TFS Financial CORP

Previous wording

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 40 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.

Current wording

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 42 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.

Previous wording

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. 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; (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.

Current wording

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. The U.S. 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 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 are robust and commensurate to an institution of our size and complexity.

Previous wording

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

Current wording

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 three years. 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.

Previous wording

At September 30, 2024, the Company’s Tier 1 (leverage) capital totaled $1.86 billion, or 10.89%, of net average assets and 18.50% of risk-weighted assets, while the Association’s Tier 1 (leverage) capital totaled $1.72 billion, or 10.11%, of net average assets and 17.17% of risk-weighted assets. Each of these measures is in excess of the requirements in effect for the Association at September 30, 2024 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. Refer to the Liquidity and Capital Resources section of this Item 7 for additional discussion regarding regulatory capital requirements.

Current wording

At September 30, 2025, the Company’s Tier 1 (leverage) capital totaled $1.87 billion, or 10.76%, of net average assets and 17.60% of risk-weighted assets, while the Association’s Tier 1 (leverage) capital totaled $1.76 billion, or 10.11%, of net average assets and 16.53% of risk-weighted assets. 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 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.

Previous wording

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 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. Our home equity lending is discussed in the preceding Lending Activities section of Item 1. Businessin Part I. THIRD FEDERAL SAVINGS AND LOAN ASSOCIATION OF CLEVELAND.

Current wording

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

Previous wording

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. 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.

Current wording

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"). 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.

Previous wording

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 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, 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. BORROWED FUNDSand 17. DERIVATIVE INSTRUMENTS of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

Current wording

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. 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. BORROWED FUNDSand 17. DERIVATIVE INSTRUMENTS of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

Previous wording

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. 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.

Current wording

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 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. 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.

Previous wording

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". At September 30, 2024, loans classified as held for sale totaled $17.8 million. At September 30, 2024, we serviced $1.97 billion of loans we originated and later sold to investors.

Current wording

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. At September 30, 2025, we serviced $2.13 billion of loans we originated and later sold to investors.

Previous wording

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.

Current wording

We continue to consider liquidity and balance sheet management, as well as secondary market pricing, in evaluating the opportunity to sell loans. Loan sales are discussed in more detail within the Liquidity and Capital Resources section of this Item 7.

Previous wording

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 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. 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.

Current wording

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 estimated credit losses. 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. 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.

Previous wording

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 purchased during the current fiscal year, the average credit score was 778, and the average LTV was 70% 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.

Current wording

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

Previous wording

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 September 30, 2024, approximately 58.1% and 17.3% of the combined total of our residential Core and construction loans held for investment and approximately 23.6% and 22.5% 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 25 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.

Current wording

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

Previous wording

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, 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%. We expect to continue to remain a well capitalized institution.

Current wording

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, 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.

Previous wording

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

Current wording

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, 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.

Previous wording

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, the Association had the ability to borrow a maximum of $6.86 billion from the FHLB of Cincinnati and $633.1 million from the FRB-Cleveland Discount Window. As of September 30, 2024, 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 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, our investment securities portfolio totaled $526.3 million. 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. Finally, cash flows from operating activities have been a regular source of funds.

Current wording

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, 2025, the Association had the ability to borrow a maximum of $6.94 billion from the FHLB of Cincinnati and $505.4 million from the FRB-Cleveland Discount Window. As of September 30, 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 $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, 2025, our investment securities portfolio totaled $520.7 million. Fourth, selling loans in the secondary market is a regular source of liquidity. 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. During the fiscal years ended September 30, 2025 and 2024, cash flows from operations provided $82.4 million and $88.6 million, respectively.

Previous wording

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 offset the pressure of margin compression resulting from the extended inverted yield curve. Our ratio of non-interest expense to average assets was 1.20% for the fiscal year ended September 30, 2024, and 1.31% for the fiscal year ended September 30, 2023. As of September 30, 2024, our average assets per full-time associate and our average deposits per full-time associate were $18.7 million and $11.1 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 million per branch office as of September 30, 2024) 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.

Current wording

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. As of September 30, 2025, our average assets per full-time associate and our average deposits per full-time associate were $18.3 million and $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 ($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. 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.

Previous wording

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 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.

Current wording

Allowance for Credit Losses. 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, 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.

Previous wording

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 LOSSESof the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS and the Lending Activities section of Item 1. Business in Part I. for further discussion.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Cash and cash equivalents decreased $3.0 million, or 0.6%, to $463.7 million at September 30, 2024, from $466.7 million at September 30, 2023. Cash is managed to maintain the level of liquidity described later in the Liquidity and Capital Resources section of the Overview.

Current wording

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.

Previous wording

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. There were no sales of investment securities during the year ended September 30, 2024.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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. Refer to Note 5. LOANS AND ALLOWANCE FOR CREDIT LOSSESof the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for additional discussion.

Current wording

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 LOSSESof the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for additional discussion.

Previous wording

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

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Deposits increased $745.3 million, or 7.9%, to $10.20 billion at September 30, 2024, from $9.45 billion at September 30, 2023. 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.

Current wording

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 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.

Previous wording

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. 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 Riskfor additional discussion regarding short-term borrowings and interest-rate swaps.

Current wording

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 for additional discussion regarding short-term borrowings and interest-rate swaps.

Previous wording

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. The Company's eighth stock repurchase program allows for a total of 10,000,000 shares to be repurchased, with 5,191,951 shares remaining to be repurchased at September 30, 2024. 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. Refer to Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securitiesfor additional details regarding the repurchase of shares of common stock and the payment of dividends.

Current wording

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, 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. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securitiesfor additional details regarding the repurchase of shares of common stock and the payment of dividends.

Previous wording

General. 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.

Current wording

General. 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.

Previous wording

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 income on loans increased $98.1 million, or 17%, to $663.7 million for the year ended September 30, 2024, compared to $565.6 million for the year ended September 30, 2023. 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.

Current wording

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 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

Interest Expense. 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.

Previous wording

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

Current wording

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 Conditionfor further discussion.

Previous wording

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.

Current wording

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.

Previous wording

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. For the fiscal year ended September 30, 2024, we recorded net recoveries of $4.7 million, as compared to net recoveries of $6.4 million for the year ended September 30, 2023. 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. LOANS AND ALLOWANCE FOR CREDIT LOSSESof the NOTES TO CONSOLIDATED FINANCIAL STATEMENTSfor further discussion.

Current wording

Provision (Release) for Credit Losses. 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. 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. Refer to the Lending Activities section of the Overview and Note 5. LOANS AND ALLOWANCE FOR CREDIT LOSSESof the NOTES TO CONSOLIDATED FINANCIAL STATEMENTSfor further discussion.

Previous wording

Non-Interest Income. Non-interest income increased $3.3 million, or 15%, to $24.7 million during the year ended September 30, 2024, compared 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 million during the year ended September 30, 2024. Loans sold, or committed to be sold, during the fiscal year ended September 30, 2024, were $247.4 million compared to loan sales of $77.2 million during the year ended September 30, 2023.

Current wording

Non-Interest Income. 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 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.

Previous wording

Income Tax Expense. The provision for income taxes was $20.7 million during the year ended September 30, 2024, compared to $18.1 million during the year ended September 30, 2023. The provision for the current year included $18.8 million of federal income tax provision and $1.9 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.

Current wording

Income Tax Expense. The provision for income taxes was $23.8 million during the year ended September 30, 2025, compared to $20.7 million during the year ended September 30, 2024. 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 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.

Previous wording

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

Current wording

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.

Previous wording

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by interest rates, economic conditions and competition. 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, 2024, the liquidity ratio averaged 5.95% for the Association. We believe that we had sufficient sources of liquidity to satisfy our short- and long-term liquidity needs as of September 30, 2024.

Current wording

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by interest rates, economic conditions and competition. 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 interest-earning assets). For the year ended September 30, 2025, the liquidity ratio averaged 5.47% for the Association. We believe that we had sufficient sources of liquidity to satisfy our short- and long-term liquidity needs as of September 30, 2025.