Tfs Financial Corporation · NASDAQ:TFSL
Tfs Financial — Sandler O'Neill East Coast Financial Services Conference 2010
22 slides from Tfs Financial's conference presentation, Nov 10, 2010
Slide 1: Sandler O'Neill East Coast Financial Services Conference
Exhibit 99.1 Sandler O'Neill East Coast Financial Services Conference November 10-12, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, which can be identified by the use of such words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar expressions. These forward-looking statements include: Statements of our goals, intenti
Slide 3: Overview of TFS Financial Corporation
Overview of TFS Financial Corporation Organized in 1997 as the mid-tier stock holding company for Third Federal Savings & Loan Association of Cleveland (“Thrift”), which was founded in 1938 by Ben and Gerome Stefanski Completed first step IPO conversion in April 2007 TFSL (NASDAQ) Financials at 9/30
Slide 4: Markets of Operation
Markets of Operation Ohio 22 full service branches in Northeast Ohio 4 loan production offices in the Columbus area (Central Ohio) 4 loan production offices in the Cincinnati area (Southwestern Ohio) Deposits Market Market MSA Branches ($M) Share (%) Rank Cleveland-Elyria-Mentor, OH 19 5,782 11.51 2
Slide 5: Strategic Overview
Strategic Overview Our business model is to originate and service first mortgage loans and continue to service existing home equity loans and lines which we fund with core retail deposits Thrift stopped accepting applications of new home equity loans and lines in June 2010 Thrift introduced and is o
Slide 6: Financial Highlights
Financial Highlights (Dollars in Thousands) At or for the year ended, 9/30/08 9/30/09 9/30/10 Balance Sheet Assets ($) 10,786,451 10,598,840 11,076,027 Net Loans ($) 9,208,736 9,219,585 9,181,749 Deposits ($) 8,261,101 8,570,506 8,851,941 Common Equity ($) 1,843,652 1,745,865 1,752,897 Balance Sheet
Slide 7: Loan and Deposit Balances
Loan and Deposit Balances Gross Loan Balances 9/30/10 Deposit Data 9/30/10 1% 0% 18% Residential non-Home Certificates of Deposit Today 30% Residential Home Negotiable Order of Today 11% Withdrawal Equity loans and lines Savings of credit 3% 66% Other 71% Accrued Interest (negligible) 80% of 1-4 fam
Slide 8: Capital Position as of September 30, 2010
Capital Position as of September 30, 2010* 20.00% 19.17% 18.00% 17.46% 16.20% 15.75% 15.00% 12.14% 10.92% 10.00% 9.68% 10.00% 6.00% 5.00% 5.00% 0.00% Tangible Common Core Capital Ratio Tier 1 Risk-based Ratio Total Risk-Based Equity Ratio (TFSL) (Thrift) (Thrift) Capital Ratio (Thrift) TFSL/Thrift P
Slide 9: Loan Delinquencies and Charge-offs
Loan Delinquencies and Charge-offs Dollars in millions Loan Delinquencies Net Charge-offs for FYE Balances 9/30/2009 9/30/2010 9/30/2009 9/30/2010 Residential non-Home Today Ohio and Kentucky $4,970 1.8% 1.8% $5 $5 Florida 1,168 3.8% 5.1% 2 7 Total $6,138 2.2% 2.5% $7 $12 Residential Home Today Ohio
Slide 10: Memorandum of Understanding
Memorandum of Understanding On August 16, 2010, the Thrift received a Memorandum of Understanding from the OTS. Key elements of the MOU: Provide the OTS a written report from a consulting firm assessing the home equity lending portfolio Develop a plan to reduce the concentration limits for home equi
Slide 11: Promontory Financial Group ("PFG")
Promontory Financial Group (“PFG”) PFG (a premier financial consulting group made up primarily of former regulators) was engaged to provide an assessment of the home equity portfolio and lending practices Report was completed and submitted to the OTS in September 2010 The report had several key find
Slide 12: Summary of Home Equity Portfolio
Summary of Home Equity Portfolio (charts available in appendix) The ratio of home equity portfolio and open commitments relative to Tier 1 (Core) Capital plus ALLL, has ranged between 288% to 544% over the past seven years. Balance at September 2010 is 350%, with a plan to reduce to 260% by December
Slide 13: Home Equity Lending Reduction Plan
Home Equity Lending Reduction Plan The Reduction plan effectively began with the suspension of all new home equity loan and line originations, increases and extensions beginning in June 2010. The formal plan submitted to the OTS in September 2010, included 3 key elements: Line Reduction – From June
Slide 14: Home Equity Lending Reduction Plan
Home Equity Lending Reduction Plan Current Status of Plan: The Thrift believes the requirements of the MOU for the submission of documents have been met. However the OTS has neither approved nor disapproved the plan, and therefore the plan is subject to revision. The OTS has the ultimate authority a
Slide 15: Cash Dividends and Stock Repurchases
Cash Dividends and Stock Repurchases TFS Financial must provide the OTS 45 days prior written notice of the Company’s intent to declare and pay dividends to its stockholders or repurchase any of its outstanding stock. The Company understands and shares the view of the importance to shareholders of d
Slide 16: Summary
Summary Working diligently to resolve the MOU with the OTS Focus on our core competency of originating high credit quality 1-4 family residential mortgages in our banking footprint including the introduction of new products like our new ARM loans TFSL has a strong capital position and flexibility at
Slide 17: Appendix: Home Equity Lines of Credit
Appendix: Home Equity Lines of Credit
Slide 18: Home Equity Lines of Credit: History of Equity Portfolio Exposure
Home Equity Lines of Credit History of Equity Portfolio Exposure Calculations include only capital at Thrift level and excludes additional capital maintained at TFSL Home Equity Portfolio and Open Commitments Relative to Thrift Tier 1 (Core) Plus ALLL 600% 544% 500% 414% 449% 400% 375% 387% 350% 300
Slide 19: Home Equity Lines of Credit: Credit Extended by Credit Score
Home Equity Lines of Credit Credit Extended, Balances and Delinquencies by Credit Score As of July 2010, dollars in millions Credit Credit Seriously Total Unused % Seriously Score Extended Current Delinquent* Balances Balances Delinquent < 600 $250 $152 $53 $205 $45 25.87% 600-699 $475 $361 $23 $384
Slide 20: Home Equity Lines of Credit: Refreshed Property Values
Home Equity Lines of Credit Credit Extended and Balances by Refreshed Property Values As of June 2010, dollars in millions Extended $s Extended $s as of June Seriously % Seriously CLTV at Origination 2010 Current Delinquent* Delinquent Not Available $183 $478 $254 $10 3.90% <=80% $3,321 $2,171 $1,05
Slide 21: Home Equity Lines of Credit: Customers not Using Lines
Home Equity Lines of Credit Customers not Using Lines to Maintain Credit Score Data as of June 2010 Customers who've maintained a 700 Credit Score All Accounts Accounts in a Negative Equity Position Utilization Percent as Utilization Percent as Utilization Percent as Utilization Percent as of June 2
Slide 22: Home Equity Lines of Credit: Negative Equity by Credit Score
Home Equity Lines of Credit Negative Equity by Credit Score As of July 2010, dollars in millions Negative Seriously % Seriously Equity $s Current Delinquent* Delinquent Negative equity is the updated property value, less the original senior lien < 600 $78 $63 $24 27.49% balance, less the credit expo
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