TFSL · TFS Financial Corporation

TFS Financial Corporation reported net income of $23.2 million for the quarter ended March 31, 2026, a 4.0% increase from $22.3 million in the prior quarter. The improvement was driven by a 2.8% rise in net interest income to a record $77.8 million, as the cost of interest-bearing liabilities decreased 12 basis points, particularly from a $609.7 million decline in certificates of deposit balances and a 19 basis point reduction in their cost. Loan yields decreased three basis points due to the full quarterly impact of two 25 basis point prime rate cuts in the first fiscal quarter. The interest rate spread improved seven basis points to 1.54%, and net interest margin increased five basis points to 1.84%. The company recorded no provision for credit losses in the current quarter, compared to a $1.0 million release in the prior quarter, as the allowance for credit losses increased $0.8 million to $104.9 million. Non-interest income fell $0.6 million to $7.4 million, primarily due to a decrease in net gain on loan sales. Non-interest expense decreased $0.8 million to $55.4 million, led by a $2.2 million reduction in marketing costs, partially offset by higher federal insurance premiums and other operating expenses. Total loan delinquencies rose to $38.4 million, or 0.24% of loans, from $36.9 million. Management expressed optimism for mortgage growth in the upcoming purchase season, citing a Tier 1 capital ratio of 10.75% that supports growth, dividends, and strategic buybacks.