What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-11-22 compared with 2023-11-21 · 198 added, 251 removed, 874 unchanged (34% of the section changed)

13 unchanged sentences

● decreased demand for our products and services and lower revenue and earnings because of a recession or other events;

● changes in consumer spending, borrowing and savings habits;

● changes in consumer spending, borrowing and savings habits, including repayment speeds on loans;

● adverse changes and volatility in the securities markets, credit markets or real estate markets;

2 unchanged sentences

● legislative or regulatory changes that adversely affect our business, including changes in regulatory costs and capital requirements and changes related to our ability to pay dividends and the ability of Third Federal Savings, MHC to waive dividends;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the FASB or the PCAOB;

● the adoption of implementing regulations by a number of different regulatory bodies, and uncertainty in the exact nature, extent and timing of such regulations and the impact they will have on us;

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● cyber-attacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data or disable our systems;

● the impact of wide-spread pandemic, including COVID-19, and related government action, on our business and the economy.

● the impact of a wide-spread pandemic, and related government action, on our business and the economy.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by any forward-looking statements.

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As the holding company of the Association, we are authorized to pursue other business activities permitted by applicable laws and regulations for savings and loan holding companies, which include making equity investments and the acquisition of banking and financial services companies.

Our cash flow depends primarily on earnings from the investment of proceeds we retained from the initial offering, and any dividends we receive from the Association and Third Capital, Inc.

Our cash flow depends primarily on earnings from the investment in the Association, and any dividends we receive from the Association and Third Capital, Inc.

All of our officers are also officers of the Association.

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The Association’s principal business consists of originating and servicing residential real estate mortgage loans and attracting retail savings deposits.

The Association’s business strategy is to originate mortgage loans with interest rates that are competitive with those of similar products offered by other financial institutions in its markets.

Similarly, the Association offers checking accounts, savings accounts and certificate of deposit accounts, each bearing interest rates that are competitive with similar products offered by other financial institutions in its markets.

The Association’s primary business strategy is to originate mortgage loans with interest rates that are competitive with those of similar products offered by other financial institutions in its markets.

Similarly, the Association offers checking accounts, savings accounts, money market accounts and certificate of deposit accounts, each bearing interest rates that are competitive with similar products offered by other financial institutions in its markets.

The Association expects to continue to pursue this business philosophy.

8 unchanged sentences

Loans that the Association sells consist primarily of long-term, fixed-rate residential real estate mortgage loans.

The Association retains the servicing rights on all loans that it sells.

The Association’s revenues are derived primarily from interest on loans and, to a lesser extent,

interest on interest-earning deposits in other financial institutions, deposits maintained at the FRS, federal funds sold, investment securities, including mortgage-backed securities and dividends from FHLB of Cincinnati stock.

The Association also generates revenues from fees and service charges.

The Association currently retains the servicing rights on all loans that it sells.

The Association’s revenues are derived primarily from interest on loans and, to a lesser

extent, interest on interest-earning deposits in other financial institutions, deposits maintained at the FRS, federal funds sold, investment securities, including mortgage-backed securities and dividends from FHLB of Cincinnati stock.

The Association also generates revenues from fees, gains on loan sales and service charges.

The Association’s primary sources of funds are deposits, borrowings, principal and interest payments on loans and securities and proceeds from loan sales.

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Information on that website is not and should not be considered a part of this document.

The Association conducts its operations from its main office in Cleveland, Ohio, and from 37 additional, full-service branches and four loan production offices located throughout the states of Ohio and Florida.

In Ohio, the Association maintains 21 full-service offices located in the northeast Ohio counties of Cuyahoga, Lake, Lorain, Medina and Summit, one regional loan production office located in the central Ohio (Columbus, Ohio) and three loan production offices located in the southern Ohio counties of Butler and Hamilton (Cincinnati, Ohio).

The Association conducts its operations from its main office in Cleveland, Ohio, and from 37 additional, full-service branches and two loan production offices located throughout the states of Ohio and Florida.

In Ohio, the Association maintains 21 full-service offices located in the northeast Ohio counties of Cuyahoga, Lake, Lorain, Medina and Summit, one regional loan production office located in the central Ohio (Columbus, Ohio) and one regional loan production office located in the southern Ohio county of Butler (Cincinnati, Ohio).

In Florida, the Association maintains 16 full-service branches located in the counties of Pasco, Pinellas, Hillsborough, Sarasota, Lee, Collier, Palm Beach and Broward.

The Association also provides savings products in all 50 states and first mortgage refinance loans in 21 states and the District of Columbia.

Home equity lines of credit are provided in 25 states and the District of Columbia.

First mortgage loans and bridge loans to purchase homes are provided in 13 states while other equity loan products are provided in eight states.

These products are provided through its branch network for customers in its core markets of Ohio, Florida, Kentucky and Indiana as well as its customer service call center and its internet site for all customers not served by its branch network.

The Association also provides savings and loan products in states outside of its core markets of Ohio, Florida, Kentucky and Indiana using its customer service call center and its internet site.

The Association also purchases first mortgage loans from its correspondent lending partner, in Ohio, Indiana, North Carolina, South Carolina, Pennsylvania and Michigan.

Savings products are available in all 50 states, while first mortgage loans, home equity lines of credit, home equity loans and bridge loans are offered in up to 27 states and the District of Columbia.

The Association faces intense competition in its market areas both in making loans and attracting deposits.

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As of June 30, 2024 (the latest date for which information is publicly available), the Association had $5.72 billion of deposits in Cuyahoga County, and ranked fifth among all financial institutions with offices in the county in terms of deposits, with a market share of 5.40%.

As of that date, the Association had $6.5 billion of deposits in the State of Ohio, and ranked eleventh among all financial institutions in the state in terms of deposits, with a market share of 1.19%.

As of that date, the Association had $7.35 billion of deposits in the State of Ohio, and ranked tenth among all financial institutions in the state in terms of deposits, with a market share of 1.37%.

As of June 30, 2024 (the latest date for which information is publicly available), the Association had $2.83 billion of deposits in the State of Florida, and ranked 34th among all financial institutions in terms of deposits, with a market share of 0.34%.

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From October 2023 through August 2024 (the latest date for which information is publicly available), per data furnished by MarketTrac ® , the Association had the second largest market share of conventional purchase mortgage loans originated in Cuyahoga County, Ohio.

For the same period, it also had the second largest market share of conventional purchase mortgage loans originated in the seven northeast Ohio counties which comprise the Cleveland and Akron metropolitan statistical areas.

In addition, based on the same statistics, the Association has consistently been one of the twenty largest lenders in both Franklin County (Columbus, Ohio) and Hamilton County (Cincinnati, Ohio) since it entered those markets in 1999.

For the same period, it also had the third largest market share of conventional purchase mortgage loans originated in the seven northeast Ohio counties which comprise the Cleveland and Akron metropolitan statistical areas.

In addition, based on the same statistics, the Association has consistently been one of the twenty-five largest lenders in both Franklin County (Columbus, Ohio) and Hamilton County (Cincinnati, Ohio) since it entered those markets in 1999.

The Association’s primary strategy for increasing and retaining its customer base is to offer competitive deposit and loan rates and other product features, delivered with exceptional customer service, in each of the markets it serves.

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Third, our CEO remains accessible to both local and national media, as a spokesman for our institution as well as an observer and interpreter of financial marketplace situations and events.

Fourth, we periodically include advertisements in local newspapers and online that display our strong capital levels and history of service.

Fourth, we periodically include advertisements in local newspapers and online which display our strong capital levels and history of service.

We also continue to emphasize our traditional tagline—“STRONG * STABLE * SAFE”—in our advertisements, website, online presence and branch displays.

1 unchanged sentence

Lending Activities

The Company’s principal lending activity is the origination of fixed-rate and adjustable-rate, first mortgage loans to purchase or refinance residential real estate.

Adjustable-rate and up to 30-year fixed-rate first mortgage loans to refinance real estate are offered in 21 states and the District of Columbia.

Also, the Company offers adjustable-rate and up to 30-year fixed- rate first mortgage loans to purchase real estate in 13 states.

Further, the Company originates residential construction loans to individuals (for the construction of their personal residences by a qualified builder) in Ohio and Florida.

The Company also purchases first mortgage loans originated in Ohio, Pennsylvania and North Carolina through a correspondent lending partnership.

Additionally, the Company offers home equity lines of credit in 25 states and the District of Columbia and home equity loans in eight states.

The Company’s principal lending activity is the origination of up to 30-year fixed-rate and adjustable-rate, first mortgage loans to purchase or refinance residential real estate.

Also, the Company offers home equity loans and lines of credit and originates residential construction loans to individuals (for the construction of their personal residences by a qualified builder).

The Company lends in 27 states and the District of Columbia and, through a correspondent lending partnership, we purchase first mortgages in six of those states.

At September 30, 2024, fixed-rate and adjustable-rate, first mortgage residential real estate loans totaled $11.43 billion, or 74.5% of our loan portfolio, home equity lines of credit totaled $3.32 billion, or 21.7% of our loan portfolio, home equity loans and bridge loans totaled $560.9 million, or 3.7% of our loan portfolio, and residential construction loans totaled $21.7 million, or 0.2% of our loan portfolio.

At September 30, 2024, adjustable-rate, residential real estate, first mortgage loans totaled $4.38 billion and comprised 28.5% of our loan portfolio.

Refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operation-Monitoring and Limiting Our Credit Risk for additional information regarding home equity loans and lines of credit.

At September 30, 2023, fixed-rate and adjustable-rate, first mortgage residential real estate loans totaled $12.12 billion, or 79.7% of our loan portfolio, home equity loans and lines of credit totaled $3.03 billion, or 19.9% of our loan portfolio, and residential construction loans totaled $48.4 million, or 0.4% of our loan portfolio.

At September 30, 2023, adjustable-rate, residential real estate, first mortgage loans totaled $4.76 billion and comprised 31.3% of our loan portfolio.

Loan Portfolio Composition.

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Amount Percent Amount Percent

(Dollars in thousands)

Real estate loans:

(Dollars in thousands)

Residential Core (1)

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See the Residential Real Estate Mortgage Loans section which follows for a further description of Residential Core and Home Today loans.

The following table provides an analysis of our residential mortgage loans disaggregated by refreshed FICO score, year of origination and portfolio at September 30, 2023.

The following table provides the amortized cost and an analysis of our real estate loans held for investment disaggregated by refreshed FICO score, year of origination and portfolio at September 30, 2024.

The Company treats the FICO score information as demonstrating that underwriting guidelines reduce risk rather than as a credit quality indicator utilized in the evaluation of credit risk.

Balances are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

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

Revolving loans converted to term are home equity lines of credit that are in repayment.

Home equity loans and bridge loans are segregated by origination year.

Revolving Loans Revolving Loans

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Real estate loans:

(In thousands)

Residential Core

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Total net real estate loans $ 888,026 $ 1,669,418 $ 2,994,890 $ 1,862,325 $ 1,212,706 $ 3,398,848 $ 3,300,466 $ 59,677 $ 15,386,356

(1) Market data necessary for stratification is not readily available.

(1) Data necessary for stratification is not readily available.

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

The following table provides an analysis of our residential mortgage loans by origination LTV, origination year and portfolio at September 30, 2023.

LTVs are not updated subsequent to origination except as part of the charge-off process.

Balances are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

The following table provides amortized cost and an analysis of our real estate loans held for investment by origination LTV, origination year and portfolio at September 30, 2024.

Subsequent to origination, LTVs are only updated for our home equity loans and lines of credit and for collateral-dependent residential mortgage loans.

Revolving Loans Revolving Loans

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Real estate loans:

(In thousands)

Residential Core

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Loan Portfolio Maturities.

The following table summarizes the scheduled repayments of principal balances in the loan portfolio at September 30, 2023, according to each loan's final due date.

Demand loans, loans having no stated repayment schedule or maturity, are reported as being due in the fiscal year ending September 30, 2024.

The following table summarizes the scheduled repayments of principal balances in the loans held for investment portfolio at September 30, 2024, according to each loan's final due date.

Loans having no stated repayment schedule or maturity are reported as being due in the fiscal year ending September 30, 2025.

Maturities are based on the final contractual payment date and do not reflect the impact of prepayments and scheduled principal amortization.

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Fixed Adjustable Total

(In thousands)

Real estate loans:

(In thousands)

Residential Core $ 6,994,976 $ 4,378,842 $ 11,373,818

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At September 30, 2024, there were no “interest only” residential real estate mortgage loans held in the Company's portfolio.

The Company generally originates both fixed- and adjustable-rate mortgage loans in amounts up to $2 million, for single-family homes in most of our lending markets.

The loans originated for larger dollar amounts are generally referred to as “jumbo loans.” The Company generally underwrites jumbo loans in a manner similar to conforming loans.

The Company generally originates or purchases both fixed- and adjustable-rate mortgage loans in amounts up to 2 million dollars, for owner occupied, one- to four-family homes in most of our lending markets.

The loans originated or purchased for dollar amounts on the higher end of the range are commonly referred to as “jumbo loans.” The Company generally underwrites jumbo loans in a manner similar to conforming loans.

Jumbo loans are not uncommon in the Company’s market areas.

The Company offers “Smart Rate” adjustable-rate mortgage loan products secured by residential properties with interest rates that are fixed for an initial period of three or five years, after which the interest rate generally resets every year based upon a contractual spread or margin linked to the Prime Rate as published in the Wall Street Journal.

As part of a loan retention program, these adjustable-rate loans provide the borrower with an attractive rate reset option, which allow the borrower to re-lock the rate an unlimited number of times at the Company’s then current lending rates, for another three or five years (which must be the same as the original lock period).

As part of a loan retention program, these adjustable-rate loans provide the borrower with an attractive rate reset option, which allows the borrower to re-lock the rate an unlimited number of times at the Company’s then current lending rates, for another three or five years (which must be the same as the original lock period), generally for a fee.

Re-lock eligibility is subject to a satisfactory payment performance history by the borrower (current at the time of re-lock, and no foreclosures or bankruptcies since the Smart Rate application was taken).

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All interest rate caps and floors remain as originated.

"Smart Rate" adjustable-rate mortgage loans represent over 99% of the adjustable-rate mortgage loan portfolio, with the difference representing the remaining balance of legacy adjustable-rate mortgage loan products with slightly different interest rate reset terms.

"Smart Rate" adjustable-rate mortgage loans represent 99.6% of the adjustable-rate mortgage loan portfolio, with the difference representing the remaining balance of legacy adjustable-rate mortgage loan products with slightly different interest rate reset terms.

Many of the borrowers who select adjustable-rate mortgage loans have shorter-term credit needs than those who select long-term, fixed-rate mortgage loans.

1 unchanged sentence

All of the Company’s adjustable-rate mortgage loans are subject to periodic and lifetime limitations on interest rate changes.

All adjustable-rate mortgage loans have initial and periodic caps of two percentage points on interest rate changes, with a cap of five or six percentage points for the life of the loan.

All adjustable-rate mortgage loans have initial and periodic caps of two percentage points on interest rate changes, with a cap of six percentage points for the life of the loan.

The Company has never offered “Option ARM” loans, where borrowers can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan.

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During fiscal 2016, the Company began to market its Home Ready mortgage loan product for low- and moderate-income homeowners.

Third Federal’s Home Ready product is designed to be saleable to Fannie Mae under its Home Ready program.

Third Federal’s Home Ready product is designed to be saleable to Fannie Mae under its Home Ready program, although not all Home Ready loans are sold.

Previously, the Company’s primary affordable housing program was referred to as "Home Today".

The vast majority of loans originated under the Home Today program had higher risk characteristics than our Core residential real estate mortgage loan, but the Company attempted to mitigate that higher risk through the use of private mortgage insurance and continued pre- and post-purchase counseling.

As of September 30, 2023, the Company had $46.5 million of loans outstanding that were originated through its Home Today program, most of which were originated prior to March 2009.

At September 30, 2023, of the loans that were originated under the Home Today program, 4.0% were delinquent 30 days or more compared to

0.1% for the portfolio of Core loans as of that date.

At September 30, 2023, $0.9 million, or 1.9%, of loans originated under the Home Today program were delinquent 90 days and over and $4.6 million of Home Today loans were non-accruing loans, representing 14.5% of total non-accruing loans as of that date.

See Delinquent Loans and Non-performing Assets and Restructured Loans for discussions of the asset quality of this portion of the Company’s loan portfolio.

As of September 30, 2024, the Company had $40.9 million of loans outstanding that were originated through its Home Today program, most of which were originated prior to 2009.

At September 30, 2024, of the loans that were originated under the Home Today program, 4.5% were delinquent 30 days or more compared to 0.2% for the portfolio of Core loans as of that date.

At September 30, 2024, $0.7 million, or 1.7%, of loans originated under the Home Today program were delinquent 90 days and over and $3.7 million of

Home Today loans were non-accruing loans, representing 10.93% of total non-accruing loans as of that date.

See Delinquent Loans and Non-performing Assets and Modified Loans for discussions of the asset quality of this portion of the Company’s loan portfolio.

The Company currently retains the servicing rights on all loans sold in order to generate fee income and reinforce its commitment to customer service.

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For home purchase loans with LTV ratios at origination in excess of 85% but equal to or less than 90%, the Company generally requires private mortgage insurance.

The Company offers a loan product allowing up to 95% LTV with no mortgage insurance for superior credit borrowers.

LTV ratios in excess of 85% are not available for refinance transactions except for adjustable-rate, first mortgage loans and Home Ready loans.

LTV ratios in excess of 85% are not available for refinance transactions except for Home Ready loans.

The Home Ready product requires private mortgage insurance on purchase transactions between 80.01% and 97% LTV and refinance transactions between 80.01% and 95% LTV.

As of September 30, 2023, the Company had a total of $356.3 million of loans outstanding that were originated through the high LTV program.

This program involves loans originated with higher interest rates than the Company's other residential real estate loans, and to qualify for this program the loan applicant must satisfy more stringent underwriting criteria (credit score, income qualification, and other criteria).

Beginning in fiscal year 2020, the Company offered a loan product allowing up to 95% LTV with no mortgage insurance for superior credit borrowers.

This program involved loans originated with higher interest rates than the Company's other residential real estate loans, and to qualify for this program the loan applicant must satisfy more stringent underwriting criteria (credit score, income qualification, and other criteria).

During fiscal year 2024, this program was suspended and as of September 30, 2024, the Company had $369.0 million of loans outstanding that were originated through this high LTV program.

Home Equity Loans and Home Equity Lines of Credit .

3 unchanged sentences

These offers were, and are, subject to certain property and credit performance conditions which, among other items, related to CLTV, geography, borrower income verification, minimum credit scores and draw period duration.

At September 30, 2023 and 2022, home equity loans totaled $399.7 million, or 2.6%, and $261.0 million, or 1.8%, respectively, of total loans receivable (which included $68.8 million and $97.0 million, respectively, of home equity lines of credit which were in the amortization period and no longer eligible to be drawn upon and $9.5 million and $12.2 million of bridge loans), and home equity lines of credit totaled $2.63 billion, or 17.3%, and $2.37 billion, or 16.5%, respectively, of total loans receivable.

At September 30, 2024 and 2023, home equity loans totaled $560.9 million, or 3.7%, and $331.0 million, or 2.2%, respectively, of total loans receivable (which included $12.6 million and $9.5 million of bridge loans), and home equity lines of credit totaled $3.32 billion, or 21.7%, and $2.70 billion, or 17.8%, respectively, of total loans receivable (which included $59.5 million and $68.8 million, respectively, of home equity lines of credit which were in the amortization period and no longer eligible to be drawn upon).

Additionally, at September 30, 2024 and 2023, the undrawn amounts of home equity lines of credit totaled $5.22 billion and $4.70 billion, respectively.

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The Company originates its home equity loans and home equity lines of credit without application fees (except for bridge loans) or borrower-paid closing costs.

Home equity loans are offered with fixed interest rates, are fully amortizing and have terms of up to 30 years.

Home equity loans are offered with variable and fixed interest rates, are fully amortizing and have terms of up to 30 years.

The Company’s home equity lines of credit are offered with adjustable rates of interest indexed to the Prime Rate, as reported in The Wall Street Journal .

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90 days or More Mean CLTV

Origination(2) Current Mean

Origination (2)

(Dollars in thousands)

Home equity lines of credit in draw period (by

Home equity lines of credit in draw period (by state):

Ohio $ 2,361,192 $ 744,920 0.09 % 60 % 42 %

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Other (1) 3,150,340 1,263,596 0.12 % 63 % 50 %

Total home equity lines of credit in draw

period 7,327,291 2,630,779 0.11 % 60 % 46 %

Home equity lines in repayment, home equity

loans and bridge loans 399,747 399,747 0.28 % 57 % 44 %

Total home equity lines of credit in draw period

8,481,521 3,264,893 0.10 % 60 % 46 %

Home equity lines in repayment, home equity loans and bridge loans

620,414 620,414 0.24 % 56 % 47 %

Total $ 9,101,935 $ 3,885,307 0.11 % 60 % 47 %

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Construction financing generally involves greater credit risk than long-term financing on improved, owner-occupied real estate.

Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions.

If the estimate of construction cost proves to be inaccurate, the Company may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property.

Moreover, if the estimated value of the completed project proves to be inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment of the construction loan upon the sale of the property.

This is more likely to occur when home prices are falling.

Loan Originations, Purchases, Sales, Participations and Servicing.

1 unchanged sentence

All loans that the Company originates are underwritten pursuant to its policies and procedures, which, for real estate loans, are consistent with the ability to repay guidance provided by the CFPB.

originated with the intent to sell and certain other long-term, fixed-rate loans, as described below, are originated using Fannie Mae processing and underwriting guidelines.

The majority of loans, however, are originated using guidelines that are similar, but not identical to Fannie Mae processing and underwriting guidelines.

The majority of long-term, fixed-rate loans are originated using Fannie Mae processing and underwriting guidelines.

Loans originated with the intent to hold for investment, all adjustable-rate loans and some fixed-rate loans are originated using guidelines that are similar, but not identical to Fannie Mae processing and underwriting guidelines.

The Company originates both adjustable-rate and fixed-rate loans and advertises extensively throughout its market area.

1 unchanged sentence

The Company’s loan origination and sales activity may be adversely affected by a rising interest rate environment or economic recession, which typically results in decreased loan demand.

The Company’s residential real estate mortgage loan originations are generated by its in-house loan representatives, by direct mail solicitations, by referrals from existing or past customers, by referrals from local builders and real estate brokers, from calls to its telephone call center and from the internet.

The Company’s residential real estate mortgage loan originations are generated by its in-house loan representatives, by direct mail solicitations, by referrals

from existing or past customers, by referrals from local builders and real estate brokers, from calls to its telephone call center and from the internet.

The Company also purchases first mortgage loans through a correspondent lending partnership.

A vast majority of all loans originated are done so with the intent to hold.

The Company later determines whether to sell or securitize the loans that it holds, after evaluating current and projected market interest rates, its interest rate risk objectives, its liquidity needs and other factors.

The Company determines whether to sell or securitize the loans that it originates, after evaluating current and projected market interest rates, its interest rate risk objectives, its liquidity needs and other factors.

During the fiscal year ended September 30, 2024, the Company sold, or committed to sell, to Fannie Mae, in either whole loan or security form, $247.4 million of long-term, fixed-rate residential real estate mortgage loans, all on a servicing retained basis.

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The balance of loans held for sale was $17.8 million at September 30, 2024.

In fiscal year 2022, the Company started a new program to originate loans with the intent to sell following a more traditional mortgage banking model including risk-based pricing and loan level price adjustments.

In fiscal year 2022, the Company began purchasing first mortgage loans originated through a correspondent lending partnership.

These loans are underwritten by the correspondent lender with generally the same standards as our originated portfolio using Fannie Mae processing and underwriting guidelines.

During the fiscal year ended September 30, 2024, we purchased approximately $132.1 million of residential mortgage loans originated by our correspondent lending partner in Ohio, Indiana, Michigan, North Carolina, Pennsylvania and South Carolina.

The Company also has a program to originate loans with the intent to sell using risk-based pricing and loan level price adjustments.

The program is marketed under the name Mortgage Passport and is considered a division of the Association.

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The impact to the Company from the program to date is considered immaterial and therefore no breakout is provided.

The Company also purchases fixed-rate and adjustable-rate, first mortgage loans originated in Ohio, Pennsylvania and North Carolina through a correspondent lending partnership.

These loans are underwritten by the correspondent lender with generally the same standards as our originated portfolio using Fannie Mae processing and underwriting guidelines.

During the fiscal year ended September 30, 2023, we purchased approximately $275.1 million of residential mortgage loans through our correspondent lending partnership.

Historically, the Company has retained the servicing rights on all residential real estate mortgage loans that it has sold, and intends to continue this practice into the future.

Historically, the Company has retained the servicing rights on all residential real estate mortgage loans that it has sold.

At September 30, 2024, the Company serviced loans owned by others with a principal balance of $1.97 billion.

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The Company’s policies and loan approval limits are established by its Board of Directors.

The Company’s Board of Directors has delegated authority to its Executive Committee (consisting of the Company’s Chief Executive Officer and two directors) to review and assign lending authorities to certain individuals of the Company to consider and approve loans within their designated authority.

The Company’s Board of Directors has delegated authority to its Executive Committee (consisting of the Company’s CEO and two directors) to review and assign lending authorities to certain individuals of the Company to consider and approve loans within their designated authority.

Residential real estate mortgage loans and construction loans require the approval of one individual with designated underwriting authority.

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30-89 Days 90 Days or More Total

(Dollars in thousands)

September 30, 2023

September 30, 2024 (Dollars in thousands)

Real estate loans:

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30-89 Days 90 Days or More Total

(Dollars in thousands)

September 30, 2022

September 30, 2023 (Dollars in thousands)

Real estate loans:

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Total loans seriously delinquent (i.e.

delinquent 90 days or more) were 0.09% of total net loans at September 30, 2023 and at September 30, 2022.

The percentage of loans seriously delinquent to total net loans decreased in the residential Core portfolio from 0.06% to 0.05%.

delinquent 90 days or more) were 0.09% of total net loans at both September 30, 2024 and September 30, 2023.

The percentage of loans seriously delinquent to total net loans increased in the residential Core portfolio from 0.05% to 0.06% year to year.

Such loans in the residential Home Today portfolio remained at 0.01%.

Home equity loans and lines of credit portfolio increased from 0.02% to 0.03%.

Although delinquencies remain at or near historic lows, recent economic trends and rising interest rates have led to increased early stage delinquencies in the home equity loans and lines of credit portfolio.

Interest rates on home equity lines of credit are tied to the prime rate of interest which has increased significantly over the fiscal year, resulting in higher and less affordable monthly payments for some borrowers.

Non-performing Assets and Restructured Loans .

Home equity loans and lines of credit portfolio remained at 0.03%.

Although delinquencies remain at or near historic lows, recent economic trends and higher interest rates have led to increased delinquencies.

Interest rates on home equity lines of credit are tied to the prime rate of interest which remains elevated, resulting in higher and less affordable monthly payments for some borrowers.

Non-performing Assets and Modified Loans .

Within 15 days of a borrower’s delinquency, per the Company's collection procedures, it attempts personal, direct contact with the borrower to determine the reason for the delinquency, to ensure that the borrower correctly understands the terms of the loan and to emphasize the importance of making payments on or before the due date.

If necessary, subsequent late charges and delinquent notices are issued and the borrower’s account will be

monitored on a regular basis thereafter.

If necessary, subsequent late charges and delinquent notices are issued and the borrower’s account will be monitored on a regular basis thereafter.

The Company also mails system-generated reminder notices on a monthly basis.

When a loan is more than 30 days past due, the Company attempts to contact the borrower and develop a plan of repayment.

By the 90 th day of delinquency, the Company may recommend foreclosure.

By the 90 th day of

delinquency, the Company may recommend foreclosure.

The loan will be evaluated based on collateral prior to the 180th day of delinquency.

For further discussion on evaluating collateral-dependent loans, see Note 5.

For further discussion on evaluating collateral-dependent loans, refer to Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .

Loans are placed in non-accrual status when they are contractually 90 days or more past due or if collection of principal or interest in full is in doubt.

Loans restructured in TDRs that were in non-accrual status prior to the restructurings remain in non-accrual status for a minimum of six months after restructuring.

Loans modified that were in non-accrual status prior to modification and loans with forbearance plans that were subsequently modified, are reported in non-accrual status for a minimum of six months after modification.

Loans with a partial charge-off remain in non-accrual until, at a minimum, the loss is recovered.

Additionally, home equity loans and lines of credit which are subordinate to a first mortgage lien where the customer is severely delinquent and loans in Chapter 7 bankruptcy status where all borrowers have filed, and not reaffirmed or been dismissed, are placed in non-accrual status.

For discussion on interest recognition and further discussion on non-accrual, see Note 5.

Additionally, home equity loans and lines of credit which are subordinate to a first mortgage lien where the customer is severely delinquent (greater than 90 days past due) and loans in Chapter 7 bankruptcy status where all borrowers have filed, and not reaffirmed or been dismissed, are placed in non-accrual status.

For discussion on interest recognition and further discussion on non-accrual, refer to Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

The table below sets forth the amortized costs and categories of our non-performing assets and TDRs at the dates indicated.

The table below sets forth the amortized costs and categories of our non-performing assets at the dates indicated.

There were no construction loans reported as non-accrual for the fiscal years presented.

September 30,

(Dollars in thousands)

Non-accrual loans:

(Dollars in thousands)

Real estate loans:

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Total non-accrual loans

33,610 31,914

Real estate owned 174 1,444

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Total non-performing assets to total assets 0.20 % 0.20 %

TDRs (not included in non-accrual loans above):

Real estate loans:

Residential Core $ 40,894 $ 43,101

Residential Home Today 17,184 18,380

Home equity loans and lines of credit 19,775 22,060

Total $ 77,853 $ 83,541

____________________

(1) At September 30, 2023 and 2022, the totals include $17.8 million and $21.9 million, respectively, in TDRs that are less than 90 days past due but included with non-accrual loans for a minimum period of six months from the restructuring date due to their non-accrual status or forbearance plan prior to restructuring, because of a prior partial charge-off or because all borrowers have filed Chapter 7 bankruptcy and have not reaffirmed or dismissed.

(2) At September 30, 2023 and 2022, the totals include $3.7 million and $3.6 million in TDRs that are 90 days or more past due, respectively.

Non-accrual loans continue to decline primarily due to a decrease in the population of TDRs, in general, and those moved to accruing after a sufficient period of demonstrated payment performance.

Since many of the accounts exiting the non-accrual population are TDRs paying as agreed or paid in full and closed, we do not expect any material impact to interest income or the allowance once the non-accrual population stabilizes.

Of the $7.7 million of modified loans during the fiscal year, $3.1 million are less than 90 days past due but included with non-accrual loans for a minimum period of six months from the modification date due to their non-accrual status or forbearance plan prior to modification, because of a prior partial charge-off or because all borrowers have filed Chapter 7 bankruptcy and have not reaffirmed or dismissed.

As of September 30, 2024, $1.9 million are included in non-accrual loans that are 90 days or more past due.

We continue to modify loans to work with borrowers who are experiencing financial difficulty to keep their homes and to preserve neighborhoods.

Loan modifications may include interest rate reductions, term extensions (generally including capitalization of delinquent amounts), significant payment delays (including forbearance plans, partial payments and repayment of delinquent amounts), other, or a combination thereof.

For additional information, refer to Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

Collateral-Dependent 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.

For discussion on collateral-dependent measurement, see Note 5.

For discussion on collateral-dependent measurement, refer to Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

The amortized cost of collateral-dependent loans includes accruing TDRs and loans that are returned to accrual status when contractual payments are less than 90 days past due.

The amortized cost of collateral-dependent loans includes loans that have returned to accrual status when contractual payments became less than 90 days past due.

These loans continue to be individually evaluated based on collateral until, at a minimum, contractual payments are less than 30 days past due.

Also, the amortized cost of non-accrual loans includes loans that are not included in the amortized cost of collateral-dependent loans because they are included in loans collectively evaluated for credit loss.

The table below sets forth a reconciliation of the amortized costs and categories between non-accrual loans and collateral-dependent loans at the dates indicated.

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Non-Accrual Loans $ 33,610 $ 31,914

Accruing Collateral-Dependent TDRs 4,299 7,279

Other Accruing Collateral-Dependent Loans 6,663 6,426

Accruing Collateral-Dependent Loans

Loans Collectively Evaluated (3,097) (4,647)

Total Collateral-Dependent Loans $ 39,577 $ 38,229

In response to the economic challenges facing many borrowers, we continue to restructure loans.

Loan restructuring is a method used to help families keep their homes and preserve neighborhoods.

This involves making changes to the borrowers’ loan terms through interest rate reductions, either for a specific period or for the remaining term of the loan;

term extensions including those beyond the original agreement;

capitalization of delinquent payments in special situations;

or some combination of the aforementioned.

Loans discharged through Chapter 7 bankruptcy are also reported as TDRs per OCC interpretive guidance.

For discussion on TDR measurement, see Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .

We had $99.5 million of TDRs (accrual and non-accrual) recorded at September 30, 2023, of which $53.9 million are Residential Core, $21.2 million are Home Today and $24.4 million are Home equity loans and lines of credit.

This is a $9.5 million decrease in the amortized cost of TDRs from September 30, 2022.

The following table sets forth the amortized cost of accrual and non-accrual TDRs, by the types of concessions granted, as of September 30, 2023.

Initial concessions granted by loans restructured as TDRs can include reduction of interest rate, extension of amortization period, forbearance or other actions.

Some TDRs have experienced a combination of concessions.

TDRs also can occur as a result of bankruptcy proceedings.

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

Initial Restructuring Multiple Restructurings Bankruptcy Total

(Dollars in thousands)

Residential Core $ 26,229 $ 10,342 $ 4,323 $ 40,894

Residential Home Today 8,903 7,485 796 17,184

Home equity loans and lines of credit 18,536 966 273 19,775

Total $ 53,668 $ 18,793 $ 5,392 $ 77,853

Non-Accrual, Performing

Residential Core $ 1,363 $ 4,304 $ 5,029 $ 10,696

Residential Home Today 460 2,270 833 3,563

Home equity loans and lines of credit 1,540 1,443 606 3,589

Total $ 3,363 $ 8,017 $ 6,468 $ 17,848

Non-Accrual, Non-Performing

Residential Core $ 954 $ 1,084 $ 225 $ 2,263

Residential Home Today 27 359 62 448

Home equity loans and lines of credit 987 51 — 1,038

Total $ 1,968 $ 1,494 $ 287 $ 3,749

Residential Core $ 28,546 $ 15,730 $ 9,577 $ 53,853

Residential Home Today 9,390 10,114 1,691 21,195

Home equity loans and lines of credit 21,063 2,460 879 24,402

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

TDRs in accrual status are loans accruing interest and performing according to the terms of the restructuring.

To be performing, a loan must be less than 90 days past due as of the report date.

Non-accrual, performing status indicates that a loan was not accruing interest or in a forbearance plan at the time of restructuring, continues to not accrue interest, and is performing according to the terms of the restructuring;

but it has not been current for at least six consecutive months since its restructuring, has a partial charge-off, or is being classified as non-accrual per the OCC guidance on loans in Chapter 7 bankruptcy status, where all borrowers have filed and have not reaffirmed or been dismissed.

Non-accrual, non-performing status includes loans that are not accruing interest because they are greater than 90 days past due and therefore not performing according to the terms of the restructuring.

Real Estate Owned .

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Substandard assets include those assets characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.

Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or

Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted.

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Substandard assets at September 30, 2024 include $13.9 million of loans 90 or more days past due and $28.7 million of loans less than 90 days past due displaying a weakness sufficient to warrant an adverse classification.

Of the $37.3 million of loans less than 90 days past due, $29.2 million are TDRs, and the remaining $8.1 million are non-TDRs primarily made up of loans that had their forbearance term extended greater than 12 months, regardless of forbearance plan status at September 30, 2023.

Of the $28.7 million of loans less than 90 days past due, $3.1 million were modified during the year.

Allowance for Credit Losses .

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We regularly review the loan portfolio and off-balance sheet exposures and make provisions (or releases) for losses in order to maintain the allowance for credit losses in accordance with U.S.

Our allowance for credit losses consists of three components:

(1) individual valuation allowances (IVAs) established for any loans dependent on cash flows, such as performing TDRs;

(2) general valuation allowances (GVAs) for loans, which are comprised of quantitative GVAs, general allowances for credit losses for each loan type based on historical loan loss experience and qualitative GVAs, which are adjustments to the quantitative GVAs, maintained to cover uncertainties that affect the estimate of expected credit losses for each loan type;

(3) GVAs for off-balance sheet credit exposures, which are comprised of expected lifetime losses on unfunded loan commitments to extend credit where the obligations are not unconditionally cancellable.

Our allowance for credit losses is a GVA on our portfolio made up of:

(1) quantitative GVAs for loans, which are general allowances for credit losses for each loan type based on historical loan loss experience;

(2) quantitative GVAs for off-balance sheet credit exposures, which are comprised of expected lifetime losses on unfunded loan commitments to extend credit where the obligations are not unconditionally cancellable;

(3) qualitative GVAs, which are adjustments to the quantitative GVAs, maintained to cover uncertainties that affect the estimate of expected credit losses for each loan type.

On October 1, 2023, the IVA established for any loans dependent on cash flows, such as performing TDRs, was eliminated with the adoption of ASU 2022-02.

Subsequently, all non-collateral dependent modifications have an allowance estimated through the lifetime loss model.

The qualitative GVAs expand our ability to identify and estimate probable losses and are based on our evaluation of the following factors, some of which are consistent with factors that impact the determination of quantitative GVAs.

For example, delinquency statistics (both current and historical) are used in developing the quantitative GVAs while the trending of the delinquency statistics is considered and evaluated in the determination of the qualitative GVAs.

Factors impacting the determination of qualitative GVAs include:

Factors impacting the determination of qualitative GVAs include, among other:

• changes in lending policies and procedures including underwriting standards, collection, charge-off or recovery practices;

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• changes in the experience, ability or depth of lending management;

• changes in the volume or severity of past due loans, volume of non-accrual loans, or the volume and severity of adversely classified loans including the trending of delinquency statistics (both current and historical), historical loan loss experience and trends, the frequency and magnitude of multiple restructurings of loans previously the subject of TDRs, and uncertainty surrounding borrowers’ ability to recover from temporary hardships for which short-term loan restructurings are granted;

• changes in the volume or severity of past due loans, volume of non-accrual loans, or the volume and severity of adversely classified loans including the trending of delinquency statistics (both current and historical), historical loan loss experience and trends, the frequency and magnitude of loan modifications, and uncertainty surrounding borrowers’ ability to recover from temporary hardships for which short-term loan restructurings are granted;

• changes in the quality of the loan review system;

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• limitations within our models to predict life of loan net losses.

When loan restructurings qualify as TDRs and the loans are performing according to the terms of the restructuring, we record an IVA based on the present value of expected future cash flows, which includes a factor for potential subsequent defaults, discounted at the effective interest rate of the original loan contract.

Potential defaults are distinguished from multiple restructurings as borrowers who default are generally not eligible for subsequent restructurings.

At September 30, 2023, the balance of such individual valuation allowances was $9.5 million.

In instances when loans require multiple restructurings, additional valuation allowances may be required.

The new valuation allowance on a loan that has multiple restructurings is calculated based on the present value of the expected cash flows, discounted at the effective interest rate of the original loan contract, considering the new terms of the restructured agreement.

The estimated exposure for additional loss related to multiple loan restructurings as well as additional losses on individually reviewed TDRs are included as a $1.4 million component of our qualitative GVA at September 30, 2023.

Home equity loans and lines of credit generally have higher credit risk than traditional residential mortgage loans.

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At September 30, 2024, we had an amortized cost of $3.93 billion in home equity loans and home equity lines of credit outstanding, of which $4.4 million, or 0.1%, were delinquent 90 days or more.

The allowance for credit losses is evaluated based upon the combined total of the quantitative and qualitative GVAs and IVAs.

The allowance for credit losses is evaluated based upon the combined total of the quantitative and qualitative GVAs.

Periodically, the carrying value of loans and factors impacting our credit loss analysis are evaluated and the allowance is adjusted accordingly.

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The following table sets forth activity for credit losses segregated by geographic location for the periods indicated.

The majority of our Home Today loan portfolio is secured by properties located in Ohio, and therefore was not segregated by state.

The majority of our Residential Core and Home Today loan portfolios is secured by properties located in Ohio, and therefore was not segregated by state.

At or For the Years Ended September 30,

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Allowance balance for credit losses on loans (beginning of the year) $ 77,315 $ 72,895 $ 64,289

Adoption of ASU 2016-13 for allowance for credit losses on loans — — 24,095

Adoption of ASU 2022-02

Charge-offs on real estate loans:

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Allowance balance for credit losses on unfunded commitments (beginning of the year) $ 27,515 $ 27,021 $ 24,970

Adoption of ASU 2016-13 for allowance for credit losses on unfunded commitments — — 22,052

Provision for credit losses on unfunded commitments 296 494 2,051

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Allowance balance for all credit losses (end of the year) $ 97,813 $ 104,830 $ 99,916

Allowance for credit losses to non-accrual loans at end of the year 242.26 % 204.73 % 145.96 %

Allowance for credit losses to the total amortized cost in loans at end of the year 0.51 % 0.51 % 0.51 %

Allowance for credit losses on loans to non-accrual loans at end of the year

208.28 % 242.26 % 204.73 %

Allowance for credit losses on loans to the total amortized cost in loans at end of the year

0.45 % 0.51 % 0.51 %

The following table sets forth additional information with respect to net recoveries (charge-offs) by category for the periods indicated.

For the Years Ended September 30,

2023 2022 2021

(Dollars in thousands)

Net recoveries to average loans outstanding during the year

2024 2023 2022

Real estate loans:

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During the fiscal year ended September 30, 2024, recoveries exceeded loan charge-offs by $4.7 million.

Gross charge-offs decreased and delinquent loans continue to be evaluated for potential losses, and provisions are recorded for the estimate of potential losses of those loans.

Subject to changes in the economic environment, a moderate level of charge-offs are expected as delinquent loans are resolved in the future and uncollected balances are charged against the allowance.

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Allowance Percent of

(Dollars in thousands)

Real estate loans:

(Dollars in thousands)

Residential Core $ 44,402 63.4 % 74.3 % $ 55,375 71.6 % 79.4 %

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Allowance for credit losses on loans $ 70,002 100.0 % 100.0 % $ 77,315 100.0 % 100.0 %

During the fiscal year ended September 30, 2023, the total allowance for credit losses increased to $104.8 million, from $99.9 million at September 30, 2022.

During the fiscal year ended September 30, 2024, the total allowance for credit losses decreased to $97.8 million, from $104.8 million at September 30, 2023.

The total allowance for credit losses is comprised of the asset portion, which is applied to the loan portfolio and the liability portion, which is applied to off-balance sheet exposures, primarily related to undrawn equity exposures.

During the fiscal year ended September 30, 2023 the asset and liability portions of the total allowance increased to $77.3 million from $72.9 million and to $27.5 million from $27.0 million, respectively.

During the fiscal year ended September 30, 2024 the asset and liability portions of the total allowance decreased to $70.0 million from $77.3 million and increased to $27.8 million from $27.5 million, respectively.

We recorded a $1.5 million net release for credit losses for the year, consisting of a $1.8 million release from credit losses on loans and a $0.3 million reclassification to credit losses on off-balance sheet exposures.

Because many variables are considered in determining the appropriate level of general valuation allowances, directional changes in individual considerations do not always align with the directional change in the balance of a particular component of the general valuation allowance.

Changes in the allowance for credit losses on loan balances during the fiscal year ended

September 30, 2023 were generally related to new growth in the residential Core and home equity loans and lines of credit portfolios, partially offset by some deterioration in the economic forecasts.

The amortized cost of the residential Core portfolio increased 4.5%, or $543.7 million, and its total allowance increased 3.5% or $1.9 million as of September 30, 2023 compared to September 30, 2022.

Changes in the allowance for credit losses on loan balances during the fiscal year ended September 30, 2024, were primarily related to the adoption of ASU 2022-02 at October 1, 2023, which eliminated the Individual Valuation Allowance (IVA) that was established for TDRs dependent on cash flows, and decreases in the Core

portfolio balances primarily due to aging.

This was offset by the net impact of increases in the equity portfolios primarily due to new growth and a decrease in total net recovery qualitative factors.

The amortized cost of the residential Core portfolio decreased 5.7%, or $694.1 million, and its total allowance decreased 19.8%, or $11.0 million, as of September 30, 2024, compared to September 30, 2023.

The amortized cost of the home equity loans and lines of credit portfolio increased 28.0%, or $859.7 million, and its total allowance increased 22.5% to $28.2 million from $23.0 million at September 30, 2023.

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Our analysis for evaluating the adequacy of and the appropriateness of our allowance for credit losses is continually refined as relevant information, relating to past events, current conditions and supportable forecasts become available.

During the years ended September 30, 2023 and 2022, no material changes were made to the allowance for credit losses.

During the years ended September 30, 2024 and 2023, no material changes were made to the allowance for credit losses other than the adoption of ASU 2022-02.

The Association’s Board of Directors is responsible for establishing and overseeing the Association’s investment policy.

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This policy dictates that investment decisions be made based on the safety of the investment, liquidity requirements, potential returns, the ability to provide collateral for pledging requirements, and consistency with our interest rate risk management strategy.

The Association’s Investment Committee, which consists of the Association's chief operating officer, chief financial officer and other members of management, oversees the Association's investing activities and strategies.

The Association’s Investment Committee, which consists of the Association's CFO, CAO and other members of management, oversees the Association's investing activities and strategies.

The portfolio manager is responsible for making securities portfolio decisions in accordance with established policies.

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Additional sources of funds are borrowings from the FRB-Cleveland Discount Window, scheduled loan payments, maturing investments, loan prepayments, collateralized wholesale borrowings, Fed Fund purchases, income on other earning assets, the proceeds from loan sales, and brokered deposits.

As a result of unfavorable market conditions, proceeds from loan sales decreased during fiscal year 2023, which required an increase of borrowings from the FHLB of Cincinnati.

As a result of favorable market conditions, proceeds from loan sales increased during fiscal year 2024 which contributed to the retirement of some FHLB of Cincinnati borrowings.

The Association obtains deposits primarily from the areas in which its branch offices are located, as well as from its customer service call center, its internet website, and from brokered deposits.

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billion of brokered CDs), of which $4.95 billion had remaining maturities of one year or less.

Based on historical experience and its current pricing strategy, management believes the Association will retain a large portion of these accounts upon maturity.

Based on historical experience and its current pricing strategy, management believes the Association will retain a large portion of these balances upon maturity.

The following table sets forth the distribution of the Association’s average total deposit accounts, by account type, for the fiscal years indicated.

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Balance Percent Weighted

(Dollars in thousands)

Deposit type:

(Dollars in thousands)

Checking $ 880,893 8.9 % 0.05 % $ 1,093,036 12.1 % 0.56 % $ 1,326,882 14.7 % 0.32 %

Savings 1,798,663 20.0 % 1.37 % 1,859,990 20.7 % 0.24 % 1,742,042 19.0 % 0.17 %

money market accounts

1,518,453 15.4 % 1.46 % 1,798,663 20.0 % 1.37 % 1,859,990 20.7 % 0.24 %

Certificates of deposit 7,489,887 75.7 % 3.61 % 6,123,979 67.9 % 2.34 % 5,826,286 64.6 % 1.17 %

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The following table sets forth the distribution of the Association’s total deposit accounts, by account type, at September 30, 2024.

At September 30, 2023

September 30, 2024

Balance Percent Weighted Average Cost of Funds

(Dollars in thousands)

Deposit type (Dollars in thousands)

Interest-bearing:

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As of September 30, 2024 and September 30, 2023, the total amount of the Association's uninsured deposits were $349.3 million and $322.5 million, respectively.

As of September 30, 2023, the aggregate amount of the Association’s outstanding certificate of deposits in amounts greater than $250 thousand was approximately $230.9 million.

As of September 30, 2024, the aggregate amount of the Association’s outstanding certificates of deposit in amounts greater than $250 thousand was approximately $271.8 million.

The following table sets forth the maturity of those CDs as of September 30, 2024.

At September 30, 2023

September 30, 2024

(In thousands)

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

At September 30, 2023, the Association had the

capacity to borrow up to $126.4 million from the FRB-Cleveland.

At September 30, 2024, the Association had the capacity to borrow up to $633.1 million from the FRB-Cleveland.

A maturity schedule and available borrowing capacity schedule can be found in Note 10.

BORROWED FUNDS of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

The following tables set forth information relating to a category of short-term borrowings for which the average balance outstanding during the period was at least 30% of shareholders' equity at the end of each period shown.

The following tables set forth information relating to a category of short-term borrowings.

There are no borrowings with original terms between 30 and 90 days.

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2024 2023 2022

(Dollars in thousands)

Borrowings (30 days and under):

(Dollars in thousands)

Balance at end of year $ 40,000 $ 592,000 $ 2,000,000

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2024 2023 2022

(Dollars in thousands)

Borrowings (90 days to 12 months):

(Dollars in thousands)

Balance at end of year $ 2,925,000 $ 3,150,000 $ 1,550,000

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The Financial Institutions Tax is based on total equity capital apportioned to Ohio using a single gross receipts factor.

Ohio equity capital is taxed at a three-tiered rate of 0.8% on the first $200 million, 0.4% on amounts greater than $200 million and less than or equal to $1.3 billion, and 0.25% on amounts greater than $1.3 billion.

Ohio equity capital is taxed at a three-tiered rate of 0.8% on the first

$200 million, 0.4% on amounts greater than $200 million and less than or equal to $1.3 billion, and 0.25% on amounts greater than $1.3 billion.

SUPERVISION AND REGULATION

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The Association also is a member of and owns stock in the FHLB of Cincinnati, which is one of the eleven regional banks in the FHLB System.

The Association is also regulated to a lesser extent by the FRS.

The OCC will examine the Association and prepare reports for the consideration of the Association’s Board of Directors on any operating deficiencies.

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The Association may also invest in commercial business loans up to 20% of assets in the aggregate and consumer loans up to 35% of assets in the aggregate, and in certain types of debt securities and certain other assets.

The Association may also establish subsidiaries that may engage in certain activities not otherwise permissible for an association, including real estate investment and securities and insurance brokerage.

The Association may also establish subsidiaries that may engage in certain activities not otherwise permissible for a federal savings association, including real estate investment and securities and insurance brokerage.

A federal savings association may elect to exercise national bank powers without converting to a national bank charter.

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Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital.

Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Additional Tier 1 capital includes certain noncumulative perpetual

preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

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A federal savings association must file an application with the OCC for approval of a capital distribution if:

• the total capital distributions for the applicable calendar year exceed the sum of the savings association’s net income for that year to date plus the savings association’s retained net income for the preceding two years;

• the savings association would not be at least adequately capitalized following the distribution;

• the total capital distributions for the applicable calendar year exceed the sum of the association’s net income for that year to date plus the association’s retained net income for the preceding two years;

• the association would not be at least adequately capitalized following the distribution;

• the distribution would violate any applicable statute, regulation, agreement or condition imposed by a regulator;

• the savings association is not eligible for expedited treatment of its filings.

• the association is not eligible for expedited treatment of its filings.

Regardless of whether an application is required, every federal savings association that is a subsidiary of a holding company must still file a notice with the FRS at least 30 days before the board of directors declares a dividend or approves a capital distribution.

The OCC and the FRS have established similar criteria for approving an application or notice, and may disapprove an application or notice if:

• the savings association would be undercapitalized following the distribution;

• the association would be undercapitalized following the distribution;

• the proposed capital distribution raises safety and soundness concerns;

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In addition, the Federal Deposit Insurance Act provides that an insured depository institution may not make any capital distribution if the institution would be undercapitalized after the distribution.

The Association, in compliance with the preceding requirements, paid a $40 million cash dividend to the Company during the fiscal year ended September 30, 2023, a $56 million cash dividend to the Company during the fiscal year ended September 30, 2022 and a $55 million cash dividend to the Company during the fiscal year ended September 30, 2021.

The Association, in compliance with the preceding requirements, did not pay a cash dividend to the Company during the fiscal year ended September 30, 2024, paid a $40 million cash dividend to the Company during the fiscal year ended September 30, 2023, and a $56 million cash dividend to the Company during the fiscal year ended September 30, 2022.

There were no dividends paid to the Company by Third Capital, the Company's other wholly owned subsidiary, during the fiscal years ended September 30, 2024, 2023 or 2022.

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Third Federal Savings, MHC waived its right to receive a $0.2825 per share dividend payment on September 24, 2024.

As a result of the 2022, 2021, and 2020 approvals, Third Federal Savings, MHC previously waived its right to receive an aggregate of $1.13 per share on common stock for the period ended June 30, 2023, $1.13 per share for the period ended June 30, 2022, and $1.12 per share for the period ended June 30, 2021.

As a result of the 2023, 2022, and 2021 approvals, Third Federal Savings, MHC previously waived its right to receive an aggregate of $1.13 per share on common stock for the periods ended June 30, 2024, June 30, 2023 and June 30, 2022.

A federal savings association is required to identify, measure, monitor and control its funding and liquidity risk and maintain a sufficient amount of liquid assets to ensure its safe and sound operation.

The Association maintains a liquid asset portfolio comprised of agency securities that are collateralized by mortgages, in addition to cash and cash equivalents, to maintain sufficient liquidity to fund business operations.

The Association maintains a liquid asset portfolio comprised of federal agency and enterprise securities that are collateralized by mortgage loans, in addition to cash and cash equivalents, to maintain sufficient liquidity to fund business operations.

Community Reinvestment Act and Fair Lending Laws.

All savings associations have a responsibility under the CRA and federal regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.

In connection with its examination of a federal savings association, the OCC is required to assess the savings association’s record of compliance with the CRA.

In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.

All federal savings associations have a responsibility under the CRA and federal regulations to help meet the credit needs of their communities, including low- and moderate-income neighborhoods.

In connection with its examination of a federal savings association, the OCC is required to assess the association’s record of compliance with the CRA.

A federal savings association’s failure to comply with the provisions of the CRA could, at a minimum, result in denial of certain corporate applications such as branches, mergers, minority stock offerings or second-step conversion, or in restrictions on its activities.

The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the OCC, as well as other federal regulatory agencies and/or the Department of Justice.

In March 2021, the Association received a "Needs to Improve" CRA rating in its most recent federal evaluation dated February 24, 2020.

On October 24, 2023, the FDIC, the Federal Reserve and the OCC released a final rule revising the framework used to evaluate banks' records of community reinvestment under the CRA.

In July 2024, the Association received a rating of "Satisfactory" from the OCC for the exam during for the period of January 1, 2020 through December 31, 2022.

On October 24, 2023, the FDIC, the FRS and the OCC released a final rule revising the framework used to evaluate banks' records of community reinvestment under the CRA.

Under the revised framework, banks with assets of at least $2 billion, such as the Association, are considered large banks and will have their retail lending, retail services and products, community development financing, and community development services subject to periodic evaluation.

Depending on a large bank's geographic concentrations of lending, the evaluation of retail lending may include assessment areas in which the bank extends loans but does not operate any deposit-taking facilities, in addition to assessment areas in which the bank has deposit-taking facilities.

The rule becomes effective April 1, 2024.

Most provisions of the final rule will apply beginning January 1, 2026, and the remaining provisions will apply beginning January 1, 2027.

Under the rule as written, provisions of the final rule would apply beginning January 1, 2026, and the remaining provisions would apply beginning January 1, 2027, but in March 2024, a federal district court issued a preliminary injunction of the regulations.

The Association is evaluating the impact of the final rule.

Transactions with Related Parties.

In addition, the ECOA and FHA prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.

The failure to comply with ECOA and FHA could result in enforcement actions by the OCC, as well as other federal regulatory agencies and/or the Department of Justice.

Transactions with Affiliates.

A federal savings association’s authority to engage in transactions with its affiliates is limited by Sections 23A and 23B of the Federal Reserve Act and its implementing Regulation W.

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Collateral in specified amounts ranging from 100% to 130% of the amount of the transaction must be provided by affiliates in order to receive loans from the insured depository institution.

In addition, federal regulations prohibit a savings association from lending to any of its affiliates that are engaged in activities that are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary.

In addition, federal regulations prohibit a federal savings association from lending to any of its affiliates that are engaged in activities that are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary.

Finally, transactions with affiliates must be consistent with safe and sound banking practices, not involve low-quality assets and be on terms that are substantially the same or at least as favorable to the institution as comparable transactions with non-affiliates.

Federal savings associations are required to maintain detailed records of all transactions with affiliates.

Extensions of Credit to Insiders.

The Association’s authority to extend credit to its directors, executive officers and 10% shareholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the FRS.

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In addition, extensions of credit in excess of certain limits must be approved by the Association’s Board of Directors.

The OCC has primary enforcement responsibility over federal savings associations and has the authority to bring enforcement action against all “institution-affiliated parties,” a term that includes shareholders who participate in the affairs of the association, as well as attorneys, appraisers and accountants who knowingly or recklessly participate in violations of law or regulation, breaches of fiduciary duty, or unsafe or unsound practices.

The OCC has primary enforcement responsibility over federal savings associations and has the authority to bring enforcement actions against all “institution-affiliated parties,” a term that includes shareholders who participate in the affairs of the association, as well as attorneys, appraisers and accountants who knowingly or recklessly participate in violations of law or regulation, breaches of fiduciary duty, or unsafe or unsound practices.

Formal enforcement actions by the OCC may include issuance of a capital directive, formal agreement, or cease and desist order against institutions, and can also include the removal of officers and/or directors of the institution.

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The OCC can appoint receivers and conservators for the institutions it supervises if certain circumstances are met.

The FDIC also has the authority to terminate deposit insurance or to recommend to the OCC that enforcement action be taken with respect to a particular federal savings institution.

The FDIC also has the authority to terminate deposit insurance or to recommend to the OCC that an enforcement action be taken with respect to a particular federal savings institution.

If action is not taken by the OCC, the FDIC has authority to take action under specified circumstances.

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The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired.

If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to

submit to the agency an acceptable plan to achieve compliance with the standard.

If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

If an institution fails to meet these standards, the appropriate federal banking agency may require the institution to submit a compliance plan.

Failure to implement such a plan can result in further enforcement action, including the issuance of a cease and desist order and/or the imposition of civil money penalties.

Prompt Corrective Action Regulations .

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For this purpose, a federal savings association is placed in one of the following five categories based on its capital:

• well capitalized (at least 5% leverage capital, 8% Tier 1 risk-based capital, 10% total risk-based capital, and 6.5% common equity Tier 1 ratios, and is not subject to any written agreement, order, capital directive or prompt corrective action directive issued under certain statutes and regulations, to maintain a specific capital level for any capital measure);

• adequately capitalized (at least 4% leverage capital, 6% Tier 1 risk-based capital, 8% total risk-based capital and 4.5% common equity Tier 1 ratios);

• undercapitalized (less than 4% leverage capital, 6% Tier 1 risk-based capital, 8% total risk-based capital, or 4.5% common equity Tier 1 ratios);

• significantly undercapitalized (less than 3% leverage capital, 4% Tier 1 risk-based capital, 6% total risk-based capital or 3% common equity Tier 1 ratios);

• well capitalized (at least 5% leverage capital, 8% Tier 1 risk-based capital, 10% total risk-based capital, and 6.5% common equity Tier 1 capital ratios, and is not subject to any written agreement, order, capital directive or prompt corrective action directive issued under certain statutes and regulations, to maintain a specific capital level for any capital measure);

• adequately capitalized (at least 4% leverage capital, 6% Tier 1 risk-based capital, 8% total risk-based capital and 4.5% common equity Tier 1 capital ratios);

• undercapitalized (less than 4% leverage capital, 6% Tier 1 risk-based capital, 8% total risk-based capital, or 4.5% common equity Tier 1 capital ratios);

• significantly undercapitalized (less than 3% leverage capital, 4% Tier 1 risk-based capital, 6% total risk-based capital or 3% common equity Tier 1 capital ratios);

• critically undercapitalized (less than or equal to 2% tangible capital to total assets).

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The DIF of the FDIC insures deposits at FDIC-insured depository institutions such as the Association.

Deposit accounts in the Association are insured by the FDIC, generally up to a maximum of $250,000 per separately insured depositor.

Deposit accounts in the Association are insured by the FDIC, generally up to a maximum of $250,000 per separately insured depositor for each account ownership category.

As of September 30, 2024, 96.1% of our $8.98 billion retail deposit base consists of accounts structured under the FDIC insured limit of $250,000.

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Institutions with over $10 billion of total assets, such as the Association, are classified for assessment purposes as "Large Institutions".

Such Large Institutions are generally subject to a pricing system that includes a separate “scorecard” methodology designed to

measure risk to the DIF.

Such Large Institutions are generally subject to a pricing system that includes a separate “scorecard” methodology designed to measure risk to the DIF.

The assessment range for Large Institutions (inclusive of adjustments specified by the FDIC) is 2.5 to 42 basis points.

On November 16, 2023, the FDIC approved a final rule to implement a special assessment on certain banking organizations with financial institution subsidiaries with more than $5 billion in assets, in order to recover the costs associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in March 2023.

with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in March 2023.

The special assessment will be collected beginning with the first quarterly assessment period of 2024 at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly periods and is subject to periodic adjustments.

The assessment base is equal to uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion.

Because the Association's uninsured deposits at the measurement date were below $5 billion, the Association will not be subject to this special assessment.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

Because the Association's uninsured deposits at the measurement date were below $5 billion, the Association was not subject to this special assessment.

The Association does not believe that it is taking, or is subject to, any action, condition or violation that could lead to termination of its deposit insurance.

Brokered Deposits.

The FDIA and FDIC regulations generally limit the ability of an insured depository institution to accept, renew or roll-over any brokered deposit unless the institution's capital category is "well capitalized" or, upon application to and a waiver from the FDIC, "adequately capitalized." Less-than-well-capitalized banks are also subject to restrictions on the interest rates that they may pay on deposits.

The characterization of deposits as "brokered" may result in the imposition of higher deposit assessments on such deposits.

As mandated by the Economic Growth Act, the FDIC's brokered deposit regulations provide a limited exception for reciprocal deposits for banks that are well managed and well capitalized (or adequately capitalized and have obtained a waiver from the FDIC as mentioned above).

Under the limited exception, qualified banks are eligible for exemption from treatment as "brokered" deposits up to $5 billion, or 20% of the institution's total liabilities in reciprocal deposits.

Cyber Security.

The federal banking agencies recently adopted rules providing for new notification requirements for banking organizations and their service providers for significant cybersecurity incidents.

Specifically, the new rules require a banking organization to notify its primary federal regulator as soon as possible, and not later than 36 hours after it is determined that a "computer-security incident" rising to the level of a "notification incident" has occurred.

Notification is required for incidents that have materially affected, or are reasonably likely to materially affect, the viability of a banking organization's operations, its ability to deliver banking products and services, or the stability of the financial sector.

Service providers are required under the rule to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected, or is reasonably likely to materially affect, the banking organization's customers for four or more hours.

Prohibitions Against Tying Arrangements .

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• Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;

• Real Estate Settlement Procedures Act, requiring that borrowers for mortgage loans for one- to four-family residential real estate receive various disclosures, including good faith estimates of settlement costs, lender servicing and escrow account practices, and prohibiting certain practices that increase the cost of settlement services;

• Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;

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Specifically, the Gramm-Leach-Bliley Act requires all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy and provide such customers the opportunity to “opt out” of the sharing of certain personal financial information with unaffiliated third parties;

• The Dodd-Frank Act, which holds lenders accountable for ensuring a borrower's ability to repay a mortgage.

• The DFA, which holds lenders accountable for ensuring a borrower's ability to repay a mortgage.

Loans defined as a "qualified mortgage" must be made to a borrower whose total monthly debt-to-income ratio does not exceed 43%, as well as the verification and documentation of the income and financial resources relied upon to qualify the borrower on the loan.

Upon the loan being underwritten based on a fully amortizing payment schedule and maximum interest rate during the first five years, as well as meeting the other qualifications above, the loan is determined to be a "qualified mortgage" and therefore presumed to have complied with the ability-to-repay standard under the Dodd-Frank Act.

Holding Company Regulation

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The HOLA prohibits a savings and loan holding company, such as the Company, from directly or indirectly acquiring more than 5% of a class of voting securities of, or acquiring "control" as defined in FRS regulations of, another savings institution or savings and loan holding company, without prior written approval of the FRS.

It also prohibits the acquisition or

retention of, with certain exceptions, more than 5% of a non-subsidiary company engaged in activities other than those permitted by the HOLA or acquiring or retaining control of an institution that is not federally insured.

It also prohibits the acquisition or retention of, with certain exceptions, more than 5% of a non-subsidiary company engaged in activities other than those permitted by the HOLA or acquiring or retaining control of an institution that is not federally insured.

In evaluating applications by holding companies to acquire savings institutions, the FRS must consider the financial and managerial resources, future prospects of the company and institution involved, the effect of the acquisition on the risk to the DIF, the convenience and needs of the community and competitive factors.

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(ii) the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.

Savings and loan holding companies were historically not subject to specific regulatory capital requirements.

The DFA, however, required the FRS to promulgate consolidated capital requirements for all depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to depository institutions themselves.

Instruments such as cumulative preferred stock and trust preferred securities could no longer be included as Tier 1 capital, as was previously permitted for bank holding companies.

Consolidated regulatory capital requirements identical to those applicable to the subsidiary depository institutions, including the capital conservation buffer, apply to savings and loan holding companies.

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Federal regulations require Third Federal Savings, MHC to notify the FRS of any proposed waiver of its receipt of dividends from the Company.

The OTS, the previous regulator for Third Federal Savings, MHC, allowed dividend waivers provided that its Board of Directors determined that the waiver was consistent with the Board's fiduciary duties and the waiver would not be detrimental to the safety and soundness of its subsidiary institution.

In February 2008, the Company declared its first quarterly dividend and Third Federal Savings, MHC waived its right to receive each dividend paid by the Company.

Section 625(a) of DFA preserved, for mutual holding companies that had reorganized into mutual holding company form, issued minority stock and waived dividends prior to December 1, 2009, including Third Federal Savings, MHC, the right to waive dividends if the waiver was not detrimental to the safe and sound operation of the savings association and the board of directors expressly determined that the waiver was consistent with the fiduciary duties of the board to the mutual members of the mutual holding company.

However, on August 12, 2011, the FRS issued an interim final rule that added a requirement that a majority of the mutual holding company’s members eligible to vote must approve a dividend waiver by a mutual holding company within 12 months prior to the declaration of the dividend being waived.

Third Federal Savings, MHC received the approval of its members (depositors and certain loan customers of the Association) with respect to the waiver of dividends, and subsequently received the non-objection of the FRB-Cleveland, to waive dividends aggregating up to $1.13 per share on the common stock of the Company for the 12

months following the special meeting of members held on July 11, 2023.

Third Federal Savings, MHC previously received the approval of its members every calendar year beginning in 2014.

In addition, a majority of the mutual holding company’s members eligible to vote must approve a dividend waiver by a mutual holding company within 12 months prior to the declaration of the dividend being waived.

Company for the 12 months following the special meeting of members held on July 9, 2024.

Third Federal Savings, MHC has received the approval of its members every calendar year beginning in 2014.

Conversion of Third Federal Savings, MHC to Stock Form .

Federal regulations permit Third Federal Savings, MHC to convert from the mutual form of organization to the capital stock form of organization (a “Conversion Transaction”).

There can be no assurance when, if ever, a Conversion Transaction will occur, and the Board of Directors has no current intention or plan to undertake a Conversion Transaction.

In a Conversion Transaction, a new stock holding company would be formed as the successor to the Company, Third Federal Savings, MHC’s corporate existence would end, and certain depositors of the Association would receive the right to subscribe for additional shares of common stock of the new holding company.

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Our selection and promotion processes are without bias and include the active recruitment of minorities and women.

We encourage and support the growth and development of our associates and, wherever possible, seek to fill positions by promotion and transfer from within the organization.

Continual learning and career development is advanced through quarterly performance and development conversations between associates and their managers, internally developed training programs, customized corporate training engagements and educational reimbursement programs.

Reimbursement is available to associates enrolled in pre-approved degree or certification programs at accredited institutions that teach skills or knowledge relevant to our business, in compliance with Section 127 of the Internal Revenue Code, and for seminars, conferences, and other training events associates attend in connection with their job duties.

On an ongoing basis, we further promote the health and wellness of our associates by strongly encouraging work-life balance, offering flexible work schedules, keeping the associate portion of health care premiums to a minimum and sponsoring various wellness programs, whereby associates are compensated for incorporating healthy habits into their daily routines.

Associate retention helps us operate efficiently and achieve one of our business objectives, which is being a low-cost provider.

Our voluntary turnover rate, at 5.5% for the twelve months ending September 30, 2024, excluding retirements, remains one of the lowest in the industry.

At September 30, 2024, 39% of our current associates had been with us for fifteen years or more.

We believe our commitment to living out our core values, actively prioritizing concern for our associates’ well-being, supporting our associates’ career goals, offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing associates.

In addition, nearly all of our associates are stockholders of the Company through participation in our Associate Stock Ownership Plan, which aligns associate and stockholder interests by providing stock ownership on a tax-deferred basis at no investment cost to our associates.

At September 30, 2023, 38% of our current staff had been with us for fifteen years or more.

We encourage and support the growth and development of our associates and, wherever possible, seek to fill positions by promotion and transfer from within the organization.

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What changed 10-K

Item 1. Business