TFS Financial (TFSL) - 2025 Q2 - Quarterly Results

Financial Performance - The company reported net income of $21.0 million for Q2 2025, a decrease from $22.4 million in Q1 2025, primarily due to increased provision for credit losses and non-interest expenses [2]. - Net income for the six months ended March 31, 2025, was $43,447,000, representing an increase of 4.9% compared to $41,420,000 in the same period of 2024 [30]. - The net income for the first quarter of 2025 was $21.02 million, a decrease from $22.43 million in the previous quarter, representing a decline of 6.3% [29]. - The earnings per share for the first quarter of 2025 were $0.07, consistent with the previous quarter [29]. - Basic and diluted earnings per share remained stable at $0.15 for both the six months ended March 31, 2025, and 2024 [30]. Income and Expenses - Total non-interest expense increased by $3.2 million, or 6.7%, to $51.1 million for Q2 2025, with notable increases in salaries, marketing services, and office expenses [5]. - Total non-interest income increased by $1.6 million, or 13.3%, to $13.6 million for the six months ended March 31, 2025, primarily due to a rise in net gain on the sale of loans [14]. - Non-interest income for the first quarter of 2025 was $7.07 million, an increase from $6.50 million in the previous quarter, showing an 8.7% growth [29]. - Total non-interest expense decreased to $99,029,000 for the six months ended March 31, 2025, down 3.0% from $102,475,000 in 2024 [30]. Assets and Liabilities - Total assets increased by $54.1 million to $17.11 billion at March 31, 2025, mainly due to increases in investment securities and loans held for investment [6]. - The company's total liabilities stood at $15.22 billion as of March 31, 2025, up from $15.14 billion at the end of 2024, reflecting a 0.5% increase [28]. - Total deposits increased to $10.40 billion as of March 31, 2025, up from $10.21 billion at the end of 2024, indicating a growth of 1.8% [28]. - Borrowed funds decreased by $69.0 million to $4.59 billion at March 31, 2025, as maturing borrowings were replaced with retail deposits [9]. Credit Losses - The provision for credit losses was $1.5 million for Q2 2025, compared to a $1.5 million release in Q1 2025, with total allowance for credit losses rising to $99.9 million, or 0.65% of total loans [4]. - The provision for credit losses was $1.50 million for the first quarter of 2025, compared to a release of $1.50 million in the previous quarter [29]. - The allowance for credit losses on loans remained stable at $70.55 million as of March 31, 2025, compared to $70.56 million at the end of 2024 [28]. Capital Ratios - The Tier 1 leverage ratio improved to 10.92% at March 31, 2025, exceeding the threshold for being considered well-capitalized [22]. - Return on average assets for the three months ended March 31, 2025, was 0.49%, slightly down from 0.53% in the previous quarter [31]. - Return on average equity for the three months ended March 31, 2025, was 4.35%, compared to 4.68% in the previous quarter [31]. - Average equity to average assets ratio was 11.30% for the six months ended March 31, 2025 [33]. Interest Income and Margin - Net interest income increased by $3.7 million, or 5.4%, to $72.0 million for Q2 2025, driven by a decrease in the weighted average cost of interest-bearing liabilities [3]. - The net interest income for the three months ended March 31, 2025, was $72.05 million, compared to $68.33 million in the previous quarter, reflecting a 3.5% increase [29]. - Total interest and dividend income for the six months ended March 31, 2025, was $372,720,000, an increase of 3.0% from $360,652,000 in the same period of 2024 [30]. - Net interest margin remained stable at 1.70% for both periods ended March 31, 2025, and March 31, 2024 [33].