Tfs Financial Corp (TFSCY) SEC Filing 10-K Annual report for the fiscal year ending Sunday, September 30, 2012

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Tfs Financial Corp
Ticker: TFSCY CIK: 1381668

Exhibit 99.1

Contact: Jennifer Rosa (216) 429-5037

For release Tuesday, October 30, 2012

TFS Financial Corporation Announces Fiscal Year Ended September 30, 2012 Financial Results

(Cleveland, OH - October 30, 2012) - TFS Financial Corporation (NASDAQ: TFSL) (the "Company"), the holding company for Third Federal Savings and Loan Association of Cleveland (the "Association"), today announced results for the three months and fiscal year ended September 30, 2012.

The Company reported net income of $11.5 million for the year ended September 30, 2012, compared to net income of $9.3 million for the year ended September 30, 2011. The increase in net income for the year ended September 30, 2012 is largely the result of an increase in net interest income partially offset by lower non-interest income and slightly higher provision for loan losses and non-interest expenses. Net income of $1.1 million was reported for the three months ended September 30, 2012, compared to net income of $8.5 million for the three months ended September 30, 2011. This change is mainly attributable to an increase in the provision for loan losses and higher non-interest expenses, partially offset by an increase in net interest income.

Loan growth and lower interest rates on deposits and borrowed funds caused net interest income to increase $14.6 million, or 6%, to $262.2 million for the year ended September 30, 2012 from $247.6 million for the year ended September 30, 2011. Net interest income increased $2.3 million, or 4%, to $66.3 million for the three months ended September 30, 2012 from $64.0 million for the three months ended September 30, 2011. First mortgage loan originations exceeded $2.64 billion for the year. Low interest rates continue to decrease the yield on interest-earning assets and to an even greater extent, the rate paid on deposits and borrowed funds. As a result, the interest rate spread has improved from the prior year. The interest rate spread for the year ended September 30, 2012 was 2.11% compared to 1.97% last year. The net interest margin for the year ended September 30, 2012 was 2.39% compared to 2.32% last year.

"Our geographic expansion and a healthy refinance market has continued to fuel our growth," said Chairman and CEO Marc A. Stefanski. "However we continue to experience elevated provisions because of the slow economic recovery and adjusting to the ongoing regulatory changes."

The Office of the Comptroller and Currency, the Association's primary regulator, issued guidance in the current quarter which requires the charge off of performing loans to collateral value when the borrowers have had their obligations discharged in Chapter 7 bankruptcy, regardless of how long the loans have been performing, and the classification of those loans as troubled debt restructurings. The implementation of this guidance during the current quarter negatively impacted the Company's provision for loan losses, net charge-offs, and the levels of troubled debt restructuring and non-accrual loans at September 30, 2012. The Company recorded a provision for loan losses of $29.0 million for the three months ended September 30, 2012 compared to $19.0 million for the three months ended September 30, 2011. The Company reported $35.9 million of net loan charge-offs for the three months ended September 30, 2012 compared to $15.3 million for the three months ended September 30, 2011. Of the $35.9 million of net charge-offs for the three months ended September 30, 2012, $15.8 million occurred as a result of the regulatory guidance. Excluding these incremental charge-offs, net charge-offs for the quarter would have been $20.1 million. Of the $35.9 million of net charge-offs, $17.1 million occurred in the equity loans and lines of credit portfolio, $10.6 million occurred in the residential, non-Home Today portfolio and $8.3 million occurred in the Home Today portfolio. The Home Today portfolio is an affordable housing program targeted toward low and moderate income home buyers, which totaled $208.3 million at September 30, 2012 and $264.0 million at September 30, 2011. The Company recorded a provision for loan losses of $102.0 million for the year ended September 30, 2012 compared to $98.5 million for the year ended September 30, 2011. The Company reported $158.5 million of net loan charge-offs for the year ended September 30, 2012. This included the $15.8 million impact of the regulatory guidance mentioned above and the impact of charging off, during the December, 2011 quarter, the Specific Valuation Allowance (SVA), which was $55.5 million at September 30, 2011. This charge-off was also required by regulatory directive. The SVA charge-off was a major reason for the decrease in the reported balances of delinquent and nonperforming loans, non-accrual loans and the allowance for loan losses as of September 30, 2012, from balances at September 30, 2011. Net charge-offs were $74.8 million for the year ended September 30, 2011. The allowance for loan losses was $100.5 million, or 0.97% of total loans receivable, at September 30, 2012, compared to $157.0 million, or 1.58% of total loans receivable, at September 30, 2011.

Non-accrual loans decreased $52.7 million to $182.6 million, or 1.77% of total loans, at September 30, 2012 from $235.3 million, or 2.37% of total loans, at September 30, 2011. Non-accrual loans had decreased $86.7 million prior to implementing the regulatory guidance regarding Chapter 7 bankruptcy loans mentioned above. The $52.7 million decrease in non-accrual loans for the year ended September 30, 2012 consisted of a $19.2 million decrease in the residential, non-Home Today portfolio; a $28.5 million decrease in the residential, Home Today portfolio; a $1.6 million decrease in the equity loans and

The following information was filed by Tfs Financial Corp (TFSCY) on Tuesday, October 30, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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