Marathon Bancorp, Inc. /MD/

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 December 31, 2025, from those actually used on December 31, 2025 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $182,000, or 10.9%.

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 March 31, 2026, from those actually used on March 31, 2026 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $148,000, or 8.7%.

Previous wording

Total Assets. Total assets increased $9.2 million, or 3.8%, to $248.0 million at December 31, 2025, from $238.8 million at June 30, 2025. The increase was primarily due to an increase in loans, net of $11.1 million, or 5.5%, which was offset by decreases in debt securities available for sale and cash and cash equivalents of $1.1 million and $728,000, respectively. The remaining asset categories showed no significant changes when comparing December 31, 2025 with June 30, 2025.

Current wording

Total Assets. Total assets increased $10.2 million, or 4.3%, to $249.0 million at March 31, 2026, from $238.8 million at June 30, 2025. The increase was primarily due to an increase in loans, net of $10.9 million, or 5.4% and an increase in interest earning deposits held in other financial institutions of $1.1 million or 454.8%. These increases were offset by decreases in debt securities available for sale and cash and cash equivalents of $1.2 million and $759,000, respectively. The remaining asset categories showed no significant changes when comparing March 31, 2026 with June 30, 2025.

Previous wording

Cash and Cash Equivalents. Total cash and cash equivalents decreased $728,000, or 5.1%, to $13.7 million at December 31, 2025, from $14.4 million at June 30, 2025, primarily due to an increase in loans, net of $11.1 million, or 5.5%. This increase was primarily offset by new borrowings of $4.0 million, or 26.7%, an increase in deposits of $3.1 million, or 1.8%, and a decrease in debt securities available for sale of $1.1 million, or 21.9%.

Current wording

Cash and Cash Equivalents. Total cash and cash equivalents decreased $759,000, or 5.3%, to $13.6 million at March 31, 2026, from $14.4 million at June 30, 2025, primarily due to an increase in loans, net of $10.9 million, or 5.4% and a decrease in deposits of $1.1 million, or 0.6%. These changes were offset by new borrowings of $9.0 million, or 60.0%, and a decrease in debt securities available for sale of $1.2 million, or 23.2%.

Previous wording

Debt Securities Available for Sale. Total debt securities available for sale decreased by $1.1 million, or 21.9%, to $4.1 million at December 31, 2025 due to $1.1 million of debt securities available for sale maturing or being called during the six months ended December 31, 2025.

Current wording

Debt Securities Available for Sale. Total debt securities available for sale decreased by $1.2 million, or 23.2%, to $4.0 million at March 31, 2026 due to $1.1 million of debt securities available for sale maturing or being called during the nine months ended March 31, 2026.

Previous wording

Loans. Gross loans increased $11.1 million, or 5.5%, to $213.7 million at December 31, 2025, from $202.6 million at June 30, 2025. The increase was primarily due to an increase in one-to-four-family residential loans of $7.7 million, or 13.6%, and an increase in multi-family real estate loans of $3.9 million, or 8.1%. The increase in multi-family real estate loans and one-to-four-family residential loans was due to a strategic decision to grow both of these portfolios. The remaining categories of loans showed no substantial changes.

Current wording

Loans. Gross loans increased $10.9 million, or 5.4%, to $213.5 million at March 31, 2026, from $202.6 million at June 30, 2025. The increase was primarily due to an increase in one-to-four-family residential loans of $8.1 million, or 14.4%, and an increase in multi-family real estate loans of $2.6 million, or 5.5%. The increase in multi-family real estate loans and one-to-four-family residential loans was due to a strategic decision to grow both of these portfolios. The remaining categories of loans showed no substantial changes.

Previous wording

Federal Home Loan Bank (FHLB) Advances. FHLB advances increased by $4.0 million to $19.0 million at December 31, 2025 due to a new borrowing during the six months ended December 31, 2025.

Current wording

Federal Home Loan Bank (FHLB) Advances. FHLB advances increased by $9.0 million to $24.0 million at March 31, 2026 due to two new borrowings during the nine months ended March 31, 2026.

Previous wording

Stockholders’ Equity. Total stockholders’ equity increased by $1.2 million to $46.9 million when comparing December 31, 2025 with June 30, 2025 primarily due to net income of $946,000.

Current wording

Stockholders’ Equity. Total stockholders’ equity increased by $1.8 million to $47.5 million when comparing March 31, 2026 with June 30, 2025 primarily due to net income of $1.4 million.

Previous wording

General*.*Net income was $501,000 for the three months ended December 31, 2025, an increase of $450,000, or 880.7%, from net income of $51,000 for the three months ended December 31, 2024. The increase in net income was primarily attributable to an increase in net interest income of $652,000. This increase was offset by an increase in non-interest expenses of $100,000 and an increase in the provision for income taxes of $87,000.

Current wording

General*.*Net income was $488,000 for the three months ended March 31, 2026, an increase of $339,000, or 228.7%, from net income of $148,000 for the three months ended March 31, 2025. The increase in net income was primarily attributable to an increase in net interest income of $594,000 and an increase in non-interest income of $39,000. This increase was offset by an increase in non-interest expenses of $171,000 and an increase in the provision for income taxes of $76,000. The provision for (recovery of) credit losses also increased from a recovery of credit losses for the three months ended March 31, 2025 of $41,833 to a provision for credit losses of $5,000 for the three months ended March 31, 2026.

Previous wording

Interest Income**.**Interest income increased by $683,000, or 35.3%, to $3.0 million for the three months ended December 31, 2025 as compared to $2.3 million for the three months ended December 31, 2024 primarily due to an increase in loan interest income of $719,000.

Current wording

Interest Income**.**Interest income increased by $635,000, or 27.2%, to $3.0 million for the three months ended March 31, 2026 as compared to $2.3 million for the three months ended March 31, 2025 primarily due to an increase in loan interest income of $663,000.

Previous wording

Loan interest income increased by $719,000, or 26.3%, to $2.8 million for the three months ended December 31, 2025 as compared to $2.0 million for the three months ended December 31, 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 70 basis points from 4.68% for the three months ended December 31, 2024 to 5.38% for the three months ended December 31, 2025. The average balance of the loan portfolio increased by $31.6 million, or 18.0%, to $207.2 million for the three months ended December 31, 2025 from $175.6 million for the three months ended December 31, 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.

Current wording

Loan interest income increased by $663,000, or 31.0%, to $2.8 million for the three months ended March 31, 2026 as compared to $2.1 million for the three months ended March 31, 2025, 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 65 basis points from 4.85% for the three months ended March 31, 2025 to 5.50% for the three months ended March 31, 2026. The average balance of the loan portfolio increased by $28.6 million, or 15.7%, to $210.8 million for the three months ended March 31, 2026 from $182.2 million for the three months ended March 31, 2025. 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 (multi-family real estate loans and one-to-four-family residential loans).

Previous wording

Debt securities interest income decreased by $14,000, or 30.2%, to $31,000 for the three months ended December 31, 2025 from $45,000 for the three months ended December 31, 2024 due to a decrease in the average balance of debt securities of $2.3 million, which was offset by a slight increase in the average yield on the debt securities portfolio of eight basis points to 2.69% for the three months ended December 31, 2025 from 2.61% for the three months ended December 31, 2024. The decrease in the average balance of debt securities continues to be related to securities calls and paydowns. The increase in the average yield on the debt securities portfolio was primarily due to the change in the mix of the securities portfolio as a result of securities calls and paydowns.

Current wording

Debt securities interest income decreased by $8,000, or 19.2%, to $32,000 for the three months ended March 31, 2026 from $40,000 for the three months ended March 31, 2025 due to a decrease in the average balance of debt securities of $1.4 million, which was offset by an increase in the average yield on the debt securities portfolio of 33 basis points to 2.92% for the three months ended March 31, 2026 from 2.69% for the three months ended March 31, 2025. The decrease in the average balance of debt securities continues to be related to securities calls and paydowns. The increase in the average yield on the debt securities portfolio was primarily due to the change in the mix of the securities portfolio as a result of securities calls and paydowns.

Previous wording

Interest Expense. Interest expense increased $32,000, or 3.7%, to $893,000 for the three months ended December 31, 2025 from $861,000 for the three months ended December 31, 2024, due to an increase of $43,000 in interest paid on FHLB borrowings which was offset by a decrease of $11,000 in interest paid on deposits.

Current wording

Interest Expense. Interest expense increased $41,000, or 4.7%, to $912,000 for the three months ended March 31, 2026 from $871,000 for the three months ended March 31, 2025, due to an increase of $95,000 in interest paid on FHLB borrowings which was offset by a decrease of $55,000 in interest paid on deposits.

Previous wording

Interest expense on deposits decreased by $11,000, or 1.5%, to $752,000 for the three months ended December 31, 2025 from $763,000 for the three months ended December 31, 2024 due to a decrease in the average rate paid on deposits which was offset by an increase in the average balance of deposits. The average rate paid on deposits decreased by 13 basis points to 1.89% for the three months ended December 31, 2025 from 2.02% for the three months ended December 31, 2024 due to declining interest rates and a shift in customer funds from fixed-rate certificates of deposit into more liquid deposit products with variable rates. The increase in the average balance of deposits was the result of the initiation of new loan relationships which increased the average balances of demand, NOW and money market deposits while the decrease in the average balances of certificate of deposit account balances was related to customer funds being transferred to higher yielding certificate of deposit specials being offered by our competitors.

Current wording

Interest expense on deposits decreased by $55,000, or 7.2%, to $705,000 for the three months ended March 31, 2026 from $760,000 for the three months ended March 31, 2025 due to a decrease in the average rate paid on deposits and a slight decrease in the average balance of deposits. The average rate paid on deposits decreased by 11 basis points to 1.88% for the three months ended March 31, 2026 from 1.99% for the three months ended March 31, 2025 due to declining interest rates and a shift in customer funds from fixed-rate certificates of deposit into more liquid deposit products with variable rates. The decrease in the average balance of deposits was not significant.

Previous wording

Interest paid on FHLB borrowings increased $43,000, from $98,000 for the three months ended December 31, 2024 to $141,000 for the three months ended December 31, 2025. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $5.1 million to $15.1 million for the three months ended December 31, 2025 from $10.0 million for the three months ended December 31, 2024. The average rate paid on borrowings decreased slightly from 3.90% for the three months ended December 31, 2024 to 3.76% for the three months ended December 31, 2025 due to a decrease in the federal funds rate.

Current wording

Interest paid on FHLB borrowings increased $95,000, from $112,000 for the three months ended March 31, 2025 to $207,000 for the three months ended March 31, 2026. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $10.7 million to $22.6 million for the three months ended March 31, 2026 from $11.9 million for the three months ended March 31, 2025. The average rate paid on borrowings decreased from 3.87% for the three months ended March 31, 2025 to 3.77% for the three months ended March 31, 2026 due to a decrease in the federal funds rate.

Previous wording

Net Interest Income. Net interest income increased by $652,000, or 46.4%, to $2.1 million for the three months ended December 31, 2025 from $1.4 million for the three months ended December 31, 2024. Net interest rate spread increased by 74 basis points to 3.23% for the three months ended December 31, 2025 from 2.49% for the three months ended December 31, 2024, reflecting a 65 basis points increase in the average yield on interest-earning assets and a nine basis points decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 3.66% for the three months ended December 31, 2025 from 2.85% for the three months ended December 31, 2024. The increase in the average yield on interest earning assets for the three months ended December 31, 2025 compared to the three months ended December 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 45 basis points due to a drop in the federal funds rate) associated with 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. Also, the Company has been retaining higher rate mortgages in its one-to-four-family residential loan portfolio. Net interest-earning assets increased by $15.8 million, or 43.3%, to $52.2 million for the three months ended December 31, 2025 from $36.4 million for the three months ended December 31, 2024.

Current wording

Net Interest Income. Net interest income increased by $594,000, or 40.6%, to $2.1 million for the three months ended March 31, 2026 from $1.5 million for the three months ended March 31, 2025. Net interest rate spread increased by 61 basis points to 3.25% for the three months ended March 31, 2026 from 2.64% for the three months ended March 31, 2025, reflecting a 60 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 3.61% for the three months ended March 31, 2026 from 2.97% for the three months ended March 31, 2025. The increase in the average yield on interest earning assets for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 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 71 basis points due to a drop in the federal funds rate) associated with an increase in the percentage of commercial and multi-family real estate loans comprising the total loan portfolio which generally carry higher interest rates than the other categories of loans. Also, the Company has been retaining higher rate mortgages in its one-to-four-family residential loan portfolio. Net interest-earning assets increased by $18.6 million, or 54.6%, to $52.7 million for the three months ended March 31, 2026 from $34.1 million for the three months ended March 31, 2025.

Previous wording

Based on our evaluation of the above factors, we recorded a provision for credit losses of $33,000 for the three months ended December 31, 2025 compared to a provision for credit losses of $8,000 for the three months ended December 31, 2024. The increase in provision when comparing the two periods was primarily related to an increase in the loan portfolio for the three months ended December 31, 2025.

Current wording

Based on our evaluation of the above factors, we recorded a provision for credit losses of $5,000 for the three months ended March 31, 2026 compared to a recovery of credit losses of $42,000 for the three months ended March 31,

Previous wording

The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at December 31, 2025 and $1.7 million, or 0.92%, of loans outstanding at December 31, 2024.

Current wording

The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at March 31, 2026 and $1.6 million, or 0.85%, of loans outstanding at March 31, 2025.

Previous wording

Non-interest income increased slightly by $10,000 to $190,000 for the three months ended December 31, 2025 from $180,000 for the three months ended December 31, 2024. Other income increased by $11,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants. Mortgage banking income decreased as a result of less mortgage sales during the current three-month period.

Current wording

Non-interest income increased by $39,000 to $246,000 for the three months ended March 31, 2026 from $207,000 for the three months ended March 31, 2025. Other income increased by $28,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants and an insurance reimbursement on the Company’s foreclosed assets.

Previous wording

Non-interest expenses were $1.6 million for the three months ended December 31, 2025 and $1.5 million for the three months ended December 31, 2024. The increase was primarily related to an increase in salaries and employee benefits and professional fees which was offset by a decrease in data processing and office expenses. The salaries and employee benefits increase was associated with the new branch we opened in Brookfield, Wisconsin in January 2024. The increase in professional fees was related to timing of various legal expenses while the decrease in data processing and office expenses was related to a new contract with the Company’s core software provider which started in September 2025. This new contract is expected to save the Company approximately $185,000 annually.

Current wording

Non-interest expenses were $1.7 million for the three months ended March 31, 2026 and $1.5 million for the three months ended March 31, 2025. The increase was primarily related to an increase in salaries and employee benefits and other non-interest expenses which was offset by a decrease in data processing and office expenses. The salaries and employee benefits increase was associated with increased compensation expense related to the expansion of the Company’s ESOP and the hiring of additional personnel. The increase in other non-interest expenses was due to the payment of the annual NASDAQ listing fee. The decrease in data processing and office expenses was related to a new contract with the Company’s core software provider which started in September 2025. This new contract is expected to save the Company approximately $185,000 annually.

Previous wording

Provision for Income Taxes. Income tax expense was $87,000 for the three months ended December 31, 2025, an increase of $85,000, as compared to income tax expense of $2,000 for the three months ended December 31, 2024. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes for the three months ended December 31, 2025 and the higher percentage of non-taxable income making up income before income taxes for the three months ended December 31, 2024.

Current wording

Provision for Income Taxes. Income tax expense was $121,000 for the three months ended March 31, 2026, an increase of $76,000, as compared to income tax expense of $45,000 for the three months ended March 31, 2025. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes for the three months ended March 31, 2026.

Previous wording

Comparison of Operating Results for the Six Months Ended December 31, 2025 and 2024

Current wording

Comparison of Operating Results for the Nine Months Ended March 31, 2026 and 2025

Previous wording

General*.*Net income was $946,000 for the six months ended December 31, 2025, an increase of $720,000, or 318.4%, from net income of $226,000 for the six months ended December 31, 2024. The increase in net income was primarily attributable to an increase in net interest income of $1.2 million. This increase was offset by a decrease in the recovery of credit losses of $140,000, from a recovery of credit losses of $147,000 for the six months ended December 31, 2024 to a recovery of credit losses of $7,000 for the six months ended December 31, 2025, and an increase in non-interest expenses of $183,000. The provision for income taxes also increased by $148,000.

Current wording

General*.*Net income was $1.4 million for the nine months ended March 31, 2026, an increase of $1.1 million, or 282.9%, from net income of $374,000 for the nine months ended March 31, 2025. The increase in net income was primarily attributable to an increase in net interest income of $1.8 million and an increase in non-interest income of $45,000. These increases were offset by a decrease in the recovery of credit losses of $187,000, from a recovery of credit losses of $189,000 for the nine months ended March 31, 2025 to a recovery of credit losses of $2,000 for the nine months ended March 31, 2026, and an increase in non-interest expenses of $354,000. The provision for income taxes also increased by $224,000.

Previous wording

Interest Income**.**Interest income increased by $1.2 million, or 27.2%, to $5.8 million for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 primarily due to an increase in loan interest income.

Current wording

Interest Income**.**Interest income increased by $1.9 million, or 27.2%, to $8.8 million for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025 primarily due to an increase in loan interest income.

Previous wording

Loan interest income increased by $1.3 million, or 30.7%, to $5.4 million for the six months ended December 31, 2025, as compared to $4.1 million for the six months ended December 31, 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 63 basis points from 4.65% for the six months ended December 31, 2024 to 5.28% for the six months ended December 31, 2025. The average balance of the loan portfolio increased by $26.9 million, or 15.1%, to $204.5 million for the six months ended December 31, 2025 from $177.7 million for the six months ended December 31, 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.

Current wording

Loan interest income increased by $1.9 million, or 30.8%, to $8.2 million for the nine months ended March 31, 2026, as compared to $6.3 million for the nine months ended March 31, 2025, 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 63 basis points from 4.68% for the nine months ended March 31, 2025 to 5.31% for the nine months ended March 31, 2026. The average balance of the loan portfolio increased by $27.4 million, or 15.3%, to $206.6 million for the nine months ended March 31, 2026 from $179.2 million for the nine months ended March 31, 2025. 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 (multi-family real estate loans and one-to-four-family residential loans).

Previous wording

Debt securities interest income decreased by $3,000, or 3.5%, to $88,000 for the six months ended December 31, 2025 from $91,000 for the six months ended December 31, 2024 due to a decrease of $1.9 million in the average balance of debt securities to $5.1 million for the six months ended December 31, 2025 from $7.0 million for the six months ended December 31, 2024. This decrease was offset by an increase in the average yield on the debt securities portfolio of 82 basis points to 3.42% for the six months ended December 31, 2025 as compared to 2.60% for the six months ended December 31, 2024. The average balance of debt securities continued to decrease as a result of securities calls and paydowns. 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.

Current wording

Debt securities interest income decreased by $11,000, or 8.2%, to $120,000 for the nine months ended March 31, 2026 from $131,000 for the nine months ended March 31, 2025 due to a decrease of $1.7 million in the average balance of debt securities to $4.9 million for the nine months ended March 31, 2026 from $6.6 million for the nine months ended March 31, 2025. This decrease was offset by an increase in the average yield on the debt securities portfolio of 62 basis points to 3.26% for the nine months ended March 31, 2026 as compared to 2.64% for the nine months ended March 31, 2025. The average balance of debt securities continued to decrease as a result of securities calls and paydowns. 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.

Previous wording

Interest Expense. Interest expense increased $62,000, or 3.5%, to $1.8 million for the six months ended December 31, 2025 from $1.8 million for the six months ended December 31, 2024, due to an increase in interest paid on FHLB borrowings.

Current wording

Interest Expense. Interest expense increased $103,000, or 3.9%, to $2.7 million for the nine months ended March 31, 2026 from $2.6 million for the nine months ended March 31, 2025, due to an increase in interest paid on FHLB borrowings. Interest expense on deposits decreased slightly when comparing the nine months ended March 31, 2026 to the nine months ended March 31, 2025.

Previous wording

Interest expense on deposits remained substantially the same at $1.8 million when comparing the six months ended December 31, 2025 to the six months ended December 31, 2024. The decrease in the average rate paid on deposits was offset by an increase in the average balance of deposits. The average rate paid on deposits decreased by ten basis points to 1.92% for the six months ended December 31, 2025 from 2.02% for the six months ended December 31, 2024 due to declining interest rates and a shift in customer funds from fixed-rate certificates of deposit into more liquid deposit products with variable rates. The increase in the average balance of deposits was the result of the initiation of new loan relationships which increased the average balances of demand, NOW, money market and savings deposit accounts while the decrease in the average balances of certificate of deposit accounts was related to customer funds being transferred to higher yielding certificate of deposit specials being offered by our competitors.

Current wording

The decrease in interest expense on deposits was due to a decrease in the average rate paid on deposits offset by an increase in the average balance of deposits. The average rate paid on deposits decreased by ten basis points to 1.90% for the nine months ended March 31, 2026 from 2.0% for the nine months ended March 31, 2025 due to declining interest rates and a shift in customer funds from fixed-rate certificates of deposit into more liquid deposit products with variable rates. The increase in the average balance of deposits was the result of the initiation of new loan relationships which increased the average balances of demand, NOW, money market and savings deposit accounts while the decrease in the average balance of certificates of deposit accounts was related to runoff due to rate competition by our competitors.

Previous wording

Interest paid on FHLB borrowings increased $63,000, from $218,000 for the six months ended December 31, 2024 to $281,000 for the six months ended December 31, 2025. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $4.2 million to $15.0 million for the six months ended December 31, 2025 from $10.8 million for the six months ended December 31, 2024. The average rate paid on borrowings decreased from 4.04% for the six months ended December 31, 2024 to 3.74% for the six months ended December 31, 2025 due to a decrease in the federal funds rate.

Current wording

Interest paid on FHLB borrowings increased $158,000, from $330,000 for the nine months ended March 31, 2025 to $488,000 for the nine months ended March 31, 2026. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $6.4 million to $17.6 million for the nine months ended March 31, 2026 from $11.1 million for the nine months ended March 31, 2025. The average rate paid on borrowings decreased from 3.95% for the nine months ended March 31, 2025 to 3.72% for the nine months ended March 31, 2026 due to a decrease in the federal funds rate.

Previous wording

Net Interest Income. Net interest income increased by $1.2 million, or 41.9%, to $4.0 million for the six months ended December 31, 2025 from $2.8 million for the six months ended December 31, 2024. Net interest rate spread increased by 64 basis points to 3.11% for the six months ended December 31, 2025 from 2.47% for the six months ended December 31, 2024, reflecting a 57 basis points increase in the average yield on interest-earning assets and a seven basis points decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 3.56% for the six months ended December 31, 2025 from 2.84% for the six months ended December 31, 2024. The increase in the average yield on interest earning assets for the six months ended December 31, 2025 compared to the six months ended December 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 75 basis points due to a drop in the federal funds rate) was associated with 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. Also, the Company has been retaining higher rate mortgages in its one-to-four-family residential loan portfolio. Net interest-earning assets increased by $15.0 million, or 41.3%, to $51.4 million for the six months ended December 31, 2025 from $36.4 million for the six months ended December 31, 2024.

Current wording

Net Interest Income. Net interest income increased by $1.8 million, or 41.5%, to $6.1 million for the nine months ended March 31, 2026 from $4.3 million for the nine months ended March 31, 2025. Net interest rate spread increased by 61 basis points to 3.12% for the nine months ended March 31, 2026 from 2.51% for the nine months ended March 31, 2025, reflecting a 56 basis points increase in the average yield on interest-earning assets and a five basis points decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 3.58% for the nine months ended March 31, 2026 from 2.87% for the nine months ended March 31, 2025. The increase in the average yield on interest earning assets for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025 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 72 basis points due to a drop in the federal funds rate) was associated with an increase in the percentage of commercial and multi-family real estate loans comprising the total loan portfolio which generally carry higher interest rates than the other categories of loans. Also, the Company has been retaining higher rate mortgages in its one-to-four-family residential loan portfolio. Net interest-earning assets increased by $16.2 million, or 45.6%, to $51.9 million for the nine months ended March 31, 2026 from $35.6 million for the nine months ended March 31, 2025.

Previous wording

Based on our evaluation of the above factors, we recorded a recovery of credit losses of $7,000 for the six months ended December 31, 2025 compared to a recovery of credit losses of $147,000 for the six months ended December 31, 2024. The decrease in recovery when comparing the two periods was primarily related to an increase in the loan portfolio for the six months ended December 31, 2025. The recovery continues to be 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.

Current wording

Based on our evaluation of the above factors, we recorded a recovery of credit losses of $2,000 for the nine months ended March 31, 2026 compared to a recovery of credit losses of $189,000 for the nine months ended March 31, 2025. The decrease in recovery when comparing the two periods was primarily related to an increase in the loan portfolio for the nine months ended March 31, 2026. The recovery continues to be 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.

Previous wording

The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at December 31, 2025 and $1.7 million, or 0.92%, of loans outstanding at December 31, 2024.

Current wording

The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at March 31, 2026 and $1.6 million, or 0.85%, of loans outstanding at March 31, 2025.

Previous wording

To the best of our knowledge, we have recorded our best estimate of expected losses in the loan portfolio and for unfunded commitments at December 31, 2025. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for credit losses. In addition, the WDFI and the FDIC, as an integral part of their examination process, will 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.

Current wording

To the best of our knowledge, we have recorded our best estimate of expected credit losses in the loan portfolio and for unfunded commitments at March 31, 2026. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material changes to our estimate. In addition, the WDFI and the FDIC, as an integral part of their examination process, will 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.

Previous wording

Non-interest income increased slightly by $6,000 to $380,000 for the six months ended December 31, 2025 from $374,000 for the six months ended December 31, 2024. Other income increased by $10,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants. Mortgage banking income decreased as a result of less mortgage sales during the current six-month period.

Current wording

Non-interest income increased by $45,000 to $625,000 for the nine months ended March 31, 2026 from $580,000 for the nine months ended March 31, 2025. Other income increased by $37,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants and an insurance reimbursement on the Company’s foreclosed assets.

Previous wording

Non-interest expenses were $3.3 million for the six months ended December 31, 2025 compared to $3.1 million for the six months ended December 31, 2024. The increase was primarily related to an increase in salaries and employee benefits and professional fees which was offset by a decrease in data processing and office expenses. The salaries and employee benefits increase was associated with the new branch we opened in Brookfield, Wisconsin in January 2024. The increase in professional fees was related to timing of various legal expenses while the decrease in data processing and office expenses was related to a new contract with the Company’s core software provider which started in September 2025. This new contract is expected to save the Company approximately $185,000 annually.

Current wording

Non-interest expenses were $5.0 million for the nine months ended March 31, 2026 compared to $4.6 million for the nine months ended March 31, 2025. The increase was primarily related to an increase in salaries and employee benefits, professional fees and other non-interest expenses which was offset by a decrease in data processing and office expenses. The salaries and employee benefits increase was associated with increased compensation expense related to expansion of the Company’s ESOP and the hiring of additional personnel. The increase in professional fees was related to timing of various legal expenses while the increase in other non-interest expenses was due to the payment of the annual NASDAQ listing fee. The decrease in data processing and office expenses was related to a new contract with the Company’s core software provider which started in September 2025. This new contract is expected to save the Company approximately $185,000 annually.

Previous wording

Provision for Income Taxes. Income tax expense was $190,000 for the six months ended December 31, 2025, an increase of $148,000, as compared to income tax expense of $42,000 for the six months ended December 31, 2024. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes during the six months ended December 31, 2025. The effective tax rate for the six months ended December 31, 2025 and 2024 was 16.75% and 15.71%, respectively.

Current wording

Provision for Income Taxes. Income tax expense was $311,000 for the nine months ended March 31, 2026, an increase of $224,000, as compared to income tax expense of $87,000 for the nine months ended March 31, 2025. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes during the nine months ended March 31, 2026. The effective tax rate for the nine months ended March 31, 2026 and 2025 was 17.8% and 18.9%, respectively.

Previous wording

Non-performing assets include other real estate owned of $996,000 at December 31, 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 contract was terminated during the current quarter and the Company has relisted the property for $1.5 million. Non-performing loans at December 31, 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.

Current wording

Non-performing assets include other real estate owned of $996,000 at March 31, 2026 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 contract was terminated during the three months ended December 31, 2025 and the Company has relisted the property for $1.5 million. Non-performing loans at March 31, 2026 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

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 December 31, 2025, we had a $85.9 million line of credit with the Federal Home Loan Bank of Chicago, which had $19.0 million in borrowings outstanding as of that date. The Bank also has $16.5 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 December 31, 2025.

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 March 31, 2026, we had a $86.7 million line of credit with the Federal Home Loan Bank of Chicago, which had $24.0 million in borrowings outstanding as of that date. The Bank also has $19.8 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 March 31, 2026.

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 $1.1 million of cash provided by operating activities for the six months ended December 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 $9.8 million used in investing activities compared to $7.2 million provided by investing activities for the six months ended December 31, 2025 and 2024, respectively. Net cash provided by (used in) financing activities, consisting of activity in deposit accounts and borrowings, was $7.1 million provided by financing activities compared to $2.6 million being used in financing activities for the six months ended December 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 $2.0 million and $1.9 million of cash provided by operating activities for the nine months ended March 31, 2026 and 2025, respectively. Net cash 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 $10.8 million used in investing activities compared to $3.7 million used in investing activities for the nine months ended March 31, 2026 and 2025, respectively. Net cash provided by financing activities, consisting of activity in deposit accounts and borrowings, was $8.0 million provided by financing activities compared to $15.0 million being provided by financing activities for the nine months ended March 31, 2026 and 2025, 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 December 31, 2025, we had outstanding commitments to originate loans of $4.7 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 December 31, 2025 totaled $43.6 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 March 31, 2026, we had outstanding commitments to originate loans of $7.4 million, and $672,700 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, 2026 totaled $52.3 million, which include $10.8 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.