What changed in this filing

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Item 9A. Controls and Procedures

2024-11-22 compared with 2023-11-21 · 405 added, 299 removed, 1745 unchanged (29% of the section changed)

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Under the supervision of and with the participation of the Company’s management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based upon that

evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

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Rule 10b5-1 under the Securities Exchange Act of 1934 provides an affirmative defense that enables prearranged transactions in securities in a manner that avoids concerns about initiating transactions at a future date while possibly in possession of material nonpublic information.

During this quarter, Marc A.

Stefanski, Chairman, CEO, and President of the Company, completed the transactions that were contemplated in the Trading Plan adopted on June 14, 2023 that was intended to satisfy the affirmative defense conditions of the Exchange Act Rule 10b5-1(c) and authorized a designated option for 286,500 shares of common stock be exercised, after a 90-day cooling off period, in the event that the Company's stock equals or exceeds a predetermined share amount.

On September 18, 2023, Daniel F.

Weir, Director of the Company, adopted a Trading Plan that is intended to satisfy the affirmative defense conditions of the Exchange Act Rule 10b5-1(c) and authorizes a sale of a total of 100,000 shares of common stock on designated days, each for designated amount of shares, to be exercised, after a 90-day cooling off period, without regard to a predetermined share trading value.

The Trading Plan expires upon the earlier of (1) February 08, 2024, (2) the execution of all of the orders relating to such trades as specified in the plan, (3) the date Broker receives notice of liquidation, dissolution, bankruptcy, or insolvency of the client, (4) the date the Broker receives notice of the Client's death, or (5) the termination of the Trading Plan in accordance with Section 9(b) or Section 16.

During the quarter ended September 30, 2024, no trading plans , whether intended to satisfy the affirmative defense of Rule 10b5-1 or not, were terminated or adopted by a director or executive officer of the Company.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Incorporated by reference from the Notice of Annual Meeting and Proxy Statement for the 2025 Annual Meeting of Shareholders (the “Proxy Statement”) sections entitled “Proposal One:

Election of Directors,” “Executive Compensation,” “Delinquent Section 16(a) Reports” and “Corporate Governance.” Such information will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Election of Directors,” “Executive Compensation,” “Delinquent Section 16(a) Reports” and “Corporate Governance.” The Proxy Statement will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

The table below sets forth information, as of September 30, 2024, regarding our executive officers other than Marc A.

Stefanski and Meredith S.

Weil, whose information is set forth under the caption "Proposal One:

Election of Directors" of the Proxy Statement.

Name Title Age

Kathleen (Kitty) M.

Danckers Chief Risk Officer 61

Holmes Chief Retail Officer, the Association 60

Deborah (Debbie) L.

Chief Risk Officer 50

Sandra (Sandy) M.

Chief Consumer Banking Officer, the Association

Miller Chief Accounting Officer 59

Mulhern Chief Financial Officer (1)

Mulhern Chief Innovation Officer, the Association

Rubino Chief Information Officer, the Association 49

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Zbanek Chief Synergy Officer, the Association 51

(1) On October 26, 2023, the Board of Directors appointed Mr.

Mulhern to the role of Chief Innovation Officer of the Association and appointed Ms.

Weil as Chief Financial Officer effective January 1, 2024.

Long was appointed to the role of Chief Consumer Banking Officer by the Board of Directors on November 21, 2024.

The executive officers of the Company and the Association are elected annually and hold office until their respective successors are elected or until death, resignation, retirement or removal by the Board of Directors.

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Unless otherwise indicated, executive officers have held their positions for the past five years.

Kathleen (Kitty) M.

Danckers has been with the Association since 1997, and was named Chief Risk Officer in June 2020.

During her time with the Association, Ms.

Danckers has served in various management roles including as a Regional Manager of Retail Operations, Manager of Information Services and Operations Support, and continues to serve as the Chief Information Security Officer.

Danckers holds a BA in Computer Science, Mathematics and German from St.

Catherine University.

Danckers is a Fulbright Scholar.

Holmes has been with the Association since 2013 in retail delivery management and was named Chief Retail Officer in 2020.

He most recently served as Ohio regional manager, managing all branch and loan production offices in the state.

With 35 years in the banking business, Mr.

Holmes joined Third Federal from Key Bank where he served as SVP District Retail Leader for Eastern Ohio.

He holds a BS in Business Administration from the University of Akron, and received a Distinguished Business Alumni Award in 2009, and a Distinguished Alumni Award from the University’s multicultural department in 2013.

Deborah (Debbie) L.

Hand joined the Association in 2008, and was named Chief Risk Officer in June 2024.

Hand served in several leadership roles throughout the Company, including Default Services Manager, Internet Services Manager, and Escrow Operations Manager, before joining the Risk Management team in 2018.

Since that time, she has served in various capacities in Risk Management, most recently as Chief Credit Officer.

Hand holds both a Bachelor of Business Administration ( cum laude ) and Masters in Business Administration with a concentration in Finance from Kent State University.

Sandra (Sandy) M.

Long joined Third Federal in 1993 in the retail branch system, and was named Chief Consumer Banking Officer in 2024.

In her more than 30 years with the Association, she has spent much of her time in Retail Banking, including more than 10 years as a branch manager.

Moving to Customer Care, she held various manager roles including Internet Banking, Customer Service, and Customer Outreach before being promoted to the manager of Customer Care.

In her current role, Ms.

Long leads the Third Federal retail branch system in Ohio and Florida, Customer Care, and our operations and servicing teams.

She holds a BS from the University of Akron.

Miller joined the Association in 1998 and was appointed Chief Accounting Officer in 2020.

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Miller holds a BS in Accounting from the University of Akron.

Mulhern was named the Chief Financial Officer in January 2022.

Mulhern was named the Chief Innovation Officer in January 2024.

Mulhern joined the Association in 2003 as a project manager where he led key strategic business initiatives including a state loan expansion project, and IT projects to replace the company’s front-end servicing application, and implementation of an updated loan origination system.

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He was named the Chief Credit Officer in August 2018, and Director of Internal Audit in June 2019, where he earned his CIA credentials.

Mulhern joined the Finance Department in February 2021.

Mulhern joined the Finance Department in February 2021 and served as Chief Financial Officer through 2023.

He holds a Bachelor’s Degree in Accounting from John Carroll University and an MBA from the Weatherhead School of Management at Case Western Reserve University.

Prior to joining Third Federal, Mr.

Mulhern was in public accounting with Coopers & Lybrand where he earned his CPA credentials, and more than a decade as a small business owner.

Mulhern was in public accounting with Coopers & Lybrand where he earned his CPA credentials, and spent more than a decade as a small business owner.

Rubino h as been with the Association since 2000, joining the company as a business analyst.

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Executive Compensation

Incorporated by reference from the sections of the Proxy Statement entitled “Executive Compensation,” “Report of the Compensation Committee,” and “Director Compensation.” Such information will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Incorporated by reference from the sections of the Proxy Statement entitled “Executive Compensation”, “Compensation Committee Report”, and “Director Compensation”.

The Proxy Statement will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated by reference from the section of the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners and Management.” Such information will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Incorporated by reference from the section of the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners and Management.” The Proxy Statement will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

The Company’s only equity compensation program that was not approved by shareholders is its employee stock ownership plan, which was established in conjunction with our initial stock offering completed in 2007.

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Certain Relationships and Related Transactions, and Director Independence

Incorporated by reference from the sections of the Proxy Statement entitled “Certain Relationships and Related Transactions” and “Corporate Governance.” Such information will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Incorporated by reference from the sections of the Proxy Statement entitled “Certain Relationships and Related Transactions” and “Corporate Governance.” The Proxy Statement will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Principal Accounting Fees and Services

Incorporated by reference from the section of the Proxy Statement entitled “Fees Paid to Deloitte & Touche LLP (PCAOB ID No.

34 ).” Such information will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

34 ).” The Proxy Statement will be filed with the SEC no later than 120 days after the end of the fiscal year covered by this report.

Exhibits and Financial Statement Schedules

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As discussed in Notes 1 and 5 of the consolidated financial statements, the ACL is an amount which represents management’s best estimate of expected credit losses over the contractual life of the Company’s loan portfolio as of the balance sheet date.

We have identified the general valuation allowance ("GVA"), which is a component of ACL, for both the loan portfolio and off-balance sheet commitments, as a critical audit matter.

GVA for the loan portfolio is comprised of quantitative general valuation allowances for credit losses based on historical loan loss, and qualitative adjustments to the quantitative general valuation allowances to cover uncertainties that affect the estimate of expected credit losses.

GVA for off-balance sheet commitments is comprised of expected lifetime losses on unfunded loan commitments to extend credit where the obligations are not unconditionally cancellable.

As of September 30, 2023, the Company's loan portfolio totaled $15.2 billion, and the related ACL was $77.3 million, including $67.8 million GVA.

The Company's off-balance sheet commitments totaled $5.1 billion, and the related GVA was $27.5 million.

The GVA is established using relevant available information, relating to past events, current conditions, and reasonable and supportable forecasts.

The ACL for the loan portfolio is comprised of quantitative general valuation allowances for credit losses based on historical loan loss, and qualitative adjustments to the quantitative general valuation allowances to cover uncertainties that affect the estimate of expected credit losses.

The ACL for off-balance sheet commitments is comprised of expected lifetime losses on unfunded loan commitments to extend credit where the obligations are not unconditionally cancellable.

As of September 30, 2024, the Company’s loan portfolio totaled $15.3 billion, and the related ACL was $70.0 million.

The Company’s off-balance sheet commitments totaled $5.4 billion, and the related ACL was $27.8 million.

The ACL is established using relevant available information, relating to past events, current conditions, and reasonable and supportable forecasts.

The Company utilizes loan level regression models with forecasted economic data to derive the probability of default and loss given default factors.

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Qualitative adjustments are then made to account for factors that management does not believe are captured in the Current Expected Credit Losses (“CECL”) quantitative models.

The determination of the appropriate level of the allowance for

the loan portfolio inherently involves a high degree of subjectivity and requires significant estimates of current credit risks using both quantitative and qualitative analyses.

Auditing certain aspects of the GVA, including the (1) model methodology, (2) model accuracy, (3) model assumptions, (4) selection of relevant risk characteristics, (5) interpretation of the results, and (6) use of qualitative adjustments, involves especially subjective and complex judgment.

Given the significant judgment in determining the GVA estimate, performing audit procedures to evaluate the reasonableness of management’s estimate of the GVA requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our credit specialists.

The determination of the appropriate level of the allowance for the loan portfolio inherently involves a high degree of subjectivity and requires significant estimates of current credit risks using both quantitative and qualitative analyses.

Auditing certain aspects of the ACL, including the (1) model methodology, (2) model accuracy, (3) model assumptions, (4) interpretation of the results, and (5) use of qualitative adjustments, involves especially subjective and complex judgment.

Given the significant judgment in determining the ACL estimate, performing audit procedures to evaluate the reasonableness of management’s estimate of the ACL requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our credit specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the GVA included the following, among others:

• We tested the effectiveness of controls over the Company’s (1) model methodology, (2) model accuracy, (3) model assumptions, (4) selection of relevant risk characteristics, (5) interpretation of the results, and (6) use of qualitative adjustments.

• With the assistance of our credit specialists, we evaluated the reasonableness of the (1) model methodology, (2) model accuracy, (3) model assumptions, (4) selection of relevant risk characteristics, and (5) interpretation of the results.

• We evaluated trends in the total GVA for consistency with trends in loan portfolio growth and credit performance.

Our audit procedures related to the Allowance for Credit Losses included the following, among others:

• We tested the effectiveness of controls over the Company’s (1) model methodology, (2) model accuracy, (3) model assumptions, (4) interpretation of the results, and (5) use of qualitative adjustments.

• With the assistance of our credit specialists, we evaluated the reasonableness of the (1) model methodology, (2) model accuracy, (3) model assumptions, and (4) interpretation of the results.

• We evaluated trends in the total ACL for consistency with trends in loan portfolio growth and credit performance.

• We tested the accuracy and completeness of key risk characteristics input into the model by agreeing to source information.

• We assessed the Company's method for determining the qualitative factor adjustments and the effect of those factors on the GVA compared with relevant credit risk factors and credit trends.

• We assessed the Company’s method for determining the qualitative factor adjustments and the effect of those factors on the ACL compared with relevant credit risk factors and credit trends.

/s/ Deloitte & Touche LLP

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526,251 508,324

Mortgage loans held for sale

Mortgage loans held for sale ($ 10,713 and $ 3,260 measured at fair value, respectively)

Loans held for investment, net:

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TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For each of the three years in the period ended September 30, 2024

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Total other comprehensive income (loss) ( 100,820 ) 62,063 90,950

Total comprehensive income $ 137,313 $ 165,515 $ 145,171

Total comprehensive income (loss)

$ ( 21,232 ) $ 137,313 $ 165,515

See accompanying notes to consolidated financial statements.

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Comprehensive income

Cumulative effect from changes in accounting principle, net of tax 1

— — — — ( 35,763 ) — ( 35,763 )

— — — — 81,007 — 81,007

Net income — — — — 74,565 — 74,565

Other comprehensive income net of tax — — — — — 90,950 90,950

— — — — — 64,164 64,164

ESOP shares allocated or committed to be released — 2,729 — 4,334 — — 7,063

Compensation costs for equity incentive plans — 3,946 — — — — 3,946

Treasury stock allocated to (from) equity incentive plan — ( 5,205 ) ( 386 ) — — — ( 5,591 )

Purchase of treasury stock ( 337,259 shares)

— — ( 5,049 ) — — — ( 5,049 )

Share-based compensation activity

— ( 2,339 ) 1,098 — — — ( 1,241 )

Dividends declared to common shareholders ($ 1.13 per common share)

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Comprehensive income

— — — — 74,565 — 74,565

Net income — — — — 75,250 — 75,250

Other comprehensive income, net of tax — — — — — 62,063 62,063

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— — ( 5,000 ) — — — ( 5,000 )

Treasury stock allocated to (from) equity incentive plan — ( 2,339 ) 1,098 — — — ( 1,241 )

Share-based compensation activity

— ( 1,863 ) 885 — — — ( 978 )

Dividends declared to common shareholders ($ 1.13 per common share)

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Comprehensive income

Cumulative effect from changes in

accounting principle, net of tax 1

— — — — 7,898 — 7,898

Net income — — — — 79,588 — 79,588

Other comprehensive income, net of tax — — — — — ( 100,820 ) ( 100,820 )

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Compensation costs for equity incentive plans — 3,875 — — — — 3,875

Purchase of treasury stock ( 361,869 shares)

Share-based compensation activity

— ( 5,831 ) 3,906 — — — ( 1,925 )

Treasury stock allocated to (from) equity incentive plan — ( 1,863 ) 885 — — — ( 978 )

Dividends declared to common shareholders ($ 1.13 per common share)

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Balance at September 30, 2024 $ 3,323 $ 1,754,365 $ ( 772,195 ) $ ( 22,750 ) $ 915,489 $ ( 15,608 ) $ 1,862,624

1 Related to ASU 2016-13 adopted October 1, 2020.

1 Related to ASU 2022-02 adopted November 2, 2023 based on September 30, 2023 data.

See accompanying notes to consolidated financial statements.

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Net gain on sale of commercial property — — ( 181 )

Other net (gains) losses ( 199 ) 810 689

Other net losses (gains) 365 ( 199 ) 810

Proceeds from sales of loans held for sale 114,665 43,124 41,495

Loans originated and principal repayments on loans held for sale ( 45,082 ) ( 66,162 ) ( 67,024 )

Loans originated, purchased and principal repayments on loans held for sale

( 131,920 ) ( 45,082 ) ( 66,162 )

Increase in bank owned life insurance contracts ( 9,949 ) ( 9,355 ) ( 8,432 )

Net (increase) decrease in interest receivable and other assets ( 39,360 ) ( 13,043 ) 7,697

Net increase in interest receivable and other assets ( 4,304 ) ( 39,360 ) ( 13,043 )

Net increase (decrease) in accrued expenses and other liabilities 13,163 36,495 ( 1,155 )

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Purchases of:

Bank-owned life insurance — — ( 70,000 )

FHLB stock ( 34,515 ) ( 34,808 ) ( 49,507 )

Securities available for sale ( 133,525 ) ( 144,663 ) ( 250,022 )

Premises, equipment, and software, net ( 5,101 ) ( 2,700 ) ( 1,337 )

Premises, equipment, and software

( 3,064 ) ( 5,101 ) ( 2,700 )

Other 4,053 2,299 1,278

Net cash (used in) provided by investing activities ( 1,008,631 ) ( 1,875,095 ) 547,356

Net cash used in investing activities ( 124,709 ) ( 1,008,631 ) ( 1,875,095 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase (decrease) in deposits 732,330 520,029 ( 72,511 )

Net increase (decrease) in borrowers' advances for insurance and taxes 7,167 7,617 ( 1,903 )

Net (decrease) increase in borrowers' advances for insurance and taxes ( 10,780 ) 7,167 7,617

Net decrease in principal and interest owed on loans serviced ( 1,058 ) ( 101 ) ( 11,563 )

Net increase (decrease) in short-term borrowed funds 417,000 875,000 ( 525,000 )

Net (decrease) increase in short-term borrowed funds ( 777,000 ) 417,000 875,000

Proceeds/(repayments) from Fed Funds purchased — ( 225,000 ) 225,000

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Cash collateral/settlements received from (provided to) derivative counterparties ( 147,211 ) 88,144 162,094

Acquisition of treasury shares ( 5,978 ) ( 6,290 ) ( 5,591 )

Acquisition or net settlement of treasury shares

( 1,925 ) ( 5,978 ) ( 6,290 )

Dividends paid to common shareholders ( 58,953 ) ( 58,294 ) ( 58,297 )

Net cash provided by (used in) financing activities 1,015,091 1,717,404 ( 640,218 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 97,182 ( 118,762 ) ( 9,707 )

Net cash provided by financing activities 33,081 1,015,091 1,717,404

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 3,028 ) 97,182 ( 118,762 )

CASH AND CASH EQUIVALENTS—Beginning of year 466,746 369,564 488,326

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The Company’s primary operating subsidiaries include the Association and Third Capital, Inc.

The Association is a federal savings association, which provides retail loan and savings products to its customers in Ohio and Florida, through its 37 full-service branches, four loan production offices, customer service call center and internet site.

The Association is a federal savings association which provides retail loan and savings products to its customers in Ohio and Florida through its 37 full-service branches, two loan production offices, customer service call center and internet site.

The Association also provides savings products, purchase mortgages, first mortgage refinance loans, home equity lines of credit, and home equity loans in states outside of its branch footprint.

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Net unrealized gains or losses on loans carried at fair value are recognized in a valuation allowance by charges to income.

The Company retains servicing on loans that are sold and initially recognizes an asset for mortgage loan servicing rights based on the fair value of the servicing rights.

The Company has retained servicing on loans that are sold and initially recognizes an asset for mortgage loan servicing rights based on the fair value of the servicing rights.

Residential mortgage loans represent the single class of servicing rights and are measured at the lower of cost or fair value on a recurring basis.

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Interest on loans is not recognized in income when collectability is uncertain.

Loan fees and certain direct loan origination costs are deferred and recognized as an adjustment to interest income using the level-yield method over the contractual lives of related loans, if the loans are held for investment.

If the loans are held for sale, net deferred fees (costs) are generally not amortized, but rather are recognized when the related loans are sold.

Loans are classified as TDRs when the original contractual terms are restructured to provide a concession to a borrower experiencing financial difficulty under terms that would not otherwise be available and the restructuring is the result of an agreement between the Company and the borrower or is imposed by a court or law.

Concessions granted in TDRs may include a reduction of the stated interest rate, a reduction or forbearance of principal, an extension of the maturity date, a significant delay in payments, the removal of one or more borrowers from the obligation, or any combination of these.

Equity lines of credit amortize net deferred fees (costs) on a straight-line basis generally over the draw period.

A modification granted to a borrower experiencing financial difficulty is defined as an agreement in which, for economic reasons related to a borrower’s financial difficulties, a more than insignificant concession is granted to the borrower that would not otherwise be available.

The modifications to the payment terms of a loan may include interest rate reductions, term extensions, significant payment delays or, other, or a combination thereof.

Allowance for Credit Losses —The allowance for credit losses represents the estimate of lifetime losses in our loan portfolio and off-balance sheet commitments.

The allowance for credit losses is assessed on a quarterly basis and provisions (releases) for credit losses are made accordingly.

The allowance for credit losses is assessed on a quarterly basis and provisions

(releases) for credit losses are made accordingly.

The allowance is established using relevant available information, relating to past events, current conditions and supportable economic forecasts.

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Also, qualitative adjustments were made to reflect expected recovery of loan amounts previously charged-off, beyond what the model is able to project.

For further discussion on the allowance for credit losses, non-accrual, and TDRs, see Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES .

For further discussion on the allowance for credit losses, non-accrual, and modifications, see Note 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES and Note 15.

COMMITMENTS AND CONTINGENT LIABILITIES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS .

Real Estate Owned, net —Real estate owned, net represents real estate acquired through foreclosure or deed in lieu of foreclosure and is initially recorded at fair value, less estimated costs to sell.

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Significant differences in actual experience or significant changes in the assumptions could materially affect future pension obligations and expense.

Share-Based Compensation —Compensation expense for awards of equity instruments is recognized on a straight-line basis over the requisite service period based on the grant date fair value estimated in accordance with the provisions of FASB ASC 718 “Compensation—Stock Compensation”.

All vested equity instruments are settled in stock.

Forfeitures are recognized as they occur.

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The grant date fair value of stock options is estimated using the Black-Scholes option-pricing model using assumptions for the expected option term, expected stock price volatility, risk-free interest rate, and expected dividend yield.

Due to limited historical data on exercise of share options, the simplified method is used to estimate expected option term.

The simplified method is used to estimate expected term of "plain vanilla" options when the Company's historical experience does not provide a reasonable basis for the estimate.

Marketing Costs —Marketing costs are expensed as incurred.

1 unchanged sentence

Outstanding shares include shares sold to subscribers, shares held by the Third Federal Foundation, shares of the Employee Stock Ownership Plan which have been allocated or committed to be released for allocation to participants, and shares held by Third Federal Savings, MHC.

Unvested shares awarded in the Company's share-based compensation plan are treated as participating securities for purposes of the two-class method when they contain nonforfeitable rights to dividends, but are not included in the number of shares in the computation of basic EPS.

Unvested shares awarded in the Company's share-based compensation plan are treated as participating securities for purposes of the two-class method when they contain non-forfeitable rights to dividends, but are not included in the number of shares in the computation of basic EPS.

The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security.

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TFS Financial Corporation issued 5,000,000 shares of common stock, or 1.50 % of its post-offering outstanding common stock, to Third Federal Foundation.

Pursuant to the eighth repurchase program for the repurchase of 10,000,000 shares authorized by the Board of Directors in October, 2016, 361,869 shares were repurchased during the year ended September 30, 2023, 337,259 shares were repurchased during the year ended September 30, 2022, and no shares were repurchased during the year ended September 30, 2021.

Pursuant to the eighth repurchase program for the repurchase of 10,000,000 shares authorized by the Board of Directors in October, 2016, no shares were repurchased during the year ended September 30, 2024, 361,869 shares were repurchased during the year ended September 30, 2023, and 337,259 shares were repurchased during the year ended September 30, 2022.

At September 30, 2024, there were 5,191,951 shares remaining to be purchased under the eighth repurchase program.

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Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Association.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital

guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Association must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.

The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

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During the two-year delay, the Association and Company added back to CET1 100% of the initial adoption impact of CECL plus 25% of the cumulative quarterly changes in the allowance for credit losses.

Beginning this fiscal year, the cumulative transitional amounts became fixed and will be phased out of CET1 capital over the subsequent three-year period.

Beginning fiscal year 2023, the cumulative transitional amounts became fixed and are being phased out of CET1 capital ratably over three years.

At September 30, 2024, the Association exceeded all regulatory capital requirements and is considered “well capita lized” under regulatory guidelines.

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1,640,657 17.15 % 430,543 4.50 % 621,896 6.50 %

The Association paid dividends of $ 40,000 and $ 56,000 to the Company during the fiscal years ended September 30, 2023 and 2022, respectively.

As permitted under interim final rules issued by the FRS on August 12, 2011, a majority of Third Federal Savings, MHC's members eligible to vote approved Third Federal Savings, MHC waiving dividends aggregating up to $1.13 per share on the common stock of the Company for the 12 month following the special meeting of members held on July 11 2023.

The Association paid dividends of $ 0 and $ 40 million to the Company during the fiscal years ended September 30, 2024 and 2023, respectively.

As permitted under interim final rules issued by the FRS on August 12, 2011, a majority of Third Federal Savings, MHC's members eligible to vote approved Third Federal Savings, MHC waiving 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 9, 2024.

Unless the FRS amends its interim rule, a member vote will be required for Third Federal Savings, MHC to waive its right to receive dividends beyond July 9, 2025.

12 unchanged sentences

Fannie Mae certificates 834 1 ( 21 ) 814

Freddie Mac certificates

1,141 — ( 97 ) 1,044

Government and agency obligations 63,866 — ( 407 ) 63,459

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Fannie Mae certificates 578 21 — — 578 21

Freddie Mac certificates

1,045 97 — — 1,045 97

Government and agency obligations 59,813 11 3,646 396 63,459 407

5 unchanged sentences

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

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

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

LOANS AND ALLOWANCE FOR CREDIT LOSSES

14 unchanged sentences

Loans held for investment, net $ 15,322,059 $ 15,165,747

Loans are carried at amortized cost, which includes outstanding principal balance adjusted for any unamortized premiums or discounts, net of deferred fees and expenses.

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

Accrued interest is $ 56,982 and $ 51,989 as of September 30, 2024 and September 30, 2023, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION.

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

As of September 30, 2023, and September 30, 2022, the percentage of aggregate Residential Core, Home Today and Construction loans secured by properties in Ohio was 57 % and 56 %, respectively, and the percentage of loans secured by properties in Florida was 18 % as of both dates.

As of September 30, 2023 and September 30, 2022, home equity loans and lines of credit were concentrated in the states of Ohio ( 26 % and 27 %, respectively), Florida ( 22 % and 20 %, respectively), and California ( 17 % and 16 %, respectively).

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

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

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

7 unchanged sentences

Most loans under the program were originated prior to 2009.

No new loans were originated under the Home Today program after September 30, 2016.

No new loans were originated under the Home Today program after 2016.

Home Today loans have greater credit risk than traditional residential real estate mortgage loans.

Home equity loans and lines of credit, which are comprised primarily of home equity lines of credit, represent a significant portion of the residential real estate portfolio and include monthly principal and interest payments throughout the entire term.

Once the draw period on lines of credit has expired, the accounts are included in the home equity loan balance.

The full credit exposure on home equity lines of credit is secured by the value of the collateral real estate at the time of origination.

At September 30, 2024 and September 30, 2023, respectively, the amortized cost of home equity lines of credit was $ 3,361,176 and $ 2,733,275 , and the amortized cost of home equity loans and bridge loans was $ 565,840 and $ 334,006 .

The Company originates construction loans to individuals for the construction of their personal single-family residence by a qualified builder (construction/permanent loans).

4 unchanged sentences

The Company offers construction/permanent loans with fixed or adjustable-rates, and a current maximum loan-to-completed-appraised value ratio of 85 %.

Other loans are comprised of loans secured by certificate of deposit accounts, which are fully recoverable in the event of non-payment, and forgivable down payment assistance loans, which are unsecured loans used as down payment assistance to borrowers qualified through partner housing agencies.

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

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

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

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

1 unchanged sentence

At September 30, 2024 and September 30, 2023, mortgage loans held for sale totaled $ 17,775 and $ 3,260 , respectively.

During the years ended September 30, 2023 and September 30, 2022, the principal balance of loans sold was $ 77,205 and $ 128,118 , respectively.

During the years ended September 30, 2023 and September 30, 2022, the amortized cost of loans classified as held for sale that were subsequently transferred to the held for investment portfolio was $ 8,433 and $ 22,741 , respectively.

These transfers were due to changes in market pricing, affected by the rise in long-term interest rates, and managements' intent to hold the loans in portfolio until maturity for the foreseeable future.

During the year ended September 30, 2021, there were no transfers to the held for investment portfolio.

During the years ended September 30, 2024, September 30, 2023 and September 30, 2022, the principal balance of loans sold (including loans in contracts pending settlement when applicable) was $ 247,442 , $ 77,205 , and $ 128,118 , respectively.

During the years ended September 30, 2024, September 30, 2023 and September 30, 2022, the amortized cost of loans classified as held for sale that were subsequently transferred to the held for investment portfolio was $ 8,525 , $ 8,433 and $ 22,741 , respectively.

DELINQUENCY and NON-ACCRUAL

1 unchanged sentence

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

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

Past Due 60-89 Days

11 unchanged sentences

Total $ 12,502 $ 5,452 $ 13,934 $ 31,888 $ 15,360,173 $ 15,392,061

Past Due 60-89

Past Due 90 Days

60-89 Days Past Due

Past Due Total Past

10 unchanged sentences

Loans are placed in non-accrual status when they are contractually 90 days or more past due.

The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled payment.

The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled

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

Loans restructured in TDRs that were in non-accrual status prior to the restructurings and loans with forbearance plans that were subsequently modified are reported in non-accrual status for a minimum of six months after restructuring.

Loans restructured in TDRs with a high debt-to-income ratio at the time of modification are placed in non-accrual status for a minimum of 12 months.

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

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 modified with a high debt-to-income ratio, per the Company's modification policy, at the time of modification are placed in non-accrual status for a minimum of 12 months.

Additionally, home equity loans and lines of credit where the customer has a severely delinquent first mortgage loan (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.

The amortized cost of loan receivables in non-accrual status is summarized in the following table.

Non-accrual with no ACL describes non-accrual loans which have no quantitative or individual valuation allowance, primarily because they have already been collaterally reviewed and any required charge-offs have been taken, but may be included in consideration of qualitative allowance factors.

Balances are adjusted for deferred loan fees and expenses.

Non-accrual with no ACL describes non-accrual loans which have no quantitative allowance, primarily because they have already been subject to collateral review and any required charge-offs have been taken, but may be included in consideration of qualitative allowance factors.

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

7 unchanged sentences

Total non-accrual loans $ 30,513 $ 33,610 $ 27,237 $ 31,914

At September 30, 2023 and September 30, 2022, the amortized cost in non-accrual loans includes $ 18,915 and $ 23,159 , respectively, which are performing according to the terms of their agreement, of which $ 11,508 and $ 13,526 , respectively, are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

At September 30, 2023 and September 30, 2022, real estate loans include $ 9,144 and $ 9,833 , respectively, of loans that are in the process of foreclosure.

At September 30, 2024 and September 30, 2023, respectively, the amortized cost in non-accrual loans includes $ 19,704 and $ 18,915 , which are performing according to the terms of their agreement, of which $ 11,532 and $ 11,508 , are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

At September 30, 2024 and September 30, 2023, real estate loans include $ 10,527 and $ 9,144 , respectively, of loans that were in the process of foreclosure.

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

Accrued interest on loans in non-accrual status is reversed by a charge to interest income and income is subsequently recognized only to the extent cash payments are received.

Accrued interest on loans in non-accrual status is written off by a charge to interest income and income is subsequently recognized only to the extent cash payments are received.

The Company has elected not to measure an allowance for credit losses on accrued interest receivable amounts since amounts are written off timely.

1 unchanged sentence

The amount of interest income recognized on non-accrual loans was $ 750 and $ 663 for the years ended September 30, 2024 and September 30, 2023, respectively.

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

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

A non-accrual loan is generally returned to accrual status when contractual payments are less than 90 days past due.

However, a loan may remain in non-accrual status when collectability is uncertain, such as a TDR that has not met minimum payment requirements, a loan with a partial charge-off, a home equity loan or line of credit with a delinquent first mortgage greater than 90 days past due, or a loan in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed.

However, a loan may remain in non-accrual status when collectability is uncertain, such as a modification that has not met minimum payment requirements, a loan with a partial charge-off, a home equity loan or line of credit with a delinquent first mortgage greater than 90 days past due, or a loan in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed.

ALLOWANCE FOR CREDIT LOSSES

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

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

Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the amortized cost in the loans.

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

The allowance for credit losses represents the estimate of lifetime losses in the loan portfolio and unfunded loan commitments.

The allowance is estimated at each reporting date using relevant available information relating to past events, current conditions and reasonable and supportable forecasts.

The Company utilizes loan level regression models with forecasted economic data to derive the probability of default and loss given default factors.

These factors are used to calculate the loan level credit loss over a 24-month period with an immediate reversion to historical mean loss rates for the remaining life of the loans.

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

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

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

Historical credit loss experience provides the basis for the estimation of expected credit losses.

Qualitative adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in

underwriting standards, portfolio mix, delinquency status or likely recovery of previous loan charge-offs.

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

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

The net qualitative adjustment at September 30, 2024, was a net reduction to the allowance for credit loses of $ 5,519 , compared to a reduction of $ 13,425 at September 30, 2023.

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

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

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

• For residential mortgage loans, payments are greater than 180 days delinquent;

• For home equity loans and lines of credit, and residential loans restructured in a TDR, payments are greater than 90 days delinquent;

• For all classes of loans restructured in a TDR with a high debt-to-income ratio at time of modification;

• For home equity loans and lines of credit, and modified residential loans, payments are greater than 90 days delinquent;

• For all classes of loan modifications with a high debt-to-income ratio at time of modification;

• For all classes of loans, a sheriff sale is scheduled within 60 days to sell the collateral securing the loan;

3 unchanged sentences

• For all classes of loans, it becomes evident that a loss is probable.

Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are also recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the amortized cost in the loans.

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

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

3 unchanged sentences

A loan in any portfolio that has a partial charge-off will continue to be individually evaluated for credit loss until, at a minimum, the loss has been recovered.

Residential mortgage loans, home equity loans and lines of credit and construction loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for credit losses on a loan by loan basis at each reporting date for as long as they are reported as TDRs.

The credit loss evaluation is based on the present value of expected future cash flows discounted at the effective interest rate of the original loan.

Expected future cash flows include a discount factor representing a potential for default.

Valuation allowances are recorded for the excess of the amortized costs over the result of the cash flow analysis.

Loans discharged in Chapter 7 bankruptcy are reported as TDRs and also evaluated based on the present value of expected future cash flows unless evaluated based on collateral.

These loans are evaluated using expected future cash flows because the borrower, not liquidation of the collateral, is expected to be the source of repayment for the loan.

Other loans are not considered for restructuring.

At September 30, 2023 and September 30, 2022, allowances on individually reviewed TDRs (IVAs), evaluated for credit losses based on the present value of cash flows were $ 9,546 and $ 10,284 , respectively.

All other individually evaluated loans received a charge-off, if applicable.

The allowance for credit losses represents the estimate of lifetime losses in the loan portfolio and unfunded loan commitments.

The allowance is estimated at each reporting date using relevant available information relating to past events, current conditions and supportable forecasts.

The Company utilizes loan level regression models with forecasted economic data to derive the probability of default and loss given default factors.

These factors are used to calculate the loan level credit loss over a 24-month period with an immediate reversion to historical mean loss rates for the remaining life of the loans.

Historical credit loss experience provides the basis for the estimation of expected credit losses.

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

The qualitative adjustments resulted in a negative ending balance on the allowance for credit losses for the Home Today portfolio, where recoveries are expected to exceed charge-offs over the remaining life of that portfolio.The net qualitative adjustment at September 30, 2023 was a net reduction of $ 13,425 , compared to a net reduction of $ 7,085 at September 30, 2022.

Adjustments are evaluated quarterly based on current facts and circumstances.

Activity in the allowance for credit losses by portfolio segment is summarized as follows.

1 unchanged sentence

For the Year Ended September 30, 2024

Balance Adoption of ASU 2022-02

Provisions (Releases) Charge-offs Recoveries Ending

Real estate loans:

Residential Core $ 55,375 $ ( 5,896 ) $ ( 6,100 ) $ ( 226 ) $ 1,249 $ 44,402

Residential Home Today ( 1,236 ) ( 1,896 ) ( 1,533 ) ( 112 ) 2,105 ( 2,672 )

Home equity loans and lines of credit 23,047 ( 2,470 ) 5,946 ( 875 ) 2,584 28,232

Construction 129 — ( 109 ) — 20 40

Total real estate loans

$ 77,315 $ ( 10,262 ) $ ( 1,796 ) $ ( 1,213 ) $ 5,958 $ 70,002

Total Unfunded Loan Commitments (1)

$ 27,515 $ — $ 296 $ — $ — $ 27,811

Total Allowance for Credit Losses $ 104,830 $ ( 10,262 ) $ ( 1,500 ) $ ( 1,213 ) $ 5,958 $ 97,813

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

For the Year Ended September 30, 2023

Balance Provisions (Releases) Charge-offs Recoveries Ending

9 unchanged sentences

Total Allowance for Credit Losses $ 99,916 $ ( 1,500 ) $ ( 1,242 ) $ 7,656 $ 104,830

For the Year Ended September 30, 2022

10 unchanged sentences

Total Allowance for Credit Losses $ 89,259 $ 1,000 $ ( 1,450 ) $ 11,107 $ 99,916

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

CLASSIFIED LOANS

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

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

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

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

therefore they are not included in the following table.

therefore they are not included in the following tables.

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

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

Revolving Loans Revolving Loans

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

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

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

For the Year Ended September 30, 2024

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term

By fiscal year of origination

2024 2023 2022 2021 2020 Prior Total

Real estate loans:

Residential Core

$ 11 $ — $ 20 $ — $ — $ 195 $ — $ — $ 226

Residential Home Today

— — — — — 112 — — 112

Home equity loans and lines of credit

— — 16 17 — — 470 372 875

Total real estate loans $ 11 $ — $ 36 $ 17 $ — $ 307 $ 470 $ 372 $ 1,213

The home equity lines of credit converted from revolving to term loans during the years ended September 30, 2024 and September 30, 2023, totaled $ 10,475 and $ 2,492 , respectively.

The amount of conversions to term loans is expected to remain low for several years since the length of the draw period on new originations changed from five to 10 years in 2016.

The amount of conversions to term loans is expected to remain relatively low for several years since the length of the draw period on new originations changed from five to 10 years in 2016.

Residential loans are internally assigned a grade that complies with the guidelines outlined in the OCC’s Handbook for Rating Credit Risk.

4 unchanged sentences

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

Loss loans are of such little value that their continuance as bankable assets is not warranted even though partial recovery may be effected in the future.

At September 30, 2023 and September 30, 2022, respectively, $ 73,172 and $ 75,904 of TDRs individually evaluated for credit loss have adequately performed under the terms of the restructuring and are classified as Pass loans.

loans are of such little value that their continuance as bankable assets is not warranted even though partial recovery may be effected in the future.

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

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

TROUBLED DEBT RESTRUCTURINGS

Initial concessions granted for loans restructured as TDRs may include reduction of interest rate, extension of amortization period, capitalization of delinquent amounts, forbearance or other actions.

Some TDRs have experienced a combination of concessions.

TDRs also may 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.

The amortized cost in TDRs by category as of September 30, 2023 and September 30, 2022 is shown in the tables below.

September 30, 2023 Initial Restructuring Multiple

Restructurings Bankruptcy Total

MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

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

For additional information on the adoption, refer to Note 20.

RECENT ACCOUNTING PRONOUNCEMENTS .

To mitigate losses, the Company works with borrowers who are experiencing financial difficulty to identify solutions the borrowers can afford by entering into agreements to modify their loans.

These efforts often result in modifications to the payment terms of the loan, which vary by situation and may include interest rate reductions, term extensions (generally including capitalization of delinquent amounts), significant payment delays (including forbearance, partial payments and repayment of delinquent amounts), other, or a combination thereof.

The Company does not generally offer principal forgiveness as a type of modification.

The Other category includes loans that were modified multiple times during the period with different concessions.

If a borrower is experiencing an income curtailment that temporarily has reduced their capacity to repay, such as loss of employment, reduction of work hours, non-paid leave or short-term disability, a temporary modification is considered.

If a borrower lacks the capacity to repay the loan at the current terms due to a permanent condition, a permanent modification is considered.

Loans may be modified more than once.

Among other requirements, a subsequent modification may be available for a borrower upon the expiration of temporary modified terms if the borrower is unable to resume contractually scheduled loan payments.

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

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

For the year ended September 30, 2024, there were no modifications made on construction loans.

For the Year Ended September 30, 2024

Interest Rate Reduction

Term Extension

Significant Payment Delay

Combination-Rate Reduction & Term Extension

% of Total Class

Residential Core $ 66 $ 1,416 $ 3,074 $ 842 $ 478 $ 5,876 0.05 %

2 unchanged sentences

Total $ 66 $ 1,549 $ 4,090 $ 1,462 $ 503 $ 7,670 0.05 %

September 30, 2022 Initial Restructuring Multiple

Restructurings Bankruptcy Total

The following tables present the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended September 30, 2024.

For the Year Ended September 30, 2024

Interest Rate Reduction

Term Extension

Weighted-Average Contractual

Interest Rate

Weighted-Average Years Added to Life

Residential Core 3.96 % 2.07 % 10.3

1 unchanged sentence

Home equity loans and lines of credit 6.37 % 3.31 % 6.4

Total $ 63,066 $ 31,811 $ 14,159 $ 109,036

TDRs may be restructured more than once.

Among other requirements, a subsequent restructuring may be available for a borrower upon the expiration of temporary restructuring terms if the borrower is unable to resume contractually scheduled loan payments.

If the borrower is experiencing an income curtailment that temporarily has reduced their capacity to repay, such as loss of employment, reduction of work hours, non-paid leave or short-term disability, a temporary restructuring is considered.

If the borrower lacks the capacity to repay the loan at the current terms due to a permanent condition, a permanent restructuring is considered.

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

For all TDRs restructured during the years ended September 30, 2023 and September 30, 2022 (set forth in the tables below), the pre-restructured outstanding amortized cost was not materially different from the post-restructured outstanding amortized cost.

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

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

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

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

For the Year Ended September 30, 2024

Initial Restructuring Multiple

Interest Rate Reduction

Term Extension

Significant Payment Delay

Combination-Rate Reduction & Term Extension Other Total

Residential Core $ — $ — $ 25 $ 14 $ — $ 39

Residential Home Today — 4 18 — — 22

Home equity loans and lines of credit — — 190 — — 190

Total $ — $ 4 $ 233 $ 14 $ — $ 251

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

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

September 30, 2024 30-59

Past Due 60-89

Past Due 90 Days or

Due Total Past

Residential Core $ 651 $ 355 $ 1,165 $ 2,171 $ 3,705 $ 5,876

Residential Home Today 55 70 217 342 268 610

Home equity loans and lines of credit 98 — 476 574 610 1,184

Total $ 804 $ 425 $ 1,858 $ 3,087 $ 4,583 $ 7,670

TROUBLED DEBT RESTRUCTURINGS PRIOR TO THE ADOPTION OF ASU 2022-02

Prior to the adoption of ASU 2022-02 on October 1, 2023, initial concessions granted for loans restructured as TDRs include reduction of interest rate, extension of amortization period, capitalization of delinquent amounts, forbearance or other actions.

Some TDRs had experienced a combination of concessions.

TDRs also could occur as a result of bankruptcy proceedings.

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

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

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

September 30, 2023 Initial Restructuring Multiple

Restructurings Bankruptcy Total

3 unchanged sentences

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

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

For all loans modified during during the years ended September 30, 2023 and September 30, 2022, the pre-modified outstanding amortized cost was not materially different from the post-modified amortized cost.

For the Year Ended September 30, 2023

12 unchanged sentences

Total $ 4,535 $ 2,779 $ 1,350 $ 8,664

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

For the Year Ended September 30, 2023 For the Year Ended September 30, 2022 For the Year Ended September 30, 2021

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

For the Year Ended September 30, 2023 For the Year Ended September 30, 2022

TDRs That Subsequently Defaulted Number of

2 unchanged sentences

Contracts Recorded

Investment Number of

Contracts Recorded

Residential Core 6 $ 575 5 $ 780

39 unchanged sentences

Servicing rights are evaluated periodically for impairment based on the fair value of those rights.

Twenty-one risk tranches are used in evaluating servicing rights for impairment, segregated primarily by interest rate stratum within original term to maturity categories with additional strata for less uniform account types.

Twenty risk tranches are used in evaluating servicing rights for impairment, segregated primarily by interest rate stratum within original term to maturity categories with additional strata for less uniform account types.

Activity in mortgage servicing rights is summarized as follows.

There was no change in the valuation allowance for the years ended September 30, 2024, 2023 and 2022.

Year Ended September 30,

2 unchanged sentences

Additions from loan securitizations/sales

Amortization (1)

1,108 322 657

Net change in valuation allowance — — 9

( 881 ) ( 865 ) ( 1,655 )

Balance—end of year $ 7,627 $ 7,400 $ 7,943

Fair value of capitalized amounts $ 17,093 $ 15,916 $ 15,288

(1) Year ended September 30, 2021, amounts include $ 199 related to the repurchase of loans previously sold and serviced by the Company.

The Company receives annual servicing fees ranging from 0.02 % to 0.84 % of the outstanding loan balances.

15 unchanged sentences

As a lessee, the Company enters into operating leases of buildings and land.

The Company occupies certain banking branches, loan production and customer service offices and a disaster recovery site through non-cancellable operating leases with remaining terms from less than one year to 13 years.

The Company occupies certain banking branches, loan production and customer care call center offices and a disaster recovery site through non-cancellable operating leases with remaining terms from less than one year to 13 years.

Most of the leases have fixed payment terms with annual fixed-escalation clauses.

6 unchanged sentences

As the interest rate implicit in all of the Company's lease contracts is not readily determinable, the Company utilized its incremental borrowing rate, which is the rate that would be incurred to borrow on a collateralized basis over a similar term on an amount equal to the total contractual lease payments in a similar economic environment.

The incremental borrowing rate utilized for all the Company's leases is the FHLB Advance rate based on the lease term at commencement in determining the present value of lease payments.

The incremental borrowing rate utilized for all the Company's leases is an FHLB Advance rate based on the lease term at commencement in determining the present value of lease payments.

Operating lease expense for the years ended September 30, 2024, 2023 and 2022, totaled $ 5,781 , $ 5,573 and $ 5,576 , respectively.

22 unchanged sentences

Deposit account balances are summarized by interest rate as follows:

Rate September 30,

Stated Interest Rate

September 30,

Amount Percent Amount Percent

24 unchanged sentences

The aggregate amount of CD's in denominations of $250 or more was $ 1,283,719 and $ 845,375 at September 30, 2024 and 2023, respectively.

In accordance with the DFA, the maximum amount of deposit insurance is $250 per depositor.

Brokered CD's (exclusive of acquisition costs and subsequent amortization), which are used as an additional funding alternative, totaled $ 1,162,601 and $ 575,236 at September 30, 2023 and 2022, respectively.

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

Brokered CD's (exclusive of acquisition costs and subsequent amortization), which are used as an additional funding source, totaled $ 1,217,303 and $ 1,162,601 at September 30, 2024 and 2023, respectively.

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

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

The scheduled maturity of certificates of deposit is as follows:

The scheduled maturity of certificates of deposit is summarized in the table below, which include the effective maturities and fixed interest rates of the $725,000 of brokered CDs that are tied to interest rate swaps discussed in Note 17.

DERIVATIVE INSTRUMENTS.

September 30, 2024

6 unchanged sentences

Over 60 months 10,719 0.1 % 1.42 %

Total $ 6,648,982 100.0 % 3.44 %

$ 8,021,123 100.0 % 4.00 %

Interest expense on deposits is summarized as follows:

5 unchanged sentences

22,165 24,686 4,553

Total $ 174,201 $ 76,943 $ 97,319

$ 292,728 $ 174,201 $ 76,943

BORROWED FUNDS

At September 30, 2024, the Association had a maximum borrowing capacity of $7,891,042, of which $4,792,847 was outstanding.

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

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

The Association also has the ability to purchase Fed Funds through arrangements with other institutions.

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

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

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

19 unchanged sentences

Accrued interest 21,309

Total $ 5,273,637

All borrowings have fixed rates during their term ranging up to 240 months.

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

The table above reflects the effective maturities and fixed interest rates of the $2,925,000 of short-term FHLB advances that are tied to interest rate swaps discussed in Note 17.

DERIVATIVE INSTRUMENTS.

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

For the years ended September 30, 2024, 2023 and 2022, net interest expense related to short-term borrowings was $ 105,224 , $ 115,329 and $ 49,828 , respectively.

1 unchanged sentence

The change in AOCI by component is as follows:

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

Fiscal year 2021 activity

Fiscal year 2022 activity Unrealized Gains (Losses) on Securities Available for Sale Cash Flow Hedges Defined Benefit Plan Total

Balance at September 30, 2021 $ 961 $ ( 58,210 ) $ ( 10,552 ) $ ( 67,801 )

Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $ 8,656

Other comprehensive income (loss) before reclassifications

( 34,860 ) 109,452 ( 1,665 ) 72,927

Amounts reclassified, net of tax expense (benefit) of $ 9,907

Amounts reclassified

— 17,641 382 18,023

Other comprehensive income (loss) ( 3,733 ) 56,096 11,801 64,164

Other comprehensive income (loss), net of tax

( 34,860 ) 127,093 ( 1,283 ) 90,950

Balance at September 30, 2022 $ ( 33,899 ) $ 68,883 $ ( 11,835 ) $ 23,149

Tax expense (benefit) netted in other comprehensive income or loss

$ ( 10,070 ) $ 36,810 $ ( 286 ) $ 26,454

Fiscal year 2023 activity

Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $ 21,242

Other comprehensive income (loss) before reclassifications

( 7,274 ) 112,851 1,904 107,481

Amounts reclassified, net of tax expense (benefit) of $ 5,212

Amounts reclassified

— ( 46,202 ) 784 ( 45,418 )

Other comprehensive income (loss) ( 34,860 ) 127,093 ( 1,283 ) 90,950

Other comprehensive income (loss), net of tax

( 7,274 ) 66,649 2,688 62,063

Balance at September 30, 2023 $ ( 41,173 ) $ 135,532 $ ( 9,147 ) $ 85,212

Tax expense (benefit) netted in other comprehensive income or loss

$ ( 2,427 ) $ 20,338 $ 704 $ 18,615

Fiscal year 2024 activity

Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $ 31,998

Other comprehensive income (loss) before reclassifications

20,114 ( 58,522 ) 5,292 ( 33,116 )

Amounts reclassified, net of tax expense (benefit) of $( 13,383 )

Amounts reclassified

— ( 68,124 ) 420 ( 67,704 )

Other comprehensive income (loss) ( 7,274 ) 66,649 2,688 62,063

Other comprehensive income (loss), net of tax

20,114 ( 126,646 ) 5,712 ( 100,820 )

Balance at September 30, 2024 $ ( 21,059 ) $ 8,886 $ ( 3,435 ) $ ( 15,608 )

Tax expense (benefit) netted in other comprehensive income or loss

$ 5,969 $ ( 37,608 ) $ 1,668 $ ( 29,971 )

The following table presents the reclassification adjustment out of AOCI included in net income and the corresponding line item on the CONSOLIDATED STATEMENTS OF INCOME for the periods indicated:

34 unchanged sentences

Income tax provision

20.7 % 19.4 % 19.0 %

Temporary differences between the financial statement carrying amounts and tax basis of assets and liabilities that gave rise to significant portions of net deferred taxes relate to the following:

1 unchanged sentence

Deferred tax assets:

Loan loss reserve $ 29,390 $ 27,659

Impairment and credit loss reserves

$ 27,966 $ 29,390

Deferred compensation 3,217 4,215

1 unchanged sentence

Property, equipment and software basis difference 1,029 975

Fair value adjustment

Other 2,149 2,099

12 unchanged sentences

$ 11,725 $ ( 13,182 )

In the accompanying CONSOLIDATED STATEMENTS OF CONDITION the net deferred tax asset or liability is included in Accrued expenses and other liabilities, and Other assets for September 30, 2023 and 2022, respectively.

In the accompanying CONSOLIDATED STATEMENTS OF CONDITION the net deferred tax asset or liability is included in other assets, and accrued expenses and other liabilities for September 30, 2024 and 2023, respectively.

A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized.

13 unchanged sentences

The Company recognizes interest and penalties on income tax assessments or income tax refunds, where applicable, in the financial statements as a component of its provision for income taxes.

The Company recognized $ 0 , $ 0 , and $ 9 of interest expense or penalties on income tax assessments, and $ 0 , $ 34 , and $ 116 of interest on income tax refunds related to net operating loss carrybacks during the years ended September 30, 2023, 2022 and 2021, respectively.

The Company recognized $ 7 , $ 0 , and $ 0 of interest expense or penalties on income tax assessments, and $ 0 , $ 0 , and $ 34 of interest on income tax refunds related to net operating loss carry-backs during the years ended September 30, 2024, 2023 and 2022, respectively.

There was no interest related to income tax assessments accrued at September 30, 2024 or 2023.

15 unchanged sentences

federal and other governmental laws and regulations.

During fiscal year 2022, a settlement adjustment was recognized as a result of lump sum payments exceeding the interest costs for the year.

There were no settlement adjustments made during fiscal year 2023.

There were no settlement adjustments made during the fiscal years 2024 or 2023.

As of September 30, 2024, the Plan utilizes a liability-driven investing (LDI) strategy.

The LDI strategy de-risks the Plan by allocating more to long-duration, fixed income assets.

The Plan's target asset allocation is currently 80 % in LDI fixed income and 20 % in equity.

The following table sets forth the change in projected benefit obligation for the defined benefit plan:

3 unchanged sentences

Actuarial (gain) loss and other 3,365 ( 3,764 )

Settlement — ( 4,292 )

Benefits paid ( 4,251 ) ( 4,140 )

6 unchanged sentences

Benefits paid ( 4,251 ) ( 4,140 )

Settlement — ( 4,292 )

Fair value of plan assets at end of year $ 82,310 $ 72,383

8 unchanged sentences

Net periodic benefit (income) cost

$ ( 128 ) $ 472 $ ( 901 )

There were no contributions, required minimum or voluntary, made during the fiscal year ended September 30, 2024.

As of September 30, 2023, the Plan had $ 0 invested in pooled separate accounts due to the Plan moving to an LDI strategy.

The LDI strategy derisks the Plan by allocating more to long-duration, fixed income assets.

The Plan's target asset allocation is now 80 % in LDI fixed income and 20 % in equity.

At September 30, 2022, $ 43.8 million were invested in pooled separate accounts with a redemption notice of 7 days.

The following table summarizes Plan assets measured at fair value on a recurring basis as of September 30, 2024 and 2023.

16 unchanged sentences

9,024 — 9,024 —

Asset-Backed Securities

Total fixed income

3 unchanged sentences

$ 81,216 $ 19,025 $ 62,191 $ —

(1) Plan assets measured at fair value on a recurring basis excludes approximately $ 1,851 of unsettled security transactions.

(1) Plan assets measured at fair value on a recurring basis excludes approximately $ 1,094 of net unsettled security transactions.

Recurring Fair Value Measurements at Reporting Date Using

5 unchanged sentences

(Level 2) Significant

Cash equivalents $ 1,001 $ 1,001 $ — $ —

Fixed income:

government obligations 2,550 2,550 — —

Corporate debt securities 42,573 — 42,573 —

Government strips 8,617 — 8,617 —

Total fixed income 53,740 2,550 51,190 —

Mutual equity funds 15,791 15,791 — —

25 unchanged sentences

The second tier permits the Company to make a profit-sharing contribution at its discretion.

The first and second tiers cover substantially all employees who have reached age 18 and have worked 30 days of service in one year of service.

The first and second tiers cover substantially all employees who have reached age 18 and have worked 30 days of service within one year.

The third tier permits the Company to make discretionary contributions allocable to eligible employees including those eligible employees who are participants, but no longer receiving service credits, under the Company’s defined benefit pension plan.

1 unchanged sentence

The total of the Company’s matching and discretionary contributions related to the 401(k) savings plan for the years ended September 30, 2024, 2023 and 2022 was $ 3,404 , $ 4,297 and $ 4,295 , respectively.

Employee (Associate) Stock Ownership Plan — The Company established an ESOP for its employees effective January 1, 2006.

Employee (Associate) Stock Ownership Plan — The Company established an ESOP for its employees (associates) effective January 1, 2006.

The ESOP is a tax-qualified plan designed to invest primarily in the Company’s common stock and provides employees with an opportunity to receive a funded retirement benefit, based on the value of the Company’s common stock.

18 unchanged sentences

The amended and restated plan is substantially similar to the previous plan, except that the number of future shares eligible to be granted has been reduced to 8,450,000 shares, of which 6,601,393 shares remain available for future award, and the term to grant shares has been extended to February 21, 2028.

The Company recorded excess tax benefits (expense) of $( 224 ), $ 109 , and $ 1,331 related to share-based compensation awards for the years ended September 2023, 2022 and 2021, respectively.

The following table presents share-based compensation expense and the related tax benefit recognized during the periods presented.

The Company recorded excess tax benefits (expense) of $( 397 ), $( 224 ), and $ 109 related to share-based compensation awards for the years ended September 30, 2024, 2023 and 2022, respectively.

Year Ended September 30,

9 unchanged sentences

The following is a summary of the status of the Company’s restricted stock units as of September 30, 2024, and changes therein during the year then ended.

No awards were forfeited during the year ended September 30, 2024.

Awarded Weighted

Outstanding at September 30, 2023 1,339,833 $ 13.85

Granted 174,550 $ 13.69

Released ( 91,765 ) $ 17.86

Forfeited ( 850 ) $ 17.77

231,750 $ 12.97

( 431,918 ) $ 16.95

Outstanding at September 30, 2024 (1) 1,139,665 $ 12.49

13 unchanged sentences

Outstanding at September 30, 2023 218,071 15.87

Granted 102,000 13.69

Released ( 58,277 ) 19.76

( 62,971 ) 17.77

Performance adjustment

( 2,655 ) 17.80

Outstanding at September 30, 2024 213,445 14.45

5 unchanged sentences

The following is a summary of the Company’s stock option activity and related information for the Equity Plan for the year ended September 30, 2024.

There were no stock options granted during 2023, 2022 and 2021.

There were no stock options exercised or forfeited during the year ended September 30, 2024.

There were no stock options granted during the years ended 2023 and 2022.

Stock Options Weighted

2 unchanged sentences

Outstanding at September 30, 2023 1,991,975 $ 15.69 2.66 $ —

Exercised ( 315,200 ) $ 11.64 $ 820

Forfeited or expired

247,200 $ 12.94 $ —

( 49,500 ) $ 14.90 $ —

Outstanding at September 30, 2024 2,189,675 $ 15.40 2.56 $ —

1 unchanged sentence

Vested or expected to vest, at September 30, 2024 2,189,675 $ 15.40 2.56 $ —

The total intrinsic value of options exercised during the years ended September 30, 2023, 2022 and 2021 was $ 820 , $ 551 and $ 8,605 , respectively.

There were no non-vested options outstanding as of September 30, 2023.

The fair values of the stock options were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions.

Expected dividend yield

Expected volatility

Risk-free interest rate

Expected option term (in years)

The expected dividend yield for 2024 was estimated on the then-current annualized dividend payout of $ 1.13 per share, which was not expected to change.

Volatility of the company's stock was used in the estimation of fair value.

Management estimated the expected life of the options using the simplified method allowed under SEC Staff Accounting Bulletin No.

110, which expresses the views of the SEC regarding the use of a "simplified" method, as discussed in Staff Accounting Bulletin No.

The five and seven year Treasury yield in effect at the time of the grant provides the risk free rate of return for periods within the expected term of the options.

The weighted average grant date fair value of options granted during the year ended September 30, 2024 was $ 1.22 .

Expected future compensation relating to the non-vested options outstanding as of September 30, 2024 is $ 220 over a weighted average period of 2.10 years.

Upon exercise of vested options, management expects to draw on treasury stock as the source of the shares.

The total intrinsic value of options exercised during the years ended September 30, 2024, 2023 and 2022 was $ 0 , $ 820 and $ 551 , respectively.

COMMITMENTS AND CONTINGENT LIABILITIES

2 unchanged sentences

Commitments to originate or purchase loans generally have fixed expiration dates of 60 to 360 days or other termination clauses and may require payment of a fee.

Unfunded commitments related to home equity lines of credit generally expire from five to 10 years following the date that the line of credit was established, subject to various conditions including compliance with payment obligation, adequacy of collateral securing the line and maintenance of a satisfactory credit profile by the borrower.

Unfunded commitments related to home equity lines of credit generally expire 10 years following the date that the line of credit was established, subject to various conditions including compliance with payment obligation, adequacy of collateral securing the line and maintenance of a satisfactory credit profile by the borrower.

Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

4 unchanged sentences

Refer to Note 5.

LOANS AND ALLOWANCES FOR CREDIT LOSSES for discussion on

credit loss methodology.

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

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

15 unchanged sentences

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

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

The Association is undergoing an escheat audit covering Ohio, Kentucky and Florida.

Any potential loss that may result from this matter is not reasonably estimable at September 30, 2024.

3 unchanged sentences

A fair value framework is established whereby assets and liabilities measured at fair value are grouped into three levels of a fair value hierarchy, based on the transparency of inputs and the reliability of assumptions used to estimate fair value.

As permitted under the fair value guidance in U.S.

GAAP, the Company elects to measure at fair value, mortgage loans classified as held for sale that are subject to pending agency contracts to securitize and sell loans.

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

At September 30, 2023 and September 30, 2022, there were no pending agency contracts held for sale.

For the years ended September 30, 2023, 2022, and 2021, net gain (loss) on the sale of loans includes $ 0 , $ 0 and $ 134 , respectively, related to unrealized gains or losses during the period due to changes in the fair value of loans held for sale subject to pending agency contracts.

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

3 unchanged sentences

Treasury notes and investments in highly liquid collateralized mortgage obligations, that can include items issued by Fannie Mae, Freddie Mac, and Ginnie Mae, measured using the market approach.

The fair values of investment securities represent unadjusted price estimates obtained from third party independent nationally recognized pricing services using pricing models or quoted prices of securities with similar characteristics and are included in Level 2 of the hierarchy.

The fair values of investment securities represent unadjusted price estimates obtained from independent third-party nationally recognized pricing services using pricing models or quoted prices of securities with similar characteristics and are included in Level 2 of the hierarchy.

Third party pricing is reviewed on a monthly basis for reasonableness based on the market knowledge and experience of company personnel that interact daily with the markets for these types of securities.

Mortgage Loans Held for Sale — The fair value of mortgage loans held for sale is estimated on an aggregate basis using a market approach based on quoted secondary market pricing for loan portfolios with similar characteristics.

Loans held for sale are carried at the lower of cost or fair value except, as described above, the Company elects the fair value measurement option for mortgage loans held for sale subject to pending agency contracts to securitize and sell loans.

Loans held for sale are carried at the lower of cost or fair value, with the exception of mortgage loans held for sale subject to pending agency contracts to securitize and sell loans.

The Company elects the fair value measurement option for mortgage loans held for sale subject to pending agency contracts to securitize and sell loans, as permitted under the fair value guidance in U.S.

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

At September 30, 2024 and September 30, 2023, there were $ 10,713 and $ 0 pending agency contracts held for sale measured at fair value, respectively, with unpaid principal balances of $ 10,336 and $ 0 .

For the years ended September 30, 2024 and 2023, net gain (loss) on the sale of loans includes $ 337 and $ 0 , respectively, related to unrealized gains or losses during the period due to changes in the fair value of loans held for sale subject to pending agency contracts.

At September 30, 2024 and 2023 there were $ 7,061 and $ 0 of loans held for sale carried at cost.

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

At September 30, 2023 and 2022, there were $ 3,260 and $ 9,661 , respectively, of loans held for sale measured at fair value.

At September 30, 2023 and 2022 there were no loans held for sale carried at cost.

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

10 unchanged sentences

The range and weighted average impact of estimated costs to dispose on fair values is determined at the time of credit loss or when additional credit loss is recognized and is included in quantitative information about significant unobservable inputs later in this note.

Loans held for investment that have been restructured in TDRs, are performing according to the restructured terms of the loan agreement and are not evaluated based on collateral, are individually evaluated for credit loss using the present value of future cash flows based on the loan’s effective interest rate, which is not a fair value measurement.

At September 30, 2023 and 2022, this included $ 74,691 and $ 76,692 , respectively, in amortized costs of TDRs with related allowances for loss of $ 9,546 and $ 10,284 .

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

3 unchanged sentences

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

At September 30, 2023 and 2022, respectively, $ 1,413 and $ 1,192 of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis where the cost basis equals or exceeds the estimated fair values, less estimated costs to dispose, of $ 163 and $ 156 , respectively.

At September 30, 2024 and 2023, $ 220 and $ 1,413 , respectively, of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis where the cost basis equals or exceeds the estimated fair values, less estimated costs to dispose, of $ 46 and $ 163 , respectively.

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

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

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

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

2 unchanged sentences

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

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

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

16 unchanged sentences

Freddie Mac certificates 1,129 — 1,129 —

1,044 — 1,044 —

government and agency obligations

Forward commitments for the sale of mortgage loans

Total $ 508,335 $ — $ 508,335 $ —

72,776 — 72,776 —

Mortgage loans held for sale 10,713 — 10,713 —

Interest rate lock commitments 395 — — 395

Total $ 537,359 $ — $ 536,964 $ 395

Forward commitments for the sale of mortgage loans 72 — 72 —

Total $ 72 $ — $ 72 $ —

Recurring Fair Value Measurements at Reporting Date Using

9 unchanged sentences

Fannie Mae certificates 814 — 814 —

Freddie Mac certificates 1,044 — 1,044 —

government and agency obligations 63,459 — 63,459 —

3,619 — 3,619 —

$ 457,908 $ — $ 457,908 $ —

Forward commitments for the sale of mortgage loans 11 — 11 —

Total $ 508,335 $ — $ 508,335 $ —

Interest rate lock commitments 1 — — 1

8 unchanged sentences

Ending balance $ 395 $ ( 1 ) $ ( 333 )

Change in unrealized gains for the period included in earnings for

assets held at end of the reporting date $ ( 1 ) $ ( 333 ) $ 525

Change in unrealized gains for the period included in earnings for assets held at end of the reporting date

$ 395 $ ( 1 ) $ ( 333 )

Summarized in the tables below are those assets measured at fair value on a nonrecurring basis.

8 unchanged sentences

Collateral-dependent loans, net of allowance $ 39,577 $ — $ — $ 39,577

Mortgage loans held for sale 3,260 — 3,260 —

Real estate owned (1)

1,413 — — 1,413

Total $ 39,797 $ — $ — $ 39,797

17 unchanged sentences

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

The interest rate lock commitments include mortgage origination applications.

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

Collateral-dependent loans, net of allowance $ 38,289 Market comparables of collateral discounted to estimated net proceeds Discount appraised value to estimated net proceeds based on historical experience:

Collateral-dependent loans, net of allowance $ 39,577 Market comparables of collateral discounted to estimated net proceeds Discount rate applied to appraised value to estimated net proceeds:

• Residential Properties

0 - 28 % 4.0 %

Interest rate lock commitments $ 395 Quoted Secondary Market pricing Closure rate 0 - 100 % 90.1 %

September 30, 2023 Valuation Technique(s) Unobservable Input Range Weighted Average

Collateral-dependent loans, net of allowance $ 47,121 Market comparables of collateral discounted to estimated net proceeds Discount appraised value to estimated net proceeds based on historical experience:

Collateral-dependent loans, net of allowance $ 38,289 Market comparables of collateral discounted to estimated net proceeds Discount rate applied to appraised value to estimated net proceeds:

• Residential Properties 0 - 30 % 4.8 %

5 unchanged sentences

Cash and due from banks

$ 26,287 $ 26,287 $ 26,287 $ — $ —

Interest earning cash equivalents

437,431 437,431 437,431 — —

Investment securities available for sale

526,251 526,251 — 526,251 —

Mortgage loans held for sale

17,775 17,986 — 17,986 —

Mortgage loans held for investment 15,316,354 13,922,944 — — 13,922,944

Other loans 5,705 5,705 — — 5,705

Federal Home Loan Bank stock 247,098 247,098 N/A — —

Federal Home Loan Bank stock

228,494 228,494 N/A — —

Accrued interest receivable

59,398 59,398 — 59,398 —

Cash collateral received from or held by counterparty 7,844 7,844 7,844 — —

1 unchanged sentence

Checking and passbook accounts

$ 2,150,770 $ 2,150,770 $ — $ 2,150,770 $ —

Certificates of deposit

8,044,309 7,989,992 — 7,989,992 —

Borrowed funds

4,792,847 4,819,873 — 4,819,873 —

Borrowers’ advances for taxes and insurance

113,637 113,637 — 113,637 —

Principal, interest and escrow owed on loans serviced 28,753 28,753 — 28,753 —

4 unchanged sentences

Cash and due from banks

$ 29,134 $ 29,134 $ 29,134 $ — $ —

Interest earning cash equivalents

437,612 437,612 437,612 — —

Investment securities available for sale

508,324 508,324 — 508,324 —

Mortgage loans held for sale

3,260 3,260 — 3,260 —

Mortgage loans held for investment 15,161,336 13,262,711 — — 13,262,711

Other loans 4,411 4,411 — — 4,411

Federal Home Loan Bank stock 212,290 212,290 N/A — —

Federal Home Loan Bank stock

247,098 247,098 N/A — —

Accrued interest receivable

53,910 53,910 — 53,910 —

Cash collateral received from or held by counterparty 24,887 24,887 24,887 — —

Checking and passbook accounts

$ 2,790,476 $ 2,790,476 $ — $ 2,790,476 $ —

Certificates of deposit

6,659,344 6,571,674 — 6,571,674 —

Borrowed funds

5,273,637 5,256,278 — 5,256,278 —

Borrowers’ advances for taxes and insurance

124,417 124,417 — 124,417 —

Principal, interest and escrow owed on loans serviced 29,811 29,811 — 29,811 —

Derivatives 333 333 — — 333

DERIVATIVE INSTRUMENTS

2 unchanged sentences

These derivatives are used to hedge the forecasted cash outflows associated with the Company's FHLB borrowings and brokered certificates of deposit.

Cash flows from derivatives used to manage interest rate risks are classified as operating activities in the cash flow statement.

The Company classifies both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item.

Cash flow hedges are initially assessed for effectiveness using regression analysis.

Changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in OCI and is subsequently reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

Derivatives qualifying as cash flow hedges are settled daily, bringing their fair value to $ 0 .

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

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

In accordance with the reference rate reform, for every LIBOR referenced interest rate swap with a reset date after the LIBOR cessation date, counterparties received a LIBOR referenced instrument maturing on the first reset date after the LIBOR cessation date, and a forward starting SOFR instrument.

At September 30, 2023, all previous LIBOR referenced swaps have transitioned to a SOFR-based rate.

Additionally, under previously adopted ASU 2020-04, Reference Rate Reform (Topic 848), the Company has elected and applied certain optional expedients for eligible hedging relationships impacted by the LIBOR cessation.

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

September 30, 2023

Weighted Average

Notional Value Fair Value Term (years) Fixed-Rate Payments

The following tables provide the locations within the CONSOLIDATED STATEMENTS OF CONDITION , notional values for all derivative instruments, and fair values for derivatives not designated as hedging instruments, at the reporting dates.

September 30, 2024 September 30, 2023

Weighted Average Weighted Average

Notional Value Term (years) Fixed-Rate Payments Notional Value Term (years) Fixed-Rate Payments

Derivatives designated as hedging instruments

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$ 2,075,000 2.3 2.68 % $ 3,815,000 3.7 2.91 %

Total cash flow hedges:

Interest rate swaps

$ 3,815,000 $ — 3.7 2.91 %

September 30, 2022

Weighted Average

Notional Value Fair Value Term (years) Fixed-Rate Payments

Cash flow hedges:

Interest rate swaps

Other Liabilities

1,575,000 4.1 3.67 % — 0 — %

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Interest rate swaps

$ 3,650,000 3.1 3.10 % $ 3,815,000 3.7 2.91 %

September 30, 2024 September 30, 2023

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Interest rate lock commitments

$ 11,467 $ 395 — —

Other Liabilities

— — 1,830 ( 1 )

Forward Commitments for the sale of mortgage loans

Other Assets — — 2,094 11

Other Liabilities 17,411 ( 72 ) — —

Total derivatives not designated as hedging instruments $ 28,878 $ 323 $ 3,924 $ 10

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Accrued expenses and other liabilities 2,696 2,445

Accrued federal and state income taxes — 167

Total liabilities 11,135 10,577

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Accumulated other comprehensive income ( 15,608 ) 85,212

85,212 23,149

Total shareholders’ equity 1,862,624 1,927,361

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For purposes of computing dilutive earnings per share, stock options and restricted and performance share units with a dilutive impact are added to the outstanding shares used in the basic earnings per share calculation.

Unvested shares awarded pursuant to the Company's restricted stock plans are treated as participating securities in the computation of EPS pursuant to the two-class method as they contain nonforfeitable rights to dividends.

The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security.

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Adopted in fiscal year ended September 30, 2024

In December of 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

This ASU deferred the period of time entities can utilize the reference rate reform relief guidance from ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effect of Reference Rate Reform on Financial Reporting , to December 31, 2024 instead of the original December 31, 2022.

This amendment is a result of the expectation that the LIBOR would cease to be published as of June 30, 2023.

The FASB Board decided that this amendment would be effective for all entities upon issuance of ASU 2022-06.

This update did not have a material impact on the Company's consolidated financial condition or results of operation.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323) .

The amendments in this update expand the proportional amortization method, by election, to account for all investments made primarily for the purpose of receiving income tax credits or other tax benefits.

Previously, this accounting method was only allowed for low-income housing tax credit investments.

This update is effective for fiscal years beginning after December 15, 2023, with early adoption permitted in any interim period.

The Company adopted this update effective April 1, 2023 and will consider the provisions on future tax credit investments, should they occur.

This update did not have an immediate impact on our consolidated financial condition or results of operations.

Issued but not yet adopted as of September 30, 2023

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

The amendments in this Update eliminate the accounting guidance for TDR by creditors in Subtopic 310-40, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when the borrower is experiencing financial difficulty.

This will be done by applying the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan.

The amendments in this update eliminate the accounting guidance for TDR by creditors in Subtopic 310-40, while enhancing disclosure requirements for certain loan refinancings and modifications by creditors when the borrower is experiencing financial difficulty.

Additionally, this amendment requires that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326.

This update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company plans to adopt this guidance as of October 1, 2023 and apply the modified retrospective transition method that will evaluate loans previously identified as TDRs for credit loss under the Company’s current ACL policy.

We expect to recognize an increase to opening retained earnings of $7,898, net of income taxes resulting from a pretax decrease to the allowance for credit losses on loans and unfunded commitments of $10,262 upon adoption.

The enhanced disclosure requirements provided for by the ASU will be adopted on a prospective basis.

The Company adopted this guidance as of October 1, 2023, and applied the modified retrospective transition method that evaluates loans previously identified as TDRs for credit loss under the Company’s current ACL policy.

Upon adoption, an increase in retained earnings of $7,898, net of income taxes, resulted from a pretax decrease to the allowance for credit losses on loans and unfunded commitments of $10,262.

The enhanced disclosure requirements provided for by the ASU have been adopted on a prospective basis.

The required disclosures are included in Note 5.

LOANS AND ALLOWANCES FOR CREDIT LOSSES .

Issued but not yet adopted as of September 30, 2024

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) .

The amendments in this update improve disclosures about a public entity's reportable segments and addresses request from investors and other allocators of capital for additional information about a reportable segment's expenses.

While the Company only has one reportable segment, the update requires public entities with a single segment to provide all segment disclosures under ASC 280.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning

after December 15, 2024.

Retrospective application is required for all prior periods presented in the financial statements.

The Company intends to present the newly required annual disclosures in its Annual Report on Form 10-K for the fiscal year ending September 30, 2025 and the newly required interim disclosures beginning with its Quarterly Report on Form 10-Q for the period ending December 31, 2025.

The Company does not expect the adoption to have a material effect on the consolidated financial statements or disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) .

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income tax paid.

The update is effective for fiscal years beginning after December 15, 2024.

Management is currently evaluating the impact of the ASU on the Company's income tax disclosures within the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

The amendments in this update improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

The new guidance is effective for public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this ASU may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

Management is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company's consolidated financial statements or do not apply to its operations.

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Subsidiaries of the registrant

Registration Statement on Form S-1 No.

333-139295 (filed with the SEC on December 13, 2006;

Exhibit 21 therein)

Filed herewith

Consent of Independent Registered Public Accounting Firm

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Filed herewith

P olicy relating to recovery of erroneously awar ded compensation

Policy relating to recovery of erroneously awarded compensation

Filed herewith

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(Principal Executive Officer)

November 21, 2023 /S/ TIMOTHY W.

November 21, 2024 /S/ MEREDITH S.

Chief Financial Officer

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Asher, Director

November 21, 2024 /S/ TERRENCE L.

Bauer, Director

November 21, 2024 /S/ MARTIN J.

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

What changed 10-K

Item 9A. Controls and Procedures