What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-11-25 compared with 2024-11-22 · 146 added, 172 removed, 436 unchanged (42% of the section changed)

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We intend to continue to adhere to our primary values and to support our customers and the communities in which we operate as we pursue our mission to help people achieve the dream of home ownership and financial security while creating value for our customers, our communities, our associates and our shareholders.

The unprecedented implications of the prolonged period of inversion in the yield curve, influenced by the FRS's restrictive monetary policy resulted in a heightened exposure of certain banking industry practices.

The yield curve is currently positive, normalizing in mid-September just prior to the FRS's 50 basis point rate cut, the first in four years.

Also, in the spirit of our values and specifically our Commitment to Excellence, the Association is in the process of implementing a new core processing system.

The implementation is intended to go live in July 2026 and will modernize our operations, boost efficiency and allow us to leverage technology to enhance our customers' experience.

Consumers, businesses, and governments alike are navigating an elevated level of economic uncertainty as a new perspective on global trade policy is being deliberated by the markets.

After maintaining interest rates near 20-year highs, the Federal Reserve has shifted its focus and initiated an easing cycle, conducting rate cuts in September and October 2025.

Treasury yield curve is currently positive, after a prolonged period of inversion, normalizing just prior to the FRS's 100 basis point rate cuts between September and December 2024.

It is possible that the easing cycle will continue into late 2025 and 2026, however, uncertainty can lead to volatility in interest rates and spreads, creating a challenging operating environment.

Taking all of this into consideration, we remain committed to our mission, business model, and strategic approach.

Specifically, (1) our capital ratios remain a primary source of financial strength;

(2) our deposits provide a stable source of funding and the majority of our deposit accounts fall within FDIC insurance limits;

(2) our core deposits remain stable and the majority of our deposit accounts fall within FDIC insurance limits;

(3) we maintain adequate access to contingent sources of liquidity;

and (4) our risk management practices around an array of financial disciplines which are robust and commensurate to an institution of our size and complexity.

and (4) our risk management practices around an array of financial disciplines are robust and commensurate to an institution of our size and complexity.

The following tables present select financial data of the Company for the five most recent fiscal years.

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Investment securities available for sale 520,659 526,251 508,324 457,908 421,783

526,251 508,324 457,908 421,783 453,438

Mortgage loans held for sale 57,662 17,775 3,260 9,661 8,848

17,775 3,260 9,661 8,848 36,871

Loans held for investment, net 15,663,312 15,322,059 15,165,747 14,257,067 12,509,035

15,322,059 15,165,747 14,257,067 12,509,035 13,103,062

Bank owned life insurance contracts 325,149 317,977 312,072 304,040 297,332

317,977 312,072 304,040 297,332 222,919

Total liabilities

15,562,392 15,228,161 14,990,618 13,945,540 12,325,170

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Interest and dividend income $ 763,180 $ 734,074 $ 611,919 $ 409,333 $ 389,351

$ 734,074 $ 611,919 $ 409,333 $ 389,351 $ 455,298

Interest expense 470,486 455,616 328,352 141,937 157,721

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Provision (release) for credit losses 2,500 (1,500) (1,500) 1,000 (9,000)

(1,500) (1,500) 1,000 (9,000) 3,000

Net interest income after provision (release) for credit losses 290,194 279,958 285,067 266,396 240,630

279,958 285,067 266,396 240,630 239,268

Non-interest income 28,780 24,702 21,429 23,804 55,299

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Income before income taxes 114,715 100,313 93,367 92,054 100,094

100,313 93,367 92,054 100,094 100,245

Income tax expense 23,756 20,725 18,117 17,489 19,087

$ 79,588 $ 75,250 $ 74,565 $ 81,007 $ 83,317

Net income $ 90,959 $ 79,588 $ 75,250 $ 74,565 $ 81,007

Earnings per share

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Return on average total assets 0.53 % 0.47 % 0.46 % 0.51 % 0.56 %

0.47 % 0.46 % 0.51 % 0.56 % 0.56 %

Return on average equity 4.74 % 4.12 % 4.00 % 4.14 % 4.77 %

4.12 % 4.00 % 4.14 % 4.77 % 4.88 %

Interest rate spread (1)

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Non-interest expense to average total assets 1.19 % 1.20 % 1.31 % 1.34 % 1.35 %

1.20 % 1.31 % 1.34 % 1.35 % 1.29 %

Average interest-earning assets to average interest-bearing liabilities 110.86 % 111.07 % 111.36 % 112.42 % 111.92 %

111.07 % 111.36 % 112.42 % 111.92 % 111.41 %

Asset Quality Ratios:

Non-performing assets as a percent of total assets 0.23 % 0.20 % 0.20 % 0.23 % 0.32 %

0.20 % 0.20 % 0.23 % 0.32 % 0.37 %

Non-accruing loans as a percent of total loans 0.25 % 0.22 % 0.21 % 0.25 % 0.35 %

0.22 % 0.21 % 0.25 % 0.35 % 0.41 %

Allowance for credit losses on loans as a percent of non-accruing loans 191.82 % 208.28 % 242.26 % 204.73 % 145.96 %

208.28 % 242.26 % 204.73 % 145.96 % 87.95 %

Allowance for credit losses on loans as a percent of total loans 0.47 % 0.45 % 0.51 % 0.51 % 0.51 %

0.45 % 0.51 % 0.51 % 0.51 % 0.36 %

Capital Ratios:

Total capital to risk-weighted assets 17.40 % 17.91 % 17.87 % 18.84 % 21.00 %

17.91 % 17.87 % 18.84 % 21.00 % 19.96 %

Tier 1 (leverage) capital to net average assets 10.11 % 10.11 % 9.82 % 10.33 % 11.15 %

10.11 % 9.82 % 10.33 % 11.15 % 10.39 %

Tier 1 capital to risk-weighted assets 16.53 % 17.17 % 17.15 % 18.25 % 20.43 %

17.17 % 17.15 % 18.25 % 20.43 % 19.37 %

Common equity tier 1 capital to risk-weighted assets 16.53 % 17.17 % 17.15 % 18.25 % 20.43 %

17.17 % 17.15 % 18.25 % 20.43 % 19.37 %

TFS Financial Corporation

Total capital to risk-weighted assets 18.46 % 19.24 % 19.85 % 21.18 % 23.75 %

19.24 % 19.85 % 21.18 % 23.75 % 22.71 %

Tier 1 (leverage) capital to net average assets 10.76 % 10.89 % 10.96 % 11.66 % 12.65 %

10.89 % 10.96 % 11.66 % 12.65 % 11.88 %

Tier 1 capital to risk-weighted assets 17.60 % 18.50 % 19.13 % 20.59 % 23.18 %

18.50 % 19.13 % 20.59 % 23.18 % 22.13 %

Common equity tier 1 capital to risk-weighted assets 17.60 % 18.50 % 19.13 % 20.59 % 23.18 %

18.50 % 19.13 % 20.59 % 23.18 % 22.13 %

Average equity to average total assets 11.19 % 11.33 % 11.58 % 12.23 % 11.72 %

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This difference has been an important component of our net interest income and is fundamental to our operations.

A challenge to our business model occurs when there is a rapid and substantial increase in short-term rates or there is an extended inverted yield curve where short-term rates exceed long-term rates, both of which occurred in the past two years.

Although the yield curve became positive in early September 2024, rapid and substantial decreases in short-term rates can also pose a challenge when interest rates on our home equity line of credit portfolio, indexed to the prime rate, reprice more quickly than interest rates on borrowings and certificate of deposit accounts which generally reprice at maturity.

Although the yield curve became positive in September 2024, rapid and substantial decreases in short-term rates can also pose a challenge when interest rates on our home equity line of credit portfolio, indexed to the prime rate, reprice more quickly than interest rates on borrowings and certificate of deposit accounts which generally reprice at maturity.

These economic environments may result in decreases in our net interest income and our net interest margin.

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Each of these measures is in excess of the requirements in effect for the Association at September 30, 2025 for designation as “well capitalized” under regulatory prompt corrective action provisions.

Beginning this fiscal year, the Company entered into the final two years of the five-year transitional period, as provided by a final rule, after CECL was adopted in fiscal year 2021.

Beginning this fiscal year, the Company entered into the final year of the five-year transitional period, as provided by a final rule, after CECL was adopted in fiscal year 2021.

Refer to the Liquidity and Capital Resources section of this Item 7 for additional discussion regarding regulatory capital requirements.

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Amount Percent Amount Percent

First Mortgage Loan Originations and Purchases:

First Mortgage Loan Originations and Acquisitions:

(Dollars in thousands)

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Terms less than or equal to 10 years 5,326 0.4 5,981 0.7

5,981 0.7 34,710 1.9

Terms greater than 10 years 1,046,489 88.1 690,820 80.9

690,820 80.9 1,195,562 64.4

Total fixed-rate production 1,051,815 88.5 696,801 81.6

696,801 81.6 1,230,272 66.3

Total First Mortgage Loan Originations and Purchases:

Total First Mortgage Loan Originations and Acquisitions:

$ 1,188,066 100.0 % $ 854,247 100.0 %

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Terms less than or equal to 10 years 623,413 5.8 836,875 7.3

836,875 7.3 1,088,048 9.0

Terms greater than 10 years 6,271,793 57.9 6,210,073 54.4

6,210,073 54.4 6,275,775 51.8

Total fixed-rate loans 6,895,206 63.7 7,046,948 61.7

7,046,948 61.7 7,363,823 60.8

Total First Mortgage Loans Held For Investment:

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2031 18,237 6.44 %

$4,379,132 3.39 %

Total $3,944,540 3.72 %

Loan Portfolio Yield

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Terms less than or equal to 10 years $ 623,413 4.0 % 2.68 %

$ 836,875 5.5 % 2.67 %

Terms greater than 10 years 6,271,793 40.0 4.25 %

6,210,073 40.5 4.03 %

Total Fixed-Rate Residential Mortgage loans 6,895,206 44.0 4.10 %

7,046,948 46.0 3.87 %

ARMs 3,944,540 25.2 3.72 %

Home Equity Loans and Lines of Credit 3,885,307 25.3 7.03 %

Home Equity Lines of Credit

4,062,798 25.9 6.43 %

Home Equity Loans

749,548 4.8 6.99 %

Construction and Other loans 20,455 0.1 6.29 %

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September 30, 2025

Balance Fixed-Rate Balance Percent Yield

Balance Fixed-Rate Balance Percent 1

Residential Mortgage Loans (Dollars in thousands)

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Total Residential Mortgage Loans 10,839,746 6,895,206 63.6 3.98 %

Home Equity Lines of Credit

Ohio 902,048 6,533 0.7 6.43 %

Florida 872,045 6,560 0.8 6.39 %

California 681,709 2,814 0.4 6.45 %

Other 1,606,996 2,827 0.2 6.46 %

Total Home Equity Lines of Credit

4,062,798 18,734 0.5 6.43 %

Home Equity Loans and Lines of Credit

Home Equity Loans

Ohio 174,984 145,459 83.1 6.61 %

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Other 275,239 223,292 81.1 7.30 %

Total Home Equity Loans and Lines of Credit

Total Home Equity Loans

749,548 595,557 79.5 6.99 %

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Total Loans Receivable $ 15,672,547 $ 7,529,952 48.0 % 4.76 %

1 Percent calculated as Fixed-Rate Balance divided by Balance.

Marketing of Home Equity Lines of Credit

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We strive to grow the home equity line of credit portfolio through offering competitive rates, marketing efforts, and by utilizing partners to attract more home equity line of credit customers.

At September 30, 2024, the principal balance of home equity lines of credit (including those in repayment) that are structured to reset with each prime rate adjustment totaled $3.32 billion.

At September 30, 2025, the principal balance of home equity lines of credit

(including those in repayment) that are structured to reset with each prime rate adjustment totaled $4.06 billion.

Our home equity lending is discussed in the preceding Lending Activities section of Item 1.

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Extending the Duration of Funding Sources

As a complement to our strategies to shorten the fixed rate duration of our interest-earning assets, as described above, we also seek to lengthen the duration of our interest-bearing funding sources.

As a complement to our strategies to shorten the duration of our fixed rate interest-earning assets, as described above, we also seek to lengthen the duration of our interest-bearing funding sources.

These efforts include monitoring the relative costs of alternative funding sources such as retail certificates of deposit, brokered certificates of deposit, longer-term (e.g.

three years or greater) fixed-rate advances from the FHLB of Cincinnati, and shorter-term (e.g.

one or three months) funding, the durations of

which are extended by correlated interest rate exchange contracts ("swap").

one or three months) funding, the durations of which are extended by correlated interest rate exchange contracts ("swap").

Funding sources are discussed in more detail within this Item 7 in the sections entitled Maintaining Access to Adequate Liquidity and Diverse Funding Sources to Support our Growth and Liquidity and Capital Resources .

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No exchange of principal amounts occur and the notional principal amount does not appear on our balance sheet.

In each of the Association's agreements, interest paid is based on a fixed rate of interest throughout the term of each agreement while interest received is based on an interest rate that resets and compounds daily over a specified interval (generally three months) throughout the term of each agreement.

In each of the Association's agreements, interest paid is based on a fixed rate of interest throughout the term of each agreement while interest received is based on an interest rate that resets and compounds daily over a specified interval (generally one to three months) throughout the term of each agreement.

On the initiation date of the swap, the agreed upon exchange interest rates reflect market conditions at that point in time.

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Each individual swap agreement has been designated as a cash flow hedge of interest rate risk associated with either the Company's variable rate borrowings from the FHLB of Cincinnati or brokered CDs.

In challenging economic times, such as with an extended inverted yield curve, the Association has found it financially beneficial to use swaps with a relatively lower cost to extend the duration of our liabilities.

The Association has found it financially beneficial to use swaps with a relatively lower cost to extend the duration of our liabilities.

For more details, refer to Notes 10.

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We also manage interest rate risk by selectively selling a portion of our long-term, fixed-rate mortgage loans in the secondary market.

First mortgage loans (primarily fixed-rate mortgages with terms of 15 years or more, Home Ready and certain loans purchased through our correspondent lending partner) are originated under Fannie Mae guidelines and are eligible for sale to Fannie Mae either as whole loans or within mortgage-backed securities.

First mortgage loans (primarily fixed-rate mortgages with terms of 15 years or more, Home Ready and certain loans acquired through our correspondent lending partner) are originated under Fannie Mae guidelines and are eligible for sale to Fannie Mae either as whole loans or within mortgage-backed securities.

Currently, certain types of loans (i.e.

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Additionally, sales to private investors are dependent upon favorable market conditions, including motivated buyers, and involve more complicated negotiations and longer settlement timelines.

During the fiscal year ended September 30, 2024, $247.4 million of agency-compliant, long-term (15 to 30 years), fixed-rate mortgage loans were sold, or committed to be sold, to Fannie Mae on a servicing retained basis.

Of these sold or committed loans, $143.1 million were originated through our traditional lending programs as other agency-compliant first mortgage loans, $98.1 million were purchased through a correspondent lending partnership, and $6.2 million were originated through our mortgage banking brand, known as "Mortgage Passport".

During the fiscal year ended September 30, 2025, $411.3 million of agency-compliant, long-term (15 to 30 years), fixed-rate mortgage loans were sold, or committed to be sold, primarily to Fannie Mae.

Of these sold or committed loans, $284.1 million were originated as other agency-compliant first mortgage loans, $88.6 million were acquired through a correspondent

lending partnership, and $38.6 million were originated under Fannie Mae's Home Ready initiative.

At September 30, 2025, loans classified as held for sale totaled $57.7 million.

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We continue to consider liquidity and balance sheet management, as well as secondary market pricing, in evaluating the opportunity to sell loans.

Additionally, we are using a proprietary approach to loan-level price adjustments in markets outside of Ohio and Florida using our "Mortgage Passport" brand to expand our ability to sell certain fixed-rate loans to Fannie Mae.

Loan sales are discussed in more detail within the Liquidity and Capital Resources section of this Item 7.

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While, historically, we had been successful in limiting our credit risk exposure by generally imposing high credit standards with respect to lending, the memory of the 2008 housing market collapse and financial crisis is a constant reminder to focus on credit risk.

In response to the evolving economic landscape, we continuously revise and update our quarterly analysis and evaluation procedures, as needed, for each category of our lending with the objective of identifying and recognizing all appropriate credit losses.

At September 30, 2024, 90% of our assets consisted of residential real estate loans (both “held for sale” and “held for investment”) and home equity loans and lines of credit.

At September 30, 2025, 90% of our assets consisted of residential mortgage loans (both “held for sale” and “held for investment”) and home equity loans and lines of credit.

Our analytic procedures and evaluations include specific reviews of all home equity loans and lines of credit that become 90 or more days past due, as well as collateral reviews of all first mortgage loans that become 180 or more days past due.

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We use stringent, conservative lending standards for underwriting to reduce our credit risk.

For first mortgage loans originated or purchased during the current fiscal year, the average credit score was 778, and the average LTV was 70% at origination.

For first mortgage loans originated or acquired during the current fiscal year, the average credit score was 776, and the average LTV was 71% at origination.

Our current delinquency levels reflect the higher credit standards to which we subject all new originations.

As of September 30, 2024, loans originated or purchased had a balance of $15.41 billion, of which $31.9 million, or 0.2%, were delinquent.

One aspect of our credit risk concern relates to high concentrations of our loans that are secured by residential real estate in specific states, particularly Ohio and Florida, where a large portion of our historical lending has occurred.

As of September 30, 2025, loans originated or acquired had a balance of $15.80 billion, of which $34.6 million, or 0.2%, were delinquent.

One aspect of our credit risk exposure relates to high concentrations of our loans that are secured by residential real estate in specific states, particularly Ohio and Florida, where a large portion of our historical lending has occurred.

At September 30, 2025, approximately 58.4% and 16.8% of the combined total of our residential Core and construction loans held for investment and approximately 22.4% and 21.5% of our home equity loans and lines of credit were secured by properties in Ohio and Florida, respectively.

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Currently, in addition to Ohio and Florida, we are actively lending in 26 other states and the District of Columbia, and as a result of that activity, the concentration ratios of the combined total of our residential Core and construction loans held for investment in Ohio and Florida have trended downward from their September 30, 2010 levels when the concentrations were 79.1% in Ohio and 19.0% in Florida.

Of the total mortgage loan originations and purchases for the year ended September 30, 2024, 20.7% are secured by properties in states other than Ohio or Florida.

Of the total mortgage loan originations and acquisitions for the year ended September 30, 2025, 28.9% are secured by properties in states other than Ohio or Florida.

Maintaining Access to Adequate Liquidity and Diverse Funding Sources to Support our Growth.

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At September 30, 2025, the Association’s ratio of Tier 1 (leverage) capital to net average assets (a basic industry measure that deems 5.00% or above to represent a “well capitalized” status) was 10.11%.

The Association's Tier 1 (leverage) capital ratio at September 30, 2025, included the negative impact of a $40 million cash dividend payment that the Association made to the Company, it's sole shareholder, in December 2024.

Because of its intercompany nature, this dividend payment did not impact the Company's consolidated capital ratios which are reported in the Liquidity and Capital Resources section of this Item 7.

We expect to continue to remain a well capitalized institution.

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To attract deposits, we typically offer rates that are competitive with the rates on similar products offered by other financial institutions.

At September 30, 2024, deposits totaled $10.20 billion (including $1.22 billion of brokered CDs), while borrowings totaled $4.79 billion and borrowers’ advances and servicing escrows totaled $142.4 million, combined.

At September 30, 2025, deposits totaled $10.45 billion (including $902.1 million of brokered CDs), while borrowings totaled $4.87 billion and borrowers’ advances and servicing escrows totaled $143.5 million, combined.

In evaluating funding sources, we consider many factors, including cost, collateral, duration and optionality, current availability, expected sustainability, impact on operations and capital levels.

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Fourth, selling loans in the secondary market is a regular source of liquidity.

During the fiscal year ended September 30, 2024, we sold, or committed to sell $247.4 million in loans to Fannie Mae.

During the fiscal year ended September 30, 2025, we sold, or committed to sell $411.3 million in loans primarily to Fannie Mae.

Finally, cash flows from operating activities have been a regular source of funds.

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We continue to focus on managing operating expenses.

We have successfully been able to reduce our operating expenses to offset the pressure of margin compression resulting from the extended inverted yield curve.

We have successfully been able to reduce our operating expenses to help offset the pressure of margin compression resulting from our

liabilities repricing at elevated interest rates and sooner than most of our longer-term fixed rate assets reprice.

Our ratio of non-interest expense to average assets was 1.19% for the fiscal year ended September 30, 2025, and 1.20% for the fiscal year ended September 30, 2024.

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Our relatively high average deposits (exclusive of brokered CDs) held at our branch offices ($265.1 million per branch office as of September 30, 2025) contributes to our expense management efforts by limiting the overhead costs of serving our customers.

We will continue our efforts to control operating expenses to help safeguard against margin compression.

While we will continue our efforts to control operating expenses to help safeguard against the ongoing pressure of margin compression, in periods subsequent to the Association's core processing system implementation, management anticipates information technology and related expenses to increase.

Critical Accounting Estimates

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Allowance for Credit Losses.

The allowance for credit losses is the amount estimated by management as necessary to absorb credit losses related to both the loan portfolio and off-balance sheet commitments based on a life of loan methodology.

The allowance for credit losses is the amount estimated by management as adequate to absorb credit losses related to both the loan portfolio and off-balance sheet commitments based on a life of loan methodology.

The amount of the allowance is based on significant estimates and the ultimate losses may vary from such estimates as more information becomes available, or conditions change.

The methodology for determining the allowance for credit losses is considered a critical accounting policy by management due to the high degree of judgment involved, the subjectivity of the assumptions used and the potential for changes in the economic environment that could result in changes to the amount of the recorded allowance for credit losses.

At September 30, 2024, the allowance for credit losses was $97.8 million, or 0.64% of total loans.

An increase or decrease of 10% in the allowance at September 30, 2024, would result in a $9.8 million charge or release, respectively, to income before income taxes.

At September 30, 2025, the allowance for credit losses was $104.4 million, which included a $74.2 million allowance on loans receivable and a $30.1 million allowance for unfunded commitments.

The allowance on loans receivable represents 0.47% of total loans.

An increase or decrease of 10% in the total allowance for credit losses at September 30, 2025, would result in a $10.4 million charge or release, respectively, to income before income taxes.

As a substantial percentage of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical in determining the charge-offs for specific loans.

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Refer to Note 5.

LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and the Lending Activities section of Item 1.

LOANS AND ALLOWANCES FOR CREDIT

LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and the Lending Activities section of Item 1.

Business in Part I.

for further discussion.

Actual loan losses may be significantly more than the allowances we have established, which would have a materially adverse effect on our financial results.

Actual credit losses may be significantly more than the allowances we have established, which would have a materially adverse effect on our financial results.

Comparison of Financial Condition at September 30, 2025 and September 30, 2024

Total assets increased $365.5 million, or 2.14%, to $17.46 billion at September 30, 2025, from $17.09 billion at September 30, 2024.

This increase was mainly due to new loan originations exceeding the total of loan sales and principal repayments.

This increase was mainly the result of an increase in mortgage loans held for investment.

Cash and cash equivalents decreased $34.3 million, or 7.40%, to $429.4 million at September 30, 2025, from $463.7 million at September 30, 2024.

Cash is managed to maintain the level of liquidity described later in the Liquidity and Capital Resources section of the Overview .

Investment securities, all of which are classified as available for sale, increased $18.0 million, or 3.5%, to $526.3 million at September 30, 2024, from $508.3 million at September 30, 2023.

Investment securities increased as $141.7 million in principal repayments were exceeded by the combined effect of $133.5 million in purchases and a $26.1 million decrease in net losses that occurred during the year ended September 30, 2024.

Investment securities, all of which are classified as available for sale, decreased $5.6 million, or 1.06%, to $520.7 million at September 30, 2025, from $526.3 million at September 30, 2024.

The decrease was due to the combined effect of cash flow from security repayments and maturities exceeding purchases during the year ended September 30, 2025.

There were no sales of investment securities during the year ended September 30, 2025.

Loans held for sale increased $14.5 million, or 439.4%, to $17.8 million at September 30, 2024 from $3.3 million at September 30, 2023 due to an increase in both loans committed to forward sales and loans identified for future sale.

Loans held for investment, net of deferred loan fees and allowance for credit losses, increased $156.3 million, or 1.0%, to $15.32 billion at September 30, 2024, from $15.17 billion at September 30, 2023, as new originations and additional draws on existing accounts exceeded loan sales and repayments.

There was an $854.8 million increase in the balance of home equity loans and lines of credit during the year ended September 30, 2024, while residential mortgage loans decreased $698.6 million, or 5.8%, to $11.43 billion at September 30, 2024.

During the fiscal year ended September 30, 2024, $157.4 million of three- and five-year “Smart Rate” loans were originated, and $696.8 million of 10-, 15-, and 30-year fixed-rate first mortgage loans were originated or purchased.

Of the total $854.2 million in first mortgage loans originated and purchased for the fiscal year ended September 30, 2024, 7% were refinance transactions and 93% were purchases, while 18% were adjustable-rate mortgages and 82% were fixed-rate mortgages.

Fixed-rate loans with terms of 10 years or less accounted for 1% of total first mortgage loan originations and purchases.

Commitments originated for home equity lines of credit and equity and bridge loans were $2.28 billion for the year ended September 30, 2024, compared to $1.70 billion for the year ended September 30, 2023.

At September 30, 2024, pending commitments to originate new home equity lines of credit were $98.2 million and equity and bridge loans were $74.4 million.

Refer to the Controlling Our Interest Rate Risk Exposure section of the Overview for additional information.

The allowance for credit losses was $97.8 million, or 0.64% of total loans receivable, at September 30, 2024, and included a $27.8 million liability for unfunded commitments.

At September 30, 2023, the allowance for credit losses was $104.8 million, or 0.69% of total loans receivable and included a $27.5 million liability for unfunded commitments.

Mortgage loans held for sale increased $39.9 million, or 224.16%, to $57.7 million at September 30, 2025, from $17.8 million at September 30, 2024, due to an increase in both loans committed to forward sales and loans identified for future sale.

Loans held for investment, net of deferred loan fees and allowance for credit losses, increased $341.3 million, or 2.23%, to $15.66 billion at September 30, 2025, from $15.32 billion at September 30, 2024.

During the year ended September 30, 2025, the home equity loans and lines of credit portfolio increased $927.0 million and residential core mortgage loans decreased $581.3 million.

The changes in loans held for sale and loans held for investment were affected by the volume of loans originated, acquired and sold.

During the year ended September 30, 2025, total first mortgage loan originations and acquisitions were $1.19 billion compared to $854.2 million for the year ended September 30, 2024.

Of total residential mortgage loans originated and acquired during the current period, $1.07 billion (89.7%) were purchase transactions and $136.3 million (11.5%) were adjustable rate loans.

Commitments originated for home equity loans and lines of credit were $2.52 billion for the year ended September 30, 2025, compared to $2.28 billion for the year ended September 30, 2024.

Refer to Note 4.

LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for additional information.

Premises, equipment and software, net increased by $6.8 million, or 20.5%, to $40.0 million at September 30, 2025, from $33.2 million at September 30, 2024.

This growth was mainly driven by higher software acquisitions, primarily for our upcoming core processing system.

Other assets, including prepaid expenses, decreased $2.4 million, or 2.10%, to $111.7 million at September 30, 2025, from $114.1 million at September 30, 2024.

The decrease was primarily the result of a $5.8 million decrease in interest receivable from swaps, offset by a $2.0 million increase in prepaid expenses.

The allowance for credit losses was $104.4 million, or 0.67%, of total loans receivable, at September 30, 2025, and included a $30.1 million allowance for unfunded commitments.

At September 30, 2024, the allowance for credit losses was $97.8 million, or 0.64%, of total loans receivable and included a $27.8 million allowance for unfunded commitments.

Refer to Note 5.

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

The amount of FHLB stock owned decreased $18.6 million, or 7.5%, to $228.5 million at September 30, 2024, from $247.1 million at September 30, 2023.

The amount of FHLB stock owned increased $6.9 million, or 3.02%, to $235.4 million at September 30, 2025, from $228.5 million at September 30, 2024.

FHLB stock ownership requirements dictate the amount of stock owned at any given time.

Total bank owned life insurance contracts increased $5.9 million, to $318.0 million at September 30, 2024, from $312.1 million at September 30, 2023, primarily due to changes in cash surrender value.

Total bank owned life insurance contracts increased $7.2 million, or 2.23%, to $325.1 million at September 30, 2025, from $318.0 million at September 30, 2024, primarily due to changes in cash surrender value.

Deposits increased $251.9 million, or 2.47%, to $10.45 billion at September 30, 2025, from $10.20 billion at September 30, 2024.

The increase in deposits resulted primarily from a $1.37 billion increase in CDs, partially offset by a $469.9 million decrease in savings accounts (consisting of an $153.4 million decrease in money market accounts in the state of Florida and a $332.8 million decrease in our high yield savings accounts) and a $153.5 million decrease in interest-bearing checking accounts.

The balance of brokered CDs at September 30, 2024, was $1.22 billion, which is an increase of $54.7 million from the balance of $1.16 billion at September 30, 2023.

Based on FDIC insurance limits by ownership structure, the total uninsured deposits were $349.3 million and $322.5 million at September 30, 2024 and September 30, 2023, respectively.

Borrowed funds decreased $480.8 million, or 9.1%, to $4.79 billion at September 30, 2024, from $5.27 billion at September 30, 2023.

The decrease was primarily due to borrowings paid off at maturity.

The total balance of borrowed funds at September 30, 2024, all from the FHLB, included $40.0 million of overnight advances, $1.81 billion of term advances with a weighted average maturity of approximately 2.0 years, and $2.93 billion of short-term advances aligned with interest rate swap contracts.

The increase in deposits included a $453.4 million increase in certificates of deposit, partially offset by a $84.1 million decrease in savings accounts, a $64.8 million decrease in money market accounts and a $44.1 million decrease in checking accounts.

Based on FDIC insurance limits by ownership structure, total uninsured deposits were $387.3 million and $349.3 million at September 30, 2025 and September 30, 2024, respectively.

Borrowed funds increased $77.4 million, or 1.61%, to $4.87 billion at September 30, 2025, from $4.79 billion at September 30, 2024.

The total balance of borrowed funds at September 30, 2025, all from the FHLB, included $1.60 billion of long-term advances with a weighted average maturity of approximately 1.8 years, $3.00 billion of short-term advances aligned with interest rate swap contracts and $248.0 million in overnight borrowings.

Interest rate swaps have been used to extend the duration of short-term borrowings at inception by paying a fixed rate of interest and receiving a variable rate.

Refer to the Extending the Duration of Funding Sources section of the Overview and Part II , Item 7A.

Quantitative and Qualitative Disclosures About Market Risk for additional discussion regarding short-term borrowings and interest-rate swaps.

Borrowers' advances for insurance and taxes decreased by $10.8 million, or 9%, to $113.6 million at September 30, 2024,

from $124.4 million at September 30, 2023.

This change is consistent with decreases in our residential mortgage loan portfolio.

Accrued expenses and other liabilities decreased by $15.1 million to $97.8 million at September 30, 2024 from $112.9 million at September 30, 2023.

The decrease is primarily due to a $13.2 million deferred tax decrease.

Total shareholders’ equity decreased $64.7 million, or 3.4%, to $1.86 billion at September 30, 2024, from $1.93 billion at September 30, 2023.

Activity reflects $79.6 million of net income in the current year, reduced by dividends of $59.0 million and a positive $7.9 million change related to a change in accounting principle.

Other changes include a $100.8 million net negative change in accumulated other comprehensive income, primarily related to changes in market values due to fluctuations in market interest rates and maturities of swap contracts, and $7.6 million of positive change related to activity in the Company's stock compensation and employee stock ownership plans.

During the fiscal year ended September 30, 2024, no shares were repurchased.

Refer to the Extending the Duration of Funding Sources section of the Overview for additional discussion regarding short-term borrowings and interest-rate swaps.

Accrued expenses and other liabilities increased by $3.9 million to $101.7 million at September 30, 2025, from $97.8 million at September 30, 2024.

The increase was primarily due to a $2.0 million increase in provision for off-balance sheet credit losses and a $1.2 million increase in accrued bonus expense.

Total shareholders’ equity increased $31.3 million, or 1.68%, to $1.89 billion at September 30, 2025, from $1.86 billion at September 30, 2024.

The increase reflects $91.0 million of net income in the current year, reduced by dividends of $59.7 million.

Other changes include an $8.9 million net positive change related to activity in the Company's stock compensation and employee stock ownership plans offset by a $5.6 million net decrease in accumulated other comprehensive income, primarily related to a net decrease in unrealized gains on swaps contracts.

During the fiscal year ended September 30, 2025, a total of 247,865 shares of our common stock were repurchased for $3.2 million, an average cost of $13.05 per share.

The Company's eighth stock repurchase program allows for a total of 10,000,000 shares to be repurchased, with 4,944,086 shares remaining to be repurchased at September 30, 2025.

As a result of a mutual member vote, Third Federal Savings and Loan Association of Cleveland, MHC, the mutual holding company that owns approximately 81% of the outstanding stock of the Company, was able to waive receipt of its share of each dividend paid.

As a result of a mutual member vote, Third Federal Savings, MHC, the mutual holding company that owns approximately 80.9% of the outstanding stock of the Company, was able to waive receipt of its share of each dividend paid.

Refer to Item 5.

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Comparison of Operating Results for the Fiscal Years Ended September 30, 2025 and 2024

Net income of $79.6 million for the year ended September 30, 2024, increased $4.3 million, compared to $75.3 million for the year ended September 30, 2023.

The change was primarily due to lower non-interest expenses and an increase in non-interest income, offset by a decrease in net interest income.

Net income increased $11.4 million to $91.0 million for the year ended September 30, 2025, compared to $79.6 million for the year ended September 30, 2024.

The increase was primarily driven by an increase in net interest income.

Interest and Dividend Income.

Interest and dividend income increased $122.2 million, or 20%, to $734.1 million during the year ended September 30, 2024, compared to $611.9 million during the prior year.

Interest and dividend income increased $29.1 million, or 4.0%, to $763.2 million during the year ended September 30, 2025, compared to $734.1 million during the year ended September 30, 2024.

The increase in interest and dividend income resulted mainly from an increase in interest on loans, partially offset by decreases in income earned on FHLB stock and other interest-bearing cash equivalents.

Interest income on loans increased $42.8 million, or 6.4%, to $706.5 million for the year ended September 30, 2025, compared to $663.7 million for the year ended September 30, 2024.

This increase was primarily attributed to a 50 basis point increase in yield on loans and a $550.2 million increase in the average balance of loans to $15.21 billion for the current year compared to $14.66 billion during the prior year.

Interest income on interest bearing cash equivalents increased $12.9 million, or 77% to $29.7 million during the current year compared to $16.8 million during the prior year.

The increase was attributed to a 68 basis point increase in the average yield, and a $193.1 million increase in the average balance of the interest-bearing cash equivalents to $549.6 million for the current year compared to $356.5 million during the prior year.

Additionally, dividend income from FHLB Stock increased $7.4 million, or 49% to $22.5 million in the current year from $15.1 million during the prior year.

The increase was attributed mainly to a 268 basis point increase in the average yield on FHLB stock.

This increase was attributed mainly to a 21 basis point increase in average yield on loans to 4.57% for the current year, from 4.36% for the prior year.

Additionally, there was a $257.3 million increase in the average balance of loans to $15.46 billion for the current year, compared to $15.21 billion during the prior year.

The increase was attributed to an increase in loan production that exceeded repayments and loan sales.

Interest income on interest bearing cash equivalents decreased $11.6 million, or 39.1%, to $18.1 million during the current year compared to $29.7 million during the prior year.

The decrease was attributed to a 93 basis point decrease in the average yield, and a $145.8 million decrease in the average balance of the interest-bearing cash equivalents to $403.8 million for the current year compared to $549.6 million during the prior year.

Additionally, dividend income from FHLB Stock decreased $2.6 million, or 11.6%, to $19.9 million in the current year from $22.5 million during the prior year.

The increase was attributed mainly to a 36 basis point decrease in the average yield on FHLB stock.

Interest Expense.

Interest expense increased $127.2 million, or 39%, to $455.6 million during the current year, compared to $328.4 million during the year ended September 30, 2023.

The increase primarily resulted from an increase in interest expense on deposits and borrowed funds.

Interest expense on CDs increased $126.8 million, or 88%, to $270.2 million during the year ended September 30, 2024, compared to $143.4 million during the year ended September 30, 2023.

The increase was attributed primarily to a 127 basis point increase in the average rate paid on CDs to 3.61% during the current year, from 2.34% during the prior year.

Additionally, there was a $1.37 billion, or 22%, increase in the average balance of CDs to $7.49 billion from $6.12 billion during the prior

year as customers sought higher rate products during a period of elevated interest rates.

Interest expense on savings and checking accounts decreased $2.5 million and $5.7 million, respectively, to $22.2 million and $0.4 million during the year ended September 30, 2024, compared to the prior year largely due to a decrease in the average balance of savings and checking accounts and a net decrease in the average rates paid on checking accounts.

Interest expense on borrowed funds increased $8.7 million, or 6%, to $162.9 million during the year ended September 30, 2024, from $154.2 million during the year ended September 30, 2023.

The increase was attributed to a combination of a $128.6 million, or 3%, decrease in the average balance of borrowed funds to $4.99 billion during the current year, from $5.11 billion during the prior year, and a 26 basis point increase in the average rate paid for these funds to 3.27% during the year ended September 30, 2024, from 3.01% for the year ended September 30, 2023.

Interest expense increased $14.9 million, or 3.3%, to $470.5 million for the year ended September 30, 2025, compared to $455.6 million for the year ended September 30, 2024.

The increase mainly resulted from an increase in average volume of deposits.

Interest expense on CDs, net of related interest swap contracts, increased $25.5 million, or 9.4%, to $295.7 million for the year ended September 30, 2025, compared to $270.2 million for the year ended September 30, 2024.

The increase was attributed primarily to a $765.2 million, or 10.2%, increase in the average balance of CDs to $8.26 billion for the current year,

from $7.49 billion for the prior year, partially offset by a 3 basis point decrease in the average rate paid on CDs to 3.58% for the current year, from 3.61% for the prior year.

Interest expense on savings decreased $9.6 million, or 43.3%, to $12.6 million during the year ended September 30, 2025, compared to $22.2 million during the year ended September 30, 2024.

The decrease was attributed to a $276.6 million, or 18.2%, decrease in the average balance of savings accounts.

In addition, there was a 44 basis point decrease in the average rate paid on savings accounts to 1.02% during the current year, from 1.46% during the prior year.

Interest expense on borrowed funds, net of related interest swap contracts, decreased $1.2 million, or 0.74%, to $161.7 million during the year ended September 30, 2025, from $162.9 million during the year ended September 30, 2024.

The decrease was attributed to a combination of a $309.8 million, or 6.21%, decrease in the average balance of borrowed funds to $4.68 billion during the current year, from $4.99 billion during the prior year, as well as a 19 basis point increase in the average rate paid for these funds to 3.46% during the current year, from 3.27% during the prior year.

Refer to the Extending the Duration of Funding Sources section of the Overview and Comparison of Financial Condition for further discussion.

Net Interest Income .

Net interest income decreased $5.1 million, or 2%, to $278.5 million during the year ended September 30, 2024, from $283.6 million during the year ended September 30, 2023.

The decrease consisted of a $127.2 million increase in interest expense, offset by a $122.2 million increase in interest income.

Average interest-earning assets increased during the current year by $785.3 million, or 5%, when compared to the year ended September 30, 2023.

Average interest-bearing liabilities increased by $745.0 million.

The average yield on interest earning assets increased 55 basis points to 4.44% from 3.89%, compared to a 74 basis point increase in the average rate paid on interest-bearing liabilities to 3.06% in the current year from 2.32% in the prior year.

The interest rate spread was 1.38% for the fiscal year ended September 30, 2024, compared to 1.57% at September 30, 2023.

The net interest margin was 1.69% for the fiscal year ended September 30, 2024, and 1.80% for the fiscal year ended September 30, 2023.

The decrease in our interest rate spread and net interest margin is primarily due to the impact of a prolonged period of historically low interest rate environment followed by a rapid and meaningful rise in interest rates, that started in March 2022, along with an extended period of yield curve inversion.

Refer to Controlling Our Interest Rate Risk Exposure of the Overview section for further discussion.

Net interest income increased $14.2 million, or 5.10%, to $292.7 million during the year ended September 30, 2025, from $278.5 million during the year ended September 30, 2024.

The net increase consisted of a $29.1 million increase in interest income, offset by a $14.9 million increase in interest expense.

Average interest-earning assets increased during the current year by $93.8 million, or 0.57%, to $16.61 billion when compared to $16.52 billion during the prior year.

The increase was attributed primarily to a $257.3 million increase in our average balance of loans, offset by a $145.8 million decrease in other interest-bearing cash equivalents and a $19.4 million decrease in FHLB stock.

The average yield on interest earning assets increased 15 basis points to 4.59% for the current year, from 4.44% for the prior year.

Average interest-bearing liabilities increased during the current year by $112.1 million, or 0.75% to $14.99 billion when compared to $14.87 billion during the prior year.

Average interest-bearing liabilities experienced an 8 basis point increase in the average rate paid on interest-bearing liabilities to 3.14% in the current year, from 3.06% in the prior year.

The interest rate spread was 1.45% for the current year, compared to 1.38% for the prior year.

The net interest margin was 1.76% for the current year, compared to 1.69% for the prior year.

Provision (Release) for Credit Losses .

We recorded a release of the allowance for credit losses of $1.5 million during each of the years ended September 30, 2024 and September 30, 2023.

As delinquencies in the portfolio are resolved through pay-off, short sale or foreclosure, or management determines the collateral is not sufficient to satisfy the loan, uncollected balances have been charged against the allowance for credit losses previously provided.

Recoveries of amounts charged against the allowance for credit losses occur when collateral values increase and homes are sold or when borrowers repay the amounts previously charged-off.

We recorded a provision for credit losses on loans and off-balance sheet exposures of $2.5 million during the year ended September 30, 2025, and a $1.5 million release of provision for credit losses during the year ended September 30, 2024.

For the fiscal year ended September 30, 2025, we recorded net recoveries of $4.0 million, as compared to net recoveries of $4.7 million for the year ended September 30, 2024.

Credit loss provisions (releases) are recorded with the objective of aligning our allowance for credit loss balances with our current estimates of loss in the portfolio.

Refer to the Lending Activities section of the Overview and Note 5.

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Non-interest income increased $4.1 million, or 16.6%, to $28.8 million during the year ended September 30, 2025, compared to $24.7 million during the year ended September 30, 2024.

The increase in non-interest income was primarily due to increases in net gain on sale of loans of $2.2 million during the year ended September 30, 2024.

The increase in non-interest income was primarily due to an increase in net gain on sale of loans of $2.6 million and an increase in loan fees and service charges of $1.4 million during the current year.

Loans sold, or committed to be sold, during the fiscal year ended September 30, 2025, were $411.3 million, compared to loan sales of $247.4 million during the year ended September 30, 2024.

Non-Interest Expense.

Non-interest expense decreased $8.8 million, or 4%, to $204.3 million during the fiscal year ended September 30, 2024, compared to $213.1 million during the fiscal year ended September 30, 2023.

This decrease resulted primarily from a $5.0 million and $5.6 million decrease in salary and employee benefits and marketing expenses, respectively, due to cost containment measures implemented as a result of the challenging interest rate environment.

Non-interest expense decreased less than 1% to $204.3 million during the fiscal year ended September 30, 2025.

This decrease resulted primarily from a $1.1 million decrease in marketing and a $1.2 million decrease in other operating expenses, partially offset by a $1.7 million increase in salary and employee benefits.

Income Tax Expense.

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The provision for the current year included $21.8 million of federal income tax provision and $2.0 million of state income tax provision.

The provision for the year ended September 30, 2023, included $17.3 million of federal income tax provision and $0.8 million of state income tax provision.

Our combined effective tax rate was 20.7% during the year ended September 30, 2024, and 19.4% during the year ended September 30, 2023.

The provision for the prior year included $18.8 million of federal income tax provision and $1.9 million of state income tax provision.

Our combined effective tax rate was 20.7% during each of the years ended September 30, 2025 and September 30, 2024.

For a comparison of operating results for the fiscal years ended September 30, 2024 and 2023, see the Company's Form 10-K for the fiscal year ended September 30, 2024.

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Liquidity is the ability to meet current and future financial obligations of a short-term nature.

Our primary sources of funds consist of deposit inflows, loan repayments, advances from the FHLB of Cincinnati, borrowings from the FRB-Cleveland

Discount Window, overnight Fed Funds through various arrangements with other institutions, proceeds from brokered CDs transactions, principal repayments and maturities of securities, and sales of loans.

Our primary sources of funds consist of deposit inflows, loan repayments, advances from the FHLB of Cincinnati, borrowings from the FRB-Cleveland Discount Window, overnight Fed Funds through various arrangements with other institutions, proceeds from brokered CDs transactions, principal repayments and maturities of securities, and sales of loans.

In addition to the primary sources of funds described above, we have the ability to obtain funds through the use of collateralized borrowings in the wholesale markets, and from sales of securities.

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The Association’s Investment Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies.

We generally seek to maintain a minimum liquidity ratio of 5% (which we compute as the sum of cash and cash equivalents plus unencumbered investment securities for which ready markets exist, divided by total average assets).

For the year ended September 30, 2025, the liquidity ratio averaged 5.47% for the Association.

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The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period.

At September 30, 2024, cash and cash equivalents totaled $463.7 million, which represented a decrease of 0.64% from September 30, 2023.

At September 30, 2025, cash and cash equivalents totaled $429.4 million, which represented a decrease of 7.40% from $463.7 million at September 30, 2024.

Investment securities classified as available for sale, which provide additional sources of liquidity, totaled $520.7 million at September 30, 2025.

During the year ended September 30, 2024, loan sales, including commitments to sell, totaled $247.4 million, which included sales to Fannie Mae consisting of $215.6 million of long-term, fixed-rate, agency-compliant, non-Home Ready first mortgage loans and $31.8 million of loans that qualified under Fannie Mae's Home Ready initiative.

At September 30, 2024, $17.8 million of long-term, fixed-rate residential first mortgage loans were classified as "held for sale".

During the year ended September 30, 2025, we settled $399.3 million of loan sales and had commitments to sell $59.3 million of mortgage loans to Fannie Mae at September 30, 2025.

Our cash flows are derived from operating activities, investing activities and financing activities as reported in our CONSOLIDATED STATEMENTS OF CASH FLOWS included in the CONSOLIDATED FINANCIAL STATEMENTS .

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Our primary investing activities are originating residential mortgage loans, home equity loans and lines of credit and purchasing investments.

During the year ended September 30, 2024, we originated $854.2 million of residential mortgage loans, and $2.28 billion of commitments for home equity loans and lines of credit, while during the year ended September 30, 2023, we originated $1.86 billion of residential mortgage loans and $1.70 billion of commitments for home equity loans and lines of credit.

During the year ended September 30, 2025, we originated and acquired $1.19 billion of residential mortgage loans, and $2.52 billion of commitments for home equity loans and lines of credit, while during the year ended September 30, 2024, we originated and acquired $854.2 million of residential mortgage loans and $2.28 billion of commitments for home equity loans and lines of credit.

We purchased $160.3 million of securities during the year ended September 30, 2025, and $133.5 million during the year ended September 30, 2024.

Also, during the years ended September 30, 2024 and September 30, 2023, we purchased $308.9 million and $279.2 million of long-term, fixed-rate first mortgage loans.

Also, during the years ended September 30, 2025 and September 30, 2024, we acquired $432.2 million and $308.9 million of long-term, residential mortgage loans, respectively.

Financing activities consist primarily of changes in deposit accounts, changes in the balances of principal and interest owed on loans serviced for others, FHLB advances, including any collateral requirements related to interest rate swap agreements and borrowings from the FRB-Cleveland Discount Window.

We experienced a net increase in total deposits of $745.3 million during the year ended September 30, 2024 compared to a net increase of $520.0 million during the year ended September 30, 2023.

We experienced a net increase in total deposits of $251.9 million during the year ended September 30, 2025, compared to a net increase of $745.3 million during the year ended

September 30, 2024.

Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors.

During the year ended September 30, 2024, there was a $54.7 million

increase in the balance of brokered CDs (exclusive of acquisition costs and subsequent amortization), which had a balance of $1.22 billion at September 30, 2024.

During the year ended September 30, 2025, there was a $315.2 million decrease in the balance of brokered CDs (exclusive of acquisition costs and subsequent amortization), which had a balance of $902.1 million at September 30, 2025.

At September 30, 2024, the balance of brokered CDs was $1.22 billion.

Principal and interest received on loans serviced for others and owed to investors experienced a net decrease of $1.0 million to $28.8 million during the year ended September 30, 2024, compared to a net decrease of $0.1 million to $29.8 million during the year ended September 30, 2023.

During the year ended September 30, 2024, we decreased our borrowed funds by $480.8 million to manage future interest costs and to actively manage our liquidity ratio.

Principal and interest received on loans serviced for others and owed to investors experienced a net increase of $1.6 million to $30.3 million during the year ended September 30, 2025, compared to a net decrease of $1.0 million to $28.8 million during the year ended September 30, 2024.

During the year ended September 30, 2025, we increased our borrowed funds by $77.4 million to appropriately fund future operations and to actively manage our liquidity ratio.

Liquidity management is both a daily and long-term function of business management.

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The exception requires the Association to maintain compliance with certain credit and regulatory criteria.

In an effort to manage our available borrowing capacity with the FHLB, the Company has replaced a portion of its 90-day FHLB advances with like-term brokered deposits.

On July 8, 2024, the Association received a rating of "Satisfactory" on its CRA exam covering the period ended December 31, 2022.

As a result, on July 22, 2024, the Association was notified that it is now compliant with the FHFA's Community Support Regulation, has regained access to long-term advances (advances with a term greater than one year) from the FHLB of Cincinnati and is eligible for participation in the FHLB's Affordable Housing Program or other Community Investment Cash Advance programs.

At September 30, 2025, we had $4.85 billion of FHLB of Cincinnati advances, no outstanding borrowings from the FRB-Cleveland Discount Window and no outstanding borrowings in the form of Fed Funds.

Additionally, at September 30, 2024, we had $1.22 billion of brokered CDs.

During the year ended September 30, 2025, we had average outstanding borrowed funds of $4.68 billion, as compared to $4.99 billion during the year ended September 30, 2024.

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banking organizations ("Basel III Rules") includes both a revised definition of capital and guidelines for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories.

In 2019, a final rule adopted by the federal banking agencies provided banking organizations with the option to phase in, over a three-year period, the adverse day-one regulatory capital effects of the adoption of the CECL accounting standard.

In 2020, as part of its response to the impact of COVID-19, U.S.

federal banking regulatory agencies issued a final rule which provides banking organizations that implement CECL during the 2020 calendar year the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period, which the Association and Company have adopted.

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

The Association is subject to the "capital conservation buffer" requirement level of 2.5%.

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The Company's primary source of liquidity is dividends received from the Association.

The amount of dividends that the Association may declare and pay to the Company in any calendar year, without the receipt of prior approval from the OCC but with prior notice to the FRB-Cleveland, cannot exceed net income for the current calendar year-to-date period plus retained net income (as defined) for the preceding two calendar years, reduced by prior dividend payments made during those periods.

The Company did not receive a cash dividend from the Association in December 2023.

Because of its intercompany nature, this dividend payment would not have had an impact on the Company's capital ratios or its consolidated statement of condition but would have reduced the Association's

reported capital ratios.

The Company received a $40.0 million cash dividend from the Association in December 2024.

At September 30, 2025, the Company had, in the form of cash and a demand loan from the Association, $112.9 million of funds readily available to support its stand-alone operations.

The Company’s eighth stock repurchase program, which authorized the repurchase of up to 10,000,000 shares of the Company’s outstanding common stock was approved by the Board of Directors on October 27, 2016, and repurchases began on January 6, 2017.

There were 4,808,049 shares repurchased under that program between its start date and September 30, 2024.

During the year ended September 30, 2024, the Company did not repurchase any shares of its common stock.

The payment of dividends, support of asset growth and strategic stock repurchases are planned for the future as the focus for future capital deployment activities.

Third Federal Savings, MHC has the approval of its members to waive dividends aggregating up to $1.13 per share on the common stock of the Company for the 12 months following the special meeting of members held on July 9, 2024, and subsequently received the non-objection from the FRB.

The payment of dividends, support of asset growth and strategic stock repurchases are planned to continue in the future as the focus for future capital deployment activities.

See Part II Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for details on stock repurchase programs, dividends paid and dividend waivers.

Impact of Inflation and Changing Prices

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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 7. Management’s Discussion and Analysis