
	December 31, 2022		September 30, 2022
Real estate loans:
Residential Core	$	11,687,740	$	11,539,859
Residential Home Today	51,404		53,255
Home equity loans and lines of credit	2,699,513		2,633,878
Construction	113,815		121,759
Real estate loans	14,552,472		14,348,751
Other loans	3,481		3,263
Add (deduct):
Deferred loan expenses, net	51,768		50,221
Loans in process	(59,749)		(72,273)
Allowance for credit losses on loans	(74,477)		(72,895)
Loans held for investment, net	$	14,473,495	$	14,257,067

Loans are carried at amortized cost, which includes outstanding principal balance adjusted for any unamortized premiums or discounts, net of deferred fees and expenses. Accrued interest is $44,068 and $39,124 as of December 31, 2022 and September 30, 2022, respectively, and is reported in accrued interest receivable on the CONSOLIDATED STATEMENTS OF CONDITION.

A large concentration of the Company’s lending is in Ohio and Florida. As of December 31, 2022 and September 30, 2022, the percentage of aggregate Residential Core, Home Today and Construction loans secured by properties in Ohio was 57% and 56%, respectively, and the percentage of loans secured by properties in Florida was 18%, as of both dates. As of December 31, 2022 and September 30, 2022, home equity loans and lines of credit were concentrated in the states of Ohio (26% and 27% respectively), Florida (21% and 20% respectively), and California (17% and 16% respectively).

Residential Core mortgage loans represent the largest portion of the residential real estate portfolio. The Company believes overall credit risk is low based on the nature, composition, collateral, products, lien position and performance of the portfolio. The portfolio does not include loan types or structures that have experienced severe performance problems at other financial institutions (sub-prime, no documentation or pay-option adjustable-rate mortgages). The portfolio contains "Smart Rate" adjustable-rate mortgage loans whereby the interest rate is locked initially for three or five years then resets annually, subject to periodic rate adjustments caps and various re-lock options available to the borrower. Although the borrower is qualified for its loan at a higher rate than the initial rate offered, the adjustable-rate feature may impact a borrower's ability to afford the higher payments upon rate reset during periods of rising interest rates while this repayment risk may be reduced in a declining or low rate environment. With limited historical loss experience compared to other types of loans in the portfolio, judgment is required by management in assessing the allowance required on adjustable-rate mortgage loans. The principal amount of adjustable-rate mortgage loans included in the Residential Core portfolio was $4,703,176 and $4,668,089 at December 31, 2022 and September 30, 2022, respectively.

Home Today was an affordable housing program targeted to benefit low- and moderate-income home buyers and most loans under the program were originated prior to 2009. No new loans were originated under the Home Today program after September 30, 2016. Home Today loans have greater credit risk than traditional residential real estate mortgage loans.

Home equity loans and lines of credit, which are comprised primarily of home equity lines of credit, represent a significant portion of the residential real estate portfolio and include monthly principal and interest payments throughout the entire term. Once the draw period on lines of credit has expired, the accounts are included in the home equity loan balance. The full credit exposure on home equity lines of credit is secured by the value of the collateral real estate at the time of origination.

The Company originates construction loans to individuals for the construction of their personal single-family residence by a qualified builder (construction/permanent loans). The Company’s construction/permanent loans generally provide for disbursements to the builder or sub-contractors during the construction phase as work progresses. During the construction

phase, the borrower only pays interest on the drawn balance. Upon completion of construction, the loan converts to a permanent amortizing loan without the expense of a second closing. The Company offers construction/permanent loans with fixed or adjustable-rates, and a current maximum loan-to-completed-appraised value ratio of 85%.

Other loans are comprised of loans secured by certificate of deposit accounts, which are fully recoverable in the event of non-payment, and forgivable down payment assistance loans, which are unsecured loans used as down payment assistance to borrowers qualified through partner housing agencies. The Company records a liability for the down payment assistance loans which are forgiven in equal increments over a pre-determined term, subject to residency requirements.

Loans held for sale include loans originated with the intent to sell which are generally priced in alignment with secondary market pricing and may be subject to loan level pricing adjustments. Additionally, loans originated for the held for investment portfolio may later be identified for sale and transferred to the held for sale portfolio, which may include loans originated within the parameters of programs established by Fannie Mae. During the three months ended December 31, 2022 and December 31, 2021, reclassifications to the held for sale portfolio included loans that were sold during the period, including those in contracts pending settlement at the end of the period, and loans originated for the held for investment portfolio that were later identified for sale. At December 31, 2022 and September 30, 2022, respectively, mortgage loans held for sale totaled $12,549 and $9,661. During the three months ended December 31, 2022, the principal balance of loans sold was $19,182 (including no loans in contracts pending settlement) compared to $102,006 (including $32,968 in contracts pending settlement) during three months ended December 31, 2021. During both the three months ended December 31, 2022 and December 31, 2021, there were no transfers to the held for investment portfolio.

An aging analysis of the amortized cost in loan receivables that are past due at December 31, 2022 and September 30, 2022 is summarized in the following tables. When a loan is more than one month past due on its scheduled payments, the loan is considered 30 days or more past due, regardless of the number of days in each month. Balances are adjusted for deferred loan fees and expenses and any applicable loans-in-process.


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
December 31, 2022
Real estate loans:
Residential Core	$	6,856	$	1,744	$	7,525	$	16,125	$	11,691,893	$	11,708,018
Residential Home Today	1,253		537		1,179		2,969		47,980		50,949
Home equity loans and lines of credit	3,021		754		2,951		6,726		2,725,715		2,732,441
Construction	—		—		—		—		53,083		53,083
Total real estate loans	11,130		3,035		11,655		25,820		14,518,671		14,544,491
Other loans	—		—		—		—		3,481		3,481
Total	$	11,130	$	3,035	$	11,655	$	25,820	$	14,522,152	$	14,547,972


	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
September 30, 2022
Real estate loans:
Residential Core	$	2,725	$	1,491	$	9,281	$	13,497	$	11,545,784	$	11,559,281
Residential Home Today	1,341		770		861		2,972		49,836		52,808
Home equity loans and lines of credit	1,599		796		2,321		4,716		2,661,416		2,666,132
Construction	—		—		—		—		48,478		48,478
Total real estate loans	5,665		3,057		12,463		21,185		14,305,514		14,326,699
Other loans	—		—		—		—		3,263		3,263
Total	$	5,665	$	3,057	$	12,463	$	21,185	$	14,308,777	$	14,329,962

payment. Loans with a partial charge-off are placed in non-accrual and will remain in non-accrual status until, at a minimum, the loss is recovered. Loans restructured in TDRs that were in non-accrual status prior to the restructurings and loans with forbearance plans that were subsequently modified in TDRs are reported in non-accrual status for a minimum of six months after restructuring. Loans restructured in TDRs with a high debt-to-income ratio at the time of modification are placed in non-accrual status for a minimum of 12 months. Additionally, home equity loans and lines of credit where the customer has a severely delinquent first mortgage loan and loans in Chapter 7 bankruptcy status where all borrowers have filed, and not reaffirmed or been dismissed, are placed in non-accrual status.

The amortized cost of loan receivables in non-accrual status is summarized in the following table. Non-accrual with no ACL describes non-accrual loans which have no quantitative or individual valuation allowance, primarily because they have already been collaterally reviewed and any required charge-offs have been taken, but may be included in consideration of qualitative allowance factors. Balances are adjusted for deferred loan fees and expenses. There are no loans 90 or more days past due and still accruing at December 31, 2022 or September 30, 2022.


	December 31, 2022				September 30, 2022
	Non-accrual with No ACL		Total Non-accrual		Non-accrual with No ACL		Total Non-accrual
Real estate loans:
Residential Core	$	19,587	$	21,058	$	20,995	$	22,644
Residential Home Today	5,345		5,783		5,753		6,037
Home equity loans and lines of credit	6,912		7,289		6,668		6,925

Total non-accrual loans	$	31,844	$	34,130	$	33,416	$	35,606

At December 31, 2022 and September 30, 2022, respectively, the amortized cost in non-accrual loans includes $22,484 and $23,159 which are performing according to the terms of their agreement, of which $12,752 and $13,526 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed. At December 31, 2022 and September 30, 2022, real estate loans include $8,768 and $9,833, respectively, of loans that were in the process of foreclosure.

Interest on loans in accrual status is recognized in interest income as it accrues, on a daily basis. Accrued interest on loans in non-accrual status is reversed by a charge to interest income and income is subsequently recognized only to the extent cash payments are received. The Company has elected not to measure an allowance for credit losses on accrued interest receivable amounts since amounts are written off timely. Cash payments on loans in non-accrual status are applied to the oldest scheduled, unpaid payment first. The amount of interest income recognized on non-accrual loans was $162 and for the three months ended December 31, 2022 and $186 for three months ended December 31, 2021, respectively. Cash payments on loans with a partial charge-off are applied fully to principal, then to recovery of the charged off amount prior to interest income being recognized, except cash payments may be applied to interest capitalized in a restructuring when collection of remaining amounts due is considered probable. A non-accrual loan is generally returned to accrual status when contractual payments are less than 90 days past due. However, a loan may remain in non-accrual status when collectability is uncertain, such as a TDR that has not met minimum payment requirements, a loan with a partial charge-off, a home equity loan or line of credit with a delinquent first mortgage greater than 90 days past due, or a loan in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed.

For all classes of loans, a loan is considered collateral-dependent when, based on current information and events, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the sale of the collateral or foreclosure is probable. Factors considered in determining that a loan is collateral-dependent may include the deteriorating financial condition of the borrower indicated by missed or delinquent payments, a pending legal action, such as bankruptcy or foreclosure, or the absence of adequate security for the loan.

Collateral-dependent residential mortgage loans and construction loans are charged-off to the extent the amortized cost in the loan, net of anticipated mortgage insurance claims, exceeds the fair value, less estimated costs to dispose of the underlying property. Management can determine if the loan is uncollectible for reasons such as foreclosures exceeding a reasonable time frame and recommend a full charge-off. Home equity loans or lines of credit are charged-off to the extent the amortized cost in the loan plus the balance of any senior liens exceeds the fair value, less estimated costs to dispose of the underlying property, or management determines the collateral is not sufficient to satisfy the loan. A loan in any portfolio identified as collateral-dependent will continue to be reported as such until it is no longer considered collateral-dependent, is less than 30 days past due and does not have a prior charge-off. A loan in any portfolio that has a partial charge-off will continue to be individually evaluated for credit loss until, at a minimum, the loss has been recovered.

Residential mortgage loans, home equity loans and lines of credit and construction loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for credit losses on a loan by loan basis at each reporting date for as long as they are reported as TDRs. The credit loss evaluation is based on the present value of expected future cash flows discounted at the effective interest rate of the original loan. Expected future cash flows include a discount factor representing a potential for default. Valuation allowances are recorded for the excess of the amortized costs over the result of the cash flow analysis. Loans discharged in Chapter 7 bankruptcy are reported as TDRs and also evaluated based on the present value of expected future cash flows unless evaluated based on collateral. These loans are evaluated using expected future cash flows because the borrower, not liquidation of the collateral, is expected to be the source of repayment for the loan. Other loans are not considered for restructuring.

The allowance for credit losses represents the estimate of lifetime losses in the loan portfolio and unfunded loan commitments. The allowance is estimated at each reporting date using relevant available information relating to past events, current conditions and supportable forecasts. The Company utilizes loan level regression models with forecasted economic data to derive the probability of default and loss given default factors. These factors are used to calculate the loan level credit loss over a 24-month period with an immediate reversion to historical mean loss rates for the remaining life of the loans.

Historical credit loss experience provides the basis for the estimation of expected credit losses. Qualitative adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency status or likely recovery of previous loan charge-offs. Qualitative adjustments for expected changes in environmental conditions, such as changes in unemployment rates, property values or other relevant factors, are recognized when forecasted economic data used in the model differs from management's view or contains significant unobservable changes within a short period, particularly when those changes are directionally positive. Identifiable model limitations may also lead to qualitative adjustments, such as those made to reflect the expected recovery of loan amounts previously charged-off, beyond what the model is able to project. The qualitative adjustments resulted in a negative ending balance on the allowance for credit losses for the Home Today portfolio, where recoveries are expected to exceed charge-offs over the remaining life of that portfolio. The net qualitative adjustment at December 31, 2022 was a net reduction of $7,796. Adjustments are evaluated quarterly based on current facts and circumstances.


	For the Three Months Ended December 31, 2022
	Beginning Balance		Provisions (Releases)		Charge-offs		Recoveries		Ending Balance
Real estate loans:
Residential Core	$	53,506	$	792	$	(114)	$	314	$	54,498
Residential Home Today	(997)		(506)		(173)		691		(985)
Home equity loans and lines of credit	20,032		(402)		(127)		1,080		20,583
Construction	354		27		—		—		381
Total real estate loans	$	72,895	$	(89)	$	(414)	$	2,085	$	74,477
Total Unfunded Loan Commitments (1)	$	27,021	$	(911)	$	—	$	—	$	26,110
Total Allowance for Credit Losses	$	99,916	$	(1,000)	$	(414)	$	2,085	$	100,587


	For the Three Months Ended December 31, 2021
	Beginning Balance		Provisions (Releases)		Charge-offs		Recoveries		Ending Balance
Real estate loans:
Residential Core	$	44,523	$	(506)	$	(26)	$	481	$	44,472
Residential Home Today	15		(685)		(12)		588		(94)
Home equity loans and lines of credit	19,454		(1,529)		(237)		1,164		18,852
Construction	297		49		—		—		346
Total real estate loans	$	64,289	$	(2,671)	$	(275)	$	2,233	$	63,576
Total Unfunded Loan Commitments (1)	$	24,970	$	671	$	—	$	—	$	25,641
Total Allowance for Credit Losses	$	89,259	$	(2,000)	$	(275)	$	2,233	$	89,217

The following tables provide information about the credit quality of residential loan receivables by an internally assigned grade as of the dates presented. Revolving loans reported at amortized cost include home equity lines of credit currently in their draw period. Revolving loans converted to term are home equity lines of credit that are in repayment. Home equity loans and bridge loans are segregated by origination year. Loans, or the portions of loans, classified as loss are fully charged-off in the period in which they are determined to be uncollectible; therefore they are not included in the following table. No Home Today loans are classified Special Mention and no construction loans are classified Substandard for either period presented. No construction loans are classified Special Mention at December 31, 2022. Balances are adjusted for deferred loan fees and expenses and any applicable loans-in-process.


													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term
	By fiscal year of origination
	2023		2022		2021		2020		2019		Prior						Total
December 31, 2022
Real estate loans:
Residential Core
Pass	$	463,396	$	3,274,958	$	2,204,396	$	1,451,445	$	610,582	$	3,670,822	$	—	$	—	$	11,675,599
Special Mention	—		—		260		—		108		1,273		—		—		1,641
Substandard	—		156		563		2,856		1,269		25,934		—		—		30,778
Total Residential Core	463,396		3,275,114		2,205,219		1,454,301		611,959		3,698,029		—		—		11,708,018
Residential Home Today (1)
Pass	—		—		—		—		—		43,574		—		—		43,574

Substandard	—		—		—		—		—		7,375		—		—		7,375
Total Residential Home Today	—		—		—		—		—		50,949		—		—		50,949
Home equity loans and lines of credit
Pass	41,476		85,098		28,770		8,704		7,395		17,181		2,448,906		82,118		2,719,648
Special Mention	—		253		117		47		—		53		2,294		321		3,085
Substandard	—		—		73		53		19		142		2,971		6,450		9,708
Total Home equity loans and lines of credit	41,476		85,351		28,960		8,804		7,414		17,376		2,454,171		88,889		2,732,441
Construction
Pass	4,608		44,451		4,024		—		—		—		—		—		53,083

Total Construction	4,608		44,451		4,024		—		—		—		—		—		53,083
Total real estate loans
Pass	509,480		3,404,507		2,237,190		1,460,149		617,977		3,731,577		2,448,906		82,118		14,491,904
Special Mention	—		253		377		47		108		1,326		2,294		321		4,726
Substandard	—		156		636		2,909		1,288		33,451		2,971		6,450		47,861
Total real estate loans	$	509,480	$	3,404,916	$	2,238,203	$	1,463,105	$	619,373	$	3,766,354	$	2,454,171	$	88,889	$	14,544,491


													Revolving Loans Amortized Cost Basis		Revolving Loans Converted To Term
	By fiscal year of origination
	2022		2021		2020		2019		2018		Prior						Total
September 30, 2022
Real estate loans:
Residential Core
Pass	$	3,349,200	$	2,251,075	$	1,488,763	$	629,090	$	665,116	$	3,141,907	$	—	$	—	$	11,525,151
Special Mention	—		292		—		108		464		816		—		—		1,680
Substandard	—		1,195		3,188		1,142		1,883		25,042		—		—		32,450
Total Residential Core	3,349,200		2,252,562		1,491,951		630,340		667,463		3,167,765		—		—		11,559,281
Residential Home Today (1)
Pass	—		—		—		—		—		45,408		—		—		45,408

Substandard	—		—		—		—		—		7,400		—		—		7,400
Total Residential Home Today	—		—		—		—		—		52,808		—		—		52,808
Home equity loans and lines of credit
Pass	98,904		30,614		9,204		8,036		6,965		11,247		2,400,095		89,448		2,654,513
Special Mention	—		191		—		—		—		—		898		640		1,729
Substandard	—		—		54		20		19		127		2,996		6,674		9,890
Total Home equity loans and lines of credit	98,904		30,805		9,258		8,056		6,984		11,374		2,403,989		96,762		2,666,132
Construction
Pass	37,810		10,668		—		—		—		—		—		—		48,478

Total Construction	37,810		10,668		—		—		—		—		—		—		48,478
Total real estate loans
Pass	3,485,914		2,292,357		1,497,967		637,126		672,081		3,198,562		2,400,095		89,448		14,273,550
Special Mention	—		483		—		108		464		816		898		640		3,409
Substandard	—		1,195		3,242		1,162		1,902		32,569		2,996		6,674		49,740
Total real estate loans	$	3,485,914	$	2,294,035	$	1,501,209	$	638,396	$	674,447	$	3,231,947	$	2,403,989	$	96,762	$	14,326,699

The home equity lines of credit converted from revolving to term loans during the three months ended December 31, 2022 and December 31, 2021, respectively, totaled $396 and $40. The amount of conversions to term loans is expected to remain low for several years since the length of the draw period on new originations changed from five to ten years in 2016.

Residential loans are internally assigned a grade that complies with the guidelines outlined in the OCC’s Handbook for Rating Credit Risk. Pass loans are assets well protected by the current paying capacity of the borrower. Special Mention loans have a potential weakness, as evaluated based on delinquency status or nature of the product, that the Company deems to deserve management’s attention and may result in further deterioration in their repayment prospects and/or the Company’s credit position. Included in Special Mention loans are residential mortgage loans purchased which were current and performing at the time of purchase, but due to the absence of mortgage insurance coverage are potentially weaker repayment prospects when compared with the Company's originated residential Core portfolio. Substandard loans are inadequately protected by the current payment capacity of the borrower or the collateral pledged with a defined weakness that jeopardizes the liquidation of the debt. Also included in Substandard are performing home equity loans and lines of credit where the customer has a severely delinquent first mortgage to which the performing home equity loan or line of credit is subordinate and all loans in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed. Loss loans are considered uncollectible and are charged off when identified. Loss loans are of such little value that their continuance as bankable assets is not warranted even though partial recovery may be effected in the future.

Initial concessions granted for loans restructured as TDRs may include reduction of interest rate, extension of amortization period, forbearance or other actions. Some TDRs have experienced a combination of concessions. TDRs also may 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. The amortized cost in TDRs by category as of December 31, 2022 and September 30, 2022 is shown in the tables below.


December 31, 2022	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	30,157	$	17,385	$	10,873	$	58,415
Residential Home Today	10,060		11,177		1,884		23,121
Home equity loans and lines of credit	22,490		2,676		1,162		26,328

Total	$	62,707	$	31,238	$	13,919	$	107,864

TDRs may be restructured more than once. Among other requirements, a subsequent restructuring may be available for a borrower upon the expiration of temporary restructuring terms if the borrower is unable to resume contractually scheduled loan payments. If the borrower is experiencing an income curtailment that temporarily has reduced their capacity to repay, such as loss of employment, reduction of work hours, non-paid leave or short-term disability, a temporary restructuring is considered. If the borrower lacks the capacity to repay the loan at the current terms due to a permanent condition, a permanent restructuring is considered. In evaluating the need for a subsequent restructuring, the borrower’s ability to repay is generally assessed utilizing a debt to income and cash flow analysis.