What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 189 added, 184 removed, 1013 unchanged (27% of the section changed)

35 unchanged sentences

332,318,750 shares issued;

280,710,854 and 280,359,173 outstanding at March 31, 2024 and September 30, 2023, respectively

280,710,854 and 280,359,173 outstanding at June 30, 2024 and September 30, 2023, respectively

Paid-in capital 1,753,074 1,755,027

Treasury stock, at cost;

51,607,896 and 51,959,577 shares at March 31, 2024 and September 30, 2023, respectively

51,607,896 and 51,959,577 shares at June 30, 2024 and September 30, 2023, respectively

( 772,195 ) ( 776,101 )

8 unchanged sentences

(In thousands, except share and per share data)

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

38 unchanged sentences

(In thousands)

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

7 unchanged sentences

196 46,284 ( 42,598 ) 27,836

Total comprehensive income (loss)

Total comprehensive income

$ 20,149 $ 63,887 $ 18,775 $ 83,540

3 unchanged sentences

(In thousands, except share and per share data)

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

stock Paid-in

6 unchanged sentences

shareholders’

Balance at December 31, 2022 $ 3,323 $ 1,751,020 $ ( 775,154 ) $ ( 30,334 ) $ 877,713 $ 23,021 $ 1,849,589

Balance at March 31, 2023 $ 3,323 $ 1,752,508 $ ( 775,852 ) $ ( 29,250 ) $ 879,046 $ 4,701 $ 1,834,476

Net income — — — — 17,603 — 17,603

Other comprehensive income (loss), net of tax

Other comprehensive income, net of tax

— — — — — 46,284 46,284

1 unchanged sentence

Compensation costs for equity incentive plans — 1,065 — — — — 1,065

Purchase of treasury stock ( 46,869 shares)

— — ( 684 ) — — — ( 684 )

Treasury stock allocated to equity incentive plan — ( 4 ) — — — — ( 4 )

1 unchanged sentence

— — — — ( 14,615 ) — ( 14,615 )

Balance at March 31, 2023 $ 3,323 $ 1,752,508 $ ( 775,852 ) $ ( 29,250 ) $ 879,046 $ 4,701 $ 1,834,476

For the Three Months Ended March 31, 2024

Balance at June 30, 2023 $ 3,323 $ 1,753,801 $ ( 775,852 ) $ ( 28,167 ) $ 882,034 $ 50,985 $ 1,886,124

For the Three Months Ended June 30, 2024

stock Paid-in

6 unchanged sentences

shareholders’

Balance at December 31, 2023 $ 3,323 $ 1,750,440 $ ( 772,195 ) $ ( 26,000 ) $ 900,973 $ 10,186 $ 1,866,727

Balance at March 31, 2024 $ 3,323 $ 1,751,960 $ ( 772,195 ) $ ( 24,917 ) $ 906,908 $ 42,418 $ 1,907,497

Net income — — — — 19,953 — 19,953

2 unchanged sentences

Compensation costs for equity incentive plans — 840 — — — — 840

Treasury stock allocated to equity incentive plan — ( 6 ) — — — — ( 6 )

Dividends declared to common shareholders ($ 0.2825 per common share)

— — — — ( 14,779 ) — ( 14,779 )

Balance at March 31, 2024 $ 3,323 $ 1,751,960 $ ( 772,195 ) $ ( 24,917 ) $ 906,908 $ 42,418 $ 1,907,497

For the Six Months Ended March 31, 2023

Balance at June 30, 2024 $ 3,323 $ 1,753,074 $ ( 772,195 ) $ ( 23,834 ) $ 912,082 $ 42,614 $ 1,915,064

For the Nine Months Ended June 30, 2023

stock Paid-in

17 unchanged sentences

— — — — ( 43,717 ) — ( 43,717 )

Balance at March 31, 2023 $ 3,323 $ 1,752,508 $ ( 775,852 ) $ ( 29,250 ) $ 879,046 $ 4,701 $ 1,834,476

For the Six Months Ended March 31, 2024

Balance at June 30, 2023 $ 3,323 $ 1,753,801 $ ( 775,852 ) $ ( 28,167 ) $ 882,034 $ 50,985 $ 1,886,124

For the Nine Months Ended June 30, 2024

stock Paid-in

17 unchanged sentences

— — — — ( 44,173 ) — ( 44,173 )

Balance at March 31, 2024 $ 3,323 $ 1,751,960 $ ( 772,195 ) $ ( 24,917 ) $ 906,908 $ 42,418 $ 1,907,497

Balance at June 30, 2024 $ 3,323 $ 1,753,074 $ ( 772,195 ) $ ( 23,834 ) $ 912,082 $ 42,614 $ 1,915,064

1 Related to ASU 2022-02 adopted October 1, 2023.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands)

For the Six Months Ended March 31,

For the Nine Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

27 unchanged sentences

Other 3,001 88

Net cash provided by (used in) investing activities 30,133 ( 346,929 )

Net cash used in investing activities ( 12,839 ) ( 724,101 )

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Net decrease in principal and interest owed on loans serviced ( 12,944 ) ( 13,403 )

Net increase in short-term borrowed funds ( 642,000 ) 275,000

Net increase (decrease) in short-term borrowed funds ( 742,000 ) 518,050

Net increase (decrease) in Fed Funds purchased — ( 225,000 )

2 unchanged sentences

Cash collateral/settlements received from (provided to) derivative counterparties ( 44,851 ) 33,561

Acquisition of treasury shares ( 1,918 ) ( 5,632 )

Acquisition or net settlement of treasury shares

( 1,924 ) ( 5,636 )

Dividends paid to common shareholders ( 44,203 ) ( 43,733 )

Net cash provided by financing activities 46,918 355,367

Net cash (used in) provided by financing activities ( 40,752 ) 713,856

NET INCREASE IN CASH AND CASH EQUIVALENTS 93,689 66,651

18 unchanged sentences

The principal line of business of the Company is retail consumer banking, including mortgage lending, deposit gathering and, to a much lesser extent, other financial services.

As of March 31, 2024, approximately 80.9 % of the Company’s outstanding shares were owned by the federally chartered mutual holding company, Third Federal Savings and Loan Association of Cleveland, MHC.

As of June 30, 2024, approximately 80.9 % of the Company’s outstanding shares were owned by the federally chartered mutual holding company, Third Federal Savings and Loan Association of Cleveland, MHC.

The thrift subsidiary of TFS Financial Corporation is Third Federal Savings and Loan Association of Cleveland.

5 unchanged sentences

The allowance for credit losses, the valuation of deferred tax assets, and the determination of pension obligations are particularly subject to change.

The unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial condition of the Company at March 31, 2024, and its consolidated results of operations and cash flows for the periods presented.

The unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial condition of the Company at June 30, 2024, and its consolidated results of operations and cash flows for the periods presented.

Such adjustments are the only adjustments reflected in the unaudited interim financial statements.

6 unchanged sentences

RECENT ACCOUNTING PRONOUNCEMENTS for additional details related to the adoption.

Per ASC 606, Revenue from Contracts with Customers , an entity is required to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services.

Per ASC 606, Revenue from Contracts with Customers , an entity is required to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.

Three of the Company's revenue streams within scope of Topic 606 are the sales of REO, interchange income, and deposit account and other transaction-based service fee income.

8 unchanged sentences

Performance share units, determined to be contingently issuable and not participating securities, are excluded from the calculation of basic EPS.

At March 31, 2024 and 2023, the ESOP held 2,491,701 and 2,925,041 shares, respectively, that were neither allocated to participants nor committed to be released to participants.

At June 30, 2024 and 2023, the ESOP held 2,383,366 and 2,816,706 shares, respectively, that were neither allocated to participants nor committed to be released to participants.

The following is a summary of the Company's earnings per share calculations.

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Income Shares Per share

8 unchanged sentences

Income available to common shareholders $ 19,610 279,221,360 $ 0.07 $ 17,215 278,590,810 $ 0.06

For the Six Months Ended March 31,

For the Nine Months Ended June 30,

Income Shares Per share

9 unchanged sentences

The following is a summary of outstanding stock options and restricted and performance share units that are excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive.

For the Three Months Ended March 31, For the Six Months Ended March 31,

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2024 2023 2024 2023

3 unchanged sentences

Investments available for sale are summarized in the tables below.

March 31, 2024

June 30, 2024

Unrealized Fair

11 unchanged sentences

Total $ 561,715 $ 1 $ ( 53,392 ) $ 508,324

At March 31, 2024 and September 30, 2023, investment securities included $ 68,335 and $ 59,813 , respectively, of U.S.

At June 30, 2024 and September 30, 2023, investment securities included $ 68,581 and $ 59,813 , respectively, of U.S.

government obligations pledged as collateral on our open swap positions to meet margin requirements established by the clearing organization.

Accrued interest on investment securities is $ 2,355 and $ 1,907 at March 31, 2024 and September 30, 2023, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION .

The following is a summary of our securities portfolio by the period remaining until contractual maturity and yield at March 31, 2024.

Accrued interest on investment securities is $ 1,813 and $ 1,907 at June 30, 2024 and September 30, 2023, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION .

The following is a summary of our securities portfolio by the period remaining until contractual maturity and yield at June 30, 2024.

Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur.

Weighted average yields are not presented on a tax-equivalent basis and are calculated by multiplying each carry value by its yield and dividing the sum of these results by the total carry values.

We did not hold any tax-exempt securities at March 31, 2024 or September 30, 2023.

March 31, 2024 September 30, 2023

We did not hold any tax-exempt securities at June 30, 2024 or September 30, 2023.

June 30, 2024 September 30, 2023

Amortized Cost Fair Value Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield

4 unchanged sentences

Total $ 564,548 $ 522,967 3.36 % $ 561,715 $ 508,324 3.03 %

Gross unrealized losses on available for sale securities and the estimated fair value of the related securities, aggregated by the length of time the securities have been in a continuous loss position, at March 31, 2024 and September 30, 2023, were as follows:

March 31, 2024

Gross unrealized losses on available for sale securities and the estimated fair value of the related securities, aggregated by the length of time the securities have been in a continuous loss position, at June 30, 2024 and September 30, 2023, were as follows:

June 30, 2024

Less Than 12 Months 12 Months or More Total

23 unchanged sentences

In addition, the U.S.

Treasury Department established financing agreements in 2008 to ensure Fannie Mae and Freddie Mac meet their obligations to holders of mortgage-backed securities that they have issued or guaranteed.

Since the decline in value is primarily attributable to an increase in market interest rates and not credit quality deterioration and because the Company has neither the intent to sell the securities nor is it more likely than not the Company will be required to sell the securities prior to recovery of the amortized cost, the Company did not record an allowance for credit losses as of March 31, 2024 or September 30, 2023 .

Treasury Department has established financing agreements to ensure Fannie Mae and Freddie Mac meet their obligations to holders of mortgage-backed securities that they have issued or guaranteed.

Since the decline in value is primarily attributable to an increase in market interest rates and not credit quality deterioration, and because the Company has neither the intent to sell the securities nor is it more likely than not the Company will be required to sell the securities prior to recovery of the amortized cost, the Company did not record an allowance for credit losses on investment securities as of June 30, 2024 or September 30, 2023 .

LOANS AND ALLOWANCE FOR CREDIT LOSSES

15 unchanged sentences

Loans held for investment are carried at amortized cost, which includes outstanding principal balance adjusted for any unamortized premiums or discounts, net of deferred fees and expenses and any applicable loans-in-process.

Accrued interest is $ 54,514 and $ 51,989 as of March 31, 2024 and September 30, 2023, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION.

Accrued interest is $ 56,795 and $ 51,989 as of June 30, 2024 and September 30, 2023, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION.

A large concentration of the Company’s lending is in Ohio and Florida.

As of March 31, 2024 and September 30, 2023, the percentage of aggregate Residential Core, Home Today and Construction loans secured by properties in Ohio was 58 % and 57 %, respectively, and the percentage of loans secured by properties in Florida was 18 % as of both dates.

As of March 31, 2024 and September 30, 2023, home equity loans and lines of credit were concentrated in Ohio ( 25 % and 26 %, respectively), Florida ( 23 % and 22 %, respectively), and California ( 17 % as of both dates).

At June 30, 2024 and September 30, 2023, the percentage of aggregate Residential Core, Home Today and Construction loans secured by properties in Ohio was 58 % and 57 %, respectively, and the percentage of loans secured by properties in Florida was 17 % and 18 %, respectively.

As of June 30, 2024 and September 30, 2023, home equity loans and lines of credit were concentrated in Ohio ( 24 % and 26 %, respectively), Florida ( 23 % and 22 %, respectively), and California ( 17 % as of both dates).

Residential Core mortgage loans represent the largest portion of the residential real estate portfolio.

4 unchanged sentences

With limited historical loss experience compared to other types of loans in the portfolio, judgment is required by management in assessing the allowance required on adjustable-rate mortgage loans.

The principal amount of adjustable-rate mortgage loans included in the Residential Core portfolio was $ 4,621,146 and $ 4,760,843 at March 31, 2024 and September 30, 2023, respectively.

The principal amount of adjustable-rate mortgage loans included in the Residential Core portfolio was $ 4,497,753 and $ 4,760,843 at June 30, 2024 and September 30, 2023, respectively.

Home Today was an affordable housing program targeted to benefit low- and moderate-income home buyers.

12 unchanged sentences

The Company records a liability for the down payment assistance loans which are forgiven in equal increments over a pre-determined term, subject to residency requirements.

Loans held for sale include loans originated with the intent to sell which are generally priced in alignment with secondary market pricing and may be subject to loan level pricing adjustments.

Loans held for sale include loans originated or purchased with the intent to sell which are generally priced in alignment with secondary market pricing and may be subject to loan level pricing adjustments.

Additionally, loans originated or purchased for the held for investment portfolio may later be identified for sale and transferred to the held for sale portfolio, which may include loans originated or purchased within the parameters of programs established by Fannie Mae.

During the three and six months ended March 31, 2024 and March 31, 2023, reclassifications to the held for sale portfolio included loans that were sold during the period, including those in contracts pending settlement at the end of the period, and loans originated for the held for investment portfolio that were later identified for sale.

At March 31, 2024 and September 30, 2023, mortgage loans held for sale totaled $ 9,698 and $ 3,260 , respectively.

During the three and six months ended March 31, 2024, the principal balance of loans sold was $ 33,477 and $ 121,320 (including loans in contracts pending settlement) compared to $ 15,381 and $ 34,563 (including contracts pending settlement) during the three and six months ended March 31, 2023.

During the three and six months ended March 31, 2024, the amortized cost of loans originated as held for sale that were subsequently transferred to the held for investment portfolio was $ 0 , compared to $ 8,433 during the three and six months ended March 31, 2023.

During the three and nine months ended June 30, 2024 and June 30, 2023, reclassifications to the held for sale portfolio included loans that were sold during the period, including those in contracts pending settlement at the end of the period, and loans originated for the held for investment portfolio that were later identified for sale.

At June 30, 2024 and September 30, 2023, mortgage loans held for sale totaled $ 30,391 and $ 3,260 , respectively.

During the three and nine months ended June 30, 2024, the principal balance of loans sold was $ 69,420 and $ 190,743 (including loans in contracts pending settlement) compared to $ 23,583 and $ 58,146 (including no contracts pending settlement) during the three and nine months ended June 30, 2023, respectively.

During the three and nine months ended June 30, 2024, the amortized cost of loans originated as held for sale that were subsequently transferred to the held for investment portfolio were both $ 771 , compared to $ 0 and $ 8,433 during the three and nine months ended June 30, 2023, respectively.

DELINQUENCY and NON-ACCRUAL

An aging analysis of the amortized cost in loan receivables that are past due at March 31, 2024 and September 30, 2023 is summarized in the following tables.

An aging analysis of the amortized cost in loan receivables that are past due at June 30, 2024 and September 30, 2023, is summarized in the following tables.

When a loan is more than one month past due on its scheduled payments, the loan is considered 30 days or more past due, regardless of the number of days in each month.

3 unchanged sentences

Due Current Total

March 31, 2024

June 30, 2024

Real estate loans:

28 unchanged sentences

Balances are adjusted for deferred loan fees and expenses.

There are no loans 90 or more days past due and still accruing at March 31, 2024 or September 30, 2023.

March 31, 2024 September 30, 2023

There are no loans 90 or more days past due and still accruing at June 30, 2024 or September 30, 2023.

June 30, 2024 September 30, 2023

Non-accrual with No ACL

5 unchanged sentences

Total non-accrual loans $ 30,621 $ 35,369 $ 27,237 $ 31,914

At March 31, 2024 and September 30, 2023, respectively, the amortized cost in non-accrual loans includes $ 21,028 and $ 18,915 which are performing according to the terms of their agreement, of which $ 11,610 and $ 11,508 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

At March 31, 2024 and September 30, 2023, real estate loans include $ 10,483 and $ 9,144 , respectively, of loans that were in the process of foreclosure.

At June 30, 2024 and September 30, 2023, respectively, the amortized cost in non-accrual loans includes $ 20,635 and $ 18,915 which are performing according to the terms of their agreement, of which $ 11,434 and $ 11,508 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

At June 30, 2024 and September 30, 2023, real estate loans include $ 9,543 and $ 9,144 , respectively, of loans that were in the process of foreclosure.

Interest on loans in accrual status is recognized in interest income as it accrues, on a daily basis.

2 unchanged sentences

Cash payments on loans in non-accrual status are applied to the oldest scheduled, unpaid payment first.

The amount of interest income recognized on non-accrual loans was $ 162 and $ 324 for the three and six months ended March 31, 2024, and $ 196 and $ 359 for the three and six months ended March 31, 2023.

The amount of interest income recognized on non-accrual loans was $ 183 and $ 507 for the three and nine months ended June 30, 2024, and $ 145 and $ 503 for the three and nine months ended June 30, 2023, respectively.

Cash payments on loans with a partial charge-off are applied fully to principal, then to recovery of the charged off amount prior to interest income being recognized, except cash payments may be applied to interest capitalized in a modification when collection of remaining amounts due is considered probable.

7 unchanged sentences

The Company adopted ASU 2022-02 on October 1, 2023, which eliminated the accounting for TDRs.

As such, at March 31, 2024, there was no allowance for individually reviewed TDRs (IVAs), based on the present value of cash flows, as compared to September 30, 2023, when there was $ 9,546 .

As such, at June 30, 2024, there was no allowance for individually reviewed TDRs (IVAs), based on the present value of cash flows, as compared to September 30, 2023, when there was $ 9,546 .

Effective with this adoption, losses on loans with modifications to borrowers experiencing financial difficulties, previously identified as TDRs, will be estimated as described above, in the same manner as loans that have not been subject to such modifications.

1 unchanged sentence

Qualitative adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency status or likely recovery of previous loan charge-offs.

Qualitative adjustments for expected changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors, are recognized when forecasted economic data used in the model differs from management's view or contains significant unobservable changes within a short period, particularly when those changes are directionally positive.

Identifiable model limitations may also lead to qualitative adjustments, such as those made to reflect the expected recovery of loan amounts previously charged-off, beyond what the model is able to project.

The qualitative adjustments resulted in a negative ending balance on the allowance for credit losses for the Home Today portfolio, where recoveries are expected to exceed charge-offs over the remaining life of that portfolio.

The net qualitative adjustment at March 31, 2024, was a reduction to the allowance for

credit losses of $ 6,598 , compared to a reduction of $ 13,425 at September 30, 2023.

During the fiscal year, a portion of the loss estimate that had previously been measured qualitatively was reclassified to the model-driven quantitative estimate due to enhancements in the accessibility of certain data.

Adjustments are evaluated quarterly based on current facts and circumstances.

The net qualitative adjustment at June 30, 2024, was a reduction to the allowance for credit losses of $ 6,753 , compared to a reduction of

$ 13,425 at September 30, 2023.

At June 30, 2024, a portion of the allowance for credit losses that had been measured qualitatively at September 30, 2023 was included in the model-driven quantitative estimate due to enhancements in data quality.

Qualitative adjustments are evaluated quarterly, at a minimum, based on current facts and circumstances.

Partial or full charge-offs are recognized for the amount of credit losses on loans when the borrower is experiencing financial difficulty as described by meeting the conditions below:

9 unchanged sentences

For all classes of loans, a loan is considered collateral-dependent when, based on current information and events, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the collateral or foreclosure is probable.

Factors considered in determining that a loan is collateral-dependent may include the deteriorating financial condition of the borrower indicated by missed or delinquent payments, a pending legal action, such as bankruptcy or foreclosure, or the absence of adequate security for the loan.

Factors considered in determining that a loan is collateral-dependent may include the deteriorating financial condition of the borrower indicated by missed or delinquent payments, or a pending legal action, such as bankruptcy or foreclosure.

Collateral-dependent residential mortgage loans and construction loans are charged-off to the extent the amortized cost in the loan, net of anticipated mortgage insurance claims, exceeds the fair value, less estimated costs to dispose of the underlying property.

5 unchanged sentences

LOAN COMMITMENTS AND CONTINGENT LIABILITIES for further details on the allowance for unfunded commitments.

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Balance Provisions (Releases) Charge-offs Recoveries Ending

8 unchanged sentences

Total Allowance for Credit Losses $ 94,826 $ ( 500 ) $ ( 263 ) $ 1,629 $ 95,692

(1) For all periods presented, the total allowance for unfunded loan commitments is recorded in other liabilities on the CONSOLIDATED STATEMENTS OF CONDITION and primarily relates to undrawn home equity lines of credit.

For the Three Months Ended March 31, 2023

(1) For all periods presented, the total allowance for unfunded loan commitments is recognized in accrued expenses and other liabilities on the CONSOLIDATED STATEMENTS OF CONDITION and primarily relates to undrawn home equity lines of credit.

For the Three Months Ended June 30, 2023

Balance Provisions (Releases) Charge-offs Recoveries Ending

8 unchanged sentences

Total Allowance for Credit Losses $ 100,791 $ — $ ( 91 ) $ 1,855 $ 102,555

For the Six Months Ended March 31, 2024

For the Nine Months Ended June 30, 2024

Balance Adoption of ASU 2022-02

9 unchanged sentences

Total Allowance for Credit Losses $ 104,830 $ ( 10,262 ) $ ( 2,500 ) $ ( 1,014 ) $ 4,638 $ 95,692

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

Balance Provisions (Releases) Charge-offs Recoveries Ending

8 unchanged sentences

Total Allowance for Credit Losses $ 99,916 $ ( 2,000 ) $ ( 1,099 ) $ 5,738 $ 102,555

CLASSIFIED LOANS

The following tables provides the amortized cost and information about the credit quality of residential loan receivables by an internally assigned grade as of the dates presented.

The following tables provide the amortized cost and information about the credit quality of residential loan receivables by an internally assigned grade as of the dates presented.

Revolving loans reported at amortized cost include home equity lines of credit currently in their draw period.

2 unchanged sentences

Loans, or the portions of loans, classified as loss are fully charged-off in the period in which they are determined to be uncollectible;

therefore they are not included in the following table.

therefore they are not included in the following tables.

No Home Today loans are classified Special Mention and all construction loans are classified Pass for both periods presented.

2 unchanged sentences

2024 2023 2022 2021 2020 Prior Total

March 31, 2024

June 30, 2024

Real estate loans:

19 unchanged sentences

Total real estate loans $ 615,256 $ 1,703,233 $ 3,073,829 $ 1,922,612 $ 1,253,583 $ 3,537,117 $ 3,086,802 $ 59,989 $ 15,252,421

(1) No new originations of Home Today loans since fiscal 2016.

(1) No new originations of Home Today loans since fiscal year 2016.

Revolving Loans Amortized Cost Basis Revolving Loans Converted To Term

23 unchanged sentences

Total real estate loans $ 1,888,991 $ 3,253,545 $ 2,080,770 $ 1,351,773 $ 571,006 $ 3,359,166 $ 2,664,707 $ 68,693 $ 15,238,651

(1) No new originations of Home Today loans since fiscal 2016.

The following table provides information on the gross charge-offs of residential loan receivables for the period presented.

(1) No new originations of Home Today loans since fiscal year 2016.

The following table presents gross charge-offs of residential loan receivables recorded during the fiscal year-to-date period presented.

There were no gross charge-offs in the construction loan portfolio for the period presented.

For the Six Months Ended March 31, 2024

For the Nine Months Ended June 30, 2024

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term

9 unchanged sentences

Total real estate loans $ 11 $ — $ 26 $ 18 $ — $ 298 $ 369 $ 292 $ 1,014

(1) No new originations of Home Today loans since fiscal 2016.

The home equity lines of credit converted from revolving to term loans during the three and six months ended March 31, 2024 totaled $ 1,208 and $ 2,294 and during the three and six months ended March 31, 2023, totaled $ 562 and $ 938 , respectively.

The home equity lines of credit converted from revolving to term loans during the three and nine months ended June 30, 2024, totaled $ 4,392 and $ 6,558 and during the three and nine months ended June 30, 2023, totaled $ 802 and $ 1,697 , respectively.

The amount of conversions to term loans is expected to remain relatively low for several years since the length of the draw period on new originations changed from five to ten years in 2016.

3 unchanged sentences

Substandard loans are inadequately protected by the current payment capacity of the borrower or the collateral pledged with a defined weakness that jeopardizes the liquidation of the debt.

Also included in Substandard are performing home equity loans and lines of credit where the customer has a severely delinquent first mortgage to which the performing

home equity loan or line of credit is subordinate and all loans in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed.

Also included in Substandard are performing home equity loans and lines of credit where the customer has a severely delinquent first mortgage to which the performing home equity loan or line of credit is subordinate and all loans in Chapter 7 bankruptcy status where all borrowers have filed,

and have not reaffirmed or been dismissed.

Loss loans are considered uncollectible and are charged off when identified.

1 unchanged sentence

Other loans are internally assigned a grade of non-performing when they become 90 days or more past due.

At March 31, 2024 and September 30, 2023, no other loans were graded as non-performing.

At June 30, 2024 and September 30, 2023, no other loans were graded as non-performing.

MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

On October 1, 2023, the Company adopted ASU 2022-02, which eliminates the accounting guidance for TDRs by creditors and enhances the disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty.

On October 1, 2023, the Company adopted ASU 2022-02, which eliminates the accounting guidance for TDRs and enhances the disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty.

For additional information on the adoption, refer to Note 14.

9 unchanged sentences

In evaluating the need for a subsequent modification, the borrower’s ability to repay is generally assessed utilizing a debt-to-income and cash flow analysis.

The following table represents the amortized cost of modifications by type during the periods presented.

For the three and six months ended March 31, 2024, there were no modifications made on construction loans.

For the Three Months Ended March 31, 2024

The following tables present the amortized cost of modifications by type during the periods presented.

For the three and nine months ended June 30, 2024, there were no modifications made on construction loans.

For the Three Months Ended June 30, 2024

Interest Rate Reduction

7 unchanged sentences

Total $ — $ 238 $ 1,130 $ 151 $ — $ 1,519 0.01 %

For the Six Months Ended March 31, 2024

For the Nine Months Ended June 30, 2024

Interest Rate Reduction

7 unchanged sentences

Total $ — $ 633 $ 3,910 $ 1,302 $ 500 $ 6,345 0.04 %

The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended March 31, 2024.

For the Three Months Ended March 31, 2024

The following tables present the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended June 30, 2024.

For the Three Months Ended June 30, 2024

Interest Rate Reduction

6 unchanged sentences

Home equity loans and lines of credit 7.99 % 3.50 % 7.3

For the Six Months Ended March 31, 2024

For the Nine Months Ended June 30, 2024

Interest Rate Reduction

6 unchanged sentences

Home equity loans and lines of credit 6.46 % 3.18 % 10.6

The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored by the Company to understand the effectiveness of modification efforts.

Modifications made to borrowers experiencing financial difficulty that become 90 days or more past due under the modified terms are considered subsequently defaulted.

The table below summarizes information about modifications that had subsequently defaulted for the three and six months ending March 31, 2024.

No Residential Core or Home Today loans modified since October 1, 2023, the date of which the Company adopted ASU 2022-02, have subsequently defaulted during the periods presented.

For the Three Months Ended March 31, 2024

Interest Rate Reduction

Term Extension

Significant Payment Delay

Other Capitalize and Extend Combination-Rate Reduction & Term Extension

The performance of loans modified for borrowers experiencing financial difficulty is closely monitored by the Company to understand the effectiveness of modification efforts.

Modifications made to borrowers experiencing financial difficulty that subsequently become 90 days or more past due under the modified terms are considered subsequently defaulted.

The table below summarizes information about modifications that were modified on or after October 1, 2023 and subsequently defaulted during the three and nine months ended June 30, 2024.

For the Three Months Ended June 30, 2024

Interest Rate Reduction Term Extension Significant Payment Delay Combination-Rate Reduction & Term Extension Other Total

Residential Core $ — $ — $ 22 $ 14 $ — $ 36

Residential Home Today — — 16 — — 16

Home equity loans and lines of credit — — 101 — — 101

Total $ — $ — $ 139 $ 14 $ — $ 153

For the Six Months Ended March 31, 2024

For the Nine Months Ended June 30, 2024

Interest Rate Reduction

1 unchanged sentence

Significant Payment Delay

Other Capitalize and Extend Combination-Rate Reduction & Term Extension Total

Combination-Rate Reduction & Term Extension Other Total

Residential Core $ — $ — $ 22 $ 14 $ — $ 36

Residential Home Today — — 16 — — 16

Home equity loans and lines of credit — — 195 — — 195

Total $ — $ — $ 233 $ 14 $ — $ 247

The following table presents the performance by loan type for loans modified to borrowers experiencing financial difficulty, on or after October 1, 2023, the date of which the Company adopted ASU 2022-02, through March 31, 2024.

The loans in delinquency status primarily consisted of significant payment delays, which are still reported delinquent even after modification.

March 31, 2024 30-59

The following table presents performance by loan type on loans modified during the nine months ended June 30, 2024, for borrowers experiencing financial difficulty.

The loans in delinquency status primarily consisted of loans with significant payment delays prior to modification, which continue to be reported delinquent based on their original contractual terms.

June 30, 2024 30-59

Past Due 60-89

10 unchanged sentences

Loans discharged in Chapter 7 bankruptcy are classified as multiple restructurings if the loan's original terms had also been restructured by the Company.

At September 30, 2023, $ 73,172 of TDRs individually evaluated for credit loss have adequately performed under the terms of the restructuring and are classified as Pass loans.

The amortized cost in TDRs by category as of September 30, 2023 is shown in the table below.

At September 30, 2023, $ 73,172 of TDRs individually evaluated for credit loss had adequately performed under the terms of the restructuring and were classified as Pass loans.

The amortized cost in TDRs by category, at September 30, 2023, is shown in the table below.

September 30, 2023 Initial Restructuring Multiple

4 unchanged sentences

Total $ 58,999 $ 28,304 $ 12,147 $ 99,450

The following table sets forth the amortized cost in TDRs restructured during the period presented.

For all loans modified during the three and six months ended March 31, 2023, the pre-modified outstanding amortized cost was not materially different from the post-modified outstanding amortized cost.

For the Three Months Ended March 31, 2023

The following tables set forth the amortized cost of TDRs restructured during the periods presented.

For all loans modified during the three and nine months ended June 30, 2023, the pre-modified outstanding amortized cost was not materially different from the post-modified outstanding amortized cost.

For the Three Months Ended June 30, 2023

Initial Restructuring Multiple

4 unchanged sentences

Total $ 1,585 $ 693 $ 104 $ 2,382

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

Initial Restructuring Multiple

4 unchanged sentences

Total $ 3,995 $ 1,824 $ 685 $ 6,504

The table below summarizes information about TDRs restructured within 12 months of the period presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented.

For the Three Months Ended March 31, 2023

The tables below summarize information about TDRs restructured within 12 months of the periods presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented.

For the Three Months Ended June 30, 2023

TDRs That Subsequently Defaulted Number of Contracts

4 unchanged sentences

Total 9 $ 621

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

TDRs That Subsequently Defaulted Number of Contracts

13 unchanged sentences

Total deposits $ 10,025,977 $ 9,449,820

The aggregate amount of CDs in denominations of more than $250 was $ 1,106,203 and $ 845,375 at March 31, 2024 and September 30, 2023, respectively.

The aggregate amount of CDs in denominations of more than $250 was $ 1,187,325 and $ 845,375 at June 30, 2024 and September 30, 2023, respectively.

In accordance with the DFA, the maximum amount of federal deposit insurance is $250 per depositor for each account ownership category.

Brokered CDs (exclusive of acquisition costs and subsequent amortization), which are used as a cost effective funding alternative, totaled $ 1,261,663 and $ 1,162,601 at March 31, 2024 and September 30, 2023, respectively, of which $725,000 and $665,000 were aligned with interest rate swaps discussed in Note 13.

Brokered CDs (exclusive of acquisition costs and subsequent amortization), which are used as a cost effective funding alternative, totaled $ 1,215,284 and $ 1,162,601 at June 30, 2024 and September 30, 2023, respectively, of which $725,000 and $665,000 were aligned with interest rate swaps discussed in Note 13.

DERIVATIVE INSTRUMENTS .

The FDIC places restrictions on banks with regard to issuing brokered deposits based on the bank's capital classification.

As a well capitalized institution at March 31, 2024 and September 30, 2023, the Association may accept brokered deposits without FDIC restrictions.

As a well capitalized institution at June 30, 2024 and September 30, 2023, the Association may accept brokered deposits without FDIC restrictions.

BORROWED FUNDS

At March 31, 2024, the Association had a maximum borrowing capacity of $8,085,306, of which $4,955,438 was outstanding.

At June 30, 2024, the Association had a maximum borrowing capacity of $8,575,012, of which $4,829,365 was outstanding.

Borrowings from the FHLB of Cincinnati are secured by the Association’s investment in the common stock of the FHLB of Cincinnati, as well as by a blanket pledge of its mortgage portfolio not otherwise pledged.

1 unchanged sentence

Additionally, the ability to borrow from the FRB-Cleveland Discount Window is available to the Association and is secured by a pledge of specific loans in the Association’s mortgage portfolio.

Total borrowings at March 31, 2024, are summarized in the table below:

Total borrowings at June 30, 2024 are summarized in the table below:

Borrowing Capacity Borrowings Available Borrowings Outstanding

5 unchanged sentences

Total Borrowings $ 4,829,365

Maturities of borrowings at March 31, 2024, are summarized in the table below:

Amount Weighted

Maturities of borrowings at June 30, 2024 are summarized in the table below:

Amount Weighted Average Rate

12 months or less $ 975,000 2.43 %

10 unchanged sentences

DERIVATIVE INSTRUMENTS.

Interest is payable monthly for long-term advances and at maturity for FHLB swap based three-month and overnight advances.

For the three and six months ended March 31, 2024 and March 31, 2023, net interest expense related to short-term borrowings was $ 23,067 and $ 56,040 , and $ 28,677 and $ 53,275 , respectively.

Interest is payable monthly for long-term FHLB advances and generally at maturity for FHLB advances with terms of three months or less.

For the three and nine months ended June 30, 2024, and June 30, 2023, net interest expense related to short-term borrowings was $ 25,098 and $ 81,137 , and $ 29,406 and $ 82,681 , respectively.

OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) by component is as follows:

The change in accumulated other comprehensive income (loss), net of tax and the related tax expense (benefit) by component is as follows:

For the Three Months Ended For the Three Months Ended

March 31, 2024 March 31, 2023

June 30, 2024 June 30, 2023

Unrealized Gains (Losses) on Securities Available for Sale Cash Flow Hedges Defined Benefit Plan Total Unrealized Gains (Losses) on Securities Available for Sale Cash Flow Hedges Defined Benefit Plan Total

Balance at beginning of period $ ( 32,107 ) $ 83,044 $ ( 8,519 ) $ 42,418 $ ( 31,687 ) $ 47,831 $ ( 11,443 ) $ 4,701

Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $ 14,907 and $( 2,594 )

Other comprehensive income (loss) before reclassifications

42 16,525 — 16,567 ( 6,127 ) 65,980 — 59,853

Amounts reclassified, net of tax expense (benefit) of $( 5,333 ) and $( 2,795 )

Amounts reclassified

— ( 16,476 ) 105 ( 16,371 ) — ( 13,765 ) 196 ( 13,569 )

Other comprehensive income (loss) ( 2,589 ) 34,717 104 32,232 4,173 ( 22,688 ) 195 ( 18,320 )

Other comprehensive income (loss), net of tax

42 49 105 196 ( 6,127 ) 52,215 196 46,284

Balance at end of period $ ( 32,065 ) $ 83,093 $ ( 8,414 ) $ 42,614 $ ( 37,814 ) $ 100,046 $ ( 11,247 ) $ 50,985

For the Six Months Ended For the Six Months Ended

March 31, 2024 March 31, 2023

Tax expense (benefit) netted in other comprehensive income

$ 12 $ 14 $ 31 $ 57 $ ( 1,803 ) $ 15,368 $ 59 $ 13,624

For the Nine Months Ended For the Nine Months Ended

June 30, 2024 June 30, 2023

Balance at beginning of period $ ( 41,173 ) $ 135,532 $ ( 9,147 ) $ 85,212 $ ( 33,899 ) $ 68,883 $ ( 11,835 ) $ 23,149

Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $( 2,286 ) and $( 1,020 )

Other comprehensive income (loss) before reclassifications

9,108 ( 663 ) 418 8,863 ( 3,915 ) 59,763 — 55,848

Amounts reclassified, net of tax expense (benefit) of $( 10,419 ) and $( 4,222 )

Amounts reclassified

— ( 51,776 ) 315 ( 51,461 ) — ( 28,600 ) 588 ( 28,012 )

Other comprehensive income (loss) 9,066 ( 52,488 ) 628 ( 42,794 ) 2,212 ( 21,052 ) 392 ( 18,448 )

Other comprehensive income (loss), net of tax

9,108 ( 52,439 ) 733 ( 42,598 ) ( 3,915 ) 31,163 588 27,836

Balance at end of period $ ( 32,065 ) $ 83,093 $ ( 8,414 ) $ 42,614 $ ( 37,814 ) $ 100,046 $ ( 11,247 ) $ 50,985

Tax expense (benefit) netted in other comprehensive income

$ 2,703 $ ( 15,572 ) $ 221 $ ( 12,648 ) $ ( 1,330 ) $ 9,535 $ 177 $ 8,382

The following table presents the reclassification adjustments out of accumulated other comprehensive income (loss) included in net income and the corresponding line item on the CONSOLIDATED STATEMENTS OF INCOME for the periods indicated:

2 unchanged sentences

Other Comprehensive Income

Details about Accumulated Other Comprehensive Income Components For the Three Months Ended March 31, For the Six Months Ended March 31, Line Item in the Consolidated Statements of Income

Details about Accumulated Other Comprehensive Income Components For the Three Months Ended June 30, For the Nine Months Ended June 30, Line Item in the Consolidated Statements of Income

2024 2023 2024 2023

12 unchanged sentences

federal jurisdiction and in various state and city jurisdictions.

The Company’s combined federal and state effective income tax rate was 20.4 % and 20.9 % for the six months ended March 31, 2024 and March 31, 2023, respectively.

The Company’s combined federal and state effective income tax rate was 20.6 % and 20.3 % for the nine months ended June 30, 2024 and June 30, 2023, respectively.

The Company is no longer subject to income tax examinations in its major jurisdictions for tax years ended prior to 2020.

1 unchanged sentence

The Company makes certain investments in limited partnerships, which invest in affordable housing projects that qualify for the Low Income Housing Tax Credit.

The Company acts as a limited partner in these investments and does not exert control

over the operating or financial policies of the partnership.

The Company acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnership.

The Company accounts for its interests in LIHTCs using the proportional amortization method.

The impact of the Company's investments in tax credit entities on the provision for income taxes was not material during the six months ended March 31, 2024 and March 31, 2023.

The impact of the Company's investments in tax credit entities on the provision for income taxes was not material during the nine months ended June 30, 2024 and June 30, 2023.

DEFINED BENEFIT PLAN

7 unchanged sentences

The components of net periodic cost recognized in other non-interest expense in the CONSOLIDATED STATEMENTS OF INCOME are as follows:

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

3 unchanged sentences

Net periodic (benefit) cost $ ( 32 ) $ 118 $ ( 96 ) $ 354

There were no required minimum employer contributions during the six months ended March 31, 2024.

There were no required minimum employer contributions during the nine months ended June 30, 2024.

There are no required minimum employer contributions expected during the remainder of the fiscal year ending September 30, 2024.

1 unchanged sentence

During the quarter ended March 31, 2024, 231,750 restricted stock units, 61,000 performance share units, and 247,200 stock options were granted to directors, officers and certain managers of the Company.

During the six months ended March 31, 2024, performance share units granted in December 2021 were reduced by 2,655 units, according to the targeted performance formula.

During the nine months ended June 30, 2024, performance share units granted in December 2021 were reduced by 2,655 units, according to the targeted performance formula.

The awards were made pursuant to the Amended and Restated 2008 Equity Incentive Plan, which was approved at the annual meeting of shareholders held on February 22, 2018.

The following table presents share-based compensation expense recognized during the periods presented:

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

3 unchanged sentences

Total stock-based compensation expense $ 840 $ 1,065 $ 2,926 $ 3,284

At March 31, 2024, 2,231,475 shares were subject to options, with a weighted average exercise price of $ 15.39 per share and a weighted average grant date fair value of $ 2.29 per share.

Expected future expense, relating to the 247,200 non-vested options outstanding as of March 31, 2024, is $ 279 over a weighted average period of 2.6 years.

At March 31, 2024, 374,491 restricted stock units and 213,445 performance share units with a weighted average grant date fair value of $ 13.78 and $ 14.45 per unit, respectively, are unvested.

Expected future compensation expense, relating to the 1,140,239 restricted stock units and 213,445 performance share units, outstanding as of March 31, 2024, is $ 3,979 over a weighted average period of 2.3 years and $ 1,455 over a weighted average period of 2.0 years, respectively.

At June 30, 2024, 2,231,475 shares were subject to options, with a weighted average exercise price of $ 15.39 per share and a weighted average grant date fair value of $ 2.29 per share.

Expected future expense, relating to the 247,200 non-vested options outstanding as of June 30, 2024, is $ 248 over a weighted average period of 2.3 years.

At June 30, 2024, 373,945 restricted stock units and 213,445 performance share units with a weighted average grant date fair value of $ 13.78 and $ 14.45 per unit, respectively, are unvested.

Expected future compensation expense, relating to the 1,139,693 restricted stock units and 213,445 performance share units outstanding as of June 30, 2024, is $ 3,395 over a weighted average period of 2.2 years and $ 1,230 over a weighted average period of 1.8 years, respectively.

Each unit is equivalent to one share of common stock.

10 unchanged sentences

Refer to Note 4.

LOANS AND ALLOWANCES FOR CREDIT LOSSES for discussion on credit loss methodology .

LOANS AND ALLOWANCES FOR CREDIT LOSSES for discussion on

credit loss methodology .

Interest rate risk on commitments to extend credit results from the possibility that interest rates may move unfavorably from the position of the Company since the time the commitment was made.

At March 31, 2024, the Company had commitments to originate or purchase loans and related allowances as follows:

At June 30, 2024, the Company had commitments to originate or purchase loans and related allowances as follows:

Commitment Allowance

3 unchanged sentences

Total $ 348,767 $ 3,673

At March 31, 2024, the Company had unfunded commitments outstanding and related allowances as follows:

At June 30, 2024, the Company had unfunded commitments outstanding and related allowances as follows:

Commitment Allowance

2 unchanged sentences

Total $ 5,119,242 $ 24,490

At March 31, 2024, the unfunded commitment on home equity lines of credit, including commitments for accounts suspended as a result of material default or a decline in equity, was $ 4,944,702 .

At March 31, 2024 and September 30, 2023, the Company had $ 49,352 and $ 2,094 , respectively, in commitments to sell mortgage loans.

At March 31, 2024 and September 30, 2023, the Company had $ 10,183 and $ 51,275 , respectively, in commitments to purchase mortgage loans, which are included in mortgage loan commitments above.

At June 30, 2024, the unfunded commitment on home equity lines of credit, including commitments for accounts suspended as a result of material default or a decline in equity, was $ 5,138,353 .

At June 30, 2024 and September 30, 2023, the Company had $ 47,238 and $ 2,094 , respectively, in commitments to sell mortgage loans.

At June 30, 2024 and September 30, 2023, the Company had $ 36,606 and $ 51,275 , respectively, in commitments to purchase mortgage loans, which are included in mortgage loan commitments above.

The above commitments are expected to be funded through normal operations.

The Company is undergoing an escheat audit covering the states of Ohio, Kentucky and Florida.

Any potential loss, or range of loss, that may result from this matter is not reasonably estimable at March 31, 2024.

Any potential loss, or range of loss, that may result from this matter is not reasonably estimable at June 30, 2024.

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business.

5 unchanged sentences

This election is expected to reduce volatility in earnings related to market fluctuations between the contract trade and settlement dates.

At March 31, 2024 and September 30, 2023, there were $ 6,038 and $ 0 loans held for sale, respectively, with unpaid principal balances of $ 5,917 and $ 0 , in pending agency contracts for which the fair value was elected.

Changes in fair value on loans held for sale subject to pending agency contracts are included in the net gain on sale of loans, which included a net gain of $ 68 and $ 0 for both three and six months ended March 31, 2024 and March 31, 2023.

At June 30, 2024 and September 30, 2023, there were $ 19,308 and $ 0 loans held for sale, respectively, with unpaid principal balances of $ 19,038 and $ 0 , in pending agency contracts for which the fair value was elected.

Changes in fair value on loans held for sale subject to pending agency contracts are included in the net gain on sale of loans, which included a net gain of $ 94 and $ 162 for the three and nine months ended June 30, 2024, and a net gain of $ 0 for both the three and nine months ended June 30, 2023.

Presented below is a discussion of the methods and significant assumptions used by the Company to estimate fair value.

Investment Securities Available for Sale— Investment securities available for sale are recorded at fair value on a recurring basis.

At March 31, 2024 and September 30, 2023, this includes $ 520,172 and $ 508,324 , respectively, of investments in U.S.

At June 30, 2024 and September 30, 2023, this includes $ 522,967 and $ 508,324 , respectively, of investments in U.S.

government and agency obligations including U.S.

5 unchanged sentences

Loans held for sale are included in Level 2 of the hierarchy.

At March 31, 2024 and September 30, 2023, there were $ 9,698 and $ 3,260 , respectively, of loans held for sale measured at fair value.

At March 31, 2024 and September 30, 2023, there were $ 0 of loans held for sale carried at cost.

At June 30, 2024 and September 30, 2023, there were $ 30,391 and $ 3,260 , respectively, of loans held for sale measured at fair value.

At June 30, 2024 and September 30, 2023, there were $ 0 of loans held for sale carried at cost.

Interest income on mortgage loans held for sale is recorded in interest income on loans.

11 unchanged sentences

Real Estate Owned— Real estate owned includes real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of the cost basis or fair value, less estimated costs to dispose.

The carrying amounts of real estate owned at March 31, 2024 and September 30, 2023, were $ 230 and $ 1,444 , respectively.

The carrying amounts of real estate owned at June 30, 2024 and September 30, 2023, were $ 431 and $ 1,444 , respectively.

Fair value is estimated under the market approach using independent third party appraisals.

As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions.

At March 31, 2024 and September 30, 2023, these adjustments were not significant to reported fair values.

At March 31, 2024 and September 30, 2023, $ 250 and $ 1,413 , respectively, of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis, where the cost basis equals or exceeds the estimated fair values, less estimated costs to dispose, of $ 20 and

$ 163 , respectively.

Real estate owned includes $ 0 and $ 194 of properties carried at their original or adjusted cost basis at March 31, 2024 and September 30, 2023, respectively.

Derivatives— Derivative instruments include interest rate locks on commitments to originate or purchase loans for the held for sale portfolio, forward commitments on contracts to deliver mortgage loans and interest rate swaps designated as cash flow hedges.

At June 30, 2024 and September 30, 2023, these adjustments were not significant to reported fair values.

At June 30, 2024 and September 30, 2023, $ 513 and $ 1,413 , respectively, of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis, where the cost basis equals or exceeds the estimated fair values, less estimated costs to dispose, of $ 82 and $ 163 , respectively.

Real estate owned includes $ 0 and $ 194 of properties carried at their original or adjusted cost basis at June 30, 2024 and September 30, 2023, respectively.

Derivatives— Derivative instruments include interest rate lock commitments on loans being originated or purchased for the held for sale portfolio, forward commitments on contracts to deliver mortgage loans and interest rate swaps designated as cash flow hedges.

Derivatives not designated as cash flow hedges are reported at fair value in Other assets or Other liabilities on the CONSOLIDATED STATEMENTS OF CONDITION with changes in value recorded in current earnings.

2 unchanged sentences

DERIVATIVE INSTRUMENTS for additional information on cash flow hedges and other derivative instruments.

Interest rate lock commitments are commitments to lend at interest rates and amounts defined prior to funding.

The fair value of interest rate lock commitments is adjusted by a closure rate based on the estimated percentage of commitments that will result in closed loans.

3 unchanged sentences

Forward commitments on contracts to deliver mortgage loans are included in Level 2 of the hierarchy.

Assets and liabilities carried at fair value on a recurring basis in the CONSOLIDATED STATEMENTS OF CONDITION at March 31, 2024 and September 30, 2023, are summarized below.

Assets and liabilities carried at fair value on a recurring basis in the CONSOLIDATED STATEMENTS OF CONDITION at June 30, 2024 and September 30, 2023, are summarized below.

Recurring Fair Value Measurements at Reporting Date Using

7 unchanged sentences

Fannie Mae certificates

2,895 — 2,895 —

Freddie Mac securities

25 unchanged sentences

The table below presents a reconciliation of the beginning and ending balances and the location within the CONSOLIDATED STATEMENTS OF INCOME where gains (losses) due to changes in fair value are recognized on interest rate lock commitments which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

2024 2023 2024 2023

29 unchanged sentences

The following provides quantitative information about significant unobservable inputs categorized within Level 3 of the Fair Value Hierarchy.

The interest rate lock commitments include mortgage origination applications.

March 31, 2024 Valuation Technique(s) Unobservable Input Range Weighted Average

June 30, 2024 Valuation Technique(s) Unobservable Input Range Weighted Average

Collateral-dependent loans, net of allowance $ 38,523 Market comparables of collateral discounted to estimated net proceeds Discount appraised value to estimated net proceeds based on historical experience:

6 unchanged sentences

The following tables present the estimated fair value of the Company’s financial instruments and their carrying amounts as reported in the CONSOLIDATED STATEMENTS OF CONDITION .

March 31, 2024

June 30, 2024

Carrying Fair Level 1 Level 2 Level 3

58 unchanged sentences

Quarterly, a quantitative analysis is performed to monitor the ongoing effectiveness of the hedging instrument.

All derivative positions were initially, and continue to be, highly effective at March 31, 2024.

All derivative positions were initially, and continue to be, highly effective at June 30, 2024.

The Company enters into forward commitments for the sale of mortgage loans primarily to protect against the risk of lost revenue from adverse interest rate movements on net income.

5 unchanged sentences

therefore, gains and losses are recognized immediately in the CONSOLIDATED STATEMENTS OF INCOME.

The following tables provide the locations within the CONSOLIDATED STATEMENTS OF CONDITION, notional values and fair values, at the reporting dates, for all derivative instruments.

March 31, 2024

The following tables provide the locations within the CONSOLIDATED STATEMENTS OF CONDITION for fair values of derivative instruments at the reporting dates and their related notional values.

June 30, 2024

Weighted Average

16 unchanged sentences

Interest rate swaps $ 3,815,000 $ — 3.7 2.91 %

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Notional Value Fair Value Notional Value Fair Value

8 unchanged sentences

The following tables present the net gains and losses recorded within the CONSOLIDATED STATEMENTS OF INCOME and the CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME relating to derivative instruments.

Three Months Ended Six Months Ended

Location of Gain or (Loss) March 31, March 31,

Three Months Ended Nine Months Ended

Location of Gain or (Loss) June 30, June 30,

Recognized in Income 2024 2023 2024 2023

7 unchanged sentences

Forward commitments for the sale of mortgage loans Net gain/(loss) on the sale of loans 132 84 ( 19 ) 8

The Company estimates that $ 66,586 of the amounts reported in AOCI will be reclassified as a reduction to interest expense during the twelve months ending March 31, 2025.

The Company estimates that $ 65,251 of the amounts reported in AOCI will be reclassified as a reduction to interest expense during the twelve months ending June 30, 2025.

Derivatives contain an element of credit risk which arises from the possibility that the Company will incur a loss because a counterparty fails to meet its contractual obligations.

4 unchanged sentences

This process shifts the risk away from the counterparty, since the clearing organization acts as an intermediary on each cleared transaction.

At March 31, 2024 and September 30, 2023, there was $ 6,656 and $ 24,887 , respectively, of cash collateral included in other assets, and $ 68,335 and $ 59,813 , respectively, included in investment securities related to initial margin requirements that are held by the central clearing organization.

At June 30, 2024 and September 30, 2023, there was $ 1,727 and $ 24,887 , respectively, of cash collateral included in other assets, and $ 68,581 and $ 59,813 , respectively, included in investment securities related to initial margin requirements that are held by the central clearing organization.

For derivative transactions cleared through certain clearing parties, variation margin payments are recognized as settlements on a daily basis.

1 unchanged sentence

RECENT ACCOUNTING PRONOUNCEMENTS

Adopted as of March 31, 2024

Adopted during the nine months ended June 30, 2024

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326 ).

7 unchanged sentences

LOANS AND ALLOWANCES FOR CREDIT LOSSES .

Issued but not yet adopted as of March 31, 2024

The Company has determined that the accounting pronouncements issued since the last filing for the quarter ended December 31, 2023, will not have a material impact on the Company's consolidated financial statements or do not apply to its operations.

Issued but not yet adopted as of June 30, 2024

There have been no accounting pronouncements issued since the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements