UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 11, 2020
TFS FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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| United States of America | | 001-33390 | | 52-2054948 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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| 7007 Broadway Ave., | Cleveland, | Ohio | | 44105 |
| (Address of principle executive offices) | | (Zip Code) |
Registrant's telephone number, including area code (216) 441-6000
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act
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| Title of each class | | Trading Symbol(s) | | Name of each exchange in which registered |
| Common Stock, par value $0.01 per share | | TFSL | | The NASDAQ Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 8.01 Other Events
Reliance on SEC Order Providing 45-Day Extension of Filing of Quarterly Report on Form 10-Q
Reference is made to the current report on Form 8-K filed by TFS Financial Corporation, (the Company), on April 30, 2020 in which the Company furnished a press release announcing its operating results for the three months and six months ended March 31, 2020.
Notwithstanding that the internal review of the Company's financial results is substantially complete and the Company's earnings were released April 30, 2020, the Company has determined that it will delay its filing of its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 as a result of the outbreak in the United States of the novel coronavirus, COVID-19 in order to complete its review of said Quarterly Report. In reliance on the order promulgated by the Securities and Exchange Commission on March 25, 2020 in Release No. 34-88465 relating to the Securities Exchange Act of 1934, as amended, the Company will file its Quarterly Report by June 22, 2020, which is 45 calendar days after the due date of the Quarterly Report, although the Company currently expects to file its Quarterly Report on or about May 15, 2020.
The Company is unable to file the Quarterly Report in a timely manner because the Company has been following the recommendations of local authorities to minimize exposure risk for its associates for the past several weeks, including reducing the number of associates reporting to their normal workplace while the Company established the ability for those associates to work remotely. As a result, the Quarterly Report will not be completed by the filing deadline, due to insufficient time to facilitate the review process.
In light of the current COVID-19 pandemic, the Company will be including the following Risk Factor in its Report:
The economic impact of the COVID-19 outbreak could adversely affect our financial condition and results of operations.
In December 2019, a coronavirus (COVID-19) was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. On March 12, 2020 the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation in the United States as many state and local governments have ordered non-essential businesses to close and residents to shelter in place at home. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. Since the COVID-19 outbreak, millions of individuals have filed claims for unemployment, and stock markets have declined in value and in particular bank stocks have significantly declined in value. In response to the COVID-19 outbreak, the Federal Reserve has reduced the benchmark fed funds rate to a target range of 0% to 0.25%, and the yields on 10 and 30-year treasury notes have declined to historic lows. Various state governments and federal agencies are requiring lenders to provide forbearance and other relief to borrowers (e.g., waiving late payment and other fees). The federal banking agencies have encouraged financial institutions to prudently work with affected borrowers and recently passed legislation has provided relief from reporting loan classifications due to modifications related to the COVID-19 outbreak. Finally, the spread of the coronavirus has caused us to modify our business practices, including associate travel, associate work locations, and cancellation of physical participation in meetings, events and conferences. We have many associates working remotely and we may take further actions as may be required by government authorities or that we determine are in the best interests of our associates, customers and business partners.
Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the† COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:
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| • | demand for our products and services may decline, making it difficult to grow assets and income; |
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| • | if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; |
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| • | collateral for loans,†especially real estate, may decline in value, which could cause loan losses to increase; |
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| • | our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income; |
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| • | the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; |
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| • | as the result of the decline in the Federal Reserve Board's target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income; |
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| • | a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend; |
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| • | our cyber security risks are increased as the result of an increase in the number of associates working remotely; |
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| • | we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us; and |
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| • | Federal Deposit Insurance Corporation premiums may increase if the agency experience additional resolution costs. |
Moreover, our future success and profitability substantially depends on the management skills of our executive officers and directors, many of whom have held officer and director positions with us for many years. The unanticipated loss or unavailability of key associates due to the outbreak could harm our ability to operate our business or execute our business strategy. We may not be successful in finding and integrating suitable successors in the event of key associate loss or unavailability.
Any one or a combination of the factors identified above could negatively impact our business, financial condition and results of operations and prospects.
FORM 8-K EXHIBIT INDEX
Exhibit No.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | TFS FINANCIAL CORPORATION (Registrant) | |
| Date: May 11, 2020 | By: | /s/ Paul J. Huml | |
| | | Paul J. Huml | |
| | | Chief Financial Officer | |
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