Friday, TFS Financial Corp. (TFSL), the holding company for Third Federal Savings and Loan Association of Cleveland, reported a swing to fourth-quarter net loss, weighed down by higher provision for loan losses.
The Cleveland, Ohio-based company reported a net loss of $12.9 million or $0.04 per share for the fourth quarter, compared to net income of $14.1 million or $0.04 per share a year ago.
The company attributed the loss to a higher provision for loan losses in the fourth quarter, partially offset by an increase in net gain on the sale of loans and decreases in marketing services and income tax expense.
Net interest income for the quarter increased 5% to $230.1 million from $219.9 million in the prior-year quarter, primarily from an improvement in interest rate spread, which increased 25 basis points to 1.70% from 1.45% in the prior-year quarter.
Non-interest income increased 41% to $67.4 million, primarily from a $29.0 million increase in net gain on the sale of loans, offset by a $4.3 million reduction of income on private equity investments and a $3.9 million reduction in fees and service charges, net of amortization.
Total interest and dividend income for the quarter declined to $114.05 million from $134.06 million in the year-earlier quarter.
Non-interest expense climbed 7% to $162.4 million due to an increase in federal insurance premiums.
Non-performing loans for the quarter increased to $255.8 million, or 2.73% of total loans, from $172.9 million, or 1.86% of total loans, in the prior-year quarter.
The company recorded a provision for loan losses of $57.0 million in the fourth quarter, compared to $9.0 million in the previous-year quarter. The provisions exceeded net charge-offs of $17.6 million and $7.4 million for the fourth quarter of 2009 and 2008, respectively.
The company's total deposits increased 4% to $8.57 billion during the fourth quarter.
For the full year, the company reported a decline in net income to $14.4 million from $54.5 million last year, primarily due to an increase in provision for loan losses and non-interest expenses. Total net interest income for the year increased to $230.08 million from $219.86 million in the previous year.
TFSL closed Friday's regular trading at $11.45, down $0.06 or 0.52%, on a volume of 335 thousand shares on the Nasdaq.
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