TFS Financial Corporation (TFSL): Business Model Canvas [10-2024 Updated]

Discover the strategic framework that drives TFS Financial Corporation (TFSL) to success through its innovative Business Model Canvas. This comprehensive overview outlines the essential components of TFSL's operations, including their key partnerships, activities, and value propositions. Dive deeper to understand how this financial institution effectively serves its customers and maintains a strong community presence while navigating the competitive landscape of mortgage lending.

TFS Financial Corporation (TFSL) - Business Model: Key Partnerships

Collaborations with FHLB of Cincinnati and FRB-Cleveland

TFS Financial Corporation has established significant partnerships with the Federal Home Loan Bank (FHLB) of Cincinnati and the Federal Reserve Bank (FRB) of Cleveland. These collaborations are essential for liquidity management and funding sources. At June 30, 2024, TFS had $4.81 billion in advances from the FHLB of Cincinnati. The average outstanding advances from FHLB during the nine months ended June 30, 2024, were approximately $5.05 billion. The FHLB of Cincinnati allows TFS to utilize its investment in common stock for secured borrowings, which provides a critical funding mechanism for the institution.

Additionally, TFS has access to the FRB-Cleveland Discount Window, providing another layer of financial security. As of June 30, 2024, there were no outstanding borrowings from the FRB-Cleveland. This strategic partnership with federal institutions helps TFS mitigate risks associated with liquidity and capital management.

Relationships with Mortgage Brokers and Real Estate Agents

TFS Financial Corporation maintains robust relationships with mortgage brokers and real estate agents, which are vital for generating new business and expanding market reach. For the nine months ended June 30, 2024, TFS originated approximately $598.7 million in residential mortgage loans, compared to $1.31 billion during the same period in the previous year. These partnerships are instrumental in facilitating home equity loans and lines of credit, with commitments originating at $1.62 billion for the nine months ended June 30, 2024, up from $1.24 billion in 2023.

Furthermore, TFS has expanded its ability to sell certain fixed-rate loans to Fannie Mae through partnerships with mortgage brokers, enhancing its traditional mortgage banking activities. This strategic collaboration with brokers and agents not only drives loan originations but also strengthens TFS's position in the competitive mortgage market.

Partnerships with Technology Providers for Financial Services

In the rapidly evolving financial services landscape, TFS Financial Corporation collaborates with technology providers to enhance its operational efficiency and customer experience. These partnerships are essential for integrating digital solutions into their banking services. While specific financial metrics related to technology partnerships were not disclosed, the impact of these collaborations can be seen in the bank's improved service offerings and operational capabilities.

Moreover, TFS's focus on technology-driven solutions allows for better risk management and customer engagement. By leveraging advanced technology, TFS can streamline processes, improve data analytics, and enhance customer service, which is critical for maintaining a competitive edge in the financial services industry.

Partnership Type	Details	Financial Impact
FHLB of Cincinnati	Funding source for liquidity management	$4.81 billion in advances as of June 30, 2024
FRB-Cleveland	Access to discount window for additional liquidity	No outstanding borrowings as of June 30, 2024
Mortgage Brokers and Real Estate Agents	Generate new mortgage and home equity loans	$598.7 million in residential mortgage loans originated in 2024
Technology Providers	Enhance operational efficiency and customer experience	Improved service offerings (specific financial impact undisclosed)

TFS Financial Corporation (TFSL) - Business Model: Key Activities

Originating residential mortgage loans and home equity lines of credit

TFS Financial Corporation focuses on originating residential mortgage loans and home equity lines of credit as a core activity. During the nine months ended June 30, 2024, the company originated approximately $598.7 million in residential mortgage loans and $1.62 billion in commitments for home equity loans and lines of credit. This reflects an increase from $1.31 billion in residential mortgage loans and $1.24 billion in commitments for home equity loans during the same period in 2023.

At June 30, 2024, the total loans originated or purchased had a balance of $15.29 billion, with only $28.5 million or 0.2% being delinquent. Additionally, the average credit score for first mortgage loans originated in the current quarter was 777, with an average loan-to-value (LTV) ratio of 71%.

Managing liquidity and funding sources

TFS Financial Corporation employs a comprehensive approach to liquidity and funding management. As of June 30, 2024, the company had total deposits of $10.03 billion, which includes $1.22 billion in brokered certificates of deposit (CDs). The liquidity ratio averaged 6.19% for the three months ended June 30, 2024, surpassing the minimum target of 5%.

The company has access to various funding sources, including the ability to borrow up to $7.48 billion from the Federal Home Loan Bank (FHLB) of Cincinnati and $646 million from the FRB-Cleveland Discount Window. Additionally, TFS maintains a portfolio of investment securities totaling $523 million.

Funding Source	Amount Available as of June 30, 2024
FHLB of Cincinnati	$7.48 billion
FRB-Cleveland Discount Window	$646 million
Investment Securities Portfolio	$523 million
Total Deposits	$10.03 billion
Brokered CDs	$1.22 billion

Conducting risk management and compliance checks

TFS Financial Corporation emphasizes rigorous risk management and compliance checks within its operations. As of June 30, 2024, the allowance for credit losses was $95.7 million, representing 0.63% of total loans receivable. The company recorded a release of the allowance for credit losses of $2.5 million during the nine months ended June 30, 2024.

In managing credit risk, TFS implements stringent underwriting standards. During the current quarter, the company established specific reviews of home equity loans that become 90 days past due and first mortgage loans that become 180 days past due. The company’s asset quality is reflected in its low delinquency levels, with only 0.2% of loans being delinquent as of June 30, 2024.

Risk Management Metrics	Amount
Allowance for Credit Losses	$95.7 million
Credit Loss Release	$2.5 million
Delinquency Rate	0.2%

TFS Financial Corporation (TFSL) - Business Model: Key Resources

Strong capital ratios exceeding regulatory requirements

TFS Financial Corporation maintains robust capital ratios that are well above regulatory requirements. As of June 30, 2024, the average equity to average assets ratio stood at 11.46%. The return on average equity was reported at 4.08%. These figures indicate a strong capital position that supports the company's ability to absorb losses and provide a cushion against financial volatility.

Diverse funding sources totaling $15.03 billion in deposits

The company has established a diverse funding base, with total deposits amounting to $10.03 billion at June 30, 2024. This includes a significant increase of $576.2 million or 6.1% compared to the previous year. The funding sources consist of various deposit types, including:

• Certificates of Deposit (CDs): $7.65 billion
• Brokered CDs: $1.22 billion
• Noninterest-bearing liabilities: $261.7 million

These diverse funding sources enhance the company's liquidity and financial stability, allowing it to effectively manage its lending portfolio and operational costs.

Experienced workforce with competitive average assets per employee

TFS Financial Corporation prides itself on its skilled workforce, which contributes significantly to its operational efficiency. As of June 30, 2024, the average assets per employee were $18.5 million. This figure is competitive within the industry, reflecting the company's ability to generate substantial asset growth while maintaining a relatively lean workforce.

Metric	Value
Average Assets per Employee	$18.5 million
Average Deposits per Employee	$10.9 million
Total Employees	Approximately 1,000

The combination of an experienced workforce and competitive productivity metrics positions TFS Financial Corporation favorably in the financial services sector, enhancing its capacity to deliver value to customers and stakeholders alike.

TFS Financial Corporation (TFSL) - Business Model: Value Propositions

Competitive interest rates on mortgage products

TFS Financial Corporation offers competitive interest rates on its mortgage products, which are crucial in attracting customers. As of June 30, 2024, the average yield on loans increased to 4.38% from 3.93% in the same period of the prior year . The company has structured its mortgage products to provide a rate that is appealing compared to industry standards.

As of June 30, 2024, the total loans receivable stood at $15.21 billion, with residential mortgage loans representing a significant portion of this amount . The competitive rates are further emphasized by the fact that the company maintains a robust portfolio of home equity loans and lines of credit, which totaled $3.59 billion .

Flexible loan modification options for borrowers in distress

TFS Financial Corporation has implemented flexible loan modification options to assist borrowers facing financial difficulties. The allowance for credit losses was recorded at $95.7 million, approximately 0.63% of total loans receivable as of June 30, 2024 . This proactive approach reflects the company's commitment to addressing customer needs during challenging economic times.

In the nine months ending June 30, 2024, TFS recorded a release of the allowance for credit losses of $2.5 million, indicating effective management of credit risk and a focus on recovery for distressed borrowers . The company has also seen net recoveries of $3.6 million during this period, showcasing its capacity to manage and mitigate loan defaults effectively .

Strong community presence and focus on customer service

TFS Financial Corporation prides itself on its strong community presence and exceptional customer service. The bank's operating strategy emphasizes local engagement, which has fostered customer loyalty and trust. As of June 30, 2024, the total deposits increased by $576.2 million, reaching $10.03 billion . This growth can be attributed to the bank's commitment to community relationships and service excellence.

The average deposits per branch office were reported at $238.1 million as of June 30, 2024 . This figure reflects the bank’s ability to maintain strong relationships with its customers, enhancing its competitive advantage in the financial services market.

Value Proposition	Details	Financial Data
Competitive Interest Rates	Attractive mortgage products to draw customers	Average yield on loans: 4.38% (up from 3.93% YoY)
Flexible Loan Modifications	Support for distressed borrowers with tailored solutions	Allowance for credit losses: $95.7 million (0.63% of total loans)
Community Focus	Strong customer service and local engagement	Total deposits: $10.03 billion (increase of $576.2 million)

TFS Financial Corporation (TFSL) - Business Model: Customer Relationships

Long-term relationship building through personalized services

TFS Financial Corporation emphasizes personalized services to foster long-term relationships with its customers. The company has achieved a net income of $61.4 million for the nine months ended June 30, 2024, reflecting a 14% increase compared to the same period in 2023. This growth can be attributed to strong customer engagement and tailored service offerings. The average credit score for first mortgage loans originated during the current quarter was 777, indicating a focus on high-quality borrowers.

Active customer support for loan modifications

TFS Financial Corporation actively supports its customers through loan modifications, particularly for those experiencing financial difficulties. During the nine months ended June 30, 2024, the company recorded a release of the allowance for credit losses amounting to $2.5 million, alongside net recoveries of $3.6 million. The company has modified loans with significant payment delays, indicating their commitment to assisting customers in maintaining their mortgage obligations.

Loan Modification Type	Three Months Ended June 30, 2024	Nine Months Ended June 30, 2024
Interest Rate Reduction	$0	$0
Term Extension	$139,000	$633,000
Significant Payment Delay	$153,000	$6,345,000
Combination of Modifications	$0	$500,000

Engagement through community outreach programs

Community outreach is another pillar of TFS Financial Corporation's customer relationship strategy. They have increased commitments for home equity loans and lines of credit to $1.62 billion for the nine months ended June 30, 2024, compared to $1.24 billion in the previous year. This growth illustrates the bank's proactive approach to engaging with the community and meeting customer needs through accessible financial products.

As of June 30, 2024, total deposits reached $10.03 billion, showing an increase of 6.1% from September 30, 2023. The bank's ability to attract deposits is closely linked to its community engagement initiatives, which strengthen customer relationships and enhance trust within the community.

TFS Financial Corporation (TFSL) - Business Model: Channels

Branch network primarily in Ohio and Florida

The TFS Financial Corporation operates a robust branch network, primarily located in Ohio and Florida. As of June 30, 2024, the total number of branches stood at 38, with 29 branches in Ohio and 9 branches in Florida. The average deposits per branch amounted to approximately $238.1 million.

Online banking and digital channels for service access

TFS Financial Corporation has made significant investments in its online banking and digital platforms to enhance customer access and service efficiency. As of June 30, 2024, the company reported that its digital banking platform had approximately 1.2 million active users, with mobile banking app downloads exceeding 500,000. The digital channels facilitate various banking services, including loan applications, account management, and fund transfers, contributing to a streamlined customer experience.

Direct marketing efforts targeting potential borrowers

The company employs direct marketing strategies to attract potential borrowers, focusing on home equity lines of credit and residential mortgage products. Commitments for home equity loans and lines of credit reached $1.62 billion for the nine months ended June 30, 2024, up from $1.24 billion in the same period of the previous year. Additionally, TFS Financial Corporation has leveraged partnerships and digital marketing campaigns to enhance visibility and engagement with prospective customers.

Channel Type	Details	Metrics
Branch Network	Locations in Ohio and Florida	38 branches (29 in Ohio, 9 in Florida)
Online Banking	Digital access for customers	1.2 million active users; 500,000+ app downloads
Direct Marketing	Targeting home equity and mortgage borrowers	Commitments for home equity loans: $1.62 billion (FY 2024)

TFS Financial Corporation (TFSL) - Business Model: Customer Segments

Homebuyers seeking residential mortgages

As of June 30, 2024, TFS Financial Corporation has a total residential mortgage loan portfolio of approximately $11.59 billion. The company originated $598.7 million in residential mortgage loans during the nine months ending June 30, 2024. The average yield on loans for the quarter ended June 30, 2024, was 4.38%, reflecting a 45 basis point increase from the same quarter in the prior year. TFS primarily serves homebuyers in Ohio and Florida, with significant portions of the mortgage portfolio secured by properties in these states.

Existing homeowners looking for home equity lines of credit

During the same period, TFS Financial Corporation originated $1.62 billion of commitments for home equity loans and lines of credit. The total balance of home equity loans and lines of credit was approximately $3.59 billion as of June 30, 2024. The average yield on home equity loans during this period was reported at 7.43%. The company has also seen a significant increase in home equity loans, with a $558.3 million rise during the nine months ending June 30, 2024.

Borrowers facing financial difficulties needing modifications

TFS Financial Corporation has a proactive stance towards borrowers facing financial difficulties. The allowance for credit losses on loans amounted to $67.5 million as of June 30, 2024. The company has provided modifications for borrowers experiencing financial distress, with modifications resulting in a weighted average contractual interest rate reduction for the Residential Core loans at 3.39%. As of June 30, 2024, the percentage of loans seriously delinquent (90 days or more) was 0.10% of total net loans. TFS Financial Corporation continues to monitor its modified loans closely to ensure effective management of credit risk.

Customer Segment	Total Loans (in billions)	Average Yield (%)	New Originations (in millions)	Serious Delinquency Rate (%)
Homebuyers seeking residential mortgages	11.59	4.38	598.7	0.06
Existing homeowners looking for home equity lines of credit	3.59	7.43	1,620	0.03
Borrowers facing financial difficulties needing modifications	N/A	3.39	N/A	0.10

TFS Financial Corporation (TFSL) - Business Model: Cost Structure

Operating expenses managed to remain competitive

The non-interest expense for TFS Financial Corporation decreased by $8.3 million, or 5%, to $153.3 million during the nine months ended June 30, 2024, compared to $161.6 million during the same period in 2023. This decrease was driven by a $7.0 million reduction in marketing expenses and a $2.6 million decrease in salaries and employee benefits.

As of June 30, 2024, the ratio of annualized non-interest expense to average assets was 1.20%, down from 1.34% for the nine months ended June 30, 2023. The average assets per full-time employee were $18.5 million.

Costs associated with maintaining branch infrastructure

The average deposits per full-time employee were $10.9 million, with average deposits held at branch offices amounting to $238.1 million as of June 30, 2024. This high level of deposits contributes to managing overhead costs effectively. The decrease in operating expenses has allowed TFS Financial to maintain a competitive edge in the market.

Interest expenses from deposits and borrowings

For the nine months ended June 30, 2024, TFS Financial reported a total interest expense of $335.8 million, an increase of $105.8 million, or 46%, compared to $230.0 million for the same period in 2023. Interest expense on certificates of deposit increased by $98.8 million, or 103%, to $194.7 million, driven by a 141 basis point increase in the average rate paid on CDs.

The average balance of certificates of deposit rose by $1.31 billion, or 22%, to $7.35 billion during the same nine-month period. Additionally, interest expense on borrowed funds increased by $12.0 million, or 11%, to $123.3 million, mainly due to higher average interest rates.

Expense Type	Amount (in millions)	Change (%)	Average Rate (%)
Total Interest Expense	335.8	46	N/A
Certificates of Deposit	194.7	103	3.53
Borrowed Funds	123.3	11	3.25

The increase in interest expenses reflects the rising market interest rates impacting the overall cost structure.

TFS Financial Corporation (TFSL) - Business Model: Revenue Streams

Interest income from mortgage and home equity loans

For the nine months ended June 30, 2024, TFS Financial Corporation reported an interest income on loans of $491.3 million, which is an increase of $80.5 million or 20% compared to the same period in the previous year. This increase was primarily due to a 54 basis point increase in the average yield on loans, reaching 4.31% from 3.77% in the prior year. The average balance of loans rose by $659.9 million to $15.19 billion for the current period compared to $14.53 billion previously.

Fees from loan origination and servicing activities

TFS Financial Corporation reported non-interest income of $18.3 million during the nine months ended June 30, 2024, which reflects an increase of $2.0 million or 12% compared to $16.3 million during the same period the previous year. This growth was largely driven by a $1.0 million increase in net gains from loan sales, which totaled $190.7 million during the reporting period.

Income from investments in marketable securities

As of June 30, 2024, TFS Financial Corporation had an investment securities portfolio valued at $523.0 million. This portfolio includes $448.4 million in mortgage-backed securities, which contributed $10.9 million in income during the nine months ended June 30, 2024.

Revenue Stream	Amount (in millions)	Change (%)	Description
Interest Income from Loans	$491.3	20%	Increase due to higher loan yields and balances.
Non-Interest Income	$18.3	12%	Includes gains from loan sales.
Investment Securities	$523.0	N/A	Marketable securities portfolio value.