TFS Financial (TFSL) risk factors, FY2024 10-K

Risks Related to Economic Conditions

1. 01A worsening of economic conditions could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could have an adverse effect on our results of operations
2. 02Inflation can have an adverse impact on our business and on our customers

Risks Related to Market Interest Rates

1. 03Future changes in interest rates could reduce our net income
2. 04Hedging against interest rate risk exposure may adversely affect our earnings

Risks Related to Laws and Regulations

1. 05Changes in laws and regulations and the cost of compliance with new laws and regulations may adversely affect our operations and our income
2. 06We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or limit our ability to pay dividends or repurchase shares
3. 07The FRS may require the Company to commit capital resources to support the Association, and we may not have sufficient access to such capital resources
4. 08Monetary policies and regulations of the FRS could adversely affect our business, financial condition and results of operations
5. 09We may be required to raise additional capital in the future, but that capital may not be available when it is needed, or it may only be available on unacceptable terms, which could adversely affect our financial condition and results of operations
6. 10We may become subject to enforcement actions even though noncompliance was inadvertent or unintentional

Risks Related to our Lending Activities

1. 11Our lending activities provide lower interest rate returns than financial institutions that originate more commercial loans
2. 12Our business may be adversely affected by credit risk associated with residential property
3. 13Secondary mortgage market conditions could have a material impact on our financial condition and results of operations
4. 14If we are required to repurchase mortgage loans that we have previously sold, it would negatively affect our earnings
5. 15If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease
6. 16The foreclosure process may adversely impact our recoveries on non-performing loans

Risks Related to Competitive Matters

1. 17Strong competition within our market areas may limit our growth and profitability
2. 18We continually encounter technological change, and may have fewer resources than many of our larger competitors to continue to invest in technological improvements

Risks Related to Our Operations

1. 19Cyber-attacks, other security breaches or failure or interruption of information systems could adversely affect our operations, net income or reputation
2. 20If this confidential or proprietary information were to be mishandled, misused or lost, we could be exposed to significant regulatory consequences, reputational damage, civil litigation and financial loss
3. 21Customer or associate fraud subjects us to additional operational risks
4. 22If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected
5. 23Our operations rely on numerous external vendors
6. 24Our board of directors relies to a large degree on management and outside consultants in overseeing cybersecurity risk management
7. 25Our funding sources may prove insufficient to replace deposits at maturity and support our future growth. A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us
8. 26funding sources. Our financial flexibility will be severely constrained if we are unable to maintain our access to funding or if adequate financing is not available to accommodate future growth at acceptable interest rates
9. 27Recently we have held larger levels of certificates of deposit, which has increased our cost of funds and could continue to do so in the future
10. 28The soundness of other financial institutions could adversely affect us

Risk Related to Our Corporate Structure

1. 29Our sources of funds are limited because of our holding company structure
2. 30Restrictions on our ability to pay dividends to stockholders could adversely affect the value of our common stock
3. 31Public stockholders own a minority of the outstanding shares of our common stock and are not able to exercise voting control over most matters put to a vote of stockholders

Risks Related to Accounting Matters

1. 32Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and on our financial condition and/or operating results
2. 33Changes in accounting standards could affect reported earnings
3. 34Hurricanes or other adverse weather events could negatively affect the economy in our Florida market area or cause disruptions to our branch office locations, which could have an adverse effect on our business or results of operations
4. 35We are subject to environmental liability risk associated with lending activities or properties we own
5. 36Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
6. 37Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance
7. 38A protracted government shutdown may result in reduced loan originations and related gains on sales and could negatively affect our financial condition and results of operations