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Shares of TFS Financial Corp. (TFSL - Free Report) rallied almost 1% in response to better-than-expected first-quarter fiscal 2022 (ended Dec 31) results. Earnings per share of 6 cents surpassed the Zacks Consensus Estimate by a penny. However, the bottom line compared unfavorably with the year-ago figure of 9 cents.
Results gained from lower expenses, rise in loan balance and provision benefits. However, a fall in revenues and lower interest rates were the undermining factors.
Net income plummeted 35.4% year over year to $16.1 million.
Revenues & Expenses Down
Total revenues came in at $66 million, down 17.7% year over year. The top line matched the Zacks Consensus Estimate.
Net interest income decreased 1.5% to $57.8 million. Net interest margin rose 3 basis points (bps) year over year to 1.69%.
Non-interest income plunged 62% to $8.2 million. This was mainly due to lower net gain on the sale of loans.
Non-interest expenses were $47.7 million, declining 7.8%. This was primarily due to lower salaries and employee benefit costs.
As of Dec 31, 2021, net loans were $12.6 billion, up 1.1% sequentially. Total deposits declined marginally to $8.9 billion.
In the fiscal first quarter, TFS Financial reported a provision benefit of $2 million, on par with the prior-year period.
TFS Financial’s capital ratios were well above the regulatory requirement. As of Dec 31, 2021, common equity Tier 1 risk-based capital ratio was 22.97%. Total risk-based capital came in at 23.53%.
Share Repurchase Update
During the reported quarter, TFS Financial repurchased 16,000 shares for an average price of $17.80 per share. As of Dec 31, 2021, nearly 5.9 million shares remained under authorization.
Our Viewpoint
Rise in loan demand and an improving economy are expected to keep supporting TFS Financial’s top line. Nevertheless, relatively lower interest rates pose a major near-term concern.
TFS Financial Corporation Price, Consensus and EPS Surprise
Commerce Bancshares Inc.’s (CBSH - Free Report) fourth-quarter 2021 earnings per share of 94 cents matched the Zacks Consensus Estimate. The bottom line, however, declined 10.5% from the prior-year quarter.
CBSH’s results primarily benefited from improved non-interest income, a slight rise in loan balance and provision benefit. However, an increase in non-interest expenses and a fall in net interest income were the major headwinds.
Hancock Whitney Corporation’s (HWC - Free Report) fourth-quarter 2021 adjusted earnings of $1.51 per share outpaced the Zacks Consensus Estimate of $1.35. The bottom line improved 29% from the prior-year quarter.
HWC’s results benefited from higher non-interest income, fall in non-interest expenses and provision benefit. However, a decline in net interest income, which reflected lower interest rates, was the undermining factor.
Washington Federal’s (WAFD - Free Report) first-quarter fiscal 2022 (ended Dec 31) earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 69 cents. The figure reflects a year-over-year jump of 39%.
WAFD’s results primarily benefited from increased revenues, decreased provision for credit losses and a robust loan balance. The company’s balance-sheet position remained strong during the quarter. However, an increase in expenses was the undermining factor.
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TFS Financial (TFSL) Q1 Earnings Beat, Revenues Down, Stock Up 1%
Shares of TFS Financial Corp. (TFSL - Free Report) rallied almost 1% in response to better-than-expected first-quarter fiscal 2022 (ended Dec 31) results. Earnings per share of 6 cents surpassed the Zacks Consensus Estimate by a penny. However, the bottom line compared unfavorably with the year-ago figure of 9 cents.
Results gained from lower expenses, rise in loan balance and provision benefits. However, a fall in revenues and lower interest rates were the undermining factors.
Net income plummeted 35.4% year over year to $16.1 million.
Revenues & Expenses Down
Total revenues came in at $66 million, down 17.7% year over year. The top line matched the Zacks Consensus Estimate.
Net interest income decreased 1.5% to $57.8 million. Net interest margin rose 3 basis points (bps) year over year to 1.69%.
Non-interest income plunged 62% to $8.2 million. This was mainly due to lower net gain on the sale of loans.
Non-interest expenses were $47.7 million, declining 7.8%. This was primarily due to lower salaries and employee benefit costs.
As of Dec 31, 2021, net loans were $12.6 billion, up 1.1% sequentially. Total deposits declined marginally to $8.9 billion.
In the fiscal first quarter, TFS Financial reported a provision benefit of $2 million, on par with the prior-year period.
TFS Financial’s capital ratios were well above the regulatory requirement. As of Dec 31, 2021, common equity Tier 1 risk-based capital ratio was 22.97%. Total risk-based capital came in at 23.53%.
Share Repurchase Update
During the reported quarter, TFS Financial repurchased 16,000 shares for an average price of $17.80 per share. As of Dec 31, 2021, nearly 5.9 million shares remained under authorization.
Our Viewpoint
Rise in loan demand and an improving economy are expected to keep supporting TFS Financial’s top line. Nevertheless, relatively lower interest rates pose a major near-term concern.
TFS Financial Corporation Price, Consensus and EPS Surprise
TFS Financial Corporation price-consensus-eps-surprise-chart | TFS Financial Corporation Quote
At present, TFS Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Commerce Bancshares Inc.’s (CBSH - Free Report) fourth-quarter 2021 earnings per share of 94 cents matched the Zacks Consensus Estimate. The bottom line, however, declined 10.5% from the prior-year quarter.
CBSH’s results primarily benefited from improved non-interest income, a slight rise in loan balance and provision benefit. However, an increase in non-interest expenses and a fall in net interest income were the major headwinds.
Hancock Whitney Corporation’s (HWC - Free Report) fourth-quarter 2021 adjusted earnings of $1.51 per share outpaced the Zacks Consensus Estimate of $1.35. The bottom line improved 29% from the prior-year quarter.
HWC’s results benefited from higher non-interest income, fall in non-interest expenses and provision benefit. However, a decline in net interest income, which reflected lower interest rates, was the undermining factor.
Washington Federal’s (WAFD - Free Report) first-quarter fiscal 2022 (ended Dec 31) earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 69 cents. The figure reflects a year-over-year jump of 39%.
WAFD’s results primarily benefited from increased revenues, decreased provision for credit losses and a robust loan balance. The company’s balance-sheet position remained strong during the quarter. However, an increase in expenses was the undermining factor.