TFS Financial (US:TFSL)2023-11-21 21:48Loan Portfolio - As of September 30, 2023, the total loan portfolio amounted to $15.21 billion, an increase from $14.35 billion in 2022, representing a growth of approximately 6%[38] - Fixed-rate and adjustable-rate first mortgage residential real estate loans totaled $12.12 billion, accounting for 79.7% of the loan portfolio[35] - Home equity loans and lines of credit reached $3.03 billion, making up 19.9% of the loan portfolio, up from 18.4% in the previous year[38] - The company originated residential construction loans totaling $48.4 million, which is 0.4% of the loan portfolio, down from 0.8% in 2022[38] - Adjustable-rate residential real estate first mortgage loans totaled $4.76 billion, comprising 31.3% of the loan portfolio[35] - The residential core loan portfolio in Ohio increased to $6.89 billion, up from $6.43 billion in 2022, reflecting a growth of approximately 7%[38] - Home equity loans in Ohio rose to $773.3 million, compared to $706.6 million in the previous year, indicating an increase of about 9%[38] - Total net real estate loans amounted to $15.24 billion as of September 30, 2023, compared to $15.21 billion in 2022, reflecting a slight increase[44] - The company reported $12.1 billion in total residential core loans, with a significant portion being in the <80% LTV category, totaling $6.75 billion[44] - Home equity loans and lines of credit totaled $3.07 billion, with $2.66 billion in loans under the <80% LTV category[44] Credit Losses and Delinquency - The total allowance for credit losses on loans was $77.3 million, slightly up from $72.9 million in 2022[38] - The company has $46.5 million in loans outstanding from the Home Today program, with a delinquency rate of 4.0% for loans 30 days or more past due[53] - Total loans seriously delinquent (90 days or more) were 0.09% of total net loans as of September 30, 2023, unchanged from the previous year[76] - The percentage of seriously delinquent loans in the residential Core portfolio decreased from 0.06% to 0.05%[76] - Home equity loans and lines of credit portfolio delinquency increased from 0.02% to 0.03%[76] - The company continues to restructure loans to assist borrowers, with $99.5 million in TDRs recorded as of September 30, 2023[87] - The allowance for credit losses at the end of the year was $104.83 million, reflecting an increase from $99.92 million in 2022[103] - The allowance for credit losses to non-accrual loans was 242.26% at the end of the year, up from 204.73% in 2022[103] - The total allowance for credit losses on loans increased from $72.90 million in 2022 to $77.32 million in 2023[103] Deposits and Borrowings - Total deposits as of September 30, 2023, amounted to $9.45 billion, with checking accounts totaling $983.4 million and savings accounts totaling $1.81 billion[125] - The Association's total certificates of deposit (CDs) reached $6.65 billion, including $1.16 billion in brokered CDs, with $3.42 billion having remaining maturities of one year or less[126] - As of September 30, 2023, the Association had total borrowings of $5.27 billion, with $5.25 billion from the FHLB of Cincinnati and $22.8 million of accrued interest[130] - The maximum borrowing capacity with the FHLB of Cincinnati is $6.63 billion, and the Association can also purchase overnight Fed Funds up to $585.0 million[130] - The average interest rate for borrowings (30 days and under) increased to 4.16% in 2023 from 1.59% in 2022[133] Capital and Regulatory Compliance - The company maintains a strong capital level, having received the highest rating from an independent rating organization for over 100 consecutive quarters[34] - The Association exceeded all regulatory capital requirements to be considered "Well Capitalized" as of September 30, 2023[150] - The Association's total capital to risk-weighted assets ratio is 17.87%, significantly exceeding the required 10% for being considered "Well Capitalized"[169] - The Tier 1 (Leverage) capital to net average assets ratio stands at 9.82%, well above the required 5%[169] - The company is in compliance with the holding company consolidated capital requirements and the capital conservation buffer as of September 30, 2023[184] Employee and Workplace Culture - As of September 30, 2023, the company employed 995 associates, a decrease from 1,025 associates in the previous year, with approximately 74% being women[191] - The voluntary turnover rate for the twelve months ending September 30, 2023, was 4.4%, one of the lowest in the industry[194] - The company emphasizes a workplace culture grounded in core values, including love, trust, respect, and a commitment to excellence[191] - The company supports the growth and development of associates through various training programs and educational reimbursement[192] Market and Economic Conditions - Economic downturns could lead to increased non-performing loans and reduced demand for the company's products and services, adversely affecting operations[211] - Changes in interest rates could negatively impact the company's net interest income and profitability, particularly if mortgage interest rates decline[205] - The monetary policies and regulations of the FRS significantly impact the operating results of financial institutions, with unpredictable effects on business and financial conditions[219] - Strong competition in the banking and financial services industry may limit growth and profitability, with larger competitors having greater resources and market presence[225] Cybersecurity and Technology - Cybersecurity risks have increased due to new technologies and sophisticated cyber-attacks, potentially affecting operations and reputation[229] - The company employs various safeguards to protect confidential information, but risks of mishandling or breaches remain, necessitating ongoing investment in information security measures[231] - The company believes it has not experienced any material breaches, indicating a focus on maintaining information security[232]