Capital Ratios and Requirements - The company's Common Equity Tier 1 Capital ratio is 17.35%, exceeding the regulatory requirement for being considered "Well Capitalized" [141] - The company is committed to maintaining regulatory capital in excess of levels required to be considered well capitalized [153] - The Association's Tier 1 (leverage) capital ratio was 9.81% as of December 31, 2025, indicating a well-capitalized status despite a $65 million cash dividend payment [168] - The Company aims to maintain minimum capital ratios exceeding total capital to risk-weighted assets of 13.0%, tier 1 capital to net average assets of 9.0%, and tier 1 capital to risk-weighted assets of 11.0% [258] - As of December 31, 2025, the Company reported total capital to risk-weighted assets of $1,978,291, representing a ratio of 18.31% [260] Loan and Mortgage Activity - First mortgage loan originations for the three months ended December 31, 2025, totaled $315.39 million, a 78.6% increase from $176.49 million in the same period of 2024 [154] - The balance of first mortgage loans held for investment as of December 31, 2025, was $10.68 billion, down from $10.84 billion as of September 30, 2025 [154] - The average credit score for first mortgage loans originated during the current quarter was 772, with an average loan-to-value (LTV) ratio of 71% [166] - As of December 31, 2025, loans originated or acquired had a balance of $15.83 billion, with only $36.8 million, or 0.23%, classified as delinquent [166] - The total residential core loans reached $10.68 billion, with a significant portion being in the <80% loan-to-value (LTV) category, totaling $5.45 billion [194] Interest Rate Management - The company maintains a multi-disciplined risk management program that includes stress testing and scenario analysis for interest rate risk, credit risk, market risk, and liquidity risk [144] - The company utilizes interest rate swaps to convert short-term FHLB advances and brokered certificates of deposit into long-term, fixed-rate borrowings [153] - The company employs interest rate swaps to extend the duration of its funding sources, aiming to manage interest rate risk effectively [160] - The interest rate spread improved to 1.47% for the quarter ended December 31, 2025, compared to 1.34% for the same quarter in 2024 [225] - In the event of a 200 basis point increase in interest rates, the Company would experience a 19.98% decrease in estimated economic value of equity (EVE) to $1,279,286 [272] Credit Losses and Delinquencies - The allowance for credit losses on loans increased to $74.98 million by the end of the period, with total charge-offs amounting to $448,000 [180] - The total allowance for credit losses decreased to $104.1 million from $104.4 million at the end of the previous quarter, with a net release of $1.0 million for the period [183] - The allowance for credit losses on loans to non-accrual loans was 192.39% at the end of the period, indicating strong coverage [180] - The total amount of loans delinquent for 90 days or more was $17.32 million, representing 0.11% of total net loans [206] - Delinquencies in the home equity lines of credit portfolio have shown an upward trend due to elevated interest rates tied to the prime rate [207] Financial Performance - Net income decreased by $0.1 million, or 0.4%, to $22.3 million for the quarter ended December 31, 2025, from $22.4 million for the same quarter in 2024 [227] - Total shareholders' equity increased by $7.0 million, or less than 1%, to $1.90 billion at December 31, 2025, from $1.89 billion at September 30, 2025 [223] - Interest and dividend income increased by $11.0 million, or 5.9%, to $197.8 million compared to $186.8 million in the same quarter last year [229] - Non-interest income rose by $1.5 million, or 23.1%, to $8.0 million, primarily due to increases in loan fees and net gains on loan sales [239] - Non-interest expense increased by $8.3 million, or 17.3%, to $56.2 million, mainly due to higher marketing expenses and salaries [240] Asset Management - Total assets increased by $42.4 million, or less than 1%, to $17.50 billion at December 31, 2025, from $17.46 billion at September 30, 2025 [212] - Cash and cash equivalents rose by $27.3 million, or 6.4%, to $456.7 million at December 31, 2025, compared to $429.4 million at September 30, 2025 [213] - Loans held for investment increased by $78.4 million, or 0.5%, to $15.74 billion at December 31, 2025, from $15.66 billion at September 30, 2025 [216] - The total home equity lines of credit increased to $4.239 billion as of December 31, 2025, from $4.063 billion at September 30, 2025 [189] - The total home equity loans increased to $809.4 million as of December 31, 2025, compared to $749.5 million at September 30, 2025 [189]

Exhibit 99.1 TFS Financial Corporation Announces First Quarter Fiscal Year 2026 Results (Cleveland, OH - January 29, 2026) - TFS Financial Corporation (NASDAQ: TFSL) (the "Company"), the holding company for Third Federal Savings and Loan Association of Cleveland (the "Association"), today announced results for the quarter ended December 31, 2025. "We have had a positive start to our fiscal year as we quickly adapted to three recent Fed rate cuts," said Chairman and CEO Marc A. Stefanski. "Our net interest i ...

TFS Financial Corporation ® Overview For the quarter ended December 31, 2025 TFSL Shareholder Ownership | | | % of | | --- | --- | --- | | | # of shares | Ownership | | As of Dec 31, 2025 | | | | Owned by Third Federal MHC | 227,119,132 | 80.93% | | Owned by Minority Shareholders | 53,505,667 | 19.07% | | Total shares outstanding | 280,624,799 | 100.00% | | As of April 20, 2007 Minority Offering | | | | Owned by Third Federal MHC | 227,119,132 | 68.30% | | Owned by Minority Shareholders | 105,199,618 | 31.7 ...

Loan Portfolio and Performance - As of September 30, 2025, the total loan portfolio amounted to $15.67 billion, an increase from $15.34 billion in 2024, representing a growth of 2.2%[39] - Fixed-rate and adjustable-rate first mortgage residential loans totaled $10.84 billion, accounting for 69.1% of the loan portfolio[36] - Home equity lines of credit reached $4.06 billion, representing 25.9% of the loan portfolio, up from 21.7% in 2024[39] - Home equity loans increased to $749.5 million, which is 4.8% of the loan portfolio, compared to 3.6% in 2024[39] - The adjustable-rate first mortgage residential loans totaled $3.94 billion, making up 25.2% of the loan portfolio[36] - Total net real estate loans amounted to $15,729,403 thousand as of September 30, 2025, with a significant increase from previous years[45] - The Company reported $10,803,813 thousand in total loans receivable, with $4,062,798 thousand in home equity lines of credit[48] - The delinquency rate for loans originated under the Home Today program was 4.45% for loans 30 days or more past due, compared to 0.18% for Core loans[53] - Total loans seriously delinquent (90 days or more) were 0.11% of total net loans as of September 30, 2025, compared to 0.09% as of September 30, 2024[77] - The percentage of serious delinquencies in the residential Core portfolio increased from 0.06% to 0.07% year over year[77] - Total non-accrual loans increased to $38.706 million in 2025 from $33.610 million in 2024, representing 0.25% of total loans[81] - Total non-performing assets rose to $40.627 million in 2025 from $33.784 million in 2024, accounting for 0.23% of total assets[81] Credit Losses and Allowances - The allowance for credit losses on loans was $74.24 million, slightly increased from $70.00 million in 2024[39] - The allowance for credit losses is based on a life of loan methodology, with qualitative and quantitative general valuation allowances (GVAs) established[90] - The allowance for credit losses on loans increased to $74.2 million as of September 30, 2025, from $70.0 million in 2024, reflecting a net provision of $2.5 million for the year[101] - The total allowance for credit losses increased to $104.4 million as of September 30, 2025, from $97.8 million in 2024[101] - The allowance for credit losses on loans to non-accrual loans was 191.82% at the end of 2025, down from 208.28% in 2024[97] - The provision for credit losses on unfunded commitments was $2.3 million for the year ended September 30, 2025[101] - The total recoveries for the fiscal year ended September 30, 2025, were $5.2 million, compared to $6.0 million in 2024[97] Deposits and Borrowings - As of September 30, 2025, total deposits amounted to $10.45 billion, with checking accounts at $785.8 million and savings accounts at $1.17 billion[119] - The Association's certificates of deposit (CDs) totaled $8.47 billion, including $902.1 million in brokered CDs, with $5.64 billion having maturities of one year or less[119] - The average balance of checking accounts for fiscal year 2025 was $814.1 million, with a weighted average interest rate of 0.05%[121] - The average balance of savings and money market accounts was $1.24 billion, with a weighted average interest rate of 1.02%[121] - The Association's borrowings at September 30, 2025, totaled $4.87 billion, primarily from the FHLB of Cincinnati[123] - The maximum borrowing capacity with the FHLB of Cincinnati is $6.94 billion, with an additional capacity to borrow up to $505.4 million from the FRB-Cleveland[123] Capital and Regulatory Compliance - As of September 30, 2025, the Association exceeded all regulatory capital requirements to be considered "Well Capitalized" and maintained a capital conservation buffer[144] - The Association's capital standards require a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6%, and a total capital ratio of at least 8%[140] - The Association satisfied the Qualified Thrift Lender test, maintaining at least 65% of its portfolio assets in qualified thrift investments[146] - The Association's capital ratios include a Tier 1 (Leverage) Capital to Net Average Assets ratio of 10.11%, exceeding the required 5.00%[165] - As of September 30, 2025, the company is in compliance with consolidated regulatory capital requirements, including the capital conservation buffer[180] Employee and Operational Insights - The voluntary turnover rate for the twelve months ending September 30, 2025, is 3.8%, one of the lowest in the industry[188] - At September 30, 2025, 36% of current associates have been with the company for fifteen years or more, indicating strong employee retention[188] - The company employs 958 associates, with approximately 71% being women, reflecting a commitment to diversity[186] - The company actively promotes the health and wellness of associates through various programs and flexible work schedules[190] Market and Economic Factors - A significant portion of the residential mortgage loan portfolio is secured by one- to four-family real estate, increasing credit risk due to regional economic conditions[223] - Strong competition in the banking and financial services industry may limit the company's growth and profitability, as larger competitors can price loans more aggressively[230] - Cybersecurity risks have increased due to the proliferation of new technologies, which could adversely affect operations and reputation if breaches occur[232] - The company may face increased costs if required to repurchase mortgage loans sold in the secondary market due to borrower defaults or breaches of representations and warranties[225] - The soundness of other financial institutions could adversely affect the company due to interrelated financial services transactions, exposing it to credit risk[248] Strategic Initiatives - The implementation of a new core banking system is expected to be operational by July 2026, which is a major investment aimed at improving efficiency and customer experience[246] - The company focuses on residential mortgage loans, which generally provide lower interest rate returns compared to commercial loans[222] - The company may need to raise additional capital in the future, which could be challenging depending on market conditions[220] Dividend Policy and Stock Value - The ability to pay dividends is contingent on meeting regulatory capital requirements and total dividends not exceeding net income plus retained net income from the previous two years[250] - The value of the Company's common stock is significantly influenced by its ability to pay dividends, which depends on the availability of cash and earnings from the Association[251] - Third Federal Savings, MHC must notify the FRS of any proposed waiver of dividends, and a majority of eligible members must approve such waivers within twelve months prior to the declaration[252] - The FRS has non-objected to Third Federal Savings, MHC's dividend waivers in the past, but future approvals are not guaranteed, which could negatively impact stock value[252]

Core Points - TFS Financial Corporation announced a quarterly cash dividend of $0.2825 per share [1] - The dividend is payable on December 16, 2025, to stockholders of record on December 2, 2025 [1] - The company is the holding entity for Third Federal Savings and Loan Association of Cleveland [1]

Group 1 - TFS Financial (TFSL) is identified as the largest mutual holding company in the market, trading at a low valuation of 7 times run-rate earnings and 39% of book value [1] - The focus of the investment strategy is on high return on equity and high free cash flow stocks that have a proven track record of compounding earnings at rates higher than the market [1] - The investment group aims to provide 2-4 new high-quality investment ideas each month, which have historically yielded returns significantly above benchmark levels [1] Group 2 - The leader of the investment group, Thomas Lott, has over 30 years of financial experience and follows a value investing approach inspired by Graham and Dodd/Buffett [1] - The investment group offers features such as an exclusive portfolio of compounders, live chat, and direct access for inquiries [1]

Core Insights - TFS Financial (TFSL) is identified as the largest mutual holding company in the market, trading at a low valuation of 7 times run-rate earnings and 39% of book value [1] Group 1: Company Overview - TFS Financial is based in Cleveland, Ohio, and is recognized for its significant position in the banking sector as a mutual holding company [1] - The company is noted for its attractive valuation metrics, which include a low price-to-earnings ratio and a substantial discount to book value [1] Group 2: Investment Strategy - The investment approach emphasizes high return on equity and high free cash flow, focusing on companies with a proven track record of compounding earnings at rates higher than the market [1] - The investment group, Cash Flow Compounders, aims to identify high-quality equities that are undervalued, providing 2-4 new investment ideas each month [1]

Core Insights - TFS Financial Corporation reported record earnings of $91 million for the fiscal year ended September 30, 2025, attributed to a focus on improving net interest margin and an increase in first mortgage and home equity originations [1] Financial Performance - The company achieved record earnings of $91 million for the fiscal year [1] - The earnings growth was driven by a continued focus on enhancing the net interest margin [1] - There was an increase in first mortgage and home equity originations contributing to the financial performance [1]

Core Insights - Middle Coast Investing's third-quarter 2025 investor letter indicates a strong performance, with its portfolio outperforming the S&P 500 and other benchmarks year to date [1] - The US Portfolios returned 9.6% in Q3 2025, while the S&P 500 returned 7.8%, and Core U.S. portfolios returned 10% [1] - European Portfolios appreciated by 5.5% during the same period [1] Company Focus: TFS Financial Corporation - TFS Financial Corporation (NASDAQ:TFSL) is highlighted as a retail consumer banking services provider, with a one-month return of 1.04% and a 52-week gain of 9.11% [2] - As of October 6, 2025, TFS Financial Corporation's stock closed at $13.65 per share, with a market capitalization of $3.831 billion [2] - The company is noted for its 8%+ dividend yield, making it a viable bond replacement, especially in the context of recent interest rate cuts [3] Hedge Fund Interest - TFS Financial Corporation is not among the 30 most popular stocks among hedge funds, with 13 hedge fund portfolios holding the stock at the end of Q2 2025, down from 15 in the previous quarter [4] - While TFS Financial Corporation shows potential, the company is compared unfavorably to certain AI stocks that are believed to offer greater upside potential and less downside risk [4]

[Glossary of Terms](index=3&type=section&id=Glossary%20of%20Terms) This section provides a list of acronyms and defined terms used throughout the document to assist the reader in understanding the financial report [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited interim consolidated financial statements and management's discussion and analysis of the company's financial condition and operating results [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited interim consolidated financial statements of TFS Financial Corporation and its subsidiaries, including the Statements of Condition, Income, Comprehensive Income (Loss), Shareholders' Equity, and Cash Flows, along with detailed notes explaining the basis of presentation, key accounting policies, and financial instrument details [Consolidated Statements of Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Condition) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time | Metric | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | **ASSETS** | | | | Cash and cash equivalents | $452,581 | $463,718 | | Investment securities available for sale | $525,212 | $526,251 | | Loans, net | $15,595,997 | $15,322,059 | | Total Assets | $17,375,666 | $17,090,785 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Deposits | $10,341,499 | $10,195,079 | | Borrowed funds | $4,882,993 | $4,792,847 | | Total Liabilities | $15,487,660 | $15,228,161 | | Total Shareholders' Equity | $1,888,006 | $1,862,624 | | Total Liabilities and Shareholders' Equity | $17,375,666 | $17,090,785 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This statement details the company's revenues, expenses, and net income over specific reporting periods | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Total interest and dividend income | $191,407 | $184,906 | $564,127 | $545,558 | | Total interest expense | $116,413 | $115,633 | $348,756 | $335,815 | | NET INTEREST INCOME | $74,994 | $69,273 | $215,371 | $209,743 | | Provision (release) for credit losses | $1,500 | $(500) | $1,500 | $(2,500) | | Total non-interest income | $7,048 | $6,245 | $20,619 | $18,282 | | Total non-interest expense | $53,185 | $50,788 | $152,214 | $153,263 | | INCOME BEFORE INCOME TAXES | $27,357 | $25,230 | $82,276 | $77,262 | | INCOME TAX EXPENSE | $5,844 | $5,277 | $17,316 | $15,889 | | NET INCOME | $21,513 | $19,953 | $64,960 | $61,373 | | Earnings per share—basic and diluted | $0.08 | $0.07 | $0.23 | $0.22 | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents net income and other comprehensive income items, reflecting the total change in equity from non-owner sources | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Net income | $21,513 | $19,953 | $64,960 | $61,373 | | Total other comprehensive income (loss) | $(16,797) | $196 | $(397) | $(42,598) | | Total comprehensive income | $4,716 | $20,149 | $64,563 | $18,775 | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This statement tracks changes in the company's equity accounts, including net income, dividends, and other comprehensive income | Metric | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Balance at beginning of period (Sept 30, 2024) | $1,862,624 | $1,927,361 (Sept 30, 2023) | | Net Income | $64,960 | $61,373 | | Other comprehensive income (loss), net of tax | $(397) | $(42,598) | | Dividends declared to common shareholders | $(44,707) | $(44,173) | | Balance at end of period (June 30, 2025) | $1,888,006 | $1,915,064 (June 30, 2024) | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities over a period | Metric | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash provided by operating activities | $93,522 | $147,280 | | Net cash used in investing activities | $(310,366) | $(12,839) | | Net cash provided by (used in) financing activities | $205,707 | $(40,752) | | NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $(11,137) | $93,689 | | CASH AND CASH EQUIVALENTS—End of period | $452,581 | $560,435 | [Notes to Unaudited Interim Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) These notes provide essential details and explanations for the figures presented in the interim consolidated financial statements [1. Basis of Presentation](index=11&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This section outlines the company's primary business activities and the accounting principles and estimates used in preparing the financial statements - TFS Financial Corporation operates primarily in retail consumer banking, including mortgage lending and deposit gathering, with Third Federal Savings, MHC owning approximately **80.9%** of its outstanding shares as of June 30, 2025[21](index=21&type=chunk) - The financial statements adhere to U.S. GAAP, requiring management estimates and assumptions, particularly for the allowance for credit losses, deferred tax assets, and pension obligations[22](index=22&type=chunk) [2. Earnings Per Share](index=11&type=section&id=2.%20EARNINGS%20PER%20SHARE) This section details the calculation of basic and diluted earnings per share, including the shares outstanding | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Basic EPS | $0.08 | $0.07 | $0.23 | $0.22 | | Diluted EPS | $0.08 | $0.07 | $0.23 | $0.22 | | Basic Weighted Average Shares Outstanding | 278,832,875 | 278,291,376 | 278,699,423 | 278,104,352 | | Diluted Weighted Average Shares Outstanding | 279,873,274 | 279,221,360 | 279,716,745 | 279,072,087 | - Outstanding shares for EPS calculation include public shares, allocated ESOP shares, and shares held by Third Federal Savings, MHC. Diluted EPS also accounts for dilutive stock options and restricted/performance share units[26](index=26&type=chunk) [3. Investment Securities](index=12&type=section&id=3.%20INVESTMENT%20SECURITIES) This section provides a breakdown of the company's investment securities portfolio, including fair values and unrealized gains or losses | Category | Amortized Cost (June 30, 2025) | Fair Value (June 30, 2025) | Amortized Cost (Sept 30, 2024) | Fair Value (Sept 30, 2024) | | :--------------------------------- | :----------------------------- | :------------------------- | :----------------------------- | :------------------------- | | REMICs | $483,774 | $459,937 | $476,680 | $449,401 | | Fannie Mae certificates | $2,658 | $2,739 | $2,810 | $2,945 | | Freddie Mac certificates | $8,477 | $8,533 | $1,138 | $1,129 | | U.S. government and agency obligations | $54,129 | $54,003 | $72,931 | $72,776 | | Total | $549,038 | $525,212 | $553,559 | $526,251 | - The investment portfolio consists entirely of U.S. government entities and agencies securities. Unrealized losses are primarily due to increased market interest rates, not credit quality deterioration, and no allowance for credit losses was recorded as there is no intent to sell prior to recovery[35](index=35&type=chunk)[36](index=36&type=chunk) [4. Loans and Allowance for Credit Losses](index=14&type=section&id=4.%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) This section details the composition of the loan portfolio and the methodology and balances of the allowance for credit losses [Loan Portfolios](index=14&type=section&id=LOAN%20PORTFOLIOS) This section provides a detailed breakdown of the company's loan portfolio by type and geographic concentration | Loan Type | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Residential Core | $10,969,930 | $11,385,142 | | Home equity lines of credit | $3,881,132 | $3,323,381 | | Home equity loans | $695,004 | $561,926 | | Construction | $14,506 | $21,701 | | Total Loans held for investment, net | $15,595,997 | $15,322,059 | - A significant portion of the Company's lending is concentrated in Ohio (**59%** of residential/construction loans) and Florida (**17%** of residential/construction loans). Home equity loans and lines of credit are also concentrated in Ohio, Florida, and California[39](index=39&type=chunk)[40](index=40&type=chunk) - Adjustable-rate mortgage (ARM) loans, specifically 'Smart Rate' loans, constituted **$4.06 billion** at June 30, 2025, representing a key component of the residential real estate portfolio with inherent interest rate risk management features[41](index=41&type=chunk) [Delinquency and Non-Accrual](index=16&type=section&id=DELINQUENCY%20and%20NON-ACCRUAL) This section reports on the status of delinquent and non-accrual loans, including criteria for non-accrual classification and related interest income | Delinquency Status | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | 30-59 Days Past Due | $14,105 | $12,502 | | 60-89 Days Past Due | $4,363 | $5,452 | | 90 Days or More Past Due | $15,800 | $13,934 | | Total Past Due | $34,268 | $31,888 | | Total Non-accrual loans | $37,254 | $33,610 | - Loans are placed in non-accrual status when they are **90 days or more past due**, or under specific conditions like partial charge-offs, high debt-to-income modifications, or Chapter 7 bankruptcy filings[47](index=47&type=chunk) - Interest income recognized on non-accrual loans was **$757 thousand** for the nine months ended June 30, 2025, an increase from **$507 thousand** for the same period in 2024[50](index=50&type=chunk) [Allowance for Credit Losses](index=17&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES) This section details the methodology for estimating the allowance for credit losses and presents its components and changes over time - The allowance for credit losses (ACL) is estimated using loan-level regression models with forecasted economic data to determine probability of default and loss given default over a **24-month period**, reverting to historical mean loss rates thereafter[51](index=51&type=chunk) - Qualitative adjustments are made to historical loss information for current loan-specific risk characteristics and expected changes in environmental conditions, resulting in a net reduction to ACL of **$3.38 million** at June 30, 2025, compared to **$5.52 million** at September 30, 2024[52](index=52&type=chunk) | Metric | June 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Beginning Balance (Nine Months) | $70,002 | $77,315 | | Provision (Release) for Credit Losses on Loans | $(520) | $(3,148) | | Charge-offs on real estate loans | $(817) | $(1,014) | | Recoveries on real estate loans | $3,875 | $4,638 | | Ending Balance (Loans) | $72,540 | $67,529 | | Ending Balance (Unfunded Commitments) | $29,831 | $28,163 | | Total Allowance for Credit Losses | $102,371 | $95,692 | [Classified Loans](index=20&type=section&id=CLASSIFIED%20LOANS) This section categorizes loans based on internal credit risk grades and reports on the volume of home equity lines of credit converted to term loans | Loan Classification | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Pass | $15,603,677 | $15,336,689 | | Special Mention | $8,359 | $7,063 | | Substandard | $48,756 | $42,604 | | Total Real Estate Loans | $15,660,792 | $15,386,356 | - Loans are internally graded as Pass, Special Mention (potential weakness), or Substandard (inadequately protected). Loss loans are charged off when uncollectible[74](index=74&type=chunk) - Home equity lines of credit converted from revolving to term loans totaled **$11.33 million** for the nine months ended June 30, 2025, an increase from **$6.56 million** for the same period in 2024[73](index=73&type=chunk) [Modifications to Borrowers Experiencing Financial Difficulty](index=22&type=section&id=MODIFICATIONS%20TO%20BORROWERS%20EXPERIENCING%20FINANCIAL%20DIFFICULTY) This section outlines the types of loan modifications offered to financially distressed borrowers and reports on subsequent default rates | Modification Type (Nine Months Ended June 30, 2025) | Total (in thousands) | % of Total Class | | :-------------------------------------------------- | :------------------- | :--------------- | | Term Extension | $1,068 | | | Significant Payment Delay | $2,381 | | | Combination-Rate Reduction & Term Extension | $1,274 | | | Other | $336 | | | Total Modifications | $5,059 | 0.03% | - The Company offers temporary and permanent loan modifications, such as term extensions and significant payment delays, to borrowers experiencing financial difficulty, but generally does not offer principal forgiveness[76](index=76&type=chunk)[77](index=77&type=chunk) | Subsequent Default (Nine Months Ended June 30, 2025) | Total (in thousands) | | :--------------------------------------------------- | :------------------- | | Residential Core | $630 | | Residential Home Today | $46 | | Home equity lines of credit | $31 | | Total | $707 | [5. Deposits](index=26&type=section&id=5.%20DEPOSITS) This section provides a breakdown of the company's deposit portfolio by type and details the use of brokered certificates of deposit | Deposit Type | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Checking accounts | $810,629 | $829,924 | | Savings accounts | $1,101,088 | $1,127,772 | | Money market accounts | $143,339 | $193,074 | | Certificates of deposit | $8,271,633 | $8,021,123 | | Total deposits | $10,341,499 | $10,195,079 | - Brokered CDs, used as a cost-effective funding alternative, totaled **$977.5 million** at June 30, 2025, down from **$1.22 billion** at September 30, 2024. The Association, as a well-capitalized institution, can accept brokered deposits without FDIC restrictions[90](index=90&type=chunk) [6. Borrowed Funds](index=26&type=section&id=6.%20BORROWED%20FUNDS) This section outlines the company's borrowing capacity and outstanding balances from various sources, including maturity profiles | Borrowing Source | Borrowing Capacity (June 30, 2025, in thousands) | Borrowings Outstanding (June 30, 2025, in thousands) | | :--------------------------------- | :--------------------------------------- | :------------------------------------- | | FHLB | $6,633,552 | $4,865,018 | | FRB Cleveland | $530,799 | — | | Fed Funds Purchased | $455,000 | — | | Total Borrowings | $7,619,351 | $4,882,993 | | Maturity Period | Amount (June 30, 2025, in thousands) | Weighted Average Rate | | :--------------------------------- | :----------------------------------- | :-------------------- | | 12 months or less | $1,435,163 | 3.43% | | 13 to 24 months | $950,000 | 3.14% | | 25 to 36 months | $926,162 | 3.76% | | 37 to 48 months | $600,870 | 3.53% | | 49 to 60 months | $951,090 | 3.43% | | Over 60 months | $1,733 | 1.40% | | Total Advances | $4,865,018 | 3.45% | [7. Other Comprehensive Income (Loss)](index=27&type=section&id=7.%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) This section details the components of other comprehensive income (loss) and their reclassification expectations | Component | Three Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | | :--------------------------------- | :------------------------------------ | :----------------------------------- | | Net change in unrealized gain on securities available for sale | $2,918 | $2,686 | | Net change in cash flow hedges | $(19,715) | $(3,083) | | Total other comprehensive income (loss) | $(16,797) | $(397) | | Balance at end of period | $(16,005) | $(16,005) | - The Company estimates that **$17.56 million** of the amounts reported in Accumulated Other Comprehensive Income (AOCI) will be reclassified as a reduction to interest expense during the twelve months ending June 30, 2026[135](index=135&type=chunk) [8. Income Taxes](index=28&type=section&id=8.%20INCOME%20TAXES) This section reports on the company's effective income tax rate and the impact of Low Income Housing Tax Credit investments - The Company's combined federal and state effective income tax rate was **21.0%** for the nine months ended June 30, 2025, up from **20.6%** for the same period in 2024[97](index=97&type=chunk) - The impact of the Company's investments in Low Income Housing Tax Credit (LIHTC) entities on the provision for income taxes was not material during the nine months ended June 30, 2025 and 2024[99](index=99&type=chunk) [9. Defined Benefit Plan](index=29&type=section&id=9.%20DEFINED%20BENEFIT%20PLAN) This section details the net periodic benefit cost of the company's defined benefit plan and its frozen status | Component of Net Periodic Cost | Three Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | | :--------------------------------- | :------------------------------------ | :----------------------------------- | | Interest cost | $740 | $2,220 | | Expected return on plan assets | $(1,197) | $(3,590) | | Amortization of net loss | — | — | | Net periodic (benefit) cost | $(457) | $(1,370) | - The Plan was amended to freeze future benefit accruals for participants after December 31, 2011, with no required minimum employer contributions expected for the remainder of fiscal year 2025[100](index=100&type=chunk)[101](index=101&type=chunk) [10. Equity Incentive Plan](index=29&type=section&id=10.%20EQUITY%20INCENTIVE%20PLAN) This section reports on stock-based compensation expenses and the grants made under the company's equity incentive plan | Expense Type | Three Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | | :--------------------------------- | :------------------------------------ | :----------------------------------- | | Stock option expense | $28 | $84 | | Restricted stock units expense | $654 | $1,973 | | Performance share units expense | $265 | $745 | | Total stock-based compensation expense | $947 | $2,802 | - During the nine months ended June 30, 2025, the Company granted **178,700** restricted stock units, **135,300** performance share units, and **12,000** stock options under the Amended and Restated 2008 Equity Incentive Plan[102](index=102&type=chunk) [11. Commitments and Contingent Liabilities](index=29&type=section&id=11.%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) This section details the company's commitments to originate or acquire loans, unfunded commitments, and potential legal liabilities | Commitment Type | Commitment (June 30, 2025, in thousands) | Allowance (June 30, 2025, in thousands) | | :--------------------------------- | :--------------------------------------- | :-------------------------------------- | | Fixed-rate mortgage loans | $213,030 | $1,105 | | Adjustable-rate mortgage loans | $18,652 | $101 | | Home equity lines of credit | $123,772 | $1,267 | | Home equity loans | $70,989 | $1,490 | | Total Commitments to originate or acquire loans | $426,443 | $3,963 | | Unfunded Commitment Type | Commitment (June 30, 2025, in thousands) | Allowance (June 30, 2025, in thousands) | | :--------------------------------- | :--------------------------------------- | :-------------------------------------- | | Home equity lines of credit | $5,515,011 | $25,828 | | Construction loans | $6,771 | $40 | | Total Unfunded Commitments | $5,521,782 | $25,868 | - The Company is undergoing an escheat audit for Ohio, Kentucky, and Florida, with any potential loss not reasonably estimable as of June 30, 2025. Management believes other legal actions will not have a material adverse effect[109](index=109&type=chunk)[110](index=110&type=chunk) [12. Fair Value](index=30&type=section&id=12.%20FAIR%20VALUE) This section defines fair value, outlines the three-level hierarchy for inputs, and presents fair value measurements for various assets and liabilities - Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants. Assets and liabilities are grouped into a **three-level hierarchy** based on input transparency[111](index=111&type=chunk) | Asset/Liability | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Investment securities available for sale | $525,212 | $526,251 | | Mortgage loans held for sale | $29,303 | $10,713 | | Interest rate lock commitments | $597 | $395 | | Forward commitments for the sale of mortgage loans | $(160) | $(72) | - Collateral-dependent loans and real estate owned (REO) are measured at fair value on a nonrecurring basis, primarily using third-party appraisals, and are categorized as **Level 3** due to significant unobservable inputs[115](index=115&type=chunk)[116](index=116&type=chunk) [13. Derivative Instruments](index=35&type=section&id=13.%20DERIVATIVE%20INSTRUMENTS) This section describes the company's use of interest rate swaps for cash flow hedging and other derivatives not designated as hedging instruments - The Company uses interest rate swaps as cash flow hedges to manage interest rate risk on borrowings and brokered CDs, aiming to stabilize interest expense. These derivatives are settled daily, bringing their fair value to **$0**[129](index=129&type=chunk)[130](index=130&type=chunk) | Derivative Type | Notional Value (June 30, 2025, in thousands) | Notional Value (Sept 30, 2024, in thousands) | | :--------------------------------- | :--------------------------------------- | :--------------------------------------- | | Total cash flow hedges: Interest rate swaps | $3,650,000 | $3,650,000 | | Total derivatives not designated as hedging instruments | $85,737 | $28,878 | - Derivatives not designated as hedges, such as interest rate lock commitments and forward commitments for loan sales, have gains and losses recognized immediately in the Consolidated Statements of Income[131](index=131&type=chunk)[132](index=132&type=chunk) [14. Recent Accounting Pronouncements](index=38&type=section&id=14.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section discusses the adoption of new accounting standards and the assessment of their potential impact on the company's financial disclosures - The Company adopted ASU 2023-07, 'Segment Reporting,' effective for fiscal years beginning after December 15, 2023, which did not materially affect its financial statements[138](index=138&type=chunk) - ASU 2023-09, 'Income Taxes,' and ASU 2024-03, 'Expense Disaggregation Disclosures,' have been issued but not yet adopted, with the Company currently assessing their potential impact on disclosures[139](index=139&type=chunk)[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and operating results, discussing key trends, strategies, and critical accounting policies. It covers changes in assets, liabilities, equity, and income statement components for the reported periods, along with an overview of liquidity and capital resources [Forward Looking Statements](index=38&type=section&id=Forward%20Looking%20Statements) This section highlights that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements regarding goals, business plans, growth strategies, credit loss trends, and financial condition, which are subject to significant risks and uncertainties[142](index=142&type=chunk)[143](index=143&type=chunk) - Key risk factors include increased competition, inflation, interest rate changes, general economic conditions, real estate market strength, and regulatory changes[146](index=146&type=chunk) [Overview](index=39&type=section&id=Overview) This section outlines the company's business strategy, strong capital position, and key factors for managing financial risks and operations - TFS Financial Corporation's business strategy focuses on operating as a well-capitalized and profitable financial institution, emphasizing exceptional personal service and core values[145](index=145&type=chunk) - The Company's capital ratios remain strong, exceeding 'Well Capitalized' regulatory requirements, with a Common Equity Tier 1 Capital ratio of **17.75%** at June 30, 2025[149](index=149&type=chunk)[156](index=156&type=chunk) - Key success factors include controlling interest rate risk (through adjustable-rate loans, duration extension of funding, and interest rate swaps), monitoring credit risk, maintaining liquidity, and controlling operating expenses[153](index=153&type=chunk)[160](index=160&type=chunk) [Critical Accounting Policies and Estimates](index=46&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies the most critical accounting policies and estimates, emphasizing the significant judgment involved in their application - The most critical accounting policies and estimates involve significant judgments and uncertainties, with the allowance for credit losses being paramount to the Company's financial condition and results of operations[183](index=183&type=chunk) [Allowance for Credit Losses](index=46&type=section&id=Allowance%20for%20Credit%20Losses) This section explains the methodology for the allowance for credit losses and reports on its balance and key related ratios - The allowance for credit losses (ACL) is based on a life-of-loan methodology, comprising quantitative general valuation allowances (GVAs) for loans and off-balance sheet exposures, and qualitative adjustments for uncertainties[184](index=184&type=chunk) - The total allowance for credit losses increased to **$102.4 million** at June 30, 2025, from **$99.9 million** at March 31, 2025, driven by growth in home equity loan portfolios and higher mortgage loss dollars[193](index=193&type=chunk)[194](index=194&type=chunk) | Ratio | June 30, 2025 | September 30, 2024 | | :--------------------------------- | :------------ | :----------------- | | Allowance for credit losses on loans to non-accrual loans | 194.72% | 190.93% | | Allowance for credit losses on loans to total amortized cost in loans | 0.46% | 0.44% | [Lending Activities](index=51&type=section&id=Lending%20Activities) This section provides an overview of the company's loan portfolio, including composition, delinquency trends, and non-performing assets [Loan Portfolio Composition](index=51&type=section&id=Loan%20Portfolio%20Composition) This section details the breakdown of the loan portfolio by type and geographic concentration, including home equity lines of credit | Loan Type | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Residential Core | $10,969,930 | $11,385,142 | | Home equity lines of credit | $3,881,132 | $3,323,381 | | Home equity loans | $695,004 | $561,926 | | Construction loans | $14,506 | $21,701 | | Total loans receivable | $15,605,791 | $15,338,791 | - The Company's loan portfolio shows a high concentration in Ohio and Florida for residential and construction loans, and in Ohio, Florida, and California for home equity products[198](index=198&type=chunk) | Home Equity Lines of Credit in Draw Period (June 30, 2025) | Principal Balance (in thousands) | Percent Delinquent 90 Days or More | Mean CLTV Percent at Origination | Current Mean CLTV Percent | | :--------------------------------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | :------------------------ | | Ohio | $835,783 | 0.10% | 60% | 42% | | Florida | $826,838 | 0.12% | 56% | 45% | | California | $648,651 | 0.09% | 59% | 50% | | Other | $1,511,486 | 0.10% | 63% | 51% | | Total | $3,822,758 | 0.10% | 59% | 47% | [Delinquent Loans](index=55&type=section&id=Delinquent%20Loans) This section reports on the trends in delinquent loans, particularly those 90 days or more past due, and attributes increases to economic factors | Delinquency Status | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Total 30-89 Days Delinquent | $18,468 | $17,954 | | Total 90 Days or More Delinquent | $15,800 | $13,934 | | Total Delinquent | $34,268 | $31,888 | - Total loans seriously delinquent (**90 days or more**) were **0.10%** of total net loans at June 30, 2025, slightly up from **0.09%** at September 30, 2024[214](index=214&type=chunk) - An upward trend in delinquencies in the home equity lines of credit portfolio is noted, attributed to recent economic trends and elevated interest rates tied to the prime rate, leading to higher monthly payments for some borrowers[217](index=217&type=chunk) [Non-Performing Assets](index=57&type=section&id=Non-Performing%20Assets) This section presents the company's non-performing assets, including non-accrual loans and real estate owned, and their reconciliation | Non-Performing Asset | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Total non-accrual loans | $37,254 | $33,610 | | Real estate owned | $1,240 | $174 | | Total non-performing assets | $38,494 | $33,784 | | Reconciliation | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :-------------------------------- | | Non-Accrual Loans | $37,254 | $33,610 | | Accruing Collateral-Dependent Loans | $11,474 | $9,064 | | Less: Loans Collectively Evaluated | $(5,317) | $(3,097) | | Total Collateral-Dependent loans | $43,411 | $39,577 | [Comparison of Financial Condition at June 30, 2025 and September 30, 2024](index=57&type=section&id=Comparison%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20and%20September%2030%2C%202024) This section analyzes changes in the company's total assets, deposits, and shareholders' equity between the two reporting periods - Total assets increased by **$284.9 million** (**1.7%**) to **$17.38 billion** at June 30, 2025, primarily due to a **$273.9 million** increase in loans held for investment, net[223](index=223&type=chunk)[226](index=226&type=chunk) - Deposits increased by **$146.4 million** (**1.4%**) to **$10.34 billion**, with a **$250.5 million** increase in certificates of deposit partially offset by decreases in other deposit types[230](index=230&type=chunk) - Total shareholders' equity increased by **$25.4 million** (**1.4%**) to **$1.89 billion**, reflecting **$65.0 million** in net income, offset by **$44.7 million** in dividends and a **$0.4 million** net decrease in AOCI[234](index=234&type=chunk) [Comparison of Operating Results for the Three Months Ended June 30, 2025 and 2024](index=59&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's net income, net interest income, and provision for credit losses for the three-month periods - Net income increased by **$1.5 million** (**7.5%**) to **$21.5 million**, driven by higher net interest income and non-interest income, partially offset by increased non-interest expense and provision for credit losses[239](index=239&type=chunk) - Net interest income rose by **$5.7 million** to **$75.0 million**, primarily due to a **14 basis point** increase in the yield on interest-earning assets to **4.61%**, while the net interest margin also increased by **14 basis points** to **1.81%**[246](index=246&type=chunk)[248](index=248&type=chunk) - A provision for credit losses of **$1.5 million** was recorded, compared to a release of **$0.5 million** in the prior year, mainly due to growth in equity loan and line of credit portfolios[249](index=249&type=chunk) [Comparison of Operating Results for the Nine Months Ended June 30, 2025 and 2024](index=63&type=section&id=Comparison%20of%20Operating%20Results%20for%20the%20Nine%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's net income, net interest income, and non-interest income for the nine-month periods - Net income increased by **$3.6 million** to **$65.0 million**, primarily from higher net interest income and non-interest income, and lower non-interest expense, partially offset by an increased provision for credit losses[257](index=257&type=chunk) - Net interest income increased by **$5.7 million** (**2.7%**) to **$215.4 million**, with the yield on average interest-earning assets rising by **15 basis points** to **4.55%**. The net interest margin was **1.74%** for the current nine months[264](index=264&type=chunk)[265](index=265&type=chunk) - Non-interest income increased by **$2.3 million** (**12.6%**) to **$20.6 million**, mainly due to a **$1.4 million** increase in net gain on loan sales and a **$1.2 million** increase in loan fees and service charges[268](index=268&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's funding sources, liquidity management, and capital ratios, highlighting its well-capitalized status - Primary funding sources include deposit inflows, loan repayments, FHLB advances, FRB-Cleveland Discount Window borrowings, Fed Funds, brokered CDs, and sales of loans and securities[271](index=271&type=chunk)[272](index=272&type=chunk) - The Company maintains a liquidity ratio averaging **5.50%** for the three months ended June 30, 2025, and has sufficient liquidity to meet short- and long-term obligations[273](index=273&type=chunk) | Capital Ratio (Association) | Actual Ratio (June 30, 2025) | Well Capitalized Level | | :--------------------------------- | :--------------------------- | :--------------------- | | Total Capital to Risk-Weighted Assets | 17.37% | 10.00% | | Tier 1 (Leverage) Capital to Net Average Assets | 10.10% | 5.00% | | Tier 1 Capital to Risk-Weighted Assets | 16.51% | 8.00% | | Common Equity Tier 1 Capital to Risk-Weighted Assets | 16.51% | 6.50% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the Company's management of market risk, primarily interest rate risk, through various strategies and analytical models like Economic Value of Equity (EVE) and Net Interest Income (NII) sensitivity analysis. It outlines the methodologies, assumptions, and estimated impacts of hypothetical interest rate changes on the Company's financial position [General](index=68&type=section&id=General) This section identifies interest rate risk as the company's most significant market risk, managed by the Asset/Liability Management Committee - The Company's most significant market risk is interest rate risk, managed by the Asset/Liability Management Committee and overseen by the Board of Directors, with established risk parameter limits[290](index=290&type=chunk) [Economic Value of Equity](index=68&type=section&id=Economic%20Value%20of%20Equity) This section explains the use of customized modeling software to estimate changes in Economic Value of Equity (EVE) under various interest rate scenarios - The Company uses customized modeling software to estimate changes in the Economic Value of Equity (EVE) under various hypothetical market interest rate changes, using a discounted cash flow and option-based pricing approach[291](index=291&type=chunk) [Net Interest Income](index=68&type=section&id=Net%20Interest%20Income) This section describes the simulation model used to analyze the sensitivity of Net Interest Income (NII) to instantaneous interest rate changes - The simulation model also analyzes the sensitivity of Net Interest Income (NII) to interest rate changes for prospective **12 and 24-month periods**, assuming instantaneous adjustments to market interest rates[293](index=293&type=chunk) [Other Considerations](index=69&type=section&id=Other%20Considerations) This section differentiates between EVE and NII models and presents the estimated impact of hypothetical interest rate changes on both metrics - EVE is a stochastic model providing a long-term, liquidation view of the Company, while NII is based on flat balance sheet projections for one to two years, assuming static volume and pricing[296](index=296&type=chunk) | Change in Interest Rates (basis points) | Estimated EVE (Amount, in thousands) | Estimated EVE (Percentage Change) | Estimated NII (Amount, in thousands) | Estimated NII (Percentage Change) | | :-------------------------------------- | :----------------------------------- | :-------------------------------- | :----------------------------------- | :-------------------------------- | | +200 | $1,098,262 | (25.68)% | $372,089 | 9.40% | | +100 | $1,300,981 | (11.96)% | $356,656 | 4.86% | | 0 | $1,477,771 | —% | $340,127 | —% | | -100 | $1,590,301 | 7.61% | $317,343 | (6.70)% | | -200 | $1,635,863 | 10.70% | $289,144 | (14.99)% | - At June 30, 2025, a **200 basis point** increase in interest rates would result in a **25.68%** decrease in the Company's EVE, while a **200 basis point** decrease would lead to a **10.70%** increase[304](index=304&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the most recently completed fiscal quarter [Evaluation of Disclosure Controls and Procedures](index=71&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of the reporting date - The Company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting of required information[309](index=309&type=chunk) [Changes in Internal Control over Financial Reporting](index=71&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states that no material changes occurred in internal control over financial reporting during the most recent fiscal quarter - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[310](index=310&type=chunk) [Part II — OTHER INFORMATION](index=67&type=section&id=Part%20II%20%E2%80%94%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity security sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) Management's opinion on legal actions indicates no expected material adverse effect on the Company's consolidated financial condition or results of operations - The Company and its subsidiaries are subject to various legal actions in the normal course of business, but management does not expect their resolution to have a material adverse effect on financial condition or results of operations[311](index=311&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors were identified during the quarter ended June 30, 2025 - There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024[312](index=312&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock repurchase activity and the mutual holding company's dividend waiver approval | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------------------- | :------------------------------- | :--------------------------- | | June 1, 2025 through June 30, 2025 | 57,500 | $12.87 | - The Company's eighth stock repurchase program, approved on October 27, 2016, authorized the repurchase of up to **10,000,000 shares**, with **5,134,451 shares** remaining to be repurchased at June 30, 2025[314](index=314&type=chunk) - Third Federal Savings, MHC, the mutual holding company and **81%** majority shareholder, approved a waiver of dividends aggregating up to **$1.13 per share** for the twelve months subsequent to July 8, 2025[315](index=315&type=chunk) [Item 3. Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company - This section is marked as 'Not applicable'[317](index=317&type=chunk) [Item 4. Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This section is marked as 'Not applicable'[317](index=317&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) This section provides information on securities trading plans of directors and executive officers [Securities Trading Plans of Directors and Executive Officers](index=73&type=section&id=Securities%20Trading%20Plans%20of%20Directors%20and%20Executive%20Officers) This section reports on the termination of Rule 10b5-1 trading plans for certain executive officers during the quarter - Two Rule 10b5-1 trading plans, for the Chief Financial Officer and Chief Synergy Officer, were terminated during the quarter ended June 30, 2025, with no new plans adopted[319](index=319&type=chunk)[320](index=320&type=chunk) [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including financial statements in Inline XBRL format and certifications - The report includes unaudited financial statements formatted in Inline XBRL, along with certifications from the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act[322](index=322&type=chunk)[324](index=324&type=chunk) [SIGNATURES](index=70&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report is signed by Marc A. Stefanski, Chairman of the Board, President and Chief Executive Officer, and Meredith S. Weil, Chief Financial Officer, on August 7, 2025[327](index=327&type=chunk)