Marathon Bancorp, Inc. /MD/

Previous wording

This quarterly report contains certain forward-looking statements, which are included pursuant to the “safeharbor” provisions of the Private Securities Litigation Reform Act of 1995, and reflect management’s beliefs and expectations based on information currently available. These forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “potential,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

Current wording

This quarterly report contains certain forward-looking statements, which are included pursuant to the “safeharbor” provisions of the Private Securities Litigation Reform Act of 1995, and reflect management’s beliefs and expectations based on information currently available. These forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “potential,” “target” and words of similar meaning, include, but are not limited to:

Previous wording

Provision for (Recovery of) Income Taxes. Our income tax expense (recovery) is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.

Current wording

Provision for Income Taxes. Our income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.

Previous wording

for the difference between the carrying value of the loan and the estimated net realizable value or fair value of the collateral, if collateral dependent, when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance.

Current wording

Allowance for Credit Losses. We establish the allowance for credit losses through charges (credits) to earnings in the form of a provision for (recovery of) credit losses. Loan losses are charged against the allowance for credit losses for the difference between the carrying value of the loan and the estimated net realizable value or fair value of the collateral, if collateral dependent, when management believes that the collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance.

Previous wording

Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. In addition, management’s estimate of expected credit losses is based on the discounted cash flows over the remaining life of loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses.

Current wording

Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. In addition, management’s estimate of expected credit losses is based on the weighted-average remaining maturity of loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses.

Previous wording

Changes in the Wisconsin unemployment rate, the Wisconsin annual housing price index and the Wisconsin annual gross domestic product could have a material impact on the model’s estimation of the allowance for credit losses. Marathon Bank’s methodology for maintaining its allowance for credit losses includes various levels within each of the aforementioned criteria. Set forth below is a hypothetical change to the next level within Marathon Bank’s allowance calculation. Changing these levels as of March 31, 2025, from those actually used on March 31, 2025 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $126,000, or 7.8%.

Current wording

Changes in the Wisconsin unemployment rate, the Wisconsin annual housing price index and the Wisconsin annual gross domestic product could have a material impact on the model’s estimation of the allowance for credit losses. Marathon Bank’s methodology for maintaining its allowance for credit losses includes various levels within each of the aforementioned criteria. Set forth below is a hypothetical change to the next level within Marathon Bank’s allowance calculation. Changing these levels as of September 30, 2025, from those actually used on September 30, 2025 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $108,000, or 6.3%.

Previous wording

Provision for (Recovery of) Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Current wording

Provision for Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Previous wording

securities available for sale of $1.4 million, or 21.4%. The remaining asset categories showed no significant changes when comparing March 31, 2025 with June 30, 2024.

Current wording

Total Assets. Total assets increased $7.2 million, or 3.0%, to $246.0 million at September 30, 2025 from $238.8 million at June 30, 2025. The increase was primarily due to an increase in loans, net of $5.5 million, or 2.7% and an increase in cash and cash equivalents of $1.1 million, or 7.5%. The remaining asset categories showed no significant changes when comparing September 30, 2025 with June 30, 2025 with the exception of interest earning deposits in other financial institutions which increased by $581,000, or 244.9% due to the reasons discussed in the following section under Cash and Cash Equivalents.

Previous wording

Foreclosed Assets. Foreclosed assets, net remained unchanged at $1.4 million when comparing March 31, 2025 with June 30, 2024.

Current wording

Foreclosed Assets. Foreclosed assets, net remained unchanged at $996,000 when comparing September 30, 2025 with June 30, 2025.

Previous wording

Stockholders’ Equity. Total stockholders’ equity increased by $659,000 when comparing March 31, 2025 with June 30, 2024 due to net income of $374,000 and a decrease in accumulated other comprehensive loss, net of taxes of $176,000 resulting from an increase in the fair market value of the debt securities available for sale portfolio due to favorable changes in market interest rates.

Current wording

Stockholders’ Equity. Total stockholders’ equity increased by $572,000 to $46.3 million when comparing September 30, 2025 with June 30, 2025 primarily due to net income of $444,000.

Previous wording

The following tables set forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans, if applicable, are included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. Loan balances include loans held for sale.

Current wording

The following table sets forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans, if applicable, are included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. Loan balances include loans held for sale.

Previous wording

General*.*Net income was $148,000 for the three months ended March 31, 2025, an increase of $780,000, or 123.5%, from a net loss of $631,000 for the three months ended March 31, 2024. The increase in net income was primarily attributable to a decrease in non-interest expenses of $991,000, an increase in net interest income of $58,000 and an increase in non-interest income of $60,000. These increases were offset by a decrease in the provision for (recovery of) credit losses of $80,000 from a recovery of credit losses of $122,000 for the three months ended March 31, 2024 to a recovery of credit losses of $42,000 for the three months ended March 31, 2025 and an increase in the provision for (recovery of) income taxes of $248,000.

Current wording

General*.*Net income was $444,000 for the three months ended September 30, 2025, an increase of $269,000, or 154.0%, from net income of $175,000 for the three months ended September 30, 2024. The increase in net income was primarily attributable to an increase in net interest income of $533,000. This increase was offset by a decrease in the recovery of credit losses of $115,000, from a recovery of credit losses of $155,000 for the three months ended September 30, 2024 to a recovery of credit losses of $40,000 for the three months ended September 30, 2025, and a slight increase in non-interest expenses of $82,000.

Previous wording

Interest Income**.**Interest income decreased by $215,000, or 3.0%, to $6.9 million for the nine months ended March 31, 2025 as compared to $7.1 million for the nine months ended March 31, 2024 primarily due to a decrease in loan interest income and debt securities income of $253,000 and $35,000, respectively. Offsetting these decreases was an increase in other interest income of $72,000.

Current wording

Interest Income**.**Interest income increased by $563,000, or 24.4%, to $2.9 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 primarily due to an increase in loan interest income of $545,000.

Previous wording

offset by a decrease in the average balance of the loan portfolio. The average yield on the loan portfolio increased by 32 basis points from 4.53% for the three months ended March 31, 2024 to 4.85% for the three months ended March 31, 2025. The average balance of the loan portfolio decreased by $10.4 million, or 5.4%, to $182.2 million for the three months ended March 31, 2025 from $192.6 million for the three months ended March 31, 2024. The increase in the average yield on the loan portfolio was the result of higher interest rates. The decrease in the average balance of the loan portfolio was primarily related to repayments exceeding new loan growth.

Current wording

Loan interest income increased by $545,000, or 26.3%, to $2.6 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, due to an increase in the average yield on loans and an increase in the average balance of loans. The average yield on the loan portfolio increased by 59 basis points from 4.66% for the three months ended September 30, 2024 to 5.25% for the three months ended September 30, 2025. The average balance of the loan portfolio increased by $22.2 million, or 12.3%, to $201.9 million for the three months ended September 30, 2025 from $179.7 million for the three months ended September 30, 2024. The increase in the average yield on the loan portfolio was the result of higher interest rates on new loan originations. The increase in the average balance of the loan portfolio was primarily related to new loan growth.

Previous wording

Debt securities interest income decreased by $11,000, or 21.8%, to $39,000 for the three months ended March 31, 2025 from $50,000 for the three months ended March 31, 2024 due to a decrease of $1.6 million in the average balance of debt securities to $5.9 million for the three months ended March 31, 2025 from $7.6 million for the three months ended March 31, 2024. Offsetting the decrease in average balance, was a one basis point increase in the average yield on the debt securities portfolio to 2.69% for the three months ended March 31, 2025 from 2.68% for the three months ended March 31, 2024 as a result of the higher interest rate environment. The average balance of debt securities continued to decrease as a result of securities calls and paydowns.

Current wording

Debt securities interest income increased by $11,000, or 23.9%, to $57,000 for the three months ended September 30, 2025 from $46,000 for the three months ended September 30, 2024 due to an increase in the average yield on the debt securities portfolio of 145 basis points to 4.05% for the three months ended September 30, 2025 which was offset by a decrease of $1.4 million in the average balance of debt securities to $5.7 million for the three months ended September 30, 2025 from $7.1 million for the three months ended September 30, 2024. The increase in the average yield on the debt securities portfolio was due to a $1.0 million floating rate corporate bond that was called in October 2025 that had a coupon rate of 10.17% for the last three months prior to being called. It was purchased in May 2021. The average balance of debt securities continued to decrease as a result of securities calls and paydowns.

Previous wording

Interest paid on FHLB borrowings decreased $100,000, from $212,000 for the three months ended March 31, 2024 to $112,000 for the three months ended March 31, 2025. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $9.8 million to $11.9 million for the three months ended March 31, 2025 from $21.7 million for the three months ended March 31, 2024 as a result of repayments of borrowings. The average rate paid on borrowings decreased slightly from 3.99% for the three months ended March 31, 2024 to 3.87% for the three months ended March 31, 2025 due to a decrease in the federal funds rate.

Current wording

Interest paid on FHLB borrowings increased $19,000, from $121,000 for the three months ended September 30, 2024 to $140,000 for the three months ended September 30, 2025. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $3.4 million to $15.0 million for the three months ended September 30, 2025 from $11.6 million for the three months ended September 30, 2024. The average rate paid on borrowings decreased slightly from 4.19% for the three months ended September 30, 2024 to 3.75% for the three months ended September 30, 2025 due to a decrease in the federal funds rate.

Previous wording

Net Interest Income. Net interest income increased by $58,000, or 4.1%, to $1.5 million for the three months ended March 31, 2025 from $1.4 million for the three months ended March 31, 2024. Net interest rate spread increased by 25 basis points to 2.64% for the three months ended March 31, 2025 from 2.39% for the three months ended March 31, 2024, reflecting a 24 basis points increase in the average yield on interest-earning assets and a one basis point decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 2.97% for the three months ended March 31, 2025 from 2.73% for the three months ended March 31, 2024. The increase in the average yield on interest earning assets for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to an increase in the average yield of all interest-earning asset categories (with the exception of cash and cash equivalents which decreased by 146 basis points due to a drop in the federal funds rate) related to the increase in market interest rates over the past year and an increase in the percentage of commercial real estate loans making up the total loan portfolio which generally carry higher interest rates then the categories of other loans. Net interest-earning assets decreased by $1.8 million, or 4.9%, to $34.1 million for the three months ended March 31, 2025 from $35.9 million for the three months ended March 31, 2024.

Current wording

Net Interest Income. Net interest income increased by $533,000, or 37.5%, to $2.0 million for the three months ended September 30, 2025 from $1.4 million for the three months ended September 30, 2024. Net interest rate spread increased by 56 basis points to 3.05% for the three months ended September 30, 2025 from 2.49% for the three months ended September 30, 2024, reflecting a 50 basis points increase in the average yield on interest-earning assets and a six basis points decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 3.49% for the three months ended September 30, 2025 from 2.85% for the three months ended September 30, 2024. The increase in the average yield on interest earning assets for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily due to an increase in the average yield of all interest-earning asset categories (with the exception of cash and cash equivalents which decreased by 114 basis points due to a drop in the federal funds rate) related to the increase in market interest rates over the past year and an increase in the percentage of commercial and multi-family real estate loans making up the total loan portfolio which generally carry higher interest rates than the other categories of loans. Net interest-earning assets increased by $14.3 million, or 39.3%, to $50.6 million for the three months ended September 30, 2025 from $36.3 million for the three months ended September 30, 2024.

Previous wording

Based on our evaluation of the above factors, we recorded a recovery of credit losses of $42,000 for the three months ended March 31, 2025 compared to a recovery of credit losses of $122,000 for the three months ended March 31, 2024. The decrease in recovery when comparing the two periods was primarily related to a decrease in the loan portfolio for the three months ended March 31, 2024. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years, an increase in prepayments in both consumer and commercial loans, which was impactful to the weighted average life of the loan portfolio and the continuous recoveries of two legacy charge-offs. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.

Current wording

Based on our evaluation of the above factors, we recorded a recovery of credit losses of $40,000 for the three months ended September 30, 2025 compared to a recovery of credit losses of $155,000 for the three months ended September 30, 2024. The decrease in recovery when comparing the two periods was primarily related to an increase in the loan portfolio for the three months ended September 30, 2025. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years, an increase in prepayments in both consumer and commercial loans, which was impactful to the weighted average life of the loan portfolio and the continuous recoveries of two legacy charge-offs. During the three months ended September 30, 2025, the Company updated the historical look-back method period used in developing lifetime loss estimate. Management believes the extended period better reflects a set of relevant loss experience. These predictions align with the Bank’s historic charge-off history over the past 9 years adjusted for current and forecasted conditions.

Previous wording

The allowance for credit losses was $1.6 million, or 0.85%, of loans outstanding at March 31, 2025 and $1.8 million, or 0.91%, of loans outstanding at March 31, 2024.

Current wording

The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at September 30, 2025 and $1.7 million, or 0.92%, of loans outstanding at September 30, 2024.

Previous wording

Non-interest income increased by $60,000 to $207,000 for the three months ended March 31, 2025 from $147,000 for the three months ended March 31, 2024 primarily due to an increase in other income. The increase in other income was related to a small recovery in connection with a settlement of litigation relating to our foreclosed asset, net (OREO). There were no other significant changes in the components comprising non-interest income when comparing the two periods.

Current wording

Non-interest income decreased slightly by $3,000 to $190,000 for the three months ended September 30, 2025 from $193,000 for the three months ended September 30, 2024. There were no significant changes in the components comprising non-interest income when comparing the two periods.

Previous wording

Provision for (Recovery of) Income Taxes. Income tax expense was $45,000 for the three months ended March 31, 2025, an increase of $248,000, as compared to an income tax recovery of $203,000 for the three months ended March 31, 2024. The increase in income tax expense was primarily the result of an increase in income (loss) before provision for (recovery of) income taxes. The effective tax rate for the three months ended March 31, 2025 and 2024 was 23.4% and 24.3%, respectively.

Current wording

Provision for Income Taxes. Income tax expense was $103,000 for the three months ended September 30, 2025, an increase of $62,000, as compared to income tax expense of $41,000 for the three months ended September 30, 2024. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes. The effective tax rate for the three months ended September 30, 2025 and 2024 was 18.8% for both periods.

Previous wording

Non-performing assets include other real estate owned of $1.4 million, at March 31, 2025 and June 30, 2024. During the three months ended June 30, 2023, the Company foreclosed on collateral supporting a construction loan which was valued at $2.3 million and was included in foreclosed assets, net. The valuation was based on independent appraisals subject to certain discounts less estimated costs to sell. A subsequent independent appraisal was obtained in April 2024 resulting in a new valuation of $2.1 million subject to certain discounts less estimated costs to sell. After adjusting for estimated costs to sell, the revised valuation was $1.4 million resulting in a provision for valuation allowance of $937,100 being recorded during the year ended June 30, 2024. No subsequent valuation allowance was taken during the nine months ended March 31, 2025.

Current wording

Non-performing assets include other real estate owned of $996,000 at September 30, 2025 and June 30, 2025. During the year ended June 30, 2023, the Company foreclosed on collateral supporting a construction loan which was valued at $2.3 million and was included in foreclosed assets (OREO), net. The valuation was based on independent appraisals subject to certain discounts less estimated costs to sell. A subsequent independent appraisal was obtained in April 2024 subject to certain discounts less estimated costs to sell. After adjusting for estimated costs to sell, the revised valuation was $1.4 million resulting in a provision for valuation allowance of $937,100 being recorded during the year ended June 30, 2024. An offer to sell the property for $1.1 million was accepted by the Company in August 2025 resulting in a provision for valuation allowance of $378,767 being recorded during the year ended June 30, 2025. The sale is subject to customary due diligence and has not closed as of November 12, 2025. Non-performing loans at September 30, 2025 consisted of two one-to four-family residential loans that were fully secured compared to one one-to four-family residential loan that was fully secured at June 30, 2025.

Previous wording

Classified Assets**.** Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of an allowance for credit loss is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated as “special mention” or “Watch” by our management. There were no loans classified as substandard, doubtful or loss in the Company’s loan portfolio as of March 31, 2025 or June 30, 2024.

Current wording

Classified Assets**.** Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of an allowance for credit loss is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated as “special mention” or “watch” by our management.

Previous wording

Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. In addition, management’s estimate of expected credit losses is based on the discounted cash flows over the remaining life of loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses.

Current wording

Management’s judgment in determining the level of the allowance is based on evaluations of historical loan losses, current conditions and reasonable and supportable forecasts relevant to the collectability of loans. In addition, management’s estimate of expected credit losses is based on the weighted-average remaining maturity of loans held for investment, and changes in expected prepayment behavior may result in changes in the remaining life of loans and expected credit losses.

Previous wording

The allowance may be affected materially by a variety of qualitative factors that the Company considers to reflect its current judgement of various events and risks that are not measured in our statistical procedures. These qualitative risk factors include: (1) lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; (2) changes in the value of underlying collateral for collateral dependent loans; (3) nature and volume of the portfolio and terms of loans; (4) volume and severity of past due, classified and nonaccrual loans as well as loan modifications; (5) existence and effect of any concentrations of credit and changes in the level of such concentrations; (6) experience, ability, and depth of lending department management and other relevant staff; (7) quality of loan review and board of directors oversight; (8) the effect of other external factors such as competition, legal and regulatory requirements; and (9) changes in national and local economic conditions related to unemployment, house

Current wording

The allowance may be affected materially by a variety of qualitative factors that the Company considers to reflect its current judgement of various events and risks that are not measured in our statistical procedures. These qualitative risk factors include: (1) lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; (2) changes in the value of underlying collateral for collateral dependent loans; (3) nature and volume of the portfolio and terms of loans; (4) volume and severity of past due, classified and nonaccrual loans as well as loan modifications; (5) existence and effect of any concentrations of credit and changes in the level of such concentrations; (6) experience, ability, and depth of lending department management and other relevant staff; (7) quality of loan review and board of directors oversight; (8) the effect of other external factors such as competition, legal and regulatory requirements; and (9) changes in national and local economic conditions related to unemployment, house price index, and gross domestic product. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. The level of the allowance is particularly sensitive to changes in the actual and forecasted probability of default of benchmarked banks and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.

Previous wording

Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the WDFI, as an integral part of their examination process, periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance

Current wording

Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the WDFI, as an integral part of their examination process, periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses. However, regulatory agencies are not directly involved in establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.

Previous wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At March 31, 2025, we had a $76.2 million line of credit with the Federal Home Loan Bank of Chicago, which had $15.0 million in borrowings outstanding as of that date. The Bank also has $25.0 million available to borrow from the Federal Reserve Bank when pledging acceptable assets and an unsecured Federal Funds purchasing limit of $5.0 million with the Bank’s correspondent bank. At March 31, 2025, the Bank did not borrow any additional funds from the Federal Reserve or from the correspondent bank.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At September 30, 2025, we had a $83.4 million line of credit with the Federal Home Loan Bank of Chicago, which had $15.0 million in borrowings outstanding as of that date. The Bank also has $17.0 million available to borrow from the Federal Reserve Bank which is pledged by multi-family loans and an unsecured Federal Funds purchasing limit of $5.0 million with the Bank’s correspondent bank. There were no borrowings under these arrangements at September 30, 2025.

Previous wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $1.9 million and $188,000 of cash provided by operating activities for the nine months ended March 31, 2025 and 2024, respectively. Net cash provided by (used in) investing activities, which consists primarily of disbursements for loan origination, the purchase of securities, and the purchase of premises and equipment offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $3.7 million used in investing activities compared to $8.7 million provided by investing activities for the nine months ended March 31, 2025 and 2024, respectively. Net cash provided by (used in) financing activities, consisting of activity in deposit accounts and borrowings, was $15.0 million provided by financing activities compared to $12.6 million being used in financing activities for the nine months ended March 31, 2025 and 2024, respectively.

Current wording

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $464,000 and $945,000 of cash provided by operating activities for the three months ended September 30, 2025 and 2024, respectively. Net cash provided by (used in) investing activities, which consists primarily of disbursements for loan origination, the purchase of securities, and the purchase of premises and equipment offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $5.9 million used in investing activities compared to $7.5 million provided by investing activities for the three months ended September 30, 2025 and 2024, respectively. Net cash provided by (used in) financing activities, consisting of activity in deposit accounts and borrowings, was $6.5 million provided by financing activities compared to $3.9 million being used in financing activities for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At March 31, 2025, we had outstanding commitments to originate loans of $17.6 million, and no outstanding commitments to sell loans. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from March 31, 2025 totaled $46.9 million, which include $2.3 million in brokered certificates of deposit. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize additional Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.

Current wording

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At September 30, 2025, we had outstanding commitments to originate loans of $7.5 million, and no outstanding commitments to sell loans. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from September 30, 2025 totaled $45.1 million, which include $2.3 million in brokered certificates of deposit. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize additional Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.