Executive Summary

Q4 delivered a clean beat on EPS and revenue with diluted EPS $0.09 vs S&P Global consensus $0.08*, and net revenue roughly $85.5M vs $84.4M* consensus; net income was $26.0M vs $22.7M* consensus, supported by NIM expansion and higher loan yields .
Net interest margin improved to 1.84% (from 1.81% in Q3 and 1.67% YoY), while interest rate spread rose to 1.54%; loan yield increased 13 bps QoQ, partially offset by an 8 bps rise in the cost of interest-bearing liabilities .
Deposits grew $105.5M in the quarter (retail CDs +$202.9M), and the company resumed buybacks, repurchasing 247,865 shares at $13.05 average, with strong Tier 1 leverage ratio at 10.76% .
No formal guidance and no earnings call; management emphasized record FY earnings ($91M) and continued focus on NIM improvement, deposit strength, and home equity growth .

What Went Well and What Went Wrong

What Went Well

Net interest margin expansion to 1.84% (+3 bps QoQ, +17 bps YoY) and interest rate spread to 1.54% (+4 bps QoQ), driven by higher loan yields replacing older, lower-rate mortgages .
Home equity loans and lines of credit continued strong growth (+$236.2M QoQ to $4.81B), lifting loan yields; net gain on sale of loans increased by $1.6M QoQ .
CEO on strategy: “Third Federal saw record earnings of $91 million… driven by a continued focus on improving our net interest margin, and an increase in first mortgage and home equity originations… With confidence, we resumed stock buybacks, while continuing to report a Tier 1 capital ratio near 11%.” .

What Went Wrong

Credit metrics ticked up YoY: non-accrual loans rose to $38.7M (0.25% of loans) from $33.6M (0.22%) and total delinquencies to $34.7M (0.22% of loans) from $31.9M (0.21%) .
Cost of interest-bearing liabilities increased 8 bps QoQ, partially offsetting loan yield gains; deposit mix continues to shift towards higher-cost CDs .
Ongoing reliance on FHLB borrowings remains sizable ($4.87B), though down slightly YoY; brokered CD balances still significant at $900.9M (down from $1.22B) .

Financial Results

Quarterly comparison (oldest → newest)

Metric	Q4 2024	Q2 2025	Q3 2025	Q4 2025
Net Interest Income ($USD Millions)	$68.7	$72.0	$75.0	$77.3
Non-Interest Income ($USD Millions)	$6.4	$7.1	$7.0	$8.2
Net Revenue ($USD Millions, NII + Non-Interest Income)	$75.1	$79.1	$82.0	$85.5
Provision for Credit Losses ($USD Millions)	$1.0	$1.5	$1.5	$1.0
Non-Interest Expense ($USD Millions)	$51.1	$51.1	$53.2	$52.0
Pre-Tax Income ($USD Millions)	$23.1	$26.5	$27.4	$32.4
Net Income ($USD Millions)	$18.2	$21.0	$21.5	$26.0
Diluted EPS ($USD)	$0.06	$0.07	$0.08	$0.09
Net Interest Margin (%)	1.67%	1.75%	1.81%	1.84%
Interest Rate Spread (%)	1.36%	1.45%	1.50%	1.54%

Note: Net Revenue is calculated as Net Interest Income + Non-Interest Income using reported figures .

Actual vs S&P Global consensus (Q4 2025)

Metric	Actual	Consensus	Beat/(Miss)
Diluted EPS ($)	$0.09	0.08*	+0.01
Net Revenue ($USD Millions)	$85.5	84.4*	+1.1
Net Income ($USD Millions)	$26.0	22.7*	+3.3

Values with asterisk (*) retrieved from S&P Global.

Balance sheet and operating KPIs

KPI	Q3 2025	Q4 2025	YoY (Q4 2024 → Q4 2025)
Total Assets ($USD Billions)	$17.38	$17.46	$17.09 → $17.46 (+$0.37B)
Loans Held for Investment, Net ($USD Billions)	$15.60	$15.66	$15.32 → $15.66 (+$0.34B)
Home Equity Loans & LOC ($USD Billions)	$4.58	$4.81	+$0.93 YoY
Residential Core Mortgage Loans ($USD Billions)	$10.97	$10.80	−$0.58 YoY
Deposits ($USD Billions)	$10.34	$10.45	$10.20 → $10.45 (+$0.25B)
CDs ($USD Millions) QoQ change	+$20.4	+$202.9	+$453.4 YoY
Borrowed Funds ($USD Billions)	$4.88	$4.87	$4.79 → $4.87 (−$0.08B)
Total Allowance for Credit Losses ($USD Millions)	$102.4	$104.4	$97.8 → $104.4 (+$6.6M)
Allowance for Unfunded Commitments ($USD Millions)	$29.8	$30.1	$27.8 → $30.1 (+$2.3M)
Non-Accrual Loans ($USD Millions; % of loans)	$37.3; 0.24%	$38.7; 0.25%	$33.6; 0.22% → $38.7; 0.25%
Total Delinquencies ($USD Millions; % of loans)	$34.3; 0.22%	$34.7; 0.22%	$31.9; 0.21% → $34.7; 0.22%
Tier 1 Leverage Ratio (%)	10.86%	10.76%	—
CET1 / Tier 1 (%)	17.75%	17.60%	—
Total Capital Ratio (%)	18.61%	18.46%	—
Dividend per Share ($)	$0.2825	$0.2825	MHC waiver renewed
Shares Repurchased	57,500 YTD through Q3	247,865 FY total; avg $13.05	Remaining authorization: 4,944,086

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal Financial Guidance	FY/Q4	None provided	None provided	Maintained (no guidance)
Dividend per Share ($)	Quarterly	$0.2825	$0.2825	Maintained; MHC waiver through Jul 8, 2026
Stock Repurchase Program	FY	5.13M shares remaining (Q3)	4.94M shares remaining (Q4)	Resumed buybacks; activity increased
Capital Ratios (Regulatory)	Q3 → Q4	Leverage 10.86%; CET1/Tier1 17.75%; Total 18.61%	Leverage 10.76%; CET1/Tier1 17.60%; Total 18.46%	Slightly lower; still “well capitalized”

Earnings Call Themes & Trends

Note: The company did not host an earnings call for Q4; presentation slides were posted; no transcript available .

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
Net Interest Margin	Rose to 1.75%; spread +11 bps QoQ	Rose to 1.81%; nine-quarter high	Increased to 1.84%; spread +4 bps QoQ	Improving sequentially
Loan Mix: Home Equity vs Mortgage	HELOC/HEL +$193.7M; mortgage −$175.9M QoQ	HELOC/HEL +$260.9M; mortgage −$25.0M QoQ	HELOC/HEL +$236.2M; mortgage −$166.1M QoQ	Continued pivot to home equity
Deposits	+$202.6M since FY start; retail CDs up	−$56.1M QoQ; mix shift to CDs	+$105.5M QoQ; CDs +$202.9M	Growing, CD-heavy mix
Credit Quality	Allowance up to $99.9M; non-accrual $37.0M	Allowance $102.4M; non-accrual $37.3M	Allowance $104.4M; non-accrual $38.7M	Gradual normalization
Capital & Buybacks	No repurchases; leverage 10.92%	Small repurchases; leverage 10.86%	Resumed repurchases; leverage 10.76%	Stable capital; resumed buybacks

Management Commentary

“Third Federal saw record earnings of $91 million in our fiscal year, driven by a continued focus on improving our net interest margin, and an increase in first mortgage and home equity originations… With confidence, we resumed stock buybacks, while continuing to report a Tier 1 capital ratio near 11%.” — Chairman & CEO Marc A. Stefanski .
“Retail deposits stayed strong in fiscal year 2025, showing a $567 million increase.” — Marc A. Stefanski .
Q4 operating drivers: loan yield +13 bps QoQ; NIM +3 bps to 1.84%; provision for credit losses trimmed to $1.0M; marketing expense down $1.3M QoQ .

Q&A Highlights

No conference call or Q&A session for Q4; slides posted online .

Estimates Context

Coverage is limited: EPS and revenue each had 1 estimate in Q4 2025; consensus diluted EPS $0.08*, revenue $84.4M*, normalized net income $22.7M*; TFSL reported $0.09 EPS, ~$85.5M net revenue, and $26.0M net income — a broad-based beat vs the sparse consensus .
Target Price consensus stood at $14.00*; given ongoing NIM improvement and resumed buybacks, estimates may track higher if momentum persists.
Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Sequential margin expansion and stronger loan yields are supporting earnings momentum; watch for further NIM uplift as older mortgages amortize and are replaced by higher-yield assets .
Deposit growth is returning, but with a CD-heavy mix; monitor funding costs as CDs and borrowings (FHLB) shape liability costs and spreads .
Credit normalization continues (non-accruals, delinquencies up modestly YoY); allowance built appropriately alongside home equity growth and higher unfunded commitments .
Capital remains strong (“well capitalized”); management resumed buybacks with ~4.94M shares remaining under authorization, potentially providing EPS support .
With no formal guidance and limited sell-side coverage, quarterly press releases and slides are the primary catalysts; beats on sparse consensus can drive outsized reactions.
Focus near-term: sustainability of NIM improvement and deposit growth; medium-term: mix shift toward home equity, mortgage purchase activity, and disciplined expense control .
Dividend stability ($0.2825/qtr; MHC waiver renewed) offers yield support while buybacks provide additional capital return .

TFS Financial CORP (TFSL)·Q4 2025 Earnings Summary