TFSL 10-K & 10-Q changes, risk factors and insider trading

Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. From 2022 to 2023, the FRS raised certain benchmark interest rates in an effort to combat elevated inflation,. As inflation increases, the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expense. Furthermore, our customers are also affected by inflation, higher interest rates, and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us.

In general, changes in market and competitive interest rates result from events that we do not control and over which we generally have little or no influence. As a result, mitigation of the adverse effects of changing interest rates is generally limited to controlling the composition of the assets and liabilities that we hold. To monitor our positions, we maintain an interest rate risk modeling system which is designed to measure our interest rate risk sensitivity. Using customized modeling software, the Association prepares periodic estimates of the amounts by which the net present value of its cash flows from assets, liabilities and off balance sheet items (the institution’s EVE) would change in the event of a range of assumed changes in market interest rates. The simulation model uses a discounted cash flow analysis and an option-based pricing approach in measuring the interest rate sensitivity of EVE. At September 30, 2024,2025, in the event of an immediate 200 basis point increase in all interest rates, our model projects that we would experience a $311.5$333.1 million, or 27.24%,23.62%, decrease in EVE. Our calculations further project that, at September 30, 2024, in the event that market interest rates used in the simulation were adjusted in equal monthly amounts (termed a "ramped" format) during the twelve month measurement period to an aggregate increase in 200 basis points, we would expect our projected net interest income for the twelve months ended September 30, 2025, to increase by 1.27%. See Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

We may be required to raise additional capital in the future, but that capital may not be available when it is needed, or it may only be available on unacceptableunfavorable terms, which could adversely affect our financial condition and results of operations.

We are required by federal regulatory authorities to maintain adequate levels of capital to support our operations. We may at some point, however, need to raise additional capital to support continued growth or be required by our regulators to increase our capital resources. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial performance. Accordingly, we may not be able to raise additional capital, if needed, on terms acceptablefavorable to us. If we cannot raise additional capital when needed, our ability to further expand our operations and pursue our growth strategy could be materially impaired and our financial condition and liquidity could be materially and adversely affected. In addition, if we are unable to raise additional capital when required by our bank regulators, we may be subject to adverse regulatory action.

Our principal lending activity consists of originating, and essentially all of our loan portfolio consists of, residential real estate mortgage loans. We originate our loans with a focus on limiting credit risk exposure and not necessarily to generate the highest return possible or maximize our interest rate spread. In addition, residential real estate mortgage loans generally have lower interest rates than commercial business loans, commercial real estate loans and consumer loans. As a result, we may generate lower interest rate spreads and rates of return when compared to our competitors who originate more consumer or commercial loans than we do. We intend to continue our focus on residential real estate lending.

Loan sales provide a portion of our non-interest income. In addition to being affected by interest rates, the secondary mortgage markets are also subject to investor demand for residential real estatemortgage loans and increased investor yield requirements for these loans. These conditions may fluctuate or worsen in the future. A prolonged period of secondary market illiquidity could have a material adverse effect on our financial condition and results of operations.

If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings couldwould decrease.

Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing stockholder value. We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject to, including credit, liquidity, operational, information technology, regulatory compliance, reputationalcompliance and strategic. However, as with any risk management framework, there are inherent limitations to our risk management strategies as risks may exist, or develop in the future, that we have not appropriately anticipated or identified. If our risk management framework proves ineffective, we could suffer unexpected losses and our business and results of operations could be materially adversely affected.

The Association has a standing Technology Steering Committee, consisting of several senior managers (CAO, CIO, CSO, CXO, and ISO). The Committee meets quarterly, or more frequently if needed, and reports to the Board of Directors after each meeting through Committee minutes. The Association also engages outside consultants to support its cybersecurity efforts. The directors of the Association have limited experience in cybersecurity risk management in other business entities comparable to the Association and rely on the ISO and CIO for cybersecurity guidance.

The Company is a separate legal entity from its subsidiaries and does not have significant operations of its own. Dividends from the Association provide a significant source of cash for the Company. The availability of dividends from the Association is limited by various statutes and regulations. Under these statutes and regulations, the Association is not permitted to pay dividends on its capital stock to the Company, its sole stockholder, if the dividend would reduce the stockholders' equity of the Association below the amount of the liquidation account established in connection with the mutual-to-stock conversion. Federal savings associations may pay dividends without the approval of its primary federal regulator only if they meet applicable regulatory capital requirements before and after the payment of the dividends and total dividends do not exceed net income to date over the calendar year plus its retained net income over the preceding two years. If in the future, the Company utilizes its available cash and the Association is unable to pay dividends to the Company, the Company may not have sufficient funds to pay dividends or fund stock repurchases.

Our reputation is one of the most valuable components of our business and is critical to our success. The ability to attract and retain customers, investors, employeesassociates and advisors may depend upon external perceptions of the Company. Damage to the Company's reputation could cause significant harm to our business and prospects and may arise from numerous sources, including litigation or regulatory actions, failing to deliver minimum standards of service and quality, compliance failures, unethical behavior and the misconduct of employees,associates, advisors and counterparties. Adverse developments with respect to the financial services industry may also, by association, negatively impact the Company's reputation or result in greater regulatory or legislative scrutiny or litigation against the Company.

Since being organized in 1938, we grew to become, at the time of our initial public offering of stock in 2007, the nation’s largest mutually-owned savings and loan association based on total assets. We credit our success to our continued emphasis on our primary values: “Love, Trust, Respect, and a Commitment to Excellence, along with Having Fun". Our values are reflected in the design and pricing of our loan and deposit products, as described below. Our values are further reflected in a long-term revitalization program encompassing the three-mile corridor of the Broadway-Slavic Village neighborhood in Cleveland, Ohio where our main office was established and continues to be located and where we've been the developer of a community of 4042 homes, intended to serve the low- to moderate income home owner. 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. 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.

TheConsumers, unprecedentedbusinesses, implicationsand governments alike are navigating an elevated level of theeconomic prolongeduncertainty periodas ofa inversionnew inperspective theon yieldglobal curve,trade influencedpolicy is being deliberated by the FRS'smarkets. restrictiveAfter monetarymaintaining policyinterest resultedrates near 20-year highs, the Federal Reserve has shifted its focus and initiated an easing cycle, conducting rate cuts in aSeptember heightenedand exposureOctober of certain banking industry practices.2025. The U.S. Treasury yield curve is currently positive, after a prolonged period of inversion, normalizing in mid-September just prior to the FRS's 50100 basis point rate cut,cuts between September and December 2024. It is possible that the firsteasing cycle will continue into late 2025 and 2026, however, uncertainty can lead to volatility in fourinterest years.rates and spreads, creating a challenging operating environment. Taking all of this into consideration, we remain committed to our mission, business modelmodel, and strategic approach. Specifically, (1) our capital ratios remain a primary source of financial strength; (2) our core deposits provide aremain stable source of funding 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.

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

At September 30, 2024,2025, the Company’s Tier 1 (leverage) capital totaled $1.86$1.87 billion, or 10.89%,10.76%, of net average assets and 18.50%17.60% of risk-weighted assets, while the Association’s Tier 1 (leverage) capital totaled $1.72$1.76 billion, or 10.11%, of net average assets and 17.17%16.53% of risk-weighted assets. Each of these measures is in excess of the requirements in effect for the Association at September 30, 20242025 for designation as “well capitalized” under regulatory prompt corrective action provisions. Beginning this fiscal year, the Company entered into the final two yearsyear 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.

As a complement to our strategies to shorten the fixed rate 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"). 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. All of our swaps are subject to collateral pledges and require specific structural features to qualify for hedge accounting treatment. Hedge accounting treatment directs that periodic mark-to-market adjustments be recorded in other comprehensive income (loss) in the equity section of the balance sheet, rather than being included in operating results of the income statement. The Association's intent is that any swap to which it may be a party will qualify for hedge accounting treatment.

The Association uses swaps to extend the duration of its funding sources. Each of the Association's swap agreements is registered on the Chicago Mercantile Exchange and involves the exchange of interest payment amounts based on a notional principal balance. 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 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. Swaps generally require counterparty collateral pledges that ensure the counterparties' ability to comply with the conditions of the agreement. Concurrent with the execution of each swap, the Association enters into a short-term borrowing in an amount equal to the notional amount of the swap and with interest rate resets aligned with the reset interval of the swap. 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, theThe 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. BORROWED FUNDS and 17. DERIVATIVE INSTRUMENTS of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

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 purchasedacquired 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. our Smart Rate adjustable-rate loans, 10-year fixed-rate loans, and first mortgage loans secured by certain property types) are originated under our proprietary underwriting and closing process, not eligible for sale to Fannie Mae. We can also manage interest rate risk by selling non-Fannie Mae compliant mortgage loans to private investors, although those transactions may be limited to loans that have established payment histories, strong borrower credit profiles and are supported by adequate collateral. 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, 2024,2025, $247.4$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 on a servicing retained basis.Mae. Of these sold or committed loans, $143.1$284.1 million were originated through our traditional lending programs as other agency-compliant first mortgage loans, $98.1$88.6 million were purchasedacquired through a correspondent lending partnership, and $6.2$38.6 million were originated throughunder ourFannie mortgageMae's bankingHome brand,Ready known as "Mortgage Passport".initiative. At September 30, 2024,2025, loans classified as held for sale totaled $17.8$57.7 million. At September 30, 2024,2025, we serviced $1.97$2.13 billion of loans we originated and later sold to investors.

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.

Monitoring and Limiting Our Credit Risk. 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 appropriateestimated credit losses. At September 30, 2024,2025, 90% of our assets consisted of residential real estatemortgage 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. We transfer performing home equity lines of credit subordinate to first mortgages delinquent greater than 90 days to non-accrual status. We also charge-off performing loans to collateral value and classify those loans as non-accrual within 60 days of notification of all borrowers filing Chapter 7 bankruptcy, that have not reaffirmed or been dismissed, regardless of how long the loans have been performing.

In an effort to limit our credit risk exposure and keep it consistent with the low risk appetite approved by the Board of Directors, the credit eligibility criteria is evaluated to ensure a successful homeowner has the primary source of repayment, followed by a collateral position that allows for a secondary source of repayment, if needed. Products that do not result in an effective mix of repayment ability are not offered. We use stringent, conservative lending standards for underwriting to reduce our credit risk. For first mortgage loans originated or purchasedacquired during the current fiscal year, the average credit score was 778,776, and the average LTV was 70%71% at origination. Our current delinquency levels reflect the higher credit standards to which we subject all new originations. As of September 30, 2024,2025, loans originated or purchasedacquired had a balance of $15.41$15.80 billion, of which $31.9$34.6 million, or 0.2%, were delinquent.

One aspect of our credit risk concernexposure 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, 2024,2025, approximately 58.1%58.4% and 17.3%16.8% of the combined total of our residential Core and construction loans held for investment and approximately 23.6%22.4% and 22.5%21.5% of our home equity loans and lines of credit were secured by properties in Ohio and Florida, respectively. In an effort to moderate the concentration of our credit risk exposure in individual states, we have utilized direct mail marketing, our internet site and our customer service call center to extend our lending activities to other attractive geographic locations. Currently, in addition to Ohio and Florida, we are actively lending in 2526 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 purchasesacquisitions for the year ended September 30, 2024,2025, 20.7%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. For most insured depositories, customer and community confidence are critical to their ability to maintain access to adequate liquidity and to conduct business in an orderly manner. We believe that a well capitalized institution is one of the most important factors in nurturing customer and community confidence. At September 30, 2024,2025, 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.

In managing its level of liquidity, the Company monitors available funding sources, which include attracting new deposits (including brokered deposits), borrowing from others, the conversion of assets to cash and the generation of funds through profitable operations. The Company has traditionally relied on retail deposits as its primary means in meeting its funding needs. To attract deposits, we typically offer rates that are competitive with the rates on similar products offered by other financial institutions. At September 30, 2024,2025, deposits totaled $10.20$10.45 billion (including $1.22$902.1 billionmillion of brokered CDs), while borrowings totaled $4.79$4.87 billion and borrowers’ advances and servicing escrows totaled $142.4$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.

While our retail deposit customers remain our preferred source of funding, we maintain many alternative funding sources. First, we pledge available real estate mortgage loans with the FHLB of Cincinnati and the FRB-Cleveland. At September 30, 2024,2025, the Association had the ability to borrow a maximum of $6.86$6.94 billion from the FHLB of Cincinnati and $633.1$505.4 million from the FRB-Cleveland Discount Window. As of September 30, 2024,2025, our capacity for additional borrowing from FHLB of Cincinnati was $2.09 billion. Second, we have the ability to purchase overnight Fed Funds up to $395.0$455.0 million through various arrangements with other institutions. Third, we invest in high quality marketable securities that exhibit limited market price variability and, to the extent that they are not needed as collateral for borrowings, can be sold in the institutional market and converted to cash. At September 30, 2024,2025, our investment securities portfolio totaled $526.3$520.7 million. Fourth, selling loans in the secondary market is a regular source of liquidity. During the fiscal year ended September 30, 2024,2025, we sold, or committed to sell $247.4$411.3 million in loans primarily to Fannie Mae. Finally, cash flows from operating activities have been a regular source of funds. During the fiscal years ended September 30, 2025 and 2024, cash flows from operations provided $82.4 million and $88.6 million, respectively.

Monitoring and Controlling Our Operating Expenses. We continue to focus on managing operating expenses. We have successfully been able to reduce our operating expenses to help offset the pressure of margin compression resulting from theour extendedliabilities invertedrepricing yieldat curve.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, and 1.31% for the fiscal year ended September 30, 2023.2024. As of September 30, 2024,2025, our average assets per full-time associate and our average deposits per full-time associate were $18.7$18.3 million and $11.1$10.9 million, respectively. We believe that each of these measures compares favorably with industry averages. Our relatively high average deposits (exclusive of brokered CDs) held at our branch offices ($242.6$265.1 million per branch office as of September 30, 20242025) contributes to our expense management efforts by limiting the overhead costs of serving our customers. WeWhile we will continue our efforts to control operating expenses to help safeguard against the ongoing pressure of margin compression.compression, in periods subsequent to the Association's core processing system implementation, management anticipates information technology and related expenses to increase.

Allowance for Credit Losses. The allowance for credit losses is the amount estimated by management as necessaryadequate 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, 2024,2025, the allowance for credit losses was $97.8$104.4 million, orwhich 0.64%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, 2024,2025, would result in a $9.8$10.4 million charge or release, respectively, to income before income taxes.

Management performs a quarterly evaluation of the adequacy of the allowance for credit losses. We consider a variety of factors in establishing this estimate including, but not limited to, current economic conditions, delinquency statistics, geographic concentrations, economic forecasts and how they correlate to management's view of the future, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates by management that may be susceptible to significant change based on changes in economic and real estate market conditions. 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. Business in Part I. for further discussion.

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

Total assets increased $172.8$365.5 million, or 1.0%,2.14%, to $17.46 billion at September 30, 2025, from $17.09 billion at September 30, 2024, from $16.92 billion at September 30, 2023.2024. This increase was mainly due to new loan originations exceeding the totalresult of loanan salesincrease andin principalmortgage repayments.loans held for investment.

Investment securities, all of which are classified as available for sale, increaseddecreased $18.0$5.6 million, or 3.5%,1.06%, to $520.7 million at September 30, 2025, from $526.3 million at September 30, 2024,2024. fromThe $508.3decrease millionwas atdue September 30, 2023. Investment securities increased as $141.7 million in principal repayments were exceeded byto the combined effect of $133.5cash millionflow infrom purchasessecurity repayments and amaturities $26.1exceeding million decrease in net losses that occurredpurchases during the year ended September 30, 2024.2025. There were no sales of investment securities during the year ended September 30, 2024.2025.

LoansMortgage loans held for sale increased $14.5$39.9 million, or 439.4%,224.16%, to $57.7 million at September 30, 2025, from $17.8 million at September 30, 2024 from $3.3 million at September 30, 20232024, due to an increase in both loans committed to forward sales and loans identified for future sale.

Borrowers'Loans advancesheld for insuranceinvestment, net of deferred loan fees and taxesallowance decreasedfor bycredit $10.8losses, increased $341.3 million, or 9%,2.23%, to $113.6$15.66 millionbillion at September 30, 2024,2025, from $124.4$15.32 millionbillion at September 30, 2023.2024. ThisDuring changethe isyear consistentended withSeptember decreases30, in2025, ourthe home equity loans and lines of credit portfolio increased $927.0 million and residential core mortgage loanloans portfolio.decreased $581.3 million.

Accrued expenses and other liabilities decreasedincreased by $15.1$3.9 million to $101.7 million at September 30, 2025, from $97.8 million at September 30, 2024 from $112.9 million at September 30, 2023.2024. The decreaseincrease iswas primarily due to a $13.2$2.0 million deferredincrease taxin decrease.provision for off-balance sheet credit losses and a $1.2 million increase in accrued bonus expense.

Total shareholders’ equity decreasedincreased $64.7$31.3 million, or 3.4%,1.68%, to $1.89 billion at September 30, 2025, from $1.86 billion at September 30, 2024,2024. fromThe $1.93 billion at September 30, 2023. Activityincrease reflects $79.6$91.0 million of net income in the current year, reduced by dividends of $59.0$59.7 million and a positive $7.9 million change related to a change in accounting principle.million. Other changes include aan $100.8$8.9 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.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, 2024,2025, noa total of 247,865 shares of our common stock were repurchased.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 5,191,9514,944,086 shares remaining to be repurchased at September 30, 2024.2025. As a result of a mutual member vote, Third Federal Savings and Loan Association of Cleveland,Savings, MHC, the mutual holding company that owns approximately 81%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. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities for additional details regarding the repurchase of shares of common stock and the payment of dividends.

General. Net income ofincreased $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, increased $4.3 million, compared to $75.3 million for the year ended September 30, 2023.2024. The changeincrease was primarily duedriven to lower non-interest expenses andby an increase in non-interest income, offset by a decrease in net interest income.

Interest Expense.and Dividend Income. Interest expenseand dividend income increased $127.2$29.1 million, or 39%,4.0%, to $455.6 million during the current year, compared to $328.4$763.2 million during the year ended September 30, 2023.2025, compared to $734.1 million during the year ended September 30, 2024. The increase primarilyin interest and dividend income resulted mainly from an increase in interest expenseon loans, partially offset by decreases in income earned on depositsFHLB stock and borrowedother funds.interest-bearing cash equivalents.

Interest expenseincome on CDsloans increased $126.8$42.8 million, or 88%,6.4%, to $270.2$706.5 million duringfor the year ended September 30, 2024,2025, compared to $143.4$663.7 million duringfor the year ended September 30, 2023.2024. TheThis increase was attributed primarilymainly to a 12721 basis point increase in the average rate paidyield on CDsloans to 3.61%4.57% duringfor the current year, from 2.34%4.36% duringfor the prior year. Additionally, there was a $1.37$257.3 billion, or 22%,million increase in the average balance of CDsloans to $7.49$15.46 billion fromfor $6.12the current year, compared to $15.21 billion during the prior yearyear. asThe customersincrease soughtwas higherattributed rateto productsan duringincrease ain periodloan ofproduction elevatedthat interestexceeded rates. Interest expense on savingsrepayments and checkingloan 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.sales.

Interest expense on borrowedsavings fundsdecreased increased $8.7$9.6 million, or 6%,43.3%, to $162.9$12.6 million during the year ended September 30, 2024,2025, fromcompared $154.2to $22.2 million during the year ended September 30, 2023.2024. The increasedecrease was attributed to a combination of a $128.6$276.6 million, or 3%,18.2%, decrease in the average balance of borrowedsavings fundsaccounts. In addition, there was a 44 basis point decrease in the average rate paid on savings accounts to $4.99 billion1.02% during the current year, from $5.11 billion1.46% 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. Refer to the Extending the Duration of Funding Sources section of the Overview and Comparison of Financial Condition for further discussion.year.

Non-InterestNet Interest Income. Non-interestNet interest income increased $3.3$14.2 million, or 15%,5.10%, to $24.7$292.7 million during the year ended September 30, 2024,2025, comparedfrom to $21.4 million during the year ended September 30, 2023. The increase in non-interest income was primarily due to increases in net gain on sale of loans of $2.2$278.5 million during the year ended September 30, 2024. LoansThe sold,net orincrease committedconsisted toof bea sold, during the fiscal year ended September 30, 2024, were $247.4$29.1 million comparedincrease toin loaninterest salesincome, ofoffset $77.2by a $14.9 million duringincrease thein yearinterest ended September 30, 2023.expense.

Non-Interest Expense. Non-interest expense decreased $8.8less million,than or 4%,1% to $204.3 million during the fiscal year ended September 30, 2024, compared to $213.1 million during the fiscal year ended September 30, 2023.2025. This decrease resulted primarily from a $5.0 million and $5.6$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 and marketing expenses, respectively, due to cost containment measures implemented as a result of the challenging interest rate environment.benefits.

During the quarter ended MarchJune 31,30, 2026, there have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the SEC on November 25, 2025.

Consumers, businesses, and governments alike are navigating an elevated level of economic uncertainty, as inflation remains elevated, the labor market is showing signs of weakness,elevated and markets continue to deliberate the implications of global trade policies and the conflict in the Middle East. The FRS implemented three consecutive 25 basis point rate cuts between September and the end of December 2025. ItCurrent ismarket lesssentiments likelyhave thatshifted from anticipated policy easing to the easingpossibility cycleof willrate continuehikes. inUncertainty 2026; however, uncertainty can lead toand volatility in interest rates and spreads, andcan create 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 core deposits remain stable and the majority of our deposit accounts are 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 are robust and commensurate to an institution of our size and complexity.

The Company maintains high-quality core deposits distributed primarily across our Ohio and Florida branch network in products tailored toward consumers seeking non-transactional savings. As of MarchJune 31,30, 2026, 95.8%95.6% of our $9.33$9.07 billion retail deposit base consists of accounts structured under the FDIC insured limit of $250,000. The Company has the ability to fund 100% of all uninsured deposit balances through sources described later in this Item 2 under the heading Liquidity and Capital Resources.

The Company retains ample and diverse sources of liquidity and funding, beyond deposits. At MarchJune 31,30, 2026, our combined additional borrowing capacity under the Association's blanket pledge arrangements with the FHLB of Cincinnati and the FRB Cleveland along with our ability to purchase Fed Funds through arrangements with other institutions totaled $2.47$1.85 billion. We also hold marketable securities that could be sold and converted to cash. Further details about liquidity and funding are described in the section labelled Maintaining Access to Adequate Liquidity and Diverse Funding Sources to Support our Growth of this Item 2.

Controlling Our Interest Rate Risk Exposure. Historically, our greatest risk has been our exposure to changes in market interest rates. When we hold longer-term, fixed-rate assets, funded by liabilities with shorter-term re-pricing characteristics, we are exposed to potentially adverse impacts from changing interest rates, and most notably rising interest rates. Generally, and particularly over extended periods of time that encompass full economic cycles, interest rates associated with longer-term assets, like fixed-rate mortgages, have been higher than interest rates associated with shorter-term funding sources, like deposits. 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 are rapid and substantial changes in short-term rates or there is ana extendedprolonged inverted yield curve where short-term rates exceed long-term rates. When short-term rates drop,change, our home equity line of credit portfolio, indexed to the prime rate, reprices immediately, whereas interest rates on certificate of deposit accounts and borrowings generally reprice at maturity. An inverted yield curve impacts our balance sheet even after it becomes positive because our assets, originated at historically low yields, pay down at slower rates than our sources of funding, creating the risk that a portion of our liabilities are at costs higher than the yields we earn on a portion of our assets. These economic environments may result in decreases in our net interest income and our net interest margin.

At MarchJune 31,30, 2026, the Company’s Tier 1 (leverage) capital totaled $1.88$1.89 billion, or 10.77%,10.72%, of net average assets and 17.22%16.88% of risk-weighted assets, while the Association’s Tier 1 (leverage) capital totaled $1.73$1.76 billion, or 9.94%,9.99%, of net average assets and 15.89%15.73% of risk-weighted assets. Each of these measures is in excess of the requirements in effect at MarchJune 31,30, 2026, for designation as “well capitalized” under regulatory prompt corrective action provisions. Refer to the Liquidity and Capital Resources section of this Item 2 for additional discussion regarding regulatory capital requirements.

The following table sets forth the principal balances and yields as of MarchJune 31,30, 2026, for primarily Smart Rate ARM loans segregated by the next scheduled interest rate reset date:

The following tables set forth the principal balance and interest yield as of MarchJune 31,30, 2026, for the portfolio of loans held for investment, by type of loan, structure and geographic location. Weighted average yields are based on principal balances as of MarchJune 31,30, 2026.

We actively market home equity lines of credit, which carry an adjustable rate of interest indexed to the prime rate which provides interest rate sensitivity to that portion of our assets and is a meaningful strategy to manage our interest rate risk profile. Increasing our investments in loans with variable rates of interest help to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates. 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 MarchJune 31,30, 2026, the principal balance of home equity lines of credit (including those in repayment) that are structured to reset with each prime rate adjustment totaled $4.36$4.49 billion. Our home equity lending is discussed in the Lending Activities section of this Item 2.

As a complement to our strategies to shorten the duration of our fixed rate interest-earning assets, as described above, we also seek opportunities 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"). Funding sources are discussed in more detail within this Item 2 in the sections entitled Maintaining Access to Adequate Liquidity and Diverse Funding Sources to Support our Growth and Liquidity and Capital Resources. All of our swaps are subject to collateral pledges and require specific structural features to qualify for hedge accounting treatment. Hedge accounting treatment directs that periodic mark-to-market adjustments be recorded in other comprehensive income (loss) in the equity section of the balance sheet, rather than being included in operating results of the income statement. The Association's intent is that any swap to which it may be a party will qualify for hedge accounting treatment.

Selling Fixed RateFixed-Rate Loans in the Secondary Market

During the sixnine months ended MarchJune 31,30, 2026, $204.1$260.3 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 on a servicing retained basis. Of these sold or committed loans, $142.9$196.2 million were originated as agency-compliant first mortgage loans, $36.8$37.1 million were acquired through a correspondent lending partnership, and $24.4$27.1 million were originated under Fannie Mae's Home Ready initiative. At MarchJune 31,30, 2026, loans classified as held for sale totaled $5.1$14.5 million.million, compared to $57.7 million at September 30, 2025. At MarchJune 31,30, 2026, we serviced $2.21$2.17 billion of loans we originated or acquired and later sold to investors.

Monitoring and Limiting Our Credit Risk. 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 MarchJune 31,30, 2026, 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. 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 specific reviews of all first mortgage loans that are at least 150 days past due, but not later than 180 days past due. We transfer performing home equity lines of credit subordinate to first mortgages delinquent greater than 90 days to non-accrual status. We also charge-offcharge off performing loans to collateral value and classify those loans as non-accrual within 60 days of notification of all borrowers filing Chapter 7 bankruptcy, that have not reaffirmed or been dismissed, regardless of how long the loans have been performing.

In an effort to limit our credit risk exposure and keep it consistent with the low risk appetite approved by the Board of Directors, the credit eligibility criteria is evaluated to ensure a successful homeowner has the primary source of repayment, followed by a collateral position that allows for a secondary source of repayment, if needed. Products that do not result in an effective mix of repayment ability are not offered. We believe we use stringent, conservative lending standards for underwriting to reduce our credit risk. For first mortgage loans originated during the current quarter, the average credit score was 775761 and the average LTV was 71%69% at origination. Our current delinquency levels reflect the higher credit standards to which we subject all new originations. As of MarchJune 31,30, 2026, loans originated or acquired had a balance of $15.82$16.27 billion, of which $38.3$43.5 million, or 0.24%,0.27%, 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. At MarchJune 31,30, 2026, approximately 58.7%58.8% and 16.7%16.3% of the combined total of our residential Core and construction loans were held for investment in Ohio and Florida, respectively, and approximately 21.6% and 20.8%20.2% of our home equity loans and lines of credit were secured by properties in Ohio and Florida, respectively. In an effort to moderate the concentration of our credit risk exposure in individual states, we have utilized direct mail marketing, our internet site and our customer service call center to extend our lending activities to other attractive geographic locations. 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 loans originated in the sixnine months ended MarchJune 31,30, 2026, 22.5%24.7% are secured by properties in states other than Ohio or Florida.

Maintaining Access to Adequate Liquidity and Diverse Funding Sources to Support our Growth. For most insured depositories, customer and community confidence are critical to their ability to maintain access to adequate liquidity and to conduct business in an orderly manner. We believe that a well capitalized institution is one of the most important factors in nurturing customer and community confidence. At MarchJune 31,30, 2026, 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 9.94%.9.99%. The Association's Tier 1 (leverage) capital ratio at MarchJune 31,30, 2026, included the negative impact of a $65 million cash dividend payment that the Association made to the Company, its sole shareholder, in December 2025. 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 2. We expect to continue to remain a well capitalized institution.

In managing its level of liquidity, the Company monitors available funding sources, which include attracting new deposits (including brokered deposits), borrowing from others, the conversion of assets to cash and the generation of funds through profitable operations. The Company has traditionally relied on retail deposits as its primary means in meeting its funding needs. To attract deposits, we typically offer rates that are competitive with the rates on similar products offered by other financial institutions. At MarchJune 31,30, 2026, deposits totaled $10.19$9.99 billion (including $863.7$920.5 million of brokered CDs), while borrowings totaled $5.14$5.81 billion and borrowers’ advances and servicing escrows totaled $125.7$204.4 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.

While our retail deposit customers provide our primary source of funding, we maintain many alternative funding sources. First, we pledge available real estate mortgage loans with the FHLB of Cincinnati and the FRB-Cleveland. At MarchJune 31,30, 2026, the Association had the ability to borrow a maximum of $6.69$6.78 billion from the FHLB of Cincinnati and $451.5$423.2 million from the FRB-Cleveland Discount Window. AsAt ofJune March 31,30, 2026, our capacity for additional borrowing from the FHLB of Cincinnati was $1.57$1.13 billion. Second, we have the ability to purchase overnight Fed Funds up to $455.0$445.0 million through various arrangements with other institutions. At June 30, 2026, our capacity to purchase additional Fed Funds was $295.0 million. Third, we invest in high quality marketable securities that exhibit limited market price variability and, to the extent that they are not needed as collateral for borrowings, can be sold in the institutional market and converted to cash. At MarchJune 31,30, 2026, our investment securities portfolio totaled $454.6$482.4 million. Fourth, selling loans in the secondary market is a regular source of liquidity. During the sixnine months ended MarchJune 31,30, 2026, we sold, or committed to sell $204.1$260.3 million in loans primarily to Fannie Mae. Finally, cash flows from operating activities have been a regular source of funds. During the sixnine months ended MarchJune 31,30, 2026 and 2025, cash flows from operations provided $76.4$108.9 million and $66.8$93.5 million, respectively.

Monitoring and Controlling Our Operating Expenses. We continue to focus on managing operating expenses.expenses while balancing those efforts with investments to improve technology and customer experience. Our ratio of annualized non-interest expense to average assets was 1.28%1.26% for the sixnine months ended MarchJune 31,30, 2026, and 1.16%1.19% for the sixnine months ended MarchJune 31,30, 2025. As of MarchJune 31,30, 2026, our average assets per full-time employee and our average deposits per full-time employee were $17.9$17.6 million and $10.6$10.3 million, respectively. We believe that each of these measures compares favorably with industry averages. Our relatively high average deposits (exclusive of brokered CDs) held at our branch offices ($262.8$266.4 million per branch office as of MarchJune 31,30, 2026) contributes to our expense management efforts by limiting the overhead costs of serving our customers. During the nine months ended June 30, 2026, we capitalized $7.7 million of development costs related to our conversion to a new core operating system, which reduced compensation and technology expenses recognized in the current year. Following implementation of the core operating system in July 2026, we anticipate compensation and technology expenses will increase. We will continue our efforts to control operating expenses to help offset the risk of margin compression and to support profitable growth of the business.

Home equity loans and lines of credit and home equity loans generally have higher credit risk than traditional residential mortgage loans. These loans and credit lines are usually in a second lien position and when combined with the first mortgage, result in generally higher overall loan-to-value ratios. In a stressed housing market with high delinquencies and decreasing housing prices, these higher loan-to-value ratios represent a greater risk of loss to the Company. A borrower with more equity in the property has a vested interest in keeping the loan current when compared to a borrower with little or no equity in the property. Given the higher risk inherent in home equity loans and lines of credit and our experience during periods of weak housing markets and potential uncertainty with respect to future employment levels and economic prospects, we conduct an expanded loan level evaluation of our home equity loans and lines of credit, including bridge loans used to aid borrowers in buying a new home before selling their old one, which are delinquent 90 days or more. This expanded evaluation is in addition to our traditional evaluation procedures. We have established an allowance for our unfunded commitments on this portfolio, which is recorded in other liabilities. Our home equity loans and lines of credit portfolio continues to comprise a significant portion of our gross charge-offs. At MarchJune 31,30, 2026, we had an amortized cost of $4.40$4.53 billion in home equity lines of creditcredit, of which $6.1 million, or 0.13%, and $883.1$990.9 million in home equity loans outstanding, of which $5.5$1.4 million, or 0.10%,0.15%, were delinquent 90 days or more.

The following table sets forth activity for credit losses segregated by product and geographic location for the periods indicated. The majority of our Residential Core and Home Today loan portfolios is secured by properties located in Ohio, and therefore were not segregated by state.

We continue to evaluate loans becoming delinquent for potential losses and record provisions for the estimate of those losses. We reported net recoveries in each quarter for the past seven years, primarily due to improvements in the values of properties used to secure loans that were fully or partially charged off after the 2008 collapse of the housing market. Charge-offs are recognized on loans identified as collateral-dependent and subject to individual review when the collateral value does not sufficiently support full repayment of the obligation. Recoveries are recognized on previously charged-off loans as borrowers perform their repayment obligations or as loans with improved collateral positions reach final resolution. During the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, recoveries exceeded loan charge-offs by $0.8$0.7 million and $0.7$0.9 million, respectively. During the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, gross charge-offs were $0.3$0.5 million atand both$0.2 dates.million, respectively. Delinquent loans continue to be evaluated for potential losses and provisions are recorded for the estimate of potential losses of those loans.

During the three months ended MarchJune 31,30, 2026, the total allowance for credit losses increaseddecreased to $104.9$102.0 million, from $104.1$104.9 million at DecemberMarch 31, 2025.2026. The total allowance for credit losses is comprised of the asset portion, which is applied to the loan portfolio and the liability portion, which is applied to off-balance sheet exposures, primarily related to undrawn equity exposures. During the three months ended MarchJune 31,30, 2026, the asset and liability portionsportion of the total allowance decreased to $74.9$73.5 million from $75.0$74.9 million and increasedthe liability portion of the allowance decreased to $30.0$28.5 million from $29.1$30.0 million,million. respectively.These Wedecreases recordedreflect noa net $3.5 million release of provision expense for the allowance for credit losseslosses, forconsisting theof period.a $2.1 million release related to loans and a $1.4 million release related to off-balance sheet exposures.

Because many variables are considered in determining the appropriate level of GVAs, directional changes in individual considerations do not always align with the directional change in the balance of a particular component of the GVA. TheDuring slightthe decreasethree months ended June 30, 2026, management refined the quantitative model for certain long-term fixed-rate home equity loan products, which resulted in a reduction in the allowance for credit losses appliedallocated to the home equity loan portfolio duringdespite thecontinued threegrowth monthsin endedthat Marchportfolio. 31,This 2026,reduction was primarily related to a slight decrease in mortgage loan loss dollars,also partially offset by ahigher lowergrowth-related netallowance recovery forecast for total qualitative factors and an increaserequirements in equityother loss forecasts due to growth in theseloan portfolios.

The amortized cost of the residential Core portfolio decreasedincreased 1.7%,1.9%, or $186.3$202.8 million, and its total allowance decreasedincreased 4.9%,4.7%, or $1.9$1.7 million, as of MarchJune 31,30, 2026, compared to DecemberMarch 31, 2025.2026. The amortized cost of the home equity lines of credit portfolio increased 2.8%,2.9%, or $121.4$128.8 million, and its total allowance increased 1.5%6.9% to $23.4$25.0 million, from $23.0$23.4 million at DecemberMarch 31, 2025.2026. The amortized cost of the home equity loans increased 8.3%,12.2%, or $67.4$107.9 million, and its total allowance increaseddecreased 8.4%29.3% to $17.0$12.0 million, from $15.7$17.0 million at DecemberMarch 31, 2025.2026. As we are no longer originating loans under our Home Today program, there is an expected net recovery position for this portfolio which was $1.7 million at June 30, 2026 and $2.0 million at March 31, 2026 and $2.1 million at December 31, 2025.2026. Under the CECL methodology, the life of loan concept allows for qualitative adjustments for the expected future recoveries of previously charged-off loans, which is driving the allowance balance for the Home Today loans to be negative. Refer to the "Activity in the Allowance for Credit Losses" and "Analysis of the Allowance for Credit Losses" tables in Note 4. LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for more information.

The following table provides the amortized cost and an analysis of our real estate loans held for investment disaggregated by refreshed FICO score, year of origination and portfolio at MarchJune 31,30, 2026. FICO scores are updated quarterly as available. The Company treats the FICO score information as demonstrating that underwriting guidelines reduce risk rather than as a credit quality indicator utilized in the evaluation of credit risk. Revolving loans reported at amortized cost include home equity lines of credit currently in their draw period, therefore not by year of origination. Revolving loans converted to term are home equity lines of credit that are in repayment.

The following table provides amortized cost and an analysis of our real estate loans held for investment by origination LTV, origination year and portfolio at MarchJune 31,30, 2026. Subsequent to origination, LTVs are only updated for our home equity loans and lines of credit and for collateral-dependent residential mortgage loans.

At MarchJune 31,30, 2026, the home equity loan portfolio had an unpaid principal balance of $876.4$983.7 million, including $14.0$20.7 million in bridge loans, and home equity lines of credit had an unpaid principal balance of $4.36$4.49 billion of which $56.2$57.0 million were in repayment and no longer eligible to be drawn upon.

The following table sets forth credit exposure, principal balance, percent delinquent 90 days or more, the mean CLTV percent at the time of origination and the current mean CLTV percent of home equity loans, home equity lines of credit and bridge loan portfolios as of MarchJune 31,30, 2026. Home equity lines of credit in the draw period are reported according to geographic distribution.

(3)Current Mean CLTV is based on best available first mortgage and property values as of MarchJune 31,30, 2026. Property values are estimated using HPI data published by the FHFA. Current Mean CLTV percent for home equity lines of credit in the draw period is calculated using the committed amount. Current Mean CLTV on home equity lines of credit in the repayment period is calculated using the principal balance.

The principal balance of home equity lines of credit in the draw period that have a current CLTV over 80% or unknown, based on drawn amount, is $38.5$35.0 million, or 0.9%0.8% of the total at MarchJune 31,30, 2026. In recognition of the past weakness in the housing market, we continue to conduct an expanded loan level evaluation of our home equity lines of credit which are delinquent 90 days or more.

At MarchJune 31,30, 2026, 21.7%21.2% of the home equity lending portfolio was either in a first lien position (11.4%11.1%), in a subordinate (second) lien position behind a first lien that we held (8.4%8.2%) or behind a first lien that was held by a loan that we originated, sold and now serviced for others (1.9%). At MarchJune 31,30, 2026, 11.6%12.0% of the home equity line of credit portfolio in the draw period were making only the minimum payment on the outstanding line balance. Minimum payments include both a principal and interest component.

Total loans seriously delinquent (i.e. delinquent 90 days or more) were 0.11%0.12% of total net loans at MarchJune 31,30, 2026, and 0.11% at September 30, 2025. The percentage of loans seriously delinquent in the residential Core portfoliomortgage loans to total net loans remained at 0.07% for both periods. Serious delinquencies increased in the home equity lines of credit portfolio remainedto 0.04% of total net loans at June 30, 2026, from 0.03% forat bothSeptember periods.30, 2025. Serious delinquencies in the Home Today and home equity loan portfolios as compared to total net loans are not material at MarchJune 31,30, 2026 and September 30, 2025, respectively, are immaterial due to the low level of seriously delinquent loans as compared to the total net loans at each period.2025.

Although delinquencies in most portfolios remain at or near historic lows, recent economic trends and elevated interest rates on home equity lines of credit led to an upward trend in delinquencies in that portfolio. Interest rates on home equity lines of credit are tied to the prime rate of interest which remains moderately elevated, despite the three recent FRS 25 basis point rate cuts,cuts in late 2025, resulting in higher and possibly less affordable monthly payments for some borrowers.

Comparison of Financial Condition at MarchJune 31,30, 2026 and September 30, 2025

Total assets increased $23.4$618.7 million, or less than 1%,3.54%, to $17.48$18.08 billion at MarchJune 31,30, 2026, from $17.46 billion at September 30, 2025. This change was mainly the result of increases in loans held for investment and prepaid expensescash and othercash assets, offset by a decrease in mortgage loans held for sale.equivalents.

Cash and cash equivalents increased $7.9$139.5 million, or 1.8%,32.5%, to $437.3$568.9 million at MarchJune 31,30, 2026, from $429.4 million at September 30, 2025.2025 due to normal fluctuations and liquidity management. Cash is managed to maintain the level of liquidity described later in the Liquidity and Capital Resources section.

Investment securities, all of which are classified as available for sale, decreased $66.1$38.3 million, or 12.69%,7.36%, to $454.6$482.4 million at MarchJune 31,30, 2026, from $520.7 million at September 30, 2025. The decrease was primarily due to cash flows from security repayments and maturities exceeding purchases during the six-monthnine-month period ended MarchJune 31,30, 2026, including a $50.0 million U.S. Treasury security that matured and was not replaced.2026.

Mortgage loans held for sale decreased by $52.6$43.2 million, or 91.2%,74.9%, to $5.1$14.5 million at MarchJune 31,30, 2026, from $57.7 million at September 30, 2025, due to lower volumes of loans designated for sale and a decreasereduction in both loans committed tounder forward salessale and loans identified for future sale.agreements.

Loans held for investment, net of deferred loan fees and allowance for credit losses, increased $79.0$518.3 million, or 0.5%,3.3%, to $15.74$16.18 billion at MarchJune 31,30, 2026, from $15.66 billion at September 30, 2025. During the sixnine months ended MarchJune 31,30, 2026, the home equity loans and lines of credit portfolio increased $424.4$660.5 million and residential core mortgage loans decreased $339.8$138.4 million.

The changes in loans held for investment were affected by the volume of loans originated, acquired and sold. During the sixnine months ended MarchJune 31,30, 2026, total first mortgage loan originations and acquisitions were $567.1$1.18 millionbillion compared to $376.0$760.2 million for the sixnine months ended MarchJune 31,30, 2025. Of total residential mortgage loans originated and acquired during the current period, $455.7$988.7 million (80.4%83.5%) were purchase mortgage transactions and $71.4$133.5 million (12.6%11.3%) were adjustable rateadjustable-rate loans. Commitments originated for home equity loans and lines of credit were $1.10$1.70 billion for the six-monthnine-month period ended MarchJune 31,30, 2026, compared to $1.20$1.87 billion for the six-monthnine-month period ended MarchJune 31,30, 2025. Refer to Note 4. LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for additional information.

Federal Home Loan Bank stock increased $9.0$32.7 million, or 3.82%13.89% to $244.4$268.1 million at MarchJune 31,30, 2026, from $235.4 million at September 30, 2025. FHLB stock ownership requirementsrequirements, established by the FHLB, dictate the minimum amount of stock owned at any given time.

Premises, equipment and software, netnet, increased $3.4$5.6 million, or 8.50%14.00% to $43.4$45.6 million at MarchJune 31,30, 2026 from $40.0 million at September 30, 2025, due to increased software acquisitions.

Other assets,assets includingdecreased prepaid expenses, increased $41.2$1.5 million, or 36.9%,1.3%, to $152.9$110.2 million at MarchJune 31,30, 2026, from $111.7 million at September 30, 2025. The increasedecrease was primarily the result of aan $47.9$8.9 million increasedecrease in margin requirement on swap contracts after an investment security that had been posted as collateral matured during the sixdeferred monthstax ended March 31, 2026,asset, partially offset by a $3.5$7.4 million decreaseincrease in deferredprepaid income tax assetsexpenses and aother $4.0 million decrease in interest receivable on swap contracts.assets.

Deposits decreased $259.6$454.6 million, or 2.5%,4.4%, to $10.19$9.99 billion at MarchJune 31,30, 2026, from $10.45 billion at September 30, 2025. The decrease in deposits included a $965.2$1.19 millionbillion decrease in the CD portfolio and a $19.4$29.7 million decrease in money market accounts, partially offset by a $711.2$752.0 million increase in savings accounts, and aan $8.7$4.8 million increase in checking accounts. The maturity of CDs that convert to tiered-interest savings accounts at maturity primarily led to the movement between the CD and savings account portfolios between the periods compared. In addition, CD balances declined as a result of the competitive deposit pricing environment and the Company's strategic focus on managing funding costs at the risk of increasing customer attrition. At MarchJune 31,30, 2026, brokered CDs totaled $863.7$920.5 million and included $550.0$600.0 million of three-month certificates of deposit accounts aligned with pay-fixed interest rate swap contracts. Based on FDIC insurance limits by ownership structure, uninsured deposits were $391.2$398.5 million and $387.3 million at MarchJune 31,30, 2026 and September 30, 2025, respectively.

Borrowed funds increased $272.2$940.7 million, or 5.59%,19.32%, to $5.14$5.81 billion at MarchJune 31,30, 2026, from $4.87 billion at September 30, 2025. The total balance of borrowed funds at MarchJune 31,30, 2026, consisted of $1.53$1.25 billion of long-term advances with a weighted average maturity of approximately 1.5 years, $2.98$3.05 billion of one- to three-month advances, aligned with interest rate swap contracts with a remaining weighted average effective maturity of approximately 2.82.6 yearsyears, and $624.0 million in overnight borrowings,borrowings of $1.34 billion, all from the FHLB.FHLB, and $150 million of federal funds purchased.

Borrowers' advances for insurance and taxes decreasedincreased $16.7$46.6 million to $96.5$159.7 million at MarchJune 31,30, 2026, from $113.2 million at September 30, 2025. This change primarily reflects the cyclical nature of real estate tax payments that have been collected from borrowers and are in the process of being remitted to various taxing agencies.

Total shareholders’ equity increased $28.5$63.5 million, or 1.5%,3.4%, to $1.92$1.96 billion at MarchJune 31,30, 2026, from $1.89 billion at September 30, 2025. The increase reflects $45.5$76.1 million of net income, reduced by dividends of $30.1$45.2 million. Other changes include a $12.4$29.8 million increase in accumulated other comprehensive income, primarily related to a net increase in unrealized gains on swap contracts, a positive net adjustment of $4.7$7.8 million related to stock compensation and employee stock ownership plans and $4.0$5.0 million of stock repurchases. During the sixnine months ended MarchJune 31,30, 2026, a total of 288,196355,241 shares of our common stock were repurchased at an average cost of 13.8614.07 per share. The Company's eighth stock repurchase program allows for a total of 10,000,000 shares to be repurchased, with 4,655,8904,588,845 shares remaining to be repurchased at MarchJune 31,30, 2026. As a result of a mutual member vote, Third Federal Savings, MHC, the mutual holding company that owns approximately 81.0% of the outstanding stock of the Company, was able to waive the receipt of its share of the dividend paid. Refer to Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for additional details regarding the repurchase of shares of common stock and the dividend waiver.

Comparison of Operating Results for the Three Months Ended MarchJune 31,30, 2026 and 2025

General. Net income increased $2.2$9.0 million, or 10.5%,41.9%, to $23.2$30.5 million for the quarter ended MarchJune 31,30, 2026, from $21.0$21.5 million for the quarter ended MarchJune 31,30, 2025. The increase in net income was primarily attributable to an increase in net interest income,income and a release of provision for credit losses, partially offset by an increase in non-interest expense.

Interest and Dividend Income. Interest and dividend income increased $9.5$10.7 million, or 5.1%,5.6%, to $195.5$202.1 million during the current quarter, compared to $186.0$191.4 million during the same quarter of the prior year. The increase in interest and dividend income was primarily the result of an increase in interest income on loans, offset by decreases in income earned on other interest earning assetsassets, mortgage-backed securities available for sale and FHLB stock.

Interest income on loans increased $12.0$12.5 million, or 7.0%, to $183.5$190.0 million during the current quarter, compared to $171.5$177.5 million for the same quarter of the prior year. This change was primarily attributed to ana 1816 basis point increase in the average yield on loans for the quarter ended MarchJune 31,30, 2026, to 4.65%,4.75%, compared to 4.47%4.59% for the same quarter of the prior year. It was also attributed to a 2.9%,3.5%, or $449.1$541.9 million, increase in the average balance of loans to $15.80$16.02 billion for the quarter ended MarchJune 31,30, 2026, compared to $15.35$15.48 billion during the same quarter of the prior year, as new loan production exceeded principal repayments and loan sales.

Interest Expense. Interest expense increased $3.8$4.3 million, or 3.3%,3.7%, to $117.7$120.7 million during the current quarter, compared to $113.9$116.4 million for the quarter ended MarchJune 31,30, 2025. The increase was mainly due to higher interest expense on savings and borrowed funds, partially offset by lower interest expense on certificates of deposit.

Interest expense on CDs, net of related interest rate swap contracts, decreased $6.1$9.5 million, or 8.4%,13.0%, to $66.5$63.8 million during the current quarter, compared to $72.6$73.3 million for the quarter ended MarchJune 31,30, 2025. The decrease was primarily attributed to a $541.9$889.8 million, or 6.5%,10.7%, decrease in the average balance of CDs to $7.75$7.42 billion during the current quarter, from $8.29$8.31 billion during the same quarter of the prior year, as well as a 79 basis point decrease in the average rate paid on CDs, to 3.43%3.44% for the current quarter, from 3.50%3.53% for the same quarter of the prior year.