10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 10-Q

________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2019

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from              to             

Commission File Number 001-33390

________________________________________

TFS FINANCIAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

________________________________________

United States of America	52-2054948
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
7007 Broadway Avenue Cleveland, Ohio	44105
(Address of Principal Executive Offices)	(Zip Code)

(216) 441-6000

Registrant’s telephone number, including area code:

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

________________________________________

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller Reporting Company	¨
Emerging Growth Company	o

If an emerging company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Securities registered pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol(s)	Name of each exchange in which registered
Common Stock, par value $0.01 per share	TFSL	The NASDAQ Stock Market, LLC

As of May 6, 2019, there were 279,990,293 shares of the Registrant’s common stock, par value $0.01 per share, outstanding, of which 227,119,132 shares, or 81.1% of the Registrant’s common stock, were held by Third Federal Savings and Loan Association of Cleveland, MHC, the Registrant’s mutual holding company.

TFS Financial Corporation

INDEX

		Page
	Glossary of Terms	3
PART l – FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Condition
	March 31, 2019 and September 30, 2018	4
	Consolidated Statements of Income
	Three and Six Months Ended March 31, 2019 and 2018	5
	Consolidated Statements of Comprehensive Income
	Three and Six Months Ended March 31, 2019 and 2018	6
	Consolidated Statements of Shareholders’ Equity
	Three and Six Months Ended March 31, 2019 and 2018	7
	Consolidated Statements of Cash Flows
	Six Months Ended March 31, 2019 and 2018	9
	Notes to Unaudited Interim Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	68
Item 4.	Controls and Procedures	72
Part II — OTHER INFORMATION
Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibits	73
SIGNATURES		74

2

GLOSSARY OF TERMS

TFS Financial Corporation provides the following list of acronyms and defined terms as a tool for the reader. The acronyms and defined terms identified below are used throughout the document.

ACT: Tax Cuts and Jobs Act	FRB-Cleveland:  Federal Reserve Bank of Cleveland
AOCI:  Accumulated Other Comprehensive Income	Freddie Mac: Federal Home Loan Mortgage Corporation
ARM:  Adjustable Rate Mortgage	FRS:  Board of Governors of the Federal Reserve System
ASC: Accounting Standards Codification	GAAP:  Generally Accepted Accounting Principles
ASU:  Accounting Standards Update	Ginnie Mae:  Government National Mortgage Association
Association: Third Federal Savings and Loan	GVA:  General Valuation Allowances
Association of Cleveland	HARP:  Home Affordable Refinance Program
BOLI:  Bank Owned Life Insurance	HPI:  Home Price Index
CDs:  Certificates of Deposit	IRR:  Interest Rate Risk
CFPB:  Consumer Financial Protection Bureau	IRS:  Internal Revenue Service
CLTV:  Combined Loan-to-Value	IVA:  Individual Valuation Allowance
Company:  TFS Financial Corporation and its	LIHTC:  Low Income Housing Tax Credit
subsidiaries	LIP:  Loans-in-Process
DFA:  Dodd-Frank Wall Street Reform and Consumer	LTV:  Loan-to-Value
Protection Act	MGIC:  Mortgage Guaranty Insurance Corporation
EaR:  Earnings at Risk	OCC:  Office of the Comptroller of the Currency
EPS: Earnings per Share	OCI:  Other Comprehensive Income
ESOP:  Third Federal Employee (Associate) Stock	OTS:  Office of Thrift Supervision
Ownership Plan	PMI:  Private Mortgage Insurance
EVE:  Economic Value of Equity	PMIC:  PMI Mortgage Insurance Co.
Fannie Mae:  Federal National Mortgage Association	QTL:  Qualified Thrift Lender
FASB:  Financial Accounting Standards Board	REMICs:  Real Estate Mortgage Investment Conduits
FDIC:  Federal Deposit Insurance Corporation	SEC:  United States Securities and Exchange Commission
FHFA:  Federal Housing Finance Agency	TDR:  Troubled Debt Restructuring
FHLB:  Federal Home Loan Bank	Third Federal Savings, MHC:  Third Federal Savings
FICO:  Financing Corporation	and Loan Association of Cleveland, MHC

3

Item 1. Financial Statements

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION (unaudited)

(In thousands, except share data)

	March 31, 2019			September 30, 2018
ASSETS
Cash and due from banks	$	29,055		$	29,056
Interest-earning cash equivalents	230,185			240,719
Cash and cash equivalents	259,240			269,775
Investment securities available for sale (amortized cost $581,086 and $549,211, respectively)	574,572			531,965
Mortgage loans held for sale, at lower of cost or market (none measured at fair value)	1,016			659
Loans held for investment, net:
Mortgage loans	12,882,319			12,872,125
Other consumer loans	2,793			3,021
Deferred loan expenses, net	40,177			38,566
Allowance for loan losses	(40,286		)	(42,418		)
Loans, net	12,885,003			12,871,294
Mortgage loan servicing rights, net	8,484			8,840
Federal Home Loan Bank stock, at cost	93,544			93,544
Real estate owned	2,898			2,794
Premises, equipment, and software, net	62,433			63,399
Accrued interest receivable	40,071			38,696
Bank owned life insurance contracts	214,619			212,021
Other assets	64,747			44,344
TOTAL ASSETS	$	14,206,627		$	14,137,331
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	8,732,790		$	8,491,583
Borrowed funds	3,590,072			3,721,699
Borrowers’ advances for insurance and taxes	88,839			103,005
Principal, interest, and related escrow owed on loans serviced	29,561			31,490
Accrued expenses and other liabilities	29,380			31,150
Total liabilities	12,470,642			12,378,927
Commitments and contingent liabilities
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding	—			—
Common stock, $0.01 par value, 700,000,000 shares authorized; 332,318,750 shares issued; 280,076,911 and 280,311,070 outstanding at March 31, 2019 and September 30, 2018, respectively	3,323			3,323
Paid-in capital	1,729,499			1,726,992
Treasury stock, at cost; 52,241,839 and 52,007,680 shares at March 31, 2019 and September 30, 2018, respectively	(760,367		)	(754,272		)
Unallocated ESOP shares	(46,584		)	(48,751		)
Retained earnings—substantially restricted	823,644			807,890
Accumulated other comprehensive income (loss)	(13,530		)	23,222
Total shareholders’ equity	1,735,985			1,758,404
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	14,206,627		$	14,137,331

See accompanying notes to unaudited interim consolidated financial statements.

4

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except share and per share data)

	For the Three Months Ended						For the Six Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	114,306		$	105,239		$	226,797		$	207,865
Investment securities available for sale	3,494			2,759			6,618			5,348
Other interest and dividend earning assets	2,643			2,182			5,316			4,196
Total interest and dividend income	120,443			110,180			238,731			217,409
INTEREST EXPENSE:
Deposits	35,077			23,630			67,839			46,624
Borrowed funds	17,605			14,852			35,319			29,099
Total interest expense	52,682			38,482			103,158			75,723
NET INTEREST INCOME	67,761			71,698			135,573			141,686
PROVISION (CREDIT) FOR LOAN LOSSES	(4,000		)	(4,000		)	(6,000		)	(7,000		)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	71,761			75,698			141,573			148,686
NON-INTEREST INCOME:
Fees and service charges, net of amortization	1,795			1,799			3,571			3,559
Net gain on the sale of loans	451			65			562			543
Increase in and death benefits from bank owned life insurance contracts	1,874			1,509			3,421			3,063
Other	786			1,243			2,028			2,295
Total non-interest income	4,906			4,616			9,582			9,460
NON-INTEREST EXPENSE:
Salaries and employee benefits	26,152			26,057			51,516			49,310
Marketing services	6,719			6,016			11,516			11,054
Office property, equipment and software	6,261			6,728			13,247			13,379
Federal insurance premium and assessments	2,370			3,008			5,136			5,726
State franchise tax	1,282			1,284			2,544			2,410
Other expenses	7,943			6,595			14,748			13,585
Total non-interest expense	50,727			49,688			98,707			95,464
INCOME BEFORE INCOME TAXES	25,940			30,626			52,448			62,682
INCOME TAX EXPENSE	5,810			7,312			11,985			19,755
NET INCOME	$	20,130		$	23,314		$	40,463		$	42,927
Earnings per share - basic and diluted	$	0.07		$	0.08		$	0.14		$	0.15
Weighted average shares outstanding
Basic	275,359,201			275,656,445			275,367,821			275,737,265
Diluted	277,343,155			277,256,178			277,197,565			277,434,648

See accompanying notes to unaudited interim consolidated financial statements.

5

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(In thousands)

	For the Three Months Ended						For the Six Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Net income	$	20,130		$	23,314		$	40,463		$	42,927
Other comprehensive income (loss), net of tax:
Net change in unrealized loss on securities available for sale	3,381			(3,262		)	8,478			(6,259		)
Net change in cash flow hedges	(18,936		)	19,552			(45,758		)	27,812
Change in pension obligation	264			317			528			594
Total other comprehensive income (loss)	(15,291		)	16,607			(36,752		)	22,147
Total comprehensive income	$	4,839		$	39,921		$	3,711		$	65,074

See accompanying notes to unaudited interim consolidated financial statements.

6

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)

(In thousands, except share and per share data)

	For the Three Months Ended March 31, 2018
	Common stock		Paid-in capital			Treasury stock			Unallocated common stock held by ESOP			Retained earnings			Accumulated other comprehensive income (loss)			Total shareholders’ equity
Balance at December 31, 2017	$	3,323	$	1,721,067		$	(741,034	)	$	(52,001	)	$	771,317		$	(1,994	)	$	1,700,678
Net income	—		—			—			—			23,314			—			23,314
Other comprehensive income, net of tax	—		—			—			—			—			16,607			16,607
ESOP shares allocated or committed to be released	—		539			—			1,084			—			—			1,623
Compensation costs for equity incentive plans	—		1,647			—			—			—			—			1,647
Purchase of treasury stock (366,000 shares)	—		—			(5,492		)	—			—			—			(5,492		)
Treasury stock allocated to equity incentive plan	—		1			(119		)	—			—			—			(118		)
Dividends paid to common shareholders ($0.17 per common share)	—		—			—			—			(8,464		)	—			(8,464		)
Balance at March 31, 2018	$	3,323	$	1,723,254		$	(746,645	)	$	(50,917	)	$	786,167		$	14,613		$	1,729,795
	For the Three Months Ended March 31, 2019
	Common stock		Paid-in capital			Treasury stock			Unallocated common stock held by ESOP			Retained earnings			Accumulated other comprehensive income (loss)			Total shareholders’ equity
Balance at December 31, 2018	$	3,323	$	1,727,909		$	(757,464	)	$	(47,667	)	$	815,918		$	1,761		$	1,743,780
Net income	—		—			—			—			20,130			—			20,130
Other comprehensive income (loss), net of tax	—		—			—			—			—			(15,291		)	(15,291		)
ESOP shares allocated or committed to be released	—		729			—			1,083			—			—			1,812
Compensation costs for equity incentive plans	—		1,146			—			—			—			—			1,146
Purchase of treasury stock (146,000 shares)	—		—			(2,432		)	—			—			—			(2,432		)
Treasury stock allocated to equity incentive plan	—		(285		)	(471		)	—			—			—			(756		)
Dividends paid to common shareholders ($0.25 per common share)	—		—			—			—			(12,404		)	—			(12,404		)
Balance at March 31, 2019	$	3,323	$	1,729,499		$	(760,367	)	$	(46,584	)	$	823,644		$	(13,530	)	$	1,735,985

7

	For the Six Months Ended March 31, 2018
	Common stock		Paid-in capital			Treasury stock			Unallocated common stock held by ESOP			Retained earnings			Accumulated other comprehensive income (loss)			Total shareholders’ equity
Balance at September 30, 2017	$	3,323	$	1,722,672		$	(735,530	)	$	(53,084	)	$	760,070		$	(7,492	)	$	1,689,959
Net income	—		—			—			—			42,927			—			42,927
Other comprehensive income, net of tax	—		—			—			—			42			22,105			22,147
ESOP shares allocated or committed to be released	—		1,106			—			2,167			—			—			3,273
Compensation costs for equity incentive plans	—		2,525			—			—			—			—			2,525
Purchase of treasury stock (858,000 shares)	—		—			(13,034		)	—			—			—			(13,034		)
Treasury stock allocated to equity incentive plan	—		(3,049		)	1,919			—			—			—			(1,130		)
Dividends paid to common shareholders ($0.34 per common share)	—		—			—			—			(16,872		)	—			(16,872		)
Balance at March 31, 2018	$	3,323	$	1,723,254		$	(746,645	)	$	(50,917	)	$	786,167		$	14,613		$	1,729,795
	For the Six Months Ended March 31, 2019
	Common stock		Paid-in capital			Treasury stock			Unallocated common stock held by ESOP			Retained earnings			Accumulated other comprehensive income (loss)			Total shareholders’ equity
Balance at September 30, 2018	$	3,323	$	1,726,992		$	(754,272	)	$	(48,751	)	$	807,890		$	23,222		$	1,758,404
Net income	—		—			—			—			40,463			—			40,463
Other comprehensive income (loss), net of tax	—		—			—			—			—			(36,752		)	(36,752		)
ESOP shares allocated or committed to be released	—		1,310			—			2,167			—			—			3,477
Compensation costs for equity incentive plans	—		2,227			—			—			—			—			2,227
Purchase of treasury stock (388,500 shares)	—		—			(6,208		)	—			—			—			(6,208		)
Treasury stock allocated to equity incentive plan	—		(1,030		)	113			—			—			—			(917		)
Dividends paid to common shareholders ($0.50 per common share)	—		—			—			—			(24,709		)	—			(24,709		)
Balance at March 31, 2019	$	3,323	$	1,729,499		$	(760,367	)	$	(46,584	)	$	823,644		$	(13,530	)	$	1,735,985

See accompanying notes to unaudited interim consolidated financial statements.

8

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands)

	For the Six Months Ended March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	40,463		$	42,927
Adjustments to reconcile net income to net cash provided by operating activities:
ESOP and stock-based compensation expense	5,704			5,798
Depreciation and amortization	10,618			12,661
Deferred income taxes	438			4,604
Provision (credit) for loan losses	(6,000		)	(7,000		)
Net gain on the sale of loans	(562		)	(543		)
Other net losses (gains)	(108		)	409
Principal repayments on and proceeds from sales of loans held for sale	13,516			7,919
Loans originated for sale	(13,901		)	(7,884		)
Increase in bank owned life insurance contracts	(3,071		)	(3,052		)
Net (increase) decrease in interest receivable and other assets	(2,772		)	698
Net decrease in accrued expenses and other liabilities	(1,174		)	(2,699		)
Net cash provided by operating activities	43,151			53,838
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated	(1,185,602		)	(1,504,338		)
Principal repayments on loans	1,125,215			1,177,999
Proceeds from principal repayments and maturities of:
Securities available for sale	62,559			67,588
Proceeds from sale of:
Loans	45,319			60,101
Real estate owned	2,400			4,520
Purchases of:
FHLB stock	—			(3,554		)
Securities available for sale	(96,324		)	(86,184		)
Premises and equipment	(1,993		)	(5,744		)
Other	(622		)	—
Net cash used in investing activities	(49,048		)	(289,612		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	241,207			198,797
Net decrease in borrowers' advances for insurance and taxes	(14,166		)	(12,288		)
Net decrease in principal and interest owed on loans serviced	(1,929		)	(3,844		)
Net increase in short-term borrowed funds	51,887			159,833
Proceeds from long-term borrowed funds	—			88
Repayment of long-term borrowed funds	(183,514		)	(114,234		)
Cash collateral/settlements received from (provided to) derivative counterparties (1)	(66,360		)	41,280
Purchase of treasury shares	(6,137		)	(12,985		)
Acquisition of treasury shares through net settlement of stock benefit plans compensation	(917		)	(1,130		)
Dividends paid to common shareholders	(24,709		)	(16,872		)
Net cash (used in) provided by financing activities	(4,638		)	238,645
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(10,535		)	2,871
CASH AND CASH EQUIVALENTS—Beginning of period	269,775			268,218
CASH AND CASH EQUIVALENTS—End of period	$	259,240		$	271,089
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest on deposits	$	67,122		$	45,786
Cash paid for interest on borrowed funds	38,125			27,060
Cash paid for income taxes	9,647			14,827
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfer of loans to real estate owned	2,531			2,900
Transfer of loans from held for sale to held for investment	—			149
Transfer of loans from held for investment to held for sale	45,102			60,274
Treasury stock issued for stock benefit plans	1,068			3,049

(1) In accordance with ASC 230-10-45-27, cash flows from derivative instruments may be classified in the same category as items hedged. For the six months ended March 31, 2018, $41,280 of cash collateral and settlement payments received from derivative counterparties were reclassified from Operating to Financing Activities to conform to this presentation.

See accompanying notes to unaudited interim consolidated financial statements.

9

TFS FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands unless otherwise indicated)

1. BASIS OF PRESENTATION

TFS Financial Corporation, a federally chartered stock holding company, conducts its principal activities through its wholly owned subsidiaries. The principal line of business of the Company is retail consumer banking, including mortgage lending, deposit gathering, and, to a much lesser extent, other financial services. As of March 31, 2019, approximately 81% of the Company’s outstanding shares were owned by a federally chartered mutual holding company, Third Federal Savings and Loan Association of Cleveland, MHC. The thrift subsidiary of TFS Financial Corporation is Third Federal Savings and Loan Association of Cleveland.

The accounting and reporting policies followed by the Company conform in all material respects to U.S. GAAP and to general practices in the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses, the valuation of deferred tax assets, and the determination of pension obligations are particularly subject to change.

The unaudited interim consolidated financial statements were prepared without an audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial condition of the Company at March 31, 2019, and its results of operations and cash flows for the periods presented. Such adjustments are the only adjustments reflected in the unaudited interim financial statements.

In accordance with SEC Regulation S-X for interim financial information, these statements do not include certain information and footnote disclosures required for complete audited financial statements. The Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 contains audited consolidated financial statements and related notes, which should be read in conjunction with the accompanying interim consolidated financial statements. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019 or for any other period.

2. EARNINGS PER SHARE

Basic earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. For purposes of computing earnings per share amounts, outstanding shares include shares held by the public, shares held by the ESOP that have been allocated to participants or committed to be released for allocation to participants, the 227,119,132 shares held by Third Federal Savings, MHC, and, for purposes of computing dilutive earnings per share, stock options and restricted and performance stock units with a dilutive impact. Unvested shares awarded pursuant to the Company's restricted stock plans are treated as participating securities in the computation of EPS pursuant to the two-class method as they contain nonforfeitable rights to dividends. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. At March 31, 2019 and 2018, respectively, the ESOP held 4,658,402 and 5,091,741 shares, respectively, that were neither allocated to participants nor committed to be released to participants.

10

The following is a summary of the Company's earnings per share calculations.

	For the Three Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	20,130				$	23,314
Less: income allocated to restricted stock units	406					300
Basic earnings per share:
Income available to common shareholders	$	19,724	275,359,201	$	0.07	$	23,014	275,656,445	$	0.08
Diluted earnings per share:
Effect of dilutive potential common shares			1,983,954					1,599,733
Income available to common shareholders	$	19,724	277,343,155	$	0.07	$	23,014	277,256,178	$	0.08

	For the Six Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	40,463				$	42,927
Less: income allocated to restricted stock units	536					543
Basic earnings per share:
Income available to common shareholders	$	39,927	275,367,821	$	0.14	$	42,384	275,737,265	$	0.15
Diluted earnings per share:
Effect of dilutive potential common shares			1,829,744					1,697,383
Income available to common shareholders	$	39,927	277,197,565	$	0.14	$	42,384	277,434,648	$	0.15

The following is a summary of outstanding stock options and restricted and performance stock units that are excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2019	2018	2019	2018
Options to purchase shares	710,100	2,571,240	710,100	2,149,740
Restricted and performance stock units	—	15,501	—	11,001

3.INVESTMENT SECURITIES

Investments available for sale are summarized as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	569,541	$	1,211	$	(7,915	)	$	562,837
Fannie Mae certificates	7,555		234		(43		)	7,746
U.S. government and agency obligations	3,990		—		(1		)	3,989
Total	$	581,086	$	1,445	$	(7,959	)	$	574,572

11

	September 30, 2018
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	537,330	$	7	$	(17,338	)	$	519,999
Fannie Mae certificates	7,906		237		(145		)	7,998
U.S. government and agency obligations	3,975		—		(7		)	3,968
Total	$	549,211	$	244	$	(17,490	)	$	531,965

Gross unrealized losses on available for sale securities and the estimated fair value of the related securities, aggregated by the length of time the securities have been in a continuous loss position, at March 31, 2019 and September 30, 2018, were as follows:

	March 31, 2019
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	2,596	$	2	$	396,173	$	7,913	$	398,769	$	7,915
Fannie Mae certificates	—		—		4,372		43		4,372		43
U.S. government and agency obligations	3,989		1		—		—		3,989		1
Total	$	6,585	$	3	$	400,545	$	7,956	$	407,130	$	7,959

	September 30, 2018
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	113,111	$	1,799	$	400,558	$	15,539	$	513,669	$	17,338
Fannie Mae certificates	—		—		4,337		145		4,337		145
U.S. government and agency obligations	3,968		7		—		—		3,968		7
Total	$	117,079	$	1,806	$	404,895	$	15,684	$	521,974	$	17,490

We believe the unrealized losses on investment securities were attributable to interest rate increases. The contractual terms of U.S. government and agency obligations do not permit the issuer to settle the security at a price less than the par value of the investment. The contractual cash flows of mortgage-backed securities are guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. REMICs are issued by or backed by securities issued by these governmental agencies. It is expected that the securities would not be settled at a price substantially less than the amortized cost of the investment. The U.S. Treasury Department established financing agreements in 2008 to ensure Fannie Mae and Freddie Mac meet their obligations to holders of mortgage-backed securities that they have issued or guaranteed.

Since the decline in value is attributable to changes in interest rates and not credit quality and because the Company has neither the intent to sell the securities nor is it more likely than not the Company will be required to sell the securities for the time periods necessary to recover the amortized cost, these investments are not considered other-than-temporarily impaired. At March 31, 2019, the amortized cost and fair value of U.S. government obligations, categorized as due in less than one year are $3,990 and $3,989, respectively.

12

4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans held for investment consist of the following:

	March 31, 2019			September 30, 2018
Real estate loans:
Residential Core	$	10,803,550		$	10,930,811
Residential Home Today	90,495			94,933
Home equity loans and lines of credit	1,965,580			1,818,918
Construction	47,783			64,012
Real estate loans	12,907,408			12,908,674
Other consumer loans	2,793			3,021
Add (deduct):
Deferred loan expenses, net	40,177			38,566
Loans in process ("LIP")	(25,089		)	(36,549		)
Allowance for loan losses	(40,286		)	(42,418		)
Loans held for investment, net	$	12,885,003		$	12,871,294

At March 31, 2019 and September 30, 2018, respectively, $1,016 and $659 of loans were classified as mortgage loans held for sale.

A large concentration of the Company’s lending is in Ohio and Florida. As of March 31, 2019 and September 30, 2018, the percentage of aggregate Residential Core, Home Today and Construction loans held in Ohio was 56% as of both dates and the percentage held in Florida was 16% as of both dates. As of March 31, 2019 and September 30, 2018, home equity loans and lines of credit were concentrated in Ohio (34% and 36%), Florida (20% as of both dates), and California (16% and 15%).

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. Through this program the Association provided the majority of loans to borrowers who would not otherwise qualify for the Association’s loan products, generally because of low credit scores. Although the credit profiles of borrowers in the Home Today program might be described as sub-prime, Home Today loans generally contained the same features as loans offered to our Residential Core borrowers. Borrowers with a Home Today loan completed financial management education and counseling and were referred to the Association by a sponsoring organization with which the Association partnered as part of the program. Because the Association 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. As of March 31, 2019 and September 30, 2018, the principal balance of Home Today loans originated prior to March 27, 2009 was $87,429 and $91,805, respectively. Since loans are no longer originated under the Home Today program, the Home Today portfolio will continue to decline in balance, primarily due to contractual amortization. To supplant the Home Today product and to continue to meet the credit needs of customers and the communities served, since fiscal 2016 the Association has offered Fannie Mae eligible, Home Ready loans. These loans are originated in accordance with Fannie Mae's underwriting standards. While the Association retains the servicing to these loans, the loans, along with the credit risk associated therewith, are securitized/sold to Fannie Mae. The Association 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, a LTV ratio greater than 100%, or pay-option adjustable-rate mortgages.

13

An aging analysis of the recorded investment in loan receivables that are past due at March 31, 2019 and September 30, 2018 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. Balances are adjusted for deferred loan fees, 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
March 31, 2019
Real estate loans:
Residential Core	$	7,359	$	4,087	$	10,632	$	22,078	$	10,797,264	$	10,819,342
Residential Home Today	2,686		1,309		3,881		7,876		82,319		90,195
Home equity loans and lines of credit	3,636		1,744		6,336		11,716		1,978,791		1,990,507
Construction	—		—		—		—		22,452		22,452
Total real estate loans	13,681		7,140		20,849		41,670		12,880,826		12,922,496
Other consumer loans	—		—		—		—		2,793		2,793
Total	$	13,681	$	7,140	$	20,849	$	41,670	$	12,883,619	$	12,925,289

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
September 30, 2018
Real estate loans:
Residential Core	$	7,539	$	2,335	$	10,807	$	20,681	$	10,926,294	$	10,946,975
Residential Home Today	2,787		1,765		3,814		8,366		86,383		94,749
Home equity loans and lines of credit	4,152		2,315		5,933		12,400		1,829,427		1,841,827
Construction	—		—		—		—		27,140		27,140
Total real estate loans	14,478		6,415		20,554		41,447		12,869,244		12,910,691
Other consumer loans	—		—		—		—		3,021		3,021
Total	$	14,478	$	6,415	$	20,554	$	41,447	$	12,872,265	$	12,913,712

At March 31, 2019 and September 30, 2018, real estate loans include $9,363 and $8,501, respectively, of loans that were in the process of foreclosure.

Loans are placed in non-accrual status when they are contractually 90 days or more past due. Loans with a partial charge-off are placed in non-accrual and will remain in non-accrual status until, at a minimum, the impairment is recovered. Loans restructured in TDRs that were in non-accrual status prior to the restructurings remain 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 recorded investment of loan receivables in non-accrual status is summarized in the following table. Balances are adjusted for deferred loan fees and expenses.

	March 31, 2019		September 30, 2018
Real estate loans:
Residential Core	$	41,126	$	41,628
Residential Home Today	14,202		14,641
Home equity loans and lines of credit	21,943		21,483
Total non-accrual loans	$	77,271	$	77,752

14

At March 31, 2019 and September 30, 2018, respectively, the recorded investment in non-accrual loans includes $56,422 and $57,197, which are performing according to the terms of their agreement, of which $27,752 and $29,439 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

Interest on loans in accrual status, including certain loans individually reviewed for impairment, 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. Cash payments on loans in non-accrual status are first applied to the oldest scheduled, unpaid payment first. 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, an 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. The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled payment.

The recorded investment in loan receivables at March 31, 2019 and September 30, 2018 is summarized in the following table. The table provides details of the recorded balances according to the method of evaluation used for determining the allowance for loan losses, distinguishing between determinations made by evaluating individual loans and determinations made by evaluating groups of loans not individually evaluated. Balances of recorded investments are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	93,367	$	10,725,975	$	10,819,342	$	91,360	$	10,855,615	$	10,946,975
Residential Home Today	39,516		50,679		90,195		41,523		53,226		94,749
Home equity loans and lines of credit	49,144		1,941,363		1,990,507		47,911		1,793,916		1,841,827
Construction	—		22,452		22,452		—		27,140		27,140
Total real estate loans	182,027		12,740,469		12,922,496		180,794		12,729,897		12,910,691
Other consumer loans	—		2,793		2,793		—		3,021		3,021
Total	$	182,027	$	12,743,262	$	12,925,289	$	180,794	$	12,732,918	$	12,913,712

An analysis of the allowance for loan losses at March 31, 2019 and September 30, 2018 is summarized in the following table. The analysis provides details of the allowance for loan losses according to the method of evaluation, distinguishing between allowances for loan losses determined by evaluating individual loans and allowances for loan losses determined by evaluating groups of loans collectively.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	7,219	$	12,368	$	19,587	$	6,934	$	11,354	$	18,288
Residential Home Today	2,167		1,108		3,275		2,139		1,065		3,204
Home equity loans and lines of credit	3,554		13,866		17,420		3,014		17,907		20,921
Construction	—		4		4		—		5		5
Total	$	12,940	$	27,346	$	40,286	$	12,087	$	30,331	$	42,418

At March 31, 2019 and September 30, 2018, individually evaluated loans that required an allowance were comprised only of loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, and loans with a further deterioration in the fair value of collateral not yet identified as uncollectible. All other individually evaluated loans received a charge-off, if applicable.

15

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. At March 31, 2019 and September 30, 2018, respectively, allowances on individually reviewed loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, were $12,714 and $12,002; and allowances on loans with further deteriorations in the fair value of collateral not yet identified as uncollectible were $245 and $85.

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 adjustable-rate mortgage loans whereby the interest rate is locked initially for mainly three or five years then resets annually, subject to various re-lock options available to the borrower. Although the borrower is qualified for its loan at a higher rate than the initial one, the adjustable-rate feature may impact a borrower's ability to afford the higher payments upon rate reset during periods of rising interest rates. The principal amount of loans in the portfolio that are adjustable-rate mortgage loans was $5,128,674 and $5,166,282 at March 31, 2019 and September 30, 2018, respectively.

As described earlier in this footnote, Home Today loans have greater credit risk than traditional residential real estate mortgage loans. At March 31, 2019 and September 30, 2018, respectively, approximately 16% and 18% of Home Today loans include private mortgage insurance coverage. The majority of the coverage on these loans was provided by PMI Mortgage Insurance Co., which was seized by the Arizona Department of Insurance in 2011 and currently pays all claim payments at 74.5%. Appropriate adjustments have been made to the Association’s affected valuation allowances and charge-offs, and estimated loss severity factors were adjusted accordingly for loans evaluated collectively. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by PMIC as of March 31, 2019 and September 30, 2018, respectively, was $33,317 and $39,367, of which $30,755 and $36,075 was current. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by Mortgage Guaranty Insurance Corporation as of March 31, 2019 and September 30, 2018, respectively, was $18,897 and $20,912 of which $18,736 and $20,792 was current. As of March 31, 2019, MGIC's long-term debt rating, as published by the major credit rating agencies, did not meet the requirements to qualify as "high credit quality"; however, MGIC continues to make claims payments in accordance with its contractual obligations and the Association has not increased its estimated loss severity factors related to MGIC's claim paying ability. No other loans were covered by mortgage insurers that were deferring claim payments or which were assessed as being non-investment grade.

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. Post-origination deterioration in economic and housing market conditions may impact a borrower's ability to afford the higher payments required during the end of draw repayment period that follows the period of interest only payments on home equity lines of credit originated prior to 2012 or the ability to secure alternative financing. Beginning in February 2013, the terms on new home equity lines of credit included monthly principal and interest payments throughout the entire term to minimize the potential payment differential between the draw and after draw periods.

The Association originates construction loans to individuals for the construction of their personal single-family residence by a qualified builder (construction/permanent loans). The Association’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 Association offers construction/permanent loans with fixed or adjustable-rates, and a current maximum loan-to-completed-appraised value ratio of 85%.

Other consumer loans are comprised of loans secured by certificate of deposit accounts, which are fully recoverable in the event of non-payment.

For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Association will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Factors considered in determining that a loan is impaired 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.

16

The recorded investment and the unpaid principal balance of impaired loans, including those reported as TDRs, as of March 31, 2019 and September 30, 2018 are summarized as follows. Balances of recorded investments are adjusted for deferred loan fees and expenses.

	March 31, 2019						September 30, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related IVA recorded:
Residential Core	$	48,058	$	64,246	$	—	$	53,656	$	69,516	$	—
Residential Home Today	15,056		34,823		—		16,006		35,532		—
Home equity loans and lines of credit	21,754		27,821		—		22,423		28,504		—
Total	$	84,868	$	126,890	$	—	$	92,085	$	133,552	$	—
With an IVA recorded:
Residential Core	$	45,309	$	45,398	$	7,219	$	37,704	$	37,774	$	6,934
Residential Home Today	24,460		24,440		2,167		25,517		25,492		2,139
Home equity loans and lines of credit	27,390		27,413		3,554		25,488		25,519		3,014
Total	$	97,159	$	97,251	$	12,940	$	88,709	$	88,785	$	12,087
Total impaired loans:
Residential Core	$	93,367	$	109,644	$	7,219	$	91,360	$	107,290	$	6,934
Residential Home Today	39,516		59,263		2,167		41,523		61,024		2,139
Home equity loans and lines of credit	49,144		55,234		3,554		47,911		54,023		3,014
Total	$	182,027	$	224,141	12,940		$	180,794	$	222,337	$	12,087

At March 31, 2019 and September 30, 2018, respectively, the recorded investment in impaired loans includes $166,328 and $165,391 of loans restructured in TDRs of which $10,597 and $10,468 were 90 days or more past due.

The average recorded investment in impaired loans and the amount of interest income recognized during the period that the loans were impaired are summarized below.

	For the Three Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	49,934	$	341	$	50,403	$	1,374
Residential Home Today	15,287		52		17,454		856
Home equity loans and lines of credit	22,292		120		20,071		99
Total	$	87,513	$	513	$	87,928	$	2,329
With an IVA recorded:
Residential Core	$	42,446	$	397	$	42,180	$	535
Residential Home Today	24,690		297		27,211		620
Home equity loans and lines of credit	26,713		173		21,633		144
Total	$	93,849	$	867	$	91,024	$	1,299
Total impaired loans:
Residential Core	$	92,380	$	738	$	92,583	$	1,909
Residential Home Today	39,977		349		44,665		1,476
Home equity loans and lines of credit	49,005		293		41,704		243
Total	$	181,362	$	1,380	$	178,952	$	3,628

17

	For the Six Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	50,857	$	801	$	50,718	$	1,760
Residential Home Today	15,531		124		18,124		972
Home equity loans and lines of credit	22,089		224		20,059		173
Total	$	88,477	$	1,149	$	88,901	$	2,905
With an IVA recorded:
Residential Core	$	41,507	$	1,156	$	42,804	$	955
Residential Home Today	24,989		593		27,384		956
Home equity loans and lines of credit	26,439		627		21,329		275
Total	$	92,935	$	2,376	$	91,517	$	2,186
Total impaired loans:
Residential Core	$	92,364	$	1,957	$	93,522	$	2,715
Residential Home Today	40,520		717		45,508		1,928
Home equity loans and lines of credit	48,528		851		41,388		448
Total	$	181,412	$	3,525	$	180,418	$	5,091

Interest on loans in non-accrual status is recognized on a cash basis. The amount of interest income on impaired loans recognized using a cash basis method was $347 and $739 for the three and six months ended March 31, 2019 and $795 and $1,208 for the three and six months ended March 31, 2018. 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. Interest income on the remaining impaired loans is recognized on an accrual basis.

Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the recorded investment in the loans.

Partial or full charge-offs are also recognized for the amount of impairment on loans considered collateral dependent that meet the conditions described below.

• For residential mortgage loans, payments are greater than 180 days delinquent;

• For home equity lines of credit, equity loans, and residential loans restructured in a TDR, payments are greater than 90 days delinquent;

• For all classes of loans restructured in a TDR with a high debt-to-income ratio at time of modification;

• For all classes of loans, a sheriff sale is scheduled within 60 days to sell the collateral securing the loan;

• For all classes of loans, all borrowers have been discharged of their obligation through a Chapter 7 bankruptcy;

• For all classes of loans, within 60 days of notification, all borrowers obligated on the loan have filed Chapter 7 bankruptcy and have not reaffirmed or been dismissed;

• For all classes of loans, a borrower obligated on a loan has filed bankruptcy and the loan is greater than 30 days delinquent; and

• For all classes of loans, it becomes evident that a loss is probable.

Collateral dependent residential mortgage loans and construction loans are charged off to the extent the recorded investment in a 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 recorded investment 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 that is identified as collateral dependent will continue to be reported as impaired 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

18

consequent to impairment evaluation will continue to be individually evaluated for impairment until, at a minimum, the impairment has been recovered.

Loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for impairment on a loan by loan basis at the time of restructuring and at each subsequent reporting date for as long as they are reported as TDRs. The impairment 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 recorded investments 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. We evaluate these loans using the expected future cash flows because we expect the borrower, not liquidation of the collateral, to be the source of repayment for the loan. Other consumer loans are not considered for restructuring. A loan restructured in a TDR is classified as an impaired loan for a minimum of one year. After one year, that loan may be reclassified out of the balance of impaired loans if the loan was restructured to yield a market rate for loans of similar credit risk at the time of restructuring and the loan is not impaired based on the terms of the restructuring agreement. No loans whose terms were restructured in TDRs were reclassified from impaired loans during the six months ended March 31, 2019 and March 31, 2018.

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 Association. The recorded investment in TDRs by category as of March 31, 2019 and September 30, 2018 is shown in the tables below.    

March 31, 2019	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	40,342	$	23,935	$	21,064	$	85,341
Residential Home Today	17,467		17,671		3,577		38,715
Home equity loans and lines of credit	35,736		2,801		3,735		42,272
Total	$	93,545	$	44,407	$	28,376	$	166,328

September 30, 2018	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	39,265	$	23,116	$	21,832	$	84,213
Residential Home Today	18,243		18,483		3,683		40,409
Home equity loans and lines of credit	33,768		2,563		4,438		40,769
Total	$	91,276	$	44,162	$	29,953	$	165,391

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 cannot return to regular 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 hours, non-paid leave or short-erm 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.

For all loans restructured during the three and six months ended March 31, 2019 and March 31, 2018 (set forth in the tables below), the pre-restructured outstanding recorded investment was not materially different from the post-restructured outstanding recorded investment.

19

The following tables set forth the recorded investment in TDRs restructured during the periods presented.

	For the Three Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	2,713	$	2,921	$	649	$	6,283
Residential Home Today	172		1,447		180		1,799
Home equity loans and lines of credit	2,121		700		73		2,894
Total	$	5,006	$	5,068	$	902	$	10,976

	For the Three Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	374	$	1,035	$	1,242	$	2,651
Residential Home Today	233		509		90		832
Home equity loans and lines of credit	5,208		426		225		5,859
Total	$	5,815	$	1,970	$	1,557	$	9,342

	For the Six Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	5,479	$	2,923	$	1,571	$	9,973
Residential Home Today	444		1,447		305		2,196
Home equity loans and lines of credit	5,655		700		273		6,628
Total	$	11,578	$	5,070	$	2,149	$	18,797

	For the Six Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	1,371	$	2,111	$	1,807	$	5,289
Residential Home Today	442		1,264		382		2,088
Home equity loans and lines of credit	6,856		609		312		7,777
Total	$	8,669	$	3,984	$	2,501	$	15,154

20

Below summarizes the information on TDRs restructured within 12 months of the period presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented.

	For the Three Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	9	$	853
Residential Home Today	21	895		19	805
Home equity loans and lines of credit	11	731		7	557
Total	48	$	4,287	35	$	2,215

	For the Six Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	12	$	1,488
Residential Home Today	22	928		19	805
Home equity loans and lines of credit	11	731		8	557
Total	49	$	4,320	39	$	2,850

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 Association feels deserve management’s attention and may result in further deterioration in their repayment prospects and/or the Association’s credit position. 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 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.

The following tables provide information about the credit quality of residential loan receivables by an internally assigned grade. Balances are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	Pass		Special Mention		Substandard		Loss		Total
March 31, 2019
Real estate loans:
Residential Core	$	10,767,228	$	4,499	$	47,615	$	—	$	10,819,342
Residential Home Today	74,563		—		15,632		—		90,195
Home equity loans and lines of credit	1,961,826		3,662		25,019		—		1,990,507
Construction	22,452		—		—		—		22,452
Total	$	12,826,069	$	8,161	$	88,266	$	—	$	12,922,496

21

	Pass		Special Mention		Substandard		Loss		Total
September 30, 2018
Real estate loans:
Residential Core	$	10,898,725	$	—	$	48,250	$	—	$	10,946,975
Residential Home Today	78,180		—		16,569		—		94,749
Home equity loans and lines of credit	1,813,502		4,216		24,109		—		1,841,827
Construction	27,140		—		—		—		27,140
Total	$	12,817,547	$	4,216	$	88,928	$	—	$	12,910,691

At March 31, 2019 and September 30, 2018, respectively, the recorded investment of impaired loans includes $95,822 and $95,916 of TDRs individually evaluated for impairment that have adequately performed under the terms of the restructuring and are classified as Pass loans. At March 31, 2019 and September 30, 2018, respectively, there were $2,061 and $4,051 of loans classified Substandard and $8,161 and $4,216 of loans designated Special Mention that are not included in the recorded investment of impaired loans; rather, they are included in loans collectively evaluated for impairment. Of the $8,161 of loans classified Special Mention at March 31, 2019, $4,499 are residential mortgage loans purchased during the quarter ended December 31, 2018. The purchased loans were current and performing at the time of purchase, but are classified Special Mention due to the absence of MI coverage and potentially weaker repayment prospects when compared with the Company's originated residential Core Portfolio.

Other consumer loans are internally assigned a grade of non-performing when they become 90 days or more past due. At March 31, 2019 and September 30, 2018, no consumer loans were graded as non-performing.

Activity in the allowance for loan losses is summarized as follows:

	For the Three Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	19,165	$	(45	)	$	(299	)	$	766	$	19,587
Residential Home Today	3,748		(1,012		)	(85		)	624		3,275
Home equity loans and lines of credit	19,021		(2,943		)	(475		)	1,817		17,420
Construction	4		—			—			—		4
Total	$	41,938	$	(4,000	)	$	(859	)	$	3,207	$	40,286

	For the Three Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	13,546	$	(58	)	$	(195	)	$	787	$	14,080
Residential Home Today	4,134		(705		)	(288		)	599		3,740
Home equity loans and lines of credit	28,245		(3,237		)	(1,619		)	1,893		25,282
Construction	4		—			—			—		4
Total	$	45,929	$	(4,000	)	$	(2,102	)	$	3,279	$	43,106

22

	For the Six Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	18,288	$	864		$	(542	)	$	977	$	19,587
Residential Home Today	3,204		(695		)	(326		)	1,092		3,275
Home equity loans and lines of credit	20,921		(6,168		)	(1,318		)	3,985		17,420
Construction	5		(1		)	—			—		4
Total	$	42,418	$	(6,000	)	$	(2,186	)	$	6,054	$	40,286

	For the Six Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	14,186	$	(899	)	$	(587	)	$	1,380	$	14,080
Residential Home Today	4,508		(806		)	(963		)	1,001		3,740
Home equity loans and lines of credit	30,249		(5,294		)	(3,155		)	3,482		25,282
Construction	5		(1		)	—			—		4
Total	$	48,948	$	(7,000	)	$	(4,705	)	$	5,863	$	43,106

5. DEPOSITS

Deposit account balances are summarized as follows:

	March 31, 2019		September 30, 2018
Checking accounts	$	902,251	$	913,525
Savings accounts	1,399,389		1,256,054
Certificates of deposit	6,426,710		6,318,281
	8,728,350		8,487,860
Accrued interest	4,440		3,723
Total deposits	$	8,732,790	$	8,491,583

Brokered certificates of deposit (exclusive of acquisition costs and subsequent amortization), which are used as a cost effective funding alternative, totaled $591,325 at March 31, 2019 and $670,081 at September 30, 2018. The FDIC places restrictions on banks with regard to issuing brokered deposits based on the bank's capital classification. As a well-capitalized institution at March 31, 2019 and September 30, 2018, the Association may accept brokered deposits without FDIC restrictions.

23

6.    BORROWED FUNDS

Federal Home Loan Bank borrowings at March 31, 2019 are summarized in the table below. The amount and weighted average rates of certain FHLB Advances maturing in 36 months or less reflect the net impact of deferred penalties discussed below:

	Amount		Weighted Average Rate
Maturing in:
12 months or less	$	3,439,780	2.44	%
13 to 24 months	99,917		1.90	%
25 to 36 months	674		1.45	%
37 to 48 months	2,544		0.94	%
49 to 60 months	15,000		2.99	%
Over 60 months	24,461		1.67	%
Total FHLB Advances	3,582,376		2.42	%
Accrued interest	7,696
Total	$	3,590,072

For the periods ending March 31, 2019 and March 31, 2018 net interest expense related to Federal Home Loan Bank short-term borrowings was $28,827 and $20,128, respectively.

Through the use of interest rate swaps discussed in Note 13. Derivative Instruments, $2,225,000 of FHLB advances included in the table above as maturing in 12 months or less, have effective maturities, assuming no early terminations of the swap contracts, as shown below:

	Amount		Swap Adjusted Weighted Average Rate
Effective maturity:
12 months or less	$	50,000	1.23	%
13 to 24 months	225,000		1.28	%
25 to 36 months	675,000		1.58	%
37 to 48 months	650,000		1.92	%
49 to 60 months	125,000		2.87	%
Over 60 months	500,000		2.76	%
Total FHLB Advances under swap contracts	$	2,225,000	1.98	%

During fiscal year 2016, $150,000 fixed-rate FHLB advances with remaining terms of approximately four years were prepaid and replaced with new four- and five-year interest rate swap arrangements. The unamortized deferred repayment penalties of $804 related to the $150,000 of restructuring are being recognized in interest expense over the remaining term of the swap contracts.

24

7.OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) by component is as follows:

	For the Three Months Ended												For the Three Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total
Balance at beginning of period	$	(8,527	)	$	25,092		$	(14,804	)	$	1,761		$	(7,185	)	$	22,834		$	(17,643	)	$	(1,994	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(3,282) and $4,357	3,381			(15,731		)	—			(12,350		)	(3,262		)	19,634			—			16,372
Amounts reclassified, net of tax expense (benefit) of $(782) and $75	—			(3,205		)	264			(2,941		)	—			(82		)	317			235
Other comprehensive income (loss)	3,381			(18,936		)	264			(15,291		)	(3,262		)	19,552			317			16,607
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386		$	(17,326	)	$	14,613

	For the Six Months Ended												For the Six Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges		Defined Benefit Plan			Total
Accumulated other comprehensive income (loss) at beginning of period	$	(13,624	)	$	51,914		$	(15,068	)	$	23,222		$	(2,915	)	$	10,249	$	(14,826	)	$	(7,492	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(8,440) and $7,361	8,478			(40,231		)	—			(31,753		)	(6,259		)	27,099		—			20,840
Amounts reclassified, net of tax expense (benefit) of $(1,329) and $476	—			(5,527		)	528			(4,999		)	—			713		594			1,307
Other comprehensive income (loss)	8,478			(45,758		)	528			(36,752		)	(6,259		)	27,812		594			22,147
Adoption of ASU 2018-02	—			—			—			—			(1,273		)	4,325		(3,094		)	(42		)
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386	$	(17,326	)	$	14,613

25

The following table presents the reclassification adjustment out of accumulated other comprehensive income included in net income and the corresponding line item on the consolidated statements of income for the periods indicated:

	Amounts Reclassified from Accumulated  Other Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended March 31,						For the Six Months Ended March 31,						Line Item in the Statement of Income
	2019			2018			2019			2018
Cash flow hedges:
Interest (income) expense	$	(4,057	)	$	(109	)	$	(6,996	)	$	944		Interest expense
Net income tax effect	852			27			1,469			(231		)	Income tax expense
Net of income tax expense (benefit)	(3,205		)	(82		)	(5,527		)	713
Amortization of pension plan:
Actuarial loss	334			419			668			839			(a)
Net income tax effect	(70		)	(102		)	(140		)	(245		)	Income tax expense
Net of income tax expense (benefit)	264			317			528			594
Adoption of ASU 2018-02	—			—			—			(42		)	(b)
Total reclassifications for the period	$	(2,941	)	$	235		$	(4,999	)	$	1,265

(a) This item is included in the computation of net periodic pension cost. See Note 9. Defined Benefit Plan for additional disclosure.

(b) This item is a reclassification between Accumulated Other Comprehensive Income and Retained Earnings due to the adoption of ASU 2018-02 in fiscal year 2018.

8.    INCOME TAXES

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various state and city jurisdictions. The Company is no longer subject to income tax examinations in its major jurisdictions for tax years prior to 2015.

The Company recognizes interest and penalties on income tax assessments or income tax refunds, where applicable, in the financial statements as a component of its provision for income taxes.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act. Among its numerous changes to the Internal Revenue Code, the Act reduced the federal corporate tax rate to 21% from 35% effective January 1, 2018. Because of the Company's September 30 fiscal year end, a blended federal tax rate of 24.53% was applied to the fiscal year ended September 30, 2018. The federal statutory rate of 21% is effective for the Company beginning with the fiscal year ending September 30, 2019.

The Company’s effective income tax rate was 22.9% and 31.5% for the six months ended March 31, 2019 and March 31, 2018, respectively. The decrease in the effective tax rate is primarily due to a lower federal statutory rate in the recent fiscal year period, and $34 and $4,644 of additional tax expense related to the remeasurement of the Company's deferred tax asset during the six months ended March 31, 2019 and March 31, 2018, respectively, as a result of the Act.

The Company makes certain investments in limited partnerships which invest in affordable housing projects that qualify for the Low Income Housing Tax Credit (LIHTC). The Company acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnership. The Company accounts for its interests in LIHTCs using the proportional amortization method. The impact of the Company's investments in tax credit entities on the provision for income taxes was not material during the six months ended March 31, 2019 and March 31, 2018.

9.    DEFINED BENEFIT PLAN

The Third Federal Savings Retirement Plan (the “Plan”) is a defined benefit pension plan. Effective December 31, 2002, the Plan was amended to limit participation to employees who met the Plan’s eligibility requirements on that date. Effective

26

December 31, 2011, the Plan was amended to freeze future benefit accruals for participants in the Plan. After December 31, 2002, employees not participating in the Plan, upon meeting the applicable eligibility requirements, and those eligible participants who no longer receive service credits under the Plan, participate in a separate tier of the Company’s defined contribution 401(k) Savings Plan. Benefits under the Plan are based on years of service and the employee’s average annual compensation (as defined in the Plan) through December 31, 2011. The funding policy of the Plan is consistent with the funding requirements of U.S. federal and other governmental laws and regulations.

The components of net periodic cost recognized in other non-interest expense in the Consolidated Statements of Income are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Interest cost	$	807		$	774		$	1,614		$	1,548
Expected return on plan assets	(1,146		)	(1,035		)	(2,292		)	(2,071		)
Amortization of net loss	334			419			668			839
Net periodic cost (benefit)	$	(5	)	$	158		$	(10	)	$	316

There were no required minimum employer contributions during the six months ended March 31, 2019. There are no minimum employer contributions expected during the remainder of the fiscal year ending September 30, 2019.

10.    EQUITY INCENTIVE PLAN

In December 2018, 138,400 restricted stock units were granted to certain directors and officers of the Company and 64,500 performance stock units were granted to certain officers of the Company. The awards were made pursuant to the Amended and Restated 2008 Equity Incentive Plan, which was approved at the annual meeting of shareholders held on February 22, 2018.

The performance stock units vest in the form of Company common stock issued at the end of a three-year period, based on the pro-rata achievement of performance based metrics over a two-year period. The Company recognizes compensation expense for the fair value of performance stock units on a straight-line basis over the requisite service period.

The following table presents share-based compensation expense recognized during the periods presented.

	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2018		2019		2018
Stock option expense	$	200	$	344	$	437	$	657
Restricted and performance stock units expense	946		1,303		1,790		1,868
Total stock-based compensation expense	$	1,146	$	1,647	$	2,227	$	2,525

At March 31, 2019, 4,696,462 shares were subject to options, with a weighted average exercise price of $13.82 per share and a weighted average grant date fair value of $2.64 per share. Expected future expense related to the 928,594 non-vested options outstanding as of March 31, 2019 is $1,014 over a weighted average period of 1.4 years. At March 31, 2019, 649,213 restricted stock units and performance stock units with a weighted average grant date fair value of $15.14 per unit, are unvested. Expected future compensation expense relating to the 1,414,961 restricted stock units and performance stock units outstanding as of March 31, 2019 is $5,975 over a weighted average period of 2.0 years. Each unit is equivalent to one share of common stock.

11.    COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business, the Company enters into commitments with off-balance sheet risk to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to originate loans generally have fixed expiration dates of 60 to 360 days or other termination clauses and may require payment of a fee. Unfunded commitments related to home equity lines of credit generally expire from five to 10 years following the date that the line of credit was established, subject to various

27

conditions, including compliance with payment obligations, adequacy of collateral securing the line and maintenance of a satisfactory credit profile by the borrower. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Off-balance sheet commitments to extend credit involve elements of credit risk and interest rate risk in excess of the amount recognized in the consolidated statements of condition. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. The

Company generally uses the same credit policies in making commitments as it does for on-balance-sheet instruments. Interest rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Company since the time the commitment was made.

At March 31, 2019, the Company had commitments to originate loans as follows:

Fixed-rate mortgage loans	$	151,454
Adjustable-rate mortgage loans	161,569
Equity loans and lines of credit	186,549
Total	$	499,572

At March 31, 2019, the Company had unfunded commitments outstanding as follows:

Equity lines of credit	$	1,911,089
Construction loans	25,089
Limited partner investments	11,541
Total	$	1,947,719

At March 31, 2019, the unfunded commitment on home equity lines of credit, including commitments for accounts suspended as a result of material default or a decline in equity, is $1,923,807.

The above commitments are expected to be funded through normal operations.

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial condition, results of operation, or statements of cash flows.

12.    FAIR VALUE

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions. A fair value framework is established whereby assets and liabilities measured at fair value are grouped into three levels of a fair value hierarchy, based on the transparency of inputs and the reliability of assumptions used to estimate fair value. The Company’s policy is to recognize transfers between levels of the hierarchy as of the end of the reporting period in which the transfer occurs. The three levels of inputs are defined as follows:

Level 1 –	quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 –	quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with few transactions, or model-based valuation techniques using assumptions that are observable in the market.
Level 3 –	a company’s own assumptions about how market participants would price an asset or liability.

As permitted under the fair value guidance in U.S. GAAP, the Company elects to measure at fair value mortgage loans classified as held for sale that are subject to pending agency contracts to securitize and sell loans. This election is expected to reduce volatility in earnings related to market fluctuations between the contract trade and settlement dates. At March 31, 2019 and September 30, 2018, there were no loans held for sale subject to pending agency contracts for which the fair value option was elected.

Presented below is a discussion of the methods and significant assumptions used by the Company to estimate fair value.

28

Investment Securities Available for Sale—Investment securities available for sale are recorded at fair value on a recurring basis. At March 31, 2019 and September 30, 2018, respectively, this includes $574,572 and $531,965 of investments in U.S. government obligations including U.S. Treasury notes and highly liquid collateralized mortgage obligations issued by Fannie Mae, Freddie Mac and Ginnie Mae. Both are measured using the market approach. The fair values of investment securities represent unadjusted price estimates obtained from third party independent nationally recognized pricing services using pricing models or quoted prices of securities with similar characteristics and are included in Level 2 of the hierarchy. Third party pricing is reviewed on a monthly basis for reasonableness based on the market knowledge and experience of company personnel that interact daily with the markets for these types of securities.

Mortgage Loans Held for Sale—The fair value of mortgage loans held for sale is estimated on an aggregate basis using a market approach based on quoted secondary market pricing for loan portfolios with similar characteristics. Loans held for sale are carried at the lower of cost or fair value except, as described above, the Company elects the fair value measurement option for mortgage loans held for sale subject to pending agency contracts to securitize and sell loans. Loans held for sale are included in Level 2 of the hierarchy. At March 31, 2019 and September 30, 2018, there were $1,016 and $659, respectively, of loans held for sale carried at cost.

Impaired Loans—Impaired loans represent certain loans held for investment that are subject to a fair value measurement under U.S. GAAP because they are individually evaluated for impairment and that impairment is measured using a fair value measurement, such as the fair value of the underlying collateral. Impairment is measured using a market approach based on the fair value of the collateral, less estimated costs to dispose, for loans the Company considers to be collateral-dependent due to a delinquency status or other adverse condition severe enough to indicate that the borrower can no longer be relied upon as the continued source of repayment. These conditions are described more fully in Note 4. Loans and Allowance for Loan Losses. To calculate impairment of collateral-dependent loans, the fair market values of the collateral, estimated using exterior appraisals in the majority of instances, are reduced by calculated costs to dispose, derived from historical experience and recent market conditions. Any indicated impairment is recognized by a charge to the allowance for loan losses. Subsequent increases in collateral values or principal pay downs on loans with recognized impairment could result in an impaired loan being carried below its fair value. When no impairment loss is indicated, the carrying amount is considered to approximate the fair value of that loan to the Company because contractually that is the maximum recovery the Company can expect. The recorded investment of loans individually evaluated for impairment based on the fair value of the collateral are included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis. The range and weighted average impact of estimated costs to dispose on fair values is determined at the time of impairment or when additional impairment is recognized and is included in quantitative information about significant unobservable inputs later in this note.

Loans held for investment that have been restructured in TDRs and are performing according to the restructured terms of the loan agreement are individually evaluated for impairment using the present value of future cash flows based on the loan’s effective interest rate, which is not a fair value measurement. At March 31, 2019 and September 30, 2018, respectively, this included $103,435 and $98,459 in recorded investment of TDRs with related allowances for loss of $12,714 and $12,002.

Real Estate Owned—Real estate owned includes real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of the cost basis or fair value, less estimated costs to dispose. Fair value is estimated under the market approach using independent third party appraisals. As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions. At March 31, 2019 and September 30, 2018, these adjustments were not significant to reported fair values. At March 31, 2019 and September 30, 2018, respectively, $1,698 and $1,238 of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis where the cost basis equals or exceeds the estimate of fair values, less estimated costs to dispose of these properties. Real estate owned, included in other assets in the Consolidated Statements of Condition, includes estimated costs to dispose of $266 and $132 related to properties measured at fair value and $1,467 and $1,688 of properties carried at their original or adjusted cost basis at March 31, 2019 and September 30, 2018, respectively.

Derivatives—Derivative instruments include interest rate locks on commitments to originate loans for the held for sale portfolio, forward commitments on contracts to deliver mortgage loans, and interest rate swaps designated as cash flow hedges. Derivatives not designated as cash flow hedges are reported at fair value in other assets or other liabilities on the Consolidated Statement of Condition with changes in value recorded in current earnings. Derivatives qualifying as cash flow hedges, when highly effective, are reported in other assets or other liabilities on the Consolidated Statement of Condition with changes in value recorded in OCI. The fair value of interest rate lock commitments is adjusted by a closure rate based on the estimated percentage of commitments that will result in closed loans. The range and weighted average impact of the closure rate is included in quantitative information about significant unobservable inputs later in this note. A significant change in the closure rate may result in a significant change in the ending fair value measurement of these derivatives relative to their total fair value. Because the closure rate is a significantly unobservable assumption, interest rate lock commitments are included in Level 3 of the hierarchy. Fair value of forward commitments is estimated using a market approach based on quoted secondary market

29

pricing for loan portfolios with characteristics similar to loans underlying the derivative contracts. Forward commitments on contracts to deliver mortgage loans are included in Level 2 of the hierarchy.

Assets and liabilities carried at fair value on a recurring basis in the Consolidated Statements of Condition at March 31, 2019 and September 30, 2018 are summarized below. There were no liabilities carried at fair value on a recurring basis at March 31, 2019.

			Recurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	562,837	$	—	$	562,837	$	—
Fannie Mae certificates	7,746		—		7,746		—
U.S. government and agency obligations	3,989		—		3,989		—
Derivatives:
Interest rate lock commitments	141		—		—		141
Total	$	574,713	$	—	$	574,572	$	141

			Recurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	519,999	$	—	$	519,999	$	—
Fannie Mae certificates	7,998		—		7,998		—
U.S. government and agency obligations	3,968		—		3,968		—
Total	$	531,965	$	—	$	531,965	$	—
Liabilities
Derivatives:
Interest rate lock commitments	$	2	$	—	$	—	$	2
Total	$	2	$	—	$	—	$	2

The table below presents a reconciliation of the beginning and ending balances and the location within the Consolidated Statements of Income where gains (losses) due to changes in fair value are recognized on interest rate lock commitments which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Three Months Ended March 31,					Six Months Ended March 31,
	2019		2018			2019			2018
Beginning balance	$	77	$	28		$	(2	)	$	58
Gain (loss) during the period due to changes in fair value:
Included in other non-interest income	64		(30		)	143			(60		)
Ending balance	$	141	$	(2	)	$	141		$	(2	)
Change in unrealized gains for the period included in earnings for assets held at end of the reporting date	$	141	$	(2	)	$	141		$	(2	)

30

Summarized in the tables below are those assets measured at fair value on a nonrecurring basis.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	81,519	$	—	$	—	$	81,519
Real estate owned(1)	1,698		—		—		1,698
Total	$	83,217	$	—	$	—	$	83,217

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	82,250	$	—	$	—	$	82,250
Real estate owned(1)	1,238		—		—		1,238
Total	$	83,488	$	—	$	—	$	83,488

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

The following provides quantitative information about significant unobservable inputs categorized within Level 3 of the Fair Value Hierarchy. The interest rate lock commitments at March 31, 2019 include both mortgage origination applications and preapprovals. Preapprovals have a much lower closure rate than origination applications as reflected in the weighted average closure rate.

	Fair Value						Weighted
	3/31/2019	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$81,519	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	5.6%
Interest rate lock commitments	$141	Quoted Secondary Market pricing	Closure rate	0	-	100%	48.6%

	Fair Value						Weighted
	9/30/2018	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$82,250	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	6.4%
Interest rate lock commitments	$(2)	Quoted Secondary Market pricing	Closure rate	0	-	100%	50.0%

31

The following tables present the estimated fair value of the Company’s financial instruments and their carrying amounts as reported in the Statement of Condition.

	March 31, 2019
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,055	$	29,055	$	29,055	$	—	$	—
Interest earning cash equivalents	230,185		230,185		230,185		—		—
Investment securities available for sale	574,572		574,572		—		574,572		—
Mortgage loans held for sale	1,016		1,041		—		1,041		—
Loans, net:
Mortgage loans held for investment	12,882,210		13,209,129		—		—		13,209,129
Other loans	2,793		2,879		—		—		2,879
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	40,071		40,071		—		40,071		—
Cash collateral received from or held by counterparty	26,168		26,168		26,168		—		—
Derivatives	141		141		—		—		141
Liabilities:
Checking and passbook accounts	$	2,301,640	$	2,301,640	$	—	$	2,301,640	$	—
Certificates of deposit	6,431,150		6,414,001		—		6,414,001		—
Borrowed funds	3,590,072		3,595,253		—		3,595,253		—
Borrowers’ advances for insurance and taxes	88,839		88,839		—		88,839		—
Principal, interest and escrow owed on loans serviced	29,561		29,561		—		29,561		—

32

	September 30, 2018
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,056	$	29,056	$	29,056	$	—	$	—
Interest earning cash equivalents	240,719		240,719		240,719		—		—
Investment securities available for sale	531,965		531,965		—		531,965		—
Mortgage loans held for sale	659		661		—		661		—
Loans, net:
Mortgage loans held for investment	12,868,273		12,908,729		—		—		12,908,729
Other loans	3,021		3,045		—		—		3,045
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	38,696		38,696		—		38,696		—
Cash collateral received from or held by counterparty	13,794		13,794		13,794		—		—
Liabilities:
Checking and passbook accounts	$	2,169,579	$	2,169,579	$	—	$	2,169,579	$	—
Certificates of deposit	6,322,004		6,006,951		—		6,006,951		—
Borrowed funds	3,721,699		3,724,020		—		3,724,020		—
Borrowers’ advances for insurance and taxes	103,005		103,005		—		103,005		—
Principal, interest and escrow owed on loans serviced	31,490		31,490		—		31,490		—
Derivatives	2		2		—		—		2

Presented below is a discussion of the valuation techniques and inputs used by the Company to estimate fair value.

Cash and Due from Banks, Interest Earning Cash Equivalents, Cash Collateral Received from or Held by Counterparty— The carrying amount is a reasonable estimate of fair value.

Investment and Mortgage-Backed Securities— Estimated fair value for investment and mortgage-backed securities is based on quoted market prices, when available. If quoted prices are not available, management will use as part of their estimation process fair values which are obtained from third party independent nationally recognized pricing services using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

Mortgage Loans Held for Sale— Fair value of mortgage loans held for sale is based on quoted secondary market pricing for loan portfolios with similar characteristics.

Loans— For mortgage loans held for investment and other loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term. The use of current rates to discount cash flows reflects current market expectations with respect to credit exposure. Impaired loans are measured at the lower of cost or fair value as described earlier in this footnote.

Federal Home Loan Bank Stock— It is not practical to estimate the fair value of FHLB stock due to restrictions on its transferability. The fair value is estimated to be the carrying value, which is par. All transactions in capital stock of the FHLB Cincinnati are executed at par.

Deposits— The fair value of demand deposit accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flows and rates currently offered for deposits of similar remaining maturities.

Borrowed Funds— Estimated fair value for borrowed funds is estimated using discounted cash flows and rates currently charged for borrowings of similar remaining maturities.

33

Accrued Interest Receivable, Borrowers’ Advances for Insurance and Taxes, and Principal, Interest and Related Escrow Owed on Loans Serviced— The carrying amount is a reasonable estimate of fair value.

Derivatives— Fair value is estimated based on the valuation techniques and inputs described earlier in this footnote.

13.    DERIVATIVE INSTRUMENTS

The Company enters into interest rate swaps to add stability to interest expense and manage exposure to interest rate movements as part of an overall risk management strategy. For hedges of the Company's borrowing program, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments. These derivatives are used to hedge the forecasted cash outflows associated with the Company's FHLB borrowings. At March 31, 2019 and September 30, 2018, the interest rate swaps used in the Company's asset/liability management strategy have weighted average terms of 3.8 years and 3.3 years and weighted average fixed-rate interest payments of 1.98% and 1.75%, respectively.

Cash flow hedges are initially assessed for effectiveness using regression analysis. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in OCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Quarterly, a qualitative analysis is performed to monitor the ongoing effectiveness of the hedging instrument. All derivative positions were initially and continue to be highly effective at March 31, 2019.

The Company enters into forward commitments for the sale of mortgage loans principally to protect against the risk of adverse interest rate movements on net income. The Company recognizes the fair value of such contracts when the characteristics of those contracts meet the definition of a derivative. These derivatives are not designated in a hedging relationship; therefore, gains and losses are recognized immediately in the statement of income. There were no forward commitments for the sale of mortgage loans at March 31, 2019 or September 30, 2018.

In addition, the Company is party to derivative instruments when it enters into commitments to originate a portion of its loans, which when funded, are classified as held for sale. Such commitments are not designated in a hedging relationship; therefore, gains and losses are recognized immediately in the statement of income.

The following tables provide the locations within the Consolidated Statements of Condition, notional values and fair values, at the reporting dates, for all derivative instruments.

	March 31, 2019				September 30, 2018
	Notional Value		Fair Value		Notional Value		Fair Value
Derivatives designated as hedging instruments
Cash flow hedges: Interest rate swaps
Other Assets	$	1,600,000	$	—	$	1,725,000	$	—
Other Liabilities	$	625,000	$	—	$	—	$	—
Total cash flow hedges: Interest rate swaps	$	2,225,000	$	—	$	1,725,000	$	—
Derivatives not designated as hedging instruments
Interest rate lock commitments
Other Assets	$	8,184	$	141	$	—	$	—
Other Liabilities	$	—	$	—	$	4,248	$	2
Total interest rate lock commitments	$	8,184	$	141	$	4,248	$	(2	)

34

The following tables present the net gains and losses recorded within the Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income relating to derivative instruments.

		Three Months Ended						Six Months Ended
	Location of Gain or (Loss)	March 31,						March 31,
	Recognized in Income	2019			2018			2019			2018
Cash flow hedges
Amount of gain/(loss) recognized	Other comprehensive income	$	(19,912	)	$	24,858		$	(50,925	)	$	36,941
Amount of gain/(loss) reclassified from AOCI	Interest expense: Borrowed funds	4,057			109			6,996			(944		)
Derivatives not designated as hedging instruments
Interest rate lock commitments	Other non-interest income	$	64		$	(30	)	$	143		$	(60	)

The Company estimates that $11,720 of the amounts reported in AOCI will be reclassified as a credit to interest expense during the twelve months ending March 31, 2020.

Derivatives contain an element of credit risk which arises from the possibility that the Company will incur a loss because a counterparty fails to meet its contractual obligations. The Company's exposure is limited to the replacement value of the contracts rather than the notional or principal amounts. Credit risk is minimized through counterparty margin payments, transaction limits and monitoring procedures. All of the Company's swap transactions are cleared through a registered clearing broker to a central clearing organization. The clearing organization establishes daily cash and upfront cash or securities margin requirements to cover potential exposure in the event of default. This process shifts the risk away from the counterparty, since the clearing organization acts as the middleman on each cleared transaction. For derivative transactions cleared through certain clearing parties, variation margin payments are recognized as settlements. The fair value of derivative instruments are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements.

14.    RECENT ACCOUNTING PRONOUNCEMENTS

Adopted during the six months ended March 31, 2019

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The amendments include a five step process for consideration of the core principle, guidance on the accounting treatment for costs associated with a contract, and disclosure requirements related to the revenue process. The FASB issued several additional ASU's to clarify guidance and provide implementation support for ASU 2014-09. Topic 606 does not apply to revenue within the scope of other standards, such as revenue associated with financial instruments.

Effective October 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments related to the ASU (collectively, “Topic 606”). We elected to adopt this guidance utilizing the modified retrospective approach. The adoption did not have a significant impact to the Company's consolidated financial statements, as such, a cumulative effect adjustment to beginning retained earnings was not necessary. Neither the new standard, nor any of the related amendments, resulted in a material change from our current accounting for revenue because a significant amount of the Company’s revenue streams such as interest income, are not within the scope of Topic 606. Our services that fall within the scope of Topic 606 are recognized as revenue as we satisfy our performance obligation to the customer. The disaggregation of our revenue from contracts with customers in scope of Topic 606 is provided below:

35

		Three Months Ended March 31,						Six Months Ended March 31,
	Location of Revenue	2019			2018			2019			2018
Net Gain/(Loss) from Sales of REO	Non-Interest Expense (1)	$	(249	)	$	(256	)	$	(26	)	$	(234	)
Deposit Account and Other Banking Income	Non-Interest Income	212			227			443			457
Total		$	(37	)	$	(29	)	$	417		$	223

____________________________

(1) Net gain/(loss) from sales of real estate owned (REO) is located in non-interest expense in the consolidated statements of income because the gains and losses from the sales of REO assets are netted together with real estate owned expenses (which includes associated legal and maintenance expenses).

Sales of REO: The Company derecognizes the REO asset and fully recognizes a gain or loss from the REO sale when control of the property transfers to the buyer, which generally occurs at closing. Topic 606 does not significantly change the pattern of revenue recognition unless the Company finances the sale. When the Company finances the REO sale, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether the Company will collect substantially all of the consideration to which it is entitled in exchange for the property. Once these criteria are met, the REO asset is derecognized and the Company fully recognizes the gain or loss upon transfer of control of the property to the buyer. There are no instances of the Company financing the sale of one of its REO properties during the six months ended March 31, 2019.

Deposit Account and Other Banking Income: The Company charges depositors transaction-based service fees, which includes services such as stop-payments, wire transfers, check and checking account charges. The performance obligation of the transaction-based fees is satisfied, and related revenue is recognized, at the point in time we perform the requested service.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU changes the accounting for certain equity investments, financial liabilities under the fair value option and presentation and disclosure requirements for financial instruments. Equity investments not accounted for under the equity method of accounting will be measured at fair value with changes recognized in net income. If there are no readily determinable fair values, the guidance allows entities to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value of financial instruments measured at amortized cost. The guidance also requires financial assets and financial liabilities to be presented separately in the footnotes, grouped by measurement category (fair value, amortized cost) and form of financial assets. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in fair value of a liability resulting from credit risk to be presented in OCI. ASU 2018-03 was issued in February 2018 as technical guidance to ASU 2016-01 to aid in clarification and presentation requirements. Both accounting and disclosure guidance are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years on a prospective basis, with a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year adopted. Early adoption is not permitted. The Company adopted this guidance effective October 1, 2018 utilizing the modified-retrospective transition method. The Company did not recognize a cumulative adjustment to equity upon implementation of the standard. The guidance solely impacted the Company's disclosures, and did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and Other Topics. Current guidance is either unclear or does not include specific guidance on these issues. Additionally, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash, which requires restricted cash or restricted cash equivalents be included in beginning-of-period and end-of-period cash totals and changes in this classification be explained separately. The amendments in both these Updates are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied using a retrospective transition method. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The Company adopted the guidance effective October 1, 2018. Adoption of this accounting guidance did not have a material impact on the presentation of the Consolidated Statements of Cash Flows.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. This Update clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value (or calculated intrinsic value,

36

if those amounts are being used to measure the award under ASC 718), the vesting conditions, or the classification of the award (as equity or liability) change as a result of the change in terms or conditions. The guidance is effective prospectively for annual periods beginning on or after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The Company adopted the guidance effective October 1, 2018. The Update did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This Update is intended to more closely align financial reporting of hedging relationships with risk management activities. This amendment expands hedge accounting for both nonfinancial and financial risk components, modifies the presentation of certain hedging relationships in the financial statements and eases hedge effectiveness testing requirements. The amendments are effective for fiscal years beginning after December 15, 2018. Early adoption is permissible in any interim period after the issuance of this Update. The Company early adopted the amendments effective October 1, 2018 and revised the disclosures included in footnote 13. Derivative Instruments, accordingly. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index SWAP (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this Update permit use of the Overnight Index Swap Rate (OIS) rate based on Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the SIFMA Municipal Swap Rate. Third Federal adopted ASU 2018-16 concurrently with ASU 2017-12. The Updates did not have a material impact on the Company's consolidated financial condition or results of operations.

Issued but not yet adopted as of March 31, 2019

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This guidance changes the accounting treatment of leases by requiring lessees to recognize operating leases on the balance sheet as lease assets (a right-to-use asset) and lease liabilities (a liability to make lease payments), measured on a discounted basis and will require both quantitative and qualitative disclosure regarding key information about the leasing arrangements. An accounting policy election to not recognize operating leases with terms of 12 months or less as assets and liabilities is permitted. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 required entities to adopt the new lease standard using a modified retrospective approach. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides entities with an additional (and optional) transition method to adopt the new lease standard. Under this new method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to adopt this guidance effective October 1, 2019 utilizing the transition method described in ASU 2018-11. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient, which allows entities to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity's adoption of Topic 842. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842) Narrow-Scope Improvements, which addresses lessor stakeholder questions regarding sales tax, certain lessor costs and the recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, Leases Codification Improvements, which addresses stakeholder questions regarding presentation of cash flows for sales type and direct financing leases, determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, and transition disclosures related to Topic 250. An implementation team has been created to identify all leases involved, determine which, if any, practical expedients to utilize, and gather data required to comply. All leases have been identified. The Company expects to recognize a right-to-use asset and a lease liability for its operating lease commitments on the Consolidated Statements of Condition and is assessing any additional impact this new standard may have on its consolidated financial condition and results of operations. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this Update replace the existing incurred loss impairment methodology with a methodology that reflects the expected credit losses for the remaining life of the asset. This will require consideration of a broader range of information, including reasonably supportable forecasts, in the measurement of expected credit losses. The amendments expand disclosures of credit quality indicators, requiring disaggregation by year of origination (vintage). Additionally, credit losses on available for sale debt securities will be recognized as an allowance rather than a write-down, with reversals permitted as credit loss estimates decline. An entity will apply the amendments in this Update through a modified-retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. For public business entities that are SEC filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company intends to adopt this guidance effective October 1, 2020. Management has formed a working group comprised of associates from across the Association including accounting, risk management, and finance. This group has begun

37

assessing the required changes to our credit loss estimation methodologies and systems, as well as additional data and resources that may be required to comply with this standard. The Company is currently evaluating the impact that this accounting guidance may have on its consolidated financial condition or results of operations. The actual effect on our allowance for loan losses at the adoption date will be dependent upon the nature of the characteristics of the portfolio as well as the macroeconomic conditions and forecasts at that date.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update add, remove and modify the disclosure requirements on fair value measurements in Topic 820. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of this Update. The Company intends to adopt the amendments effective October 1, 2020. The Update is not expected to have a material impact on the Company's consolidated financial condition, results of operations, or disclosures.

In August 2018, the FASB issued ASU 2018-15, Internal-Use Software (Subtopic 350-40) - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Current GAAP does not specifically address the accounting for implementation costs of a hosting arrangement that is a service contract. Accordingly, the amendments in this Update improve current GAAP because they clarify that accounting and align the accounting for implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities. The Company intends to adopt the amendments effective October 1, 2020. Management is currently assessing the impact the Update will have on the Company's disclosures.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Updates 2016-13, 2017-12 and 2016-01. The amendments related to Update 2016-13 clarify the scope of the credit losses standard and address issues related to accrued interest and recoveries. The Company intends to adopt the credit loss standard amendments concurrently with Update 2016-13 on October 1, 2020. The amendments related to Update 2017-12 address partial-term fair value hedges, fair value hedge basis adjustments and certain transition requirements. The Company is currently evaluating the impact of the hedge accounting amendments and is considering early adoption. The amendments related to Update 2016-01 address the scope of financial instrument recognition and measurement guidance, the requirement for re-measurement under ASC 820 when using the measurement alternative and certain disclosure requirements. The Company is currently evaluating the impact of the financial instrument amendments and is considering early adoption. ASU 2019-04 is not expected to have a material impact on the Company’s consolidated financial condition, results of operation, or disclosures.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company's consolidated financial statements or do not apply to its operations.

38

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 operating strategies;

• statements concerning trends in our provision for loan losses and charge-offs;

• statements regarding the trends in factors affecting our financial condition and results of operations, including asset 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 financial 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 conditions that are worse 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;

• decreased demand for our products and services and lower revenue 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 markets or real estate markets;

• 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 waive dividends;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board;

• the adoption of implementing regulations by a number of different regulatory bodies under the DFA, and uncertainty in the exact nature, extent and timing of such regulations and the impact they will have on us;

• our ability to enter new markets successfully and take advantage of growth opportunities, and the possible short-term dilutive effect of potential acquisitions or de novo branches, if any;

• 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 that adversely affect us or our customer;

• 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-performing assets, charge-offs and provisions for loan losses);

• the inability of third-party providers to perform their obligations to us;

• a slowing or failure of the prevailing economic recovery; and

• cyber attacks, computer viruses and other technological risks that may breach the security of our websites or other systems to obtain unauthorized access to confidential information, destroy data or disable our systems.

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 InformationItem 1A. Risk Factors for a discussion of certain risks related to our business.

39

Overview

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 April 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 supported are located. We intend to continue to adhere to our primary values and to support our customers and the communities in which we operate.

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; and (4) monitoring and controlling our operating expenses.

Controlling Our Interest Rate Risk Exposure. Although the significant housing and credit quality issues that arose in connection with the 2008 financial crisis had a distinctly negative effect on our operating results and, as described below, that experience made a lasting impression on our risk awareness, 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 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 the levels of regulatory capital 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 and by opportunistically extending the duration of our funding sources.

Levels of Regulatory Capital

At March 31, 2019, the Company’s Tier 1 (leverage) capital totaled $1.73 billion, or 12.19% of net average assets and 22.34% of risk-weighted assets, while the Association’s Tier 1 (leverage) capital totaled $1.48 billion, or 10.45% of net average assets and 19.19% 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.

Promotion of 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 less severe 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.

40

The following tables set forth our first mortgage loan production and balances segregated by loan structure at origination.

	For the Six Months Ended March 31, 2019				For the Six Months Ended March 31, 2018
	Amount		Percent		Amount		Percent
	(Dollars in thousands)
First Mortgage Loan Originations:
ARM (all Smart Rate) production	$	320,738	48.2	%	$	476,758	47.6	%
Fixed-rate production:
Terms less than or equal to 10 years	40,143		6.0		141,550		14.1
Terms greater than 10 years	304,178		45.8		383,075		38.3
Total fixed-rate production	344,321		51.8		524,625		52.4
Total First Mortgage Loan Originations	$	665,059	100.0	%	$	1,001,383	100.0	%

	March 31, 2019				September 30, 2018
	Amount		Percent		Amount		Percent
	(Dollars in thousands)
Balance of Residential Mortgage Loans Held For Investment:
ARMs	$	5,128,674	47.0	%	$	5,166,282	46.9	%
Fixed-rate:
Terms less than or equal to 10 years	1,651,008		15.2		1,822,918		16.5
Terms greater than 10 years	4,114,363		37.8		4,036,544		36.6
Total fixed-rate	5,765,371		53.0		5,859,462		53.1
Total Residential Mortgage Loans Held For Investment	$	10,894,045	100.0	%	$	11,025,744	100.0	%

The following table sets forth the balances as of March 31, 2019 for all ARM loans segregated 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)
2019	$	98,748
2020	673,771
2021	1,281,913
2022	1,602,622
2023	1,086,736
2024	384,884
Total	$	5,128,674

At March 31, 2019 and September 30, 2018, mortgage loans held for sale, all of which were long-term, fixed-rate first mortgage loans and all of which were held for sale to Fannie Mae, totaled $1.0 million and $0.7 million, respectively.

41

Loan Portfolio Yield

The following tables set forth the interest yield as of March 31, 2019 for the portfolio of loans held for investment, by type of loan, structure and geographic location.

	March 31, 2019
	Balance		Percent		Yield
	(Dollars in thousands)
Real Estate Loans:
Fixed Rate
Terms less than or equal to 10 years	$	1,651,008	12.8	%	2.92	%
Terms greater than 10 years	4,114,363		31.9	%	4.10	%
Total Fixed-Rate loans	5,765,371		44.7	%	3.76	%
ARMs	5,128,674		39.7	%	3.12	%
Home Equity Loans and Lines of Credit	1,965,580		15.2	%	4.71	%
Construction and Consumer	50,576		0.4	%	3.82	%
Total Loans Receivable, net	$	12,910,201	100.0	%	3.65	%

	March 31, 2019
	Balance		Fixed Rate Balance		Percent		Yield
	(Dollars in thousands)
Residential Mortgage Loans
Ohio	$	6,112,767	$	4,189,015	47.4	%	3.68	%
Florida	1,745,634		687,021		13.5	%	3.44	%
Other	3,035,644		889,335		23.5	%	3.03	%
Total Residential Mortgage Loans	10,894,045		5,765,371		84.4	%	3.46	%
Home Equity Loans and Lines of Credit
Ohio	662,068		60,766		5.1	%	4.71	%
Florida	392,651		35,950		3.0	%	4.57	%
California	305,042		21,045		2.4	%	4.78	%
Other	605,819		15,461		4.7	%	4.78	%
Total Home Equity Loans and Lines of Credit	1,965,580		133,222		15.2	%	4.71	%
Construction and Consumer	50,576		50,576		0.4	%
Total Loans Receivable, net	$	12,910,201	$	5,949,169	100.0	%	3.65	%

Marketing Home Equity Lines of Credit

Since 2016, we have actively marketed home equity lines of credit, which carry an adjustable rate of interest indexed to the prime rate which provides interest rate sensitivity to that portion of our assets. Prior to 2010, home equity lending also represented a meaningful strategy to manage our interest rate risk profile. Between 2010 and 2015, the Association, in various steps, restricted and modified its home equity lending products and the markets where they were offered, in response to the 2008 financial crisis and the resulting regulatory environments that existed during that time. Through redesigned home equity products, we believe we have re-established home equity line of credit lending as a meaningful strategy to manage our interest rate risk profile. At March 31, 2019, the principal balance of home equity lines of credit totaled $1.51 billion. Our home equity lending is discussed in the Allowance for Loan Losses section of the Critical Accounting Policies that follows this Overview.

42

Extending 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 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.

During the six months ended March 31, 2019, the balance of deposits increased $241.2 million, which was comprised of a $319.9 million increase in the balance of customer retail deposits, partially offset by a $78.7 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, 2019, we decreased the balance of our short-term advances from the FHLB of Cincinnati by $450 million; and we added $500 million of new, 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 to approximately six to eight years at inception. These funding source modifications facilitated asset growth of $69.3 million and funded stock repurchases of $6.1 million, dividends of $24.7 million and scheduled repayments of long-term borrowed funds of $183.5 million.

Other Interest Rate Risk Management Tools

We also manage interest rate risk by selectively selling a small portion of our long-term, fixed-rate mortgage loans in the secondary market. Prior to fiscal 2010, this strategy was used to a greater extent to manage our interest rate risk. At March 31, 2019, we serviced $1.87 billion of loans for others, of which $963 million were sold in the secondary market prior to fiscal 2010. While the sales of first mortgage loans remain strategically important for us, since fiscal 2010, they have played only a minor role in our management of interest rate risk. 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 1,Item 2. under the heading Liquidity and Capital Resources, and in Part 1,Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Notwithstanding our efforts to manage interest rate risk, should a rapid and substantial increase occur in general market interest rates, or an extended period of a flat yield curve market persists, it is expected that, prospectively and particularly over a multi-year time horizon, the level of our net interest income would be adversely impacted.

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 confluence of unfavorable regional and macro-economic events that culminated in the 2008 housing market collapse and financial crisis, coupled with our pre-2010 expanded participation in the second lien mortgage lending markets, significantly refocused our attention with respect to 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 impairments. At March 31, 2019, 91% 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, 2019, $24.9 million of loans in Chapter 7 bankruptcy status were included in total TDRs. At March 31, 2019, the recorded investment in non-accrual status loans included $27.8 million of performing loans in Chapter 7 bankruptcy status, of which $27.4 million were also reported as TDRs.

In response to the unfavorable regional and macro-economic environment that arose beginning in 2008, and in an effort to limit our credit risk exposure and improve the credit performance of new customers, we tightened our credit eligibility criteria

43

in evaluating a borrower’s ability to successfully fulfill its repayment obligation, revised the design of many of our loan products to require higher borrower down-payments, limited the products available for condominiums, eliminated certain product features (such as interest-only adjustable-rate loans and loans above certain LTV ratios), and suspended home equity lending products with the exception of bridge loans between 2010 and 2012. The delinquency level related to loan originations prior to 2009, compared to originations in 2009 and after, reflect the higher credit standards to which we have subjected all new originations. As of March 31, 2019, loans originated prior to 2009 had a balance of $936.3 million, of which $29.3 million, or 3.1%, were delinquent, while loans originated in 2009 and after had a balance of $11.97 billion, of which $12.4 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, 2019, approximately 56.0% and 16.1% of the combined total of our residential Core and construction loans held for investment and approximately 33.7% and 20.0% 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, and as a result of that activity, the concentration ratios of the combined total of our residential, Core and construction loans held for investment in Ohio and Florida have trended downward from their September 30, 2010 levels when the concentrations were 79.1% in Ohio and 19.0% in Florida. Of the total mortgage and equity loan originations for the six months endedMarch 31, 2019, 21.6% are secured by properties in states other than Ohio or Florida.

Our residential Home Today loans are another area of credit risk concern. Although we no longer originate loans under this program and the principal balance in these loans had declined to $90.5 million at March 31, 2019, and constituted only 0.7% of our total “held for investment” loan portfolio balance, they comprised 18.6% and 18.9% of our 90 days or greater delinquencies and our total delinquencies, respectively, at that date. At March 31, 2019, approximately 95.3% and 4.5% of our residential Home Today loans were secured by properties in Ohio and Florida, respectively. At March 31, 2019, the percentages of those loans delinquent 30 days or more in Ohio and Florida were 8.9% and 5.5%, respectively. The disparity between the portfolio composition ratio and delinquency composition ratio reflects the nature of the Home Today loans. We do not offer, and have not offered, loan products frequently considered to be designed to target sub-prime borrowers containing features such as higher fees or higher interest rates, negative amortization, or low initial payment features with adjustable interest rates. Our Home Today loans, the majority of which were entered into with borrowers that had credit profiles that would not have otherwise qualified for our loan products due to deficient credit scores, generally contained the same features as loans offered to our Core borrowers. The overriding objective of our Home Today lending, just as it is with our Core lending, was the creation of successful homeowners. We have attempted to manage our Home Today credit risk by requiring that borrowers attend pre- and post-borrowing financial management education and counseling and that the borrowers be referred to us by a sponsoring organization with which we have partnered. Further, to manage the credit aspect of these loans, inasmuch as the majority of these buyers did not have sufficient funds for required down payments, many loans included private mortgage insurance. At March 31, 2019, 16.3% of Home Today loans included private mortgage insurance coverage. From a peak recorded investment of $306.6 million at December 31, 2007, the total recorded investment of the Home Today portfolio has declined to $90.2 at March 31, 2019. 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. 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 securitized/sold to Fannie Mae.

Maintaining Access to Adequate Liquidity and Diverse Funding Sources. 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, 2019, 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 10.45%. The Association's Tier 1 (leverage) capital ratio is lower atMarch 31, 2019than its ratio at September 30, 2018, which was 10.87%, due primarily to an $85 million cash dividend payment that the Association made to the Company, its sole shareholder, in December 2018 that reduced the Association's Tier 1 (leverage) capital ratio by an estimated 60 basis points. Because of its intercompany nature, this dividend payment did not impact the Company's consolidated capital ratios which are reported in theLiquidity and Capital Resourcessection of this Item 2. We expect to continue to remain a well capitalized institution.

44

In managing its level of liquidity, the Company monitors available funding sources, which include attracting new deposits (including brokered CDs), 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, 2019, deposits totaled $8.73 billion (including $591.3 million of brokered CDs), while borrowings totaled $3.59 billion and borrowers’ advances and servicing escrows totaled $118.4 million, combined. In evaluating funding sources, we consider many factors, including cost, collateral, duration and optionality, current availability, expected sustainability, impact on operations and capital levels.

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, 2019, these collateral pledge support arrangements provided the Association with the ability to immediately borrow an additional $262.7 million from the FHLB of Cincinnati and $50.9 million from the FRB-Cleveland Discount Window. From the perspective of collateral value securing FHLB of Cincinnati advances, our capacity limit for additional borrowings beyond the balance outstanding at March 31, 2019 was $4.66 billion, subject to satisfaction of the FHLB of Cincinnati common stock ownership requirement. To satisfy the common stock ownership requirement for the maximum limit of borrowing, we would need to increase our ownership of FHLB of Cincinnati common stock by an additional $93.2 million. Third, we invest in high quality marketable securities that exhibit limited market price variability, and to the extent that they are not needed as collateral for borrowings, can be sold in the institutional market and converted to cash. At March 31, 2019, our investment securities portfolio totaled $574.6 million. Finally, cash flows from operating activities have been a regular source of funds. During the six months endedMarch 31, 2019 and 2018, cash flows from operations provided $43.2 million and $53.8 million, respectively.

Fannie Mae, historically the Association’s primary loan investor, implemented, effective July 2010, certain loan origination requirement changes affecting loan eligibility that we chose not to adopt until fiscal 2013. Since then, first mortgage loans (primarily fixed-rate, mortgage refinances with terms of 15 years or more and HARP II, and more recently Home Ready, loans) that are originated under the revised procedures are eligible for sale to Fannie Mae either as whole loans or within mortgage-backed securities. The HARP II program expired at December 31, 2018. 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. For loans that are not originated under the revised (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. At March 31, 2019, $1.0 million of agency eligible, long-term, fixed-rate first mortgage loans were classified as “held for sale.” During the six months endedMarch 31, 2019, $13.5 million of agency-compliant HARP II and Home Ready loans and $26.3 million of long-term, fixed-rate, agency-compliant, non-HARP II, non-Home Ready first mortgage loans were sold to Fannie Mae. Additionally, $19.0 million of fixed-rate loans were sold in a single bulk sale to a private investor.

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

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 1.40% for the six months endedMarch 31, 2019 and 1.38% for the six months endedMarch 31, 2018. As of March 31, 2019, our average assets per full-time employee and our average deposits per full-time employee were $13.8 million and $8.5 million, respectively. We believe that each of these measures compares favorably with industry averages. Our relatively high average of deposits (exclusive of brokered CDs) held at our branch offices ($214.2 million per branch office as of March 31, 2019) 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.

Critical Accounting Policies

Critical accounting policies are defined as those that involve significant judgments 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

45

subjective decisions or assessments, are our policies with respect to our allowance for loan losses, income taxes and pension benefits.

Allowance for Loan Losses. We provide for loan losses based on the allowance method. Accordingly, all loan losses are charged to, and all recoveries are credited to, the related allowance. Additions to the allowance for loan losses are provided by charges to income based on various factors which, in our judgment, deserve current recognition in estimating probable losses. We regularly review the loan portfolio and make provisions (or recapture credits) for loan losses in order to maintain the allowance for loan losses in accordance with U.S. GAAP. Our allowance for loan losses consists of two components:

(1) individual valuation allowances (IVAs) established for any impaired loans dependent on cash flows, such as performing TDRs, and IVAs related to a portion of the allowance on loans individually reviewed that represents further deterioration in the fair value of the collateral not yet identified as uncollectible; and

(2) general valuation allowances (GVAs), which are comprised of quantitative GVAs, which are general allowances for loan 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 our estimate of incurred probable losses for each loan type.

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, charge-off or recovery practices;

• changes in national, regional, and local economic and business conditions and trends including 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;

• 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 the experience, ability or depth of lending 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 loan 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 on individually reviewed loans;

• existence of any concentrations of credit; and

• 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.

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 restructurings as borrowers who default are generally not eligible for subsequent restructurings. At March 31, 2019, the balance of such individual valuation allowances was $12.7 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. Due to the immaterial amount of this exposure to date, we continue to capture this exposure as a component of our qualitative GVA evaluation. The significance of this exposure will be monitored and, if warranted, we will enhance our loan loss methodology to include a new default factor (developed to reflect the estimated impact to the balance of the allowance for loan losses that will occur as a result of subsequent future restructurings) that will be assessed against all loans reviewed collectively. If new default factors are implemented, the qualitative GVA methodology will be adjusted to preclude duplicative loss consideration.

46

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, as arose beginning in 2008, 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, which are delinquent 90 days or more. This expanded evaluation is in addition to our traditional evaluation procedures. Our home equity loans and lines of credit portfolio continues to comprise a significant portion of our gross charge-offs. At March 31, 2019, we had a recorded investment of $1.99 billion in home equity loans and equity lines of credit outstanding, $6.3 million, or 0.3%, of which were 90 days or more past due.

We evaluate the allowance for loan losses based upon the combined total of the quantitative and qualitative GVAs and IVAs. We periodically evaluate the carrying value of loans 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.

The following tables set forth the allowance for loan losses allocated by loan category, the percent of allowance in each category to the total allowance, and the percent of loans in each category to total loans at the dates indicated. The allowance for loan 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.

	March 31, 2019						December 31, 2018
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Category to Total  Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Category to Total  Loans
	(Dollars in thousands)
Real estate loans:
Residential Core	$	19,587	48.7	%	83.7	%	$	19,165	45.7	%	84.2	%
Residential Home Today	3,275		8.1		0.7		3,748		8.9		0.7
Home equity loans and lines of credit	17,420		43.2		15.2		19,021		45.4		14.6
Construction	4		—		0.4		4		—		0.5
Total allowance	$	40,286	100.0	%	100.0	%	$	41,938	100.0	%	100.0	%

	September 30, 2018						March 31, 2018
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Category to Total  Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Category to Total  Loans
	(Dollars in thousands)
Real estate loans:
Residential Core	$	18,288	43.1	%	84.7	%	$	14,080	32.7	%	85.5	%
Residential Home Today	3,204		7.6		0.7		3,740		8.7		0.8
Home equity loans and lines of credit	20,921		49.3		14.1		25,282		58.6		13.3
Construction	5		—		0.5		4		—		0.4
Total allowance	$	42,418	100.0	%	100.0	%	$	43,106	100.0	%	100.0	%

47

The following table sets forth activity in our allowance for loan losses segregated by geographic location for the periods indicated. The majority of our construction loan portfolio is secured by properties located in Ohio and the balances of other consumer loans are considered immaterial, therefore neither was segregated.

	As of and For the Three Months Ended March 31,						As of and For the Six Months Ended March 31,
	2019			2018			2019			2018
	(Dollars in thousands)
Allowance balance (beginning of the period)	$	41,938		$	45,929		$	42,418		$	48,948
Charge-offs:
Real estate loans:
Residential Core
Ohio	128			183			371			531
Florida	86			12			86			29
Other	85			—			85			27
Total Residential Core	299			195			542			587
Residential Home Today
Ohio	85			288			326			906
Florida	—			—			—			57
Total Residential Home Today	85			288			326			963
Home equity loans and lines of credit
Ohio	229			725			519			1,593
Florida	55			712			500			1,099
California	—			—			22			—
Other	191			182			277			463
Total Home equity loans and lines of credit	475			1,619			1,318			3,155
Total charge-offs	859			2,102			2,186			4,705
Recoveries:
Real estate loans:
Residential Core	766			787			977			1,380
Residential Home Today	624			599			1,092			1,001
Home equity loans and lines of credit	1,817			1,893			3,985			3,482
Total recoveries	3,207			3,279			6,054			5,863
Net recoveries (charge-offs)	2,348			1,177			3,868			1,158
Provision (Credit) for loan losses	(4,000		)	(4,000		)	(6,000		)	(7,000		)
Allowance balance (end of the period)	$	40,286		$	43,106		$	40,286		$	43,106
Ratios:
Net charge-offs (recoveries) to average loans outstanding (annualized)	0.07		%	0.04		%	0.03		%	0.01		%
Allowance for loan losses to non-accrual loans at end of the period	52.14		%	55.09		%	52.14		%	55.09		%
Allowance for loan losses to the total recorded investment in loans at end of the period	0.31		%	0.34		%	0.31		%	0.34		%

The net recoveries of $3.9 million during the six months ended March 31, 2019 increased from $1.2 million for the six months ended March 31, 2018, as credit quality continued to improve during the current fiscal year. Charge-offs decreased during the six months ended March 31, 2019 in all portfolios when compared to the six months ended March 31, 2018, reflecting the improving market conditions. We continue to evaluate loans becoming delinquent for potential losses and record provisions for the estimate of potential losses of those loans. We expect a moderate level of charge-offs to continue as delinquent loans are resolved in the future and uncollected balances are charged against the allowance.

48

During the three months ended March 31, 2019, the total allowance for loan losses decreased$1.6 million, to $40.3 million from $41.9 million at December 31, 2018, as we recorded a $4.0 million credit for loan losses, while recoveries exceeded loan charge-offs by $2.3 million. The allowance for loan losses related to loans evaluated collectively decreased by $2.1 million during the three months ended March 31, 2019, and the allowance for loan losses related to loans evaluated individually increased by approximately $0.4 million. Refer to the "Activity in the Allowance for Loan Losses" and "Analysis of the Allowance for Loan Losses" tables in Note 4 of the Notes to the Unaudited Interim Consolidated Financial Statements for more information. Other than the less significant construction and other consumer loans segments, changes during the three months ended March 31, 2019 in the balances of the GVAs, excluding changes in IVAs, related to the significant loan segments are described as follows:

• Residential Core – The recorded investment of this segment of the loan portfolio decreased0.9%, or $100.6 million, while the total allowance for loan losses for this segment increased2.2% or $0.4 million. The portion of this loan segment’s allowance for loan losses that was determined by evaluating groups of loans collectively (i.e. those loans that were not individually evaluated), increased$0.2 million, or 1.4%, from $12.2 million at December 31, 2018, to $12.4 million at March 31, 2019. The ratio of this portion of the allowance for loan losses to the total balance of loans in this loan segment that were evaluated collectively, increased 0.01% to 0.12% at March 31, 2019 from 0.11% at December 31, 2018. The portfolio contains adjustable-rate loans with fixed interest rates over an initial period of mainly three to five years, followed by annual resets, with various re-lock features that provide options to borrowers. The allowance increased to address the risk prompted by recent increases in the prime rate, the index at which these loans are scheduled to reset. Total delinquencies increased2.0% to $22.1 million at March 31, 2019 from $21.6 million at December 31, 2018. Loans 90 or more days delinquent decreased 1.7% to $10.6 million at March 31, 2019 from $10.8 million at December 31, 2018. Net recoveries during the current quarter were less at $0.5 million compared to $0.6 million for the quarter endedMarch 31, 2018.

• Residential Home Today – The recorded investment of this segment of the loan portfolio decreased2.2%, or $2.1 million, as we are no longer originating loans under the Home Today program. The total allowance for loan losses for this segment decreased by $0.5 million or 12.6%. The portion of this loan segment’s allowance for loan losses that was determined by evaluating groups of loans collectively (i.e. those loans that were not individually evaluated), decreased by 25.1% to $1.1 million at March 31, 2019 from $1.5 million at December 31, 2018. Similarly, the ratio of this portion of the allowance to the total balance of loans in this loan segment that were evaluated collectively, decreased 0.7% to 2.2% at March 31, 2019 from 2.9% at December 31, 2018. Total delinquencies decreased to $7.9 million at March 31, 2019 from $9.7 million at December 31, 2018. Delinquencies greater than 90 days decreased 8.3% to $3.9 million from $4.2 million at December 31, 2018. Net recoveries of $0.5 million were slightly greater during the current quarter compared to $0.3 million during the quarter ended March 31, 2018. The allowance for this portfolio fluctuates based on not only the generally declining portfolio balance, but also on the credit profile trends in this portfolio. This portfolio's allowance decreased this quarter, which coincided with the decrease in the Home Today balance, but we continue to be aware that risk remains based on the generally less stringent credit requirements that were in place at the time that these borrowers qualified for their loans and the continued depressed home values that remain in this portfolio.

• Home Equity Loans and Lines of Credit – The recorded investment of this segment of the loan portfolio increased3.6%, or $68.3 million, to $1.99 billion at March 31, 2019 from $1.92 billion at December 31, 2018. The total allowance for loan losses for this segment decreased7.89% to $17.4 million from $19.0 million at December 31, 2018. During the quarter ended March 31, 2019, the portion of this loan segment's allowance for loan losses that was determined by evaluating groups of loans collectively (i.e. those loans that were not individually evaluated) decreased by $1.8 million, or 11.2%, from $15.7 million to $13.9 million during the quarter ended March 31, 2019. The ratio of this portion of the allowance to the total balance of loans in this loan segment that were evaluated collectively also decreased to 0.7% at March 31, 2019 from 0.8% at December 31, 2018. Net recoveries for this loan segment during the current quarter were greater at $1.3 million as compared to $0.3 million for the quarter ended March 31, 2018. Total delinquencies for this portfolio segment decreased5.0% to $11.7 million at March 31, 2019 as compared to $12.3 million at December 31, 2018. Delinquencies greater than 90 days decreased6.2% to $6.3 million at March 31, 2019 from $6.8 million at December 31, 2018. The reduction in the allowance is mainly supported by a reduction in the principal balance of home equity lines of credit coming to an end of the draw period. In recent years, a large portion of the overall allowance has been allocated to the home equity loans and lines of credit portfolio to address exposure from customers whose lines of credit were originated without amortizing payments during the draw period and who could face potential increased payment shock at the end of the draw period. In general, home equity lines of credit originated prior to June 2010 were characterized by a ten-year draw period, with interest only payments, followed by a ten-year repayment period. However, a large number of those lines of credit approaching the end of draw period have been paid off or refinanced without significant loss. The principal balance of home equity lines of credit originated prior to 2010 without amortizing payments during the draw period that are coming to the end of its

49

draw period through fiscal 2020 is $28.6 million at March 31, 2019 as compared to $62.2 million at December 31, 2018. As this exposure decreases without incurring significant loss, the portion of the overall allowance allocated to the home equity loans and lines of credit category can be decreased. Generally, there were minimal home equity lines of credit originated between June 2010 and February 2013 and those originated after February 2013 require an amortizing payment during the draw period and do not face the same end-of-draw increased payment shock risk.

Loan Portfolio Composition

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 construction loan portfolio is secured by properties located in Ohio and the balances of other consumer loans are considered immaterial. Therefore, neither is segregated by geographic location.

	March 31, 2019					December 31, 2018					September 30, 2018					March 31, 2018
	Amount			Percent		Amount			Percent		Amount			Percent		Amount			Percent
	(Dollars in thousands)
Real estate loans:
Residential Core
Ohio	$	6,026,509				$	6,070,710				$	6,052,208				$	6,100,300
Florida	1,741,571					1,755,482					1,758,762					1,739,286
Other	3,035,470					3,077,639					3,119,841					3,033,815
Total Residential Core	10,803,550			83.7	%	10,903,831			84.2	%	10,930,811			84.7	%	10,873,401			85.5	%
Residential Home Today
Ohio	86,258					88,261					90,604					96,541
Florida	4,062					4,132					4,150					4,589
Other	175					177					179					231
Total Residential Home Today	90,495			0.7		92,570			0.7		94,933			0.7		101,361			0.8
Home equity loans and lines of credit
Ohio	662,068					660,937					652,271					624,015
Florida	392,651					383,784					369,252					359,258
California	305,042					286,510					268,230					236,353
Other	605,819					566,954					529,165					471,082
Total Home equity loans and lines of credit	1,965,580			15.2		1,898,185			14.6		1,818,918			14.1		1,690,708			13.3
Total Construction	47,783			0.4		59,185			0.5		64,012			0.5		54,524			0.4
Other consumer loans	2,793			—		3,000			—		3,021			—		2,812			—
Total loans receivable	12,910,201			100.0	%	12,956,771			100.0	%	12,911,695			100.0	%	12,722,806			100.0	%
Deferred loan expenses, net	40,177					39,526					38,566					35,023
Loans in process	(25,089		)			(34,833		)			(36,549		)			(31,822		)
Allowance for loan losses	(40,286		)			(41,938		)			(42,418		)			(43,106		)
Total loans receivable, net	$	12,885,003				$	12,919,526				$	12,871,294				$	12,682,901

50

At March 31, 2019, the unpaid principal balance of our home equity loans and lines of credit portfolio consisted of $458.4 million in home equity loans (which included $307.3 million of home equity lines of credit, which are in the amortization period and no longer eligible to be drawn upon, and $30.2 million in bridge loans) and $1.51 billion in home equity lines of credit. The following table sets forth credit exposure, principal balance, percent delinquent 90 days or more, the mean CLTV percent at the time of origination and the current mean CLTV percent of our home equity loans, home equity lines of credit and bridge loan portfolio as of March 31, 2019. Home equity lines of credit in the draw period are reported according to geographic distribution.

	Credit Exposure		Principal Balance		Percent Delinquent 90 Days or More		Mean CLTV Percent at Origination (2)		Current Mean CLTV Percent (3)
	(Dollars in thousands)
Home equity lines of credit in draw period (by state)
Ohio	$	1,296,136	$	501,621	0.08	%	59	%	52	%
Florida	535,859		264,633		0.05	%	57	%	52	%
California	490,034		224,164		0.03	%	62	%	58	%
Other (1)	1,096,241		516,763		0.06	%	64	%	60	%
Total home equity lines of credit in draw period	3,418,270		1,507,181		0.06	%	61	%	55	%
Home equity lines in repayment, home equity loans and bridge loans	458,399		458,399		1.19	%	66	%	48	%
Total	$	3,876,669	$	1,965,580	0.34	%	61	%	53	%

_________________

(1) No other individual state has a committed or drawn balance greater than 10% of our total equity lending portfolio nor 5% of total loans.

(2) Mean CLTV percent at origination 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, 2019. 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, 2019, 38.2% of our home equity lending portfolio was either in a first lien position (21.3%), in a subordinate (second) lien position behind a first lien that we held (13.6%) or in a subordinate (second) lien position behind a first lien that was held by a loan that we serviced for others (3.3%). In addition, at March 31, 2019, 14.4% of our home equity line of credit portfolio in the draw period was making only the required minimum payment on the outstanding line balance.

The following table sets forth credit exposure, principal balance, percent delinquent 90 days or more, the mean CLTV percent at the time of origination and the current mean CLTV percent of our home equity loans, home equity lines of credit and bridge loan portfolio as of March 31, 2019. Home equity lines of credit in the draw period are stratified by the calendar year in which originated:

51

	Credit Exposure		Principal Balance		Percent Delinquent 90 Days or More		Mean CLTV Percent at Origination (1)		Current Mean CLTV Percent (2)
	(Dollars in thousands)
Home equity lines of credit in draw period (3)
2009 and Prior	$	75,054	$	24,842	1.29	%	55	%	46	%
2010	12,097		3,770		—	%	58	%	42	%
2013	40		18		—	%	79	%	57	%
2014	145,306		49,402		0.35	%	60	%	43	%
2015	230,771		91,471		0.06	%	60	%	46	%
2016	425,504		180,861		0.11	%	62	%	51	%
2017	922,547		433,003		0.01	%	61	%	54	%
2018	1,274,901		596,710		0.01	%	61	%	60	%
2019	332,050		127,104		—	%	62	%	62	%
Total home equity lines of credit in draw period	3,418,270		1,507,181		0.06	%	61	%	55	%
Home equity lines in repayment, home equity loans and bridge loans	458,399		458,399		1.19	%	66	%	48	%
Total	$	3,876,669	$	1,965,580	0.34	%	61	%	53	%

________________

(1) Mean CLTV percent at origination 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, 2019. 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.

(3) There are no remaining principal balances of home equity lines of credit for years 2011 and 2012. Those years are excluded from the table above.

In general, the home equity line of credit product originated prior to June 2010 (when new home equity lending was temporarily suspended) was characterized by a ten-year draw period followed by a ten-year repayment period; however, there was one type of transaction that could result in a draw period that extended beyond ten years, which involved customer requests for increases in the amount of their home equity line of credit. When the customer’s credit performance and profile supported the increase, the draw period term was reset for the ten-year period following the date of the increase in the home equity line of credit amount. As a result of this program, the reported draw periods for certain home equity line of credit accounts exceed ten years. In addition, as customers approach the end of the draw period and face the likelihood of an increased monthly payment during the amortization period, we continue to work with them to manage their loan payments, including the possibility of restructuring loans, in an attempt to help families keep their home.

The following table sets forth, as of March 31, 2019, the principal balance of home equity lines of credit in the draw period segregated by the current combined LTV range and by fiscal year in which the draw period expires.

	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 (2)	Total
	(Dollars in thousands)
2019 (1)	$64,215	$376	$152	$105	$121	$64,969
2020 (1)	99,157	85	14	21	2	99,279
2021	34,961	—	—	—	—	34,961
2022	32	—	—	—	—	32
2023	18	—	—	—	—	18
2024	790	—	—	6	26	822
Post 2024	1,293,010	12,927	457	278	428	1,307,100
Total	$1,492,183	$13,388	$623	$410	$577	$1,507,181

52

_________________

(1) Home equity lines of credit whose draw period ends in fiscal years 2019 and 2020 include $18.2 million and $10.4 million, respectively, of lines where the customer has an interest only payment during the draw period. All other home equity lines of credit have an amortizing payment during the draw period.

(2) Market data necessary for stratification is not readily available.

The following table sets forth the breakdown of current mean CLTV percentages for our home equity lines of credit in the draw period as of March 31, 2019.

	Credit Exposure		Principal Balance		Percent of Total Principal Balance		Percent Delinquent 90 Days or More		Mean CLTV Percent at Origination (2)		Current Mean CLTV Percent (3)
	(Dollars in thousands)
Home equity lines of credit in draw period (by current mean CLTV)
< 80%	$	3,386,064	$	1,492,183	99.0	%	0.03	%	61	%	55	%
80 - 89.9%	29,485		13,388		0.9	%	1.80	%	79	%	81	%
90 - 100%	1,128		623		0.1	%	16.40	%	76	%	93	%
> 100%	859		410		—	%	—	%	61	%	130	%
Unknown (1)	734		577		—	%	—	%	25	%	(1	)
	$	3,418,270	$	1,507,181	100.0	%	0.06	%	61	%	55	%

_________________

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

(2) Mean CLTV percent at origination 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, 2019. 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 recorded investment in loan delinquencies by type, segregated by geographic location and severity of delinquency at the dates indicated.

	Loans Delinquent for
	30-89 Days		90 Days or More		Total
	(Dollars in thousands)
March 31, 2019
Real estate loans:
Residential Core
Ohio	$	8,108	$	7,015	$	15,123
Florida	1,931		1,443		3,374
Other	1,407		2,174		3,581
Total Residential Core	11,446		10,632		22,078
Residential Home Today
Ohio	3,820		3,836		7,656
Florida	175		45		220
Total Residential Home Today	3,995		3,881		7,876
Home equity loans and lines of credit
Ohio	2,343		2,052		4,395
Florida	955		1,493		2,448
California	438		906		1,344
Other	1,644		1,885		3,529
Total Home equity loans and lines of credit	5,380		6,336		11,716
Total	$	20,821	$	20,849	$	41,670

53

	Loans Delinquent for
	30-89 Days		90 Days or More		Total
	(Dollars in thousands)
December 31, 2018
Real estate loans:
Residential Core
Ohio	$	7,952	$	7,988	$	15,940
Florida	1,068		1,543		2,611
Other	1,805		1,283		3,088
Total Residential Core	10,825		10,814		21,639
Residential Home Today
Ohio	5,284		4,116		9,400
Florida	191		118		309
Total Residential Home Today	5,475		4,234		9,709
Home equity loans and lines of credit
Ohio	1,821		2,186		4,007
Florida	1,332		1,949		3,281
California	763		524		1,287
Other	1,660		2,099		3,759
Total Home equity loans and lines of credit	5,576		6,758		12,334
Total	$	21,876	$	21,806	$	43,682

	Loans Delinquent for
	30-89 Days		90 Days or More		Total
	(Dollars in thousands)
September 30, 2018
Real estate loans:
Residential Core
Ohio	$	7,622	$	7,392	$	15,014
Florida	906		2,455		3,361
Other	1,346		960		2,306
Total Residential Core	9,874		10,807		20,681
Residential Home Today
Ohio	4,483		3,756		8,239
Florida	69		58		127
Total Residential Home Today	4,552		3,814		8,366
Home equity loans and lines of credit
Ohio	2,117		2,286		4,403
Florida	2,011		2,085		4,096
California	302		255		557
Other	2,037		1,307		3,344
Total Home equity loans and lines of credit	6,467		5,933		12,400
Total	$	20,893	$	20,554	$	41,447

54

	Loans Delinquent for
	30-89 Days		90 Days or More		Total
	(Dollars in thousands)
March 31, 2018
Real estate loans:
Residential Core
Ohio	$	7,329	$	8,294	$	15,623
Florida	933		2,291		3,224
Other	2,549		465		3,014
Total Residential Core	10,811		11,050		21,861
Residential Home Today
Ohio	3,309		5,779		9,088
Florida	70		134		204
Total Residential Home Today	3,379		5,913		9,292
Home equity loans and lines of credit
Ohio	2,191		2,621		4,812
Florida	1,841		2,133		3,974
California	353		200		553
Other	1,028		929		1,957
Total Home equity loans and lines of credit	5,413		5,883		11,296
Total	$	19,603	$	22,846	$	42,449

Loans delinquent 90 days or more were 0.2% of total net loans at March 31, 2019, December 31, 2018, September 30, 2018 and March 31, 2018. Loans delinquent 30 to 89 days were 0.2% of total net loans at March 31, 2019, December 31, 2018, September 30, 2018 and March 31, 2018.

55

Non-Performing Assets and Troubled Debt Restructurings

The following table sets forth the recorded investments and categories of our non-performing assets and TDRs at the dates indicated.

	March 31, 2019			December 31, 2018			September 30, 2018			March 31, 2018
	(Dollars in thousands)
Non-accrual loans:
Real estate loans:
Residential Core	$	41,126		$	41,011		$	41,628		$	41,223
Residential Home Today	14,202			14,438			14,641			16,248
Home equity loans and lines of credit	21,943			21,523			21,483			20,777
Total non-accrual loans (1)(2)	77,271			76,972			77,752			78,248
Real estate owned	2,898			2,888			2,794			3,668
Total non-performing assets	$	80,169		$	79,860		$	80,546		$	81,916
Ratios:
Total non-accrual loans to total loans	0.60		%	0.59		%	0.60		%	0.61		%
Total non-accrual loans to total assets	0.54		%	0.54		%	0.55		%	0.56		%
Total non-performing assets to total assets	0.56		%	0.56		%	0.57		%	0.59		%
TDRs: (not included in non-accrual loans above)
Real estate loans:
Residential Core	$	51,072		$	51,116		$	50,351		$	51,188
Residential Home Today	25,354			25,972			26,861			28,769
Home equity loans and lines of credit	26,005			26,857			25,604			22,147
Total	$	102,431		$	103,945		$	102,816		$	102,104

_________________

(1) Totals at March 31, 2019, December 31, 2018, September 30, 2018, and March 31, 2018, include $53.3 million, $51.2 million, $52.1 million, and $49.2 million, respectively, in TDRs that are less than 90 days past due but included with non-accrual loans for a minimum period of six months from the restructuring date due to their non-accrual status prior to restructuring, because they have been partially charged off, or because all borrowers have been discharged of their obligation through a Chapter 7 bankruptcy.

(2) Includes $10.6 million, $10.7 million, $10.5 million, and $11.8 million in TDRs that are 90 days or more past due at March 31, 2019, December 31, 2018, September 30, 2018, and March 31, 2018, respectively.

The gross interest income that would have been recorded during the six months ended March 31, 2019 and March 31, 2018 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 $4.6 million and $4.7 million, respectively. The interest income recognized on those loans included in net income for the six months ended March 31, 2019 and March 31, 2018 was $2.8 million and $5.3 million, respectfully.

At March 31, 2019, December 31, 2018, September 30, 2018 and March 31, 2018, the recorded investment of impaired 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 for impairment until, at a minimum, contractual payments are less than 30 days past due. Also, the recorded investment of non-accrual loans includes loans that are not included in the recorded investment of impaired loans because they are included in loans collectively evaluated for impairment.

56

The table below sets forth the recorded investments and categories of loans representing the difference between non-accrual loans and impaired loans at the dates indicated.

	March 31, 2019			December 31, 2018			September 30, 2018			March 31, 2018
	(Dollars in thousands)
Non-Accrual Loans	$	77,271		$	76,972		$	77,752		$	78,248
Accruing TDRs	102,431			103,945			102,816			102,104
Performing Impaired	4,537			3,800			3,982			5,130
Collectively Evaluated	(2,211		)	(4,025		)	(3,756		)	(5,209		)
Total Impaired loans	$	182,028		$	180,692		$	180,794		$	180,273

In response to the economic challenges facing many borrowers, we continue to restructure loans, resulting in $166.3 million of TDRs (accrual and non-accrual) recorded at March 31, 2019. There was a $0.4 millionincrease in the recorded investment of TDRs from December 31, 2018, a $0.9 millionincrease from September 30, 2018 and a $4.6 millionincrease from March 31, 2018.

Loan restructuring is a method used to help families keep their homes and preserve our 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 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 impairment measurement, see Note 4 to the Unaudited Interim Consolidated Financial Statements: LOANS AND ALLOWANCE FOR LOAN LOSSES.

The following table sets forth the recorded investment in accrual and non-accrual TDRs as of March 31, 2019.

	Initial Restructurings		Multiple Restructurings		Bankruptcy		Total
	(In thousands)
Accrual
Residential Core	$	30,443	$	13,468	$	7,161	$	51,072
Residential Home Today	14,776		9,713		865		25,354
Home equity loans and lines of credit	24,661		175		1,169		26,005
Total	$	69,880	$	23,356	$	9,195	$	102,431
Non-Accrual, Performing
Residential Core	$	6,716	$	9,121	$	13,186	$	29,023
Residential Home Today	1,824		5,804		2,106		9,734
Home equity loans and lines of credit	9,921		2,438		2,184		14,543
Total	$	18,461	$	17,363	$	17,476	$	53,300
Non-Accrual, Non-Performing
Residential Core	$	3,183	$	1,346	$	717	$	5,246
Residential Home Today	867		2,154		606		3,627
Home equity loans and lines of credit	1,154		188		382		1,724
Total	$	5,204	$	3,688	$	1,705	$	10,597
Total TDRs
Residential Core	$	40,342	$	23,935	$	21,064	$	85,341
Residential Home Today	17,467		17,671		3,577		38,715
Home equity loans and lines of credit	35,736		2,801		3,735		42,272
Total	$	93,545	$	44,407	$	28,376	$	166,328

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

57

was not accruing interest 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.

Income Taxes. We consider accounting for income taxes a critical accounting policy due to the subjective nature of certain estimates, including the impact of tax rate changes, such as those implemented by the Act signed into law in December 2017, that are involved in the calculation. We use the asset/liability method of accounting for income taxes in which deferred tax assets and liabilities are established for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. We must assess the realization of the deferred tax asset and, to the extent that we believe that recovery is not likely, a valuation allowance is established. Adjustments to increase or decrease existing valuation allowances, if any, are charged or credited, respectively, to income tax expense. At March 31, 2019, no valuation allowances were outstanding. Even though we have determined a valuation allowance is not required for deferred tax assets at March 31, 2019, there is no guarantee that those assets, if any, will be recognizable in the future.

Pension Benefits. The determination of our obligations and expense for pension benefits is dependent upon certain assumptions used in calculating such amounts. Key assumptions used in the actuarial valuations include the discount rate and expected long-term rate of return on plan assets. Actual results could differ from the assumptions and market driven rates may fluctuate. Significant differences in actual experience or significant changes in the assumptions could materially affect future pension obligations and expense.

Comparison of Financial Condition at March 31, 2019 and September 30, 2018

Total assets increased$69.3 million, or less than 1%, to $14.21 billion at March 31, 2019 from $14.14 billion at September 30, 2018. This increase was primarily the result of increases in investment securities and other assets, as well as new loan origination levels exceeding the total of loan sales and principal repayments.

Cash and cash equivalents decreased$10.6 million, or 4%, to $259.2 million at March 31, 2019 from $269.8 million at September 30, 2018 as we manage cash to maintain the level of liquidity described later in the Liquidity and Capital Resources section.

Investment securities, all of which are classified as available for sale, increased$42.6 million, or 8%, to $574.6 million at March 31, 2019 from $532.0 million at September 30, 2018. Investment securities increased as $96.3 million in purchases exceeded the combined effect of $62.6 million in principal paydowns, a $10.8 million reduction of unrealized losses and $1.9 million of net acquisition premium amortization that occurred in the mortgage-backed securities portfolio during the six months ended March 31, 2019. There were no sales of investment securities during the six months ended March 31, 2019.

Loans held for investment, net, increased$13.7 million, or less than 1%, to $12.89 billion at March 31, 2019 from $12.87 billion at September 30, 2018. Residential mortgage loans decreased$131.7 million, or less than 1%, to $10.89 billion at March 31, 2019. During the six months ended March 31, 2019, $320.7 million of three- and five-year “SmartRate” loans were originated while $344.3 million of 10-, 15-, and 30-year fixed-rate first mortgage loans were originated. These originations were offset by paydowns and fixed-rate loan sales. Between September 30, 2018 and March 31, 2019, the total fixed-rate portion of the first mortgage loan portfolio decreased$94.1 million and was comprised of a decrease of $171.9 million in the balance of fixed-rate loans with original terms of 10 years or less, partially offset by an increase of $77.8 million in the balance of fixed-rate loans with original terms greater than 10 years. During the six months ended March 31, 2019, we completed $58.8 million in loan sales, which included a $19.0 million sale to a private investor, $13.5 million of agency-compliant HARP II and Home Ready loans and $26.3 million of long-term, fixed-rate, agency-compliant, non-HARP II and non-Home Ready first mortgage loans that were sold to Fannie Mae. Also, during the six months ended March 31, 2019, we purchased $4.5 million of long-term, fixed-rate first mortgage loans.

Offsetting the decrease in residential mortgage loans was a $146.7 millionincrease in the balance of home equity loans and lines of credit during the six months ended March 31, 2019, as new originations and additional draws on existing accounts exceeded repayments. Commitments originated for home equity loans and lines of credit and bridge loans were $718.6 million for the six months ended March 31, 2019 compared to $773.3 million for the six months ended March 31, 2018. At March 31, 2019, pending commitments to originate new home equity lines of credit and bridge loans totaled $149.1 million and $37.5 million, respectively. Refer to the Controlling Our Interest Rate RiskExposure section of the Overview for additional information.

58

The total allowance for loan losses decreased$2.1 million, or 5%, to $40.3 million at March 31, 2019 from $42.4 million at September 30, 2018, primarily reflecting improved credit metrics, including continued recoveries of loan amounts previously charged off, low levels of current loan charge-offs and reduced exposure from home equity lines of credit coming to the end of the draw period. Refer to Note 4. Loans and Allowance for Loan Losses for additional discussion.

Other assets increased $20.4 million to $64.7 million at March 31, 2019 from $44.3 million at September 30, 2018. The increase included a $12.4 million increase in initial margin requirements posted on interest rate swap contracts and a $9.3 million increase in the net deferred tax asset, mainly the result of fluctuations in unrealized gains and losses recognized through AOCI, during the current fiscal year.

Deposits increased$241.2 million, or 3%, to $8.73 billion at March 31, 2019 from $8.49 billion at September 30, 2018. The increase in deposits resulted primarily from a $146.6 millionincrease in our savings accounts (which included a $230.2 million increase in the Florida money market accounts and a $83.6 decrease in high yield savings accounts), and a $108.4 millionincrease in CDs, partially offset by a $14.9 milliondecrease in our high-yield checking accounts. We believe that our savings and checking accounts provide a stable source of funds. In addition, our high-yield savings accounts are expected to reprice in a manner similar to our home equity lending products, and, therefore, assist us in managing interest rate risk. The balance of brokered CDs at March 31, 2019 was $591.3 million which was a decrease of $78.8 million during the six months ended March 31, 2019.

Borrowed funds, all from the FHLB of Cincinnati, decreased$131.6 million, or 4%, to $3.59 billion at March 31, 2019 from $3.72 billion at September 30, 2018. Activity included $500.0 million of new 90-day advances that are hedged by equal notional amounts of new interest rate swaps with initial fixed-pay terms of six to eight years, offset by scheduled principal repayments of long-term advances and a $450.0 milliondecrease in the balance of short-term advances, as deposit growth covered most funding demands. The total balance of borrowed funds of $3.59 billion at March 31, 2019 consisted of an overnight advance of $750.0 million, long-term advances of $608.0 million with a remaining weighted average maturity of approximately one year and short-term advances of $2.23 billion aligned with interest rate swap contracts with a remaining weighted average effective maturity of approximately 3.8 years. Interest rate swaps have been used to extend the duration of short-term borrowings to approximately five to eight years 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 for additional discussion regarding short-term borrowings and interest-rate swaps.

Total shareholders’ equity decreased$22.4 million, or 1%, to $1.74 billion at March 31, 2019 from $1.76 billion at September 30, 2018. This net decrease primarily reflected the effect of $40.5 million of net income reduced by $6.2 million of repurchases of outstanding common stock, $24.7 million of cash dividend payments and a $36.8 million unrealized loss recognized in accumulated other comprehensive income, mainly the result of changes in market interest rates related to our interest rate swaps. Adjustments of $5.7 million related to our stock compensation plan and ESOP further offset the decrease. As a result of a July 11, 2018 mutual member vote, Third Federal Savings, MHC, the mutual holding company that owns approximately 81% of the outstanding stock of the Company, waived the receipt of its share of the dividends 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.

59

Comparison of Operating Results for the Three Months Ended March 31, 2019 and 2018

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 have been reflected in the table as loans carrying a zero 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, 2019								March 31, 2018
	Average Balance			Interest Income/ Expense			Yield/ Cost (1)		Average Balance			Interest Income/ Expense			Yield/ Cost (1)
	(Dollars in thousands)
Interest-earning assets:
Interest-earning cash   equivalents	$	215,094		$	1,229		2.29	%	$	231,728		$	872		1.51	%
Investment securities	3,981			23			2.31	%	—			—			—	%
Mortgage-backed securities	565,256			3,471			2.46	%	542,114			2,759			2.04	%
Loans (2)	12,876,333			114,306			3.55	%	12,615,707			105,239			3.34	%
Federal Home Loan Bank stock	93,544			1,414			6.05	%	92,643			1,310			5.66	%
Total interest-earning assets	13,754,208			120,443			3.50	%	13,482,192			110,180			3.27	%
Noninterest-earning assets	400,061								367,342
Total assets	$	14,154,269							$	13,849,534
Interest-bearing liabilities:
Checking accounts	$	881,730		861			0.39	%	$	957,316		224			0.09	%
Savings accounts	1,379,163			2,898			0.84	%	1,404,328			492			0.14	%
Certificates of deposit	6,378,434			31,318			1.96	%	5,876,746			22,914			1.56	%
Borrowed funds	3,606,978			17,605			1.95	%	3,722,445			14,852			1.60	%
Total interest-bearing liabilities	12,246,305			52,682			1.72	%	11,960,835			38,482			1.29	%
Noninterest-bearing liabilities	147,975								158,421
Total liabilities	12,394,280								12,119,256
Shareholders’ equity	1,759,989								1,730,278
Total liabilities and shareholders’ equity	$	14,154,269							$	13,849,534
Net interest income				$	67,761							$	71,698
Interest rate spread (1)(3)							1.78	%							1.98	%
Net interest-earning assets (4)	$	1,507,903							$	1,521,357
Net interest margin (1)(5)				1.97		%						2.13		%
Average interest-earning assets to average interest-bearing liabilities	112.31		%						112.72		%
Selected performance ratios:
Return on average assets (1)				0.57		%						0.67		%
Return on average equity (1)				4.58		%						5.39		%
Average equity to average assets				12.43		%						12.49		%

_________________

(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.

60

General. Net income decreased$3.2 million, or 14%, to $20.1 million for the quarter ended March 31, 2019 from $23.3 million for the quarter ended March 31, 2018. The decrease in net income was attributable primarily to a decrease in net interest income and an increase in non-interest expenses, partially offset by a decrease in income tax expense.

Interest and Dividend Income. Interest and dividend income increased$10.3 million, or 9%, to $120.4 million during the current quarter compared to $110.2 million during the same quarter in the prior year. The increase in interest and dividend income resulted primarily from an increase in interest income from loans and to a lesser extent, interest income on mortgage-backed securities and interest earning cash equivalents.

Interest income on loans increased$9.1 million, or 9%, to $114.3 million during the current quarter compared to $105.2 million during the same quarter in the prior year. This change was attributed to a $260.6 million, or a 2%, increase in the average balance of loans to $12.88 billion for the quarter ended March 31, 2019 compared to $12.62 billion during the same quarter last year as new loan production exceeded repayments and loan sales. In addition to the increase in the average balance was a 21 basis point increase in the average yield on loans to 3.55% for the current quarter from 3.34% for the same quarter last year as market rate increases have impacted loan yields, particularly home equity lending products that feature interest rates that reset based on the prime rate.

Interest Expense. Interest expense increased$14.2 million, or 37%, to $52.7 million during the current quarter compared to $38.5 million during the quarter ended March 31, 2018. The increase resulted primarily from an increase in interest expense on deposits, and to a lesser extent, an increase in interest expense on borrowed funds.

Interest expense on CDs increased$8.4 million, or 37%, to $31.3 million during the current quarter compared to $22.9 million during the quarter ended March 31, 2018. The increase was attributed to a $501.7 million, or 9%, increase in the average balance of CDs to $6.38 billion during the current quarter from $5.88 billion during the same quarter of the prior year combined with a 40 basis point increase in the average rate paid on CDs to 1.96% for the current quarter from 1.56% for the same quarter last year. Rates were adjusted on deposits in response to changes in general market rates as well as to changes in the rates paid by our competition. The increase in deposits was used to fund our balance sheet growth, repay borrowed funds and fund our capital management activities, including share repurchases and dividend payments.

Interest expense on borrowed funds, all from the FHLB of Cincinnati, increased$2.7 million, or 18%, to $17.6 million during the current quarter compared to $14.9 million during the quarter ended March 31, 2018. This increase was attributed to a 35 basis point increase in the average rate paid on these funds to 1.95% for the current quarter from 1.60% for the same quarter last year as market rates, particularly short-term rates, have increased between the two periods and longer duration funding sources were utilized that carried higher interest rates. Partially offsetting the increase in the rate paid on borrowed funds was a $115.5 million, or 3%, decrease in the average balance of borrowed funds to $3.61 billion during the current quarter from an average balance of $3.72 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 decreased$3.9 million to $67.8 million during the current quarter when compared to $71.7 million for the three months ending March 31, 2018, as the increase in the yield on our assets was exceeded by the increased cost of our funding. Our average interest earning assets during the current quarter increased$272.0 million, or 2%, when compared to the quarter ended March 31, 2018. The increase in average interest-earning assets was attributed primarily to the growth of the loan portfolio and to a lesser extent mortgage-backed securities, investment securities and Federal Home Loan Bank stock, partially offset by a decrease in other interest-earning cash equivalents. In addition to the increase in average interest earning assets was a 23 basis point increase in the yield on those assets to 3.50% from 3.27%. Our interest rate spread decreased20 basis points to 1.78% compared to 1.98% during the same quarter last year, reflecting the effect of the flat yield curve. Our net interest margin decreased16 basis points to 1.97% in the current quarter compared to 2.13% for the same quarter last year.

Provision for Loan Losses. We recorded a credit for loan losses of $4.0 million during the quarter ended March 31, 2019, as well as during the quarter ended March 31, 2018. The credits for loan losses reflected reduced levels of loans delinquent 90 days or more, lower charge-offs and continued elevated levels of recoveries of previously charged-off loans. We continue our awareness of the relative values of residential properties in comparison to their cyclical peaks. 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 loan losses previously provided. In the current quarter we recorded net recoveries of $2.3 million compared to net recoveries of $1.2 million in the quarter ended March 31, 2018. Loan loss provisions (credits) are recorded with the objective of aligning our overall allowance for loan losses with our current estimates of loss in the portfolio. The allowance for loan losses was $40.3 million, or 0.31% of total recorded investment in loans receivable, at March 31, 2019, compared to $43.1 million or 0.34% of total recorded investment in loans receivable at March 31, 2018. Balances of recorded investments are net of deferred fees or expenses and any applicable loans-

61

in-process. Refer to the Lending Activities section of the Overview and Note 4. Loans and Allowance for Loan Losses for further discussion.

Non-Interest Income. Non-interest income increased $0.3 million, or 6%, to $4.9 million during the current quarter compared to $4.6 million during the quarter ended March 31, 2018 mainly as a result of increases in the gain on sale of loans and death benefits from BOLI contracts during the current quarter. Gains on the sales of loans increased $0.4 million compared to the same quarter in the prior year as market interest rate movements contributed to higher margins. There were $38.1 million of loan sales during the current quarter as compared to $38.6 million of loan sales during the quarter ended March 31, 2018.

Non-Interest Expense. Non-interest expense increased$1.0 million, or 2%, to $50.7 million during the current quarter compared to $49.7 million during the quarter ended March 31, 2018. The increase resulted primarily from a combination of an increase in marketing and other operating expenses, partially offset by lower federal insurance premium and assessments and office and property equipment expenses. Other operating expenses increased $1.3 million, which consisted of increases in expenses related to appraisals (due to the increase in home equity application volume as well as the start of home buying season) and community reinvestment activities. Marketing expenditures increased $0.7 million during the current quarter as compared to the quarter ended March 31, 2018 and was attributed to the timing of media campaigns supporting our lending activities.

Income Tax Expense. The provision for income taxes was $5.8 million during the current quarter compared to $7.3 million during the quarter ended March 31, 2018. The provision for the current quarter included $5.3 million of federal income tax provision and $0.5 million of state income tax provision. The provision for the quarter ended March 31, 2018 included $7.0 million of federal income tax provision and $0.3 million of state income tax provision. Our effective federal tax rate was 20.9% during the current quarter and 23.1% during the quarter ended March 31, 2018. As a result of the passing of the Tax Cuts and Jobs Act in 2017, the Company was required to use a blended maximum rate for the previous fiscal year. Our current effective income tax rate is below the federal statutory rate because of our ownership of bank-owned life insurance.

62

Comparison of Operating Results for the Six Months EndedMarch 31, 2019 and 2018

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 were included in the computation of loan average balances, but have been reflected in the table as loans carrying a zero 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, 2019								March 31, 2018
	Average Balance			Interest Income/ Expense			Yield/ Cost (1)		Average Balance			Interest Income/ Expense			Yield/ Cost (1)
	(Dollars in thousands)
Interest-earning assets:
Interest-earning cash equivalents	$	220,421		$	2,487		2.26	%	$	235,462		$	1,655		1.41	%
Investment securities	3,976			47			2.36	%	—			—			—	%
Mortgage-backed securities	551,153			6,571			2.38	%	540,309			5,348			1.98	%
Loans (2)	12,874,052			226,797			3.52	%	12,551,282			207,865			3.31	%
Federal Home Loan Bank stock	93,544			2,829			6.05	%	91,523			2,541			5.55	%
Total interest-earning assets	13,743,146			238,731			3.47	%	13,418,576			217,409			3.24	%
Noninterest-earning assets	393,073								372,640
Total assets	$	14,136,219							$	13,791,216
Interest-bearing liabilities:
Checking accounts	$	890,262		1,609			0.36	%	$	963,537		450			0.09	%
Savings accounts	1,332,853			5,076			0.76	%	1,426,300			995			0.14	%
Certificates of deposit	6,365,386			61,154			1.92	%	5,814,134			45,179			1.55	%
Borrowed funds	3,610,605			35,319			1.96	%	3,682,829			29,099			1.58	%
Total interest-bearing liabilities	12,199,106			103,158			1.69	%	11,886,800			75,723			1.27	%
Noninterest-bearing liabilities	170,239								186,052
Total liabilities	12,369,345								12,072,852
Shareholders’ equity	1,766,874								1,718,364
Total liabilities and shareholders’ equity	$	14,136,219							$	13,791,216
Net interest income				$	135,573							$	141,686
Interest rate spread (1)(3)							1.78	%							1.97	%
Net interest-earning assets (4)	$	1,544,040							$	1,531,776
Net interest margin (1)(5)				1.97		%						2.11		%
Average interest-earning assets to average interest-bearing liabilities	112.66		%						112.89		%
Selected performance ratios:
Return on average assets (1)				0.57		%						0.62		%
Return on average equity (1)				4.58		%						5.00		%
Average equity to average assets				12.50		%						12.46		%

_________________

(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.

63

General. Net income decreased $2.4 million to $40.5 million for the six months ended March 31, 2019 compared to $42.9 million for the six months ended March 31, 2018. This decrease in net income was attributable primarily to a decrease in net interest income, a decrease in the credit for loan loss provision and an increase in non-interest expense, partially offset by a decrease in income tax expense.

Interest and Dividend Income. Interest and dividend income increased$21.3 million, or 10%, to $238.7 million during the six months ended March 31, 2019 compared to $217.4 million during the same six months in the prior year. The increase in interest and dividend income resulted primarily from an increase in interest income from loans, and to a lesser extent, interest income on mortgage-backed securities and interest earning cash equivalents.

Interest income on loans increased$18.9 million, or 9%, to $226.8 million for the six months ended March 31, 2019 compared to $207.9 million for the six months ended March 31, 2018. This increase was attributed primarily to a$322.8 millionincrease in the average balance of loans to $12.87 billion in the current six-month period compared to $12.55 billion during the same six months in the prior year as new loan production exceeded repayments and loan sales. The impact from the increase in the average balance of loans was combined with a21 basis point increase in the average yield on loans to 3.52% for the six months ended March 31, 2019 from 3.31% for the same six months in the prior year. Increases in the prime rate between the two periods benefited the yield on home equity lines of credit for the six months ended March 31, 2019, and contributed to the higher overall average yield.

Interest income on mortgage-backed securities increased$1.3 million, or 25%, to $6.6 million during the current six months compared to $5.3 million during the six months ended March 31, 2018. This increase was attributed to a 40 basis point increase in the average yield on mortgage-backed securities, combined with a $10.9 millionincrease in the average balance of mortgage-backed securities to $551.2 million in the current six-month period compared to $540.3 million during the same six months in the prior year.

Interest Expense. Interest expense increased$27.5 million, or 36%, to $103.2 million during the current six months compared to $75.7 million during the six months ended March 31, 2018. The increase resulted from an increase in interest expense on both deposits and borrowed funds.

Interest expense on CDs increased$16.0 million, or 35%, to $61.2 million during the six months ended March 31, 2019 compared to $45.2 million during the six months ended March 31, 2018. The increase was attributed primarily to a37 basis point increase in the average rate we paid on CDs to 1.92% during the current six months from 1.55% during the same six months last year. In addition, there was a $551.3 million, or 9%, increase in the average balance of CDs to $6.37 billion from $5.81 billion during the same six months of the prior year. Interest expense on savings and checking accounts increased $4.1 million and $1.1 million, respectively, to $5.1 million and $1.6 million during the six months ended March 31, 2019, compared to the same six month period of the prior year due to an increase in the average rates we paid on the deposits. Rates were adjusted on deposits in response to changes in general market rates as well as to changes in the rates paid by our competition. The increase in deposits was used to pay down borrowings and fund our balance sheet growth and our capital management activities, including share repurchases and dividend payments.

Interest expense on borrowed funds, all from the FHLB of Cincinnati, increased$6.2 million, or 21%, to $35.3 million during the six months ended March 31, 2019 from $29.1 million during the six months ended March 31, 2018. The increase was attributed to a38 basis point increase in the average rate paid for these funds to 1.96%, during the six months ended March 31, 2019 from 1.58% for the six months ended March 31, 2018, as market rates have increased between the two periods and longer duration funding sources were utilized that carried higher interest rates. Partially offsetting the increase in the rate paid on borrowed funds was a $72.2 million, or 2%, decrease in the average balance of borrowed funds to $3.61 billion during the current six months from $3.68 billion during the same six months 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 decreased$6.1 million, or 4%, to $135.6 million during the six months ended March 31, 2019 from $141.7 million during the six months ended March 31, 2018. Average interest-earning assets increased during the current six-month period by $324.6 million, or 2%, when compared to the six months ended March 31, 2018. The increase in average assets was attributed primarily to the growth of our loan portfolio. In addition to the increase in average interest earning assets was a23 basis point increase in the yield on those assets to 3.47% from 3.24%. However, average interest-bearing liabilities increased by $312.3 million and experienced a 42 basis point increase in cost, as our interest rate spread decreased19 basis points to 1.78% compared to 1.97% during the same six months last year reflecting the flattening yield curve and general interest rate environment. Our net interest margin was 1.97% for the current six-month period and 2.11% for the same six month period in the prior year. Our interest rate spread and net interest margin narrowed as our overall funding costs increased more than our asset yields increased.

64

Provision for Loan Losses. We recorded a credit for loan losses of $6.0 million during the six months ended March 31, 2019 and a $7.0 millioncredit for loan losses during the six months ended March 31, 2018. Continued strong recoveries of loan amounts previously charged off, low levels of current loan charge-offs and reduced exposure from home equity lines of credit coming to the end of the draw period resulted in the loan provision credit during the current period. Nevertheless, we continue our awareness of the relative values of residential properties in comparison to their cyclical peaks. 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, uncollected balances have been charged against the allowance for loan losses previously provided. In the current six months, we recorded net recoveries of $3.9 million, as compared to net recoveries of $1.2 million for the six months ended March 31, 2018. The credit for loan losses recorded for the current six months, as partially offset by net recoveries, resulted in a decrease in the balance of the allowance for loan losses. The allowance for loan losses was $40.3 million, or 0.31% of the total recorded investment in loans receivable, at March 31, 2019, compared to $43.1 million, or 0.34% of the total recorded investment in loans receivable, at March 31, 2018. Balances of recorded investments are net of deferred fees, expenses and any applicable loans-in-process. Refer to the Lending Activities section of the Overview and Note 4. Loans and Allowance for Loan Losses for further discussion.

Non-Interest Income. Non-interest income increased$0.1 million, or 1%, to $9.6 million during the six months ended March 31, 2019 compared to $9.5 million during the six months ended March 31, 2018. The increase in non-interest income is primarily due to a $0.4 million increase in income from bank owned life insurance partially offset by a $0.3 million decrease in other income. Gains on the sales of loans remained relatively flat during the current period. Market interest rate movements contributed to higher margins on loan sales of $58.8 million during the six months ended March 31, 2019, compared to loan sales of $68.5 million during the six months ended March 31, 2018.

Non-Interest Expense. Non-interest expense increased$3.2 million, or 3%, to $98.7 million during the six months ended March 31, 2019 compared to $95.5 million during the six months ended March 31, 2018. This increase resulted primarily from increases in salaries and employee benefits and other operating expenses, partially offset by a reduction in federal insurance premium and assessments. There was a $2.2 million increase in salaries and employee benefits during the current six-month period compared to the six-month period ended March 31, 2018, primarily related to both the timing and amount of health insurance for our employees, which can fluctuate based on the timing of claims, and to a lesser extent, a reduction in the deferral of salary compensation related to direct loan origination costs.

Income Tax Expense. The provision for income taxes was $12.0 million during the six months ended March 31, 2019 compared to $19.8 million during the six months ended March 31, 2018. The decrease in expense was caused mainly by the combination of a decrease in income before income taxes and by the impact of the Act, which further lowered our effective federal rate in the more recent period and required additional tax expense for the re-measurement of the deferred tax asset during the six months ended March 31, 2018. The provision for the current six-month period included $10.4 million of federal income tax provision and $1.6 million of state income tax provision. The provision for the six months ended March 31, 2018 included $18.8 million of federal income tax provision and $0.9 million of state income tax provision. Our effective federal tax rate was 20.4% during the six months ended March 31, 2019 and 30.5% during the six months ended March 31, 2018. Our expected effective income tax rate in the current year is lower than the federal statutory rate because of our ownership of bank-owned life insurance.

Liquidity 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, proceeds from brokered CDs 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

65

the three months ended March 31, 2019, our liquidity ratio averaged 5.63%. We believe that we had sufficient sources of liquidity to satisfy our short- and long-term liquidity needs as of March 31, 2019.

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 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, 2019, cash and cash equivalents totaled $259.2 million, which represented a decrease of 4% from September 30, 2018.

Investment securities classified as available-for-sale, which provide additional sources of liquidity, totaled $574.6 million at March 31, 2019.

During the six-month period ended March 31, 2019, loan sales totaled $58.8 million, which included a $19.0 million sale to a private investor and sales to Fannie Mae, which included $26.3 million of long-term, fixed-rate, agency-compliant, non-HARP II and non-Home Ready first mortgage loans, $0.1 million of loans that qualified under Fannie Mae's HARP II initiative and $13.5 million of loans that qualified under Fannie Mae's Home Ready initiative. Loans originated under the HARP II and Home Ready initiatives are classified as “held for sale” at origination, though the HARP II program ended December 31, 2018. Loans originated under non-HARP II or non-Home Ready, Fannie Mae compliant procedures are classified as “held for investment” until they are specifically identified for sale.

At March 31, 2019, $1.0 million of long-term, fixed-rate residential first mortgage loans were classified as “held for sale,” all of which qualified under Fannie Mae's Home Ready initiative. There were no loan sale commitments outstanding at March 31, 2019.

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, 2019, we had $499.6 million in outstanding commitments to originate loans. In addition to commitments to originate loans, we had $1.91 billion in unfunded home equity lines of credit to borrowers. CDs due within one year of March 31, 2019 totaled $3.18 billion, or 36.5% 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, 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, 2020. 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, 2019, we originated $665.1 million of residential mortgage loans, and $718.6 million of commitments for home equity loans and lines of credit, while during the six months ended March 31, 2018, we originated $1.0 billion of residential mortgage loans and $773.3 million of commitments for home equity loans and lines of credit. We purchased $96.3 million of securities during the six months ended March 31, 2019, and $86.2 million during the six months ended March 31, 2018.

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 and borrowings from the FRB-Cleveland Discount Window. We experienced a net increase in total deposits of $241.2 million during the six months ended March 31, 2019, which reflected the active management of the offered rates on maturing CDs, compared to a net increase of $198.8 million during the six months ended March 31, 2018. 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, 2019, there was a $78.8 million decrease in the balance of brokered CDs (exclusive of acquisition costs and subsequent amortization), which had a balance of $591.3 million at March 31, 2019. At March 31, 2018 the balance of brokered CDs was $686.7 million. Principal and interest owed on loans serviced for others experienced a net decrease of $1.9 million to $29.6 million during the six months ended March 31, 2019 compared to a net decrease of $3.8 million to $31.9 million during the six months ended March 31, 2018. During the six months ended March 31, 2019, we decreased our advances from the FHLB of Cincinnati by $131.6 million, to manage the funding of: new loan originations; our capital initiatives; and actively managed our liquidity ratio. During the six months ended March 31, 2018, our advances from the FHLB of Cincinnati increased by $45.7 million.

66

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 CD market. At March 31, 2019 we had $3.59 billion of FHLB of Cincinnati advances and no outstanding borrowings from the FRB-Cleveland Discount Window. Additionally, at March 31, 2019, we had $591.3 million of brokered CDs. During the six months ended March 31, 2019, we had average outstanding advances from the FHLB of Cincinnati of $3.61 billion as compared to average outstanding advances of $3.68 billion during the six months ended March 31, 2018. The decrease in net average balance in the current year reflects an increase in the use of deposits to fund: balance sheet growth; our capital initiatives; and to manage our on-balance sheet liquidity. 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, 2019, we had the ability to immediately borrow an additional $262.7 million from the FHLB of Cincinnati and $50.9 million from the FRB-Cleveland Discount Window. From the perspective of collateral value securing FHLB of Cincinnati advances, our capacity limit for additional borrowings beyond the outstanding balance at March 31, 2019 was $4.66 billion, subject to satisfaction of the FHLB of Cincinnati common stock ownership requirement. To satisfy the common stock ownership requirement for the maximum limit of borrowing, we would have to increase our ownership of FHLB of Cincinnati common stock by an additional $93.2 million.

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.

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, 2019, the Association exceeded the regulatory requirement for the "capital conservation buffer".

As of March 31, 2019, 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	$	1,516,854	19.71	%	$	769,601	10.00	%
Tier 1 (Leverage) Capital to Net Average Assets	1,476,565		10.45	%	706,180		5.00	%
Tier 1 Capital to Risk-Weighted Assets	1,476,565		19.19	%	615,681		8.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	1,476,551		19.19	%	500,240		6.50	%

The capital ratios of the Company as of March 31, 2019 are presented in the table below (dollar amounts in thousands).

	Actual
	Amount		Ratio
Total Capital to Risk-Weighted Assets	$	1,766,049	22.86	%
Tier 1 (Leverage) Capital to Net Average Assets	1,725,763		12.19	%
Tier 1 Capital to Risk-Weighted Assets	1,725,763		22.34	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	1,725,763		22.34	%

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 our capital distribution strategies, which encompass our 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 2018, the Company received an $85.0 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 statement of condition but reduced the Association's reported capital ratios. At

67

March 31, 2019, the Company had, in the form of cash and a demand loan from the Association, $185.2 million of funds readily available to support its stand-alone operations.

On October 27, 2016, the Company announced that the Board of Directors approved 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. There were 3,921,521 shares repurchased under that program through March 31, 2019. During the six months ended March 31, 2019, the Company repurchased $6.1 million of its common stock.

On July 11, 2018, at a special meeting of members of Third Federal Savings, MHC, the members (depositors and certain loan customers of the Association) of Third Federal Savings, MHC voted to approve Third Federal Savings, MHC's proposed waiver of dividends, aggregating up to $1.00 per share, to be declared on the Company’s common stock during the twelve months subsequent to the members’ approval (i.e., through July 11, 2019). The members approved the waiver by casting 63% of the eligible votes in favor of the waiver. Of the votes cast, 97% were in favor of the proposal. Third Federal Savings, MHC is the 81% majority shareholder of the Company. Following the receipt of the members’ approval at the July 11, 2018 special meeting, Third Federal Savings, MHC filed a notice with, and subsequently received the non-objection of the FRB-Cleveland for the proposed dividend waivers.

The payment of dividends, support of asset growth and stock repurchases are planned to continue in the future as the focus for future capital deployment activities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk has historically been interest rate risk. In general, our assets, consisting primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits and advances from the FHLB of Cincinnati. As a result, a fundamental component of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established risk parameter limits deemed appropriate given our business strategy, operating environment, capital, liquidity and performance objectives. Additionally, our Board of Directors has authorized the formation of an Asset/Liability Management Committee comprised of key operating personnel, which is responsible for managing this risk in a manner that is consistent with the guidelines and risk limits approved by the Board of Directors. Further, the Board has established the Directors Risk Committee, which, among other responsibilities, conducts regular oversight and review of the guidelines, policies and deliberations of the Asset/Liability Management Committee. We have sought to manage our interest rate risk in order to control the exposure of our earnings and capital to changes in interest rates. As part of our ongoing asset-liability management, we use the following strategies to manage our interest rate risk:

(i) marketing adjustable-rate and shorter-maturity (10-year, fixed-rate mortgage) loan products;

(ii) lengthening the weighted average remaining term of major funding sources, primarily by offering attractive interest rates on deposit products, particularly longer-term certificates of deposit, and through the use of longer-term advances from the FHLB of Cincinnati (or shorter-term advances converted to longer-term durations via the use of interest rate exchange contracts that qualify as cash flow hedges) and longer-term brokered certificates of deposit;

(iii) investing in shorter- to medium-term investments and mortgage-backed securities;

(iv) maintaining the levels of capital required for "well capitalized" designation; and

(v) securitizing and/or selling long-term, fixed-rate residential real estate mortgage loans.

During the six months endedMarch 31, 2019, $39.8 million of agency-compliant, long-term, fixed-rate mortgage loans were sold to Fannie Mae on a servicing retained basis. Additionally, during the six months ended March 31, 2019, $19.0 million of fixed-rate loans were sold, on a servicing retained basis, in a single bulk sale to a private investor. At March 31, 2019, $1.0 million of agency-compliant, long-term, fixed-rate residential first mortgage loans that qualified under Fannie Mae's Home Ready program, were classified as “held for sale.” Of the agency-compliant loan sales during the six months endedMarch 31, 2019, $13.5 million was comprised of long-term (15 to 30 years), fixed-rate first mortgage loans which were sold under Fannie Mae's HARP II (the HARP II program ended December 31, 2018) or Home Ready programs, and $26.3 million was comprised of long-term (15 to 30 years), fixed-rate first mortgage loans which had been originated under our revised procedures and were sold to Fannie Mae under our reinstated seller contract, as described in the next paragraph. At March 31, 2019, we did not have any outstanding loan sales commitments.

Fannie Mae, historically the Association’s primary loan investor, implemented, effective July 2010, certain loan origination requirement changes affecting loan eligibility that we chose not to adopt until fiscal 2013. Since then, first mortgage loans (primarily fixed-rate, mortgage refinances with terms of 15 years or more and HARP II, and more recently Home Ready,

68

loans) that are originated under the revised 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. For loans that are not originated under the revised (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.

In response to the impact that the 2008 financial crisis had on housing and more particularly on the operation of the secondary mortgage market, we have actively marketed an adjustable-rate mortgage loan product since 2010 and a 10-year fixed-rate mortgage loan product since 2012. Each of these products provides us with improved interest rate risk characteristics when compared to longer-term, fixed-rate mortgage loans. Shortening the average maturity of our interest-earning assets by increasing our investments in shorter-term loans and investments, as well as loans and investments with variable rates of interest, helps to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates. By following these strategies, we believe that we are better positioned to react to increases in market interest rates.

The Association evaluates funding source alternatives as it seeks to extend its liability duration. Extended duration funding sources that are currently considered include: retail certificates of deposit (which, subject to a fee, generally provide depositors with an early withdrawal option, but do not require pledged collateral); brokered certificates of deposit (which generally do not provide an early withdrawal option and do not require collateral pledges); collateralized borrowings which are not subject to creditor call options (generally advances from the FHLB of Cincinnati); and interest rate exchange contracts ("swaps") which are subject to collateral pledges and which require specific structural features to qualify for hedge accounting treatment (hedge accounting treatment directs that periodic mark-to-market adjustments be recorded in other comprehensive income (loss) in the equity section of the balance sheet rather than being included in operating results of the income statement). The Association's intent is that any swap to which it may be a party will qualify for hedge accounting treatment. The Association attempts to be opportunistic in the timing of its funding duration deliberations and when evaluating alternative funding sources, compares effective interest rates, early withdrawal/call options and collateral requirements.

The Association is a party to interest rate swap agreements. Each of the Association's swap agreements is registered on the Chicago Mercantile Exchange and involves the exchange of interest payment amounts based on a notional principal balance. No exchange of principal amounts occurs and the notional principal amount does not appear on our balance sheet. The Association uses swaps to extend the duration of its funding sources. In each of the Association's agreements, interest paid is based on a fixed rate of interest throughout the term of each agreement while interest received is based on an interest rate that resets at a specified interval (generally three months) throughout the term of each agreement. On the initiation date of the swap, the agreed upon exchange interest rates reflect market conditions at that point in time. Swaps generally require counterparty collateral pledges that ensure the counterparties' ability to comply with the conditions of the agreement. The notional amount of the Association's swap portfolio at March 31, 2019 was $2.23 billion. The swap portfolio's weighted average fixed pay rate was 1.98% and the weighted average remaining term was 3.8 years. Concurrent with the execution of each swap, the Association entered into a short-term borrowing from the FHLB of Cincinnati in an amount equal to the notional amount of the swap and with interest rate resets aligned with the reset interval of the swap. Each individual swap agreement has been designated as a cash flow hedge of interest rate risk associated with the Association's variable rate borrowings from the FHLB of Cincinnati.

Economic Value of Equity. Using customized modeling software, the Association prepares periodic estimates of the amounts by which the net present value of its cash flows from assets, liabilities and off-balance sheet items (the association’s economic value of equity or EVE) would change in the event of a range of assumed changes in market interest rates. The simulation model uses a discounted cash flow analysis and an option-based pricing approach in measuring the interest rate sensitivity of EVE. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumption that instantaneous changes (measured in basis points) occur at all maturities along the United States Treasury yield curve and other relevant market interest rates. A basis point equals one, one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 2% to 3% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below. The model is tailored specifically to our organization, which, we believe, improves its predictive accuracy. The following table presents the estimated changes in the Association’s EVE at March 31, 2019 that would result from the indicated instantaneous changes in the United States Treasury yield curve and other relevant market interest rates. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.

69

								EVE as a Percentage  of Present Value of Assets (3)
Change in Interest Rates (basis points) (1)	Estimated EVE (2)		Estimated Increase (Decrease) in EVE					EVE Ratio  (4)		Increase (Decrease) (basis points)
			Amount			Percent
	(Dollars in thousands)
+300	$	1,436,864	$	(579,803	)	(28.75	)%	10.89	%	(300	)
+200	1,691,285		(325,382		)	(16.13	)%	12.38	%	(151	)
+100	1,897,255		(119,412		)	(5.92	)%	13.44	%	(45	)
0	2,016,667		—			—		13.89	%	—
-100	2,002,243		(14,424		)	(0.72	)%	13.51	%	(38	)

_________________

(1) Assumes an instantaneous uniform change in interest rates at all maturities.

(2) EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) EVE Ratio represents EVE divided by the present value of assets.

The table above indicates that at March 31, 2019, in the event of an increase of 200 basis points in all interest rates, the Association would experience a 16.13%decrease in EVE. In the event of a 100 basis point decrease in interest rates, the Association would experience a 0.72%decrease in EVE.

The following table is based on the calculations contained in the previous table, and sets forth the change in the EVE at a +200 basis point rate of shock at March 31, 2019, with comparative information as of September 30, 2018. By regulation, the Association must measure and manage its interest rate risk for interest rate shocks relative to established risk tolerances in EVE.

Risk Measure (+200 Basis Points Rate Shock)

	At March 31, 2019		At September 30, 2018
Pre-Shock EVE Ratio	13.89	%	15.54	%
Post-Shock EVE Ratio	12.38	%	13.35	%
Sensitivity Measure in basis points	(151	)	(219	)
Percentage Change in EVE	(16.13	)%	(19.65	)%

Certain shortcomings are inherent in the methodologies used in measuring interest rate risk through changes in EVE. Modeling changes in EVE require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the EVE tables presented above assume:

• no new growth or business volumes;

• that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, except for reductions to reflect mortgage loan principal repayments along with modeled prepayments and defaults; and

• that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities.

Accordingly, although the EVE tables provide an indication of our interest rate risk exposure as of the indicated dates, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our EVE and will differ from actual results. In addition to our core business activities, which primarily sought to originate Smart Rate (adjustable), home equity lines of credit (adjustable) and 10-year fixed-rate loans funded by borrowings from the FHLB and intermediate term CDs (including brokered CDs), and which are intended to have a favorable impact on our IRR profile, the impact of several other items and events resulted in the 3.51%improvement in the Percentage Change in EVE measure at March 31, 2019 when compared to the measure at September 30, 2018. Factors contributing to this improvement included changes in market rates, capital actions by the Association, assumption and modeling changes and changes due to business activity. Movement in market interest rates included a decrease of 56 basis points for the two-year term, a decrease of 72 basis points for the five-year term and a decrease of 66 basis points for the ten-year term, and which resulted in an improvement of 4.33% in the Percentage Change in EVE. Partially offsetting this improvement was the impact of an $85.0 million cash dividend that the Association paid to the Company. Because of its intercompany nature, this payment had no

70

impact on the Company's capital position, or the Company's overall IRR profile, but reduced the Association's regulatory capital and regulatory capital ratios and negatively impacted the Association's Percentage Change in EVE by approximately 0.78%. Additionally, modifications and enhancements to our modeling assumptions and methodologies, which are continually challenged and evaluated, on a net basis, negatively impacted the Association's Percentage Change in EVE by 3.60%. Our core business activities, as described at the beginning of this paragraph, are generally intended to have a positive impact on our IRR profile, the actual impact is determined by a number of factors, including the pace of mortgage asset additions to our balance sheet (including consideration of outstanding commitments to originate those assets), in comparison to the pace of the addition of duration extending funding sources. During the current fiscal year-to-date period, the net affect of mortgage asset accumulation and funding source extension resulted in 3.56% of improvement to our Percentage Change in EVE. The IRR simulation results presented above were in line with management's expectations and were within the risk limits established by our Board of Directors.

Our simulation model possesses random patterning capabilities and accommodates extensive regression analytics applicable to the prepayment and decay profiles of our borrower and depositor portfolios. The model facilitates the generation of alternative modeling scenarios and provides us with timely decision making data that is integral to our IRR management processes. Modeling our IRR profile and measuring our IRR exposure are processes that are subject to continuous revision, refinement, modification, enhancement, back testing and validation. We continually evaluate, challenge and update the methodology and assumptions used in our IRR model, including behavioral equations that have been derived based on third-party studies of our customer historical performance patterns. Changes to the methodology and/or assumptions used in the model will result in reported IRR profiles and reported IRR exposures that will be different, and perhaps significantly, from the results reported above.

Earnings at Risk. In addition to EVE calculations, we use our simulation model to analyze the sensitivity of our net interest income to changes in interest rates (the institution’s EaR). Net interest income is the difference between the interest income that we earn on our interest-earning assets, such as loans and securities, and the interest that we pay on our interest-bearing liabilities, such as deposits and borrowings. In our model, we estimate what our net interest income would be for prospective 12 and 24 month periods using customized (based on our portfolio characteristics) assumptions with respect to loan prepayment rates, default rates and deposit decay rates, and the implied forward yield curve as of the market date for assumptions as to projected interest rates. We then calculate what our estimated net interest income would be for the same period under numerous interest rate scenarios. The simulation process is subject to continual enhancement, modification, refinement and adaptation in order that it might most accurately reflect our current circumstances, factors and expectations. As of March 31, 2019, we estimated that our EaR for the 12 months ending March 31,2020 would decrease by 2.58% in the event that market interest rates used in the simulation were adjusted in equal monthly amounts (termed a "ramped" format) during the 12 month measurement period to an aggregate increase of 200 basis points. This assumption differs from the assumption used to report our EaR estimates in reporting periods prior to March 31, 2017, when our EaR disclosures were determined under assumed instantaneous changes in market interest rates. While that scenario is no longer used, the Association continues to calculate instantaneous scenarios, and as of March 31, 2019, we estimated that our EaR for the 12 months ending March 31,2020 would decrease by 4.96% in the event of an instantaneous 200 basis point increase in market interest rates.

Certain shortcomings are also inherent in the methodologies used in determining interest rate risk through changes in EaR. Modeling changes in EaR require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the interest rate risk information presented above assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although interest rate risk calculations provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results. In addition to the preparation of computations as described above, we also formulate simulations based on a variety of non-linear changes in interest rates and a variety of non-constant balance sheet composition scenarios.

Other Considerations. The EVE and EaR analyses are similar in that they both start with the same month end balance sheet amounts, weighted average coupon and maturity. The underlying prepayment, decay and default assumptions are also the same and they both start with the same month end "markets" (Treasury and Libor yield curves, etc.). From that similar starting point, the models follow divergent paths. EVE is a stochastic model using 100 different interest rate paths to compute market value at the cohorted transaction level for each of the categories on the balance sheet whereas EaR uses the implied forward curve to compute interest income/expense at the cohorted transaction level for each of the categories on the balance sheet.

EVE is considered as a point in time calculation with a "liquidation" view of the Association where all the cash flows (including interest, principal and prepayments) are modeled and discounted using discount factors derived from the current market yield curves. It provides a long term view and helps to define changes in equity and duration as a result of changes in interest rates. On the other hand, EaR is based on balance sheet projections going one year and two years forward and assumes

71

new business volume and pricing to calculate net interest income under different interest rate environments. EaR is calculated to determine the sensitivity of net interest income under different interest rate scenarios. With each of these models, specific policy limits have been established that are compared with the actual month end results. These limits have been approved by the Association's Board of Directors and are used as benchmarks to evaluate and moderate interest rate risk. In the event that there is a breach of policy limits that extends beyond two consecutive quarter end measurement periods, management is responsible for taking such action, similar to those described under the preceding heading of General, as may be necessary in order to return the Association's interest rate risk profile to a position that is in compliance with the policy. At March 31, 2019, the IRR profile as disclosed above was within our internal limits.

Item 4. Controls and Procedures

Under the supervision of and with the participation of the Company’s management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated

and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II — Other Information

Item 1. Legal Proceedings

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes in the "Risk Factors" previously disclosed in our Annual Report on Form 10-K, filed with the SEC on November 27, 2018 (File No. 001-33390).

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable

(b) Not applicable

(c) The following table summarizes our stock repurchase activity during the quarter ended March 31, 2019.

		Average		Total Number of	Maximum Number
	Total Number	Price		Shares Purchased	of Shares that May
	of Shares	Paid per		as Part of Publicly	Yet be Purchased
Period	Purchased	Share		Announced Plans (1)	Under the Plans
January 1, 2019 through January 31, 2019	48,000	$	16.63	48,000	6,176,479
February 1, 2019 through February 28, 2019	40,000	16.91		40,000	6,136,479
March 1, 2019 through March 31, 2019	58,000	16.51		58,000	6,078,479
	146,000	16.66		146,000

72

(1) On October 27, 2016, the Company announced that the Board of Directors approved 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. Purchases under the program will be on an ongoing basis and subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses of capital, and our financial performance. Repurchased shares will be held as treasury stock and be available for general corporate use. The repurchase program commenced in January 2017.

On July 11, 2018, at a special meeting of members of Third Federal Savings, MHC, the members (depositors and certain loan customers of the Association) of Third Federal Savings, MHC voted to approve Third Federal Savings, MHC's proposed waiver of dividends, aggregating up to $1.00 per share, to be declared on the Company’s common stock during the four quarterly periods ending June 30, 2019. The members approved the waiver by casting 63% of the eligible votes in favor of the waiver. Of the votes cast, 97% were in favor of the proposal. Third Federal Savings, MHC is the 81% majority shareholder of the Company.

Following the receipt of the members’ approval at the July 11, 2018 special meeting, Third Federal Savings, MHC filed a notice with, and subsequently received the non-objection of the FRB-Cleveland for the proposed dividend waivers.

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

Not applicable

Item 6.

(a) Exhibits

31.1	Certification of chief executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2	Certification of chief financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934
32	Certification of chief executive officer and chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
	The following unaudited financial statements from TFS Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, filed on May 8, 2019, formatted in XBRL: (i) Consolidated Statements of Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Shareholders' Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Unaudited Interim Consolidated Financial Statements.

101.INS	Interactive datafile                            XBRL Instance Document
101.SCH	Interactive datafile                            XBRL Taxonomy Extension Schema Document
101.CAL	Interactive datafile                            XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Interactive datafile                            XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Interactive datafile                            XBRL Taxonomy Extension Label Linkbase
101.PRE	Interactive datafile                            XBRL Taxonomy Extension Presentation Linkbase Document

73

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		TFS Financial Corporation
Dated:	May 8, 2019	/s/    Marc A. Stefanski
		Marc A. Stefanski
		Chairman of the Board, President and Chief Executive Officer
Dated:	May 8, 2019	/s/    Paul J. Huml
		Paul J. Huml
		Chief Financial Officer

74

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Marc A. Stefanski, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of TFS Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	May 8, 2019	/S/ MARC A. STEFANSKI
		Marc A. Stefanski
		Chairman of the Board, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul J. Huml, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of TFS Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	May 8, 2019	/S/ PAUL J. HUML
		Paul J. Huml
		Chief Financial Officer

EX-32

Exhibit 32

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Marc A. Stefanski, Chairman of the Board, President and Chief Executive Officer, and Paul J. Huml, Chief Financial Officer of TFS Financial Corporation (the “Company”) each certify in his capacity as an officer of the Company that he has reviewed the quarterly Report on Form 10-Q for the quarter ended March 31, 2019 and that to the best of his knowledge:

(1) the report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 8, 2019	/S/ MARC A. STEFANSKI
		Marc A. Stefanski
		Chairman of the Board, President and Chief Executive Officer
Dated:	May 8, 2019	/S/ PAUL J. HUML
		Paul J. Huml
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to TFS Financial Corporation and will be retained by TFS Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

******

XML

Document And Entity Information - shares	6 Months Ended
	Mar. 31, 2019	May 06, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	TFS FINANCIAL CORPORATION
Entity Central Index Key	0001381668
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Trading Symbol	TFSL
Amendment Flag	false
Entity Common Stock, Shares Outstanding		279,990,293

XML

Consolidated Statements Of Condition (unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
ASSETS
Cash and due from banks	$ 29,055	$ 29,056
Interest-earning cash equivalents	230,185	240,719
Cash and cash equivalents	259,240	269,775
Investment securities available for sale (amortized cost $581,086 and $549,211, respectively)	574,572	531,965
Mortgage loans held for sale, at lower of cost or market (none measured at fair value)	1,016	659
Loans held for investment, net:
Mortgage loans	12,882,319	12,872,125
Other consumer loans	2,793	3,021
Deferred loan expenses, net	40,177	38,566
Allowance for loan losses	(40,286)	(42,418)
Loans, net	12,885,003	12,871,294
Mortgage loan servicing rights, net	8,484	8,840
Federal Home Loan Bank stock, at cost	93,544	93,544
Real estate owned	2,898	2,794
Premises, equipment, and software, net	62,433	63,399
Accrued interest receivable	40,071	38,696
Bank owned life insurance contracts	214,619	212,021
Other assets	64,747	44,344
TOTAL ASSETS	14,206,627	14,137,331
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	8,732,790	8,491,583
Borrowed funds	3,590,072	3,721,699
Borrowers’ advances for insurance and taxes	88,839	103,005
Principal, interest, and related escrow owed on loans serviced	29,561	31,490
Accrued expenses and other liabilities	29,380	31,150
Total liabilities	12,470,642	12,378,927
Commitments and contingent liabilities
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding	0	0
Common stock, $0.01 par value, 700,000,000 shares authorized; 332,318,750 shares issued; 280,076,911 and 280,311,070 outstanding at March 31, 2019 and September 30, 2018, respectively	3,323	3,323
Paid-in capital	1,729,499	1,726,992
Treasury stock, at cost; 52,241,839 and 52,007,680 shares at March 31, 2019 and September 30, 2018, respectively	(760,367)	(754,272)
Unallocated ESOP shares	(46,584)	(48,751)
Retained earnings—substantially restricted	823,644	807,890
Accumulated other comprehensive income (loss)	(13,530)	23,222
Total shareholders’ equity	1,735,985	1,758,404
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 14,206,627	$ 14,137,331

XML

Consolidated Statements Of Condition (unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Available for sale, amortized cost	$ 581,086	$ 549,211
Loans Held-for-sale, Fair Value Disclosure	$ 0	$ 0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	700,000,000	700,000,000
Common stock, shares issued	332,318,750	332,318,750
Common stock, shares outstanding	280,076,911	280,311,070
Treasury stock, shares	52,241,839	52,007,680

XML

Consolidated Statements Of Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$ 114,306	$ 105,239	$ 226,797	$ 207,865
Investment securities available for sale	3,494	2,759	6,618	5,348
Other interest and dividend earning assets	2,643	2,182	5,316	4,196
Total interest and dividend income	120,443	110,180	238,731	217,409
INTEREST EXPENSE:
Deposits	35,077	23,630	67,839	46,624
Borrowed funds	17,605	14,852	35,319	29,099
Total interest expense	52,682	38,482	103,158	75,723
NET INTEREST INCOME	67,761	71,698	135,573	141,686
PROVISION (CREDIT) FOR LOAN LOSSES	(4,000)	(4,000)	(6,000)	(7,000)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES	71,761	75,698	141,573	148,686
NON-INTEREST INCOME:
Fees and service charges, net of amortization	1,795	1,799	3,571	3,559
Net gain on the sale of loans	451	65	562	543
Increase in and death benefits from bank owned life insurance contracts	1,874	1,509	3,421	3,063
Other	786	1,243	2,028	2,295
Total non-interest income	4,906	4,616	9,582	9,460
NON-INTEREST EXPENSE:
Salaries and employee benefits	26,152	26,057	51,516	49,310
Marketing services	6,719	6,016	11,516	11,054
Office property, equipment and software	6,261	6,728	13,247	13,379
Federal insurance premium and assessments	2,370	3,008	5,136	5,726
State franchise tax	1,282	1,284	2,544	2,410
Other expenses	7,943	6,595	14,748	13,585
Total non-interest expense	50,727	49,688	98,707	95,464
INCOME BEFORE INCOME TAXES	25,940	30,626	52,448	62,682
INCOME TAX EXPENSE	5,810	7,312	11,985	19,755
NET INCOME	$ 20,130	$ 23,314	$ 40,463	$ 42,927
Earnings per share - basic and diluted	$ 0.07	$ 0.08	$ 0.14	$ 0.15
Weighted average shares outstanding
Basic	275,359,201	275,656,445	275,367,821	275,737,265
Diluted	277,343,155	277,256,178	277,197,565	277,434,648

XML

Consolidated Statements Of Comprehensive Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Net income	$ 20,130	$ 23,314	$ 40,463	$ 42,927
Other comprehensive income (loss), net of tax:
Net change in unrealized loss on securities available for sale	3,381	(3,262)	8,478	(6,259)
Net change in cash flow hedges	(18,936)	19,552	(45,758)	27,812
Change in pension obligation	264	317	528	594
Other comprehensive income (loss)	(15,291)	16,607	(36,752)	22,147
Total comprehensive income	$ 4,839	$ 39,921	$ 3,711	$ 65,074

XML

Consolidated Statements Of Shareholders' Equity (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Paid-In Capital	Treasury Stock	Unallocated Common Stock Held By ESOP	Retained Earnings	Accumulated other comprehensive income (loss)
Balance at Sep. 30, 2017	$ 1,689,959	$ 3,323	$ 1,722,672	$ (735,530)	$ (53,084)	$ 760,070	$ (7,492)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	42,927					42,927
Other comprehensive income (loss), net of tax	22,147					42	22,105
ESOP shares allocated or committed to be released	3,273		1,106		2,167
Compensation costs for equity incentive plans	2,525		2,525			0
Purchase of treasury stock	(13,034)			(13,034)
Treasury stock allocated to equity incentive plan	(1,130)		(3,049)	1,919		0
Dividends paid to common shareholders	(16,872)					(16,872)
Balance at Mar. 31, 2018	1,729,795	3,323	1,723,254	(746,645)	(50,917)	786,167	14,613
Balance at Dec. 31, 2017	1,700,678	3,323	1,721,067	(741,034)	(52,001)	771,317	(1,994)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	23,314					23,314
Other comprehensive income (loss), net of tax	16,607					0	16,607
ESOP shares allocated or committed to be released	1,623		539		1,084
Compensation costs for equity incentive plans	1,647		1,647			0
Purchase of treasury stock	(5,492)			(5,492)
Treasury stock allocated to equity incentive plan	(118)		1	(119)		0
Dividends paid to common shareholders	(8,464)					(8,464)
Balance at Mar. 31, 2018	1,729,795	3,323	1,723,254	(746,645)	(50,917)	786,167	14,613
Balance at Sep. 30, 2018	1,758,404	3,323	1,726,992	(754,272)	(48,751)	807,890	23,222
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	40,463					40,463
Other comprehensive income (loss), net of tax	(36,752)					0	(36,752)
ESOP shares allocated or committed to be released	3,477		1,310		2,167
Compensation costs for equity incentive plans	2,227		2,227			0
Purchase of treasury stock	(6,208)			(6,208)
Treasury stock allocated to equity incentive plan	(917)		(1,030)	113		0
Dividends paid to common shareholders	(24,709)					(24,709)
Balance at Mar. 31, 2019	1,735,985	3,323	1,729,499	(760,367)	(46,584)	823,644	(13,530)
Balance at Dec. 31, 2018	1,743,780	3,323	1,727,909	(757,464)	(47,667)	815,918	1,761
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	20,130					20,130
Other comprehensive income (loss), net of tax	(15,291)					0	(15,291)
ESOP shares allocated or committed to be released	1,812		729		1,083
Compensation costs for equity incentive plans	1,146		1,146			0
Purchase of treasury stock	(2,432)			2,432
Treasury stock allocated to equity incentive plan	(756)		(285)	(471)		0
Dividends paid to common shareholders	(12,404)					(12,404)
Balance at Mar. 31, 2019	$ 1,735,985	$ 3,323	$ 1,729,499	$ (760,367)	$ (46,584)	$ 823,644	$ (13,530)

XML

Consolidated Statements Of Shareholders' Equity (unaudited) Consolidated Statements Of Shareholders' Equity (unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Purchase of treasury stock (in shares)	146,000	366,000	388,500	858,000
Dividends paid to common shareholders (per common share)	$ 0.25	$ 0.17	$ 0.50	$ 0.34

XML

Consolidated Statements Of Cash Flows (unaudited) - USD ($) $ in Thousands		6 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$ 40,463	$ 42,927
Adjustments to reconcile net income to net cash provided by operating activities:
ESOP and stock-based compensation expense		5,704	5,798
Depreciation and amortization		10,618	12,661
Deferred income taxes		438	4,604
Provision (credit) for loan losses		(6,000)	(7,000)
Net gain on the sale of loans		(562)	(543)
Other net losses (gains)		(108)	409
Principal repayments on and proceeds from sales of loans held for sale		13,516	7,919
Loans originated for sale		(13,901)	(7,884)
Increase in bank owned life insurance contracts		(3,071)	(3,052)
Net (increase) decrease in interest receivable and other assets		(2,772)	698
Net decrease in accrued expenses and other liabilities		(1,174)	(2,699)
Net cash (used in) provided by operating activities		43,151	53,838
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans originated		(1,185,602)	(1,504,338)
Principal repayments on loans		1,125,215	1,177,999
Proceeds from principal repayments and maturities of:
Securities available for sale		62,559	67,588
Proceeds from sale of:
Loans		45,319	60,101
Real estate owned		2,400	4,520
Purchases of:
FHLB stock		0	(3,554)
Securities available for sale		(96,324)	(86,184)
Premises and equipment		(1,993)	(5,744)
Other		(622)	0
Net cash used in investing activities		(49,048)	(289,612)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits		241,207	198,797
Net decrease in borrowers’ advances for insurance and taxes		(14,166)	(12,288)
Net decrease in principal and interest owed on loans serviced		(1,929)	(3,844)
Net increase in short-term borrowed funds		51,887	159,833
Proceeds from long-term borrowed funds		0	88
Repayment of long-term borrowed funds		(183,514)	(114,234)
Cash collateral received from (provided to) derivative counterparties	[1]	(66,360)	41,280
Purchase of treasury shares		(6,137)	(12,985)
Acquisition of treasury shares through net settlement of stock benefit plans compensation		(917)	(1,130)
Dividends paid to common shareholders		(24,709)	(16,872)
Net cash provided by financing activities		(4,638)	238,645
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(10,535)	2,871
CASH AND CASH EQUIVALENTS—Beginning of period		269,775	268,218
CASH AND CASH EQUIVALENTS—End of period		259,240	271,089
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest on deposits		67,122	45,786
Cash paid for interest on borrowed funds		38,125	27,060
Cash paid for income taxes		9,647	14,827
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfer of loans to real estate owned		2,531	2,900
Transfer of loans from held for sale to held for investment		0	149
Transfer of loans from held for investment to held for sale		45,102	60,274
Treasury stock issued for stock benefit plans		$ 1,068	$ 3,049

[1] In accordance with ASC 230-10-45-27, cash flows from derivative instruments may be classified in the same category as items hedged. For the six months ended March 31, 2018, $41,280 of cash collateral and settlement payments received from derivative counterparties were reclassified from Operating to Financing Activities to conform to this presentation.

XML

Basis Of Presentation

6 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis Of Presentation

BASIS OF PRESENTATION

TFS Financial Corporation, a federally chartered stock holding company, conducts its principal activities through its wholly owned subsidiaries. The principal line of business of the Company is retail consumer banking, including mortgage lending, deposit gathering, and, to a much lesser extent, other financial services. As of March 31, 2019, approximately 81% of the Company’s outstanding shares were owned by a federally chartered mutual holding company, Third Federal Savings and Loan Association of Cleveland, MHC. The thrift subsidiary of TFS Financial Corporation is Third Federal Savings and Loan Association of Cleveland.

The accounting and reporting policies followed by the Company conform in all material respects to U.S. GAAP and to general practices in the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses, the valuation of deferred tax assets, and the determination of pension obligations are particularly subject to change.

The unaudited interim consolidated financial statements were prepared without an audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial condition of the Company at March 31, 2019, and its results of operations and cash flows for the periods presented. Such adjustments are the only adjustments reflected in the unaudited interim financial statements.

In accordance with SEC Regulation S-X for interim financial information, these statements do not include certain information and footnote disclosures required for complete audited financial statements. The Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 contains audited consolidated financial statements and related notes, which should be read in conjunction with the accompanying interim consolidated financial statements. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019 or for any other period.

XML

Earnings Per Share

6 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

Basic earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. For purposes of computing earnings per share amounts, outstanding shares include shares held by the public, shares held by the ESOP that have been allocated to participants or committed to be released for allocation to participants, the 227,119,132 shares held by Third Federal Savings, MHC, and, for purposes of computing dilutive earnings per share, stock options and restricted and performance stock units with a dilutive impact. Unvested shares awarded pursuant to the Company's restricted stock plans are treated as participating securities in the computation of EPS pursuant to the two-class method as they contain nonforfeitable rights to dividends. The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security. At March 31, 2019 and 2018, respectively, the ESOP held 4,658,402 and 5,091,741 shares, respectively, that were neither allocated to participants nor committed to be released to participants.

The following is a summary of the Company's earnings per share calculations.

	For the Three Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	20,130				$	23,314
Less: income allocated to restricted stock units	406					300
Basic earnings per share:
Income available to common shareholders	$	19,724	275,359,201	$	0.07	$	23,014	275,656,445	$	0.08
Diluted earnings per share:
Effect of dilutive potential common shares			1,983,954					1,599,733
Income available to common shareholders	$	19,724	277,343,155	$	0.07	$	23,014	277,256,178	$	0.08

	For the Six Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	40,463				$	42,927
Less: income allocated to restricted stock units	536					543
Basic earnings per share:
Income available to common shareholders	$	39,927	275,367,821	$	0.14	$	42,384	275,737,265	$	0.15
Diluted earnings per share:
Effect of dilutive potential common shares			1,829,744					1,697,383
Income available to common shareholders	$	39,927	277,197,565	$	0.14	$	42,384	277,434,648	$	0.15

The following is a summary of outstanding stock options and restricted and performance stock units that are excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2019	2018	2019	2018
Options to purchase shares	710,100	2,571,240	710,100	2,149,740
Restricted and performance stock units	—	15,501	—	11,001

XML

Investment Securities

6 Months Ended

Mar. 31, 2019

Investments [Abstract]

Investment Securities

Investments available for sale are summarized as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	569,541	$	1,211	$	(7,915	)	$	562,837
Fannie Mae certificates	7,555		234		(43		)	7,746
U.S. government and agency obligations	3,990		—		(1		)	3,989
Total	$	581,086	$	1,445	$	(7,959	)	$	574,572

	September 30, 2018
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	537,330	$	7	$	(17,338	)	$	519,999
Fannie Mae certificates	7,906		237		(145		)	7,998
U.S. government and agency obligations	3,975		—		(7		)	3,968
Total	$	549,211	$	244	$	(17,490	)	$	531,965

Gross unrealized losses on available for sale securities and the estimated fair value of the related securities, aggregated by the length of time the securities have been in a continuous loss position, at March 31, 2019 and September 30, 2018, were as follows:

	March 31, 2019
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	2,596	$	2	$	396,173	$	7,913	$	398,769	$	7,915
Fannie Mae certificates	—		—		4,372		43		4,372		43
U.S. government and agency obligations	3,989		1		—		—		3,989		1
Total	$	6,585	$	3	$	400,545	$	7,956	$	407,130	$	7,959

	September 30, 2018
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	113,111	$	1,799	$	400,558	$	15,539	$	513,669	$	17,338
Fannie Mae certificates	—		—		4,337		145		4,337		145
U.S. government and agency obligations	3,968		7		—		—		3,968		7
Total	$	117,079	$	1,806	$	404,895	$	15,684	$	521,974	$	17,490

We believe the unrealized losses on investment securities were attributable to interest rate increases. The contractual terms of U.S. government and agency obligations do not permit the issuer to settle the security at a price less than the par value of the investment. The contractual cash flows of mortgage-backed securities are guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. REMICs are issued by or backed by securities issued by these governmental agencies. It is expected that the securities would not be settled at a price substantially less than the amortized cost of the investment. The U.S. Treasury Department established financing agreements in 2008 to ensure Fannie Mae and Freddie Mac meet their obligations to holders of mortgage-backed securities that they have issued or guaranteed.

Since the decline in value is attributable to changes in interest rates and not credit quality and because the Company has neither the intent to sell the securities nor is it more likely than not the Company will be required to sell the securities for the time periods necessary to recover the amortized cost, these investments are not considered other-than-temporarily impaired. At March 31, 2019, the amortized cost and fair value of U.S. government obligations, categorized as due in less than one year are $3,990 and $3,989, respectively.

XML

Loans And Allowance For Loan Losses

6 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Loans And Allowance For Loan Losses

LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans held for investment consist of the following:

	March 31, 2019			September 30, 2018
Real estate loans:
Residential Core	$	10,803,550		$	10,930,811
Residential Home Today	90,495			94,933
Home equity loans and lines of credit	1,965,580			1,818,918
Construction	47,783			64,012
Real estate loans	12,907,408			12,908,674
Other consumer loans	2,793			3,021
Add (deduct):
Deferred loan expenses, net	40,177			38,566
Loans in process ("LIP")	(25,089		)	(36,549		)
Allowance for loan losses	(40,286		)	(42,418		)
Loans held for investment, net	$	12,885,003		$	12,871,294

At March 31, 2019 and September 30, 2018, respectively, $1,016 and $659 of loans were classified as mortgage loans held for sale.

A large concentration of the Company’s lending is in Ohio and Florida. As of March 31, 2019 and September 30, 2018, the percentage of aggregate Residential Core, Home Today and Construction loans held in Ohio was 56% as of both dates and the percentage held in Florida was 16% as of both dates. As of March 31, 2019 and September 30, 2018, home equity loans and lines of credit were concentrated in Ohio (34% and 36%), Florida (20% as of both dates), and California (16% and 15%).

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. Through this program the Association provided the majority of loans to borrowers who would not otherwise qualify for the Association’s loan products, generally because of low credit scores. Although the credit profiles of borrowers in the Home Today program might be described as sub-prime, Home Today loans generally contained the same features as loans offered to our Residential Core borrowers. Borrowers with a Home Today loan completed financial management education and counseling and were referred to the Association by a sponsoring organization with which the Association partnered as part of the program. Because the Association 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. As of March 31, 2019 and September 30, 2018, the principal balance of Home Today loans originated prior to March 27, 2009 was $87,429 and $91,805, respectively. Since loans are no longer originated under the Home Today program, the Home Today portfolio will continue to decline in balance, primarily due to contractual amortization. To supplant the Home Today product and to continue to meet the credit needs of customers and the communities served, since fiscal 2016 the Association has offered Fannie Mae eligible, Home Ready loans. These loans are originated in accordance with Fannie Mae's underwriting standards. While the Association retains the servicing to these loans, the loans, along with the credit risk associated therewith, are securitized/sold to Fannie Mae. The Association 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, a LTV ratio greater than 100%, or pay-option adjustable-rate mortgages.

An aging analysis of the recorded investment in loan receivables that are past due at March 31, 2019 and September 30, 2018 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. Balances are adjusted for deferred loan fees, 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
March 31, 2019
Real estate loans:
Residential Core	$	7,359	$	4,087	$	10,632	$	22,078	$	10,797,264	$	10,819,342
Residential Home Today	2,686		1,309		3,881		7,876		82,319		90,195
Home equity loans and lines of credit	3,636		1,744		6,336		11,716		1,978,791		1,990,507
Construction	—		—		—		—		22,452		22,452
Total real estate loans	13,681		7,140		20,849		41,670		12,880,826		12,922,496
Other consumer loans	—		—		—		—		2,793		2,793
Total	$	13,681	$	7,140	$	20,849	$	41,670	$	12,883,619	$	12,925,289

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
September 30, 2018
Real estate loans:
Residential Core	$	7,539	$	2,335	$	10,807	$	20,681	$	10,926,294	$	10,946,975
Residential Home Today	2,787		1,765		3,814		8,366		86,383		94,749
Home equity loans and lines of credit	4,152		2,315		5,933		12,400		1,829,427		1,841,827
Construction	—		—		—		—		27,140		27,140
Total real estate loans	14,478		6,415		20,554		41,447		12,869,244		12,910,691
Other consumer loans	—		—		—		—		3,021		3,021
Total	$	14,478	$	6,415	$	20,554	$	41,447	$	12,872,265	$	12,913,712

At March 31, 2019 and September 30, 2018, real estate loans include $9,363 and $8,501, respectively, of loans that were in the process of foreclosure.

Loans are placed in non-accrual status when they are contractually 90 days or more past due. Loans with a partial charge-off are placed in non-accrual and will remain in non-accrual status until, at a minimum, the impairment is recovered. Loans restructured in TDRs that were in non-accrual status prior to the restructurings remain 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 recorded investment of loan receivables in non-accrual status is summarized in the following table. Balances are adjusted for deferred loan fees and expenses.

	March 31, 2019		September 30, 2018
Real estate loans:
Residential Core	$	41,126	$	41,628
Residential Home Today	14,202		14,641
Home equity loans and lines of credit	21,943		21,483
Total non-accrual loans	$	77,271	$	77,752

At March 31, 2019 and September 30, 2018, respectively, the recorded investment in non-accrual loans includes $56,422 and $57,197, which are performing according to the terms of their agreement, of which $27,752 and $29,439 are loans in Chapter 7 bankruptcy status, primarily where all borrowers have filed, and have not reaffirmed or been dismissed.

Interest on loans in accrual status, including certain loans individually reviewed for impairment, 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. Cash payments on loans in non-accrual status are first applied to the oldest scheduled, unpaid payment first. 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, an 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. The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled payment.

The recorded investment in loan receivables at March 31, 2019 and September 30, 2018 is summarized in the following table. The table provides details of the recorded balances according to the method of evaluation used for determining the allowance for loan losses, distinguishing between determinations made by evaluating individual loans and determinations made by evaluating groups of loans not individually evaluated. Balances of recorded investments are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	93,367	$	10,725,975	$	10,819,342	$	91,360	$	10,855,615	$	10,946,975
Residential Home Today	39,516		50,679		90,195		41,523		53,226		94,749
Home equity loans and lines of credit	49,144		1,941,363		1,990,507		47,911		1,793,916		1,841,827
Construction	—		22,452		22,452		—		27,140		27,140
Total real estate loans	182,027		12,740,469		12,922,496		180,794		12,729,897		12,910,691
Other consumer loans	—		2,793		2,793		—		3,021		3,021
Total	$	182,027	$	12,743,262	$	12,925,289	$	180,794	$	12,732,918	$	12,913,712

An analysis of the allowance for loan losses at March 31, 2019 and September 30, 2018 is summarized in the following table. The analysis provides details of the allowance for loan losses according to the method of evaluation, distinguishing between allowances for loan losses determined by evaluating individual loans and allowances for loan losses determined by evaluating groups of loans collectively.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	7,219	$	12,368	$	19,587	$	6,934	$	11,354	$	18,288
Residential Home Today	2,167		1,108		3,275		2,139		1,065		3,204
Home equity loans and lines of credit	3,554		13,866		17,420		3,014		17,907		20,921
Construction	—		4		4		—		5		5
Total	$	12,940	$	27,346	$	40,286	$	12,087	$	30,331	$	42,418

At March 31, 2019 and September 30, 2018, individually evaluated loans that required an allowance were comprised only of loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, and loans with a further deterioration in the fair value of collateral not yet identified as uncollectible. All other individually evaluated loans received a charge-off, if applicable.

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. At March 31, 2019 and September 30, 2018, respectively, allowances on individually reviewed loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, were $12,714 and $12,002; and allowances on loans with further deteriorations in the fair value of collateral not yet identified as uncollectible were $245 and $85.

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 adjustable-rate mortgage loans whereby the interest rate is locked initially for mainly three or five years then resets annually, subject to various re-lock options available to the borrower. Although the borrower is qualified for its loan at a higher rate than the initial one, the adjustable-rate feature may impact a borrower's ability to afford the higher payments upon rate reset during periods of rising interest rates. The principal amount of loans in the portfolio that are adjustable-rate mortgage loans was $5,128,674 and $5,166,282 at March 31, 2019 and September 30, 2018, respectively.

As described earlier in this footnote, Home Today loans have greater credit risk than traditional residential real estate mortgage loans. At March 31, 2019 and September 30, 2018, respectively, approximately 16% and 18% of Home Today loans include private mortgage insurance coverage. The majority of the coverage on these loans was provided by PMI Mortgage Insurance Co., which was seized by the Arizona Department of Insurance in 2011 and currently pays all claim payments at 74.5%. Appropriate adjustments have been made to the Association’s affected valuation allowances and charge-offs, and estimated loss severity factors were adjusted accordingly for loans evaluated collectively. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by PMIC as of March 31, 2019 and September 30, 2018, respectively, was $33,317 and $39,367, of which $30,755 and $36,075 was current. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by Mortgage Guaranty Insurance Corporation as of March 31, 2019 and September 30, 2018, respectively, was $18,897 and $20,912 of which $18,736 and $20,792 was current. As of March 31, 2019, MGIC's long-term debt rating, as published by the major credit rating agencies, did not meet the requirements to qualify as "high credit quality"; however, MGIC continues to make claims payments in accordance with its contractual obligations and the Association has not increased its estimated loss severity factors related to MGIC's claim paying ability. No other loans were covered by mortgage insurers that were deferring claim payments or which were assessed as being non-investment grade.

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. Post-origination deterioration in economic and housing market conditions may impact a borrower's ability to afford the higher payments required during the end of draw repayment period that follows the period of interest only payments on home equity lines of credit originated prior to 2012 or the ability to secure alternative financing. Beginning in February 2013, the terms on new home equity lines of credit included monthly principal and interest payments throughout the entire term to minimize the potential payment differential between the draw and after draw periods.

The Association originates construction loans to individuals for the construction of their personal single-family residence by a qualified builder (construction/permanent loans). The Association’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 Association offers construction/permanent loans with fixed or adjustable-rates, and a current maximum loan-to-completed-appraised value ratio of 85%.

Other consumer loans are comprised of loans secured by certificate of deposit accounts, which are fully recoverable in the event of non-payment.

For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Association will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Factors considered in determining that a loan is impaired 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.

The recorded investment and the unpaid principal balance of impaired loans, including those reported as TDRs, as of March 31, 2019 and September 30, 2018 are summarized as follows. Balances of recorded investments are adjusted for deferred loan fees and expenses.

	March 31, 2019						September 30, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related IVA recorded:
Residential Core	$	48,058	$	64,246	$	—	$	53,656	$	69,516	$	—
Residential Home Today	15,056		34,823		—		16,006		35,532		—
Home equity loans and lines of credit	21,754		27,821		—		22,423		28,504		—
Total	$	84,868	$	126,890	$	—	$	92,085	$	133,552	$	—
With an IVA recorded:
Residential Core	$	45,309	$	45,398	$	7,219	$	37,704	$	37,774	$	6,934
Residential Home Today	24,460		24,440		2,167		25,517		25,492		2,139
Home equity loans and lines of credit	27,390		27,413		3,554		25,488		25,519		3,014
Total	$	97,159	$	97,251	$	12,940	$	88,709	$	88,785	$	12,087
Total impaired loans:
Residential Core	$	93,367	$	109,644	$	7,219	$	91,360	$	107,290	$	6,934
Residential Home Today	39,516		59,263		2,167		41,523		61,024		2,139
Home equity loans and lines of credit	49,144		55,234		3,554		47,911		54,023		3,014
Total	$	182,027	$	224,141	12,940		$	180,794	$	222,337	$	12,087

At March 31, 2019 and September 30, 2018, respectively, the recorded investment in impaired loans includes $166,328 and $165,391 of loans restructured in TDRs of which $10,597 and $10,468 were 90 days or more past due.

The average recorded investment in impaired loans and the amount of interest income recognized during the period that the loans were impaired are summarized below.

	For the Three Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	49,934	$	341	$	50,403	$	1,374
Residential Home Today	15,287		52		17,454		856
Home equity loans and lines of credit	22,292		120		20,071		99
Total	$	87,513	$	513	$	87,928	$	2,329
With an IVA recorded:
Residential Core	$	42,446	$	397	$	42,180	$	535
Residential Home Today	24,690		297		27,211		620
Home equity loans and lines of credit	26,713		173		21,633		144
Total	$	93,849	$	867	$	91,024	$	1,299
Total impaired loans:
Residential Core	$	92,380	$	738	$	92,583	$	1,909
Residential Home Today	39,977		349		44,665		1,476
Home equity loans and lines of credit	49,005		293		41,704		243
Total	$	181,362	$	1,380	$	178,952	$	3,628

	For the Six Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	50,857	$	801	$	50,718	$	1,760
Residential Home Today	15,531		124		18,124		972
Home equity loans and lines of credit	22,089		224		20,059		173
Total	$	88,477	$	1,149	$	88,901	$	2,905
With an IVA recorded:
Residential Core	$	41,507	$	1,156	$	42,804	$	955
Residential Home Today	24,989		593		27,384		956
Home equity loans and lines of credit	26,439		627		21,329		275
Total	$	92,935	$	2,376	$	91,517	$	2,186
Total impaired loans:
Residential Core	$	92,364	$	1,957	$	93,522	$	2,715
Residential Home Today	40,520		717		45,508		1,928
Home equity loans and lines of credit	48,528		851		41,388		448
Total	$	181,412	$	3,525	$	180,418	$	5,091

Interest on loans in non-accrual status is recognized on a cash basis. The amount of interest income on impaired loans recognized using a cash basis method was $347 and $739 for the three and six months ended March 31, 2019 and $795 and $1,208 for the three and six months ended March 31, 2018. 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. Interest income on the remaining impaired loans is recognized on an accrual basis.

Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the recorded investment in the loans.

Partial or full charge-offs are also recognized for the amount of impairment on loans considered collateral dependent that meet the conditions described below.

• For residential mortgage loans, payments are greater than 180 days delinquent;

• For home equity lines of credit, equity loans, and residential loans restructured in a TDR, payments are greater than 90 days delinquent;

• For all classes of loans restructured in a TDR with a high debt-to-income ratio at time of modification;

• For all classes of loans, a sheriff sale is scheduled within 60 days to sell the collateral securing the loan;

• For all classes of loans, all borrowers have been discharged of their obligation through a Chapter 7 bankruptcy;

• For all classes of loans, within 60 days of notification, all borrowers obligated on the loan have filed Chapter 7 bankruptcy and have not reaffirmed or been dismissed;

• For all classes of loans, a borrower obligated on a loan has filed bankruptcy and the loan is greater than 30 days delinquent; and

• For all classes of loans, it becomes evident that a loss is probable.

Collateral dependent residential mortgage loans and construction loans are charged off to the extent the recorded investment in a 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 recorded investment 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 that is identified as collateral dependent will continue to be reported as impaired 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 consequent to impairment evaluation will continue to be individually evaluated for impairment until, at a minimum, the impairment has been recovered.

Loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for impairment on a loan by loan basis at the time of restructuring and at each subsequent reporting date for as long as they are reported as TDRs. The impairment 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 recorded investments 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. We evaluate these loans using the expected future cash flows because we expect the borrower, not liquidation of the collateral, to be the source of repayment for the loan. Other consumer loans are not considered for restructuring. A loan restructured in a TDR is classified as an impaired loan for a minimum of one year. After one year, that loan may be reclassified out of the balance of impaired loans if the loan was restructured to yield a market rate for loans of similar credit risk at the time of restructuring and the loan is not impaired based on the terms of the restructuring agreement. No loans whose terms were restructured in TDRs were reclassified from impaired loans during the six months ended March 31, 2019 and March 31, 2018.

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 Association. The recorded investment in TDRs by category as of March 31, 2019 and September 30, 2018 is shown in the tables below.    

March 31, 2019	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	40,342	$	23,935	$	21,064	$	85,341
Residential Home Today	17,467		17,671		3,577		38,715
Home equity loans and lines of credit	35,736		2,801		3,735		42,272
Total	$	93,545	$	44,407	$	28,376	$	166,328

September 30, 2018	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	39,265	$	23,116	$	21,832	$	84,213
Residential Home Today	18,243		18,483		3,683		40,409
Home equity loans and lines of credit	33,768		2,563		4,438		40,769
Total	$	91,276	$	44,162	$	29,953	$	165,391

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 cannot return to regular 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 hours, non-paid leave or short-erm 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.

For all loans restructured during the three and six months ended March 31, 2019 and March 31, 2018 (set forth in the tables below), the pre-restructured outstanding recorded investment was not materially different from the post-restructured outstanding recorded investment.

The following tables set forth the recorded investment in TDRs restructured during the periods presented.

	For the Three Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	2,713	$	2,921	$	649	$	6,283
Residential Home Today	172		1,447		180		1,799
Home equity loans and lines of credit	2,121		700		73		2,894
Total	$	5,006	$	5,068	$	902	$	10,976

	For the Three Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	374	$	1,035	$	1,242	$	2,651
Residential Home Today	233		509		90		832
Home equity loans and lines of credit	5,208		426		225		5,859
Total	$	5,815	$	1,970	$	1,557	$	9,342

	For the Six Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	5,479	$	2,923	$	1,571	$	9,973
Residential Home Today	444		1,447		305		2,196
Home equity loans and lines of credit	5,655		700		273		6,628
Total	$	11,578	$	5,070	$	2,149	$	18,797

	For the Six Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	1,371	$	2,111	$	1,807	$	5,289
Residential Home Today	442		1,264		382		2,088
Home equity loans and lines of credit	6,856		609		312		7,777
Total	$	8,669	$	3,984	$	2,501	$	15,154

Below summarizes the information on TDRs restructured within 12 months of the period presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented.

	For the Three Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	9	$	853
Residential Home Today	21	895		19	805
Home equity loans and lines of credit	11	731		7	557
Total	48	$	4,287	35	$	2,215

	For the Six Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	12	$	1,488
Residential Home Today	22	928		19	805
Home equity loans and lines of credit	11	731		8	557
Total	49	$	4,320	39	$	2,850

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 Association feels deserve management’s attention and may result in further deterioration in their repayment prospects and/or the Association’s credit position. 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 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.

The following tables provide information about the credit quality of residential loan receivables by an internally assigned grade. Balances are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	Pass		Special Mention		Substandard		Loss		Total
March 31, 2019
Real estate loans:
Residential Core	$	10,767,228	$	4,499	$	47,615	$	—	$	10,819,342
Residential Home Today	74,563		—		15,632		—		90,195
Home equity loans and lines of credit	1,961,826		3,662		25,019		—		1,990,507
Construction	22,452		—		—		—		22,452
Total	$	12,826,069	$	8,161	$	88,266	$	—	$	12,922,496

	Pass		Special Mention		Substandard		Loss		Total
September 30, 2018
Real estate loans:
Residential Core	$	10,898,725	$	—	$	48,250	$	—	$	10,946,975
Residential Home Today	78,180		—		16,569		—		94,749
Home equity loans and lines of credit	1,813,502		4,216		24,109		—		1,841,827
Construction	27,140		—		—		—		27,140
Total	$	12,817,547	$	4,216	$	88,928	$	—	$	12,910,691

At March 31, 2019 and September 30, 2018, respectively, the recorded investment of impaired loans includes $95,822 and $95,916 of TDRs individually evaluated for impairment that have adequately performed under the terms of the restructuring and are classified as Pass loans. At March 31, 2019 and September 30, 2018, respectively, there were $2,061 and $4,051 of loans classified Substandard and $8,161 and $4,216 of loans designated Special Mention that are not included in the recorded investment of impaired loans; rather, they are included in loans collectively evaluated for impairment. Of the $8,161 of loans classified Special Mention at March 31, 2019, $4,499 are residential mortgage loans purchased during the quarter ended December 31, 2018. The purchased loans were current and performing at the time of purchase, but are classified Special Mention due to the absence of MI coverage and potentially weaker repayment prospects when compared with the Company's originated residential Core Portfolio.

Other consumer loans are internally assigned a grade of non-performing when they become 90 days or more past due. At March 31, 2019 and September 30, 2018, no consumer loans were graded as non-performing.

Activity in the allowance for loan losses is summarized as follows:

	For the Three Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	19,165	$	(45	)	$	(299	)	$	766	$	19,587
Residential Home Today	3,748		(1,012		)	(85		)	624		3,275
Home equity loans and lines of credit	19,021		(2,943		)	(475		)	1,817		17,420
Construction	4		—			—			—		4
Total	$	41,938	$	(4,000	)	$	(859	)	$	3,207	$	40,286

	For the Three Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	13,546	$	(58	)	$	(195	)	$	787	$	14,080
Residential Home Today	4,134		(705		)	(288		)	599		3,740
Home equity loans and lines of credit	28,245		(3,237		)	(1,619		)	1,893		25,282
Construction	4		—			—			—		4
Total	$	45,929	$	(4,000	)	$	(2,102	)	$	3,279	$	43,106

	For the Six Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	18,288	$	864		$	(542	)	$	977	$	19,587
Residential Home Today	3,204		(695		)	(326		)	1,092		3,275
Home equity loans and lines of credit	20,921		(6,168		)	(1,318		)	3,985		17,420
Construction	5		(1		)	—			—		4
Total	$	42,418	$	(6,000	)	$	(2,186	)	$	6,054	$	40,286

	For the Six Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	14,186	$	(899	)	$	(587	)	$	1,380	$	14,080
Residential Home Today	4,508		(806		)	(963		)	1,001		3,740
Home equity loans and lines of credit	30,249		(5,294		)	(3,155		)	3,482		25,282
Construction	5		(1		)	—			—		4
Total	$	48,948	$	(7,000	)	$	(4,705	)	$	5,863	$	43,106

XML

Deposits

6 Months Ended

Mar. 31, 2019

Deposits [Abstract]

Deposits

DEPOSITS

Deposit account balances are summarized as follows:

	March 31, 2019		September 30, 2018
Checking accounts	$	902,251	$	913,525
Savings accounts	1,399,389		1,256,054
Certificates of deposit	6,426,710		6,318,281
	8,728,350		8,487,860
Accrued interest	4,440		3,723
Total deposits	$	8,732,790	$	8,491,583

Brokered certificates of deposit (exclusive of acquisition costs and subsequent amortization), which are used as a cost effective funding alternative, totaled $591,325 at March 31, 2019 and $670,081 at September 30, 2018. The FDIC places restrictions on banks with regard to issuing brokered deposits based on the bank's capital classification. As a well-capitalized institution at March 31, 2019 and September 30, 2018, the Association may accept brokered deposits without FDIC restrictions.

XML

Borrowed Funds

6 Months Ended

Mar. 31, 2019

Advances from Federal Home Loan Banks [Abstract]

Borrowed Funds

BORROWED FUNDS

Federal Home Loan Bank borrowings at March 31, 2019 are summarized in the table below. The amount and weighted average rates of certain FHLB Advances maturing in 36 months or less reflect the net impact of deferred penalties discussed below:

	Amount		Weighted Average Rate
Maturing in:
12 months or less	$	3,439,780	2.44	%
13 to 24 months	99,917		1.90	%
25 to 36 months	674		1.45	%
37 to 48 months	2,544		0.94	%
49 to 60 months	15,000		2.99	%
Over 60 months	24,461		1.67	%
Total FHLB Advances	3,582,376		2.42	%
Accrued interest	7,696
Total	$	3,590,072

For the periods ending March 31, 2019 and March 31, 2018 net interest expense related to Federal Home Loan Bank short-term borrowings was $28,827 and $20,128, respectively.

Through the use of interest rate swaps discussed in Note 13. Derivative Instruments, $2,225,000 of FHLB advances included in the table above as maturing in 12 months or less, have effective maturities, assuming no early terminations of the swap contracts, as shown below:

	Amount		Swap Adjusted Weighted Average Rate
Effective maturity:
12 months or less	$	50,000	1.23	%
13 to 24 months	225,000		1.28	%
25 to 36 months	675,000		1.58	%
37 to 48 months	650,000		1.92	%
49 to 60 months	125,000		2.87	%
Over 60 months	500,000		2.76	%
Total FHLB Advances under swap contracts	$	2,225,000	1.98	%

During fiscal year 2016, $150,000 fixed-rate FHLB advances with remaining terms of approximately four years were prepaid and replaced with new four- and five-year interest rate swap arrangements. The unamortized deferred repayment penalties of $804 related to the $150,000 of restructuring are being recognized in interest expense over the remaining term of the swap contracts.

XML

Other Comprehensive Income (Loss)

6 Months Ended

Mar. 31, 2019

Equity [Abstract]

Other Comprehensive Income (Loss)

OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) by component is as follows:

	For the Three Months Ended												For the Three Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total
Balance at beginning of period	$	(8,527	)	$	25,092		$	(14,804	)	$	1,761		$	(7,185	)	$	22,834		$	(17,643	)	$	(1,994	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(3,282) and $4,357	3,381			(15,731		)	—			(12,350		)	(3,262		)	19,634			—			16,372
Amounts reclassified, net of tax expense (benefit) of $(782) and $75	—			(3,205		)	264			(2,941		)	—			(82		)	317			235
Other comprehensive income (loss)	3,381			(18,936		)	264			(15,291		)	(3,262		)	19,552			317			16,607
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386		$	(17,326	)	$	14,613

	For the Six Months Ended												For the Six Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges		Defined Benefit Plan			Total
Accumulated other comprehensive income (loss) at beginning of period	$	(13,624	)	$	51,914		$	(15,068	)	$	23,222		$	(2,915	)	$	10,249	$	(14,826	)	$	(7,492	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(8,440) and $7,361	8,478			(40,231		)	—			(31,753		)	(6,259		)	27,099		—			20,840
Amounts reclassified, net of tax expense (benefit) of $(1,329) and $476	—			(5,527		)	528			(4,999		)	—			713		594			1,307
Other comprehensive income (loss)	8,478			(45,758		)	528			(36,752		)	(6,259		)	27,812		594			22,147
Adoption of ASU 2018-02	—			—			—			—			(1,273		)	4,325		(3,094		)	(42		)
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386	$	(17,326	)	$	14,613

The following table presents the reclassification adjustment out of accumulated other comprehensive income included in net income and the corresponding line item on the consolidated statements of income for the periods indicated:

	Amounts Reclassified from Accumulated  Other Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended March 31,						For the Six Months Ended March 31,						Line Item in the Statement of Income
	2019			2018			2019			2018
Cash flow hedges:
Interest (income) expense	$	(4,057	)	$	(109	)	$	(6,996	)	$	944		Interest expense
Net income tax effect	852			27			1,469			(231		)	Income tax expense
Net of income tax expense (benefit)	(3,205		)	(82		)	(5,527		)	713
Amortization of pension plan:
Actuarial loss	334			419			668			839			(a)
Net income tax effect	(70		)	(102		)	(140		)	(245		)	Income tax expense
Net of income tax expense (benefit)	264			317			528			594
Adoption of ASU 2018-02	—			—			—			(42		)	(b)
Total reclassifications for the period	$	(2,941	)	$	235		$	(4,999	)	$	1,265

(a) This item is included in the computation of net periodic pension cost. See Note 9. Defined Benefit Plan for additional disclosure.

(b) This item is a reclassification between Accumulated Other Comprehensive Income and Retained Earnings due to the adoption of ASU 2018-02 in fiscal year 2018.

XML

Income Taxes

6 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various state and city jurisdictions. The Company is no longer subject to income tax examinations in its major jurisdictions for tax years prior to 2015.

The Company recognizes interest and penalties on income tax assessments or income tax refunds, where applicable, in the financial statements as a component of its provision for income taxes.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act. Among its numerous changes to the Internal Revenue Code, the Act reduced the federal corporate tax rate to 21% from 35% effective January 1, 2018. Because of the Company's September 30 fiscal year end, a blended federal tax rate of 24.53% was applied to the fiscal year ended September 30, 2018. The federal statutory rate of 21% is effective for the Company beginning with the fiscal year ending September 30, 2019.

The Company’s effective income tax rate was 22.9% and 31.5% for the six months ended March 31, 2019 and March 31, 2018, respectively. The decrease in the effective tax rate is primarily due to a lower federal statutory rate in the recent fiscal year period, and $34 and $4,644 of additional tax expense related to the remeasurement of the Company's deferred tax asset during the six months ended March 31, 2019 and March 31, 2018, respectively, as a result of the Act.

The Company makes certain investments in limited partnerships which invest in affordable housing projects that qualify for the Low Income Housing Tax Credit (LIHTC). The Company acts as a limited partner in these investments and does not exert control over the operating or financial policies of the partnership. The Company accounts for its interests in LIHTCs using the proportional amortization method. The impact of the Company's investments in tax credit entities on the provision for income taxes was not material during the six months ended March 31, 2019 and March 31, 2018.

XML

Defined Benefit Plan

6 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Defined Benefit Plan

DEFINED BENEFIT PLAN

The Third Federal Savings Retirement Plan (the “Plan”) is a defined benefit pension plan. Effective December 31, 2002, the Plan was amended to limit participation to employees who met the Plan’s eligibility requirements on that date. Effective December 31, 2011, the Plan was amended to freeze future benefit accruals for participants in the Plan. After December 31, 2002, employees not participating in the Plan, upon meeting the applicable eligibility requirements, and those eligible participants who no longer receive service credits under the Plan, participate in a separate tier of the Company’s defined contribution 401(k) Savings Plan. Benefits under the Plan are based on years of service and the employee’s average annual compensation (as defined in the Plan) through December 31, 2011. The funding policy of the Plan is consistent with the funding requirements of U.S. federal and other governmental laws and regulations.

The components of net periodic cost recognized in other non-interest expense in the Consolidated Statements of Income are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Interest cost	$	807		$	774		$	1,614		$	1,548
Expected return on plan assets	(1,146		)	(1,035		)	(2,292		)	(2,071		)
Amortization of net loss	334			419			668			839
Net periodic cost (benefit)	$	(5	)	$	158		$	(10	)	$	316

There were no required minimum employer contributions during the six months ended March 31, 2019. There are no minimum employer contributions expected during the remainder of the fiscal year ending September 30, 2019.

XML

Equity Incentive Plan

6 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan

In December 2018, 138,400 restricted stock units were granted to certain directors and officers of the Company and 64,500 performance stock units were granted to certain officers of the Company. The awards were made pursuant to the Amended and Restated 2008 Equity Incentive Plan, which was approved at the annual meeting of shareholders held on February 22, 2018.

The performance stock units vest in the form of Company common stock issued at the end of a three-year period, based on the pro-rata achievement of performance based metrics over a two-year period. The Company recognizes compensation expense for the fair value of performance stock units on a straight-line basis over the requisite service period.

The following table presents share-based compensation expense recognized during the periods presented.

	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2018		2019		2018
Stock option expense	$	200	$	344	$	437	$	657
Restricted and performance stock units expense	946		1,303		1,790		1,868
Total stock-based compensation expense	$	1,146	$	1,647	$	2,227	$	2,525

At March 31, 2019, 4,696,462 shares were subject to options, with a weighted average exercise price of $13.82 per share and a weighted average grant date fair value of $2.64 per share. Expected future expense related to the 928,594 non-vested options outstanding as of March 31, 2019 is $1,014 over a weighted average period of 1.4 years. At March 31, 2019, 649,213 restricted stock units and performance stock units with a weighted average grant date fair value of $15.14 per unit, are unvested. Expected future compensation expense relating to the 1,414,961 restricted stock units and performance stock units outstanding as of March 31, 2019 is $5,975 over a weighted average period of 2.0 years. Each unit is equivalent to one share of common stock.

XML

Commitments And Contingent Liabilities

6 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingent Liabilities

COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business, the Company enters into commitments with off-balance sheet risk to meet the financing needs of its customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to originate loans generally have fixed expiration dates of 60 to 360 days or other termination clauses and may require payment of a fee. Unfunded commitments related to home equity lines of credit generally expire from five to 10 years following the date that the line of credit was established, subject to various conditions, including compliance with payment obligations, adequacy of collateral securing the line and maintenance of a satisfactory credit profile by the borrower. Since some of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Off-balance sheet commitments to extend credit involve elements of credit risk and interest rate risk in excess of the amount recognized in the consolidated statements of condition. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitment is represented by the contractual amount of the commitment. The

Company generally uses the same credit policies in making commitments as it does for on-balance-sheet instruments. Interest rate risk on commitments to extend credit results from the possibility that interest rates may have moved unfavorably from the position of the Company since the time the commitment was made.

At March 31, 2019, the Company had commitments to originate loans as follows:

Fixed-rate mortgage loans	$	151,454
Adjustable-rate mortgage loans	161,569
Equity loans and lines of credit	186,549
Total	$	499,572

At March 31, 2019, the Company had unfunded commitments outstanding as follows:

Equity lines of credit	$	1,911,089
Construction loans	25,089
Limited partner investments	11,541
Total	$	1,947,719

At March 31, 2019, the unfunded commitment on home equity lines of credit, including commitments for accounts suspended as a result of material default or a decline in equity, is $1,923,807.

The above commitments are expected to be funded through normal operations.

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s consolidated financial condition, results of operation, or statements of cash flows.

XML

Fair Value

6 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions. A fair value framework is established whereby assets and liabilities measured at fair value are grouped into three levels of a fair value hierarchy, based on the transparency of inputs and the reliability of assumptions used to estimate fair value. The Company’s policy is to recognize transfers between levels of the hierarchy as of the end of the reporting period in which the transfer occurs. The three levels of inputs are defined as follows:

Level 1 –	quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 –	quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with few transactions, or model-based valuation techniques using assumptions that are observable in the market.
Level 3 –	a company’s own assumptions about how market participants would price an asset or liability.

As permitted under the fair value guidance in U.S. GAAP, the Company elects to measure at fair value mortgage loans classified as held for sale that are subject to pending agency contracts to securitize and sell loans. This election is expected to reduce volatility in earnings related to market fluctuations between the contract trade and settlement dates. At March 31, 2019 and September 30, 2018, there were no loans held for sale subject to pending agency contracts for which the fair value option was elected.

Presented below is a discussion of the methods and significant assumptions used by the Company to estimate fair value.

Investment Securities Available for Sale—Investment securities available for sale are recorded at fair value on a recurring basis. At March 31, 2019 and September 30, 2018, respectively, this includes $574,572 and $531,965 of investments in U.S. government obligations including U.S. Treasury notes and highly liquid collateralized mortgage obligations issued by Fannie Mae, Freddie Mac and Ginnie Mae. Both are measured using the market approach. The fair values of investment securities represent unadjusted price estimates obtained from third party independent nationally recognized pricing services using pricing models or quoted prices of securities with similar characteristics and are included in Level 2 of the hierarchy. Third party pricing is reviewed on a monthly basis for reasonableness based on the market knowledge and experience of company personnel that interact daily with the markets for these types of securities.

Mortgage Loans Held for Sale—The fair value of mortgage loans held for sale is estimated on an aggregate basis using a market approach based on quoted secondary market pricing for loan portfolios with similar characteristics. Loans held for sale are carried at the lower of cost or fair value except, as described above, the Company elects the fair value measurement option for mortgage loans held for sale subject to pending agency contracts to securitize and sell loans. Loans held for sale are included in Level 2 of the hierarchy. At March 31, 2019 and September 30, 2018, there were $1,016 and $659, respectively, of loans held for sale carried at cost.

Impaired Loans—Impaired loans represent certain loans held for investment that are subject to a fair value measurement under U.S. GAAP because they are individually evaluated for impairment and that impairment is measured using a fair value measurement, such as the fair value of the underlying collateral. Impairment is measured using a market approach based on the fair value of the collateral, less estimated costs to dispose, for loans the Company considers to be collateral-dependent due to a delinquency status or other adverse condition severe enough to indicate that the borrower can no longer be relied upon as the continued source of repayment. These conditions are described more fully in Note 4. Loans and Allowance for Loan Losses. To calculate impairment of collateral-dependent loans, the fair market values of the collateral, estimated using exterior appraisals in the majority of instances, are reduced by calculated costs to dispose, derived from historical experience and recent market conditions. Any indicated impairment is recognized by a charge to the allowance for loan losses. Subsequent increases in collateral values or principal pay downs on loans with recognized impairment could result in an impaired loan being carried below its fair value. When no impairment loss is indicated, the carrying amount is considered to approximate the fair value of that loan to the Company because contractually that is the maximum recovery the Company can expect. The recorded investment of loans individually evaluated for impairment based on the fair value of the collateral are included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis. The range and weighted average impact of estimated costs to dispose on fair values is determined at the time of impairment or when additional impairment is recognized and is included in quantitative information about significant unobservable inputs later in this note.

Loans held for investment that have been restructured in TDRs and are performing according to the restructured terms of the loan agreement are individually evaluated for impairment using the present value of future cash flows based on the loan’s effective interest rate, which is not a fair value measurement. At March 31, 2019 and September 30, 2018, respectively, this included $103,435 and $98,459 in recorded investment of TDRs with related allowances for loss of $12,714 and $12,002.

Real Estate Owned—Real estate owned includes real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of the cost basis or fair value, less estimated costs to dispose. Fair value is estimated under the market approach using independent third party appraisals. As these properties are actively marketed, estimated fair values may be adjusted by management to reflect current economic and market conditions. At March 31, 2019 and September 30, 2018, these adjustments were not significant to reported fair values. At March 31, 2019 and September 30, 2018, respectively, $1,698 and $1,238 of real estate owned is included in Level 3 of the hierarchy with assets measured at fair value on a non-recurring basis where the cost basis equals or exceeds the estimate of fair values, less estimated costs to dispose of these properties. Real estate owned, included in other assets in the Consolidated Statements of Condition, includes estimated costs to dispose of $266 and $132 related to properties measured at fair value and $1,467 and $1,688 of properties carried at their original or adjusted cost basis at March 31, 2019 and September 30, 2018, respectively.

Derivatives—Derivative instruments include interest rate locks on commitments to originate loans for the held for sale portfolio, forward commitments on contracts to deliver mortgage loans, and interest rate swaps designated as cash flow hedges. Derivatives not designated as cash flow hedges are reported at fair value in other assets or other liabilities on the Consolidated Statement of Condition with changes in value recorded in current earnings. Derivatives qualifying as cash flow hedges, when highly effective, are reported in other assets or other liabilities on the Consolidated Statement of Condition with changes in value recorded in OCI. The fair value of interest rate lock commitments is adjusted by a closure rate based on the estimated percentage of commitments that will result in closed loans. The range and weighted average impact of the closure rate is included in quantitative information about significant unobservable inputs later in this note. A significant change in the closure rate may result in a significant change in the ending fair value measurement of these derivatives relative to their total fair value. Because the closure rate is a significantly unobservable assumption, interest rate lock commitments are included in Level 3 of the hierarchy. Fair value of forward commitments is estimated using a market approach based on quoted secondary market pricing for loan portfolios with characteristics similar to loans underlying the derivative contracts. Forward commitments on contracts to deliver mortgage loans are included in Level 2 of the hierarchy.

Assets and liabilities carried at fair value on a recurring basis in the Consolidated Statements of Condition at March 31, 2019 and September 30, 2018 are summarized below. There were no liabilities carried at fair value on a recurring basis at March 31, 2019.

			Recurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	562,837	$	—	$	562,837	$	—
Fannie Mae certificates	7,746		—		7,746		—
U.S. government and agency obligations	3,989		—		3,989		—
Derivatives:
Interest rate lock commitments	141		—		—		141
Total	$	574,713	$	—	$	574,572	$	141

			Recurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	519,999	$	—	$	519,999	$	—
Fannie Mae certificates	7,998		—		7,998		—
U.S. government and agency obligations	3,968		—		3,968		—
Total	$	531,965	$	—	$	531,965	$	—
Liabilities
Derivatives:
Interest rate lock commitments	$	2	$	—	$	—	$	2
Total	$	2	$	—	$	—	$	2

The table below presents a reconciliation of the beginning and ending balances and the location within the Consolidated Statements of Income where gains (losses) due to changes in fair value are recognized on interest rate lock commitments which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Three Months Ended March 31,					Six Months Ended March 31,
	2019		2018			2019			2018
Beginning balance	$	77	$	28		$	(2	)	$	58
Gain (loss) during the period due to changes in fair value:
Included in other non-interest income	64		(30		)	143			(60		)
Ending balance	$	141	$	(2	)	$	141		$	(2	)
Change in unrealized gains for the period included in earnings for assets held at end of the reporting date	$	141	$	(2	)	$	141		$	(2	)

Summarized in the tables below are those assets measured at fair value on a nonrecurring basis.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	81,519	$	—	$	—	$	81,519
Real estate owned(1)	1,698		—		—		1,698
Total	$	83,217	$	—	$	—	$	83,217

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	82,250	$	—	$	—	$	82,250
Real estate owned(1)	1,238		—		—		1,238
Total	$	83,488	$	—	$	—	$	83,488

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

The following provides quantitative information about significant unobservable inputs categorized within Level 3 of the Fair Value Hierarchy. The interest rate lock commitments at March 31, 2019 include both mortgage origination applications and preapprovals. Preapprovals have a much lower closure rate than origination applications as reflected in the weighted average closure rate.

	Fair Value						Weighted
	3/31/2019	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$81,519	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	5.6%
Interest rate lock commitments	$141	Quoted Secondary Market pricing	Closure rate	0	-	100%	48.6%

	Fair Value						Weighted
	9/30/2018	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$82,250	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	6.4%
Interest rate lock commitments	$(2)	Quoted Secondary Market pricing	Closure rate	0	-	100%	50.0%

The following tables present the estimated fair value of the Company’s financial instruments and their carrying amounts as reported in the Statement of Condition.

	March 31, 2019
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,055	$	29,055	$	29,055	$	—	$	—
Interest earning cash equivalents	230,185		230,185		230,185		—		—
Investment securities available for sale	574,572		574,572		—		574,572		—
Mortgage loans held for sale	1,016		1,041		—		1,041		—
Loans, net:
Mortgage loans held for investment	12,882,210		13,209,129		—		—		13,209,129
Other loans	2,793		2,879		—		—		2,879
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	40,071		40,071		—		40,071		—
Cash collateral received from or held by counterparty	26,168		26,168		26,168		—		—
Derivatives	141		141		—		—		141
Liabilities:
Checking and passbook accounts	$	2,301,640	$	2,301,640	$	—	$	2,301,640	$	—
Certificates of deposit	6,431,150		6,414,001		—		6,414,001		—
Borrowed funds	3,590,072		3,595,253		—		3,595,253		—
Borrowers’ advances for insurance and taxes	88,839		88,839		—		88,839		—
Principal, interest and escrow owed on loans serviced	29,561		29,561		—		29,561		—

	September 30, 2018
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,056	$	29,056	$	29,056	$	—	$	—
Interest earning cash equivalents	240,719		240,719		240,719		—		—
Investment securities available for sale	531,965		531,965		—		531,965		—
Mortgage loans held for sale	659		661		—		661		—
Loans, net:
Mortgage loans held for investment	12,868,273		12,908,729		—		—		12,908,729
Other loans	3,021		3,045		—		—		3,045
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	38,696		38,696		—		38,696		—
Cash collateral received from or held by counterparty	13,794		13,794		13,794		—		—
Liabilities:
Checking and passbook accounts	$	2,169,579	$	2,169,579	$	—	$	2,169,579	$	—
Certificates of deposit	6,322,004		6,006,951		—		6,006,951		—
Borrowed funds	3,721,699		3,724,020		—		3,724,020		—
Borrowers’ advances for insurance and taxes	103,005		103,005		—		103,005		—
Principal, interest and escrow owed on loans serviced	31,490		31,490		—		31,490		—
Derivatives	2		2		—		—		2

Presented below is a discussion of the valuation techniques and inputs used by the Company to estimate fair value.

Cash and Due from Banks, Interest Earning Cash Equivalents, Cash Collateral Received from or Held by Counterparty— The carrying amount is a reasonable estimate of fair value.

Investment and Mortgage-Backed Securities— Estimated fair value for investment and mortgage-backed securities is based on quoted market prices, when available. If quoted prices are not available, management will use as part of their estimation process fair values which are obtained from third party independent nationally recognized pricing services using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

Mortgage Loans Held for Sale— Fair value of mortgage loans held for sale is based on quoted secondary market pricing for loan portfolios with similar characteristics.

Loans— For mortgage loans held for investment and other loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term. The use of current rates to discount cash flows reflects current market expectations with respect to credit exposure. Impaired loans are measured at the lower of cost or fair value as described earlier in this footnote.

Federal Home Loan Bank Stock— It is not practical to estimate the fair value of FHLB stock due to restrictions on its transferability. The fair value is estimated to be the carrying value, which is par. All transactions in capital stock of the FHLB Cincinnati are executed at par.

Deposits— The fair value of demand deposit accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using discounted cash flows and rates currently offered for deposits of similar remaining maturities.

Borrowed Funds— Estimated fair value for borrowed funds is estimated using discounted cash flows and rates currently charged for borrowings of similar remaining maturities.

Accrued Interest Receivable, Borrowers’ Advances for Insurance and Taxes, and Principal, Interest and Related Escrow Owed on Loans Serviced— The carrying amount is a reasonable estimate of fair value.

Derivatives— Fair value is estimated based on the valuation techniques and inputs described earlier in this footnote.

XML

Derivative Instruments

6 Months Ended

Mar. 31, 2019

Summary of Derivative Instruments [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company enters into interest rate swaps to add stability to interest expense and manage exposure to interest rate movements as part of an overall risk management strategy. For hedges of the Company's borrowing program, interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed payments. These derivatives are used to hedge the forecasted cash outflows associated with the Company's FHLB borrowings. At March 31, 2019 and September 30, 2018, the interest rate swaps used in the Company's asset/liability management strategy have weighted average terms of 3.8 years and 3.3 years and weighted average fixed-rate interest payments of 1.98% and 1.75%, respectively.

Cash flow hedges are initially assessed for effectiveness using regression analysis. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in OCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Quarterly, a qualitative analysis is performed to monitor the ongoing effectiveness of the hedging instrument. All derivative positions were initially and continue to be highly effective at March 31, 2019.

The Company enters into forward commitments for the sale of mortgage loans principally to protect against the risk of adverse interest rate movements on net income. The Company recognizes the fair value of such contracts when the characteristics of those contracts meet the definition of a derivative. These derivatives are not designated in a hedging relationship; therefore, gains and losses are recognized immediately in the statement of income. There were no forward commitments for the sale of mortgage loans at March 31, 2019 or September 30, 2018.

In addition, the Company is party to derivative instruments when it enters into commitments to originate a portion of its loans, which when funded, are classified as held for sale. Such commitments are not designated in a hedging relationship; therefore, gains and losses are recognized immediately in the statement of income.

The following tables provide the locations within the Consolidated Statements of Condition, notional values and fair values, at the reporting dates, for all derivative instruments.

	March 31, 2019				September 30, 2018
	Notional Value		Fair Value		Notional Value		Fair Value
Derivatives designated as hedging instruments
Cash flow hedges: Interest rate swaps
Other Assets	$	1,600,000	$	—	$	1,725,000	$	—
Other Liabilities	$	625,000	$	—	$	—	$	—
Total cash flow hedges: Interest rate swaps	$	2,225,000	$	—	$	1,725,000	$	—
Derivatives not designated as hedging instruments
Interest rate lock commitments
Other Assets	$	8,184	$	141	$	—	$	—
Other Liabilities	$	—	$	—	$	4,248	$	2
Total interest rate lock commitments	$	8,184	$	141	$	4,248	$	(2	)

The following tables present the net gains and losses recorded within the Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income relating to derivative instruments.

		Three Months Ended						Six Months Ended
	Location of Gain or (Loss)	March 31,						March 31,
	Recognized in Income	2019			2018			2019			2018
Cash flow hedges
Amount of gain/(loss) recognized	Other comprehensive income	$	(19,912	)	$	24,858		$	(50,925	)	$	36,941
Amount of gain/(loss) reclassified from AOCI	Interest expense: Borrowed funds	4,057			109			6,996			(944		)
Derivatives not designated as hedging instruments
Interest rate lock commitments	Other non-interest income	$	64		$	(30	)	$	143		$	(60	)

The Company estimates that $11,720 of the amounts reported in AOCI will be reclassified as a credit to interest expense during the twelve months ending March 31, 2020.

Derivatives contain an element of credit risk which arises from the possibility that the Company will incur a loss because a counterparty fails to meet its contractual obligations. The Company's exposure is limited to the replacement value of the contracts rather than the notional or principal amounts. Credit risk is minimized through counterparty margin payments, transaction limits and monitoring procedures. All of the Company's swap transactions are cleared through a registered clearing broker to a central clearing organization. The clearing organization establishes daily cash and upfront cash or securities margin requirements to cover potential exposure in the event of default. This process shifts the risk away from the counterparty, since the clearing organization acts as the middleman on each cleared transaction. For derivative transactions cleared through certain clearing parties, variation margin payments are recognized as settlements. The fair value of derivative instruments are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements.

XML

Recent Accounting Pronouncements

6 Months Ended

Mar. 31, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

Adopted during the six months ended March 31, 2019

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The amendments include a five step process for consideration of the core principle, guidance on the accounting treatment for costs associated with a contract, and disclosure requirements related to the revenue process. The FASB issued several additional ASU's to clarify guidance and provide implementation support for ASU 2014-09. Topic 606 does not apply to revenue within the scope of other standards, such as revenue associated with financial instruments.

Effective October 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments related to the ASU (collectively, “Topic 606”). We elected to adopt this guidance utilizing the modified retrospective approach. The adoption did not have a significant impact to the Company's consolidated financial statements, as such, a cumulative effect adjustment to beginning retained earnings was not necessary. Neither the new standard, nor any of the related amendments, resulted in a material change from our current accounting for revenue because a significant amount of the Company’s revenue streams such as interest income, are not within the scope of Topic 606. Our services that fall within the scope of Topic 606 are recognized as revenue as we satisfy our performance obligation to the customer. The disaggregation of our revenue from contracts with customers in scope of Topic 606 is provided below:

		Three Months Ended March 31,						Six Months Ended March 31,
	Location of Revenue	2019			2018			2019			2018
Net Gain/(Loss) from Sales of REO	Non-Interest Expense (1)	$	(249	)	$	(256	)	$	(26	)	$	(234	)
Deposit Account and Other Banking Income	Non-Interest Income	212			227			443			457
Total		$	(37	)	$	(29	)	$	417		$	223

____________________________

(1) Net gain/(loss) from sales of real estate owned (REO) is located in non-interest expense in the consolidated statements of income because the gains and losses from the sales of REO assets are netted together with real estate owned expenses (which includes associated legal and maintenance expenses).

Sales of REO: The Company derecognizes the REO asset and fully recognizes a gain or loss from the REO sale when control of the property transfers to the buyer, which generally occurs at closing. Topic 606 does not significantly change the pattern of revenue recognition unless the Company finances the sale. When the Company finances the REO sale, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether the Company will collect substantially all of the consideration to which it is entitled in exchange for the property. Once these criteria are met, the REO asset is derecognized and the Company fully recognizes the gain or loss upon transfer of control of the property to the buyer. There are no instances of the Company financing the sale of one of its REO properties during the six months ended March 31, 2019.

Deposit Account and Other Banking Income: The Company charges depositors transaction-based service fees, which includes services such as stop-payments, wire transfers, check and checking account charges. The performance obligation of the transaction-based fees is satisfied, and related revenue is recognized, at the point in time we perform the requested service.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU changes the accounting for certain equity investments, financial liabilities under the fair value option and presentation and disclosure requirements for financial instruments. Equity investments not accounted for under the equity method of accounting will be measured at fair value with changes recognized in net income. If there are no readily determinable fair values, the guidance allows entities to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value of financial instruments measured at amortized cost. The guidance also requires financial assets and financial liabilities to be presented separately in the footnotes, grouped by measurement category (fair value, amortized cost) and form of financial assets. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in fair value of a liability resulting from credit risk to be presented in OCI. ASU 2018-03 was issued in February 2018 as technical guidance to ASU 2016-01 to aid in clarification and presentation requirements. Both accounting and disclosure guidance are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years on a prospective basis, with a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year adopted. Early adoption is not permitted. The Company adopted this guidance effective October 1, 2018 utilizing the modified-retrospective transition method. The Company did not recognize a cumulative adjustment to equity upon implementation of the standard. The guidance solely impacted the Company's disclosures, and did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and Other Topics. Current guidance is either unclear or does not include specific guidance on these issues. Additionally, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash, which requires restricted cash or restricted cash equivalents be included in beginning-of-period and end-of-period cash totals and changes in this classification be explained separately. The amendments in both these Updates are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied using a retrospective transition method. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The Company adopted the guidance effective October 1, 2018. Adoption of this accounting guidance did not have a material impact on the presentation of the Consolidated Statements of Cash Flows.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. This Update clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value (or calculated intrinsic value, if those amounts are being used to measure the award under ASC 718), the vesting conditions, or the classification of the award (as equity or liability) change as a result of the change in terms or conditions. The guidance is effective prospectively for annual periods beginning on or after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The Company adopted the guidance effective October 1, 2018. The Update did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This Update is intended to more closely align financial reporting of hedging relationships with risk management activities. This amendment expands hedge accounting for both nonfinancial and financial risk components, modifies the presentation of certain hedging relationships in the financial statements and eases hedge effectiveness testing requirements. The amendments are effective for fiscal years beginning after December 15, 2018. Early adoption is permissible in any interim period after the issuance of this Update. The Company early adopted the amendments effective October 1, 2018 and revised the disclosures included in footnote 13. Derivative Instruments, accordingly. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index SWAP (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this Update permit use of the Overnight Index Swap Rate (OIS) rate based on Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the SIFMA Municipal Swap Rate. Third Federal adopted ASU 2018-16 concurrently with ASU 2017-12. The Updates did not have a material impact on the Company's consolidated financial condition or results of operations.

Issued but not yet adopted as of March 31, 2019

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This guidance changes the accounting treatment of leases by requiring lessees to recognize operating leases on the balance sheet as lease assets (a right-to-use asset) and lease liabilities (a liability to make lease payments), measured on a discounted basis and will require both quantitative and qualitative disclosure regarding key information about the leasing arrangements. An accounting policy election to not recognize operating leases with terms of 12 months or less as assets and liabilities is permitted. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 required entities to adopt the new lease standard using a modified retrospective approach. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides entities with an additional (and optional) transition method to adopt the new lease standard. Under this new method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to adopt this guidance effective October 1, 2019 utilizing the transition method described in ASU 2018-11. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient, which allows entities to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity's adoption of Topic 842. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842) Narrow-Scope Improvements, which addresses lessor stakeholder questions regarding sales tax, certain lessor costs and the recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, Leases Codification Improvements, which addresses stakeholder questions regarding presentation of cash flows for sales type and direct financing leases, determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, and transition disclosures related to Topic 250. An implementation team has been created to identify all leases involved, determine which, if any, practical expedients to utilize, and gather data required to comply. All leases have been identified. The Company expects to recognize a right-to-use asset and a lease liability for its operating lease commitments on the Consolidated Statements of Condition and is assessing any additional impact this new standard may have on its consolidated financial condition and results of operations. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this Update replace the existing incurred loss impairment methodology with a methodology that reflects the expected credit losses for the remaining life of the asset. This will require consideration of a broader range of information, including reasonably supportable forecasts, in the measurement of expected credit losses. The amendments expand disclosures of credit quality indicators, requiring disaggregation by year of origination (vintage). Additionally, credit losses on available for sale debt securities will be recognized as an allowance rather than a write-down, with reversals permitted as credit loss estimates decline. An entity will apply the amendments in this Update through a modified-retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. For public business entities that are SEC filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company intends to adopt this guidance effective October 1, 2020. Management has formed a working group comprised of associates from across the Association including accounting, risk management, and finance. This group has begun assessing the required changes to our credit loss estimation methodologies and systems, as well as additional data and resources that may be required to comply with this standard. The Company is currently evaluating the impact that this accounting guidance may have on its consolidated financial condition or results of operations. The actual effect on our allowance for loan losses at the adoption date will be dependent upon the nature of the characteristics of the portfolio as well as the macroeconomic conditions and forecasts at that date.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update add, remove and modify the disclosure requirements on fair value measurements in Topic 820. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of this Update. The Company intends to adopt the amendments effective October 1, 2020. The Update is not expected to have a material impact on the Company's consolidated financial condition, results of operations, or disclosures.

In August 2018, the FASB issued ASU 2018-15, Internal-Use Software (Subtopic 350-40) - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Current GAAP does not specifically address the accounting for implementation costs of a hosting arrangement that is a service contract. Accordingly, the amendments in this Update improve current GAAP because they clarify that accounting and align the accounting for implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities. The Company intends to adopt the amendments effective October 1, 2020. Management is currently assessing the impact the Update will have on the Company's disclosures.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Updates 2016-13, 2017-12 and 2016-01. The amendments related to Update 2016-13 clarify the scope of the credit losses standard and address issues related to accrued interest and recoveries. The Company intends to adopt the credit loss standard amendments concurrently with Update 2016-13 on October 1, 2020. The amendments related to Update 2017-12 address partial-term fair value hedges, fair value hedge basis adjustments and certain transition requirements. The Company is currently evaluating the impact of the hedge accounting amendments and is considering early adoption. The amendments related to Update 2016-01 address the scope of financial instrument recognition and measurement guidance, the requirement for re-measurement under ASC 820 when using the measurement alternative and certain disclosure requirements. The Company is currently evaluating the impact of the financial instrument amendments and is considering early adoption. ASU 2019-04 is not expected to have a material impact on the Company’s consolidated financial condition, results of operation, or disclosures.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company's consolidated financial statements or do not apply to its operations.

XML

Basis Of Presentation Basis Of Presentation (Policies)

6 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Business, Policy

TFS Financial Corporation, a federally chartered stock holding company, conducts its principal activities through its wholly owned subsidiaries. The principal line of business of the Company is retail consumer banking, including mortgage lending, deposit gathering, and, to a much lesser extent, other financial services. As of March 31, 2019, approximately 81% of the Company’s outstanding shares were owned by a federally chartered mutual holding company, Third Federal Savings and Loan Association of Cleveland, MHC. The thrift subsidiary of TFS Financial Corporation is Third Federal Savings and Loan Association of Cleveland.

Basis of Accounting, Policy

The accounting and reporting policies followed by the Company conform in all material respects to U.S. GAAP and to general practices in the financial services industry. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for loan losses, the valuation of deferred tax assets, and the determination of pension obligations are particularly subject to change.

The unaudited interim consolidated financial statements were prepared without an audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated financial condition of the Company at March 31, 2019, and its results of operations and cash flows for the periods presented. Such adjustments are the only adjustments reflected in the unaudited interim financial statements.

In accordance with SEC Regulation S-X for interim financial information, these statements do not include certain information and footnote disclosures required for complete audited financial statements. The Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 contains audited consolidated financial statements and related notes, which should be read in conjunction with the accompanying interim consolidated financial statements. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019 or for any other period.

Loans and Leases Receivable, Nonaccrual Loan and Lease Status, Policy

Loans are placed in non-accrual status when they are contractually 90 days or more past due. Loans with a partial charge-off are placed in non-accrual and will remain in non-accrual status until, at a minimum, the impairment is recovered. Loans restructured in TDRs that were in non-accrual status prior to the restructurings remain 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.

When a loan is more than one month past due on its scheduled payments, the loan is considered 30 days or more past due.

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. Interest income on the remaining impaired loans is recognized on an accrual basis.

Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the recorded investment in the loans.

Partial or full charge-offs are also recognized for the amount of impairment on loans considered collateral dependent that meet the conditions described below.

• For residential mortgage loans, payments are greater than 180 days delinquent;

• For home equity lines of credit, equity loans, and residential loans restructured in a TDR, payments are greater than 90 days delinquent;

• For all classes of loans restructured in a TDR with a high debt-to-income ratio at time of modification;

• For all classes of loans, a sheriff sale is scheduled within 60 days to sell the collateral securing the loan;

• For all classes of loans, all borrowers have been discharged of their obligation through a Chapter 7 bankruptcy;

• For all classes of loans, within 60 days of notification, all borrowers obligated on the loan have filed Chapter 7 bankruptcy and have not reaffirmed or been dismissed;

• For all classes of loans, a borrower obligated on a loan has filed bankruptcy and the loan is greater than 30 days delinquent; and

• For all classes of loans, it becomes evident that a loss is probable.

Collateral dependent residential mortgage loans and construction loans are charged off to the extent the recorded investment in a 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 recorded investment 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 that is identified as collateral dependent will continue to be reported as impaired 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 consequent to impairment evaluation will continue to be individually evaluated for impairment until, at a minimum, the impairment has been recovered.

Interest on loans in accrual status, including certain loans individually reviewed for impairment, 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. Cash payments on loans in non-accrual status are first applied to the oldest scheduled, unpaid payment first. 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, an 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. The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled payment.

Interest on loans in non-accrual status is recognized on a cash basis.

Loans and Allowance for Loan Losses, Impaired Loan, Policy

For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Association will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Factors considered in determining that a loan is impaired 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.

Loans and Allowance for Loan Losses, Troubled Debt Restructuring, Policy

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 cannot return to regular 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 hours, non-paid leave or short-erm 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.

Loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for impairment on a loan by loan basis at the time of restructuring and at each subsequent reporting date for as long as they are reported as TDRs. The impairment 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 recorded investments 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. We evaluate these loans using the expected future cash flows because we expect the borrower, not liquidation of the collateral, to be the source of repayment for the loan. Other consumer loans are not considered for restructuring. A loan restructured in a TDR is classified as an impaired loan for a minimum of one year. After one year, that loan may be reclassified out of the balance of impaired loans if the loan was restructured to yield a market rate for loans of similar credit risk at the time of restructuring and the loan is not impaired based on the terms of the restructuring agreement.

Fair Value, Transfer, Policy

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date under current market conditions. A fair value framework is established whereby assets and liabilities measured at fair value are grouped into three levels of a fair value hierarchy, based on the transparency of inputs and the reliability of assumptions used to estimate fair value. The Company’s policy is to recognize transfers between levels of the hierarchy as of the end of the reporting period in which the transfer occurs. The three levels of inputs are defined as follows:

Level 1 –	quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 –	quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with few transactions, or model-based valuation techniques using assumptions that are observable in the market.
Level 3 –	a company’s own assumptions about how market participants would price an asset or liability.

Recent Accounting Pronouncements, Policy

RECENT ACCOUNTING PRONOUNCEMENTS

Adopted during the six months ended March 31, 2019

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the guidance requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The amendments include a five step process for consideration of the core principle, guidance on the accounting treatment for costs associated with a contract, and disclosure requirements related to the revenue process. The FASB issued several additional ASU's to clarify guidance and provide implementation support for ASU 2014-09. Topic 606 does not apply to revenue within the scope of other standards, such as revenue associated with financial instruments.

Effective October 1, 2018, the Company adopted ASU 2014-09 and all subsequent amendments related to the ASU (collectively, “Topic 606”). We elected to adopt this guidance utilizing the modified retrospective approach. The adoption did not have a significant impact to the Company's consolidated financial statements, as such, a cumulative effect adjustment to beginning retained earnings was not necessary. Neither the new standard, nor any of the related amendments, resulted in a material change from our current accounting for revenue because a significant amount of the Company’s revenue streams such as interest income, are not within the scope of Topic 606. Our services that fall within the scope of Topic 606 are recognized as revenue as we satisfy our performance obligation to the customer. The disaggregation of our revenue from contracts with customers in scope of Topic 606 is provided below:

		Three Months Ended March 31,						Six Months Ended March 31,
	Location of Revenue	2019			2018			2019			2018
Net Gain/(Loss) from Sales of REO	Non-Interest Expense (1)	$	(249	)	$	(256	)	$	(26	)	$	(234	)
Deposit Account and Other Banking Income	Non-Interest Income	212			227			443			457
Total		$	(37	)	$	(29	)	$	417		$	223

____________________________

(1) Net gain/(loss) from sales of real estate owned (REO) is located in non-interest expense in the consolidated statements of income because the gains and losses from the sales of REO assets are netted together with real estate owned expenses (which includes associated legal and maintenance expenses).

Sales of REO: The Company derecognizes the REO asset and fully recognizes a gain or loss from the REO sale when control of the property transfers to the buyer, which generally occurs at closing. Topic 606 does not significantly change the pattern of revenue recognition unless the Company finances the sale. When the Company finances the REO sale, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether the Company will collect substantially all of the consideration to which it is entitled in exchange for the property. Once these criteria are met, the REO asset is derecognized and the Company fully recognizes the gain or loss upon transfer of control of the property to the buyer. There are no instances of the Company financing the sale of one of its REO properties during the six months ended March 31, 2019.

Deposit Account and Other Banking Income: The Company charges depositors transaction-based service fees, which includes services such as stop-payments, wire transfers, check and checking account charges. The performance obligation of the transaction-based fees is satisfied, and related revenue is recognized, at the point in time we perform the requested service.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. This ASU changes the accounting for certain equity investments, financial liabilities under the fair value option and presentation and disclosure requirements for financial instruments. Equity investments not accounted for under the equity method of accounting will be measured at fair value with changes recognized in net income. If there are no readily determinable fair values, the guidance allows entities to measure investments at cost less impairment, whereby impairment is based on a qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant assumptions used to estimate fair value of financial instruments measured at amortized cost. The guidance also requires financial assets and financial liabilities to be presented separately in the footnotes, grouped by measurement category (fair value, amortized cost) and form of financial assets. If an entity has elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the change in fair value of a liability resulting from credit risk to be presented in OCI. ASU 2018-03 was issued in February 2018 as technical guidance to ASU 2016-01 to aid in clarification and presentation requirements. Both accounting and disclosure guidance are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years on a prospective basis, with a cumulative-effect adjustment to the balance sheet at the beginning of the fiscal year adopted. Early adoption is not permitted. The Company adopted this guidance effective October 1, 2018 utilizing the modified-retrospective transition method. The Company did not recognize a cumulative adjustment to equity upon implementation of the standard. The guidance solely impacted the Company's disclosures, and did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update address eight specific cash flow issues with the objective of reducing the existing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and Other Topics. Current guidance is either unclear or does not include specific guidance on these issues. Additionally, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash, which requires restricted cash or restricted cash equivalents be included in beginning-of-period and end-of-period cash totals and changes in this classification be explained separately. The amendments in both these Updates are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and should be applied using a retrospective transition method. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The Company adopted the guidance effective October 1, 2018. Adoption of this accounting guidance did not have a material impact on the presentation of the Consolidated Statements of Cash Flows.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting. This Update clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value (or calculated intrinsic value, if those amounts are being used to measure the award under ASC 718), the vesting conditions, or the classification of the award (as equity or liability) change as a result of the change in terms or conditions. The guidance is effective prospectively for annual periods beginning on or after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted. The Company adopted the guidance effective October 1, 2018. The Update did not have a material impact on the Company's consolidated financial condition or results of operations.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This Update is intended to more closely align financial reporting of hedging relationships with risk management activities. This amendment expands hedge accounting for both nonfinancial and financial risk components, modifies the presentation of certain hedging relationships in the financial statements and eases hedge effectiveness testing requirements. The amendments are effective for fiscal years beginning after December 15, 2018. Early adoption is permissible in any interim period after the issuance of this Update. The Company early adopted the amendments effective October 1, 2018 and revised the disclosures included in footnote 13. Derivative Instruments, accordingly. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index SWAP (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes. The amendments in this Update permit use of the Overnight Index Swap Rate (OIS) rate based on Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the UST, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the SIFMA Municipal Swap Rate. Third Federal adopted ASU 2018-16 concurrently with ASU 2017-12. The Updates did not have a material impact on the Company's consolidated financial condition or results of operations.

Issued but not yet adopted as of March 31, 2019

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This guidance changes the accounting treatment of leases by requiring lessees to recognize operating leases on the balance sheet as lease assets (a right-to-use asset) and lease liabilities (a liability to make lease payments), measured on a discounted basis and will require both quantitative and qualitative disclosure regarding key information about the leasing arrangements. An accounting policy election to not recognize operating leases with terms of 12 months or less as assets and liabilities is permitted. This guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 required entities to adopt the new lease standard using a modified retrospective approach. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides entities with an additional (and optional) transition method to adopt the new lease standard. Under this new method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to adopt this guidance effective October 1, 2019 utilizing the transition method described in ASU 2018-11. In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842) Land Easement Practical Expedient, which allows entities to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired before the entity's adoption of Topic 842. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842) Narrow-Scope Improvements, which addresses lessor stakeholder questions regarding sales tax, certain lessor costs and the recognition of variable payments for contracts with lease and non-lease components. In March 2019, the FASB issued ASU 2019-01, Leases Codification Improvements, which addresses stakeholder questions regarding presentation of cash flows for sales type and direct financing leases, determining the fair value of the underlying asset by lessors that are not manufacturers or dealers, and transition disclosures related to Topic 250. An implementation team has been created to identify all leases involved, determine which, if any, practical expedients to utilize, and gather data required to comply. All leases have been identified. The Company expects to recognize a right-to-use asset and a lease liability for its operating lease commitments on the Consolidated Statements of Condition and is assessing any additional impact this new standard may have on its consolidated financial condition and results of operations. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendments in this Update replace the existing incurred loss impairment methodology with a methodology that reflects the expected credit losses for the remaining life of the asset. This will require consideration of a broader range of information, including reasonably supportable forecasts, in the measurement of expected credit losses. The amendments expand disclosures of credit quality indicators, requiring disaggregation by year of origination (vintage). Additionally, credit losses on available for sale debt securities will be recognized as an allowance rather than a write-down, with reversals permitted as credit loss estimates decline. An entity will apply the amendments in this Update through a modified-retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. For public business entities that are SEC filers, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company intends to adopt this guidance effective October 1, 2020. Management has formed a working group comprised of associates from across the Association including accounting, risk management, and finance. This group has begun assessing the required changes to our credit loss estimation methodologies and systems, as well as additional data and resources that may be required to comply with this standard. The Company is currently evaluating the impact that this accounting guidance may have on its consolidated financial condition or results of operations. The actual effect on our allowance for loan losses at the adoption date will be dependent upon the nature of the characteristics of the portfolio as well as the macroeconomic conditions and forecasts at that date.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update add, remove and modify the disclosure requirements on fair value measurements in Topic 820. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of this Update. The Company intends to adopt the amendments effective October 1, 2020. The Update is not expected to have a material impact on the Company's consolidated financial condition, results of operations, or disclosures.

In August 2018, the FASB issued ASU 2018-15, Internal-Use Software (Subtopic 350-40) - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. Current GAAP does not specifically address the accounting for implementation costs of a hosting arrangement that is a service contract. Accordingly, the amendments in this Update improve current GAAP because they clarify that accounting and align the accounting for implementation costs for hosting arrangements, regardless of whether they convey a license to the hosted software. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, for all entities. The Company intends to adopt the amendments effective October 1, 2020. Management is currently assessing the impact the Update will have on the Company's disclosures.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Updates 2016-13, 2017-12 and 2016-01. The amendments related to Update 2016-13 clarify the scope of the credit losses standard and address issues related to accrued interest and recoveries. The Company intends to adopt the credit loss standard amendments concurrently with Update 2016-13 on October 1, 2020. The amendments related to Update 2017-12 address partial-term fair value hedges, fair value hedge basis adjustments and certain transition requirements. The Company is currently evaluating the impact of the hedge accounting amendments and is considering early adoption. The amendments related to Update 2016-01 address the scope of financial instrument recognition and measurement guidance, the requirement for re-measurement under ASC 820 when using the measurement alternative and certain disclosure requirements. The Company is currently evaluating the impact of the financial instrument amendments and is considering early adoption. ASU 2019-04 is not expected to have a material impact on the Company’s consolidated financial condition, results of operation, or disclosures.

The Company has determined that all other recently issued accounting pronouncements will not have a material impact on the Company's consolidated financial statements or do not apply to its operations.

XML

Earnings Per Share (Tables)

6 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Summary Of Earnings Per Share

The following is a summary of the Company's earnings per share calculations.

	For the Three Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	20,130				$	23,314
Less: income allocated to restricted stock units	406					300
Basic earnings per share:
Income available to common shareholders	$	19,724	275,359,201	$	0.07	$	23,014	275,656,445	$	0.08
Diluted earnings per share:
Effect of dilutive potential common shares			1,983,954					1,599,733
Income available to common shareholders	$	19,724	277,343,155	$	0.07	$	23,014	277,256,178	$	0.08

	For the Six Months Ended March 31,
	2019					2018
	Income		Shares	Per share amount		Income		Shares	Per share amount
	(Dollars in thousands, except per share data)
Net income	$	40,463				$	42,927
Less: income allocated to restricted stock units	536					543
Basic earnings per share:
Income available to common shareholders	$	39,927	275,367,821	$	0.14	$	42,384	275,737,265	$	0.15
Diluted earnings per share:
Effect of dilutive potential common shares			1,829,744					1,697,383
Income available to common shareholders	$	39,927	277,197,565	$	0.14	$	42,384	277,434,648	$	0.15

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following is a summary of outstanding stock options and restricted and performance stock units that are excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive.

	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2019	2018	2019	2018
Options to purchase shares	710,100	2,571,240	710,100	2,149,740
Restricted and performance stock units	—	15,501	—	11,001

XML

Investment Securities (Tables)

6 Months Ended

Mar. 31, 2019

Investments [Abstract]

Investments Securities Available For Sale

Investments available for sale are summarized as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	569,541	$	1,211	$	(7,915	)	$	562,837
Fannie Mae certificates	7,555		234		(43		)	7,746
U.S. government and agency obligations	3,990		—		(1		)	3,989
Total	$	581,086	$	1,445	$	(7,959	)	$	574,572

	September 30, 2018
	Amortized Cost		Gross Unrealized					Fair Value
			Gains		Losses
REMICs	$	537,330	$	7	$	(17,338	)	$	519,999
Fannie Mae certificates	7,906		237		(145		)	7,998
U.S. government and agency obligations	3,975		—		(7		)	3,968
Total	$	549,211	$	244	$	(17,490	)	$	531,965

Schedule Of Securities Continuous Unrealized Loss Position

Gross unrealized losses on available for sale securities and the estimated fair value of the related securities, aggregated by the length of time the securities have been in a continuous loss position, at March 31, 2019 and September 30, 2018, were as follows:

	March 31, 2019
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	2,596	$	2	$	396,173	$	7,913	$	398,769	$	7,915
Fannie Mae certificates	—		—		4,372		43		4,372		43
U.S. government and agency obligations	3,989		1		—		—		3,989		1
Total	$	6,585	$	3	$	400,545	$	7,956	$	407,130	$	7,959

	September 30, 2018
	Less Than 12 Months				12 Months or More				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Available for sale—
REMICs	$	113,111	$	1,799	$	400,558	$	15,539	$	513,669	$	17,338
Fannie Mae certificates	—		—		4,337		145		4,337		145
U.S. government and agency obligations	3,968		7		—		—		3,968		7
Total	$	117,079	$	1,806	$	404,895	$	15,684	$	521,974	$	17,490

XML

Loans And Allowance For Loan Losses (Tables)

6 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Schedule Of Loans Held For Investment

Loans held for investment consist of the following:

	March 31, 2019			September 30, 2018
Real estate loans:
Residential Core	$	10,803,550		$	10,930,811
Residential Home Today	90,495			94,933
Home equity loans and lines of credit	1,965,580			1,818,918
Construction	47,783			64,012
Real estate loans	12,907,408			12,908,674
Other consumer loans	2,793			3,021
Add (deduct):
Deferred loan expenses, net	40,177			38,566
Loans in process ("LIP")	(25,089		)	(36,549		)
Allowance for loan losses	(40,286		)	(42,418		)
Loans held for investment, net	$	12,885,003		$	12,871,294

Schedule Of Recorded Investment Of Loan Receivables That Are Past Due

Balances are adjusted for deferred loan fees, 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
March 31, 2019
Real estate loans:
Residential Core	$	7,359	$	4,087	$	10,632	$	22,078	$	10,797,264	$	10,819,342
Residential Home Today	2,686		1,309		3,881		7,876		82,319		90,195
Home equity loans and lines of credit	3,636		1,744		6,336		11,716		1,978,791		1,990,507
Construction	—		—		—		—		22,452		22,452
Total real estate loans	13,681		7,140		20,849		41,670		12,880,826		12,922,496
Other consumer loans	—		—		—		—		2,793		2,793
Total	$	13,681	$	7,140	$	20,849	$	41,670	$	12,883,619	$	12,925,289

	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total
September 30, 2018
Real estate loans:
Residential Core	$	7,539	$	2,335	$	10,807	$	20,681	$	10,926,294	$	10,946,975
Residential Home Today	2,787		1,765		3,814		8,366		86,383		94,749
Home equity loans and lines of credit	4,152		2,315		5,933		12,400		1,829,427		1,841,827
Construction	—		—		—		—		27,140		27,140
Total real estate loans	14,478		6,415		20,554		41,447		12,869,244		12,910,691
Other consumer loans	—		—		—		—		3,021		3,021
Total	$	14,478	$	6,415	$	20,554	$	41,447	$	12,872,265	$	12,913,712

Schedule Of Recorded Investment Of Loan Receivables In Non-Accrual Status

The recorded investment of loan receivables in non-accrual status is summarized in the following table. Balances are adjusted for deferred loan fees and expenses.

	March 31, 2019		September 30, 2018
Real estate loans:
Residential Core	$	41,126	$	41,628
Residential Home Today	14,202		14,641
Home equity loans and lines of credit	21,943		21,483
Total non-accrual loans	$	77,271	$	77,752

Schedule Of Impaired Loans

Balances of recorded investments are adjusted for deferred loan fees and expenses.

	March 31, 2019						September 30, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related IVA recorded:
Residential Core	$	48,058	$	64,246	$	—	$	53,656	$	69,516	$	—
Residential Home Today	15,056		34,823		—		16,006		35,532		—
Home equity loans and lines of credit	21,754		27,821		—		22,423		28,504		—
Total	$	84,868	$	126,890	$	—	$	92,085	$	133,552	$	—
With an IVA recorded:
Residential Core	$	45,309	$	45,398	$	7,219	$	37,704	$	37,774	$	6,934
Residential Home Today	24,460		24,440		2,167		25,517		25,492		2,139
Home equity loans and lines of credit	27,390		27,413		3,554		25,488		25,519		3,014
Total	$	97,159	$	97,251	$	12,940	$	88,709	$	88,785	$	12,087
Total impaired loans:
Residential Core	$	93,367	$	109,644	$	7,219	$	91,360	$	107,290	$	6,934
Residential Home Today	39,516		59,263		2,167		41,523		61,024		2,139
Home equity loans and lines of credit	49,144		55,234		3,554		47,911		54,023		3,014
Total	$	182,027	$	224,141	12,940		$	180,794	$	222,337	$	12,087

The average recorded investment in impaired loans and the amount of interest income recognized during the period that the loans were impaired are summarized below.

	For the Three Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	49,934	$	341	$	50,403	$	1,374
Residential Home Today	15,287		52		17,454		856
Home equity loans and lines of credit	22,292		120		20,071		99
Total	$	87,513	$	513	$	87,928	$	2,329
With an IVA recorded:
Residential Core	$	42,446	$	397	$	42,180	$	535
Residential Home Today	24,690		297		27,211		620
Home equity loans and lines of credit	26,713		173		21,633		144
Total	$	93,849	$	867	$	91,024	$	1,299
Total impaired loans:
Residential Core	$	92,380	$	738	$	92,583	$	1,909
Residential Home Today	39,977		349		44,665		1,476
Home equity loans and lines of credit	49,005		293		41,704		243
Total	$	181,362	$	1,380	$	178,952	$	3,628

	For the Six Months Ended March 31,
	2019				2018
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related IVA recorded:
Residential Core	$	50,857	$	801	$	50,718	$	1,760
Residential Home Today	15,531		124		18,124		972
Home equity loans and lines of credit	22,089		224		20,059		173
Total	$	88,477	$	1,149	$	88,901	$	2,905
With an IVA recorded:
Residential Core	$	41,507	$	1,156	$	42,804	$	955
Residential Home Today	24,989		593		27,384		956
Home equity loans and lines of credit	26,439		627		21,329		275
Total	$	92,935	$	2,376	$	91,517	$	2,186
Total impaired loans:
Residential Core	$	92,364	$	1,957	$	93,522	$	2,715
Residential Home Today	40,520		717		45,508		1,928
Home equity loans and lines of credit	48,528		851		41,388		448
Total	$	181,412	$	3,525	$	180,418	$	5,091

Schedule Of Troubled Debt Restructured Loans

The recorded investment in TDRs by category as of March 31, 2019 and September 30, 2018 is shown in the tables below.    

March 31, 2019	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	40,342	$	23,935	$	21,064	$	85,341
Residential Home Today	17,467		17,671		3,577		38,715
Home equity loans and lines of credit	35,736		2,801		3,735		42,272
Total	$	93,545	$	44,407	$	28,376	$	166,328

September 30, 2018	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	39,265	$	23,116	$	21,832	$	84,213
Residential Home Today	18,243		18,483		3,683		40,409
Home equity loans and lines of credit	33,768		2,563		4,438		40,769
Total	$	91,276	$	44,162	$	29,953	$	165,391

The following tables set forth the recorded investment in TDRs restructured during the periods presented.

	For the Three Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	2,713	$	2,921	$	649	$	6,283
Residential Home Today	172		1,447		180		1,799
Home equity loans and lines of credit	2,121		700		73		2,894
Total	$	5,006	$	5,068	$	902	$	10,976

	For the Three Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	374	$	1,035	$	1,242	$	2,651
Residential Home Today	233		509		90		832
Home equity loans and lines of credit	5,208		426		225		5,859
Total	$	5,815	$	1,970	$	1,557	$	9,342

	For the Six Months Ended March 31, 2019
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	5,479	$	2,923	$	1,571	$	9,973
Residential Home Today	444		1,447		305		2,196
Home equity loans and lines of credit	5,655		700		273		6,628
Total	$	11,578	$	5,070	$	2,149	$	18,797

	For the Six Months Ended March 31, 2018
	Initial Restructuring		Multiple Restructurings		Bankruptcy		Total
Residential Core	$	1,371	$	2,111	$	1,807	$	5,289
Residential Home Today	442		1,264		382		2,088
Home equity loans and lines of credit	6,856		609		312		7,777
Total	$	8,669	$	3,984	$	2,501	$	15,154

Below summarizes the information on TDRs restructured within 12 months of the period presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented.

	For the Three Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	9	$	853
Residential Home Today	21	895		19	805
Home equity loans and lines of credit	11	731		7	557
Total	48	$	4,287	35	$	2,215

	For the Six Months Ended March 31,
	2019			2018
TDRs That Subsequently Defaulted	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Residential Core	16	$	2,661	12	$	1,488
Residential Home Today	22	928		19	805
Home equity loans and lines of credit	11	731		8	557
Total	49	$	4,320	39	$	2,850

Schedule Of Credit Quality Of Residential Loan Receivables By An Internally Assigned Grade

The following tables provide information about the credit quality of residential loan receivables by an internally assigned grade. Balances are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	Pass		Special Mention		Substandard		Loss		Total
March 31, 2019
Real estate loans:
Residential Core	$	10,767,228	$	4,499	$	47,615	$	—	$	10,819,342
Residential Home Today	74,563		—		15,632		—		90,195
Home equity loans and lines of credit	1,961,826		3,662		25,019		—		1,990,507
Construction	22,452		—		—		—		22,452
Total	$	12,826,069	$	8,161	$	88,266	$	—	$	12,922,496

	Pass		Special Mention		Substandard		Loss		Total
September 30, 2018
Real estate loans:
Residential Core	$	10,898,725	$	—	$	48,250	$	—	$	10,946,975
Residential Home Today	78,180		—		16,569		—		94,749
Home equity loans and lines of credit	1,813,502		4,216		24,109		—		1,841,827
Construction	27,140		—		—		—		27,140
Total	$	12,817,547	$	4,216	$	88,928	$	—	$	12,910,691

Schedule Of The Allowance For Loan Losses

Activity in the allowance for loan losses is summarized as follows:

	For the Three Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	19,165	$	(45	)	$	(299	)	$	766	$	19,587
Residential Home Today	3,748		(1,012		)	(85		)	624		3,275
Home equity loans and lines of credit	19,021		(2,943		)	(475		)	1,817		17,420
Construction	4		—			—			—		4
Total	$	41,938	$	(4,000	)	$	(859	)	$	3,207	$	40,286

	For the Three Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	13,546	$	(58	)	$	(195	)	$	787	$	14,080
Residential Home Today	4,134		(705		)	(288		)	599		3,740
Home equity loans and lines of credit	28,245		(3,237		)	(1,619		)	1,893		25,282
Construction	4		—			—			—		4
Total	$	45,929	$	(4,000	)	$	(2,102	)	$	3,279	$	43,106

	For the Six Months Ended March 31, 2019
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	18,288	$	864		$	(542	)	$	977	$	19,587
Residential Home Today	3,204		(695		)	(326		)	1,092		3,275
Home equity loans and lines of credit	20,921		(6,168		)	(1,318		)	3,985		17,420
Construction	5		(1		)	—			—		4
Total	$	42,418	$	(6,000	)	$	(2,186	)	$	6,054	$	40,286

	For the Six Months Ended March 31, 2018
	Beginning Balance		Provisions			Charge-offs			Recoveries		Ending Balance
Real estate loans:
Residential Core	$	14,186	$	(899	)	$	(587	)	$	1,380	$	14,080
Residential Home Today	4,508		(806		)	(963		)	1,001		3,740
Home equity loans and lines of credit	30,249		(5,294		)	(3,155		)	3,482		25,282
Construction	5		(1		)	—			—		4
Total	$	48,948	$	(7,000	)	$	(4,705	)	$	5,863	$	43,106

Balances of recorded investments are adjusted for deferred loan fees, expenses and any applicable loans-in-process.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	93,367	$	10,725,975	$	10,819,342	$	91,360	$	10,855,615	$	10,946,975
Residential Home Today	39,516		50,679		90,195		41,523		53,226		94,749
Home equity loans and lines of credit	49,144		1,941,363		1,990,507		47,911		1,793,916		1,841,827
Construction	—		22,452		22,452		—		27,140		27,140
Total real estate loans	182,027		12,740,469		12,922,496		180,794		12,729,897		12,910,691
Other consumer loans	—		2,793		2,793		—		3,021		3,021
Total	$	182,027	$	12,743,262	$	12,925,289	$	180,794	$	12,732,918	$	12,913,712

An analysis of the allowance for loan losses at March 31, 2019 and September 30, 2018 is summarized in the following table. The analysis provides details of the allowance for loan losses according to the method of evaluation, distinguishing between allowances for loan losses determined by evaluating individual loans and allowances for loan losses determined by evaluating groups of loans collectively.

	March 31, 2019						September 30, 2018
	Individually		Collectively		Total		Individually		Collectively		Total
Real estate loans:
Residential Core	$	7,219	$	12,368	$	19,587	$	6,934	$	11,354	$	18,288
Residential Home Today	2,167		1,108		3,275		2,139		1,065		3,204
Home equity loans and lines of credit	3,554		13,866		17,420		3,014		17,907		20,921
Construction	—		4		4		—		5		5
Total	$	12,940	$	27,346	$	40,286	$	12,087	$	30,331	$	42,418

XML

Deposits (Tables)

6 Months Ended

Mar. 31, 2019

Deposits [Abstract]

Summary Of Deposit Account Balances

Deposit account balances are summarized as follows:

	March 31, 2019		September 30, 2018
Checking accounts	$	902,251	$	913,525
Savings accounts	1,399,389		1,256,054
Certificates of deposit	6,426,710		6,318,281
	8,728,350		8,487,860
Accrued interest	4,440		3,723
Total deposits	$	8,732,790	$	8,491,583

XML

Borrowed Funds (Tables)

6 Months Ended

Mar. 31, 2019

Advances from Federal Home Loan Banks [Abstract]

Schedule of Federal Home Loan Bank (FHLB) Borrowings

Federal Home Loan Bank borrowings at March 31, 2019 are summarized in the table below. The amount and weighted average rates of certain FHLB Advances maturing in 36 months or less reflect the net impact of deferred penalties discussed below:

	Amount		Weighted Average Rate
Maturing in:
12 months or less	$	3,439,780	2.44	%
13 to 24 months	99,917		1.90	%
25 to 36 months	674		1.45	%
37 to 48 months	2,544		0.94	%
49 to 60 months	15,000		2.99	%
Over 60 months	24,461		1.67	%
Total FHLB Advances	3,582,376		2.42	%
Accrued interest	7,696
Total	$	3,590,072

Schedule of Federal Home Loan Bank (FHLB) Short-term Debt

Through the use of interest rate swaps discussed in Note 13. Derivative Instruments, $2,225,000 of FHLB advances included in the table above as maturing in 12 months or less, have effective maturities, assuming no early terminations of the swap contracts, as shown below:

	Amount		Swap Adjusted Weighted Average Rate
Effective maturity:
12 months or less	$	50,000	1.23	%
13 to 24 months	225,000		1.28	%
25 to 36 months	675,000		1.58	%
37 to 48 months	650,000		1.92	%
49 to 60 months	125,000		2.87	%
Over 60 months	500,000		2.76	%
Total FHLB Advances under swap contracts	$	2,225,000	1.98	%

XML

Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Mar. 31, 2019

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The change in accumulated other comprehensive income (loss) by component is as follows:

	For the Three Months Ended												For the Three Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total
Balance at beginning of period	$	(8,527	)	$	25,092		$	(14,804	)	$	1,761		$	(7,185	)	$	22,834		$	(17,643	)	$	(1,994	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(3,282) and $4,357	3,381			(15,731		)	—			(12,350		)	(3,262		)	19,634			—			16,372
Amounts reclassified, net of tax expense (benefit) of $(782) and $75	—			(3,205		)	264			(2,941		)	—			(82		)	317			235
Other comprehensive income (loss)	3,381			(18,936		)	264			(15,291		)	(3,262		)	19,552			317			16,607
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386		$	(17,326	)	$	14,613

	For the Six Months Ended												For the Six Months Ended
	March 31, 2019												March 31, 2018
	Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges			Defined Benefit Plan			Total			Unrealized Gains (Losses) on Securities Available for Sale			Cash flow hedges		Defined Benefit Plan			Total
Accumulated other comprehensive income (loss) at beginning of period	$	(13,624	)	$	51,914		$	(15,068	)	$	23,222		$	(2,915	)	$	10,249	$	(14,826	)	$	(7,492	)
Other comprehensive income (loss) before reclassifications, net of tax expense (benefit) of $(8,440) and $7,361	8,478			(40,231		)	—			(31,753		)	(6,259		)	27,099		—			20,840
Amounts reclassified, net of tax expense (benefit) of $(1,329) and $476	—			(5,527		)	528			(4,999		)	—			713		594			1,307
Other comprehensive income (loss)	8,478			(45,758		)	528			(36,752		)	(6,259		)	27,812		594			22,147
Adoption of ASU 2018-02	—			—			—			—			(1,273		)	4,325		(3,094		)	(42		)
Balance at end of period	$	(5,146	)	$	6,156		$	(14,540	)	$	(13,530	)	$	(10,447	)	$	42,386	$	(17,326	)	$	14,613

Reclassification Out Of Accumulated Other Comprehensive Income (Loss) Included In Net Income

The following table presents the reclassification adjustment out of accumulated other comprehensive income included in net income and the corresponding line item on the consolidated statements of income for the periods indicated:

	Amounts Reclassified from Accumulated  Other Comprehensive Income
Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended March 31,						For the Six Months Ended March 31,						Line Item in the Statement of Income
	2019			2018			2019			2018
Cash flow hedges:
Interest (income) expense	$	(4,057	)	$	(109	)	$	(6,996	)	$	944		Interest expense
Net income tax effect	852			27			1,469			(231		)	Income tax expense
Net of income tax expense (benefit)	(3,205		)	(82		)	(5,527		)	713
Amortization of pension plan:
Actuarial loss	334			419			668			839			(a)
Net income tax effect	(70		)	(102		)	(140		)	(245		)	Income tax expense
Net of income tax expense (benefit)	264			317			528			594
Adoption of ASU 2018-02	—			—			—			(42		)	(b)
Total reclassifications for the period	$	(2,941	)	$	235		$	(4,999	)	$	1,265

(a) This item is included in the computation of net periodic pension cost. See Note 9. Defined Benefit Plan for additional disclosure.

(b) This item is a reclassification between Accumulated Other Comprehensive Income and Retained Earnings due to the adoption of ASU 2018-02 in fiscal year 2018.

XML

Defined Benefit Plan (Tables)

6 Months Ended

Mar. 31, 2019

Retirement Benefits [Abstract]

Components Of Net Periodic Benefit Cost Recognized

The components of net periodic cost recognized in other non-interest expense in the Consolidated Statements of Income are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2019			2018			2019			2018
Interest cost	$	807		$	774		$	1,614		$	1,548
Expected return on plan assets	(1,146		)	(1,035		)	(2,292		)	(2,071		)
Amortization of net loss	334			419			668			839
Net periodic cost (benefit)	$	(5	)	$	158		$	(10	)	$	316

XML

Equity Incentive Plan Equity Incentive Plan (Tables)

6 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

The following table presents share-based compensation expense recognized during the periods presented.

	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2018		2019		2018
Stock option expense	$	200	$	344	$	437	$	657
Restricted and performance stock units expense	946		1,303		1,790		1,868
Total stock-based compensation expense	$	1,146	$	1,647	$	2,227	$	2,525

XML

Commitments And Contingent Liabilities (Tables)

6 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Commitments To Originate And Unfunded Commitments

At March 31, 2019, the Company had commitments to originate loans as follows:

Fixed-rate mortgage loans	$	151,454
Adjustable-rate mortgage loans	161,569
Equity loans and lines of credit	186,549
Total	$	499,572

At March 31, 2019, the Company had unfunded commitments outstanding as follows:

Equity lines of credit	$	1,911,089
Construction loans	25,089
Limited partner investments	11,541
Total	$	1,947,719

XML

Fair Value (Tables)

6 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Of Assets And Liabilities Measured On Recurring Basis

Assets and liabilities carried at fair value on a recurring basis in the Consolidated Statements of Condition at March 31, 2019 and September 30, 2018 are summarized below. There were no liabilities carried at fair value on a recurring basis at March 31, 2019.

			Recurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	562,837	$	—	$	562,837	$	—
Fannie Mae certificates	7,746		—		7,746		—
U.S. government and agency obligations	3,989		—		3,989		—
Derivatives:
Interest rate lock commitments	141		—		—		141
Total	$	574,713	$	—	$	574,572	$	141

			Recurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Assets
Investment securities available for sale:
REMICs	$	519,999	$	—	$	519,999	$	—
Fannie Mae certificates	7,998		—		7,998		—
U.S. government and agency obligations	3,968		—		3,968		—
Total	$	531,965	$	—	$	531,965	$	—
Liabilities
Derivatives:
Interest rate lock commitments	$	2	$	—	$	—	$	2
Total	$	2	$	—	$	—	$	2

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation of the beginning and ending balances and the location within the Consolidated Statements of Income where gains (losses) due to changes in fair value are recognized on interest rate lock commitments which are measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Three Months Ended March 31,					Six Months Ended March 31,
	2019		2018			2019			2018
Beginning balance	$	77	$	28		$	(2	)	$	58
Gain (loss) during the period due to changes in fair value:
Included in other non-interest income	64		(30		)	143			(60		)
Ending balance	$	141	$	(2	)	$	141		$	(2	)
Change in unrealized gains for the period included in earnings for assets held at end of the reporting date	$	141	$	(2	)	$	141		$	(2	)

Assets Measured At Fair Value On A Nonrecurring Basis

Summarized in the tables below are those assets measured at fair value on a nonrecurring basis.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	March 31, 2019		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	81,519	$	—	$	—	$	81,519
Real estate owned(1)	1,698		—		—		1,698
Total	$	83,217	$	—	$	—	$	83,217

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

			Nonrecurring Fair Value Measurements at Reporting Date Using
	September 30, 2018		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Impaired loans, net of allowance	$	82,250	$	—	$	—	$	82,250
Real estate owned(1)	1,238		—		—		1,238
Total	$	83,488	$	—	$	—	$	83,488

⁽¹⁾  Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

Fair Value Inputs, Assets, Quantitative Information

The following provides quantitative information about significant unobservable inputs categorized within Level 3 of the Fair Value Hierarchy. The interest rate lock commitments at March 31, 2019 include both mortgage origination applications and preapprovals. Preapprovals have a much lower closure rate than origination applications as reflected in the weighted average closure rate.

	Fair Value						Weighted
	3/31/2019	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$81,519	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	5.6%
Interest rate lock commitments	$141	Quoted Secondary Market pricing	Closure rate	0	-	100%	48.6%

	Fair Value						Weighted
	9/30/2018	Valuation Technique(s)	Unobservable Input	Range			Average
Impaired loans, net of allowance	$82,250	Market comparables of collateral discounted to estimated net proceeds	Discount appraised value to estimated net proceeds based on historical experience:
			• Residential Properties	0	-	28%	6.4%
Interest rate lock commitments	$(2)	Quoted Secondary Market pricing	Closure rate	0	-	100%	50.0%

Estimated Fair Value Of Financial Instruments

The following tables present the estimated fair value of the Company’s financial instruments and their carrying amounts as reported in the Statement of Condition.

	March 31, 2019
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,055	$	29,055	$	29,055	$	—	$	—
Interest earning cash equivalents	230,185		230,185		230,185		—		—
Investment securities available for sale	574,572		574,572		—		574,572		—
Mortgage loans held for sale	1,016		1,041		—		1,041		—
Loans, net:
Mortgage loans held for investment	12,882,210		13,209,129		—		—		13,209,129
Other loans	2,793		2,879		—		—		2,879
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	40,071		40,071		—		40,071		—
Cash collateral received from or held by counterparty	26,168		26,168		26,168		—		—
Derivatives	141		141		—		—		141
Liabilities:
Checking and passbook accounts	$	2,301,640	$	2,301,640	$	—	$	2,301,640	$	—
Certificates of deposit	6,431,150		6,414,001		—		6,414,001		—
Borrowed funds	3,590,072		3,595,253		—		3,595,253		—
Borrowers’ advances for insurance and taxes	88,839		88,839		—		88,839		—
Principal, interest and escrow owed on loans serviced	29,561		29,561		—		29,561		—

	September 30, 2018
	Carrying		Fair		Level 1		Level 2		Level 3
	Amount		Value
Assets:
Cash and due from banks	$	29,056	$	29,056	$	29,056	$	—	$	—
Interest earning cash equivalents	240,719		240,719		240,719		—		—
Investment securities available for sale	531,965		531,965		—		531,965		—
Mortgage loans held for sale	659		661		—		661		—
Loans, net:
Mortgage loans held for investment	12,868,273		12,908,729		—		—		12,908,729
Other loans	3,021		3,045		—		—		3,045
Federal Home Loan Bank stock	93,544		93,544		N/A		—		—
Accrued interest receivable	38,696		38,696		—		38,696		—
Cash collateral received from or held by counterparty	13,794		13,794		13,794		—		—
Liabilities:
Checking and passbook accounts	$	2,169,579	$	2,169,579	$	—	$	2,169,579	$	—
Certificates of deposit	6,322,004		6,006,951		—		6,006,951		—
Borrowed funds	3,721,699		3,724,020		—		3,724,020		—
Borrowers’ advances for insurance and taxes	103,005		103,005		—		103,005		—
Principal, interest and escrow owed on loans serviced	31,490		31,490		—		31,490		—
Derivatives	2		2		—		—		2

XML

Derivative Instruments (Tables)

6 Months Ended

Mar. 31, 2019

Summary of Derivative Instruments [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following tables provide the locations within the Consolidated Statements of Condition, notional values and fair values, at the reporting dates, for all derivative instruments.

	March 31, 2019				September 30, 2018
	Notional Value		Fair Value		Notional Value		Fair Value
Derivatives designated as hedging instruments
Cash flow hedges: Interest rate swaps
Other Assets	$	1,600,000	$	—	$	1,725,000	$	—
Other Liabilities	$	625,000	$	—	$	—	$	—
Total cash flow hedges: Interest rate swaps	$	2,225,000	$	—	$	1,725,000	$	—
Derivatives not designated as hedging instruments
Interest rate lock commitments
Other Assets	$	8,184	$	141	$	—	$	—
Other Liabilities	$	—	$	—	$	4,248	$	2
Total interest rate lock commitments	$	8,184	$	141	$	4,248	$	(2	)

Schedule of Effect of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following tables present the net gains and losses recorded within the Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income relating to derivative instruments.

		Three Months Ended						Six Months Ended
	Location of Gain or (Loss)	March 31,						March 31,
	Recognized in Income	2019			2018			2019			2018
Cash flow hedges
Amount of gain/(loss) recognized	Other comprehensive income	$	(19,912	)	$	24,858		$	(50,925	)	$	36,941
Amount of gain/(loss) reclassified from AOCI	Interest expense: Borrowed funds	4,057			109			6,996			(944		)
Derivatives not designated as hedging instruments
Interest rate lock commitments	Other non-interest income	$	64		$	(30	)	$	143		$	(60	)

XML

Recent Accounting Pronouncements (Tables)

6 Months Ended

Mar. 31, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Revenue from External Customers by Products and Services [Table Text Block]

The disaggregation of our revenue from contracts with customers in scope of Topic 606 is provided below:

		Three Months Ended March 31,						Six Months Ended March 31,
	Location of Revenue	2019			2018			2019			2018
Net Gain/(Loss) from Sales of REO	Non-Interest Expense (1)	$	(249	)	$	(256	)	$	(26	)	$	(234	)
Deposit Account and Other Banking Income	Non-Interest Income	212			227			443			457
Total		$	(37	)	$	(29	)	$	417		$	223

____________________________

(1) Net gain/(loss) from sales of real estate owned (REO) is located in non-interest expense in the consolidated statements of income because the gains and losses from the sales of REO assets are netted together with real estate owned expenses (which includes associated legal and maintenance expenses).

XML

Basis Of Presentation (Details)	Mar. 31, 2019
Third Federal Savings, MHC | Common Stock
Percentage of the Company's outstanding shares held by Third Federal Savings, MHC	81.00%

XML

Earnings Per Share (Narrative) (Details) - shares	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Shares held by Third Federal Savings, MHC (in shares)	227,119,132
Employee Stock Ownership Plan (ESOP), neither allocated nor committed to be released to participants (in shares)	4,658,402	5,091,741

XML

Earnings Per Share (Summary Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income	$ 20,130	$ 23,314	$ 40,463	$ 42,927
Less: income allocated to restricted stock units	406	300	536	543
Income available to common shareholders	$ 19,724	$ 23,014	$ 39,927	$ 42,384
Income available to common shareholders, Shares	275,359,201	275,656,445	275,367,821	275,737,265
Income available to common shareholders, per share amount, basic	$ 0.07	$ 0.08	$ 0.14	$ 0.15
Effect of dilutive potential common shares	1,983,954	1,599,733	1,829,744	1,697,383
Income available to common shareholders	$ 19,724	$ 23,014	$ 39,927	$ 42,384
Income available to common shareholders, Shares	277,343,155	277,256,178	277,197,565	277,434,648
Income available to common shareholders, per share amount, diluted	$ 0.07	$ 0.08	$ 0.14	$ 0.15

XML

Earnings Per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Options to purchase shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options to purchase shares and restricted stock units (antidilutive) (in shares)	710,100	2,571,240	710,100	2,149,740
Restricted and Performance Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Options to purchase shares and restricted stock units (antidilutive) (in shares)	0	15,501	0	11,001

XML

Investment Securities (Investments Securities Available For Sale) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Schedule of Available For Sale Securities [Line Items]
Investments securities available for sale, Amortized Cost	$ 581,086	$ 549,211
Available-for-sale securities, gross unrealized gain	1,445	244
Available-for-sale securities, gross unrealized losses	(7,959)	(17,490)
Available-for-sale Securities	574,572	531,965
REMIC's
Schedule of Available For Sale Securities [Line Items]
Investments securities available for sale, Amortized Cost	569,541	537,330
Available-for-sale securities, gross unrealized gain	1,211	7
Available-for-sale securities, gross unrealized losses	(7,915)	(17,338)
Available-for-sale Securities	562,837	519,999
Fannie Mae Certificates
Schedule of Available For Sale Securities [Line Items]
Investments securities available for sale, Amortized Cost	7,555	7,906
Available-for-sale securities, gross unrealized gain	234	237
Available-for-sale securities, gross unrealized losses	(43)	(145)
Available-for-sale Securities	7,746	7,998
U.S. Government obligation
Schedule of Available For Sale Securities [Line Items]
Investments securities available for sale, Amortized Cost	3,990	3,975
Available-for-sale securities, gross unrealized gain	0	0
Available-for-sale securities, gross unrealized losses	(1)	(7)
Available-for-sale Securities	$ 3,989	$ 3,968

XML

Investment Securities (Investment Securities Held at a Continuous Loss) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Schedule of Available For Sale Securities [Line Items]
Available-for-sale securities, Less Than Twelve Months, Estimated Fair Value	$ 6,585	$ 117,079
Available-for-sale securities, Less Than Twelve Months, Unrealized Loss	3	1,806
Available-for-sale securities, Twelve Months or Longer, Estimated Fair Value	400,545	404,895
Available-for-sale securities, Twelve Months or Longer, Unrealized Loss	7,956	15,684
Available-for-sale securities, Total Estimated Fair Value	407,130	521,974
Available-for-sale securities, Total Unrealized Losses	7,959	17,490
REMIC's
Schedule of Available For Sale Securities [Line Items]
Available-for-sale securities, Less Than Twelve Months, Estimated Fair Value	2,596	113,111
Available-for-sale securities, Less Than Twelve Months, Unrealized Loss	2	1,799
Available-for-sale securities, Twelve Months or Longer, Estimated Fair Value	396,173	400,558
Available-for-sale securities, Twelve Months or Longer, Unrealized Loss	7,913	15,539
Available-for-sale securities, Total Estimated Fair Value	398,769	513,669
Available-for-sale securities, Total Unrealized Losses	7,915	17,338
Fannie Mae Certificates
Schedule of Available For Sale Securities [Line Items]
Available-for-sale securities, Less Than Twelve Months, Estimated Fair Value	0	0
Available-for-sale securities, Less Than Twelve Months, Unrealized Loss	0	0
Available-for-sale securities, Twelve Months or Longer, Estimated Fair Value	4,372	4,337
Available-for-sale securities, Twelve Months or Longer, Unrealized Loss	43	145
Available-for-sale securities, Total Estimated Fair Value	4,372	4,337
Available-for-sale securities, Total Unrealized Losses	43	145
U.S. Government obligation
Schedule of Available For Sale Securities [Line Items]
Available-for-sale securities, Less Than Twelve Months, Estimated Fair Value	3,989	3,968
Available-for-sale securities, Less Than Twelve Months, Unrealized Loss	1	7
Available-for-sale securities, Twelve Months or Longer, Estimated Fair Value	0	0
Available-for-sale securities, Twelve Months or Longer, Unrealized Loss	0	0
Available-for-sale securities, Total Estimated Fair Value	3,989	3,968
Available-for-sale securities, Total Unrealized Losses	$ 1	$ 7

XML

Investment Securities Investment Securities (Narrative) (Details) - U.S. Government obligation $ in Thousands	Mar. 31, 2019 USD ($)
Debt Securities, Available-for-sale [Line Items]
U.S. government obligations, categorized as due in less than one year, amortized cost	$ 3,990
U.S. government obligations, categorized as due in less than one year, fair value	$ 3,989

XML

Loans And Allowance For Loan Losses (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2019 USD ($) loans	Mar. 31, 2018 USD ($) loans	Sep. 30, 2018 USD ($)
Loan Portfolio [Line Items]
Financing Receivable, Net	$ 12,925,289		$ 12,925,289		$ 12,913,712
Allowance for loan losses, Individually Evaluated	12,940		12,940		12,087
Impaired Financing Receivable, Recorded Investment	182,027		182,027		180,794
Mortgage loans held-for-sale	1,016		1,016		659
Real estate loans	12,907,408		12,907,408		12,908,674
Loans in process of foreclosure	9,363		9,363		8,501
Interest income on impaired loans recognized using a cash-basis method	347	$ 795	$ 739	$ 1,208
Residential loans, collateral evaluated for charge-off, number of days past due			180 days
Home equity lines of credit equity loans and residential loans modified in a troubled debt restructuring charge-offs, days past due			90 days
All classes of loans collateral evaluated for charge-off, sheriff sale scheduled number of days to sell			60 days
All classes of loans, all borrowers filed Chapter 7 Bankruptcy, collateral evaluated for charge-off, days since notification			60 days
All classes of loans borrower filed bankruptcy, collateral evaluated for charge-off, days past due			30 days
Troubled debt restructuring reclassed from impaired | loans			0	0
Other consumer loans	2,793		$ 2,793		3,021
Further Deterioration In Fair Value Of Collateral
Loan Portfolio [Line Items]
Allowance for loan losses, Individually Evaluated	245		245		85
Nonperforming
Loan Portfolio [Line Items]
Other consumer loans	$ 0		$ 0		$ 0
Residential Core, Home Today and Construction | Florida
Loan Portfolio [Line Items]
Residential real estate loans held, percent	16.00%		16.00%		16.00%
Residential Core, Home Today and Construction | Ohio
Loan Portfolio [Line Items]
Residential real estate loans held, percent	56.00%		56.00%		56.00%
Home Equity Loans And Lines Of Credit
Loan Portfolio [Line Items]
Financing Receivable, Net	$ 1,990,507		$ 1,990,507		$ 1,841,827
Allowance for loan losses, Individually Evaluated	3,554		3,554		3,014
Impaired Financing Receivable, Recorded Investment	49,144		49,144		47,911
Real estate loans	1,965,580		1,965,580		1,818,918
Home Equity Loans And Lines Of Credit | Special Mention
Loan Portfolio [Line Items]
Financing Receivable, Net	3,662		3,662		4,216
Home Equity Loans And Lines Of Credit | Loss
Loan Portfolio [Line Items]
Financing Receivable, Net	0		0		0
Home Equity Loans And Lines Of Credit | Pass
Loan Portfolio [Line Items]
Financing Receivable, Net	$ 1,961,826		$ 1,961,826		$ 1,813,502
Home Equity Loans And Lines Of Credit | Florida
Loan Portfolio [Line Items]
Residential real estate loans held, percent	20.00%		20.00%		20.00%
Home Equity Loans And Lines Of Credit | Ohio
Loan Portfolio [Line Items]
Residential real estate loans held, percent	34.00%		34.00%		36.00%
Home Equity Loans And Lines Of Credit | California
Loan Portfolio [Line Items]
Residential real estate loans held, percent	16.00%		16.00%		15.00%
Residential Home Today
Loan Portfolio [Line Items]
Financing Receivable, Net	$ 90,195		$ 90,195		$ 94,749
Allowance for loan losses, Individually Evaluated	2,167		2,167		2,139
Impaired Financing Receivable, Recorded Investment	39,516		39,516		41,523
Real estate loans	90,495		90,495		94,933
Residential Home Today | Special Mention
Loan Portfolio [Line Items]
Financing Receivable, Net	0		0		0
Residential Home Today | Loss
Loan Portfolio [Line Items]
Financing Receivable, Net	0		0		0
Residential Home Today | Pass
Loan Portfolio [Line Items]
Financing Receivable, Net	74,563		74,563		78,180
Residential Home Today Loans Originated Prior To March 27, 2009
Loan Portfolio [Line Items]
Real estate loans	87,429		87,429		91,805
Adjustable Rate Residential Mortgage [Member]
Loan Portfolio [Line Items]
Real estate loans	5,128,674		5,128,674		5,166,282
Mortgage Receivable
Loan Portfolio [Line Items]
Financing Receivable, Net	12,922,496		12,922,496		12,910,691
Mortgage Receivable | Special Mention
Loan Portfolio [Line Items]
Financing Receivable, Net	8,161		8,161		4,216
Mortgage Receivable | Loss
Loan Portfolio [Line Items]
Financing Receivable, Net	0		0		0
Mortgage Receivable | Pass
Loan Portfolio [Line Items]
Financing Receivable, Net	12,826,069		12,826,069		12,817,547
Troubled Debt Restructuring
Loan Portfolio [Line Items]
Impaired Financing Receivable, Recorded Investment	166,328		166,328		165,391
Troubled Debt Restructuring | Performing | Present Value of Cash Flows
Loan Portfolio [Line Items]
Allowance for loan losses, Individually Evaluated	12,714		12,714		12,002
Troubled Debt Restructuring | Performing | Pass
Loan Portfolio [Line Items]
Impaired Financing Receivable, Recorded Investment	95,822		95,822		95,916
Troubled Debt Restructuring | Mortgage Receivable | Nonperforming
Loan Portfolio [Line Items]
Impaired Financing Receivable, Recorded Investment	10,597		10,597		10,468
Community Reinvestment Act Loans [Member] | Special Mention
Loan Portfolio [Line Items]
Financing Receivable, Net	4,499		$ 4,499
PMIC [Member]
Loan Portfolio [Line Items]
PMI Claims Payments, Percentage Of Claim Paid			74.50%
Real estate loans	33,317		$ 33,317		39,367
PMIC [Member] | Performing
Loan Portfolio [Line Items]
Real estate loans	$ 30,755		$ 30,755		$ 36,075

XML

Loans And Allowance For Loan Losses (Loans Held For Investment) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Loan Portfolio [Line Items]
Real estate loans	$ 12,907,408	$ 12,908,674
Other consumer loans	2,793	3,021
Deferred loan expense, net	40,177	38,566
LIP	(25,089)	(36,549)
Allowance for loan losses	(40,286)	(42,418)
Loans, net	12,885,003	12,871,294
Residential Core
Loan Portfolio [Line Items]
Real estate loans	10,803,550	10,930,811
Residential Home Today
Loan Portfolio [Line Items]
Real estate loans	90,495	94,933
Home Equity Loans And Lines Of Credit
Loan Portfolio [Line Items]
Real estate loans	1,965,580	1,818,918
Construction
Loan Portfolio [Line Items]
Real estate loans	$ 47,783	$ 64,012

XML

Loans And Allowance For Loan Losses (Schedule Of Recorded Investment In Loan Receivables That Are Past Due) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 41,670	$ 41,447
Current	12,883,619	12,872,265
Total	12,925,289	12,913,712
30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	13,681	14,478
60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	7,140	6,415
Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	20,849	20,554
Residential Core
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	22,078	20,681
Current	10,797,264	10,926,294
Total	10,819,342	10,946,975
Residential Core | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	7,359	7,539
Residential Core | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	4,087	2,335
Residential Core | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	10,632	10,807
Residential Home Today
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	7,876	8,366
Current	82,319	86,383
Total	90,195	94,749
Residential Home Today | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	2,686	2,787
Residential Home Today | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,309	1,765
Residential Home Today | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	3,881	3,814
Home Equity Loans And Lines Of Credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	11,716	12,400
Current	1,978,791	1,829,427
Total	1,990,507	1,841,827
Home Equity Loans And Lines Of Credit | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	3,636	4,152
Home Equity Loans And Lines Of Credit | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	1,744	2,315
Home Equity Loans And Lines Of Credit | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	6,336	5,933
Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Current	22,452	27,140
Total	22,452	27,140
Construction | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Construction | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Construction | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Total Real Estate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	41,670	41,447
Current	12,880,826	12,869,244
Total	12,922,496	12,910,691
Total Real Estate Loans | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	13,681	14,478
Total Real Estate Loans | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	7,140	6,415
Total Real Estate Loans | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	20,849	20,554
Other Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Current	2,793	3,021
Total	2,793	3,021
Other Consumer Loans | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Other Consumer Loans | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	0	0
Other Consumer Loans | Equal to Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total past due	$ 0	$ 0

XML

Loans And Allowance For Loan Losses (Schedule Of Recorded Investment Of Loan Receivables In Non-Accrual Status) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	$ 77,271	$ 77,752
Performing
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	56,422	57,197
Performing Chapter 7 Bankruptcy
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	27,752	29,439
Residential Core
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	41,126	41,628
Residential Home Today
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	14,202	14,641
Home Equity Loans And Lines Of Credit
Financing Receivable, Recorded Investment, Past Due, Nonaccrual Status [Line Items]
Total non-accrual loans	$ 21,943	$ 21,483

XML

Loans And Allowance For Loan Losses (Schedule Of Recorded Investment In Loan Receivables According To The Method Of Evaluation) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	$ 182,027	$ 180,794
Recorded Investment, Collectively Evaluated	12,743,262	12,732,918
Total	12,925,289	12,913,712
Residential Core
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	93,367	91,360
Recorded Investment, Collectively Evaluated	10,725,975	10,855,615
Total	10,819,342	10,946,975
Residential Home Today
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	39,516	41,523
Recorded Investment, Collectively Evaluated	50,679	53,226
Total	90,195	94,749
Home Equity Loans And Lines Of Credit
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	49,144	47,911
Recorded Investment, Collectively Evaluated	1,941,363	1,793,916
Total	1,990,507	1,841,827
Construction
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	0	0
Recorded Investment, Collectively Evaluated	22,452	27,140
Total	22,452	27,140
Total Real Estate Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	182,027	180,794
Recorded Investment, Collectively Evaluated	12,740,469	12,729,897
Total	12,922,496	12,910,691
Other Consumer Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Recorded Investment, Individually Evaluated	0	0
Recorded Investment, Collectively Evaluated	2,793	3,021
Total	$ 2,793	$ 3,021

XML

Loans And Allowance For Loan Losses (Schedule Of Allowance For Loan Losses According To The Method Of Evaluation) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	$ 12,940		$ 12,087
Allowance for loan losses, Collectively Evaluated	27,346		30,331
Allowance for credit losses	40,286		42,418
Present Value of Cash Flows | Performing | Troubled Debt Restructuring
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	12,714		12,002
Further Deterioration In Fair Value Of Collateral
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	245		85
Residential Core
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	7,219		6,934
Allowance for loan losses, Collectively Evaluated	12,368		11,354
Allowance for credit losses	19,587	$ 19,165	18,288	$ 14,080	$ 13,546	$ 14,186
Residential Home Today
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	2,167		2,139
Allowance for loan losses, Collectively Evaluated	1,108		1,065
Allowance for credit losses	3,275	3,748	3,204	3,740	4,134	4,508
Home Equity Loans And Lines Of Credit
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	3,554		3,014
Allowance for loan losses, Collectively Evaluated	13,866		17,907
Allowance for credit losses	17,420	19,021	20,921	25,282	28,245	30,249
Construction
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Individually Evaluated	0		0
Allowance for loan losses, Collectively Evaluated	4		5
Allowance for credit losses	$ 4	$ 4	$ 5	$ 4	$ 4	$ 5

XML

Loans And Allowance For Loan Losses (Loans with Private Mortgage Insurance Narrative) (Details) loans in Thousands, $ in Thousands	6 Months Ended
	Mar. 31, 2019 USD ($) loans	Sep. 30, 2018 USD ($)
Loan Portfolio [Line Items]
Real estate loans	$ 12,907,408	$ 12,908,674
Number of loans covered by mortgage insurers that were deferring claim payments or which were assessed as being non-investment grade | loans	0
PMIC Provided Mortgage Insurance Coverage
Loan Portfolio [Line Items]
PMI Claims Payments, Percentage Of Claim Paid	74.50%
Real estate loans	$ 33,317	39,367
MGIC Provided Mortgage Insurance Coverage
Loan Portfolio [Line Items]
Real estate loans	18,897	20,912
Performing | PMIC Provided Mortgage Insurance Coverage
Loan Portfolio [Line Items]
Real estate loans	30,755	36,075
Performing | MGIC Provided Mortgage Insurance Coverage
Loan Portfolio [Line Items]
Real estate loans	$ 18,736	$ 20,792
Residential Home Today
Loan Portfolio [Line Items]
Percentage of loans covered by private mortgage insurance	16.00%	18.00%
Real estate loans	$ 90,495	$ 94,933

XML

Loans And Allowance For Loan Losses (Schedule Of Recorded Investment And The Unpaid Principal Balance Of Impaired Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Recorded Investment	$ 84,868	$ 92,085
Impaired Loans, with No Related IVA, Unpaid Principal Balance	126,890	133,552
Impaired Loans, with an IVA, Recorded Investment	97,159	88,709
Impaired Loans, with an IVA, Unpaid Principal Balance	97,251	88,785
Impaired Loans, Recorded Investment	182,027	180,794
Impaired Loans, Unpaid Principal Balance	224,141	222,337
Allowance for loan losses, Individually Evaluated	12,940	12,087
Troubled Debt Restructuring
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment	166,328	165,391
Performing | Pass | Troubled Debt Restructuring
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment	95,822	95,916
Residential Core
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Recorded Investment	48,058	53,656
Impaired Loans, with No Related IVA, Unpaid Principal Balance	64,246	69,516
Impaired Loans, with an IVA, Recorded Investment	45,309	37,704
Impaired Loans, with an IVA, Unpaid Principal Balance	45,398	37,774
Impaired Loans, Recorded Investment	93,367	91,360
Impaired Loans, Unpaid Principal Balance	109,644	107,290
Allowance for loan losses, Individually Evaluated	7,219	6,934
Residential Home Today
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Recorded Investment	15,056	16,006
Impaired Loans, with No Related IVA, Unpaid Principal Balance	34,823	35,532
Impaired Loans, with an IVA, Recorded Investment	24,460	25,517
Impaired Loans, with an IVA, Unpaid Principal Balance	24,440	25,492
Impaired Loans, Recorded Investment	39,516	41,523
Impaired Loans, Unpaid Principal Balance	59,263	61,024
Allowance for loan losses, Individually Evaluated	2,167	2,139
Home Equity Loans And Lines Of Credit
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Recorded Investment	21,754	22,423
Impaired Loans, with No Related IVA, Unpaid Principal Balance	27,821	28,504
Impaired Loans, with an IVA, Recorded Investment	27,390	25,488
Impaired Loans, with an IVA, Unpaid Principal Balance	27,413	25,519
Impaired Loans, Recorded Investment	49,144	47,911
Impaired Loans, Unpaid Principal Balance	55,234	54,023
Allowance for loan losses, Individually Evaluated	3,554	3,014
Construction
Financing Receivable, Impaired [Line Items]
Allowance for loan losses, Individually Evaluated	0	0
Mortgage Receivable | Nonperforming | Troubled Debt Restructuring
Financing Receivable, Impaired [Line Items]
Impaired Loans, Recorded Investment	$ 10,597	$ 10,468

XML

Loans And Allowance For Loan Losses (Schedule Of Average Recorded Investment In Impaired Loans And The Amount Of Interest Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Average Recorded Investment	$ 87,513	$ 87,928	$ 88,477	$ 88,901
Impaired Loans, with No Related IVA, Interest Income Recognized	513	2,329	1,149	2,905
Impaired Loans, with an IVA, Average Recorded Investment	93,849	91,024	92,935	91,517
Impaired Loans, with an IVA, Interest Income Recognized	867	1,299	2,376	2,186
Impaired Loans, Average Recorded Investment	181,362	178,952	181,412	180,418
Impaired Loans, Interest Income Recognized	1,380	3,628	3,525	5,091
Residential Core
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Average Recorded Investment	49,934	50,403	50,857	50,718
Impaired Loans, with No Related IVA, Interest Income Recognized	341	1,374	801	1,760
Impaired Loans, with an IVA, Average Recorded Investment	42,446	42,180	41,507	42,804
Impaired Loans, with an IVA, Interest Income Recognized	397	535	1,156	955
Impaired Loans, Average Recorded Investment	92,380	92,583	92,364	93,522
Impaired Loans, Interest Income Recognized	738	1,909	1,957	2,715
Residential Home Today
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Average Recorded Investment	15,287	17,454	15,531	18,124
Impaired Loans, with No Related IVA, Interest Income Recognized	52	856	124	972
Impaired Loans, with an IVA, Average Recorded Investment	24,690	27,211	24,989	27,384
Impaired Loans, with an IVA, Interest Income Recognized	297	620	593	956
Impaired Loans, Average Recorded Investment	39,977	44,665	40,520	45,508
Impaired Loans, Interest Income Recognized	349	1,476	717	1,928
Home Equity Loans And Lines Of Credit
Financing Receivable, Impaired [Line Items]
Impaired Loans, with No Related IVA, Average Recorded Investment	22,292	20,071	22,089	20,059
Impaired Loans, with No Related IVA, Interest Income Recognized	120	99	224	173
Impaired Loans, with an IVA, Average Recorded Investment	26,713	21,633	26,439	21,329
Impaired Loans, with an IVA, Interest Income Recognized	173	144	627	275
Impaired Loans, Average Recorded Investment	49,005	41,704	48,528	41,388
Impaired Loans, Interest Income Recognized	$ 293	$ 243	$ 851	$ 448

XML

Loans And Allowance For Loan Losses (Schedule Of Recorded Investment In Troubled Debt Restructured Loans By Type Of Concession) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	$ 10,976	$ 9,342	$ 18,797	$ 15,154
Troubled debt restructuring, recorded investment	166,328		166,328		$ 165,391
Initial Restructuring
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	5,006	5,815	11,578	8,669
Troubled debt restructuring, recorded investment	93,545		93,545		91,276
Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	5,068	1,970	5,070	3,984
Troubled debt restructuring, recorded investment	44,407		44,407		44,162
Bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	902	1,557	2,149	2,501
Troubled debt restructuring, recorded investment	28,376		28,376		29,953
Residential Core
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	6,283	2,651	9,973	5,289
Troubled debt restructuring, recorded investment	85,341		85,341		84,213
Residential Core | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,713	374	5,479	1,371
Troubled debt restructuring, recorded investment	40,342		40,342		39,265
Residential Core | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,921	1,035	2,923	2,111
Troubled debt restructuring, recorded investment	23,935		23,935		23,116
Residential Core | Bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	649	1,242	1,571	1,807
Troubled debt restructuring, recorded investment	21,064		21,064		21,832
Residential Home Today
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,799	832	2,196	2,088
Troubled debt restructuring, recorded investment	38,715		38,715		40,409
Residential Home Today | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	172	233	444	442
Troubled debt restructuring, recorded investment	17,467		17,467		18,243
Residential Home Today | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	1,447	509	1,447	1,264
Troubled debt restructuring, recorded investment	17,671		17,671		18,483
Residential Home Today | Bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	180	90	305	382
Troubled debt restructuring, recorded investment	3,577		3,577		3,683
Home Equity Loans And Lines Of Credit
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,894	5,859	6,628	7,777
Troubled debt restructuring, recorded investment	42,272		42,272		40,769
Home Equity Loans And Lines Of Credit | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	2,121	5,208	5,655	6,856
Troubled debt restructuring, recorded investment	35,736		35,736		33,768
Home Equity Loans And Lines Of Credit | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	700	426	700	609
Troubled debt restructuring, recorded investment	2,801		2,801		2,563
Home Equity Loans And Lines Of Credit | Bankruptcy
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment	73	$ 225	273	$ 312
Troubled debt restructuring, recorded investment	$ 3,735		$ 3,735		$ 4,438

XML

Loans And Allowance For Loan Losses (Summary Of Troubled Debt Restructured Loans Restructured During the Period By Type Of Concession) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	$ 10,976	$ 9,342	$ 18,797	$ 15,154
Initial Restructuring
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	5,006	5,815	11,578	8,669
Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	5,068	1,970	5,070	3,984
Bankruptcy
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	902	1,557	2,149	2,501
Residential Core
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	6,283	2,651	9,973	5,289
Residential Core | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	2,713	374	5,479	1,371
Residential Core | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	2,921	1,035	2,923	2,111
Residential Core | Bankruptcy
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	649	1,242	1,571	1,807
Residential Home Today
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	1,799	832	2,196	2,088
Residential Home Today | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	172	233	444	442
Residential Home Today | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	1,447	509	1,447	1,264
Residential Home Today | Bankruptcy
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	180	90	305	382
Home Equity Loans And Lines Of Credit
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	2,894	5,859	6,628	7,777
Home Equity Loans And Lines Of Credit | Initial Restructuring
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	2,121	5,208	5,655	6,856
Home Equity Loans And Lines Of Credit | Multiple Restructurings
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	700	426	700	609
Home Equity Loans And Lines Of Credit | Bankruptcy
Financing Receivable, Modifications [Line Items]
Troubled debt restructured loans restructured in the period	$ 73	$ 225	$ 273	$ 312

XML

Loans And Allowance For Loan Losses (Schedule Of Troubled Debt Restructured Loans Restructured Within The Last 12 Months Which Defaulted) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019 USD ($) contracts	Mar. 31, 2018 USD ($) contracts	Mar. 31, 2019 USD ($) contracts	Mar. 31, 2018 USD ($) contracts
Financing Receivable, Modifications Within The Last 12 Months Which Defaulted [Line Items]
Number of contracts | contracts	48	35	49	39
Recorded investment | $	$ 4,287	$ 2,215	$ 4,320	$ 2,850
Residential Core
Financing Receivable, Modifications Within The Last 12 Months Which Defaulted [Line Items]
Number of contracts | contracts	16	9	16	12
Recorded investment | $	$ 2,661	$ 853	$ 2,661	$ 1,488
Residential Home Today
Financing Receivable, Modifications Within The Last 12 Months Which Defaulted [Line Items]
Number of contracts | contracts	21	19	22	19
Recorded investment | $	$ 895	$ 805	$ 928	$ 805
Home Equity Loans And Lines Of Credit
Financing Receivable, Modifications Within The Last 12 Months Which Defaulted [Line Items]
Number of contracts | contracts	11	7	11	8
Recorded investment | $	$ 731	$ 557	$ 731	$ 557

XML

Loans And Allowance For Loan Losses (Schedule Of Credit Quality Of Residential Loan Receivables By An Internally Assigned Grade) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	$ 12,925,289	$ 12,913,712
Residential Core
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	10,819,342	10,946,975
Residential Core | Pass
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	10,767,228	10,898,725
Residential Core | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	4,499	0
Residential Core | Substandard
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	47,615	48,250
Residential Core | Loss
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Residential Home Today
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	90,195	94,749
Residential Home Today | Pass
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	74,563	78,180
Residential Home Today | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Residential Home Today | Substandard
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	15,632	16,569
Residential Home Today | Loss
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Home Equity Loans And Lines Of Credit
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	1,990,507	1,841,827
Home Equity Loans And Lines Of Credit | Pass
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	1,961,826	1,813,502
Home Equity Loans And Lines Of Credit | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	3,662	4,216
Home Equity Loans And Lines Of Credit | Substandard
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	25,019	24,109
Home Equity Loans And Lines Of Credit | Loss
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Construction
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	22,452	27,140
Construction | Pass
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	22,452	27,140
Construction | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Construction | Substandard
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Construction | Loss
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	0	0
Total Real Estate Loans
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	12,922,496	12,910,691
Total Real Estate Loans | Pass
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	12,826,069	12,817,547
Total Real Estate Loans | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	8,161	4,216
Total Real Estate Loans | Substandard
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	88,266	88,928
Total Real Estate Loans | Loss
Financing Receivable, Recorded Investment [Line Items]
Real estate loans	$ 0	$ 0

XML

Loans And Allowance For Loan Losses (Loans Evaluated For Impairment Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment	$ 12,743,262	$ 12,732,918
Substandard
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment	2,061	4,051
Special Mention
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans collectively evaluated for impairment	$ 8,161	$ 4,216

XML

Loans And Allowance For Loan Losses (Schedule Of Activity In The Allowance For Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance			$ 42,418
Ending Balance	$ 40,286		40,286
Residential Core
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance	19,165	$ 13,546	18,288	$ 14,186
Provisions	(45)	(58)	864	(899)
Charge-offs	(299)	(195)	(542)	(587)
Recoveries	766	787	977	1,380
Ending Balance	19,587	14,080	19,587	14,080
Residential Home Today
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance	3,748	4,134	3,204	4,508
Provisions	(1,012)	(705)	(695)	(806)
Charge-offs	(85)	(288)	(326)	(963)
Recoveries	624	599	1,092	1,001
Ending Balance	3,275	3,740	3,275	3,740
Home Equity Loans And Lines Of Credit
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance	19,021	28,245	20,921	30,249
Provisions	(2,943)	(3,237)	(6,168)	(5,294)
Charge-offs	(475)	(1,619)	(1,318)	(3,155)
Recoveries	1,817	1,893	3,985	3,482
Ending Balance	17,420	25,282	17,420	25,282
Construction
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance	4	4	5	5
Provisions	0	0	(1)	(1)
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Ending Balance	4	4	4	4
Total Real Estate Loans
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning Balance	41,938	45,929	42,418	48,948
Provisions	(4,000)	(4,000)	(6,000)	(7,000)
Charge-offs	(859)	(2,102)	(2,186)	(4,705)
Recoveries	3,207	3,279	6,054	5,863
Ending Balance	$ 40,286	$ 43,106	$ 40,286	$ 43,106

XML

Deposits (Summary Of Deposit Account Balances) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Deposits [Abstract]
Checking accounts	$ 902,251	$ 913,525
Savings accounts	1,399,389	1,256,054
Certificates of deposit	6,426,710	6,318,281
Subtotal deposits	8,728,350	8,487,860
Accrued interest	4,440	3,723
Total deposits	$ 8,732,790	$ 8,491,583

XML

Deposits (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Deposits [Abstract]
Brokered certificates of deposit	$ 591,325	$ 670,081

XML

Borrowed Funds (Schedule of Federal Home Loan Bank Advances (FHLB) Borrowings) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Advances from Federal Home Loan Banks [Abstract]
Maturing in 12 months or less	$ 3,439,780
Maturing in 13 to 24 months	99,917
Maturing in 25 to 36 months	674
Maturing in 37 to 48 months	2,544
Maturing in 49 to 60 months	15,000
Over 60 months	24,461
Total FHLB Advances	3,582,376
Accrued interest	7,696
Total	$ 3,590,072	$ 3,721,699
Weighted Average Rate: 12 months or less	2.44%
Weighted Average Rate: 13 to 24 months	1.90%
Weighted Average Rate: 25 to 36 months	1.45%
Weighted Average Rate: 37 to 48 months	0.94%
Weighted Average Rate: 49 to 60 months	2.99%
Weighted Average Rate: Over 60 months	1.67%
Weighted Average Rate Total FHLB Advances	2.42%

XML

Borrowed Funds Borrowed Funds (Schedule of Federal Home Loan Bank Advances used in Swap Contracts (Details) $ in Thousands	Mar. 31, 2019 USD ($)
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 3,439,780
FHLB advances under SWAP contracts, average interest rate	2.44%
Interest Rate Swap
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 2,225,000
FHLB advances under SWAP contracts, average interest rate	1.98%
Interest Rate Swap | Effective Maturity 12 months or less
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 50,000
FHLB advances under SWAP contracts, average interest rate	1.23%
Interest Rate Swap | Effective Maturity 13 to 24 months
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 225,000
FHLB advances under SWAP contracts, average interest rate	1.28%
Interest Rate Swap | Effective Maturity 25 to 36 months
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 675,000
FHLB advances under SWAP contracts, average interest rate	1.58%
Interest Rate Swap | Effective Maturity 37 to 48 months
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 650,000
FHLB advances under SWAP contracts, average interest rate	1.92%
Interest Rate Swap | Effective Maturity 49 to 60 months
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 125,000
FHLB advances under SWAP contracts, average interest rate	2.87%
Interest Rate Swap | Effective Maturity Over 60 months
FHLB Short-term Debt [Line Items]
FHLB advances maturing in 12 months or less with effective maturities	$ 500,000
FHLB advances under SWAP contracts, average interest rate	2.76%

XML

Borrowed Funds (Narrative) (Federal Home Loan Bank Advances) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2017
FHLB Short-term Debt [Line Items]
Fixed-rate FHLB advances repaid during fiscal year 2016			$ 150,000
Unamortized deferred repayment penalties being recognized over the remaining term of swap contracts	$ 804
Federal Home Loan Bank Advances
FHLB Short-term Debt [Line Items]
Net Interest Expense, Short-term Borrowings	$ 28,827	$ 20,128

XML

Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Reclassification out of Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax benefit	$ 782	$ (75)	$ 1,329	$ (476)
Accumulated other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax	$ (3,282)	$ 4,357	$ (8,440)	$ 7,361

XML

Other Comprehensive Income (Loss) (Accumulated Other Comprehensive Income (Loss) by Component) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance		$ 1,743,780	$ 1,700,678	$ 1,758,404	$ 1,689,959
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		(2,941)	235	(4,999)	1,265
Other comprehensive income (loss)		(15,291)	16,607	(36,752)	22,147
Balance		1,735,985	1,729,795	1,735,985	1,729,795
Unrealized gain (losses) on securities available for sale
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance		(8,527)	(7,185)	(13,624)	(2,915)
Other comprehensive loss before reclassifications, net of tax		3,381	(3,262)	8,478	(6,259)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		0	0	0	0
Other comprehensive income (loss)		3,381	(3,262)	8,478	(6,259)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect				0	(1,273)
Balance		(5,146)	(10,447)	(5,146)	(10,447)
Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance		25,092	22,834	51,914	10,249
Other comprehensive loss before reclassifications, net of tax		(15,731)	19,634	(40,231)	27,099
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		(3,205)	(82)	(5,527)	713
Other comprehensive income (loss)		(18,936)	19,552	(45,758)	27,812
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect				0	4,325
Balance		6,156	42,386	6,156	42,386
Defined Benefit Plan
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance		(14,804)	(17,643)	(15,068)	(14,826)
Other comprehensive loss before reclassifications, net of tax		0	0	0	0
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		264	317	528	594
Other comprehensive income (loss)		264	317	528	594
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect				0	(3,094)
Balance		(14,540)	(17,326)	(14,540)	(17,326)
Total
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance		1,761	(1,994)	23,222	(7,492)
Other comprehensive loss before reclassifications, net of tax		(12,350)	16,372	(31,753)	20,840
Amounts reclassified from accumulated other comprehensive income (loss), net of tax		(2,941)	235	(4,999)	1,307
Other comprehensive income (loss)		(15,291)	16,607	(36,752)	22,147
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect	[1]	0	0	0	(42)
Balance		$ (13,530)	$ 14,613	$ (13,530)	$ 14,613

[1] This item is a reclassification between Accumulated Other Comprehensive Income and Retained Earnings due to the adoption of ASU 2018-02 in fiscal year 2018.

XML

Other Comprehensive Income (Loss) (Reclassification out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense (benefit)		$ 5,810	$ 7,312	$ 11,985	$ 19,755
Net of income tax expense (benefit)		(19,724)	(23,014)	(39,927)	(42,384)
Reclassification net of tax		(2,941)	235	(4,999)	1,265
Cash Flow Hedges
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect				0	4,325
Reclassification net of tax		(3,205)	(82)	(5,527)	713
Actuarial Loss
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Actuarial loss	[1]	334	419	668	839
Defined Benefit Plan
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense (benefit)		(70)	(102)	(140)	(245)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect				0	(3,094)
Reclassification net of tax		264	317	528	594
Accumulated other comprehensive income (loss)
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings,Tax Effect	[2]	0	0	0	(42)
Reclassification net of tax		(2,941)	235	(4,999)	1,307
Reclassification out of Accumulated Other Comprehensive Income
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense (benefit)		(782)	75	(1,329)	476
Reclassification out of Accumulated Other Comprehensive Income | Cash Flow Hedges
Reclassification out of Accumulated Other Comprehensive Income (Loss) [Line Items]
Interest (income) expense, effective portion		(4,057)	(109)	(6,996)	944
Income tax expense (benefit)		852	27	1,469	(231)
Net of income tax expense (benefit)		$ (3,205)	$ (82)	$ (5,527)	$ 713

[1] This item is included in the computation of net periodic pension cost. See Note 9. Defined Benefit Plan for additional disclosure.

[2] This item is a reclassification between Accumulated Other Comprehensive Income and Retained Earnings due to the adoption of ASU 2018-02 in fiscal year 2018.

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Federal Corporate Tax Rate			35.00%	21.00%
Effective income tax rate	22.40%	23.90%		22.90%	31.50%	24.53%
Additional tax expense from remeasurement of Deferred Tax Assets from Tax Cuts and Jobs Act of 2017				$ 34	$ 4,644

XML

Defined Benefit Plan (Components Of Net Periodic Benefit Cost Recognized) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Retirement Benefits [Abstract]
Interest cost	$ 807	$ 774	$ 1,614	$ 1,548
Expected return on plan assets	(1,146)	(1,035)	(2,292)	(2,071)
Amortization of net loss	334	419	668	839
Net periodic cost (benefit)	$ (5)	$ 158	$ (10)	$ 316

XML

Defined Benefit Plan (Narrative) (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2019 USD ($)
Retirement Benefits [Abstract]
Required minimum contribution	$ 0
Minimum employer contributions expected during the remainder of the fiscal year.	$ 0

XML

Equity Incentive Plan (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		6 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to options (in shares)	4,696,462		4,696,462
Weighted average exercise price per share	$ 13.82		$ 13.82
Weighted average grant date fair value (in dollars per share)	$ 2.64
Non-vested options outstanding	928,594		928,594
Expected future expense related to non-vested options outstanding	$ 1,014		$ 1,014
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares approved restricted stock units		138,400
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares approved restricted stock units		64,500
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected future expense related to non-vested options outstanding, weighted average years			1 year 4 months 24 days
Restricted and Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected future expense related to non-vested options outstanding, weighted average years	2 years
Restricted stock units, non-vested	649,213		649,213
Restricted stock units, non-vested, weighted average grant date fair value (in dollars per share)	$ 15.14		$ 15.14
Restricted stock units outstanding	1,414,961		1,414,961
Expected future compensation expense related to restricted stock units outstanding	$ 5,975		$ 5,975

XML

Equity Incentive Plan Equity Incentive Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based Compensation Expense	$ 1,146	$ 1,647	$ 2,227	$ 2,525
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based Compensation Expense	200	344	437	657
Restricted and Performance Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based Compensation Expense	$ 946	$ 1,303	$ 1,790	$ 1,868

XML

Commitments And Contingent Liabilities (Narrative) (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2019 USD ($)
Unfunded Commitments, Equity Lines of Credit Including Suspended Accounts
Unfunded And Commitments To Originate [Line Items]
Unfunded commitments on home equity lines of credit (including commitments for suspended accounts)	$ 1,923,807
Minimum
Unfunded And Commitments To Originate [Line Items]
Fixed expiration of commitments to extend credit (in days)	60 days
Home equity line of credit unfunded commitments expiration, years	5 years
Maximum
Unfunded And Commitments To Originate [Line Items]
Fixed expiration of commitments to extend credit (in days)	360 days
Home equity line of credit unfunded commitments expiration, years	10 years

XML

Commitments And Contingent Liabilities (Schedule of Off Balance Sheet Risks) (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Commitments To Originate
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	$ 499,572
Commitments To Originate Fixed-Rate Mortgage Loans
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	151,454
Commitments To Originate Adjustable-Rate Mortgage Loans
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	161,569
Commitments To Originate Equity Loans and Lines of Credit Including Bridge Loans
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	186,549
Unfunded Commitments
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	1,947,719
Unfunded Commitments Equity Lines of Credit
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	1,911,089
Unfunded Commitments Construction Loans
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	25,089
Unfunded Commitments Limited Partner Investments
Commitments And Contingencies Off-balance Sheet Risks, Disclosure Information [Line Items]
Total	$ 11,541

XML

Fair Value (Narrative) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held for sale	$ 1,041	$ 661
Available-for-sale Securities	574,572	531,965
Performing troubled debt restructurings individually evaluated for impairment	182,027	180,794
Allowance on performing troubled debt restructurings individually evaluated for impairment based on the present value of cash flows	12,940	12,087
Real estate owned	2,898	2,794
Cost to dispose related to properties measured at fair value included in Consolidated Statements of Condition	266	132
Present Value of Cash Flows | Troubled Debt Restructuring | Performing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Allowance on performing troubled debt restructurings individually evaluated for impairment based on the present value of cash flows	12,714	12,002
Subject To Pending Agency Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held for sale	0	0
Portion at Other than Fair Value | Present Value of Cash Flows | Troubled Debt Restructuring | Performing
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Performing troubled debt restructurings individually evaluated for impairment	103,435	98,459
Allowance on performing troubled debt restructurings individually evaluated for impairment based on the present value of cash flows	12,714	12,002
Portion at Other than Fair Value | Original Or Adjusted Cost Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	1,467	1,688
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held for sale	1,041	661
Available-for-sale Securities	574,572	531,965
Fair Value, Inputs, Level 2 | Portion at Other than Fair Value | Carried At Cost
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held for sale	1,016	659
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held for sale	0	0
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities carried at fair value	0	2
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities carried at fair value		0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | U.S. Treasury notes and collateralized mortgage obligations | Market Approach Valuation Technique
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	574,572	531,965
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities carried at fair value		2
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | Market Approach Valuation Technique
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real estate owned	$ 1,698	$ 1,238

XML

Fair Value (Fair Value Of Assets And Liabilities Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Assets:
Available-for-sale Securities	$ 574,572	$ 531,965
Derivative	141
Liabilities:
Derivative		2
REMIC's
Assets:
Available-for-sale Securities	562,837	519,999
Fannie Mae Certificates
Assets:
Available-for-sale Securities	7,746	7,998
U.S. Government obligation
Assets:
Available-for-sale Securities	3,989	3,968
Quoted Prices In Active Markets For Identical Assets (Level 1)
Assets:
Available-for-sale Securities	0	0
Derivative	0
Liabilities:
Derivative		0
Significant Other Observable Inputs (Level 2)
Assets:
Available-for-sale Securities	574,572	531,965
Derivative	0
Liabilities:
Derivative		0
Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale Securities	0	0
Derivative	141
Liabilities:
Derivative		2
Fair Value, Measurements, Recurring
Assets:
Total	574,713	531,965
Liabilities:
Total	0	2
Fair Value, Measurements, Recurring | Interest Rate Lock Commitments
Liabilities:
Derivative		2
Fair Value, Measurements, Recurring | Interest Rate Lock Commitments
Assets:
Derivative	141
Fair Value, Measurements, Recurring | REMIC's
Assets:
Available-for-sale Securities	562,837	519,999
Fair Value, Measurements, Recurring | Fannie Mae Certificates
Assets:
Available-for-sale Securities	7,746	7,998
Fair Value, Measurements, Recurring | U.S. Government obligation
Assets:
Available-for-sale Securities	3,989	3,968
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1)
Assets:
Total	0	0
Liabilities:
Total		0
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1) | Interest Rate Lock Commitments
Liabilities:
Derivative		0
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1) | Interest Rate Lock Commitments
Assets:
Derivative	0
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1) | REMIC's
Assets:
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1) | Fannie Mae Certificates
Assets:
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets For Identical Assets (Level 1) | U.S. Government obligation
Assets:
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)
Assets:
Total	574,572	531,965
Liabilities:
Total		0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Interest Rate Lock Commitments
Liabilities:
Derivative		0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Interest Rate Lock Commitments
Assets:
Derivative	0
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | REMIC's
Assets:
Available-for-sale Securities	562,837	519,999
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Fannie Mae Certificates
Assets:
Available-for-sale Securities	7,746	7,998
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government obligation
Assets:
Available-for-sale Securities	3,989	3,968
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3)
Assets:
Total	141	0
Liabilities:
Total		2
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Interest Rate Lock Commitments
Liabilities:
Derivative		2
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Interest Rate Lock Commitments
Assets:
Derivative	141
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | REMIC's
Assets:
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Fannie Mae Certificates
Assets:
Available-for-sale Securities	0	0
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | U.S. Government obligation
Assets:
Available-for-sale Securities	$ 0	$ 0

XML

Fair Value (Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation) (Details) - Fair Value, Inputs, Level 3 - Interest Rate Lock Commitments - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 77	$ 28	$ (2)	$ 58
Gain (loss) during the period due to changes in fair value:
Ending balance	141	(2)	141	(2)
Change in unrealized gains for the period included in earnings for assets held at the end of the reporting date	141	(2)	141	(2)
Other Income
Gain (loss) during the period due to changes in fair value:
Included in other non-interest income	$ 64	$ (30)	$ 143	$ (60)

XML

Fair Value (Assets Measured At Fair Value On A Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands		Mar. 31, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		$ 83,217	$ 83,488
Impaired Loans, Net of Allowance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		81,519	82,250
Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	[1]	1,698	1,238
Quoted Prices In Active Markets For Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		0	0
Quoted Prices In Active Markets For Identical Assets (Level 1) | Impaired Loans, Net of Allowance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		0	0
Quoted Prices In Active Markets For Identical Assets (Level 1) | Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	[1]	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		0	0
Significant Other Observable Inputs (Level 2) | Impaired Loans, Net of Allowance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		0	0
Significant Other Observable Inputs (Level 2) | Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	[1]	0	0
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		83,217	83,488
Significant Unobservable Inputs (Level 3) | Impaired Loans, Net of Allowance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		81,519	82,250
Significant Unobservable Inputs (Level 3) | Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	[1]	$ 1,698	$ 1,238

[1] (1) Amounts represent fair value measurements of properties before deducting estimated costs to dispose.

XML

Fair Value (Quantitative Information About Significant Unobservable Inputs Categorized Within Level 3 Of The Fair Value Hierarchy) (Details) - Fair Value, Inputs, Level 3 $ in Thousands	Mar. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)
Discounted Market Comparable Of Collateral | Measurement Input, Discounted Appraised Value | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, impaired loans, net of allowance	0	0
Discounted Market Comparable Of Collateral | Measurement Input, Discounted Appraised Value | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, impaired loans, net of allowance	0.28	0.28
Discounted Market Comparable Of Collateral | Measurement Input, Discounted Appraised Value | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, impaired loans, net of allowance	0.056	0.064
Discounted Market Comparable Of Collateral | Measurement Input, Discounted Appraised Value | Impaired Loans, Net of Allowance
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value		$ 82,250
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities, fair value		$ (2)
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments		0
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments		1.00
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments		0.500
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets, fair value	$ 141
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments	0
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments	1.00
Secondary Market Pricing | Measurement Input, Closure Rate | Interest Rate Lock Commitments | Weighted Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input, interest rate lock commitments	0.486

XML

Fair Value (Estimated Fair Value Of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Assets:
Available-for-sale Securities	$ 574,572	$ 531,965
Mortgage loans held for sale	1,041	661
Loans, net:
Federal Home Loan Bank stock	93,544	93,544
Cash collateral received from or held by counterparty	26,168	13,794
Derivative	141
Liabilities:
Borrowed funds	3,595,253	3,724,020
Derivative Liability		2
Checking and Passbook Accounts
Liabilities:
Deposits	2,301,640	2,169,579
Certificates of Deposit
Liabilities:
Deposits	6,414,001	6,006,951
Borrowers' Advances for insurance and Taxes
Liabilities:
Other Liabilities	88,839	103,005
Principal, Interest, And Escrow Owed On Loans Serviced
Liabilities:
Other Liabilities	29,561	31,490
Cash and Due From Banks
Assets:
Cash and Cash Equivalents	29,055	29,056
Interest Earning Cash Equivalents
Assets:
Cash and Cash Equivalents	230,185	240,719
Mortgage Receivable
Loans, net:
Loans, net	13,209,129	12,908,729
Other Loans
Loans, net:
Loans, net	2,879	3,045
Accrued Interest Receivable
Loans, net:
Accrued interest receivable	40,071	38,696
Fair Value, Inputs, Level 1
Assets:
Available-for-sale Securities	0	0
Mortgage loans held for sale	0	0
Loans, net:
Cash collateral received from or held by counterparty	26,168	13,794
Derivative	0
Liabilities:
Borrowed funds	0	0
Derivative Liability		0
Fair Value, Inputs, Level 1 | Checking and Passbook Accounts
Liabilities:
Deposits	0	0
Fair Value, Inputs, Level 1 | Certificates of Deposit
Liabilities:
Deposits	0	0
Fair Value, Inputs, Level 1 | Borrowers' Advances for insurance and Taxes
Liabilities:
Other Liabilities	0	0
Fair Value, Inputs, Level 1 | Principal, Interest, And Escrow Owed On Loans Serviced
Liabilities:
Other Liabilities	0	0
Fair Value, Inputs, Level 1 | Cash and Due From Banks
Assets:
Cash and Cash Equivalents	29,055	29,056
Fair Value, Inputs, Level 1 | Interest Earning Cash Equivalents
Assets:
Cash and Cash Equivalents	230,185	240,719
Fair Value, Inputs, Level 1 | Mortgage Receivable
Loans, net:
Loans, net	0	0
Fair Value, Inputs, Level 1 | Other Loans
Loans, net:
Loans, net	0	0
Fair Value, Inputs, Level 1 | Accrued Interest Receivable
Loans, net:
Accrued interest receivable	0	0
Fair Value, Inputs, Level 2
Assets:
Available-for-sale Securities	574,572	531,965
Mortgage loans held for sale	1,041	661
Loans, net:
Federal Home Loan Bank stock	0	0
Cash collateral received from or held by counterparty	0	0
Derivative	0
Liabilities:
Borrowed funds	3,595,253	3,724,020
Derivative Liability		0
Fair Value, Inputs, Level 2 | Checking and Passbook Accounts
Liabilities:
Deposits	2,301,640	2,169,579
Fair Value, Inputs, Level 2 | Certificates of Deposit
Liabilities:
Deposits	6,414,001	6,006,951
Fair Value, Inputs, Level 2 | Borrowers' Advances for insurance and Taxes
Liabilities:
Other Liabilities	88,839	103,005
Fair Value, Inputs, Level 2 | Principal, Interest, And Escrow Owed On Loans Serviced
Liabilities:
Other Liabilities	29,561	31,490
Fair Value, Inputs, Level 2 | Cash and Due From Banks
Assets:
Cash and Cash Equivalents	0	0
Fair Value, Inputs, Level 2 | Interest Earning Cash Equivalents
Assets:
Cash and Cash Equivalents	0	0
Fair Value, Inputs, Level 2 | Mortgage Receivable
Loans, net:
Loans, net	0	0
Fair Value, Inputs, Level 2 | Other Loans
Loans, net:
Loans, net	0	0
Fair Value, Inputs, Level 2 | Accrued Interest Receivable
Loans, net:
Accrued interest receivable	40,071	38,696
Fair Value, Inputs, Level 3
Assets:
Available-for-sale Securities	0	0
Mortgage loans held for sale	0	0
Loans, net:
Federal Home Loan Bank stock	0	0
Cash collateral received from or held by counterparty	0	0
Derivative	141
Liabilities:
Borrowed funds	0	0
Derivative Liability		2
Fair Value, Inputs, Level 3 | Checking and Passbook Accounts
Liabilities:
Deposits	0	0
Fair Value, Inputs, Level 3 | Certificates of Deposit
Liabilities:
Deposits	0	0
Fair Value, Inputs, Level 3 | Borrowers' Advances for insurance and Taxes
Liabilities:
Other Liabilities	0	0
Fair Value, Inputs, Level 3 | Principal, Interest, And Escrow Owed On Loans Serviced
Liabilities:
Other Liabilities	0	0
Fair Value, Inputs, Level 3 | Cash and Due From Banks
Assets:
Cash and Cash Equivalents	0	0
Fair Value, Inputs, Level 3 | Interest Earning Cash Equivalents
Assets:
Cash and Cash Equivalents	0	0
Fair Value, Inputs, Level 3 | Mortgage Receivable
Loans, net:
Loans, net	13,209,129	12,908,729
Fair Value, Inputs, Level 3 | Other Loans
Loans, net:
Loans, net	2,879	3,045
Fair Value, Inputs, Level 3 | Accrued Interest Receivable
Loans, net:
Accrued interest receivable	0	0
Carrying Amount
Assets:
Available-for-sale Securities	574,572	531,965
Mortgage loans held for sale	1,016	659
Loans, net:
Federal Home Loan Bank stock	93,544	93,544
Cash collateral received from or held by counterparty	26,168	13,794
Derivative	141
Liabilities:
Borrowed funds	3,590,072	3,721,699
Derivative Liability		2
Carrying Amount | Checking and Passbook Accounts
Liabilities:
Deposits	2,301,640	2,169,579
Carrying Amount | Certificates of Deposit
Liabilities:
Deposits	6,431,150	6,322,004
Carrying Amount | Borrowers' Advances for insurance and Taxes
Liabilities:
Other Liabilities	88,839	103,005
Carrying Amount | Principal, Interest, And Escrow Owed On Loans Serviced
Liabilities:
Other Liabilities	29,561	31,490
Carrying Amount | Cash and Due From Banks
Assets:
Cash and Cash Equivalents	29,055	29,056
Carrying Amount | Interest Earning Cash Equivalents
Assets:
Cash and Cash Equivalents	230,185	240,719
Carrying Amount | Mortgage Receivable
Loans, net:
Loans, net	12,882,210	12,868,273
Carrying Amount | Other Loans
Loans, net:
Loans, net	2,793	3,021
Carrying Amount | Accrued Interest Receivable
Loans, net:
Accrued interest receivable	$ 40,071	$ 38,696

XML

Derivative Instruments (Narrative) (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) contracts	Sep. 30, 2018 USD ($)
Derivative [Line Items]
Estimated amount to be reclassed in the next 12 months as an increase to expense	$ 11,720
Forward Commitments For Sale Of Mortgage Loans | Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative, number of instruments held | contracts	0
Interest Rate Lock Commitments | Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value	$ 141	$ (2)
Cash Flow Hedge | Interest Rate Swap | Designated as Hedging Instrument
Derivative [Line Items]
Derivative, weighted average terms	3 years 9 months 18 days	3 years 3 months 26 days
Derivative, weighted average fixed-rate interest payments	1.98%	1.75%
Fair Value	$ 0	$ 0

XML

Derivative Instruments (Schedule Of Derivative Instruments In Statement Of Financial Position, Fair Value) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Not Designated as Hedging Instrument | Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Notional Value	$ 8,184	$ 4,248
Fair Value	141	(2)
Other Assets | Not Designated as Hedging Instrument | Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Notional Value	8,184	0
Fair Value	141	0
Other Liabilities | Not Designated as Hedging Instrument | Interest Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Notional Value	0	4,248
Fair Value	0	2
Cash Flow Hedge | Designated as Hedging Instrument | Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional Value	2,225,000	1,725,000
Fair Value	0	0
Cash Flow Hedge | Other Assets | Designated as Hedging Instrument | Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional Value	1,600,000	1,725,000
Fair Value	0	0
Cash Flow Hedge | Other Liabilities | Designated as Hedging Instrument | Interest Rate Swap
Derivatives, Fair Value [Line Items]
Notional Value	625,000	0
Fair Value	$ 0	$ 0

XML

Derivative Instruments (Schedule Of Effect Of Derivative Instruments, Gain (Loss) In Statement Of Financial Performance) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Designated as Hedging Instrument | Cash Flow Hedge | Interest Expense
Derivatives, Fair Value [Line Items]
Amount of gain/(loss) reclassified from AOCI	$ 4,057	$ 109	$ 6,996	$ (944)
Designated as Hedging Instrument | Cash Flow Hedge | Other Comprehensive Income (Loss)
Derivatives, Fair Value [Line Items]
Amount of Gain (Loss) Recognized, Effective Portion	(19,912)	24,858	(50,925)	36,941
Not Designated as Hedging Instrument | Interest Rate Lock Commitments | Other Income
Derivatives, Fair Value [Line Items]
Total	$ 64	$ (30)	$ 143	$ (60)

XML

Recent Accounting Pronouncements Recent Accounting Pronouncements (Disaggregation of Revenue) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Revenue/(Loss) from Contract with Customer, Excluding Assessed Tax		$ (37)	$ (29)	$ 417	$ 223
Non-Interest Expense | Net Gain/(Loss) from Sale of REO
Disaggregation of Revenue [Line Items]
Revenue/(Loss) from Contract with Customer, Excluding Assessed Tax	[1]	(249)	(256)	(26)	(234)
Non-Interest Income | Deposit Account and Other Banking Income
Disaggregation of Revenue [Line Items]
Revenue/(Loss) from Contract with Customer, Excluding Assessed Tax		$ 212	$ 227	$ 443	$ 457

[1] (1) Net gain/(loss) from sales of real estate owned (REO) is located in non-interest expense in the consolidated statements of income because the gains and losses from the sales of REO assets are netted together with real estate owned expenses (which includes associated legal and maintenance expenses).