What changed in this filing

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Item 1. Financial Statements

2025-02-06 compared with 2024-08-08 · 257 added, 360 removed, 842 unchanged (42% of the section changed)

12 unchanged sentences

Mortgage loans 15,340,842 15,321,400

Other loans 5,070 4,411

Deferred loan expenses, net 65,880 64,956

Allowance for credit losses on loans ( 67,529 ) ( 77,315 )

Allowance for credit loss on loans

( 70,559 ) ( 70,002 )

Loans, net 15,342,909 15,322,059

18 unchanged sentences

332,318,750 shares issued;

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

280,799,401 and 280,710,854 outstanding at December 31, 2024 and September 30, 2024, respectively

Paid-in capital 1,754,241 1,754,365

Treasury stock, at cost;

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

51,519,349 and 51,607,896 shares at December 31, 2024 and September 30, 2024, respectively

( 771,572 ) ( 772,195 )

1 unchanged sentence

Retained earnings—substantially restricted 923,139 915,489

Accumulated other comprehensive income 42,614 85,212

Accumulated other comprehensive income (loss)

26,813 ( 15,608 )

Total shareholders’ equity 1,914,277 1,862,624

4 unchanged sentences

(In thousands, except share and per share data)

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

For the Three Months Ended

INTEREST AND DIVIDEND INCOME:

14 unchanged sentences

Net gain on the sale of loans

723 21 1,646 617

Increase in and death benefits from bank owned life insurance contracts 2,682 3,191

20 unchanged sentences

(In thousands)

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

For the Three Months Ended

Net income $ 22,426 $ 20,707

6 unchanged sentences

42,421 ( 75,026 )

Total comprehensive income

Total comprehensive income (loss)

$ 64,847 $ ( 54,319 )

3 unchanged sentences

(In thousands, except share and per share data)

For the Three Months Ended June 30, 2023

stock Paid-in

capital Treasury

stock Unallocated

held by ESOP Retained

earnings Accumulated other

comprehensive

income (loss) Total

shareholders’

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

Net income — — — — 17,603 — 17,603

Other comprehensive income, net of tax

— — — — — 46,284 46,284

ESOP shares allocated or committed to be released — 232 — 1,083 — — 1,315

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

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

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

— — — — ( 14,615 ) — ( 14,615 )

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

For the Three Months Ended June 30, 2024

stock Paid-in

capital Treasury

stock Unallocated

held by ESOP Retained

earnings Accumulated other

comprehensive

income (loss) Total

shareholders’

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

Net income — — — — 19,953 — 19,953

Other comprehensive income, net of tax — — — — — 196 196

ESOP shares allocated or committed to be released — 280 — 1,083 — — 1,363

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

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

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

— — — — ( 14,779 ) — ( 14,779 )

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

For the Nine Months Ended June 30, 2023

For the Three Months Ended December 31, 2023

stock Paid-in

7 unchanged sentences

Balance at September 30, 2023 $ 3,323 $ 1,755,027 $ ( 776,101 ) $ ( 27,084 ) $ 886,984 $ 85,212 $ 1,927,361

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

— — — — 7,898 — 7,898

Net income — — — — 20,707 20,707

3 unchanged sentences

Compensation costs for equity incentive plans — 915 — — — — 915

Purchase of treasury stock ( 361,869 shares)

— — ( 5,000 ) — — — ( 5,000 )

Treasury stock allocated to equity incentive plan — ( 5,824 ) 3,906 — — — ( 1,918 )

1 unchanged sentence

— — — — ( 14,616 ) — ( 14,616 )

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

For the Nine Months Ended June 30, 2024

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

For the Three Months Ended December 31, 2024

stock Paid-in

7 unchanged sentences

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

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

— — — — 7,898 — 7,898

Net income — — — — 22,426 — 22,426

6 unchanged sentences

— — — — ( 14,776 ) — ( 14,776 )

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

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

Balance at December 31, 2024 $ 3,323 $ 1,754,241 $ ( 771,572 ) $ ( 21,667 ) $ 923,139 $ 26,813 $ 1,914,277

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

See accompanying notes to unaudited interim consolidated financial statements.

1 unchanged sentence

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

For the Nine Months Ended June 30,

For the Three Months Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

10 unchanged sentences

Increase in bank owned life insurance contracts ( 2,548 ) ( 3,191 )

Net decrease (increase) in interest receivable and other assets 4,212 ( 23,702 )

Net increase in accrued expenses and other liabilities 92,894 32,566

Net decrease in interest receivable and other assets 10,109 1,960

Net (decrease) increase in accrued expenses and other liabilities ( 1,710 ) 8,969

Net cash provided by operating activities 45,545 36,326

16 unchanged sentences

Net increase in deposits 14,431 463,767

Net decrease in borrowers' advances for insurance and taxes ( 57,660 ) ( 42,891 )

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

Net increase (decrease) in borrowers' advances for insurance and taxes 26,374 ( 15,324 )

Net increase (decrease) in principal and interest owed on loans serviced 10,665 ( 607 )

Net increase (decrease) in short-term borrowed funds 41,000 ( 717,000 )

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

Proceeds from long-term borrowed funds — 575,000

2 unchanged sentences

Acquisition or net settlement of treasury shares ( 767 ) ( 1,918 )

( 1,924 ) ( 5,636 )

Dividends paid to common shareholders ( 14,897 ) ( 14,771 )

9 unchanged sentences

SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

Transfer of loans to real estate owned 247 589

Transfer of loans from held for investment to held for sale 43,702 84,868

7 unchanged sentences

TFS Financial Corporation, a federally chartered stock holding company, conducts its principal activities through its wholly owned subsidiaries.

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

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

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

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

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

5 unchanged sentences

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

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

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

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

2 unchanged sentences

The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2025, or for any other period.

Effective October 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326 ), eliminating the accounting guidance for TDR by creditors in Subtopic 310-40.

Refer to Note 4.

LOANS AND ALLOWANCE FOR CREDIT LOSSES and Note 14.

RECENT ACCOUNTING PRONOUNCEMENTS for additional details related to the adoption.

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

9 unchanged sentences

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

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

At December 31, 2024 and 2023, the ESOP held 2,166,696 and 2,600,036 shares, respectively, that were neither allocated to participants nor committed to be released to participants.

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

For the Three Months Ended June 30,

Income Shares Per share

amount Income Shares Per share

(Dollars in thousands, except per share data)

Net income $ 19,953 $ 17,603

income allocated to restricted stock units 343 388

Basic earnings per share:

Income available to common shareholders 19,610 278,291,376 $ 0.07 17,215 277,472,312 $ 0.06

Diluted earnings per share:

Effect of dilutive potential common shares 929,984 1,118,498

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

For the Nine Months Ended June 30,

For the Three Months Ended December 31,

Income Shares Per share

9 unchanged sentences

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

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

2024 2023 2024 2023

For the Three Months Ended December 31,

Options to purchase shares 1,513,175 1,991,975

2 unchanged sentences

Investments available for sale are summarized in the tables below.

June 30, 2024

December 31, 2024

Unrealized Fair

11 unchanged sentences

Total $ 553,559 $ 1,368 $ ( 28,676 ) $ 526,251

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

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

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

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

At December 31, 2024 and September 30, 2024, investment securities included $ 50,304 and $ 68,932 , respectively, of U.S.

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

clearing organization.

Accrued interest on investment securities is $ 1,875 and $ 2,399 at December 31, 2024 and September 30, 2024, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION .

The following is a summary of our securities portfolio by the period remaining until contractual maturity and by weighted average yield at December 31, 2024 and September 30, 2024.

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

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

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

June 30, 2024 September 30, 2023

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

December 31, 2024 September 30, 2024

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

4 unchanged sentences

Total $ 542,155 $ 507,710 3.32 % $ 553,559 $ 526,251 3.40 %

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

June 30, 2024

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

December 31, 2024

Less Than 12 Months 12 Months or More Total

24 unchanged sentences

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

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

will be required to sell the securities prior to recovery of the amortized cost, the Company did not record an allowance for credit losses on investment securities as of December 31, 2024 or September 30, 2024 .

LOANS AND ALLOWANCE FOR CREDIT LOSSES

5 unchanged sentences

Residential Home Today 39,749 40,936

Home equity loans and lines of credit 3,588,820 3,030,526

Home equity lines of credit (1)

3,513,094 3,323,381

Home equity loans (1)

608,454 561,926

Construction 18,225 21,701

6 unchanged sentences

Loans held for investment, net $ 15,342,909 $ 15,322,059

(1) For the three months ending December 31, 2024, balances of home equity lines of credit and home equity loans are reported as separate line items.

Prior periods have been reclassified to conform to the current presentation.

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

Accrued interest is $ 55,628 and $ 56,982 as of December 31, 2024 and September 30, 2024, 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.

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

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

At December 31, 2024 and September 30, 2024, the percentage of aggregate Residential Core, Residential Home Today and Construction loans secured by properties in Ohio was 58 % at both dates, and the percentage of those loans secured by properties in Florida was 17 % at both dates.

As of December 31, 2024 and September 30, 2024, home equity lines of credit were concentrated in Ohio ( 23 % at both dates), Florida ( 22 % at both dates), and California ( 17 % and 16 %, respectively).

As of December 31, 2024 and September 30, 2024, home equity loans were concentrated in Ohio ( 25 % and 26 %, respectively), Florida ( 24 % and 25 %, respectively), and California ( 19 % as of both dates).

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

4 unchanged sentences

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

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

The principal amount of adjustable-rate mortgage loans included in the Residential Core portfolio was $ 4,278,412 and $ 4,379,132 at December 31, 2024 and September 30, 2024, respectively.

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

2 unchanged sentences

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.

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

3 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.

Other loans are comprised of loans secured by certificate of deposit accounts, which are fully secured and 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.

1 unchanged sentence

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

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

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

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

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

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

At December 31, 2024 and September 30, 2024, mortgage loans held for sale totaled $ 829 and $ 17,775 , respectively.

During the three months ended December 31, 2024, the principal balance of loans sold, according to trade date, was $ 72,031 (including loans in contracts pending settlement) compared to $ 87,843 (including no contracts pending settlement) during the three months ended December 31, 2023.

During the three months ended December 31, 2024, the amortized cost of loans originated as held for sale that were subsequently transferred to the held for investment portfolio was $ 1,327 , compared to $ 0 during the three months ended December 31, 2023.

DELINQUENCY and NON-ACCRUAL

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

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

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

3 unchanged sentences

Due Current Total

June 30, 2024

December 31, 2024

Real estate loans:

1 unchanged sentence

Residential Home Today 637 422 535 1,594 37,694 39,288

Home equity loans and lines of credit 4,736 981 4,442 10,159 3,618,740 3,628,899

Home equity lines of credit

4,541 1,293 4,643 10,477 3,539,698 3,550,175

Home equity loans

310 125 461 896 612,826 613,722

Construction — — — — 8,687 8,687

10 unchanged sentences

Residential Home Today 814 307 693 1,814 38,657 40,471

Home equity loans and lines of credit 3,271 690 3,876 7,837 3,059,444 3,067,281

Home equity lines of credit

3,556 1,014 4,078 8,648 3,351,495 3,360,143

Home equity loans

578 107 282 967 565,906 566,873

Construction — — — — 10,015 10,015

6 unchanged sentences

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 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 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 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.

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

June 30, 2024 September 30, 2023

Non-accrual with no ACL 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 December 31, 2024 or September 30, 2024.

December 31, 2024 September 30, 2024

Non-accrual with No ACL

3 unchanged sentences

Residential Home Today 3,247 3,429 3,506 3,672

Home equity loans and lines of credit 7,548 8,801 7,035 7,877

Home equity lines of credit

7,662 9,329 7,610 8,361

Home equity loans

623 1,053 460 519

Total non-accrual loans $ 29,921 $ 36,515 $ 30,513 $ 33,610

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

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

At December 31, 2024 and September 30, 2024, respectively, the amortized cost in non-accrual loans includes $ 20,860 and $ 19,704 which are performing according to the terms of their agreement, of which $ 12,648 and $ 11,532 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

At December 31, 2024 and September 30, 2024, real estate loans include $ 10,835 and $ 10,527 , 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.

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

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

The amount of interest income recognized on non-accrual loans was $ 236 for the three months ended December 31, 2024, and $ 162 for the three months ended December 31, 2023, respectively.

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

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 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.

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

3 unchanged sentences

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

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

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

3 unchanged sentences

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 June 30, 2024, was a reduction to the allowance for credit losses of $ 6,753 , compared to a reduction of

$ 13,425 at September 30, 2023.

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

The net qualitative adjustment at December 31, 2024, was a reduction to the allowance for credit losses of $ 4,499 , compared to a reduction of $ 5,519 at September 30, 2024.

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;

Partial or full charge-offs are recognized for the amount of credit losses on loans when the borrower is experiencing financial difficulty.

Charge-offs are taken when:

• For residential mortgage loans, payments are at least 150 days delinquent, but no later than 180 days delinquent;

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

15 unchanged sentences

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

For the Three Months Ended June 30, 2024

For the Three Months Ended December 31, 2024

Balance Provisions (Releases) Charge-offs Recoveries Ending

2 unchanged sentences

Residential Home Today ( 2,672 ) ( 336 ) — 479 ( 2,529 )

Home equity loans and lines of credit 22,998 2,045 ( 161 ) 487 25,369

Construction 81 ( 51 ) — 20 50

Total real estate loans $ 68,169 $ ( 2,006 ) $ ( 263 ) $ 1,629 $ 67,529

Total Unfunded Loan Commitments (1)

Home equity lines of credit

16,590 1,162 ( 316 ) 758 18,194

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

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

For the Three Months Ended June 30, 2023

Balance Provisions (Releases) Charge-offs Recoveries Ending

Real estate loans:

Residential Core $ 53,772 $ 587 $ ( 35 ) $ 227 $ 54,551

Residential Home Today ( 1,212 ) ( 283 ) ( 34 ) 434 ( 1,095 )

Home equity loans and lines of credit 21,232 ( 1,272 ) ( 22 ) 1,194 21,132

Home equity loans

11,642 724 — 9 12,375

Construction 40 3 — — 43

4 unchanged sentences

For the Nine Months Ended June 30, 2024

For the Three Months Ended December 31, 2023

Balance Adoption of ASU 2022-02 2

3 unchanged sentences

Residential Home Today ( 1,236 ) ( 1,896 ) ( 138 ) ( 30 ) 486 ( 2,814 )

Home equity loans and lines of credit 23,047 ( 2,470 ) 3,544 ( 695 ) 1,943 25,369

Construction 129 — ( 99 ) — 20 50

Total real estate loans $ 77,315 $ ( 10,262 ) $ ( 3,148 ) $ ( 1,014 ) $ 4,638 $ 67,529

Total Unfunded Loan Commitments (1)

Home equity lines of credit

16,086 ( 2,468 ) 139 ( 330 ) 655 14,082

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

For the Nine Months Ended June 30, 2023

Balance Provisions (Releases) Charge-offs Recoveries Ending

Real estate loans:

Residential Core $ 53,506 $ 455 $ ( 241 ) $ 831 $ 54,551

Residential Home Today ( 997 ) ( 1,527 ) ( 278 ) 1,707 ( 1,095 )

Home equity loans and lines of credit 20,032 ( 1,520 ) ( 580 ) 3,200 21,132

Home equity loans

6,961 ( 2 ) 1,380 — 15 8,354

Construction 129 — ( 56 ) — — 73

4 unchanged sentences

(2) The Company adopted ASU 2022-02 on October 1, 2023, which eliminated the accounting for TDRs, and changed the allowance methodology, as reflected above, from using the present value of cash flows.

Instead, 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.

CLASSIFIED LOANS

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

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

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

4 unchanged sentences

2025 2024 2023 2022 2021 Prior Total

June 30, 2024

December 31, 2024

Real estate loans:

8 unchanged sentences

Total Residential Home Today — — — — — 39,288 — — 39,288

Home equity loans and lines of credit

Home equity lines of credit

Pass — — — — — — 3,479,850 52,982 3,532,832

1 unchanged sentence

Substandard — — — — — — 7,096 4,989 12,085

Total Home equity loans and lines of credit 204,113 174,633 61,547 19,926 5,643 16,246 3,086,802 59,989 3,628,899

Total Home equity lines of credit

— — — — — — 3,491,974 58,201 3,550,175

Home equity loans

83,085 284,183 154,811 54,322 17,312 18,096 — — 611,809

Special Mention

— 400 204 39 59 — — — 702

— 85 669 149 74 234 — — 1,211

Total Home equity loans

83,085 284,668 155,684 54,510 17,445 18,330 — — 613,722

Total Construction 393 7,116 1,178 — — — — — 8,687

19 unchanged sentences

Total Residential Home Today — — — — — 40,471 — — 40,471

Home equity loans and lines of credit

Home equity lines of credit

Pass — — — — — — 3,290,851 54,190 3,345,041

1 unchanged sentence

Substandard — — — — — — 5,880 4,880 10,760

Total Home equity loans and lines of credit 210,131 72,358 24,129 7,113 6,224 13,926 2,664,707 68,693 3,067,281

Total Home equity lines of credit

— — — — — — 3,300,466 59,677 3,360,143

Home equity loans

305,870 163,969 57,254 18,461 5,147 14,621 — — 565,322

Special Mention

111 613 101 — — 51 — — 876

— 196 151 141 43 144 — — 675

Total Home equity loans

305,981 164,778 57,506 18,602 5,190 14,816 — — 566,873

Total Construction 7,932 2,083 — — — — — — 10,015

5 unchanged sentences

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

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

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

For the Nine Months Ended June 30, 2024

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

There were no gross charge-offs in the equity loan or construction loan portfolios for the periods presented.

There were no gross charge-offs in the non-revolving portfolios with origination years between 2020 and 2024 for the periods presented.

For the Three Months Ended December 31, 2024

Origination years prior to fiscal 2020

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 $ 1 $ — $ — $ 1

$ 11 $ — $ 10 $ — $ — $ 195 $ — $ — $ 216

Residential Home Today — — — —

— — — — — 103 — — 103

Home equity loans and lines of credit

Home equity lines of credit

— 157 159 316

Total real estate loans $ 1 $ 157 $ 159 $ 317

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

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

For the Three Months Ended December 31, 2023

Origination years prior to fiscal 2020

Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term

Real estate loans:

Residential Core $ 150 $ — $ — $ 150

Residential Home Today 30 — — 30

Home equity lines of credit — 163 167 330

Total real estate loans $ 180 $ 163 $ 167 $ 510

The home equity lines of credit that converted from revolving to term loans during the three months ended December 31, 2024, totaled $ 3,347 , and during the three months ended December 31, 2023, totaled $ 1,135 .

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.

2 unchanged sentences

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

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

and have not reaffirmed or been dismissed.

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

1 unchanged sentence

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

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

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

MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

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

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

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, other, or a combination thereof.

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

5 unchanged sentences

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

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

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

For the Three Months Ended June 30, 2024

The following tables present the amortized cost of modifications by type executed during the periods presented for borrowers experiencing financial difficulty.

For the three months ended December 31, 2024 and December 31, 2023, there were no modifications made on construction loans.

For the Three Months Ended December 31, 2024

Interest Rate Reduction

5 unchanged sentences

Residential Home Today — 27 138 1 — 166 0.42

Home equity loans and lines of credit — — 471 98 — 569 0.02

Home equity lines of credit

— 46 31 147 — 224 0.01

Home equity loans

— — — — — — —

Total $ — $ 286 $ 1,199 $ 325 $ — $ 1,810 0.01 %

For the Nine Months Ended June 30, 2024

For the Three Months Ended December 31, 2023

Interest Rate Reduction

5 unchanged sentences

Residential Home Today — — 29 131 48 208 0.47

Home equity loans and lines of credit — — 985 234 25 1,244 0.03

Home equity lines of credit

— — 440 84 — 524 0.02

Home equity loans

— — 53 — — 53 0.01

Total $ — $ 2 $ 1,373 $ 339 $ 48 $ 1,762 0.01 %

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

For the Three Months Ended June 30, 2024

The following tables present the financial effects of the loan modifications presented above based on the type of modification.

For the Three Months Ended December 31, 2024 For the Three Months Ended December 31, 2023

Interest Rate Reduction

Term Extension

Interest Rate Reduction Term Extension

Weighted-Average Contractual

1 unchanged sentence

Weighted-Average Years Added to Life

Residential Core 3.39 % 2.00 % 1.6

Residential Home Today 5.63 % 2.00 % 10.4

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

For the Nine Months Ended June 30, 2024

Interest Rate Reduction

Term Extension

Weighted-Average Contractual

Interest Rate

Weighted-Average Years Added to Life

Interest Rate Weighted-Average Years Added to Life

Residential Core 5.73 % 3.50 % 13.8 5.99 % 2.00 % 7.3

Residential Home Today 4.00 % 3.50 % 9.8 4.26 % 2.00 % 20.0

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

Home equity lines of credit

6.99 % 3.50 % 1.2 4.24 % 3.45 % 17.4

Home equity loans

— % — % 0.0 — % — % 0.0

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

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

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

For the Three Months Ended June 30, 2024

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

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

Residential Home Today — — 16 — — 16

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

Total $ — $ — $ 139 $ 14 $ — $ 153

For the Nine Months Ended June 30, 2024

The following table provides information, by type of modification, about loans that were modified within the last 12 months and subsequently defaulted during the three months ended December 31, 2024.

There were no modifications that had subsequently defaulted for the three months ended December 31, 2023.

For the Three Months Ended December 31, 2024

Interest Rate Reduction

4 unchanged sentences

Residential Home Today — — 58 — — 58

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

Home equity lines of credit

— — 199 — — 199

Home equity loans

Total $ — $ — $ 282 $ 14 $ — $ 296

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

The following tables present performance by loan type as of December 31, 2024 and December 31, 2023, on loans modified during the previous 12 months for borrowers experiencing financial difficulty.

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

June 30, 2024 30-59

December 31, 2024 30-59

Past Due 60-89

3 unchanged sentences

Residential Home Today 43 149 207 399 159 558

Home equity loans and lines of credit 282 — 848 1,130 114 1,244

Total $ 415 $ 755 $ 2,002 $ 3,172 $ 3,173 $ 6,345

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 have experienced a combination of concessions.

TDRs also could 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.

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

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

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

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

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

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

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

For the Three Months Ended June 30, 2023

Initial Restructuring Multiple

Restructurings Bankruptcy Total

Residential Core $ 708 $ 688 $ 104 $ 1,500

Residential Home Today 113 5 — 118

Home equity loans and lines of credit 764 — — 764

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

For the Nine Months Ended June 30, 2023

Initial Restructuring Multiple

Restructurings Bankruptcy Total

Residential Core $ 2,585 $ 1,431 $ 653 $ 4,669

Residential Home Today 289 322 32 643

Home equity loans and lines of credit 1,121 71 — 1,192

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

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

For the Three Months Ended June 30, 2023

TDRs That Subsequently Defaulted Number of Contracts

Amortized Cost

Residential Core 3 $ 456

Residential Home Today 5 108

Home equity loans and lines of credit 1 57

Home equity lines of credit

— — 230 230 628 858

Home equity loans

— — — — 90 90

Total $ 860 $ 513 $ 1,738 $ 3,111 $ 4,574 $ 7,685

For the Nine Months Ended June 30, 2023

TDRs That Subsequently Defaulted Number of Contracts

Amortized Cost

December 31, 2023 30-59

Past Due 60-89

Past Due 90 Days or

Due Total Past

Residential Core $ — $ — $ 613 $ 613 $ 363 $ 976

Residential Home Today — — 17 17 191 208

Home equity loans and lines of credit 1 57

Total 10 $ 677

Home equity lines of credit

— — 440 440 85 525

Home equity loans

— — 53 53 — 53

$ — $ — $ 1,123 $ 1,123 $ 639 $ 1,762

(1) The Company adopted ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures effective October 1, 2023, therefore, the December 31, 2023 presentation only includes loans modified since adoption.

Deposit account balances are summarized as follows:

7 unchanged sentences

Total deposits $ 10,207,257 $ 10,195,079

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

The aggregate amount of CDs in denominations of more than $250 was $ 1,347,643 and $ 1,283,719 at December 31, 2024 and September 30, 2024, respectively.

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

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

Brokered CDs (exclusive of acquisition costs and subsequent amortization), which are used as a cost effective funding alternative, totaled $ 1,097,499 and $ 1,217,303 at December 31, 2024 and September 30, 2024, respectively, of which $725,000 for both periods were aligned with interest rate swaps as discussed in Note 13.

DERIVATIVE INSTRUMENTS .

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

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

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

BORROWED FUNDS

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

At December 31, 2024, the Association had a maximum borrowing capacity of $7,756,668, of which $4,656,323 was outstanding.

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

1 unchanged sentence

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

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

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

Borrowing Capacity Borrowings Available Borrowings Outstanding

5 unchanged sentences

Total Borrowings $ 4,656,323

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

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

Amount Weighted Average Rate

7 unchanged sentences

Accrued interest 19,458

Total $ 4,829,365

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

2 unchanged sentences

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

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

For the three months ended December 31, 2024, and December 31, 2023, net interest expense related to short-term borrowings was $ 25,199 and $ 32,973 , respectively.

OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

For the Three Months Ended For the Three Months Ended

June 30, 2024 June 30, 2023

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

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

Other comprehensive income (loss) before reclassifications

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

Amounts reclassified

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

Other comprehensive income (loss), net of tax

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

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

Tax expense (benefit) netted in other comprehensive income

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

For the Nine Months Ended For the Nine Months Ended

June 30, 2024 June 30, 2023

December 31, 2024 December 31, 2023

11 unchanged sentences

Amounts Reclassified from Accumulated

Other Comprehensive Income Amounts Reclassified from Accumulated

Other Comprehensive Income

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

2024 2023 2024 2023

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

Cash flow hedges:

11 unchanged sentences

federal jurisdiction and in various state and city jurisdictions.

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

The Company’s combined federal and state effective income tax rate was 21.0 % and 20.8 % for the three months ended December 31, 2024 and December 31, 2023, respectively.

The Company is no longer subject to income tax examinations in its major jurisdictions for tax years ended prior to 2021.

3 unchanged sentences

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

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

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

DEFINED BENEFIT PLAN

7 unchanged sentences

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

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

For the Three Months Ended

Interest cost $ 740 $ 827

2 unchanged sentences

Net periodic (benefit) cost

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

$ ( 457 ) $ ( 32 )

There were no required minimum employer contributions during the three months ended December 31, 2024.

There are no required minimum employer contributions expected during the remainder of the fiscal year ending September 30, 2025.

EQUITY INCENTIVE PLAN

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

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

In December 2024, 174,700 restricted stock units and 135,300 performance share units were granted to directors, executive officers and certain managers of the Company.

During the three months ended December 31, 2024, performance share units granted in December 2022 were reduced by 10,200 units, according to the targeted performance formula.

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

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

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2024 2023 2024 2023

For the Three Months Ended

Stock option expense $ 27 $ —

2 unchanged sentences

Total stock-based compensation expense $ 905 $ 915

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

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

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

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

At December 31, 2024, 1,528,175 shares were subject to options, with a weighted average exercise price of $ 15.62 per share and a weighted average grant date fair value of $ 2.05 per share.

Expected future expense, relating to the 247,200 non-vested options outstanding as of December 31, 2024, is $ 192 over a weighted average period of 1.9 years.

At December 31, 2024, 455,485 restricted stock units and 288,100 performance share units with a weighted average grant date fair value of $ 13.12 and $ 13.01 per unit, respectively, are unvested.

Expected future compensation expense, relating to the 1,221,233

restricted stock units and 288,100 performance share units outstanding as of December 31, 2024, is $ 4,353 over a weighted average period of 2.2 years and $ 2,042 over a weighted average period of 2.3 years, respectively.

Each unit is equivalent to one share of common stock.

10 unchanged sentences

Refer to Note 4.

LOANS AND ALLOWANCES FOR CREDIT LOSSES for discussion on

credit loss methodology .

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

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

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

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

Commitment Allowance

3 unchanged sentences

Total $ 268,532 $ 2,376

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

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

Commitment Allowance

2 unchanged sentences

Total $ 5,268,759 $ 24,826

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

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

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

At December 31, 2024, the unfunded commitment on home equity lines of credit, including commitments for accounts suspended as a result of material default or a decline in equity, was $ 5,301,084 .

At December 31, 2024 and September 30, 2024, the Company had $ 1,600 and $ 17,411 , respectively, in commitments to sell mortgage loans.

At December 31, 2024 and September 30, 2024, the Company had $ 54,512 and $ 15,891 , respectively, in commitments to purchase mortgage loans, which are included in mortgage loan commitments above.

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

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

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

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

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

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

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

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

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

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

At December 31, 2024 and September 30, 2024, this includes $ 507,710 and $ 526,251 , respectively, of investments in U.S.

government and agency obligations including U.S.

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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 December 31, 2024 and September 30, 2024, there were $ 829 and $ 10,713 of loans held for sale subject to pending agency contracts measured at fair value, respectively, with unpaid principal balances of $ 810 and $ 10,336 .

For the three months ended December 31, 2024 and December 31, 2023, net gain (loss) on the sale of loans includes $( 57 ) 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 December 31, 2024 and September 30, 2024, there were $ 0 and $ 7,061 of loans held for sale carried at cost.

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

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

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

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

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

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

The carrying amounts of real estate owned at December 31, 2024 and September 30, 2024, were $ 0 and $ 174 , respectively.

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

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

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

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

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

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

At December 31, 2024 and September 30, 2024, $ 0 and $ 220 , 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 $ 0 and $ 46 , respectively.

There were no real estate owned carried at their original or adjusted cost basis at December 31, 2024 and September 30, 2024.

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.

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

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

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

Recurring Fair Value Measurements at Reporting Date Using

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government and agency obligations 72,776 — 72,776 —

Forward commitments for the sale of mortgage loans

Total $ 508,335 $ — $ 508,335 $ —

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 $ —

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

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

2024 2023 2024 2023

Three Months Ended December 31,

Beginning balance $ 395 $ ( 1 )

Gain during the period due to changes in fair value:

(Loss)/Gain during the period due to changes in fair value:

Included in other non-interest income ( 369 ) 56

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Collateral-dependent loans, net of allowance $ 38,963 $ — $ — $ 38,963

Mortgage loans held for sale 11,083 — 11,083 —

Real estate owned (1)

Total $ 38,963 $ — $ — $ 38,963

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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

1 unchanged sentence

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

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

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

Collateral-dependent loans, net of allowance $ 38,963 Market comparables of collateral discounted to estimated net proceeds Discount appraised value to estimated net proceeds based on historical experience:

6 unchanged sentences

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

June 30, 2024

December 31, 2024

Carrying Fair Level 1 Level 2 Level 3

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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, are recorded in OCI and are 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 performed to monitor the ongoing effectiveness of the hedging instrument.

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

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

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

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

June 30, 2024

Weighted Average

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

December 31, 2024 September 30, 2024

Weighted Average Weighted Average

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

Derivatives designated as hedging instruments

6 unchanged sentences

$ 3,650,000 2.8 3.10 % $ 3,650,000 3.1 3.10 %

September 30, 2023

Weighted Average

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

Cash flow hedges:

Interest rate swaps

Other Assets $ 3,815,000 $ — 3.7 2.91 %

Total cash flow hedges:

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

June 30, 2024 September 30, 2023

December 31, 2024 September 30, 2024

Notional Value Fair Value Notional Value Fair Value

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Other Assets $ 680 $ 26 $ 11,467 $ 395

Other Liabilities — — 1,830 ( 1 )

Forward Commitments for the sale of mortgage loans

Other Assets — — 2,094 11

Other Liabilities 1,600 ( 2 ) 17,411 ( 72 )

1 unchanged sentence

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

Three Months Ended Nine Months Ended

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

Three Months Ended

Location of Gain or (Loss) December 31,

Recognized in Income 2024 2023

7 unchanged sentences

Forward commitments for the sale of mortgage loans Net gain/(loss) on the sale of loans 70 ( 126 )

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

The Company estimates that $ 31,812 of the amounts reported in AOCI will be reclassified as a reduction to interest expense during the twelve months ending December 31, 2025.

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

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

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

At December 31, 2024 and September 30, 2024, there was $ 11,739 and $ 7,844 , respectively, of cash collateral included in other assets, and $ 50,304 and $ 68,932 , respectively, included in investment securities related to initial margin requirements that are held by the central clearing organization.

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

1 unchanged sentence

RECENT ACCOUNTING PRONOUNCEMENTS

Adopted during the nine months ended June 30, 2024

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 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 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, we recognized an increase in 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.

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

The required disclosures are included in Note 4.

LOANS AND ALLOWANCES FOR CREDIT LOSSES .

Issued but not yet adopted as of June 30, 2024

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

Adopted during the three months ended December 31, 2024

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures.” The amendments in this update improve disclosures about a public entity's reportable segments and addresses requests 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, or the Company's Form 10-K for the fiscal year ending September 30, 2025, and interim periods within fiscal years beginning after December 15, 2024, or the Company's fiscal year ending September 30, 2026, beginning with the Form 10-Q for the quarter ending December 31, 2025.

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

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

Issued but not yet adopted as of December 31, 2024

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures".

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, or the Company's fiscal year ending September 30, 2026.

Prospective and retrospective application to prior periods presented in the financials is permitted, as well as early adoption.

The Company is currently assessing the impact of the requirements on its consolidated financial statement disclosures.

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

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, or the Company's fiscal year ending September 30, 2028, and interim periods beginning after December 15, 2027, or the Company's fiscal year ending September 30, 2029.

Early adoption is permitted and is effective on either a prospective or retrospective basis.

The Company is currently assessing the impact of this guidance on its consolidated financial statement 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.

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

What changed 10-Q

Item 1. Financial Statements