TFSL not in the same situation as some vulnerable regional banks

…and this author makes a good case why that is the case:

[TFS Financial: Don’t Throw This Bank Out With The Bathwater (NASDAQ:TFSL) | Seeking Alpha](TFS Financial: Don't Throw This Bank Out With The Bathwater (NASDAQ:TFSL) | Seeking Alpha

BL Home Fool
(long TFSL)


One potential problem with TFSL is their ability to cover the dividend payment with free cash flow. Looking at the 10-K from 9-30-22, specifically the cash flow statement, they had no problems doing that in fiscal 2021 and 2020, but in the fiscal year ended 9-30-22, they did not do that. Free cash flow was a bit over $36 million, while the dividend cost them $58 million.

For the first quarter ended 12-31-22, free cash flow was about $77 million, while the dividend cost them about $15 million. Looks good. But, included in cash flow from operations was a $63 million item for cash provided related to accrued expenses and other liabilities. I’m not sure what all is in that number, but if it’s accrued expenses, those will likely need to be paid in the coming month or two. So taking that out of the cash flow from operations total, now we have not $78 million, but rather $15 million and free cash flow would be down to $13 million. Not quite enough to cover the dividend.

Maybe I’m missing something. This could all be just due to timing, but it may be a trend as well. It’s something I will be wanting to keep an eye on going forward.

TH (long TFSL)