A move into the broker market has paid dividends for Teachers Mutual Bank, which increased its mortgage portfolio by 11.4 per cent during the year to June.Teachers entered the third party mortgage distribution market last November and now has partnerships with seven aggregators servicing about 600 brokers.One of the issues Teachers had to consider was how brokers would deal with a bonded institution that requires only teachers and others working in the education sector can be members and be eligible for mortgage finance.Teachers chief executive Steve James said this had not been a problem. "We went for smaller aggregators that we thought would have more affinity with the way we operate," he said.James said the bank's aim was to be selling through about 1000 brokers by the end of the year.Teachers reported a net profit of A$25.8 million for the 12 months to June - down 8.2 per cent on the previous corresponding period.James said the fall in earnings was the result of a decision to eliminate some transaction fees, as well as the impact of lower interest rates and increased investment spending on IT systems and product development.The bank put some work into building its credit card portfolio, which grew by two per cent in a market that has not registered any growth over the past couple of years.James said: "We have a good product with a low interest rate. It is a good product for our members who might be paying 20 per cent interest on another card, so we thought we should do more to promote it."Total assets increased by 7.5 per cent to $4.4 billion and the mortgage portfolio made up $3.6 billion of that amount.The bank's bad debt expense edged up from $2.2 million in 2012/13 to $2.7 million in the year to June. James said banks have reached the bottom of the bad debt cycle, although the ratio of bad debts to loans is still very low.He said the bank would continue to work on product development in the year ahead. In April it launched a mortgage offset facility that is available with all its mortgage products, including fixed-rate and interest-only loans. Offsets are a standard feature with variable rate loans but are not otherwise widely available.The offset works through the bank's Everyday and Everyday Direct transaction accounts. It is a full offset, with the transaction account balances netted off the mortgage balance when mortgage interest is calculated, and interest on the transaction account balance credited to the mortgage account.