Tfs Financial Corp (TFSL) SEC Filing 10-Q Quarterly report for the period ending Friday, June 30, 2017

Earnings Press Release
10-Q Quarterly Report
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Tfs Financial Corp
Ticker: TFSL CIK: 1381668

Contact: David Reavis (216) 429-5036 Exhibit 99.1

For release Thursday, July 27, 2017

QUARTERLY RESULTS FOR TFS FINANCIAL

(Cleveland, OH - July 27, 2017) - 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 nine months ended June 30, 2017.

The Company reported net income of $22.8 million for the three months ended June 30, 2017, compared to net income of $20.6 million for the three months ended June 30, 2016. The improvement was due to a combination of an increase in net interest income and an increase in the recovery of loan losses, partially offset by a decrease in non-interest income. The Company reported net income of $65.9 million for the nine months ended June 30, 2017, compared to net income of $57.7 million for the nine months ended June 30, 2016, with similar individual variances between the two periods, plus lower non-interest expenses in the current period. In addition, results for the current nine month period had the benefit of a lower effective rate used to calculate income tax expense in accordance with recently adopted accounting guidance related to stock-based compensation.

“Another quarter of strong earnings reflect an increasingly healthy housing market,” said Marc A. Stefanski, Chairman and CEO of Third Federal. “Net income was up 10 percent over the same quarter last year. Because consumer confidence has improved, the housing market has strengthened, and we are seeing an increase in purchase mortgage originations, up 30 percent (fiscal) year-to-date, compared to the same three quarters in 2016. At the same time, increasing home values have helped generate overall loan growth, including strong demand for our home equity products.”

Net interest income in the current quarter was higher than the prior year quarter, as $6.7 million of additional interest income in the current period more than offset $3.8 million of additional interest expense. Interest income was higher, as a $900.1 million increase in the three-month average balance of interest-earning assets, mainly loans, more than offset the lower weighted average yield earned on those assets. The average cost of interest-bearing liabilities was higher in the current quarter as a result of increased short-term market interest rates and the use of longer duration funding sources that carried higher costs. Net interest income was $70.3 million for the three months ended June 30, 2017 and $67.4 million for the three months ended June 30, 2016. Net interest income was $208.8 million for the nine months ended June 30, 2017 and $202.8 million for the nine months ended June 30, 2016. The interest rate spread was 2.02% for the three months ended June 30, 2017 and 2.08% for the three months ended June 30, 2016. The interest rate spread for the nine months ended June 30, 2017 was 2.04%, compared to 2.10% for the prior year period. The net interest margin for the three months ended June 30, 2017 was 2.16%, compared to 2.22% for the three months ended June 30, 2016. The net interest margin for the nine months ended June 30, 2017 was 2.17%, as compared to 2.24% for the nine months ended June 30, 2016.

The provision for loan losses was a credit of $4.0 million for the three months ended June 30, 2017 compared to a credit of $3.0 million for the three months ended June 30, 2016. The provision for loan losses was a credit of $10.0 million for the nine months ended June 30, 2017 compared to a credit of $5.0 million for the nine months ended June 30, 2016. The credit for the current quarter was a result of a combination of favorable trends including lower gross loan charge-offs, higher loan recoveries and lower levels of loans delinquent 90 days or more. Gross loan charge-offs were $2.8 million for the three months ended June 30, 2017 and $3.7 million for the three months ended June 30, 2016, while loan recoveries were $4.8 million in the current quarter and $3.2 million in the prior year quarter. As a result of loan recoveries exceeding charge-offs, the Company reported net loan recoveries of $2.1 million and $3.1 million for the three months and nine months, respectively, ended June 30, 2017, compared to $0.5 million and $1.8 million of net loan charge-offs for the three months and nine months, respectively, ended June 30, 2016. Of the $3.1 million of net loan recoveries in the current fiscal year, $2.3 million of net recoveries occurred in the residential core portfolio (first mortgage loans other than the Home Today portfolio), $1.6 million of net recoveries occurred in the home equity loans and lines of credit portfolio and $0.7 million of net charge-offs occurred in the Home Today portfolio. The allowance for loan losses was $54.9 million, or 0.45% of total loans receivable, at June 30, 2017, compared to $61.8 million, or 0.52% of total loans receivable, at September 30, 2016. The Home Today portfolio, which essentially has been in run-off status since 2009, totaled $112.0 million at June 30, 2017 and $121.9 million at September 30, 2016.

Non-accrual loans decreased $8.9 million to $81.1 million, or 0.66% of total loans, at June 30, 2017 from $90.0 million, or 0.76% of total loans, at September 30, 2016. The $8.9 million decrease in non-accrual loans for the nine months ended

The following information was filed by Tfs Financial Corp (TFSL) on Thursday, July 27, 2017 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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