TFS Financial Reports Third Quarter and 2025 Fiscal Year-To-Date Results

CLEVELAND--(BUSINESS WIRE)--Jul 30, 2025--

TFS Financial Corporation (NASDAQ: TFSL) (the "Company", "we", "our"), the holding company for Third Federal Savings and Loan Association of Cleveland (the "Association"), today announced results for the quarter and nine months ended June 30, 2025.

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“This quarter’s performance further reinforces my optimism for this year,” said Chairman and CEO Marc A. Stefanski. “Equity lines of credit originations have grown 17% from 2024, and our net interest margin improved six basis points this quarter to 1.81%, a nine quarter high. Our purchase mortgage activity is strong as we navigate a weaker-than-typical home buying season. Originations and acquired mortgage loans have totaled almost $700 million year-to-date. Our Tier 1 capital ratio of nearly 11% shows that we are well capitalized, and further demonstrates our strength and stability.”

Operating Results for the Quarter Ended June 30, 2025

The Company reported net income of $21.5 million for the quarter ended June 30, 2025 compared to net income of $21.0 million for the quarter ended March 31, 2025. The increase was mainly attributable to an increase in net interest income, partially offset by an increase in non-interest expense.

Net interest income increased $3.0 million, or 4.2%, to $75.0 million for the quarter ended June 30, 2025 from $72.0 million for the quarter ended March 31, 2025. The increase was primarily due to a ten basis point increase in the weighted average yield of interest-bearing assets, primarily loans, partially offset by a five basis point increase in the weighted average cost of interest-bearing liabilities. Residential mortgage loans originated during a lower interest rate environment continue to amortize and be replaced with higher-yielding residential loans, including mortgage loans and equity loans and lines of credit. The interest rate spread for the quarter ended June 30, 2025 increased five basis points from the previous quarter, to 1.50%, and the net interest margin increased six basis points during the quarter to 1.81%.

The Company recorded a provision for credit losses of $1.5 million for both the quarter ended June 30, 2025 and the quarter ended March 31, 2025. The total allowance for credit losses increased $2.4 million during the quarter to $102.4 million, or 0.66% of total loans receivable, from $99.9 million, or 0.65% of total loans receivable, at March 31, 2025. The increase was primarily due to growth in the equity loans and lines of credit portfolios and a slight deterioration in economic factors utilized in estimating losses. The allowance for unfunded commitments, included in other liabilities, increased $0.4 million, to $29.8 million at June 30, 2025, from $29.4 million at March 31, 2025. Net recoveries were $0.9 million for the quarter ended June 30, 2025 compared to $0.7 million for the previous quarter.

Total non-interest expense increased $2.1 million, or 4.1%, to $53.2 million for the quarter ended June 30, 2025 from $51.1 million for the quarter ended March 31, 2025. The change included increases of $1.2 million in marketing services and $1.0 million in other expenses. Other expenses increased primarily due to a $1.0 million increase in costs related to originating loans, including appraisal and credit report fees and down payment assistance.

Financial Condition at June 30, 2025 compared to March 31, 2025

Total assets increased by $263.9 million to $17.38 billion at June 30, 2025 from $17.11 billion at March 31, 2025. The increase was mainly due to increases in loans held for investment and loans held for sale.

Loans held for investment, net of allowance and deferred loan expenses, increased $235.9 million, or 1.5%, to $15.60 billion at June 30, 2025 from $15.36 billion at March 31, 2025. During the quarter ended June 30, 2025, the combined balances of home equity loans and lines of credit increased $260.9 million to $4.58 billion and residential core mortgage loans decreased $25.0 million to $10.97 billion. Loans held for sale increased $25.2 million to $31.0 million at June 30, 2025, from $5.8 million at March 31, 2025, due to an increase in loans committed to future delivery contracts with Fannie Mae.

Deposits decreased $56.1 million, or less than 1%, to $10.34 billion at June 30, 2025, compared to $10.40 billion at March 31, 2025, consisting of a $20.4 million increase in certificates of deposit ("CDs") and decreases of $16.4 million in money market deposit accounts, $16.9 million in checking accounts, and $38.8 million in savings accounts.

Borrowed funds increased $295.7 million to $4.88 billion at June 30, 2025 from $4.59 billion at March 31, 2025. The increase was primarily used to fund growth in the loan portfolio. The total balance of borrowed funds at June 30, 2025, all from the FHLB, included $435.0 million of overnight advances, $1.51 billion of term advances with a weighted average maturity of approximately 1.8 years, and $2.93 billion of term advances aligned with interest rate swap contracts, with a remaining weighted average effective maturity of approximately 2.7 years. Additional borrowing capacity at the FHLB was $1.77 billion at June 30, 2025.

Operating Results for the Nine months ended June 30, 2025

The Company reported net income of $65.0 million for the nine months ended June 30, 2025, an increase of $3.6 million compared to net income of $61.4 million for the nine months ended June 30, 2024. The increase was primarily due to increases in net interest income and non-interest income and a decrease in non-interest expense, partially offset by an increase in the provision for credit losses.

Net interest income increased $5.7 million, or 2.7%, to $215.4 million for the nine months ended June 30, 2025 compared to $209.7 million for the nine months ended June 30, 2024. The yield on interest-earning assets for the nine months ended June 30, 2025 increased 15 basis points compared to the same period a year ago, while the cost of interest-bearing liabilities increased 11 basis points. The interest rate spread was 1.43% for the nine months ended June 30, 2025 compared to 1.39% for the nine months ended June 30, 2024. The net interest margin was 1.74% for the nine months ended June 30, 2025 and 1.69% for the nine months ended June 30, 2024.

During the nine months ended June 30, 2025, there was a $1.5 million provision for credit losses compared to a $2.5 million release of provision for the nine months ended June 30, 2024. Net loan recoveries totaled $3.1 million for the nine months ended June 30, 2025 and $3.6 million for the same period in the prior year.

Due to the combined effect of the provision for credit losses and net loan recoveries during the nine months ended June 30, 2025, the total allowance for credit losses increased $4.6 million to $102.4 million, or 0.66% of total loans receivable, from $97.8 million, or 0.64% of total loans receivable, at September 30, 2024. The increase was primarily related to increases in the equity lines of credit portfolio and commitments to originate both residential mortgage loans and equity loans and lines of credit. Also contributing to the increase was a slight deterioration in economic factors utilized to estimate losses. The allowance for credit losses included $29.8 million and $27.8 million in liabilities for unfunded commitments at June 30, 2025 and September 30, 2024, respectively. Total loan delinquencies increased to $34.3 million, or 0.22% of total loans receivable, at June 30, 2025 from $31.9 million, or 0.21% of total loans receivable, at September 30, 2024. Non-accrual loans totaled $37.3 million, or 0.24% of total loans receivable, at June 30, 2025, compared to $33.6 million, or 0.22% of total loans receivable, at September 30, 2024.

Total non-interest income increased $2.3 million, or 12.6%, to $20.6 million for the nine months ended June 30, 2025, from $18.3 million for the nine months ended June 30, 2024, primarily due to a $1.2 million increase in fees and service charges, net of amortization, and a $1.4 million increase in net gain on the sale of loans. The increase in fees and service charges was mainly due to an increase in fee income earned on equity lines of credit.

Total non-interest expense decreased $1.1 million, or 0.7%, to $152.2 million for the nine months ended June 30, 2025, from $153.3 million for the nine months ended June 30, 2024. The decrease was mainly due to a decrease of $1.6 million in other expenses, partially offset by a $0.9 million increase in office property, equipment and software expenses. The decrease in other expenses included a $1.3 million positive change in net benefit related to the defined benefit plan.

Financial Condition at June 30, 2025 compared to September 30, 2024

Total assets increased $284.9 million, or 1.7%, to $17.38 billion at June 30, 2025 from $17.09 billion at September 30, 2024. The increase was mainly the result of an increase in loans held for investment.

Loans held for investment, net of allowance and deferred loan expenses, increased $273.9 million, or 1.8%, to $15.60 billion at June 30, 2025 from $15.32 billion at September 30, 2024. Home equity loans and lines of credit increased $690.8 million to $4.58 billion and the residential core mortgage loan portfolio decreased $415.2 million to $10.97 billion. Loans held for sale increased $13.2 million to $31.0 million at June 30, 2025 from $17.8 million at September 30, 2024. Loans originated and acquired during the nine months ended June 30, 2025 included $760.2 million of residential mortgage loans and $1.87 billion of equity loans and lines of credit compared to $598.7 million of residential mortgage loans and $1.62 billion of equity loans and lines of credit originated or acquired during the nine months ended June 30, 2024. Of the mortgage loans originated during the nine months ended June 30, 2025, 86% were purchases and 12% were adjustable rate loans.

Deposits increased $146.4 million, or 1.4%, to $10.34 billion at June 30, 2025 from $10.20 billion at September 30, 2024. The increase was the result of a $250.5 million increase in primarily retail certificates of deposit, partially offset by decreases of $26.7 million in savings accounts, $19.3 million in checking accounts and $49.7 million in money market deposit accounts. There were $976.5 million in brokered deposits at June 30, 2025 compared to $1.22 billion at September 30, 2024. The increase in retail certificate of deposit accounts was achieved through competitive rates and enhanced product offerings, supported by marketing efforts.

Borrowed funds increased $90.1 million, or 1.9%, to $4.88 billion at June 30, 2025 from $4.79 billion at September 30, 2024. The increase was primarily used to fund loan growth.

Total shareholders' equity increased $25.4 million, or 1.4%, to $1.89 billion at June 30, 2025 from $1.86 billion at September 30, 2024. Activity reflects $65.0 million of net income, dividends paid of $44.7 million, $0.7 million in repurchases of the Company's common stock, a $0.4 million net decrease in accumulated other comprehensive income and net positive adjustments of $6.3 million related to our stock compensation and employee stock ownership plans. The change in accumulated other comprehensive income was primarily due to a net decrease in unrealized gains on swap contracts. During the nine months ended June 30, 2025, a total of 57,500 shares of the Company's common stock were repurchased at an average cost of $12.87 per share. The Company's eighth stock repurchase program allows for a total of 10,000,000 shares to be repurchased, with 5,134,451 remaining shares authorized for repurchase at June 30, 2025.

The Company declared and paid a quarterly dividend of $0.2825 per share during each of the first three fiscal quarters of 2025. 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 dividends paid. Under 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. At a July 8, 2025 special meeting of members of the MHC, the members (depositors and certain loan customers of the Association) voted to approve the MHC’s proposed waiver of dividends, aggregating up to $1.13 per share, to be declared on the Company’s common stock during the twelve months subsequent to the members’ approval (i.e., through July 8, 2026). The MHC has filed a notice with, and a request for non-objection from, the Federal Reserve Bank of Cleveland for the proposed dividend waivers. Both the non-objection from the Federal Reserve Bank and the timing of the non-objection are unknown at this point. The MHC has conducted the member vote to approve the dividend waiver each of the past twelve years under Federal Reserve regulations and for each of those twelve years, approximately 97% of the votes cast were in favor of the waiver.

The Company operates under the capital requirements for the standardized approach of the Basel III capital framework for U.S. banking organizations (“Basel III Rules”). At June 30, 2025 all of the Company's capital ratios exceed the amounts required for the Company to be considered "well capitalized" for regulatory capital purposes. The Company's Tier 1 leverage ratio was 10.86%, its Common Equity Tier 1 and Tier 1 ratios were each 17.75% and its total capital ratio was 18.61%.

Presentation slides as of June 30, 2025 will be available on the Company's website, thirdfederal.com, under the Investor Relations link under the "Latest Presentation" heading, beginning July 31, 2025. 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 while creating value for our customers, communities, associates and shareholders. It became part of a public company in 2007 and celebrated its 85 th anniversary in May 2023. Third Federal, which lends in 27 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, two lending offices in Central and Southern Ohio, and 16 full service branches throughout Florida. As of June 30, 2025, the Company’s assets totaled $17.38 billion.

 

Chairman and CEO Marc A. Stefanski

Iran's top judge hinted at fast trials and executions for those who were detained in nationwide protests against the country's theocracy, even as activists said Wednesday that the death toll rose to levels unseen in decades, with at least 2,571 people killed so far.

Iran’s judiciary chief Gholamhossein Mohseni-Ejei, made the comments about trials and executions in a video Tuesday, despite a warning from U.S. President Donald Trump that he would “take very strong action” if executions take place.

The U.S.-based Human Rights Activists News Agency said the number of dead climbed to at least 2,571 early Wednesday. The figure dwarfs the death toll from any other round of protest or unrest in Iran in decades and recalls the chaos surrounding the country’s 1979 Islamic Revolution.

After Trump was informed of the number of deaths, he warned Iran's leaders that he was terminating any negotiations and would “act accordingly.”

Details of the crackdown began emerging Tuesday as Iranians made phone calls abroad for the first time in days after authorities severed communications countrywide when the protests broke out.

Here is the latest:

Some personnel at Qatar’s Al Udeid Air Base have been advised to evacuate by Wednesday evening, a U.S. official said. The decision came as a senior official in Iran brought up an earlier Iranian attack there.

The official, who spoke to The Associated Press on Wednesday on the condition of anonymity to discuss sensitive plans, described the move at the base as a precautionary measure. The official wouldn’t go into any further details about the move, including whether the evacuation was optional or mandatory, if it affected troops or civilian personnel, or the number of those advised to leave, citing the need for operational security.

It comes as anti-government protests in nearby Iran continue and U.S. President Donald Trump has said that he is willing to conduct military operations in the country if the government continues to retaliate against the protesters.

SpaceX’s Starlink satellite internet service dropped its fees to allow protesters in Iran to send updates of what is happening inside the Islamic Republic following a communication blackout by authorities.

Elon Musk’s SpaceX has not officially announced the decision and did not respond to a request for comment, but activists told The Associated Press that Starlink has been available for free to anyone in Iran with the receivers since Tuesday.

“Starlink has been crucial,” said Mehdi Yahyanejad, an Iranian whose nonprofit Net Freedom Pioneers has helped smuggle units into Iran, pointing to footage that emerged Sunday showing rows of bodies at a forensic medical center near Tehran.

Starlink is banned in Iran.

Tens of thousands of mourners thronged the streets near Tehran University for a mass funeral of security forces and civilians on Wednesday.

After Iranian state television reported that 300 coffins would be on display at Tehran University, Associated Press reporters there saw around 100. It wasn’t clear why there was a discrepancy.

Many held Iranian flags and identical photos of Ayatollah Ali Khamenei and their relatives. The caskets, covered in Iranian flags, were stacked at least three high in the backs of trucks and covered with red and white roses and framed photographs of people who were killed. The crowd chanted and beat their chests in response to an emcee speaking from a stage.

One man in the crowd held up a photo of U.S. President Donald Trump during the Pennsylvania assassination attempt, emblazoned with: “The arrow doesn’t always miss!”

The presenter, his voice booming across the crowd, blamed the U.S. for the unrest. “All of our problems are because of America, today’s economic problems are because of American sanctions. Death to America!” he yelled, prompting the same chant from the tens of thousands of people, dressed mostly in black.

India's Embassy in Tehran urged Wednesday all Indian nationals to leave Iran, citing what it called an “evolving situation” in the Islamic Republic.

The statement, posted on X, also advised Indian citizens to remain highly vigilant and avoid areas where protests are taking place.

German police said Wednesday the two climbed over a fence into embassy grounds and tore down an Iranian flag. Both wanted to hoist two pre-Islamic Republic flags but failed, German news agency dpa reported.

They left the grounds when guards used pepper spray and were detained on the sidewalk outside.

The incident happened late Tuesday.

Major Middle East governments were discouraging the Trump administration from waging a war with Iran, fearing “unprecedented consequences” in the volatile region, an Arab Gulf diplomat said Wednesday.

The Cairo-based diplomat, who was given anonymity because he wasn't authorized to speak to the media, said major governments in the region, including Turkey, Egypt, Saudi Arabia and Pakistan, have been “in constant contact” with the U.S. administration over a potential American strike on Iran that could explode into a “full-blown war.”

Such a war will “certainly” have dire repercussions “not only on the Middle East but also on the global economy," he said.

Iranian state television said Wednesday’s mass funeral in Tehran would include 300 bodies of security force members and civilians. The funeral is expected to take place at Tehran University under heavy security.

The U.S.-based Human Rights Activists News Agency said the crackdown killed at least 2,571 people. It said 2,403 of the dead were protesters and 147 were government-affiliated. Twelve children were killed, along with nine civilians it said were not taking part in protests. More than 18,100 people have been detained, the group said.

Gauging the demonstrations and the death toll from abroad has grown more difficult. The Associated Press has been unable to independently assess the toll, given the communications being disrupted in the country.

Melanie Lidman contributed from Jerusalem.

Trump’s decision to impose a 25% tariff on countries that trade with Iran could impact India, an expert said, as New Delhi already faces existing 50% U.S. trade levies due to its purchases of Russian oil.

Abhijit Mukhopadhyay, a senior economist at the Chintan Research Foundation in New Delhi, said the bigger risk is not India-Iran trade, but India’s access to the U.S. market, as its exports to Iran are modest.

India mainly exports rice, tea, sugar, pharmaceuticals and electrical machinery to Iran, while importing dry fruits and chemical products. Textiles and garments, gems and jewelry and engineering goods are likely to be the most vulnerable sectors, he said.

Trump’s latest move also could affect India’s investments in Iran, including the strategically important Chabahar port, which gives India a trade route to Afghanistan, Central Asia and Europe while bypassing Pakistan, Mukhopadhyay said.

Iran’s judiciary chief signals fast trials and executions for those detained in nationwide protests.

Gholamhossein Mohseni-Ejei made the comment in a video shared by Iranian state television on Wednesday.

He emphasized the need for swift action, saying delays would lessen the impact.

His remarks challenge Trump, who warned Iran about executions in an interview aired Tuesday.

Trump stated the U.S. would take strong action if Iran proceeded with executions. The situation highlights escalating tensions between the two countries over the handling of the protests.

Dozens of Pakistani students studying in Iran have returned home through a remote southwestern border crossing, a Pakistani immigration official said Wednesday.

Federal Investigation Agency spokesperson in Quetta city, Samina Raisani, said about 60 students crossed into Pakistan on Tuesday through Gabd border in Balochistan province with valid travel documents.

More students were expected to return through the same crossing later Wednesday, she said.

Mudassir Tipu, Pakistan’s ambassador to Iran, said Tuesday that Iranian universities had rescheduled exams and permitted international students to leave the country.

The satellite internet provider Starlink now offers free service to people in Iran who have access to the company's receivers, activists said Wednesday.

Mehdi Yahyanejad, a Los Angeles-based activist who helped get the units into Iran, told The Associated Press that the free service had started. Other activists also confirmed in messages online that the service was free.

Starlink has been the only way for Iranians to communicate with the outside world since authorities shut down the internet Thursday night as nationwide protests swelled and they began a bloody crackdown against demonstrators.

Starlink did not immediately acknowledge the decision.

This frame grab from videos taken between Jan. 9 and Jan. 11, 2026, and circulating on social media purportedly shows images from a morgue with dozens of bodies and mourners after crackdown on the outskirts of Iran's capital, in Kahrizak, Tehran Province. (UGC via AP)