TFS Financial (TFSL) in Cleveland boosted first-quarter profits by 28% as improved credit quality allowed it to chop its loan-loss provision in half.

The $11.5 billion-asset company reported earnings of $16.4 million in the first quarter, or 5 cents per share. Per-share earnings were consistent with the estimates of analysts polled by Bloomberg.

TFS slashed its loan-loss provision in half, to $5 million. Net chargeoffs also fell by almost half, to $6.9 million.

Net interest income ticked up 2%, to $69 million. Interest expenses fell because of lower interest rates on deposits and other factors; that offset a decline in interest income tied to lower yields on interest-earning assets. Its net interest margin was unchanged at 2.48%.

Noninterest income fell 10%, to $5.5 million, as the company took in less revenue from loan sales.

Noninterest expense dipped 0.6%, to $44.9 million.

TFS and its bank, Third Federal Savings and Loan, were released from a memorandum of understanding with the Federal Reserve early this month. TFS is now "repurchasing stock, as well as working on the requirements to reinstate a regular dividend," the company's chairman and chief executive, Marc Stefanski, said in a press release Thursday.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.