experience in many areas of the Company have prepared him
for his new role.”
Presentation slides as of March 31, 2021 will be available on
the Company's website, www.thirdfederal.com, under the Investor
Relations link within the "Recent Presentations" menu, beginning
April 30, 2021. These slides provide additional information with
respect to the Company's response to COVID-19. 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, seven lending
offices in Central and Southern Ohio, and 16 full service branches
throughout Florida. As of March 31, 2021, the Company’s assets
totaled $14.46 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 asset
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;
- inflation and changes in the interest rate environment that
reduce our interest margins or reduce the fair value of financial
instruments;
- 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;
- civic 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, 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)
March 31, 2021
September 30,
2020
ASSETS
Cash and due from banks
$
23,424
25,270
Other interest-earning cash
equivalents
641,976
472,763
Cash and cash equivalents
665,400
498,033
Investment securities available for sale
(amortized cost $417,365 and $447,384, respectively)
421,021
453,438
Mortgage loans held for sale ($24,508 and
$36,078 measured at fair value, respectively)
63,441
36,871
Loans held for investment, net:
Mortgage loans
12,702,473
13,104,959
Other loans
2,482
2,581
Deferred loan expenses, net
44,422
42,459
Allowance for credit losses on loans
(67,749)
(46,937)
Loans, net
12,681,628
13,103,062
Mortgage loan servicing rights, net
8,974
7,860
Federal Home Loan Bank stock, at cost
162,783
136,793
Real estate owned, net
—
185
Premises, equipment, and software, net
39,845
41,594
Accrued interest receivable
33,055
36,634
Bank owned life insurance contracts
294,022
222,919
Other assets
94,615
104,832
TOTAL ASSETS
$
14,464,784
$
14,642,221
LIABILITIES AND SHAREHOLDERS’
EQUITY
Deposits
9,238,411
9,225,554
Borrowed funds
3,293,717
3,521,745
Borrowers’ advances for insurance and
taxes
94,108
111,536
Principal, interest, and related escrow
owed on loans serviced
46,100
45,895
Accrued expenses and other liabilities
88,977
65,638
Total liabilities
12,761,313
12,970,368
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; 280,616,132 and
280,150,006 outstanding at March 31, 2021 and September 30, 2020,
respectively
3,323
3,323
Paid-in capital
1,742,681
1,742,714
Treasury stock, at cost; 51,702,618 and
52,168,744 shares at March 31, 2021 and September 30, 2020,
respectively
(766,407)
(767,649)
Unallocated ESOP shares
(37,917)
(40,084)
Retained earnings—substantially
restricted
849,394
865,514
Accumulated other comprehensive loss
(87,603)
(131,965)
Total shareholders’ equity
1,703,471
1,671,853
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
14,464,784
$
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 Six Months
Ended
March 31,
March 31,
2021
2020
2021
2020
INTEREST AND DIVIDEND INCOME:
Loans, including fees
$
96,175
$
115,203
$
196,301
$
230,428
Investment securities available for
sale
966
2,911
1,953
5,775
Other interest and dividend earning
assets
814
1,412
1,630
3,375
Total interest and dividend income
97,955
119,526
199,884
239,578
INTEREST EXPENSE:
Deposits
24,545
37,483
52,241
75,799
Borrowed funds
14,999
17,005
30,489
34,556
Total interest expense
39,544
54,488
82,730
110,355
NET INTEREST INCOME
58,411
65,038
117,154
129,223
PROVISION (RELEASE) FOR CREDIT LOSSES
(4,000)
6,000
(6,000)
3,000
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES
62,411
59,038
123,154
126,223
NON-INTEREST INCOME:
Fees and service charges, net of
amortization
2,460
2,119
4,955
4,265
Net gain on the sale of loans
8,911
3,138
25,354
6,063
Increase in and death benefits from bank
owned life insurance contracts
3,807
2,461
5,454
4,022
Other
530
1,229
1,406
6,527
Total non-interest income
15,708
8,947
37,169
20,877
NON-INTEREST EXPENSE:
Salaries and employee benefits
26,672
27,216
55,010
53,101
Marketing services
5,325
4,029
11,058
8,490
Office property, equipment and
software
6,395
6,534
12,830
12,980
Federal insurance premium and
assessments
2,323
2,768
4,713
5,387
State franchise tax
1,159
1,191
2,310
2,323
Other expenses
6,936
7,820
14,618
14,597
Total non-interest expense
48,810
49,558
100,539
96,878
INCOME BEFORE INCOME TAXES
29,309
18,427
59,784
50,222
INCOME TAX EXPENSE
6,300
1,170
11,773
7,323
NET INCOME
$
23,009
$
17,257
$
48,011
$
42,899
Earnings per share—basic and diluted
$
0.08
$
0.06
$
0.17
$
0.15
Weighted average shares outstanding
Basic
276,716,978
275,835,243
276,464,037
275,706,011
Diluted
278,593,303
278,101,329
278,291,638
277,990,253
TFS FINANCIAL CORPORATION AND
SUBSIDIARIES
AVERAGE BALANCES AND YIELDS
(unaudited)
Three Months Ended
Three Months Ended
March 31, 2021
March 31, 2020
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
$
494,161
$
127
0.10
%
$
255,711
$
771
1.21
%
Mortgage-backed securities
435,847
966
0.89
%
549,254
2,911
2.12
%
Loans (2)
12,892,195
96,175
2.98
%
13,489,277
115,203
3.42
%
Federal Home Loan Bank stock
158,930
687
1.73
%
104,944
641
2.44
%
Total interest-earning assets
13,981,133
97,955
2.80
%
14,399,186
119,526
3.32
%
Noninterest-earning assets
548,229
508,440
Total assets
$
14,529,362
$
14,907,626
Interest-bearing liabilities:
Checking accounts
$
1,062,894
296
0.11
%
$
874,424
370
0.17
%
Savings accounts
1,724,978
760
0.18
%
1,506,254
2,540
0.67
%
Certificates of deposit
6,394,643
23,489
1.47
%
6,672,273
34,573
2.07
%
Borrowed funds
3,352,317
14,999
1.79
%
3,887,648
17,005
1.75
%
Total interest-bearing liabilities
12,534,832
39,544
1.26
%
12,940,599
54,488
1.68
%
Noninterest-bearing liabilities
306,556
232,089
Total liabilities
12,841,388
13,172,688
Shareholders’ equity
1,687,974
1,734,938
Total liabilities and shareholders’
equity
$
14,529,362
$
14,907,626
Net interest income
$
58,411
$
65,038
Interest rate spread (1)(3)
1.54
%
1.64
%
Net interest-earning assets (4)
$
1,446,301
$
1,458,587
Net interest margin (1)(5)
1.67
%
1.81
%
Average interest-earning assets to average
interest-bearing liabilities
111.54
%
111.27
%
Selected performance ratios:
Return on average assets (1)
0.63
%
0.46
%
Return on average equity (1)
5.45
%
3.98
%
Average equity to average assets
11.62
%
11.64
%
(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)
Six Months Ended
Six Months Ended
March 31, 2021
March 31, 2020
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
$
485,375
$
255
0.11
%
$
242,849
$
1,720
1.42
%
Mortgage-backed securities
441,696
1,953
0.88
%
547,491
5,775
2.11
%
Loans (2)
12,991,561
196,301
3.02
%
13,365,570
230,428
3.45
%
Federal Home Loan Bank stock
147,861
1,375
1.86
%
103,401
1,655
3.20
%
Total interest-earning assets
14,066,493
199,884
2.84
%
14,259,311
239,578
3.36
%
Noninterest-earning assets
536,771
498,820
Total assets
$
14,603,264
$
14,758,131
Interest-bearing liabilities:
Checking accounts
$
1,040,353
617
0.12
%
$
871,198
853
0.20
%
Savings accounts
1,693,536
1,674
0.20
%
1,498,164
5,564
0.74
%
Certificates of deposit
6,444,083
49,950
1.55
%
6,589,024
69,382
2.11
%
Borrowed funds
3,411,955
30,489
1.79
%
3,816,909
34,556
1.81
%
Total interest-bearing liabilities
12,589,927
82,730
1.31
%
12,775,295
110,355
1.73
%
Noninterest-bearing liabilities
341,727
252,546
Total liabilities
12,931,654
13,027,841
Shareholders’ equity
1,671,610
1,730,290
Total liabilities and shareholders’
equity
$
14,603,264
$
14,758,131
Net interest income
$
117,154
$
129,223
Interest rate spread (3)
1.53
%
1.63
%
Net interest-earning assets (4)
$
1,476,566
$
1,484,016
Net interest margin (5)
1.67
%
1.81
%
Average interest-earning assets to average
interest-bearing liabilities
111.73
%
111.62
%
Selected performance ratios:
Return on average assets
0.66
%
0.58
%
Return on average equity
5.74
%
4.96
%
Average equity to average assets
11.45
%
11.72
%
(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.
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version on businesswire.com: https://www.businesswire.com/news/home/20210429006108/en/
TFS Financial Corporation Jennifer Rosa (216) 429-5037
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