TFS FINANCIAL CORP Management’s Report on Financial Condition and Results of Operations (Form 10-Q)

Forward-looking statements

   This report contains forward-looking statements, which can be identified by the use of such
words as estimate, project, believe, intend, anticipate, plan, seek, expect and similar
expressions. These forward-looking statements include, among other things:
            ? statements of our goals, intentions and expectations;
            ? statements regarding our business plans and prospects and 

growth and exploitation

              strategies;
            ? statements concerning trends in our provision for credit 

losses and charges

              on loans and off-balance sheet exposures;
            ? statements regarding the trends in factors affecting our 

financial situation and

              results of operations, including credit quality of our loan 

and investment

              portfolios; and
            ? estimates of our risks and future costs and benefits.

   These forward-looking statements are subject to significant risks, assumptions and
uncertainties, including, among other things, the following important factors that could affect
the actual outcome of future events:
            ? significantly increased competition among depository and 

other financier

              institutions;
            ? inflation and changes in the interest rate environment that 

reduce our interest

              margins or reduce the fair value of financial instruments;
            ? general economic conditions, either globally, nationally or 

in our market areas,

              including employment prospects, real estate values and 

worse conditions

              than expected;
            ? the strength or weakness of the real estate markets and of 

the consumer and

              commercial credit sectors and its impact on the credit 

quality of our loans and

              other assets, and changes in estimates of the allowance for 

credit losses;

            ? decreased demand for our products and services and lower 

income and earnings

              because of a recession or other events;
            ? changes in consumer spending, borrowing and savings habits;
            ? adverse changes and volatility in the securities markets, 

credit or real markets

              estate markets;
            ? our ability to manage market risk, credit risk, liquidity 

risk, reputation

              risk, and regulatory and compliance risk;
            ? our ability to access cost-effective funding;
            ? legislative or regulatory changes that adversely affect our 

business, including

              changes in regulatory costs and capital requirements and 

changes related to our

              ability to pay dividends and the ability of Third Federal 

Savings, MHC to renounce

              dividends;
            ? changes in accounting policies and practices, as may be

adopted by the bank

              regulatory agencies, the Financial Accounting Standards Board 

or the Audience

              Company Accounting Oversight Board;
            ? the adoption of implementing regulations by a number of

different regulations

              bodies, and uncertainty in the exact nature, extent and 

moment of such

              regulations and the impact they will have on us;
            ? our ability to enter new markets successfully and take

growth advantage

              opportunities, and the possible short-term dilutive effect of potential
              acquisitions or de novo branches, if any;
            ? our ability to retain key employees;
            ? future adverse developments concerning Fannie Mae or Freddie Mac;
            ? changes in monetary and fiscal policy of the U.S. Government,

including policies

              of the U.S. Treasury and the FRS and changes in the level of 

government support

              of housing finance;
            ? the continuing governmental efforts to restructure the U.S. 

financial and

              regulatory system;
            ? the ability of the U.S. Government to remain open, function 

properly and manage

              federal debt limits;
            ? changes in policy and/or assessment rates of taxing 

authorities who harm

              affect us or our customers;
            ? changes in accounting and tax estimates;
            ? changes in our organization, or compensation and benefit 

plans and changes in

              expense trends (including, but not limited to trends

affecting non-performers

              assets, charge-offs and provisions for credit losses);
            ? the inability of third-party providers to perform their

obligations to us;

            ? the effects of global or national war, conflict or acts of 

terrorism;

            ? civil unrest;
            ? cyber-attacks, computer viruses and other technological risks 

who may violate the

              security of our websites or other systems to obtain

unauthorized access to

              confidential information, destroy data or disable our

systems; and

            ? the impact of wide-spread pandemic, including COVID-19, and 

government bound

              action, on our business and the economy.
    Because of these and other uncertainties, our actual future results may be materially
different from the results indicated by any forward-looking statements. Any forward-looking
statement made by us in this report speaks only as of the date on which it is made. We
undertake no obligation to publicly update any forward-looking statements, whether as a result
of new information, future developments or otherwise, except as may be required by law. Please
see Part II Other Information Item 1A. Risk Factors for a discussion of certain risks related
to our business.


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Insight

Our business strategy is to operate as a well capitalized and profitable financial institution dedicated to providing exceptional personal service to our customers.

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 the educational programs we have established and/or support
are located. 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 shareholders, our customers, our
communities and our associates.

Management believes that the following matters are those most critical to our
success: (1) controlling our interest rate risk exposure; (2) monitoring and
limiting our credit risk; (3) maintaining access to adequate liquidity and
diverse funding sources to support our growth; and (4) monitoring and
controlling our operating expenses.

Controlling Our Interest Rate Risk Exposure. Historically, our greatest risk has
been our exposure to changes in interest rates. When we hold longer-term,
fixed-rate assets, funded by liabilities with shorter-term re-pricing
characteristics, we are exposed to potentially adverse impacts from changing
interest rates, and most notably rising interest rates. Generally, and
particularly over extended periods of time that encompass full economic cycles,
interest rates associated with longer-term assets, like fixed-rate mortgages,
have been higher than interest rates associated with shorter-term funding
sources, like deposits. This difference has been an important component of our
net interest income and is fundamental to our operations. We manage the risk of
holding longer-term, fixed-rate mortgage assets primarily by maintaining
regulatory capital in excess of levels required to be well capitalized, by
promoting adjustable-rate loans and shorter-term fixed-rate loans, by marketing
home equity lines of credit, which carry an adjustable rate of interest indexed
to the prime rate, by opportunistically extending the duration of our funding
sources and selectively selling a portion of our long-term, fixed-rate mortgage
loans in the secondary market. The decision to extend the duration of some of
our funding sources through interest rate swap contracts in the past has also
caused additional interest rate risk exposure, when market interest rates are
lower than the rates in effect at the time the swap contracts were executed. Any
rate difference is reflected in the level of cash flow hedges included in
accumulated other comprehensive loss.

Levels of Regulatory capital

At March 31, 2022, the Company's Tier 1 (leverage) capital totaled $1.81
billion, or 12.66% of net average assets and 22.24% of risk-weighted assets,
while the Association's Tier 1 (leverage) capital totaled $1.57 billion, or
10.99% of net average assets and 19.30% of risk-weighted assets. Each of these
measures was more than twice the requirements currently in effect for the
Association for designation as "well capitalized" under regulatory prompt
corrective action provisions, which set minimum levels of 5.00% of net average
assets and 8.00% of risk-weighted assets. Refer to the Liquidity and Capital
Resources section of this Item 2 for additional discussion regarding regulatory
capital requirements.

Promoting adjustable-rate loans and shorter-term fixed-rate loans

We market an adjustable-rate mortgage loan that provides us with improved
interest rate risk characteristics when compared to a 30-year, fixed-rate
mortgage loan. Our "Smart Rate" adjustable-rate mortgage offers borrowers an
interest rate lower than that of a 30-year, fixed-rate loan. The interest rate
of the Smart Rate mortgage is locked for three or five years then resets
annually. The Smart Rate mortgage contains a feature to re-lock the rate an
unlimited number of times at our then-current interest rate and fee schedule,
for another three or five years (which must be the same as the original lock
period) without having to complete a full refinance transaction. Re-lock
eligibility is subject to a satisfactory payment performance history by the
borrower (current at the time of re-lock, and no foreclosures or bankruptcies
since the Smart Rate application was taken). In addition to a satisfactory
payment history, re-lock eligibility requires that the property continues to be
the borrower's primary residence. The loan term cannot be extended in connection
with a re-lock nor can new funds be advanced. All interest rate caps and floors
remain as originated.

We also offer a ten-year, fully amortizing fixed-rate, first mortgage loan. The
ten-year, fixed-rate loan has a more desirable interest rate risk profile when
compared to loans with fixed-rate terms of 15 to 30 years and can help to more
effectively manage interest rate risk exposure, yet provides our borrowers with
the certainty of a fixed interest rate throughout the life of the obligation.

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The following tables present our production and balances of first mortgage loans broken down by original loan structure.

                                                      For the Six Months Ended March 31,          For the Six Months Ended March 31,
                                                                     2022                                        2021
                                                          Amount                Percent               Amount                Percent
                                                                                  (Dollars in thousands)
First Mortgage Loan Originations:
ARM (all Smart Rate) production                      $      448,185                25.7  %       $      676,723                32.8  %

Package production:

  Terms less than or equal to 10 years                      299,689                17.2                 366,776                17.8
  Terms greater than 10 years                               993,272                57.1               1,019,914                49.4
    Total fixed-rate production                           1,292,961                74.3               1,386,690                67.2
Total First Mortgage Loan Originations               $    1,741,146               100.0  %       $    2,063,413               100.0  %


                                                              March 31, 2022                             September 30, 2021
                                                        Amount               Percent                 Amount                  Percent
                                                                                  (Dollars in thousands)
Balance of Residential Mortgage Loans Held For
Investment:
ARM (primarily Smart Rate) Loans                   $   4,538,544                42.2  %       $        4,646,760                45.2  %

Fixed rate:

  Terms less than or equal to 10 years                 1,367,504                12.8                   1,309,407                12.7
  Terms greater than 10 years                          4,827,620                45.0                   4,322,931                42.1
    Total fixed-rate                                   6,195,124                57.8                   5,632,338                54.8
Total Residential Mortgage Loans Held For
Investment                                         $  10,733,668               100.0  %       $       10,279,098               100.0  %


The following table shows the balances at March 31, 2022 for all ARM loans separated by the next scheduled interest rate reset date.

                                       Current Balance of ARM Loans 

Scheduled for

                                                  Interest Rate Reset
During the Fiscal Years Ending
September 30,                                        (In thousands)
2022                                $                                       61,629
2023                                                                       309,221
2024                                                                       364,186
2025                                                                       738,389
2026                                                                     1,649,622
2027                                                                     1,415,497
   Total                            $                                    4,538,544


At March 31, 2022, there were no mortgage loans held for sale compared to $8.8
million at September 30, 2021, all of which were long-term, fixed-rate first
mortgage loans and all of which were held for sale to Fannie Mae.



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Loan Portfolio Return

  The following tables set forth the balance and interest yield as of March 31,
2022 for the portfolio of loans held for investment, by type of loan, structure
and geographic location.

                                                                 March 31, 2022
                                                        Balance         Percent      Yield
                                                             (Dollars in thousands)
        Total Loans:
        Fixed Rate
           Terms less than or equal to 10 years      $  1,367,504        

10.4% 2.62%

           Terms greater than 10 years                  4,827,620        

36.5% 3.43%

        Total Fixed-Rate loans                          6,195,124       

46.9% 3.25%

        ARMs                                            4,538,544       

34.3% 2.67%

        Home Equity Loans and Lines of Credit           2,375,473       

18.0% 2.73%

        Construction and Other Loans                      104,129        

0.8% 2.74%

        Total Loans Receivable                       $ 13,213,270       100.0  %     2.95  %


                                                                  March 31, 2022
                                                            Balance                 Percent      Yield
                                                              (Dollars in thousands)
  Residential Mortgage Loans
  Ohio                                                 $      5,914,598              44.8  %     3.20  %
  Florida                                                     1,986,997              15.0  %     2.91  %
  Other                                                       2,832,073              21.4  %     2.63  %
     Total Residential Mortgage Loans                        10,733,668              81.2  %     3.00  %
  Home Equity Loans and Lines of Credit
  Ohio                                                          644,421               4.9  %     2.79  %
  Florida                                                       473,009               3.6  %     2.73  %
  California                                                    381,565               2.9  %     2.72  %
  Other                                                         876,478               6.6  %     2.68  %
     Total Home Equity Loans and Lines of Credit              2,375,473              18.0  %     2.73  %
  Construction and Other Loans                                  104,129               0.8  %     2.74  %
  Total Loans Receivable                               $     13,213,270             100.0  %     2.95  %


Marketing home equity lines of credit

We actively market home equity lines of credit, which carry an adjustable rate
of interest indexed to the prime rate, that provides interest rate sensitivity
to that portion of our assets and is a meaningful strategy to manage our
interest rate risk profile. At March 31, 2022, the principal balance of home
equity lines of credit totaled $2.14 billion. Our home equity lending is
discussed in the Allowance for Credit Losses section of the Lending Activities.

Extend the duration of funding sources

As a complement to our strategies to shorten the 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 deposits, brokered
certificates of deposit, longer-term (e.g. four to six years) fixed-rate
advances from the FHLB of Cincinnati, and shorter-term (e.g. three months)
advances from the FHLB of Cincinnati, the durations of which are extended by
correlated interest rate exchange contracts. Each funding alternative is
monitored and evaluated based on its effective interest payment rate, options
exercisable by the creditor (early withdrawal, right to call, etc.), and
collateral requirements. The interest payment rate is a function of market
influences that are specific to the nuances and

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market competitiveness/breadth of each funding source. Generally, early
withdrawal options are available to our retail CD customers but not to holders
of brokered CDs; issuer call options are not provided on our advances from the
FHLB of Cincinnati; and we are not subject to early termination options with
respect to our interest rate exchange contracts. Additionally, collateral
pledges are not provided with respect to our retail CDs or our brokered CDs, but
are required for our advances from the FHLB of Cincinnati as well as for our
interest rate exchange contracts. We will continue to evaluate the structure of
our funding sources based on current needs.

During the six months ended March 31, 2022, the balance of deposits increased
$14.7 million, which included a $38.1 million decrease in the balance of
brokered CDs (which is inclusive of acquisition costs and subsequent
amortization). Additionally, during the six months ended March 31, 2022, we
increased total FHLB of Cincinnati advances $463.5 million, by adding $250.0
million of new two-to-four year advances and $590.0 million in overnight
borrowings, partially offset by a $375.0 million decrease in 90 day advances and
their related swap contracts which matured and were paid off. The balance of our
advances from the FHLB of Cincinnati at March 31, 2022 consist of both overnight
and term advances from the FHLB of Cincinnati; as well as shorter-term advances
from the FHLB of Cincinnati that were matched/correlated to interest rate
exchange contracts that extended the effective durations of those shorter-term
advances. Interest rate swaps are discussed later in Part I, Item 3.
Quantitative and Qualitative Disclosures About Market Risk.

Other interest rate risk management tools

We also manage interest rate risk by selectively selling a portion of our
long-term, fixed-rate mortgage loans in the secondary market. The sales of first
mortgage loans increased significantly during fiscal 2020 and fiscal 2021 due to
an increase in the number of fixed-rate refinances. At March 31, 2022, we
serviced $2.16 billion of loans for others. In deciding whether to sell loans to
manage interest rate risk, we also consider the level of gains to be recognized
in comparison to the impact to our net interest income. We are planning on
expanding our ability to sell certain fixed rate loans to Fannie Mae in fiscal
2022 and beyond, through the use of more traditional mortgage banking
activities, including risk-based pricing and loan-level pricing adjustments.
This concept will be tested in markets outside of Ohio and Florida, and some
additional startup and marketing costs will be incurred, but is not expected to
significantly impact our financial results in fiscal 2022. We can also manage
interest rate risk by selling non-Fannie Mae compliant mortgage loans to private
investors, although those transactions are dependent upon favorable market
conditions, including motivated private investors, and involve more complicated
negotiations and longer settlement timelines. Loan sales are discussed later in
this Part I, Item 2. under the heading Liquidity and Capital Resources, and in
Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Notwithstanding our efforts to manage interest rate risk, a rapid and
substantial increase in general market interest rates or an extended period of a
flat or inverted yield curve market, could adversely impact the level of our net
interest income, prospectively and particularly over a multi-year time horizon.

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. Continuous analysis and evaluation updates will be important as
we monitor the potential impacts of the economic environment. At March 31, 2022,
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,
which were originated predominantly to borrowers in Ohio and Florida. Our
analytic procedures and evaluations include specific reviews of all home equity
loans and lines of credit that become 90 or more days past due, as well as
specific reviews of all first mortgage loans that 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. Loans where at least one borrower has been
discharged of their obligation in Chapter 7 bankruptcy are classified as TDRs.
At March 31, 2022, $12.9 million of loans in Chapter 7 bankruptcy status with no
other modification to terms were included in total TDRs. At March 31, 2022, the
amortized cost in non-accrual status loans included $14.8 million of performing
loans in Chapter 7 bankruptcy status, of which $14.6 million were also reported
as TDRs.

In an effort to limit our credit risk exposure and improve the credit
performance of new customers, since 2009, we continually evaluate our credit
eligibility criteria and revise the design of our loan products, such as
limiting the products available for condominiums and eliminating certain product
features (such as interest-only). We use stringent, conservative lending
standards for underwriting to reduce our credit risk. For first mortgage loans
originated during the current fiscal year, the average credit score was 777, and
the average LTV was 59%. The delinquency level related to loan originations
prior to 2009, compared to originations in 2009 and after, reflects the higher
credit standards to which we have subjected all new

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originations. As of March 31, 2022, loans originated prior to 2009 had a balance
of $382.0 million, of which $10.5 million, or 2.8%, were delinquent, while loans
originated in 2009 and after had a balance of $12.82 billion, of which $12.3
million, or 0.1%, were delinquent.

One aspect of our credit risk concern relates to high concentrations of our
loans that are secured by residential real estate in specific states,
particularly Ohio and Florida, in light of the difficulties that arose in
connection with the 2008 housing crisis with respect to the real estate markets
in those two states. At March 31, 2022, approximately 55.2% and 18.5% of the
combined total of our Residential Core and construction loans held for
investment and approximately 27.1% and 19.9% 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, particularly Ohio and Florida, 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 23 other states and the District of
Columbia. As a result of that geographic expansion, the concentration ratios of
the combined total of our residential, Core and construction loans held for
investment in Ohio and Florida have trended downward from their September 30,
2010 levels when the concentrations were 79.1% in Ohio and 19.0% in Florida. Of
the total mortgage loans originated in the six months ended March 31, 2022,
24.4% are secured by properties in states other than Ohio or Florida.

Home equity loans and lines of credit generally have higher credit risk than
traditional residential mortgage loans. These loans and credit lines are usually
in a second lien position and when combined with the first mortgage, result in
generally higher overall loan-to-value ratios. In a stressed housing market with
high delinquencies and decreasing housing prices, these higher loan-to-value
ratios represent a greater risk of loss to the Company. A borrower with more
equity in the property has a vested interest in keeping the loan current when
compared to a borrower with little or no equity in the property. In light of the
past weakness in the housing market and uncertainty with respect to future
employment levels and economic prospects, we conduct an expanded loan level
evaluation of our home equity loans and lines of credit, including bridge loans
used to aid borrowers in buying a new home before selling their old one, which
are delinquent 90 days or more. This expanded evaluation is in addition to our
traditional evaluation procedures. Our home equity loan and line of credit
portfolios continue to comprise a significant portion of our gross charge-offs.
At March 31, 2022, we had an amortized cost of $2.41 billion in home equity
loans and lines of credit outstanding, of which $2.6 million, or 0.1% were
delinquent 90 days or more.

Our residential Home Today loans are another area of credit risk concern.
Through the Home Today program, the Company provided the majority of loans to
borrowers who would not otherwise qualify for the Company's loan products,
generally because of low credit scores. Because the Company applied less
stringent underwriting and credit standards to the majority of Home Today loans,
loans originated under the program have greater credit risk than its traditional
residential real estate mortgage loans in the Residential Core portfolio. Since
the vast majority of Home Today loans were originated prior to March 2009 and we
are no longer originating loans under our Home Today program, the Home Today
portfolio will continue to decline in balance, primarily due to contractual
amortization. Although the amortized cost in these loans has declined to $57.6
million at March 31, 2022, from a peak of $306.6 million at December 31, 2007,
and constitutes only 0.4% of our total "held for investment" loan portfolio
balance, they comprised 15.6% and 14.9% of our 90 days or greater delinquencies
and our total delinquencies, respectively, at that date. At March 31, 2022,
approximately 95.5% and 4.4% of our residential Home Today loans were secured by
properties in Ohio and Florida, respectively. At March 31, 2022, the percentages
of those loans delinquent 30 days or more in Ohio and Florida were 6.2% and 0%,
respectively. We attempted to manage our Home Today credit risk by requiring
private mortgage insurance for some loans. At March 31, 2022, 9.7% of Home Today
loans included private mortgage insurance coverage. Our allowance for credit
losses for the Home Today portfolio, which includes a lifetime view of expected
losses, is reduced by expected future recoveries of loan amounts previously
charged off. To supplant the Home Today product and to continue to meet the
credit needs of our customers and the communities that we serve, we have offered
Fannie Mae eligible, Home Ready loans since fiscal 2016. These loans are
originated in accordance with Fannie Mae's underwriting standards. While we
retain the servicing rights related to these loans, the loans, along with the
credit risk associated therewith, are generally securitized/sold to Fannie Mae.
The Company does not offer, and has not offered, loan products frequently
considered to be designed to target sub-prime borrowers containing features such
as higher fees or higher rates, negative amortization, an LTV ratio greater than
100%, or pay-option adjustable-rate mortgages.

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. Accordingly, we have managed the pace of our growth in a
manner that reflects our emphasis on high capital levels. At March 31, 2022, 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 10.99%. The Association's Tier 1 (leverage) capital ratio at
March 31, 2022 included the negative impact of a $56 million cash dividend
payment that the Association made to the Company, its sole shareholder, in
December 2021. Because of its intercompany nature, this dividend

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The payment had no impact on the Company’s consolidated capital ratios which are disclosed in the Liquidity and Capital Resources section of this Section 2. We expect to continue to remain a well capitalized institution.

In managing its level of liquidity, the Company monitors available funding
sources, which include attracting new deposits (including brokered CDs and
brokered checking accounts), borrowings 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. At March 31, 2022, deposits totaled $9.01 billion (including
$453.9 million of brokered CDs and $200.0 million of brokered checking
accounts), while borrowings totaled $3.56 billion and borrowers' advances and
servicing escrows totaled $128.2 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.

To attract deposits, we offer our customers attractive rates of interest on our
deposit products. Our deposit products typically offer rates that are highly
competitive with the rates on similar products offered by other financial
institutions. We intend to continue this practice, subject to market conditions.

We preserve the availability of alternative funding sources through various
mechanisms. First, by maintaining high capital levels, we retain the flexibility
to increase our balance sheet size without jeopardizing our capital adequacy.
Effectively, this permits us to increase the rates that we offer on our deposit
products thereby attracting more potential customers. Second, we pledge
available real estate mortgage loans and investment securities with the FHLB of
Cincinnati and the FRB-Cleveland. At March 31, 2022, these collateral pledge
support arrangements provided the Association with the ability to borrow a
maximum of $7.69 billion from the FHLB of Cincinnati and $208.4 million from the
FRB-Cleveland Discount Window. From the perspective of collateral value securing
FHLB of Cincinnati advances, our capacity for additional borrowings at March 31,
2022 was $4.14 billion. Third, we have the ability to purchase overnight Fed
Funds up to $630 million through various arrangements with other institutions.
Fourth, 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 March 31, 2022, our investment securities portfolio totaled $443.2
million. Finally, cash flows from operating activities have been a regular
source of funds. During the six months ended March 31, 2022 and 2021, cash flows
from operations provided $40.7 million and $43.9 million, respectively.

First mortgage loans (primarily fixed-rate, mortgage refinances with terms of 15
years or more, and Home Ready) originated under Fannie Mae compliant procedures
are eligible for sale to Fannie Mae either as whole loans or within
mortgage-backed securities. We expect that certain loan types (i.e. our Smart
Rate adjustable-rate loans, home purchase fixed-rate loans and 10-year
fixed-rate loans) will continue to be originated under our legacy procedures,
which are not eligible for sale to Fannie Mae. For loans that are not originated
under Fannie Mae procedures, the Association's ability to reduce interest rate
risk via loan sales is limited to those loans that have established payment
histories, strong borrower credit profiles and are supported by adequate
collateral values that meet the requirements of the FHLB's Mortgage Purchase
Program or of private third-party investors. Refer to the Liquidity and Capital
Resources section of the Overview for information on loan sales.

Overall, although the confidence of customers and the community can never be assured, the Company believes that its liquidity is adequate and that it has access to adequate alternative sources of funding.

Monitoring and Controlling Our Operating Expenses. We continue to focus on
managing operating expenses. Our ratio of annualized non-interest expense to
average assets was 1.37% for the six months ended March 31, 2022 and 1.38% for
the six months ended March 31, 2021. As of March 31, 2022, our average assets
per full-time employee and our average deposits per full-time employee were
$14.8 million and $9.2 million, respectively. We believe that each of these
measures compares favorably with industry averages. Our relatively high average
of deposits (exclusive of brokered CDs and brokered checking accounts) held at
our branch offices ($225.8 million per branch office as of March 31, 2022)
contributes to our expense management efforts by limiting the overhead costs of
serving our customers. We will continue our efforts to control operating
expenses as we grow our business.



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Critical accounting policies

Critical accounting policies are defined as those that involve significant
judgments, estimates and uncertainties, and could potentially give rise to
materially different results under different assumptions and conditions. We
believe that the most critical accounting policies upon which our financial
condition and results of operations depend, and which involve the most complex
subjective decisions or assessments, are our policies with respect to our
allowance for credit losses, income taxes and pension benefits as described in
the Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2021.

Lending Activities

Provision for credit losses

We provide for credit losses based on a life of loan methodology. Accordingly,
all credit losses are charged to, and all recoveries are credited to, the
related allowance. Additions to the allowance for credit losses are provided by
charges to income based on various factors which, in our judgment, deserve
current recognition in estimating life of credit losses. We regularly review the
loan portfolio and off-balance sheet exposures and make provisions (or releases)
for losses in order to maintain the allowance for credit losses in accordance
with U.S. GAAP. Our allowance for credit losses consists of three components:

(1) individual impairment provisions (IVA) established for any cash flow dependent loan, such as performing TDRs;

(2)general valuation allowances (GVAs) for loans, which are comprised of
quantitative GVAs, general allowances for credit losses for each loan type based
on historical loan loss experience, and qualitative GVAs, which are adjustments
to the quantitative GVAs, maintained to cover uncertainties that affect the
estimate of expected credit losses for each loan type; and

(3) GVA for off-balance sheet credit exposures, which include expected lifetime losses on unfunded loan commitments to extend credit where the obligations are not unconditionally cancellable.

The qualitative GVAs expand our ability to identify and estimate probable losses
and are based on our evaluation of the following factors, some of which are
consistent with factors that impact the determination of quantitative GVAs. For
example, delinquency statistics (both current and historical) are used in
developing the quantitative GVAs while the trending of the delinquency
statistics is considered and evaluated in the determination of the qualitative
GVAs. Factors impacting the determination of qualitative GVAs include:

•changes in lending policies and procedures, including underwriting standards, collection, charging or collection practices;

•management's view of changes in national, regional, and local economic and
business conditions and trends including treasury yields, housing market factors
and trends, such as the status of loans in foreclosure, real estate in judgment
and real estate owned, and unemployment statistics and trends and how it aligns
with economic modeling forecasts;

•changes in the nature and volume of the portfolios including home equity lines
of credit nearing the end of the draw period and adjustable-rate mortgage loans
nearing a rate reset;

•changes in experience, capacity or depth of loan management;

•changes in the volume or severity of past due loans, volume of non-accrual
loans, or the volume and severity of adversely classified loans including the
trending of delinquency statistics (both current and historical), historical
loan loss experience and trends, the frequency and magnitude of multiple
restructurings of loans previously the subject of TDRs, and uncertainty
surrounding borrowers' ability to recover from temporary hardships for which
short-term loan restructurings are granted;

•changes in the quality of the credit review system;

•changes in the value of the underlying collateral including asset disposition
loss statistics (both current and historical) and the trending of those
statistics, and additional charge-offs and recoveries on individually reviewed
loans;

• existence of any credit concentrations;

•effect of other external factors such as competition, market interest rate
changes or legal and regulatory requirements including market conditions and
regulatory directives that impact the entire financial services industry; and

•the limitations of our models for predicting the lifetime of net loan losses.

When loan restructurings qualify as TDRs and the loans are performing according
to the terms of the restructuring, we record an IVA based on the present value
of expected future cash flows, which includes a factor for potential subsequent
defaults, discounted at the effective interest rate of the original loan
contract. Potential defaults are distinguished from multiple
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restructurings as borrowers who default are generally not eligible for
subsequent restructurings. At March 31, 2022, the balance of such individual
valuation allowances were $11.1 million. In instances when loans require
multiple restructurings, additional valuation allowances may be required. The
new valuation allowance on a loan that has multiple restructurings is calculated
based on the present value of the expected cash flows, discounted at the
effective interest rate of the original loan contract, considering the new terms
of the restructured agreement. The estimated exposure for additional loss
related to multiple loan restructurings is included as a component of our
qualitative GVA.

We evaluate the allowance for credit losses based upon the combined total of the
quantitative and qualitative GVAs and IVAs. Periodically, the carrying value of
loans and factors impacting our credit loss analysis are evaluated and the
allowance is adjusted accordingly. While we use the best information available
to make evaluations, future additions to the allowance may be necessary based on
unforeseen changes in loan quality and economic conditions.
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The following table sets forth activity for credit losses segregated by
geographic location for the periods indicated. The majority of our Home Today
and construction loan portfolios are secured by properties located in Ohio and
the balances of other loans are considered immaterial, therefore neither was
segregated.
                                                        For the Three Months Ended          For the Six Months Ended March
                                                                 March 31,                                31,
                                                          2022               2021               2022               2021
                                                                             (Dollars in thousands)
Allowance balance for credit losses on loans
(beginning of the period)                             $  63,575           $ 70,290          $  64,288           $ 46,937
Adoption of ASU 2016-13 for allowance for credit
losses on loans                                               -                  -                  -             24,095
Charge-offs on real estate loans:
Residential Core
Ohio                                                        132                408                157                467
Florida                                                       -                  -                  -                  1
Other                                                         -                  -                  1                  1
Total Residential Core                                      132                408                158                469

Total Residential Home Today                                 94                199                106                308
Home equity loans and lines of credit
Ohio                                                        273                290                417                604
Florida                                                      67                259                 70                460
California                                                    -                 30                 14                138
Other                                                        34                185                110                246
Total Home equity loans and lines of credit                 374                764                611              1,448

Total charge-offs                                           600              1,371                875              2,225
Recoveries on real estate loans:
Residential Core                                          1,149                515              1,630                975
Residential Home Today                                      899                551              1,487                974
Home equity loans and lines of credit                     1,260              1,665              2,424              2,894

Total recoveries                                          3,308              2,731              5,541              4,843
Net recoveries                                            2,708              1,360              4,666              2,618
Release of allowance for credit losses on loans          (1,960)            (3,901)            (4,631)            (5,901)
Allowance balance for loans (end of the period)       $  64,323           $ 67,749          $  64,323           $ 67,749

Allowance balance for credit losses on unfunded
commitments (beginning of the period)                 $  25,641           $ 22,052          $  24,970           $      -
Adoption of ASU 2016-13 for allowance for credit
losses on unfunded commitments                                -                  -                  -             22,052
Provision for credit losses on unfunded loan
commitments                                                 960                (99)             1,631                (99)

Provision balance for unfunded loan commitments (end of period)

                                           26,601             21,953             26,601             21,953

Allowance balance for all credit losses (end of period)

                                               $  90,924           $ 89,702          $  90,924           $ 89,702

Reports :

Net recoveries to average loans outstanding
(annualized)                                               0.04   %           0.02  %            0.07   %           0.04  %

Allowance for credit losses on loans to outstanding loans at the end of the period

                               163.78   %         128.82  %          163.78   %         128.82  %
Allowance for credit losses on loans to the total
amortized cost in loans at end of the period               0.49   %           0.53  %            0.49   %           0.53  %


Net recoveries continued, totaling $4.7 million during the six months ended
March 31, 2022 compared to $2.6 million during the six months ended March 31,
2021. We reported net recoveries in each quarter for the last four years,
primarily due to improvements in the values of properties used to secure loans
that were fully or partially charged off after the 2008 collapse of the housing
market. Charge-offs are recognized on loans identified as collateral-dependent
and subject to individual review
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when the value of the collateral is not sufficient to justify full repayment of the obligation. Recoveries are recognized on previously written-off loans as borrowers meet their repayment obligations or when loans with enhanced collateral positions reach final resolution.

Gross charge-offs decreased and remained at relatively low levels, during the
six months ended March 31, 2022 when compared to the six months ended March 31,
2021. Delinquent loans continue to be evaluated for potential losses, and
provisions are recorded for the estimate of potential losses of those loans.
Subject to changes in the economic environment, a moderate level of charge-offs
are expected as delinquent loans are resolved in the future and uncollected
balances are charged against the allowance.

During the three months ended March 31, 2022, the total allowance for credit
losses increased $1.7 million, to $90.9 million from $89.2 million at
December 31, 2021, as we recorded a $1.0 million release of credit losses.
During the three months ended March 31, 2022, we recorded net recoveries of $2.7
million. Refer to the "Activity in the Allowance for Credit Losses" and
"Analysis of the Allowance for Credit Losses" tables in Note 4. LOANS AND
ALLOWANCES FOR CREDIT LOSSES of the NOTES TO UNAUDITED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS for more information.

Because many variables are considered in determining the appropriate level of
general valuation allowances, directional changes in individual considerations
do not always align with the directional change in the balance of a particular
component of the general valuation allowance. Changes during the three months
ended March 31, 2022 in the allowance for credit loss balances of loans are
described below. The allowance for credit losses on off-balance sheet exposures
increased by $1.0 million primarily related to an increase in undrawn equity
line of credit exposures. Other than the less significant construction and other
loans segments, the changes related to the significant loan segments are
described as follows:

•Residential Core - The amortized cost of this segment increased 3.6%, or $373.0
million, and its total allowance increased 4.5% or $2.0 million as of March 31,
2022 as compared to December 31, 2021. Total delinquencies decreased 5.8% to
$15.1 million at March 31, 2022 from $16.0 million at December 31, 2021.
Delinquencies greater than 90 days decreased by 26.4% to $8.8 million at
March 31, 2022 from $12.0 million at December 31, 2021. Net recoveries were $1.0
million for the quarter ended March 31, 2022 and there were net recoveries of
$0.1 million for the quarter ended March 31, 2021. Economic forecasts continued
to show improvements this quarter, but with the new portfolio growth the
allowance increased.

•Residential Home Today - The amortized cost of this segment decreased 4.8%, or
$2.9 million, as we are no longer originating loans under the Home Today
program. The expected net recovery position for this segment was $0.9 million at
March 31, 2022 compared to $0.1 million at December 31, 2021. Total
delinquencies decreased 19.2% to $3.4 million at March 31, 2022 from $4.2
million at December 31, 2021. Delinquencies greater than 90 days decreased 9.5%
to $2.1 million from $2.4 million at December 31, 2021. There were net
recoveries of $0.8 million recorded during the current quarter and net
recoveries of $0.4 million during the quarter ended March 31, 2021. This
allowance reflects not only the declining portfolio balance, but the lower
historical loss rates applied to the remaining balance and the higher expected
recoveries related to the loans as they age. Under the CECL methodology, the
life of loan concept allows for qualitative adjustments for the expected future
recoveries of previously charged-off loans which is driving the current
allowance balance for Home Today loans negative.

•Home Equity Loans and Lines of Credit - The amortized cost of this segment
increased 4.3%, or $99.0 million, to $2.41 billion at March 31, 2022 from $2.31
billion at December 31, 2021. The total allowance for this segment decreased by
2.3% to $18.4 million from $18.9 million at December 31, 2021. Total
delinquencies for this portfolio segment decreased 8.5% to $4.4 million at
March 31, 2022 as compared to $4.8 million at December 31, 2021. Delinquencies
greater than 90 days decreased 9.5% to $2.6 million at March 31, 2022 from $2.9
million at December 31, 2021. Net recoveries for this loan segment during the
current quarter were $0.9 million, the same as the quarter ended March 31, 2021.
Economic forecasts caused a slight increase in forecasted losses, offset by a
reduction in qualitative adjustments due to recent historical net charge-offs
being more comparable to current economic forecasts than in the prior periods.
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The following tables set forth the allowance for credit losses on loans
allocated by loan category, the percent of allowance in each category to the
total allowance on loans, and the percent of loans in each category to total
loans at the dates indicated. The allowance for credit losses allocated to each
category is not necessarily indicative of future losses in any particular
category and does not restrict the use of the allowance to absorb losses in
other categories. This table does not include allowances for credit losses on
unfunded loan commitments, which are primarily related to undrawn home equity
lines of credit.

                                                                       March 31, 2022                                                        December 31, 2021
                                                                       Percent of               Percent of                                      Percent of               Percent of
                                                                        Allowance                Loans in                                        Allowance                Loans in
                                                                        to Total            Category to Total                                    to Total            Category to Total
                                                  Amount                Allowance                 Loans                   Amount                 Allowance                 Loans
                                                                                                       (Dollars in thousands)
Real estate loans:
Residential Core                              $     46,469                    72.2  %                  80.8  %       $       44,472                    70.0  %                  80.9  %
Residential Home Today                                (850)                   (1.3)                     0.4                     (94)                   (0.2)                     0.5
Home equity loans and lines of credit               18,425                    28.7                     18.0                  18,852                    29.7                     17.9
Construction                                           280                     0.4                      0.8                     346                     0.5                      0.7

Allowance for credit losses on loans          $     64,324                   100.0  %                 100.0  %       $       63,576                   100.0  %                 100.0  %



                                                                   September 30, 2021                                                      March 31, 2021
                                                                    Percent of               Percent of                                    Percent of               Percent of
                                                                     Allowance                Loans in                                      Allowance                Loans in
                                                                     to Total            Category to Total                                  to Total            Category to Total
                                                 Amount              Allowance                 Loans                  Amount                Allowance                 Loans
                                                                                                     (Dollars in thousands)
Real estate loans:
Residential Core                              $  44,523                    69.2  %                  81.2  %       $     46,546                    68.7  %                  82.2  %
Residential Home Today                               15                       -                      0.6                  (705)                   (1.0)                     0.6
Home equity loans and lines of credit            19,454                    30.3                     17.6                21,236                    31.3                     16.8
Construction                                        297                     0.5                      0.6                   672                     1.0                      0.4

Allowance for credit losses on loans          $  64,289                   100.0  %                 100.0  %       $     67,749                   100.0  %                 100.0  %


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Composition of loan portfolio

The following table sets forth the composition of the portfolio of loans held
for investment, by type of loan segregated by geographic location at the
indicated dates, excluding loans held for sale. The majority of our Home Today
loan portfolio is secured by properties located in Ohio and the balances of
other loans are immaterial. Therefore, neither was segregated by geographic
location.

                                              March 31, 2022                             December 31, 2021                             September 30, 2021                            March 31, 2021
                                         Amount              Percent                 Amount                Percent                 Amount                 Percent               Amount              Percent
                                                                                                              (Dollars in thousands)
Real estate loans:
Residential Core
Ohio                                $   5,859,198                             $       5,680,033                             $        5,603,998                             $   5,659,112
Florida                                 1,984,467                                     1,891,467                                      1,838,259                                 1,856,019
Other                                   2,831,997                                     2,716,235                                      2,773,018                                 2,953,845
Total Residential Core                 10,675,662               80.8  %              10,287,735               80.9  %               10,215,275               81.2  %          10,468,976               82.2  %

Total Residential Home Today               58,006              0.4                       60,885              0.5                        63,823              0.6                   69,845              0.6
Home equity loans and lines of
credit
Ohio                                      644,421                                       635,495                                        630,815                                   622,855
Florida                                   473,009                                       454,210                                        438,212                                   425,938
California                                381,565                                       350,758                                        335,240                                   317,067
Other                                     876,478                                       837,298                                        809,985                                   775,308
Total Home equity loans and lines
of credit                               2,375,473              18.0                   2,277,761              17.9                    2,214,252              17.6               2,141,168              16.8
Construction loans
Ohio                                       90,888                                        81,505                                         71,651                                    48,895
Florida                                     8,366                                         7,656                                          6,604                                     6,622
Other                                       2,286                                         1,535                                          2,282                                     1,496
Total Construction                        101,540              0.8                       90,696              0.7                        80,537              0.6                   57,013              0.4
Other loans                                 2,589               -                         2,705               -                          2,778               -                     2,482               -
Total loans receivable                 13,213,270              100.0  %              12,719,782              100.0  %               12,576,665              100.0  %          12,739,484              100.0  %
Deferred loan expenses, net                47,372                                        45,954                                         44,859                                    44,422
Loans in process                          (60,343)                                      (57,120)                                       (48,200)                                  (34,529)
Allowance for credit losses on
loans                                     (64,324)                                      (63,576)                                       (64,289)                                  (67,749)
Total loans receivable, net         $  13,135,975                             $      12,645,040                             $       12,509,035                             $  12,681,628


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The following table provides an analysis of our residential mortgage loans
disaggregated by FICO score refreshed quarterly, year of origination and
portfolio as of the periods presented. The Company treats the FICO score
information as demonstrating that underwriting guidelines reduce risk rather
than as a credit quality indicator utilized in the evaluation of credit risk.
Balances are adjusted for deferred loan fees, expenses and any applicable
loans-in-process.
                                                                                                                                             Revolving
                                                                                                                         Revolving Loans       Loans
                                                     By fiscal year of origination                                          Amortized        Converted
                                      2022           2021           2020          2019         2018         Prior          Cost Basis         To Term         Total
                                                                                         (Dollars in thousands)
March 31, 2022
Real estate loans:
Residential Core
     <680                        $    33,022    $    66,660    $    46,920    $  26,919    $  27,204    $   184,919    $              -    $        -    $    385,644
     680-740                         309,372        331,079        215,111       96,386       98,022        433,200                   -             -       1,483,170
     741+                          1,373,611      1,956,188      1,332,692      558,261      607,738      2,821,830                   -             -       8,650,320
     Unknown (1)                       4,801         34,396         18,983        6,698       10,348        100,200                   -             -         175,426

Total residential core 1,720,806 2,388,323 1,613,706

     688,264      743,312      3,540,149                   -             -      10,694,560
Residential Home Today (2)
     <680                                  -              -              -            -            -         32,514                   -             -          32,514
     680-740                               -              -              -            -            -         10,532                   -             -          10,532
     741+                                  -              -              -            -            -         11,448                   -             -          11,448
     Unknown (1)                           -              -              -            -            -          3,076                   -             -           3,076
    Total Residential Home Today           -              -              -            -            -         57,570                   -             -          57,570
Home equity loans and lines of
credit
     <680                                504            951            407          455          582            922              72,610        19,869          96,300
     680-740                           6,426          4,024          1,411          977        2,074          2,405             347,278        28,053         392,648
     741+                             30,461         30,086          9,053        8,029        6,317          9,061           1,733,412        61,102       1,887,521
     Unknown (1)                           -             74             48          108          122            666              19,814         7,936          28,768
     Total Home equity loans and
                 lines of credit      37,391         35,135         10,919        9,569        9,095         13,054           2,173,114       116,960       2,405,237
Construction
     <680                                  -            687              -            -            -              -                   -             -             687
     680-740                             718          3,525              -            -            -              -                   -             -           4,243
     741+                              9,504         25,691            218            -            -              -                   -             -          35,413

              Total Construction      10,222         29,903            218            -            -              -                   -             -          40,343

Total net home loans $1,768,419 $2,453,361 $1,624,843

$697,833 $752,407 $3,610,773 $2,173,114 $116,960

$13,197,710

(1) Data needed for stratification are not readily available. (2) No new Home Today loan issuance since fiscal year 2016.







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The following table provides an analysis of our residential mortgage loans by
origination LTV, origination year and portfolio as of the periods presented.
LTVs are not updated subsequent to origination except as part of the charge-off
process. Balances are adjusted for deferred loan fees, expenses and any
applicable loans-in-process.
                                                                                                                                                         Revolving
                                                                                                                                     Revolving Loans       Loans
                                                                 By fiscal year of origination                                          Amortized        Converted
                                                  2022           2021           2020          2019         2018         Prior          Cost Basis         To Term         Total
                                                                                                     (Dollars in thousands)
March 31, 2022
Real estate loans:
     Residential Core
     <80%                                    $ 1,261,030    $ 1,679,997    $   888,072    $ 321,608    $ 395,582    $ 2,100,842    $              -    $        -    $  6,647,131
     80-89.9%                                    417,968        657,427        659,629      331,804      323,104      1,326,894                   -             -       3,716,826
     90-100%                                      40,073         49,406         65,798       34,586       24,507        110,053                   -             -         324,423
     >100%                                             -              -              -            -          119            678                   -             -             797
     Unknown (1)                                   1,735          1,493            207          266            -          1,682                   -             -           5,383
                      Total Residential Core   1,720,806      2,388,323      1,613,706      688,264      743,312      3,540,149                   -             -      10,694,560
Residential Home Today (2)
     <80%                                              -              -              -            -            -         11,419                   -             -          11,419
     80-89.9%                                          -              -              -            -            -         18,338                   -             -          18,338
     90-100%                                           -              -              -            -            -         27,813                   -             -          27,813

                Total Residential Home Today           -              -              -            -            -         57,570                   -             -          57,570
Home equity loans and lines of credit
<80%                                              33,752         34,015         10,839        9,214        8,389          9,172           2,019,177        76,553       2,201,111
80-89.9%                                           3,603          1,120             80          301          551          1,451             152,508        36,583         196,197
90-100%                                                -              -              -            -           56            862                 534           434           1,886
>100%                                                 36              -              -           54           99          1,560                 593           637           2,979
     Unknown (1)                                       -              -              -            -            -              9                 302         2,753           3,064

Total home equity loans and lines of credit 37,391 35,135

     10,919        9,569        9,095         13,054           2,173,114       116,960       2,405,237
Construction
<80%                                               4,611         19,308              -            -            -              -                   -             -          23,919
80-89.9%                                           5,611         10,595            218            -            -              -                   -             -          16,424

     Unknown (1)                                       -              -              -            -            -              -                   -             -               -
                          Total Construction      10,222         29,903            218            -            -              -                   -             -          40,343
Total net real estate loans                  $ 1,768,419    $ 2,453,361    

$1,624,843 $697,833 $752,407 $3,610,773 $2,173,114 $116,960 $13,197,710

(1) Market data needed for stratification is not readily available. (2) No new Home Today loan issuance since fiscal year 2016.


At March 31, 2022, the unpaid principal balance of the home equity loans and
lines of credit portfolio consisted of $231.2 million in home equity loans
(including $117.1 million of home equity lines of credit, which are in repayment
and no longer eligible to be drawn upon, and $7.1 million in bridge loans) and
$2.14 billion in home equity lines of credit.
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The following table sets forth credit exposure, principal balance, percent
delinquent 90 days or more, the mean CLTV percent at the time of origination and
the estimated current mean CLTV percent of home equity loans, home equity lines
of credit and bridge loans as of March 31, 2022. Home equity lines of credit in
the draw period are reported according to geographic distribution.

                                                                                                Percent                       Mean CLTV
                                                  Credit             Principal                 Delinquent                     Percent at                    Current Mean
                                                 Exposure             Balance               90 Days or More                Origination (2)       

CLTV Percentage (3)

                                                    (Dollars in thousands)
Home equity lines of credit in draw
period (by state)
Ohio                                          $ 1,839,142          $   563,486                           0.03  %                          60  %                           46  %
Florida                                           990,361              413,367                           0.04  %                          56  %                           43  %
California                                        888,307              338,681                           0.04  %                          60  %                           52  %
Other (1)                                       2,108,432              828,751                           0.07  %                          63  %                           52  %

Total home equity lines of credit in

              draw period                       5,826,242            2,144,285                           0.05  %                          60  %                           48  %
Home equity lines in repayment, home
equity loans and bridge loans                     231,188              231,188                           0.72  %                          61  %                           37  %
Total                                         $ 6,057,430          $ 2,375,473                           0.11  %                          60  %                           47  %


_________________

(1) No other individual state has a committed or drawn balance greater than 10% of our total home equity loan portfolio and 5% of total loan balance.

(2) The average CLTV percentage at origin for all home equity lines of credit is based on the committed amount.

(3)Current Mean CLTV is based on best available first mortgage and property
values as of March 31, 2022. Property values are estimated using HPI data
published by the FHFA. Current Mean CLTV percent for home equity lines of credit
in the draw period is calculated using the committed amount. Current Mean CLTV
on home equity lines of credit in the repayment period is calculated using the
principal balance.

At March 31, 2022, 39.1% of the home equity lending portfolio was either in a
first lien position (22.9%), in a subordinate (second) lien position behind a
first lien that we held (13.6%) or behind a first lien that was held by a loan
that we originated, sold and now serviced for others (2.6%). At March 31, 2022,
13.1% of the home equity line of credit portfolio in the draw period was making
only the minimum payment on the outstanding line balance.
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The following table sets forth by calendar year of origination the credit
exposure, principal balance, percent delinquent 90 days or more, the mean CLTV
percent at the time of origination and the estimated current mean CLTV percent
of the home equity loans, home equity lines of credit and bridge loan portfolio
as of March 31, 2022. Home equity lines of credit in the draw period are
included in the year originated:

                                                                                               Percent                       Mean CLTV                   Current Mean
                                                Credit             Principal                 Delinquent                      Percent at                      CLTV
                                               Exposure             Balance                90 Days or More                Origination (1)                 Percent (2)
                                                  (Dollars in thousands)
Home equity lines of credit in draw
period
2014 and Prior                              $    70,773          $    15,310                               -  %                          58  %                       32  %

2015                                            104,596               27,413                               -  %                          58  %                       33  %
2016                                            270,215               83,552                            0.11  %                          59  %                       37  %
2017                                            562,885              199,688                            0.13  %                          58  %                       39  %
2018                                            710,693              286,536                            0.10  %                          58  %                       42  %
2019                                            944,639              424,945                            0.09  %                          61  %                       47  %
2020                                            882,973              340,341                               -  %                          58  %                       47  %
2021                                          1,725,551              638,817                               -  %                          62  %                       58  %
2022                                            553,917              127,683                               -  %                          62  %                       62  %
Total home equity lines of credit in
draw period                                   5,826,242            2,144,285                            0.05  %                          60  %                       48  %
Home equity lines in repayment, home
equity loans and bridge loans                   231,188              231,188                            0.72  %                          61  %                       37  %
Total                                       $ 6,057,430          $ 2,375,473                            0.11  %                          60  %                       47  %


________________

(1) The average CLTV percentage at origin for all home equity lines of credit is based on the committed amount.

(2)Current Mean CLTV is based on best available first mortgage and property
values as of March 31, 2022. Property values are estimated using HPI data
published by the FHFA. Current Mean CLTV percent for home equity lines of credit
in the draw period is calculated using the committed amount. Current Mean CLTV
on home equity lines of credit in the repayment period is calculated using the
principal balance.

The following table sets forth, by fiscal year of the draw period expiration,
the principal balance of home equity lines of credit in the draw period as of
March 31, 2022, segregated by the estimated current combined LTV range. Home
equity lines of credit with an end of draw date in the current fiscal year
include accounts with draw privileges that have been temporarily suspended.
                                                                          Estimated Current CLTV Category
Home equity lines of credit in
draw period (by end of draw
fiscal year):                       < 80%              80 - 89.9%           90 - 100%            >100%            Unknown (1)             Total
                                                                               (Dollars in thousands)
2022                            $    41,842          $       174          $        -          $      -          $          -          $    42,016
2023                                    520                   38                   7                 -                     -                  565
2024                                  9,498                    -                   -                 -                     -                9,498
2025                                 26,979                    -                   -                 -                    13               26,992
2026                                 46,024                   16                   -                 -                     -               46,040
2027                                168,811                   10                   -                 -                   125              168,946
Post 2027                         1,841,769                6,859                 341                90                 1,169            1,850,228
  Total                         $ 2,135,443          $     7,097          $      348          $     90          $      1,307          $ 2,144,285


_________________

(1) Market data needed for stratification is not readily available.

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The following table sets forth the breakdown of estimated current mean CLTV
percentages for home equity lines of credit in the draw period as of March 31,
2022.

                                                                                         Percent                Percent                                              Current
                                                                                        of Total              Delinquent                 Mean CLTV                     Mean
                                               Credit             Principal             Principal             90 Days or                 Percent at                    CLTV
                                              Exposure             Balance               Balance                 More                 Origination (2)              Percent (3)
                                                 (Dollars in thousands)
Home equity lines of credit in draw
period (by estimated current mean
CLTV)
< 80%                                      $ 5,782,745          $ 2,135,443                  99.6  %                 0.04  %                        60  %                    48  %
80 - 89.9%                                      37,785                7,097                   0.3  %                 2.45  %                        78  %                    80  %
90 - 100%                                        1,196                  348                     -  %                    -  %                        77  %                    93  %
> 100%                                             732                   90                     -  %                    -  %                        55  %                   117  %
Unknown (1)                                      3,784                1,307                   0.1  %                    -  %                        51  %                    (1)
                                           $ 5,826,242          $ 2,144,285                 100.0  %                 0.05  %                        60  %                    48  %


_________________

(1) Market data needed for stratification is not readily available.

(2) The average CLTV percentage at origin for all home equity lines of credit is based on the committed amount.

(3)Current Mean CLTV is based on best available first mortgage and property
values as of March 31, 2022. Property values are estimated using HPI data
published by the FHFA. Current Mean CLTV percent for home equity lines of credit
in the draw period is calculated using the committed amount. Current Mean CLTV
on home equity lines of credit in the repayment period is calculated using the
principal balance.

Delinquent Loans

The following tables set forth the amortized cost in loan delinquencies by type,
segregated by geographic location and severity of delinquency as of the dates
indicated. The majority of the Home Today loan portfolio is secured by
properties located in Ohio, and therefore was not segregated by geographic
location. There are no construction or other loans with delinquent balances.
                                                                       Loans Delinquent for
                                                               30-89 Days             90 Days or More             Total
                                                                                (Dollars in thousands)
March 31, 2022
Real estate loans:
Residential Core
Ohio                                                       $     4,427              $          4,879          $    9,306
Florida                                                          1,108                           894               2,002
Other                                                              712                         3,068               3,780
Total Residential Core                                           6,247                         8,841              15,088

Residential Home Today                                           1,279                         2,128               3,407
Home equity loans and lines of credit
Ohio                                                               721                           771               1,492
Florida                                                            242                           768               1,010
California                                                         407                           425                 832
Other                                                              365                           680               1,045
Total Home equity loans and lines of credit                      1,735                         2,644               4,379

Total                                                      $     9,261              $         13,613          $   22,874


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                                                                       Loans Delinquent for
                                                               30-89 Days             90 Days or More             Total
                                                                                (Dollars in thousands)
December 31, 2021
Real estate loans:
Residential Core
Ohio                                                       $     1,790              $          7,609          $    9,399
Florida                                                          1,263                         1,002               2,265
Other                                                              954                         3,399               4,353
Total Residential Core                                           4,007                        12,010              16,017

Residential Home Today                                           1,866                         2,351               4,217
Home equity loans and lines of credit
Ohio                                                               679                         1,157               1,836
Florida                                                            543                           544               1,087
California                                                          95                           658                 753
Other                                                              550                           561               1,111
Total Home equity loans and lines of credit                      1,867                         2,920               4,787

Total                                                      $     7,740              $         17,281          $   25,021


                                                                       Loans Delinquent for
                                                               30-89 Days             90 Days or More             Total
                                                                                (Dollars in thousands)
September 30, 2021
Real estate loans:
Residential Core
Ohio                                                       $     3,217              $          5,729          $    8,946
Florida                                                            874                         1,093               1,967
Other                                                            1,814                         2,548               4,362
Total Residential Core                                           5,905                         9,370              15,275
Residential Home Today                                           1,909                         2,068               3,977
Home equity loans and lines of credit
Ohio                                                               333                         1,348               1,681
Florida                                                            432                           787               1,219
California                                                         278                         1,074               1,352
Other                                                              195                         1,022               1,217
Total Home equity loans and lines of credit                      1,238                         4,231               5,469

Total                                                      $     9,052              $         15,669          $   24,721


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                                                                       Loans Delinquent for
                                                               30-89 Days             90 Days or More             Total
                                                                                (Dollars in thousands)
March 31, 2021
Real estate loans:
Residential Core
Ohio                                                       $     3,559              $          7,044          $   10,603
Florida                                                          1,103                         2,943               4,046
Other                                                              258                         1,438               1,696
Total Residential Core                                           4,920                        11,425              16,345

Residential Home Today                                           1,791                         1,914               3,705
Home equity loans and lines of credit
Ohio                                                               357                         1,994               2,351
Florida                                                            345                           837               1,182
California                                                         713                           899               1,612
Other                                                              475                         1,375               1,850
Total Home equity loans and lines of credit                      1,890                         5,105               6,995

Total                                                      $     8,601              $         18,444          $   27,045


Total loans seriously delinquent (i.e. delinquent 90 days or more) were 0.10% of
total net loans at March 31, 2022, 0.14% at December 31, 2021, 0.12% at
September 30, 2021 and 0.14% at March 31, 2021. Total loans delinquent (i.e.
delinquent 30 days or more) were 0.17% of total net loans at March 31, 2022,
0.20% at both December 31, 2021 and September 30, 2021, and 0.21% at March 31,
2021.

Non-performing assets and distressed debt restructurings

The following table shows the amortized costs and categories of non-performing and TDR assets as of the dates indicated.

                                                     March 31,          December 31,          September 30,           March 31,
                                                       2022                 2021                   2021                 2021
                                                                               (Dollars in thousands)
Non-accrual loans:
Real estate loans:
Residential Core                                   $   23,109          $     26,348          $      24,892          $   31,066
Residential Home Today                                  7,661                 8,049                  8,043               9,292
Home equity loans and lines of credit                   8,504                 9,010                 11,110              12,234

Total non-accrual loans (1)(2)                         39,274                43,407                 44,045              52,592
Real estate owned                                         131                   131                    289                   -

Total non-performing assets                        $   39,405          $    

43,538 $44,334 $52,592
Ratios: total unrecognized loans to total loans

                   0.30  %               0.34  %                0.35  %             0.41  %
Total non-accrual loans to total assets                  0.27  %               0.31  %                0.31  %             0.36  %
Total non-performing assets to total assets              0.27  %               0.31  %                0.32  %             0.36  %
TDRs: (not included in non-accrual loans
above)
Real estate loans:
Residential Core                                   $   45,151          $    

45,493 $48,300 $45,761
The residential house today

                                 19,473                20,079                 21,307              22,683
Home equity loans and lines of credit                  23,184                24,243                 24,941              26,748

Total                                              $   87,808          $     89,815          $      94,548          $   95,192


_________________

(1)To March 31, 2022, December 31, 2021, September 30, 2021and March 31, 2021totals include $24.1 million, $24.2 million, $25.7 millionand $31.8 millionrespectively, in RDTs overdue by less than 90 days but including

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with non-accrual loans for a minimum period of six months from the restructuring
date due to their non-accrual status or forbearance plan prior to restructuring,
because of a prior partial charge off or because all borrowers have filed
Chapter 7 bankruptcy and have not been reaffirmed or dismissed.

(2)At March 31, 2022, December 31, 2021, September 30, 2021, and March 31, 2021,
the totals include $5.6 million, $7.1 million, $6.9 million and $7.8 million in
TDRs that are 90 days or more past due, respectively.

The gross interest income that would have been recorded during the six months
ended March 31, 2022 and March 31, 2021 on non-accrual loans, if they had been
accruing during the entire period, and TDRs, if they had been current and
performing in accordance with their original terms during the entire period, was
$3.1 million and $3.6 million, respectively. The interest income recognized on
those loans included in net income for the six months ended March 31, 2022 and
March 31, 2021 was $2.2 million for both periods.

The amortized cost of collateral-dependent loans includes accruing TDRs and
loans that are returned to accrual status when contractual payments are less
than 90 days past due. These loans continue to be individually evaluated based
on collateral until, at a minimum, contractual payments are less than 30 days
past due. Also, the amortized cost of non-accrual loans includes loans that are
not included in the amortized cost of collateral-dependent loans because they
are included in loans collectively evaluated for credit losses.

The table below sets forth a reconciliation of the amortized costs and
categories between non-accrual loans and collateral-dependent loans at the dates
indicated. The increase in other accruing collateral-dependent loans between
March 31, 2021 and September 30, 2021 was primarily related to forbearance plans
being extended past 12 months.

                                              March 31,            December 31,           September 30,           March 31,
                                                 2022                  2021                   2021                   2021
                                                                          (Dollars in thousands)
Non-Accrual Loans                           $    39,274          $      43,407          $       44,045               52,592
Accruing Collateral-Dependent TDRs                8,653                  8,628                  10,428                7,828
Other Accruing Collateral-Dependent Loans        27,208                 32,269                  31,956               10,165
Less: Loans Collectively Evaluated               (3,335)                (4,099)                 (2,575)              (4,540)
Total Collateral-Dependent loans            $    71,800          $      80,205          $       83,854          $    66,045




In response to the economic challenges facing many borrowers, we continue to
restructure loans. Loan restructuring is a method used to help families keep
their homes and to preserve neighborhoods. This involves making changes to the
borrowers' loan terms through interest rate reductions, either for a specific
period or for the remaining term of the loan; term extensions including those
beyond that provided in the original agreement; principal forgiveness;
capitalization of delinquent payments in special situations; or some combination
of the above. Loans discharged through Chapter 7 bankruptcy are also reported as
TDRs per OCC interpretive guidance. For discussion on TDR measurement, see Note
4. LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO UNAUDITED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS. We had $117.5 million of TDRs (accrual and
non-accrual) recorded at March 31, 2022. This was a decrease in the amortized
cost of TDRs of $3.6 million, $9.6 million and $17.2 million from December 31,
2021, September 30, 2021 and March 31, 2021, respectively.
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The following table sets forth the amortized cost in accrual and non-accrual
TDRs, by the types of concessions granted, as of March 31, 2022. Initial
concessions granted by loans restructured as TDRs can include reduction of
interest rate, extension of amortization period, forbearance or other actions.
Some TDRs have experienced a combination of concessions. TDRs also can occur as
a result of bankruptcy proceedings. Loans discharged in Chapter 7 bankruptcy are
classified as multiple restructurings if the loan's original terms had also been
restructured by the Company.

                                                            Multiple
                             Initial Restructurings      Restructurings       Bankruptcy         Total
                                                            (In thousands)
Accrual
Residential Core             $              28,316      $        12,537      $     4,298      $  45,151
Residential Home Today                      10,731                7,740            1,002         19,473
Home equity loans and
lines of credit                             21,811                  896              477         23,184

Total                        $              60,858      $        21,173      $     5,777      $  87,808
Non-Accrual, Performing
Residential Core             $               2,224      $         4,959      $     6,402      $  13,585
Residential Home Today                         580                3,385            1,289          5,254
Home equity loans and
lines of credit                              2,299                1,915            1,025          5,239

Total                        $               5,103      $        10,259      $     8,716      $  24,078
Non-Accrual,
Non-Performing
Residential Core             $               2,015      $         1,052      $       412      $   3,479
Residential Home Today                         608                1,107               28          1,743
Home equity loans and
lines of credit                                350                   55                -            405

Total                        $               2,973      $         2,214      $       440      $   5,627
Total TDRs
Residential Core             $              32,555      $        18,548      $    11,112      $  62,215
Residential Home Today                      11,919               12,232            2,319         26,470
Home equity loans and
lines of credit                             24,460                2,866            1,502         28,828

Total                        $              68,934      $        33,646      $    14,933      $ 117,513


TDRs in accrual status are loans accruing interest and performing according to
the terms of the restructuring. To be performing, a loan must be less than 90
days past due as of the report date. Non-accrual, performing status indicates
that a loan was not accruing interest or in a forbearance plan at the time of
restructuring, continues to not accrue interest and is performing according to
the terms of the restructuring but has not been current for at least six
consecutive months since its restructuring, has a partial charge-off, or is
being classified as non-accrual per the OCC guidance on loans in Chapter 7
bankruptcy status where all borrowers have filed and have not reaffirmed or been
dismissed. Non-accrual, non-performing status includes loans that are not
accruing interest because they are greater than 90 days past due and therefore
not performing according to the terms of the restructuring.


Comparison of the financial situation at March 31, 2022 and September 30, 2021

Total assets increased $523.4 million, or 4%, to $14.58 billion at March 31,
2022 from $14.06 billion at September 30, 2021. This increase was mainly the
result of new loan origination levels exceeding the total of loan sales and
principal repayments, partially offset by a decrease in cash and cash
equivalents.

Cash and cash equivalents decreased $117.6 million, or 24%, to $370.7 million at
March 31, 2022 from $488.3 million at September 30, 2021. Cash is managed to
maintain the level of liquidity described later in the Liquidity and Capital
Resources section. Balances decreased as proceeds from loan sales and principal
repayments decreased for the quarter ended March 31, 2022.

Investment securities, all of which are classified as available for sale,
increased $21.4 million to $443.2 million at March 31, 2022 from $421.8 million
at September 30, 2021. Investment securities increased as $145.5 million in
purchases exceeded $99.3 million in principal paydowns, a $22.1 million decrease
in unrealized gains to an unrealized loss position during the current year, and
$2.7 million of net acquisition premium amortization that occurred in the
mortgage-backed
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securities portfolio during the half-year ended March 31, 2022. Repayments on mortgage-backed securities declined due to higher interest rates. There were no sales of investment securities during the six months ended
March 31, 2022.

Loans held for investment, net of deferred loan fees and allowance for credit
losses, increased $626.9 million, or 5%, to $13.14 billion at March 31, 2022
from $12.51 billion at September 30, 2021. This increase was based on a
combination of a $454.6 million, or 4%, increase in residential mortgage loans
to $10.73 billion at March 31, 2022 from $10.28 billion at September 30, 2021
and a $161.2 million increase in the balance of home equity loans and lines of
credit during the six months ended March 31, 2022, as new originations and
additional draws on existing accounts exceeded loan sales and repayments. Of the
total $1.74 billion first mortgage loan originations for the six months ended
March 31, 2022, 66% were refinance transactions and 34% were purchases, 26% were
adjustable-rate mortgages and 17% were fixed-rate mortgages with terms of 10
years or less. During the six months ended March 31, 2022, $448.2 million of
three- and five-year "Smart Rate" loans were originated while $1.29 billion of
10-, 15-, and 30-year fixed-rate first mortgage loans were originated. Between
September 30, 2021 and March 31, 2022, the total fixed-rate portion of the first
mortgage loan portfolio increased $562.8 million and was comprised of an
increase of $504.7 million in the balance of fixed-rate loans with original
terms greater than 10 years, as well as an increase of $58.1 million in the
balance of fixed-rate loans with original terms of 10 years or less. During the
six months ended March 31, 2022, $101.7 million were sold or committed to sell,
which consisted of $25.8 million of agency-compliant Home Ready loans and $75.9
million of long-term, fixed-rate, agency-compliant, non-Home Ready first
mortgage loans sold to Fannie Mae.

Commitments originated for home equity loans and lines of credit, and bridge
loans were $1.08 billion for the six months ended March 31, 2022 compared to
$823.7 million for the six months ended March 31, 2021. At March 31, 2022,
pending commitments to originate new home equity loans and lines of credit were
$220.9 million. Refer to the Controlling Our Interest Rate Risk Exposure section
of the Overview for additional information.

The allowance for credit losses was $90.9 million, or 0.69% of total loans
receivable, at March 31, 2022, including a $26.6 million liability for unfunded
commitments. The allowance for credit losses was $89.3 million, or 0.71% of
total loans receivable, at September 30, 2021, including a $25.0 million
liability for unfunded commitments. The allowance for credit losses was $89.7
million, or 0.71% of total loans receivable, at March 31, 2021 and included a
$22.0 million liability for unfunded commitments. The increase in the allowance
for credit losses was primarily attributable to loan growth in both the mortgage
loan and home equity line of credit and loan portfolios. Refer to Note 4. LOANS
AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO UNAUDITED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS for additional discussion.

The amount of FHLB stock owned was $162.8 million at March 31, 2022, unchanged
from the prior year ended September 30, 2021. FHLB stock ownership requirements
dictate the amount of stock owned at any given time.

Increase in the total number of life insurance contracts held by banks $2.9 millionfor
$300.3 million to March 31, 2022from $297.3 million to September 30, 2021.

Other assets, including prepaid expenses, increased $1.5 million to $93.1
million at March 31, 2022 from $91.6 million at September 30, 2021. The increase
included a $4.8 million increase in the margin requirement on active swap
contracts, a $3.7 million increase in the federal tax asset and a $1.9 million
increase in the investment in low income housing, partially offset by an $8.7
million decrease in net deferred taxes, which is a net liability at March 31,
2022, and a $2.3 million decrease in funds accrued for the ESOP.

Deposits increased $14.7 million, or less than 1%, to $9.01 billion at March 31,
2022 from $8.99 billion at September 30, 2021. The increase in deposits resulted
primarily from a $271.8 million increase in our checking accounts, inclusive of
$200.0 million of new brokered checking accounts and a $61.1 million increase in
savings accounts, partially offset by a $317.4 million decrease in CDs,
inclusive of brokered CDs, as the low current market interest rates have reduced
customers' desires to maintain longer-term CDs. The balance of brokered CDs
included in total deposits at March 31, 2022 decreased by $38.1 million to
$453.9 million, during the six months ended March 31, 2022, compared to a
balance of $492.0 million at September 30, 2021. During the six months ended
March 31, 2022, $200.0 million of brokered checking accounts wee added as an
alternative source of funding.

Borrowed funds, all from the FHLB of Cincinnati, increased $463.5 million, or
15%, to $3.56 billion at March 31, 2022 from $3.09 billion at September 30,
2021. The increase was primarily used to fund loan growth. Activity included the
addition of $590.0 million of overnight advances and $250.0 million of long-term
advances, partially offset by principal repayments and $375.0 million of
shorter-term advances and their related swap contracts that matured and were
paid off. The total balance of borrowed funds at March 31, 2022 consisted of
$590.0 million of overnight advances, $888.3 million of term advances with a
weighted average maturity of approximately 2.5 years and shorter-term advances
of $2.1 billion, aligned with interest rate swap contracts, with a remaining
weighted average effective maturity of approximately 2.4 years. Interest rate
swaps have been used
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to extend the duration of short-term borrowings, at inception, by paying a fixed
rate of interest and receiving the variable rate. Refer to the Extending the
Duration of Funding Sources section of the Overview and Part I, Item 3.
Quantitative and Qualitative Disclosures About Market Risk for additional
discussion regarding short-term borrowings and interest-rate swaps.

Borrowers' advances for insurance and taxes decreased by $14.4 million to $95.2
million at March 31, 2022 from $109.6 million at September 30, 2021. This change
primarily reflects the cyclical nature of real estate tax payments that have
been collected from borrowers and are in the process of being remitted to
various taxing agencies.

Total shareholders' equity increased $63.5 million, or 4%, to $1.80 billion at
March 31, 2022 from $1.73 billion at September 30, 2021. Activity reflects $32.0
million of net income in the current year reduced by quarterly dividends of
$29.1 million and $1.2 million of repurchases of outstanding common stock. Other
changes include $57.0 million of unrealized net gain recognized in accumulated
other comprehensive income, primarily related to changes in market values and
maturities of swap contracts, and a $4.8 million net positive impact related to
activity in the Company's stock compensation and employee stock ownership plans.
The Company declared and paid a quarterly dividend of $0.2825 per share during
each of the quarters ended December 31, 2021 and March 31, 2022. As a result of
a mutual member vote, Third Federal Savings and Loan Association of Cleveland,
MHC (the "MHC"), the mutual holding company that owns approximately 81% of the
outstanding stock of the Company, was able to waive its receipt of its share of
the dividend paid. Refer to Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds for additional details regarding the repurchase of shares of
common stock and the dividend waiver.

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Comparison of operating results for the three months ended March 31, 2022 and 2021

Average balances and yields. The following table sets forth average balances,
average yields and costs, and certain other information for the periods
indicated. No tax-equivalent yield adjustments were made, as the effects thereof
were not material. Average balances are derived from daily average balances.
Non-accrual loans are included in the computation of loan average balances, but
only cash payments received on those loans during the period presented are
reflected in the yield. The yields set forth below include the effect of
deferred fees, deferred expenses, discounts and premiums that are amortized or
accreted to interest income or interest expense.

                                                                  Three Months Ended                                           Three Months Ended
                                                                    March 31, 2022                                               March 31, 2021
                                                                       Interest                                                     Interest
                                                    Average             Income/             Yield/               Average             Income/             Yield/
                                                    Balance             Expense            Cost (1)              Balance             Expense            Cost (1)
                                                                                              (Dollars in thousands)

Interest-bearing assets:

 Interest-earning cash
equivalents                                     $    337,915          $    161                 0.19  %       $    494,161          $    127            

0.10%

 Investment securities                                 4,044                11                 1.09  %                  -                 -             

– %

 Mortgage-backed securities                          432,012             1,344                 1.24  %            435,847               966                 0.89  %
 Loans (2)                                        12,845,756            91,125                 2.84  %         12,892,195            96,175                 2.98  %
 Federal Home Loan Bank stock                        162,783               820                 2.01  %            158,930               687                 1.73  %
Total interest-earning assets                     13,782,510            93,461                 2.71  %         13,981,133            97,955                 2.80  %
Noninterest-earning assets                           475,938                                                      548,229
Total assets                                    $ 14,258,448                                                 $ 14,529,362

Interest-bearing debts:

 Checking accounts                              $  1,292,977               293                 0.09  %       $  1,062,894               296                 0.11  %
 Savings accounts                                  1,869,103               485                 0.10  %          1,724,978               760                 0.18  %
 Certificates of deposit                           5,788,249            16,118                 1.11  %          6,394,643            23,489                 1.47  %
 Borrowed funds                                    3,282,890            13,824                 1.68  %          3,352,317            14,999                 1.79  %
Total interest-bearing liabilities                12,233,219            30,720                 1.00  %         12,534,832            39,544                 1.26  %
Noninterest-bearing liabilities                      238,884                                                      306,556
Total liabilities                                 12,472,103                                                   12,841,388
Shareholders' equity                               1,786,345                                                    1,687,974
Total liabilities and shareholders'
equity                                          $ 14,258,448                                                 $ 14,529,362
Net interest income                                                   $ 62,741                                                     $ 58,411
Interest rate spread (1)(3)                                                                    1.71  %                                                      1.54  %
Net interest-earning assets (4)                 $  1,549,291                                                 $  1,446,301
Net interest margin (1)(5)                                                1.82  %                                                      1.67  %
Average interest-earning assets to
average interest-bearing liabilities                  112.66  %                                                    111.54  %
Selected performance ratios:
Return on average assets (1)                                              0.44  %                                                      0.63  %
Return on average equity (1)                                              3.55  %                                                      5.45  %
Average equity to average assets                                         12.53  %                                                     11.62  %


_________________

(1)Annualized.
(2)Loans include both mortgage loans held for sale and loans held for
investment.
(3)Interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities.
(4)Net interest-earning assets represent total interest-earning assets less
total interest-bearing liabilities.
(5)Net interest margin represents net interest income divided by total
interest-earning assets.
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General. Net income decreased $7.2 million, or 31%, to $15.8 million for the
quarter ended March 31, 2022 from $23.0 million for the quarter ended March 31,
2021. The decrease in net income was attributable primarily to lower net gain on
the sale of loans and a decline in the release of the credit for loan losses,
partially offset by an increase in net interest income and a decline in income
tax expense.

Interest and Dividend Income. Interest and dividend income decreased $4.5
million, or 5%, to $93.5 million during the current quarter compared to $98.0
million during the same quarter in the prior year. The decrease in interest and
dividend income was primarily the result of decreases in interest income on
loans partially offset by increases in income from mortgage-backed securities
and FHLB stock.

Interest income on loans decreased $5.1 million, or 5%, to $91.1 million during
the current quarter compared to $96.2 million during the same quarter in the
prior year. This change was attributed to a 14 basis point decrease in the
average yield to 2.84% for the current quarter from 2.98% for the same quarter
last year as we continued to close the pipeline of loans originated for
borrowers refinancing to lower rates of interest. Adding to the decline in the
average yield was a $46.4 million, or less than 1%, decrease in the average
balance of loans to $12.85 billion for the quarter ended March 31, 2022 compared
to $12.89 billion during the same quarter last year as principal repayments and
loan sales exceeded new loan production during periods leading up to the current
quarter.

Interest Expense. Interest expense decreased $8.8 million, or 22%, to $30.7
million during the current quarter compared to $39.5 million during the quarter
ended March 31, 2021. The decrease resulted from a decline in interest expense
on deposits as well as borrowed funds.

Interest expense on CDs decreased $7.4 million, or 32%, to $16.1 million during
the current quarter compared to $23.5 million during the quarter ended March 31,
2021. The decrease was attributed to a 36 basis point decrease in the average
rate paid on CDs to 1.11% for the current quarter from 1.47% for the same
quarter last year. There was a $606.4 million, or 9%, decrease in the average
balance of CDs to $5.79 billion during the current quarter from $6.39 billion
during the same quarter of the prior year. Interest expense on savings accounts
decreased $0.3 million, or 39%, to $0.5 million during the current quarter from
$0.8 million during the quarter ended March 31, 2021. This decline was
attributable to an eight basis point decrease in the average rate paid on
savings accounts to 0.10% during the current quarter from 0.18% from the same
quarter last year. Partially offsetting this decrease was a $144.1 million, or
8%, increase in the average balance of savings accounts to $1.87 billion during
the current quarter compared to $1.72 billion during the same quarter of the
prior year. Rates were adjusted on deposits in response to changes in market
interest rates as well as the rates paid by our competition.

Interest expense on borrowed funds decreased $1.2 million, or 8%, to $13.8
million during the current quarter compared to $15.0 million during the quarter
ended March 31, 2021. This decrease was mainly attributed to an 11 basis point
decrease in the average rate paid on these funds, to 1.68% for the current
quarter from 1.79% for the same quarter last year, and a $69.4 million, or 2%,
decrease in the average balance of borrowed funds to $3.28 billion during the
current quarter from an average balance of $3.35 billion during the same quarter
of the prior year. Refer to the Extending the Duration of Funding Sources
section of the Overview and Comparison of Financial Condition for further
discussion.

Net Interest Income. Net interest income increased $4.3 million to $62.7 million
during the current quarter when compared to $58.4 million for the three months
ended March 31, 2021. Both the average balance and the yield of interest earning
assets decreased when compared to the same period last year, which partially
offset the decrease in the average balance and cost of interest-bearing
liabilities when compared to the same period last year. Average interest earning
assets during the current quarter decreased $198.6 million, or 1%, when compared
to the quarter ended March 31, 2021. The decrease in average interest-earning
assets was attributed primarily to a decline in the average balances of cash
equivalents and loans. In addition to the decrease in average interest earning
assets was a nine basis point decrease in the yield on those assets to 2.71%
from 2.80%, as a result of market rate changes. The interest rate spread
increased 17 basis points to 1.71% compared to 1.54% during the same quarter
last year. The net interest margin increased 15 basis points to 1.82% in the
current quarter compared to 1.67% for the same quarter last year.

Provision (Release) for Credit Losses. We recorded a release of the allowance
for credit losses on loans and off-balance sheet exposures of $1.0 million
during the quarter ended March 31, 2022, compared to a $4.0 million release of
credit losses during the quarter ended March 31, 2021. As delinquencies in the
portfolio have been resolved through pay-offs, short sale or foreclosure, or
management determines the collateral is not sufficient to satisfy the loan
balance, 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. In the current quarter,
we recorded net recoveries of $2.7 million compared to net recoveries of $1.4
million in the quarter ended March 31, 2021. 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. The allowance for
credit losses on loans was $64.3
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million, or 0.49% of total amortized cost in loans receivable, at March 31,
2022, compared to $67.8 million or 0.53% of total amortized cost in loans
receivable at March 31, 2021. The total allowance for credit losses was $90.9
million at March 31, 2022, compared to $89.7 million at March 31, 2021. Under
the CECL methodology, the allowance for credits losses at March 31, 2022
included a $26.6 million liability for unfunded commitments compared to
$22.0 million at March 31, 2021, primarily undrawn home equity lines of credit
commitments. Refer to the Lending Activities section of Item 2. and Note 4.
LOANS AND ALLOWANCES FOR CREDIT LOSSES of the NOTES TO UNAUDITED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS for further discussion.

Non-Interest Income. Non-interest income decreased $10.1 million, or 64%, to
$5.6 million during the current quarter compared to $15.7 million during the
quarter ended March 31, 2021 mainly as a result of a decrease in the net gain on
sale of loans and a decrease in income on bank owned life insurance contracts.
Gains on the sale of loans decreased $8.8 million to $0.1 million compared to
$8.9 million for the same quarter in the prior year as there were no loan sales
during the current quarter compared to $224.0 million of loan sales during the
quarter ended March 31, 2021. Loan sale gains have decreased from the prior
year, as the rise in longer term market interest rates, as compared to last
year, has impacted our interest rate risk management decision on whether to sell
future loans or hold them in portfolio to improve net interest income. The cash
surrender value and death benefits from bank owned life insurance decreased $1.6
million to $2.2 million during the quarter ended March 31, 2022 from $3.8
million during the quarter ended March 31, 2021.

Non-Interest Expense. Non-interest expense increased $1.2 million, or 2%, to
$50.0 million during the current quarter compared to $48.8 million during the
quarter ended March 31, 2021. The increase primarily consisted of a $1.3 million
increase in marketing expense due to the timing of media campaigns supporting
our lending activities. Additionally, there was a $0.4 million increase in
office property and equipment. Other operating expenses decreased by $0.8
million and were mainly due to positive actuarial adjustments to the defined
benefit plan recorded during the current fiscal year.

Income Tax Expense. The provision for income taxes decreased $2.8 million to
$3.5 million during the current quarter compared to $6.3 million during the
quarter ended March 31, 2021 reflecting the lower level of pre-tax income during
the more recent period. The provision for the current quarter included $3.4
million of federal income tax provision and $0.1 million of state income tax
expense. The provision for the quarter ended March 31, 2021 included $5.1
million of federal income tax provision and $1.2 million of state income tax
provision. Our effective federal tax rate was 17.9% during the current quarter
and 18.3% during the quarter ended March 31, 2021.
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Comparison of operating results for the six months ended March 31, 2022 and 2021

Average balances and yields. The following table sets forth average balances,
average yields and costs, and certain other information for the periods
indicated. No tax-equivalent yield adjustments were made, as the effects thereof
were not material. Average balances are derived from daily average balances.
Non-accrual loans are included in the computation of loan average balances, but
only cash payments received on those loans during the period presented are
reflected in the yield. The yields set forth below include the effect of
deferred fees, deferred expenses, discounts and premiums that are amortized or
accreted to interest income or interest expense.

                                                                    Six Months Ended                                              Six Months Ended
                                                                     March 31, 2022                                                March 31, 2021
                                                                         Interest                                                      Interest
                                                     Average             Income/              Yield/               Average             Income/              Yield/
                                                     Balance             Expense             Cost (1)              Balance             Expense             Cost (1)
                                                                                                (Dollars in thousands)

Interest-bearing assets:

 Interest-earning cash equivalents               $    416,050          $     351                 0.17  %       $    485,375          $     255          

0.11%

 Investment securities                                  3,488                 20                 1.15  %                  -                  -                    -  %
Mortgage-backed securities                            426,685              2,295                 1.08  %            441,696              1,953                 0.88  %
 Loans (2)                                         12,714,257            181,244                 2.85  %         12,991,561            196,301                 3.02  %
 Federal Home Loan Bank stock                         162,783              1,641                 2.02  %            147,861              1,375                 1.86  %
Total interest-earning assets                      13,723,263            185,551                 2.70  %         14,066,493            199,884                 2.84  %
Noninterest-earning assets                            494,020                                                       536,771
Total assets                                     $ 14,217,283                                                  $ 14,603,264

Interest-bearing debts:

 Checking accounts                               $  1,222,288                558                 0.09  %       $  1,040,353                617                 0.12  %
 Savings accounts                                   1,852,232              1,042                 0.11  %          1,693,536              1,674                 0.20  %
 Certificates of deposit                            5,866,360             34,547                 1.18  %          6,444,083             49,950                 1.55  %
 Borrowed funds                                     3,229,024             28,819                 1.78  %          3,411,955             30,489                 1.79  %
Total interest-bearing liabilities                 12,169,904             64,966                 1.07  %         12,589,927             82,730                 1.31  %
Noninterest-bearing liabilities                       275,494                                                       341,727
Total liabilities                                  12,445,398                                                    12,931,654
Shareholders' equity                                1,771,885                                                     1,671,610
Total liabilities and shareholders' equity       $ 14,217,283                                                  $ 14,603,264
Net interest income                                                    $ 120,585                                                     $ 117,154
Interest rate spread (1)(3)                                                                      1.63  %                                                       1.53  %
Net interest-earning assets (4)                  $  1,553,359                                                  $  1,476,566
Net interest margin (1)(5)                                                  1.76  %                                                       1.67  %
Average interest-earning assets to average
interest-bearing liabilities                           112.76  %                                                     111.73  %
Selected performance ratios:
Return on average assets (1)                                                0.45  %                                                       0.66  %
Return on average equity (1)                                                3.61  %                                                       5.74  %
Average equity to average assets                                           12.46  %                                                      11.45  %


_________________

(1)Annualized.
(2)Loans include both mortgage loans held for sale and loans held for
investment.
(3)Interest rate spread represents the difference between the yield on average
interest-earning assets and the cost of average interest-bearing liabilities.
(4)Net interest-earning assets represent total interest-earning assets less
total interest-bearing liabilities.
(5)Net interest margin represents net interest income divided by total
interest-earning assets.
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General. Net income decreased $16.0 million to $32.0 million for the six months
ended March 31, 2022 compared to $48.0 million for the six months ended
March 31, 2021. The decrease in net income was primarily driven from a lower net
gain on the sale of loans and a decline in the release of the credit for loan
losses, partially offset by an increase in net interest income, a decline in
operating expenses and income tax expense.

Interest and Dividend Income. Interest and dividend income decreased $14.3
million, or 7%, to $185.6 million during the six months ended March 31, 2022
compared to $199.9 million during the same six months in the prior year. The
decrease in interest and dividend income resulted mainly from a decrease in
interest income on loans, partially offset by increases in income earned on
mortgage backed securities and FHLB stock.

Interest income on loans decreased $15.1 million, or 8%, to $181.2 million for
the six months ended March 31, 2022 compared to $196.3 million for the six
months ended March 31, 2021. This decrease was attributed mainly to a 17 basis
point decrease in the average yield on loans to 2.85% for the six months ended
March 31, 2022 from 3.02% for the same six months in the prior fiscal year, as
well as a $277.3 million decrease in the average balance of loans to $12.71
billion for the current six months compared to $12.99 billion for the prior
fiscal year period as repayments and loan sales exceeded new loan production
during months leading up to the current fiscal year. Although interest rates
increased in general, the average loan yield decreased during the year as higher
yielding loans from payoffs and refinances were replaced with loans yielding
lower market interest rates.

Interest Expense. Interest expense decreased $17.7 million, or 21%, to $65.0
million during the current six months compared to $82.7 million during the six
months ended March 31, 2021. This decrease resulted from decreases in interest
expense on both deposits and borrowed funds.

Interest expense on CDs decreased $15.5 million, or 31%, to $34.5 million during
the six months ended March 31, 2022 compared to $50.0 million during the six
months ended March 31, 2021. The decrease was attributed primarily to a 37 basis
point decrease in the average rate we paid on CDs to 1.18% during the current
six months from 1.55% during the same six months last fiscal year. In addition,
there was a $577.7 million, or 9%, decrease in the average balance of CDs to
$5.87 billion from $6.44 billion during the same six months of the prior fiscal
year. While interest expense on checking accounts remained relatively unchanged,
interest expense on savings accounts decreased $0.7 million to $1.0 million
during the six months ended March 31, 2022, compared to interest expense of $1.7
million for the same six-month period during the prior fiscal year. Rates were
adjusted for deposits in response to changes in market interest rates as well as
to changes in the rates paid by our competitors.

Interest expense on borrowed funds, as impacted by related interest rate swap
contracts, decreased $1.7 million, or 6%, to $28.8 million during the six months
ended March 31, 2022 from $30.5 million during the six months ended March 31,
2021. The decrease was primarily the result of lower average balances of
borrowed funds for the six months ended March 31, 2022. The average balance of
borrowed funds decreased $182.9 million, or 5%, to $3.23 billion during the
current six months from $3.41 billion during the same six months of the prior
fiscal year. Additionally, there was a one basis point decrease in the average
rate paid for these funds to 1.78% from 1.79% for the six months ended March 31,
2022 and March 31, 2021, respectively. During the six months ended March 31,
2022, additional borrowings included $590.0 million of overnight advances and
$250.0 million of long term advances, partially offset by $375.0 million of
maturing short-term advances and their related swap contracts and other
principal repayments. Refer to the Extending the Duration of Funding Sources
section of the Overview and Comparison of Financial Condition for further
discussion.

Net Interest Income. Net interest income increased $3.4 million, or 3%, to
$120.6 million during the six months ended March 31, 2022 from $117.2 million
during the six months ended March 31, 2021. Average interest-earning assets
decreased during the current six months by $343.2 million, or 2%, to $13.72
billion when compared to the six months ended March 31, 2021. The decrease in
average assets was attributed primarily to a $277.3 million decrease in the
average balance of our loans, a $69.3 million decrease in cash and cash
equivalents, as well as a $15.0 million decrease in the average balance of
mortgage-backed security investments. The yield on average interest earning
assets decreased 14 basis points to 2.70% for the six months ended March 31,
2022 from 2.84% for the six months ended March 31, 2021. Average
interest-bearing liabilities decreased $420.0 million to $12.17 billion for the
six months ended March 31, 2022 compared to $12.59 billion for the six months
ended March 31, 2021. Average interest-bearing liabilities experienced a 24
basis point decrease in cost as our interest rate spread increased 10 basis
points to 1.63% compared to 1.53% during the same six months last fiscal year.
The net interest margin was 1.76% for the current six months and 1.67% for the
same six months in the prior fiscal year period.

Provision (Release) for Credit Losses. We recorded a release of the allowance
for credit losses on loans and off-balance sheet exposures of $3.0 million
during the six months ended March 31, 2022 and a release of $6.0 million for the
six months ended March 31, 2021. In the current six months, we recorded net
recoveries of $4.7 million, as compared to net recoveries of $2.6 million for
the six months ended March 31, 2021. Releases from the allowance for credit
losses during the current and

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prior year reflected improvements in the economic metrics used to forecast
losses for the reasonable and supportable period and decreases in pandemic
forbearance balances, as well as adjusting for the level of net loan recoveries
recorded during the period. 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. The allowance for credit losses on
loans was $64.3 million, or 0.49% of total amortized cost in loans receivable,
at March 31, 2022, compared to $67.8 million or 0.53% of total amortized cost in
loans receivable at March 31, 2021. The total allowance for credit losses was
$90.9 million at March 31, 2022, compared to $89.7 million at March 31, 2021.
Under the CECL methodology, the allowance for credits losses at March 31, 2022
included a $26.6 million liability for unfunded commitments compared to
$22.0 million at March 31, 2021, primarily undrawn home equity lines of credit
commitments. As delinquencies in the portfolio have been resolved through
pay-off, short sale or foreclosure, or management determines the collateral is
not sufficient to satisfy the loan balance, uncollected balances have been
charged against the allowance for credit losses previously provided. Refer to
the Lending Activities section of the Overview and Note 4. LOANS AND ALLOWANCES
FOR CREDIT LOSSES of the NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS for further discussion.

Non-Interest Income. Non-interest income decreased $23.5 million, or 63%, to
$13.7 million during the six months ended March 31, 2022 compared to $37.2
million during the six months ended March 31, 2021. The decrease in non-interest
income was primarily due to a $23.1 million decrease in the net gain on sale of
loans as well as a $0.4 million decrease in income from bank owned life
insurance contracts during the most recent six months. The decrease in net gain
on the sale of loans was generally attributable to both lower volumes of sales
as well as less favorable market pricing on loan delivery contracts settled
during the current fiscal year. There were loan sales of $101.7 million,
including commitments to sell, during the six months ended March 31, 2022,
compared to loan sales of $517.5 million during the six months ended March 31,
2021.

Non-Interest Expense. Non-interest expense decreased $2.9 million, or 3%, to
$97.6 million during the six months ended March 31, 2022 compared to $100.5
million during the six months ended March 31, 2021. This decrease was the
combination of a $2.7 million decrease in other operating expenses and a $1.6
million decrease in salaries and employee benefits, partially offset by a $1.1
million increase in marketing expense due to the timing of media campaigns
supporting our lending activities. The decrease in other operating expenses was
mainly attributable to a benefit from actuarial calculations related to the
defined benefit plan and a decrease in appraisal expenses and third party fees
associated with home equity lines of credit and loans. The decrease in salaries
and employee benefits was primarily due to a one-time special bonus being paid
to associates during the first quarter of the previous fiscal year.

Income Tax Expense. The provision for income taxes decreased $4.1 million to
$7.7 million during the six months ended March 31, 2022 from $11.8 million for
the six months ended March 31, 2021 reflecting the lower level of pre-tax income
during the more recent period. The provision for the current six months included
$7.2 million of federal income tax provision and $0.5 million of state income
tax provision. The provision for the six months ended March 31, 2021 included
$10.4 million of federal income tax provision and $1.4 million of state income
tax provision. Our effective federal tax rate was 18.3% during the six months
ended March 31, 2022 and 17.8% during the six months ended March 31, 2021.

Cash and capital resources

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 CD and checking account
transactions, principal repayments and maturities of securities, and sales of
loans.

In addition to the primary sources of funds described above, we have the ability
to obtain funds through the use of collateralized borrowings in the wholesale
markets and from sales of securities. Also, debt issuance by the Company and
access to the equity capital markets via a supplemental minority stock offering
or a full conversion (second-step) transaction remain as other potential sources
of liquidity, although these channels generally require up to nine months of
lead time.

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 Asset/Liability Management 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 assets). For the three months ended
March 31, 2022, our liquidity ratio averaged 5.47%. We believe that we had
sufficient sources of liquidity to satisfy our short- and long-term liquidity
needs as of March 31, 2022.
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We regularly adjust our investments in liquid assets based upon our assessment
of expected loan demand, expected deposit flows, yields available on
interest-earning deposits and securities, scheduled liability maturities and the
objectives of our asset/liability management program. Excess liquid assets are
generally invested in interest-earning deposits and short- and intermediate-term
securities.

Our most liquid assets are cash and cash equivalents. The levels of these assets
are dependent on our operating, financing, lending and investing activities
during any given period. At March 31, 2022, cash and cash equivalents totaled
$370.7 million, which represented a decrease of 24.1% from $488.3 million at
September 30, 2021.

Marketable securities classified as available for sale, which provide additional sources of liquidity, total $443.2 million to March 31, 2022.

During the six-month period ended March 31, 2022, loan sales totaled $101.7
million, which includes sales to Fannie Mae, consisting of $75.9 million of
long-term, fixed-rate, agency-compliant, non-Home Ready first mortgage loans and
$25.8 million of loans that qualified under Fannie Mae's Home Ready initiative.
Loans originated under the Home Ready initiative for sale to Fannie Mae are
classified as "held for sale" at origination. Loans originated under Fannie Mae
compliant procedures, including Home Ready loans that management intends to
retain until maturity or for the foreseeable future, are classified as "held for
investment" until they are specifically identified for sale. At March 31, 2022,
there were no long-term, fixed-rate residential first mortgage loans classified
as "held for sale".

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

At March 31, 2022, we had $870.1 million in outstanding commitments to originate
loans. In addition to commitments to originate loans, we had $3.68 billion in
unfunded home equity lines of credit to borrowers. CDs due within one year of
March 31, 2022 totaled $3.35 billion, or 37.2% of total deposits. If these
deposits do not remain with us, we will be required to seek other sources of
funds, including loan sales, sales of investment securities, other deposit
products, including new CDs, brokered CDs, brokered checking, FHLB advances,
borrowings from the FRB-Cleveland Discount Window or other collateralized
borrowings. Depending on market conditions, we may be required to pay higher
rates on such deposits or other borrowings than we currently pay on the CDs due
on or before March 31, 2023. We believe, however, based on past experience, that
a significant portion of such deposits will remain with us. Generally, we have
the ability to attract and retain deposits by adjusting the interest rates
offered.

Our primary investing activities are originating residential mortgage loans,
home equity loans and lines of credit and purchasing investments. During the six
months ended March 31, 2022, we originated $1.74 billion of residential mortgage
loans, and $1.08 billion of commitments for home equity loans and lines of
credit, while during the six months ended March 31, 2021, we originated $2.06
billion of residential mortgage loans and $823.7 million of commitments for home
equity loans and lines of credit. We purchased $145.5 million of securities
during the six months ended March 31, 2022, and $150.3 million during the six
months ended March 31, 2021.

Financing activities consist primarily of changes in deposit accounts, changes
in the balances of principal and interest owed on loans serviced for others,
FHLB advances, including any collateral requirements related to interest rate
swap agreements and borrowings from the FRB-Cleveland Discount Window. We
experienced a net increase in total deposits of $14.7 million during the six
months ended March 31, 2022, which reflected the active management of the
offered rates on maturing CDs, compared to a net increase of $12.9 million
during the six months ended March 31, 2021. Deposit flows are affected by the
overall level of interest rates, the interest rates and products offered by us
and our local competitors, and by other factors. During the six months ended
March 31, 2022, there was a $38.1 million decrease in the balance of brokered
CDs (exclusive of acquisition costs and subsequent amortization), which had a
balance of $453.9 million at March 31, 2022. At March 31, 2021 the balance of
brokered CDs was $572.4 million. During the six months ended March 31, 2022
checking accounts increased $271.8 million, which included $200.0 million in
brokered checking accounts. Principal and interest owed on loans serviced for
others experienced a net decrease of $8.4 million to $33.0 million during the
six months ended March 31, 2022 compared to a net increase of $0.2 million to
$46.1 million during the six months ended March 31, 2021. During the six months
ended March 31, 2022 we increased our advances from the FHLB of Cincinnati by
$463.5 million as we funded: new loan originations, our capital initiatives, and
actively managed our liquidity ratio. During the six months ended March 31,
2021, our advances from the FHLB of Cincinnati decreased by $228.0 million.

Liquidity management is both a daily and long-term function of business
management. If we require funds beyond our ability to generate them internally,
borrowing agreements exist with the FHLB of Cincinnati and the FRB-Cleveland
Discount Window, each of which provides an additional source of funds. Also, in
evaluating funding alternatives, we may participate in the brokered deposit
market. At March 31, 2022 we had $3.56 billion of FHLB of Cincinnati advances
and no outstanding
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borrowings from the FRB-Cleveland Discount Window. During the six months ended
March 31, 2022, we had average outstanding advances from the FHLB of Cincinnati
of $3.23 billion as compared to average outstanding advances of $3.41 billion
during the six months ended March 31, 2021. Refer to the Extending the Duration
of Funding Sources section of the Overview and the General section of Item 3.
Quantitative and Qualitative Disclosures About Market Risk for further
discussion. At March 31, 2022, we had the ability to borrow a maximum of $7.69
billion from the FHLB of Cincinnati and $208.4 million from the FRB-Cleveland
Discount Window. From the perspective of collateral value securing FHLB of
Cincinnati advances, our capacity limit for collateral based additional
borrowings beyond the outstanding balance at March 31, 2022 was $4.14 billion,
subject to satisfaction of the FHLB of Cincinnati common stock ownership
requirement.

The Association and the Company are subject to various regulatory capital
requirements, including a risk-based capital measure. The Basel III capital
framework for U.S. banking organizations ("Basel III Rules") includes both a
revised definition of capital and guidelines for calculating risk-weighted
assets by assigning balance sheet assets and off-balance sheet items to broad
risk categories.

In 2019, a final rule adopted by the federal banking agencies provided banking
organizations with the option to phase in, over a three-year period, the adverse
day-one regulatory capital effects of the adoption of the CECL accounting
standard. In 2020, as part of its response to the impact of COVID-19, U.S.
federal banking regulatory agencies issued a final rule which provides banking
organizations that implement CECL during the 2020 calendar year the option to
delay for two years an estimate of CECL's effect on regulatory capital, relative
to the incurred loss methodology's effect on regulatory capital, followed by a
three-year transition period, which the Association and Company have adopted.
During the two-year delay, the Association and Company will add back to common
equity tier 1 capital ("CET1") 100% of the initial adoption impact of CECL plus
25% of the cumulative quarterly changes in the allowance for credit losses.
After two years the quarterly transitional amounts along with the initial
adoption impact of CECL will be phased out of CET1 capital over the three-year
period.

The Association is subject to the "capital conservation buffer" requirement
level of 2.5%. The requirement limits capital distributions and certain
discretionary bonus payments to management if the institution does not hold a
"capital conservation buffer" in addition to the minimum capital requirements.
At March 31, 2022, the Association exceeded the regulatory requirement for the
"capital conservation buffer".

As of March 31, 2022, the Association exceeded all regulatory requirements to be
considered "Well Capitalized" as presented in the table below (dollar amounts in
thousands).

                                                                          Actual                             Well Capitalized Levels
                                                                Amount                Ratio                Amount                Ratio
Total Capital to Risk-Weighted Assets                       $ 1,611,763                19.85  %        $   811,806                10.00  %
Tier 1 (Leverage) Capital to Net Average Assets               1,566,444                10.99  %            712,609                 5.00  %
Tier 1 Capital to Risk-Weighted Assets                        1,566,444                19.30  %            649,444                 8.00  %

Common Equity Tier 1 capital to risk-weighted assets 1,566,444

            19.30  %            527,674                 6.50  %


The Company’s capital ratios at March 31, 2022 are presented in the table below (amounts in thousands of dollars).

Real

                                                                  Amount          Ratio
     Total Capital to Risk-Weighted Assets                     $ 1,851,507       22.79  %
     Tier 1 (Leverage) Capital to Net Average Assets             1,806,188       12.66  %
     Tier 1 Capital to Risk-Weighted Assets                      1,806,188       22.24  %
     Common Equity Tier 1 Capital to Risk-Weighted Assets        1,806,188       22.24  %


In addition to the operational liquidity considerations described above, which
are primarily those of the Association, the Company, as a separate legal entity,
also monitors and manages its own, parent company-only liquidity, which provides
the source of funds necessary to support all of the parent company's stand-alone
operations, including its capital distribution strategies which encompass its
share repurchase and dividend payment programs. The Company's primary source of
liquidity is dividends received from the Association. The amount of dividends
that the Association may declare and pay to the Company in any calendar year,
without the receipt of prior approval from the OCC but with prior notice to the
FRB-Cleveland, cannot exceed net income for the current calendar year-to-date
period plus retained net income (as defined) for the preceding two calendar
years, reduced by prior dividend payments made during those periods. In December
2021, the Company received a $56.0 million cash dividend from the Association.
Because of its intercompany nature, this dividend payment had no impact on the
Company's capital ratios or its CONSOLIDATED STATEMENTS OF CONDITION but reduced
the Association's reported

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capital ratios. At March 31, 2022, the Company had, in the form of cash and a
demand loan from the Association, $218.1 million of funds readily available to
support its stand-alone operations.

The Company's eighth stock repurchase program, which authorized the repurchase
of up to 10,000,000 shares of the Company's outstanding common stock was
approved by the Board of Directors on October 27, 2016 and repurchases began on
January 6, 2017. There were 4,177,980 shares repurchased under that program
between its start date and March 31, 2022. During the six months ended March 31,
2022, the Company repurchased $2.3 million of its common stock. The share
repurchase plan was suspended during the fiscal year ended September 30, 2020 as
part of the response to COVID-19, but was reinstated in February 2021.

On July 13, 2021, Third Federal Savings, MHC received the approval of its
members with respect to the waiver of dividends on the Company's common stock
the MHC owns, up to a total of $1.13 per share, to be declared on the Company's
common stock during the 12 months subsequent to the members' approval (i.e.,
through July 13, 2022). The members approved the waiver by casting 60% of the
eligible votes, with 97% of the votes cast, or 59% of the total eligible votes,
voting in favor of the waiver. Third Federal Savings, MHC is the 81% majority
shareholder of the Company. Following the receipt of the members' approval at
the July 13, 2021 meeting, Third Federal Savings, MHC filed a notice with, and
received the non-objection from the FRB-Cleveland for the proposed dividend
waivers. Third Federal Savings, MHC waived its right to receive $0.2825 per
share dividend payments on September 21, 2021, December 14, 2021 and March 22,
2022.

The payment of dividends, support for asset growth and strategic share buybacks are expected to continue going forward as a focus for future capital deployment activities.

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