Key Highlights

  • Fiscal 2026 Net Income rose 10.7% to $100.7 million from $91.0 million.
  • Net interest income increased 9.9% to $321.8 million, and net interest Margin reached 1.88% versus 1.76%.
  • Fourth quarter net income was $24.7 million, down 19.0% from $30.5 million in the June quarter.
  • Total Loan delinquencies reached $60.7 million, or 0.37% of loans, from 0.22% a year ago.
  • Total Assets increased 4.2% to $18.19 billion at September 30, 2026.

A record year built on net interest income

TFS Financial (NASDAQ:TFSL) is the Holding Company for Third Federal Savings and Loan Association of Cleveland, a savings and Mortgage lender founded in 1938 that lends in 28 states and the District of Columbia. On October 29, 2026, it reported results for the fiscal year ended September 30, 2026.

Net income was $100.7 million, an increase of $9.7 million from $91.0 million in fiscal 2025. Chairman and CEO Marc Stefanski said the year passed the $100 million mark, driven by margin improvement and a 39% increase in mortgage loan originations.

The gain reflected $29.1 million of additional net interest income and a $5.0 million favorable swing in the provision for Credit losses, partly offset by a $21.1 million rise in non-interest expense.

Margin expansion and loan growth lift the interest line

Net interest income rose to $321.8 million from $292.7 million. Interest income rose $46.0 million while interest expense rose $17.0 million.

The Interest Rate spread widened to 1.57% from 1.45%, and net interest margin reached 1.88% from 1.76%. Residential mortgage originations and acquisitions totaled $1.66 billion, against $1.19 billion a year earlier, and 86% were purchase transactions.

A softer fourth quarter and rising delinquencies

Fourth quarter net income was $24.7 million, down $5.8 million from $30.5 million in the quarter ended June 30, 2026. Net interest income improved 6.8% to $86.9 million, and net interest margin rose nine basis points to 1.99%.

Delinquencies deserve attention. Total delinquent loans increased $17.2 million in the quarter to $60.7 million, or 0.37% of total loans, and were $34.7 million, or 0.22%, a year earlier. Non-accrual loans were $49.8 million, or 0.30% of loans.

The allowance for credit losses was 0.63% of total loans receivable, compared with 0.67% a year ago.

Costs climb as the new core banking system goes live

Non-interest expense rose 10.3% to $225.4 million for the year. Salaries and benefits increased $11.3 million, and pension expense swung unfavorably by $4.6 million after the plan was terminated in December 2025.

In the fourth quarter, expenses were $59.7 million, up $5.6 million sequentially. Payroll costs tied to the new core banking system were no longer capitalized once it began operating in July 2026, which added to salary expense.

Balance sheet, capital and Shareholder returns

Total assets grew $735.1 million to $18.19 billion. Deposits fell 2.6% to $10.18 billion. Borrowed funds increased 17.8% to $5.74 billion, and shareholders' Equity rose 5.9% to $2.01 billion.

Regulatory capital stayed strong, with a Tier 1 Leverage Ratio of 10.53%. The company repurchased 384,241 shares at an average of $14.31 and has 4,559,845 shares remaining under its repurchase program.

The quarterly Dividend was $0.3175 per share in the fourth quarter, up from $0.2825 in each of the first three quarters, an increase of about 12% on a calculated basis.

What to watch next

Readers tracking the name will likely follow whether net interest margin holds near the fourth quarter level of 1.99% and whether delinquencies stabilize after the 0.37% reading. Expense trends after the core system launch and the remaining pension settlement, expected in the quarter ending December 31, 2026, are also worth monitoring.