TFS Financial (TFSL) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $19.95 million, up 14% year-over-year, and $61.4 million for the nine months, up 10% year-over-year.

• Total assets increased to $17.03 billion at June 30, 2024, up 1% since September 30, 2023.

• Deposits grew 6.1% to $10.03 billion, driven by strong CD offerings.

• Borrowings decreased 8.4% to $4.83 billion, down $444.3 million year-to-date.

• Shareholders' equity declined to $1.92 billion, reflecting net income, dividends, and changes in other comprehensive income.

Financial highlights

• Net interest income for Q3 2024 was $69.3 million, down 3% sequentially; year-to-date $209.7 million, down 1.6% year-over-year.

• Interest and dividend income rose 18% for the quarter and 23% for nine months, driven by higher loan yields and balances.

• Interest expense increased 32% for the quarter and 46% for nine months, mainly due to higher CD and borrowing costs.

• Non-interest expense fell 4% for the quarter and 5% for nine months, mainly from lower marketing and salary costs.

• Non-interest income increased 7% for the quarter and 12% for nine months, aided by higher loan sale gains and BOLI income.

Outlook and guidance

• Management expects continued focus on controlling interest rate risk, credit risk, liquidity, and operating expenses.

• Capital ratios remain strong, with CET1 at 18.82% and total capital ratio at 19.55%.

• The company plans to maintain dividend payments and stock repurchases, subject to regulatory approvals.

• Management remains optimistic despite higher interest rates and economic uncertainty.