Extraordinary Associate Effort Drives Business, Supports Customers at TFS Financial Corporation

first_img 111.92 867,971 Facebook By Digital AIM Web Support – January 28, 2021 67,185 3,024 Net interest income 40,770 INCOME BEFORE INCOME TAXES September 30,2020 $ 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: 13,241,863 LIABILITIES AND SHAREHOLDERS’ EQUITY 0.09 64,185 (In thousands, except share data) (3) For the Three Months Ended 447,544 1,506,831 Accrued expenses and other liabilities Loans held for investment, net: 25,270 64,185 1,657,832 472,763 100,126 Net gain on the sale of loans % Investment securities available for sale (amortized cost $443,328 and $447,384, respectively) Retained earnings—substantially restricted 14,608,636 Other interest and dividend earning assets (2) Total non-interest expense $ % Other assets $ 453,438 $ Noninterest-bearing liabilities 42,138 $ Allowance for credit losses on loans (4) 276,216,596 (46,937) Loans, net Selected performance ratios: 102 447,609 17,551 7,860 Real estate owned, net 13,090,927 % 1,017,811 0.81 42,459 (40,084) 12,915,001 26,461 NON-INTEREST EXPENSE: 3,323 36,634 Total assets 376,897 136,793 12,925,023 6,777 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES % 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: 14,572,833 % 1.78 Extraordinary Associate Effort Drives Business, Supports Customers at TFS Financial Corporation $ NET INCOME 9,225,554 987 % 6,435 Borrowed funds 101,858 2.01 % 9,190,600 1,132 Total interest expense 489,200 Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. 51,729 AverageBalance Return on average assets Commitments and contingent liabilities Local NewsBusiness — — 12,899,508 222,919 5.94 $ Average equity to average assets $ Twitter 483 % 2,390 Net interest margin represents net interest income divided by total interest-earning assets. Three Months Ended 1,739,178 Noninterest-earning assets 65,638 Three Months Ended (121,573) 2.88 Borrowed funds Loans (2) 476,589 Increase in and death benefits from bank owned life insurance contracts INTEREST AND DIVIDEND INCOME: 2.10 $ % % (39,000) 6,493,523 34,840 December 31, $ CONSOLIDATED STATEMENTS OF INCOME (unaudited) 2,925 % 1,742,714 15,490 Twitter 1,647 Investment securities available for sale 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; andthe impact of wide-spread pandemic, including COVID-19, on our business and the economy. % Total shareholders’ equity 2,581 (767,649) % 1.65 INCOME TAX EXPENSE INTEREST EXPENSE: TOTAL ASSETS 1.87 136,793 December 31,2020 55,867 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; andestimates of our risks and future costs and benefits. 41,594 47,320 55,867 8,230 58,743 Certificates of deposit 120,052 % Mortgage loans 949 Forward Looking Statements 45,895 NON-INTEREST INCOME: WhatsApp InterestIncome/Expense 2,146 1,655,246 16,443 Weighted average shares outstanding (3,000) 2,619 3.06 Other $ 2020 1.37 $ 11.81 $ 321 14,677,165 2,637 CONSOLIDATED STATEMENTS OF CONDITION (unaudited) 5,733 120,052 Office property, equipment and software 101,929 6,446 TFS FINANCIAL CORPORATION AND SUBSIDIARIES 6,153 Unallocated ESOP shares State franchise tax 1,151 43,186 Other expenses 14,642,221 99,208 470,408 Mortgage loan servicing rights, net Treasury stock, at cost; 51,753,830 and 52,168,744 shares at December 31, 2020 and September 30, 2020, respectively % 12,645,022 % 3,323 5,473center_img % Annualized. $ 1.63 17,551 25,642 Earnings per share—basic and diluted 498,033 688 Total non-interest income 43,186 185 12,609,991 Borrowed funds TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 50,866 278,028,072 $ 104,832 AVERAGE BALANCES AND YIELDS (unaudited) Return on average equity Average interest-earning assets to average interest-bearing liabilities December 31, 2020 499,920 13,021,919 InterestIncome/Expense Paid-in capital AverageBalance Basic 128 ASSETS 3.48 Interest-earning cash equivalents % 1,671,853 229,986 13,103,062 0.11 7,682 0.70 Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. 2019 $ (In thousands, except share and per share data) CLEVELAND–(BUSINESS WIRE)–Jan 28, 2021– 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 ended December 31, 2020. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210128006073/en/ Chairman and CEO Marc A. Stefanski (Photo: Business Wire) The Company reported net income of $25.0 million for the quarter ended December 31, 2020, compared to net income of $25.6 million for the quarter ended December 31, 2019. The change included a decrease in net interest income, an increase in other operating expenses and an increase in non-interest income, bolstered by increased net gains on the sale of loans. “At Third Federal, our associates continue to do extraordinary things for our customers during these unprecedented times,” said Chairman and CEO, Marc A. Stefanski. “Our strong loan originations this quarter, and a continued decrease in forbearances, are a testament to our associates’ effort. Their support of our customers and our company are the reason we have been strong, stable and safe since our founding in 1938.” Loan originations, mainly refinances, continued at an active pace. We sold, or committed to sell, $293.5 million of fixed-rate loans and recorded related gains of $16.4 million during the quarter ended December 31, 2020, as we took advantage of high origination levels, low interest rates and attractive Fannie Mae loan sale prices, while also managing our interest rate risk. Net interest income decreased $5.5 million, to $58.7 million for the quarter ended December 31, 2020 from $64.2 million for the quarter ended December 31, 2019. This decrease was primarily due to a 52 basis point reduction in the yield on interest-earning assets, primarily loans, to 2.88% during the quarter ended December 31, 2020 from 3.40% during the quarter ended December 31, 2019, as many borrowers are refinancing to take advantage of the current low interest rate environment. The yield on interest-earning assets was 2.95% for the quarter ended September 30, 2020. The decrease in yield was partially offset by a reduction in the cost of interest-bearing liabilities, which decreased 40 basis points to 1.37% for the quarter ended December 31, 2020 from 1.77% during the quarter ended December 31, 2019. Funding costs were lowered through a reduction in the average balance of borrowed funds, including the early termination of above-market priced FHLB borrowings and their related swap contracts during the quarter ended September 30, 2020, and through the repricing of certificates of deposit, to market rates of interest, as they mature. The interest rate spread for the quarter ended December 31, 2020 was 1.51% compared to 1.63% for the prior year quarter. The net interest margin for the quarter ended December 31, 2020 was 1.66% compared to 1.82% during the quarter ended December 31, 2019. The provision for loan losses was a credit of $2.0 million for the quarter ended December 31, 2020 compared to a credit of $3.0 million for the quarter ended December 31, 2019. 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 $1.3 million of net loan recoveries for the quarter ended December 31, 2020 compared to $1.4 million of net loan recoveries for the quarter ended December 31, 2019. Gross loan charge-offs were $0.9 million for the quarter ended December 31, 2020 and $1.6 million for the quarter ended December 31, 2019, while loan recoveries were $2.1 million in the current quarter and $3.0 million in the prior year quarter. The allowance for credit losses was $92.3 million, or 0.71% of total loans receivable, at December 31, 2020, including a $22.0 million liability for unfunded commitments. The allowance for loan losses was $46.9 million, or 0.36% of total loans receivable, at September 30, 2020 and $37.3 million, or 0.28% of total loans receivable, at December 31, 2019. Total loan delinquencies remained unchanged at $28.2 million, representing 0.22% of total loans receivable at December 31, 2020 and 0.21% of total loans receivable at September 30, 2020. Non-accrual loans decreased $2.6 million to $50.6 million, or 0.39% of total loans receivable, at December 31, 2020 compared with $53.4 million, or 0.41% of total loans receivable, at September 30, 2020. At December 31, 2020, there were $94.1 million of loans, or 0.73% 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 dates 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 $4.9 million to $136.4 million at December 31, 2020 from $141.3 million at September 30, 2020. COVID-19 forbearance plans are not generally classified as troubled debt restructurings. Total non-interest income increased by $9.6 million, to $21.5 million for the quarter ended December 31, 2020, from $11.9 million for the quarter ended December 31, 2019. The change included higher net gains on the sale of loans, which increased $13.5 million compared to the prior year period, offset by $4.3 million of net gain that was recognized during the quarter ended December 31, 2019 on the sale of commercial property. During the quarter ended December 31, 2020, $293.5 million of loans were sold or committed for sale at a $16.4 million net gain compared to $208.5 million of loans sold at a $2.9 million net gain during the quarter ended December 31, 2019. Total non-interest expenses increased $4.4 million, to $51.7 million for the quarter ended December 31, 2020, from $47.3 million for the quarter ended December 31, 2019. The increase consisted mainly of a combination of a $2.4 million increase in salaries and employee benefits and a $1.2 million increase in marketing services, related to the timing of when expenses are incurred. The majority of the increase in salaries and benefits was a result of a one-time after-tax bonus of $1,500 to all associates in recognition of their special efforts during this unusual year. Total assets decreased by $69.4 million, or less than 1%, to $14.57 billion at December 31, 2020 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 and the impact of adopting CECL, offset by an increase in bank owned life insurance contracts. The combination of loans held for investment, net and mortgage loans held for sale decreased $129.1 million, or 1.0%, to $13.01 billion at December 31, 2020 from $13.14 billion at September 30, 2020, mainly as a result of the increased loan sales mentioned above. Residential core mortgage loans, including those held for sale, decreased $42.3 million and the home equity loans and lines of credit portfolio decreased $61.6 million during the quarter. Total first mortgage loan originations were $1.12 billion for the quarter ended December 31, 2020 and $750.6 million for the quarter ended December 31, 2019. The current period mortgage loan originations included 77% refinance transactions, 33% adjustable rate mortgages and 18% fixed-rate mortgages with terms of 10 years or less. Commitments originated for home equity loans and lines of credit were $306.1 million for the quarter ended December 31, 2020 and $349.5 million for the quarter ended December 31, 2019. Total bank owned life insurance contracts increased $71.6 million, to $294.6 million at December 31, 2020, from $222.9 million at September 30, 2020, primarily due to $70 million of additional premiums placed during the quarter. Other assets decreased $5.6 million, or 5.3%, to $99.2 million at December 31, 2020 from $104.8 million at September 30, 2020. This decrease was primarily due to a $4.3 million reduction in margin requirements and receivables on swap contracts and a $1.2 million decrease in prepaid franchise tax. Deposits decreased by $35.0 million, or less than 1%, to $9.19 billion at December 31, 2020 from $9.23 billion at September 30, 2020. The decrease in deposits was the result of a $173.9 million decrease in certificates of deposit (“CDs”), offset by a $64.2 million increase in checking accounts, a $35.3 million increase in money market accounts and a $39.8 million increase in savings accounts during the quarter ended December 31, 2020. Total deposits include $530.4 million and $553.9 million of brokered CDs at December 31, 2020 and September 30, 2020, respectively. Borrowed funds, all from the FHLB, decreased $76.7 million, to $3.44 billion at December 31, 2020 from $3.52 billion at September 30, 2020. This decrease consisted of a $75.0 million decrease in 90 day advances, which were in place to support interest rate swap contracts that matured during the quarter, and a $1.7 million decrease in long term borrowings. Borrowers’ advances for insurance and taxes increased by $30.7 million to $142.2 million at December 31, 2020 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 are in the process of being remitted to various taxing agencies. Accrued expenses and other liabilities increased by $20.7 million to $86.3 million at December 31, 2020 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 undrawn equity lines of credit and construction loan balances upon the October 1, 2020 adoption of CECL, partially offset by a $1.4 million decrease in payables outstanding. Total shareholders’ equity decreased $14.0 million, or 0.8%, to $1.66 billion at December 31, 2020 from $1.67 billion at September 30, 2020. Activity reflects $25.0 million of net income in the current reduced by a $35.8 million provision to the allowance for credit losses, net of tax, upon the October 1, 2020 adoption of CECL, and a quarterly dividend of $14.1 million. Other changes include $10.4 million of unrealized net gain recognized in accumulated other comprehensive income, primarily related to changes in market values and maturities of swap contracts, and a $0.4 million net positive impact related to activity in the Company’s stock compensation and employee stock ownership plans. No shares of the Company’s common stock were repurchased during the quarter ended December 31, 2020. The Company declared and paid a quarterly dividend of $0.28 per share during the quarter ended December 31, 2020. 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 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 a total of $1.12 per share of possible dividends to be declared on the Company’s common stock, including up to $0.56 in dividends during the six months 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 December 31, 2020 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 10.37%, its Common Equity Tier 1 and Tier 1 ratios, as calculated under the fully phased-in Basel III Rules, were each 19.03% and its total capital ratio was 19.62%. Additionally, the Company’s Tier 1 leverage ratio was 12.15%, its Common Equity Tier 1 and Tier 1 ratios were each 22.28% and its total capital ratio was 22.86%. The Association’s current capital ratios reflect the dilutive impact of $55 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. Presentation slides as of December 31, 2020 will be available on the Company’s website, www.thirdfederal.com, under the Investor Relations link within the “Recent Presentations” menu, beginning January 29, 2021. 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 80 th 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 December 31, 2020, the Company’s assets totaled $14.57 billion. December 31, 2019 115,225 14,608,636 Savings accounts 1,725,643 Other interest-earning cash equivalents 2,864 525,312 1,014 $ Cash and cash equivalents 0.13 Net interest-earning assets (4) 60,743 Total interest-earning assets 30,475 Total interest-bearing liabilities (5) Federal Home Loan Bank stock 545,729 14,119,436 31,795 2,864 142,248 Accumulated other comprehensive loss 14,151,853 111,536 (1) 3.98 101,929 $ 1,561 Federal Home Loan Bank stock, at cost 3,521,745 % Borrowers’ advances for insurance and taxes 115,225 (131,965) 29,512 % Loans, including fees Interest-earning assets: 5,298 294,565 34,809 Facebook Interest rate spread (3) $ $ (764,774) 1.63 $ Mortgage-backed securities Yield/Cost (1) NET INTEREST INCOME 3,444,998 $ 1,662,095 914 6,505,776 Diluted $ 1.66 86,289 % Other loans % 14,642,221 Net interest margin (5) Checking accounts 1,490,074 1,963 2.14 25,002 (70,290) 3,471,593 38,316 Deferred loan expenses, net 21,461 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. Premises, equipment, and software, net 111,288 % 3,746,170 Common stock, $0.01 par value, 700,000,000 shares authorized; 332,318,750 shares issued; 280,564,920 and 280,150,006 outstanding at December 31, 2020 and September 30, 2020, respectively % 865,514 Mortgage loans held for sale ($107,978 and $36,078 measured at fair value, respectively) 275,578,184 987 1.77 876 0.22 36,871 273,002 Total liabilities 28,338 12,882,993 Loans include both mortgage loans held for sale and loans held for investment. % 12,970,368 Marketing services Principal, interest, and related escrow owed on loans serviced 14,677,165 TFS FINANCIAL CORPORATION AND SUBSIDIARIES $ 0.22 Deposits 58,743 11,930 Yield/Cost (1) 100,126 1.51 % 277,888,588 14,572,833 2,495 816 Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding Federal insurance premium and assessments 1,509,445 TFS FINANCIAL CORPORATION AND SUBSIDIARIES Bank owned life insurance contracts % 1.82 % 25,885 Cash and due from banks Fees and service charges, net of amortization Deposits 27,696 3.40 Total interest and dividend income 0.68 Total liabilities Interest-bearing liabilities: % 6.04 % 0.88 % (2,000) % Accrued interest receivable 0.09 Salaries and employee benefits 4,461 13,104,959 136,793 (Dollars in thousands) WhatsApp Total liabilities and shareholders’ equity 11.28 111.97 840,678 PROVISION FOR CREDIT LOSSES Pinterest View source version on businesswire.com:https://www.businesswire.com/news/home/20210128006073/en/ CONTACT: TFS Financial Corporation Jennifer Rosa (216) 429-5037 KEYWORD: OHIO UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE SOURCE: Third Federal Savings and Loan Copyright Business Wire 2021. PUB: 01/28/2021 04:13 PM/DISC: 01/28/2021 04:13 PM http://www.businesswire.com/news/home/20210128006073/en TAGS  $ 15,490 Pinterest Shareholders’ equity Previous articleTexas takes on Biden but Republicans keep distance from AGNext articleXL Fleet Corp. Announces Redemption of Public Warrants Digital AIM Web Supportlast_img read more