Thrifts & Mortgage Finance Stocks Q1 Recap: Benchmarking TFS Financial (NASDAQ:TFSL)

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the thrifts & mortgage finance stocks, including TFS Financial (NASDAQ:TFSL) and its peers.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 22 thrifts & mortgage finance stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 18.5%.

In light of this news, share prices of the companies have held steady as they are up 2% on average since the latest earnings results.

TFS Financial (NASDAQ:TFSL)

Tracing its roots back to 1938 during the Great Depression era when savings and loans were vital to homeownership, TFS Financial (NASDAQ:TFSL) is a savings and loan holding company that provides mortgage lending, deposit services, and other retail banking products primarily in Ohio and Florida.

TFS Financial reported revenues of $77.62 million, flat year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ net interest income estimates but EPS in line with analysts’ estimates.

“Our second quarter earnings reflect our ability to successfully operate in any economic climate,” said Chairman and CEO Marc A. Stefanski.

The stock is down 3.3% since reporting and currently trades at $13.

Is now the time to buy TFS Financial? Access our full analysis of the earnings results here, it’s free.

Best Q1: Northwest Bancshares (NASDAQ:NWBI)

Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ:NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.

Northwest Bancshares reported revenues of $156.2 million, up 19% year on year, outperforming analysts’ expectations by 9.9%. The business had a stunning quarter with a solid beat of analysts’ EPS and net interest income estimates.

The market seems happy with the results as the stock is up 6.1% since reporting. It currently trades at $12.53.

Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Franklin BSP Realty Trust (NYSE:FBRT)

Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.

Franklin BSP Realty Trust reported revenues of $52.01 million, up 1.8% year on year, falling short of analysts’ expectations by 6%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 3.7% since the results and currently trades at $11.10.

Read our full analysis of Franklin BSP Realty Trust’s results here.

Dynex Capital (NYSE:DX)

Operating in the financial markets since 1988 with a focus on capital preservation during economic turbulence, Dynex Capital (NYSE:DX) is a mortgage real estate investment trust that invests primarily in government-backed residential mortgage securities to generate income for shareholders.

Dynex Capital reported revenues of $17.13 million, up 637% year on year. This result came in 22.4% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ EPS estimates.

Dynex Capital scored the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $12.39.

Read our full, actionable report on Dynex Capital here, it’s free.

Ready Capital (NYSE:RC)

Operating as one of only 17 non-bank Small Business Lending Companies with preferred lender status from the SBA, Ready Capital (NYSE:RC) is a multi-strategy real estate finance company that originates, acquires, and services commercial real estate loans, small business loans, and other real estate investments.

Ready Capital reported revenues of $31.32 million, up 140% year on year. This print missed analysts’ expectations by 56.7%. Overall, it was a disappointing quarter as it also logged a significant miss of analysts’ tangible book value per share and EPS estimates.

The stock is up 4.9% since reporting and currently trades at $4.58.

Read our full, actionable report on Ready Capital here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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