Marathon Bancorp, Inc. /MD/
For the period ended Jun 30, 2026. Filed Sep 16, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 16, 2026
MBBC$14.78+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-06-30; filed 2025-09-26.
0001104659-25-093884
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-09-16.
0001104659-26-108076
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 76 current paragraphs.
44 unchanged; 22 reworded; 9 added; 13 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 33 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Debt Securities Available for Sale. Total debt securities available for sale decreased by $1.3 million, or 24.6%, to $3.9 million at June 30, 2026 from $5.2 million at June 30, 2025 due to $1.3 million of debt securities available for sale maturing or being called during the year ended June 30, 2026.
Current report
Loans. Gross loans increased $16.7 million, or 8.3%, to $219.3 million at June 30, 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 $7.2 million, or 12.8%, an increase in multi-family real estate loans of $6.1 million, or 12.8% and an increase in commercial real estate loans of $4.0 million, or 4.4%. These increases were due to a strategic decision to grow all of these portfolios. The remaining categories of loans showed no substantial changes.
Current report
Foreclosed Assets. Foreclosed assets, net remained unchanged at $996,000 when comparing June 30, 2026 with June 30, 2025.
Current report
Deposits. Total deposits increased by $14.5 million, or 8.3%, to $189.7 million at June 30, 2026, from $175.2 million at June 30, 2025 primarily due to an increase in demand, NOW and money market deposits of $7.2 million, or 14.9%, and an increase in certificates of deposit balances of $7.8 million, or 11.7%. The increase in demand, NOW and money market deposits was due to the Company’s increased focus on relationship management by obtaining customers’ commercial deposit balances when granting loans to new customers. The increase in certificates of deposit balances was due to offering higher rates on specific terms (specials) to attract new customers and meet internal lending demand.
Current report
Federal Home Loan Bank (FHLB) Advances. FHLB advances increased by $5.0 million to $20.0 million at June 30, 2026 from $15.0 million at June 30, 2025 due to one new borrowing during the year ended June 30, 2026.
Current report
Interest Income**.**Interest income increased by $2.4 million, or 24.6%, to $11.9 million for the year ended June 30, 2026 compared to $9.5 million for the year ended June 30, 2025 primarily due to an increase in loan interest income.
Current report
Non-interest income increased by $79,000 to $828,000 for the year ended June 30, 2026 from $749,000 for the year ended June 30, 2025. Other income increased by $48,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants and the receipt of an insurance reimbursement on the Company’s foreclosed assets.
Current report
Non-interest expenses were $6.9 million for the years ended June 30, 2026 and 2025; however, there were several significant changes in the categories comprising non-interest expenses. Increases were incurred in salaries and employee benefits, professional fees and other non-interest expenses. The increase in salaries and employee benefits, professional fees and other non-interest expenses were 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 and which we expect will reduce expense. This new contract is expected to save the Company approximately $185,000 annually.
Current report
Provision for (Benefit from) Income Taxes. Income tax expense was $341,000 for the year ended June 30, 2026, an increase of $373,000, as compared to an income tax benefit of $32,000 for the year ended June 30, 2025. The increase in income tax expense was primarily the result of an increase in income before provision for income taxes during the year ended June 30, 2026.
Removed paragraphs (13)
Previous report
In 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period.
Previous report
Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.
Previous report
Debt Securities Available for Sale. Total debt securities available for sale decreased by $1.4 million, or 21.3%, from $6.6 million at June 30, 2024 to $5.2 million at June 30, 2025. The decrease was primarily related to the maturity of a $1.0 million corporate bond, calls of municipal bonds and paydowns of mortgage-backed securities.
Previous report
Loans. Gross loans increased $17.3 million, or 9.5%, to $202.6 million at June 30, 2025 from $185.3 million at June 30, 2024. The increase was primarily due to an increase in commercial real estate loans of $17.6 million, or 23.6% and an increase in multi-family real estate loans of $2.7 million, or 6.0%. The increase in commercial real estate loans was related to a strategic focus capitalizing on market conditions, specifically focusing on higher-quality, well-capitalized assets from existing and new relationships. The increase in multi-family real estate loans was related to the improved lending conditions and the sustained demand for rental housing.** ** Consumer loans (primarily home equity loans) also increased $348,000, or 21.6%, due to an improvement in rates and housing market stability. These increases were offset by decreases in the remaining categories of loans with the most significant decrease noted in one-to-four-family residential loans which decreased by $1.5 million, or 2.6%. The decrease in one-to-four-family residential loans was primarily related to the paydown of a $3.4 million residential loan. The construction loans decrease of $580,000 was primarily related to construction loans being converted to permanent financings. The decrease in commercial and industrial loans was primarily due to repayments exceeding new loan growth.
Previous report
Foreclosed Assets. Foreclosed assets, net decreased by $379,000, or 27.5%, to $1.0 million at June 30, 2025, due to the Company accepting an offer of $1.1 million for the sale of the property resulting in a provision for valuation allowance of $379,000 being recorded during the year ended June 30, 2025.
Previous report
Deposits.* *Total deposits increased by $2.2 million, or 1.3%, to $175.2 million at June 30, 2025 from $173.0 million at June 30, 2024 due to an increase in demand, NOW and money market deposits of approximately $5.1 million due to the Bank’s growth and a movement of funds from matured certificates of deposit into more liquid deposit products.
Previous report
Federal Home Loan Bank (FHLB) Advances. FHLB advances increased $2.0 million to $15.0 million at June 30, 2025 compared to $13.0 million June 30, 2024 as the Bank borrowed an additional $2.0 million from the FHLB to help fund loan growth.
Previous report
Interest Income**.**Interest income increased by $120,000, or 1.3%, to $9.6 million for the year ended June 30, 2025 as compared to $9.4 million for the year ended June 30, 2024 primarily due to an increase in other interest income of $154,000 which was offset by a decrease in debt securities income of $45,000. Other interest income increased due to an increase in the average balance of cash and cash equivalents offset by a decrease in the average yield on cash and cash equivalents.
Previous report
The decrease in the recovery when comparing the two years was primarily related to an increase in the loan portfolio for the year ended June 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. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.
Previous report
Non-interest income increased by $23,000 to $749,000 for the year ended June 30, 2025 from $726,000 for the year ended June 30, 2024 due primarily 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 years.
Previous report
Non-interest expenses were $6.9 million for the year ended June 30, 2025 compared to $7.0 million for the year ended June 30, 2024. The decrease was related to a decrease in expenses associated with foreclosed assets, net, offset by
Previous report
an increase in salaries and employee benefits. The decrease in expenses associated with foreclosed assets, net was primarily related to the recording of a valuation allowance of $378,000 for the year ended June 30, 2025 compared to $937,100 during the year ended June 30, 2024 resulting from the Bank’s agreement to sell the property for $1.1 million. The increase in salaries and employee benefits and occupancy and equipment expenses was related to a new branch which opened in Brookfield, Wisconsin during January 2024.
Previous report
Provision for (Recovery of) Income Taxes. Income tax benefit was $32,000 for the year ended June 30, 2025, a decrease of $27,000, as compared to an income tax benefit of $59,000 for the year ended June 30, 2024. The decrease in income tax benefit was primarily related to an increase in income (loss) before income tax expense (benefit) when comparing the year ended June 30, 2025 and 2024. This decrease was offset by a Wisconsin income tax provision of $112,000 related to a change in Wisconsin tax law that provides for a subtraction from the Bank’s state taxable income for loan and fee interest income from certain commercial and agricultural loans. Based upon the provisions of this new state tax law, management determined that the Company was highly unlikely to incur a material Wisconsin tax liability in the foreseeable future, instead generating Wisconsin net operating loss carryforwards that would never be realized. Since the state rate at which net deferred tax assets are expected to be realized is 0%, the Company eliminated its state net deferred tax asset balances as of July 1, 2023, resulting in deferred tax expense of approximately $112,000 for the year ended June 30, 2024.
Reworded paragraphs (22)
Previous wording
The discussion and analysis of the financial condition and results of operations are based on our audited consolidated financial statements, which are prepared in conformity with U.S. GAAP. The preparation of these audited consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies and estimates. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.
Current wording
The discussion and analysis of the financial condition and results of operations are based on our audited consolidated financial statements, which are prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these audited consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies and estimates. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.
Previous wording
As of June 30, 2025 and June 30, 2024, the allowance for credit losses totaled $1.7 million and $1.8 million, respectively. Due to the nature and composition of Marathon Bank's lending activities, a significant portion of the allowance for credit losses is allocated to the one- to four-family residential loan portfolio and the commercial real estate and multifamily real estate loan portfolios. As of June 30, 2025 and June 30, 2024, the allowance for credit losses
Current wording
As of June 30, 2026 and June 30, 2025, the allowance for credit losses totaled $1.7 million. Due to the nature and composition of Marathon Bank's lending activities, a significant portion of the allowance for credit losses is allocated to the one- to four-family residential loan portfolio and the commercial real estate and multifamily real estate loan portfolios. As of June 30, 2026 and June 30, 2025, the allowance for credit losses allocated to the one- to four-family residential loan portfolio and the commercial real estate and multifamily real estate loan portfolios were $1.746 million and $1.708 million, respectively, or 96.9% and 98.7% of the total allowance for credit losses, respectively.
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 June 30, 2025, from those actually used on June 30, 2025 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $139,000, or 8.1%.
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 may include 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. Utilizing these levels as of June 30, 2026 and shocking them to the next level of distress resulted in an increase in Marathon Bank’s allowance for credit losses of $292,000, or 17.1%.
Previous wording
includes, but is not limited to, the extent to which fair value is less than amortized cost, the current interest rate environment, changes to rating of security or security issuer, and adverse conditions specifically related to the security among other factors. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the CECL standard, and declines due to non-credit factors are recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income (“AOCI”), net of taxes, on the unaudited consolidated balance sheets. Accrued interest receivable on AFS securities is excluded from the estimate of credit losses.
Current wording
Allowance for Credit Losses on Available for Sale (“AFS”) Securities.* *The new standard requires credit losses to be presented as an ACL. The Company is still required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance continues to require the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor. This includes, but is not limited to, the extent to which fair value is less than amortized cost, the current interest rate environment, changes to rating of security or security issuer, and adverse conditions specifically related to the security among other factors. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the CECL standard, and declines due to non-credit factors are recorded in recorded in AOCI, net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in AOCI, net of taxes, on the consolidated balance sheets. Accrued interest receivable on AFS securities is excluded from the estimate of credit losses.
Previous wording
Total Assets. Total assets increased $19.5 million, or 8.9%, to $238.8 million at June 30, 2025 from $219.3 million at June 30, 2024. The increase was primarily due to an increase in loans, net of $17.3 million, or 9.5%, and an increase in cash and cash equivalents of $3.9 million, or 37.4%. These increases were offset by a decrease in debt securities available for sale of $1.4 million, or 21.3%. The remaining asset categories showed no significant changes when comparing June 30, 2025 with June 30, 2024.
Current wording
Total Assets. Total assets increased $22.2 million, or 9.3%, to $261.0 million at June 30, 2026, from $238.8 million at June 30, 2025. The increase was primarily due to an increase in loans, net of $16.6 million, or 8.3% and an increase in cash and cash equivalents of $6.4 million, or 44.7%. These increases were offset by a decrease in debt securities available for sale of $1.3 million. The remaining asset categories showed no significant changes when comparing June 30, 2026 with June 30, 2025.
Previous wording
Cash and Cash Equivalents. Total cash and cash equivalents increased $3.9 million, or 37.4%, to $14.4 million at June 30, 2025 from $10.5 million at June 30, 2024, primarily due to the net proceeds raised from the Company’s Conversion of $13.9 million, an increase in deposits of $2.2 million, or 1.3%, an increase in borrowings of $2.0 million, or 15.4% and a decrease in debt securities available for sale of $1.4 million, or 21.3%. These increases in cash and cash equivalents were offset by an increase in loans of $17.3 million, or 9.5%.
Current wording
Cash and Cash Equivalents. Total cash and cash equivalents increased $6.4 million, or 44.7%, to $20.8 million at June 30, 2026, from $14.4 million at June 30, 2025, primarily due to an increase in deposits of $14.5 million, an increase in borrowings of $5.0 million, net income of $1.8 million and a decrease in debt securities available for sale of $1.3 million, all of which were offset by an increase in loans, net of $16.6 million.
Previous wording
Stockholders’ Equity. Total stockholders’ equity increased by $14.4 million, or 46.1% to $45.7 million, when comparing June 30, 2025 with June 30, 2024 primarily due to the net proceeds raised from the Company’s Conversion of $15.2 million offset by an increase in common shares held by the ESOP.
Current wording
Stockholders’ Equity. Total stockholders’ equity increased by $2.2 million to $48.0 million when comparing June 30, 2026 with June 30, 2025 primarily due to net income of $1.7 million.
Previous wording
income or interest expense, as applicable. Loan balances include loans held for sale. Deferred loan fees accreted to interest income totaled $52,000 and $42,000 for the years ended June 30, 2025 and 2024, respectively.
Current wording
income or interest expense, as applicable. Loan balances include loans held for sale. Deferred loan fees accreted to interest income totaled $90,000 and $52,000 for the years ended June 30, 2026 and 2025, respectively.
Previous wording
General*.*Net income was $42,000 for the year ended June 30, 2025, an increase of $229,000, or 122.7%, from a net loss of $187,000 for the year ended June 30, 2024. The increase in net income was primarily attributable to an increase in net interest income of $203,000 and a decrease in non-interest expenses of $128,000. Offsetting these increases in net income was a decrease in the provision for (recovery of) credit losses of $96,000.
Current wording
General*.*Net income was $1.8 million for the year ended June 30, 2026, an increase of $1.7 million, or 412.0%, from net income of $42,000 for the year ended June 30, 2025. The increase in net income was primarily attributable to an increase in net interest income of $2.2 million, an increase in non-interest income of $79,000 and a decrease in non-interest expenses of $9,000. These increases were offset by an increase in the provision for credit losses of $129,000, from a recovery of credit losses of $94,000 for the year ended June 30, 2025 to a provision for credit losses of $35,000 for the year ended June 30, 2026. The provision for income taxes also increased by $373,000.
Previous wording
Loan interest income increased slightly by $11,000, or 0.1%, for the year ended June 30, 2025 as compared to the year ended June 30, 2024. The average yield on loans increased by 27 basis points which was offset by a decrease in the average balance of the loan portfolio of $10.5 million, or 5.4%. The average yield on the loan portfolio increased by 27 basis points from 4.46% for the year ended June 30, 2024 to 4.73% for the year ended June 30, 2025 as a result of higher interest rates. The average balance of the loan portfolio decreased by $10.5 million, or 5.4%, to $183.0 million for the year ended June 30, 2025 from $193.5 million for the year ended June 30, 2024. 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 $2.4 million, or 28.1%, to $11.1 million for the year ended June 30, 2026, as compared to $8.6 million for the year ended June 30, 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 60 basis points from 4.73% for the year ended June 30, 2025 to 5.33% for the year ended June 30, 2026. The average balance of the loan portfolio increased by $24.7 million, or 13.5%, to $207.7 million for the year ended June 30, 2026 from $183.0 million for the year ended June 30, 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, one-to-four-family residential loans and commercial real estate loans).
Previous wording
Debt securities interest income decreased by $45,000, or 21.2%, to $169,000 for the year ended June 30, 2025 from $214,000 for the year ended June 30, 2024 due to a decrease of $1.8 million in the average balance of debt securities to $6.4 million for the year ended June 30, 2025 from $8.2 million for the year ended June 30, 2024. The average balance of debt securities continued to decrease due to the maturity of a $1.0 million corporate bond, calls of municipal bonds and paydowns of mortgage-backed securities. The average yield on debt securities increased slightly by four basis points to 2.64% for the year ended June 30, 2025 from 2.60% for the year ended June 30, 2024 as a result of the higher interest rate environment.
Current wording
Debt securities interest income decreased by $18,000, or 10.6%, to $151,000 for the year ended June 30, 2026 from $169,000 for the year ended June 30, 2025 due to a decrease of $1.6 million in the average balance of debt securities to $4.8 million for the year ended June 30, 2026 from $6.4 million for the year ended June 30, 2025. This decrease was offset by an increase in the average yield on the debt securities portfolio of 51 basis points to 3.15% for the year ended June 30, 2026 as compared to 2.64% for the year ended June 30, 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 decreased by $83,000, or 2.3%, to $3.5 million for the year ended June 30, 2025 as compared to the year ended June 30, 2024, due to a decrease of $179,000 in interest paid on borrowings offset by an increase of $96,000 in interest paid on deposits.
Current wording
Interest Expense. Interest expense increased $188,000, or 5.4%, to $3.7 million for the year ended June 30, 2026 from $3.5 million for the year ended June 30, 2025, due to an increase in interest paid on FHLB borrowings. Interest expense on deposits decreased slightly when comparing the year ended June 30, 2026 to the year ended June 30, 2025.
Previous wording
Interest expense on deposits increased $96,000, or 3.3%, to $3.0 million for the year ended June 30, 2025 as compared to $2.9 million for the year ended June 30, 2024 due to an increase in the average rate paid on all deposit categories (except savings deposits which remained unchanged), offset by a decrease in the average balances of all deposit categories except for demand, NOW and money market deposits. The average rate paid on deposits increased by 12 basis points to 1.97% for the year ended June 30, 2025 from 1.85% for the year ended June 30, 2024. The increase in the average rate paid on deposits was due to higher interest rates and increased competition for deposits. All categories of deposit average balances decreased (with the exception of demand, NOW and money market deposits) when comparing the year ended June 30, 2025 with the year ended June 30, 2024 with the total average balance of deposits decreasing by $5.0 million, or 2.2%, to $154.0 million for the year ended June 30, 2025. The decrease in the average balances of all deposits (with the exception of demand, NOW and money market deposits) was primarily related to us successfully migrating customer funds from fixed-rate certificate of deposit products into more liquid deposit products with potential variable-rate upside, coupled with the initiation of new loan relationships.
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 seven basis points to 1.90% for the year ended June 30, 2026 from 1.97% for the year ended June 30, 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 decreased $179,000, from $648,000 for the year ended June 30, 2024 to $469,000 for the year ended June 30, 2025. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $4.7 million to $12.1 million for the year ended June 30, 2025 from $16.8 million for the year ended June 30, 2024 as a result of repayments of borrowings. Offsetting the decrease in the average balance was an increase in the average rate paid on borrowings of two basis points from 3.84% for the year ended June 30, 2024 to 3.86% for the year ended June 30, 2025 due to an increase in borrowing costs.
Current wording
Interest paid on FHLB borrowings increased $242,000, from $469,000 for the year ended June 30, 2025 to $711,000 for the year ended June 30, 2026. The increase in interest paid on borrowings was due to the average balance of FHLB advances increasing by $7.0 million to $19.2 million for the year ended June 30, 2026 from $12.1 million for the year ended June 30, 2025 due to an increase in FHLB borrowings to fund additional loan growth. The average rate paid on borrowings decreased from 3.86% for the year ended June 30, 2025 to 3.71% for the year ended June 30, 2026 due to a decrease in the federal funds rate.
Previous wording
Net Interest Income. Net interest income increased by $203,000, or 3.8%, to $6.0 million for the year ended June 30, 2025 from $5.8 million for the year ended June 30, 2024. Net interest-earning assets increased by $1.8 million, or 4.8%, to $38.0 million for the year ended June 30, 2025 from $36.2 million for the year ended June 30, 2024. Net interest rate spread remained the same at 2.40% for the years ended June 30, 2025 and 2024. The net interest margin increased to 2.84% for the year ended June 30, 2025 compared to 2.75% for the year ended June 30, 2024. The increase in the average yield on interest earning assets for the year ended June 30, 2025 compared to the year ended June 30, 2024 was primarily due to an increase in the average yield of loans, the Bank’s largest interest-earning asset category.
Current wording
Net Interest Income. Net interest income increased by $2.2 million, or 35.8%, to $8.2 million for the year ended June 30, 2026 from $6.0 million for the year ended June 30, 2025. Net interest rate spread increased by 55 basis points to 3.11% for the year ended June 30, 2026 from 2.56% for the year ended June 30, 2025, reflecting a 54 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 3.59% for the year ended June 30, 2026 from 2.96% for the year ended June 30, 2025. The increase in the average yield on interest earning assets for the year ended June 30, 2026 compared to the year ended June 30, 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 76 basis points due to a drop in the federal funds rate) which 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 $14.0 million, or 36.8%, to $51.9 million for the year ended June 30, 2026 from $38.0 million for the year ended June 30, 2025.
Previous wording
Provision for (Recovery of) Credit Losses. We charge (credit) provisions for (recovery of) credit losses to operations in order to maintain our allowance for credit losses on loans and reserve for unfunded commitments at a level that is considered reasonable and necessary to absorb expected credit losses inherent in the loan portfolio and expected losses on commitments to grant loans that are expected to be advanced at the consolidated balance sheet date. In determining the level of the allowance for credit losses, we consider our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions, and the levels of non-performing and other classified loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates as more information becomes available or conditions change. We assess the allowance for credit losses on a quarterly basis and make provisions for (recovery of) credit losses in order to maintain the allowance.
Current wording
Provision for (Recovery of) Credit Losses. We charge (credit) provisions for (recovery of) credit losses to operations in order to maintain our allowance for credit losses on loans and reserve for unfunded commitments at a level that is considered reasonable and necessary to absorb expected credit losses inherent in the loan portfolio and expected losses on commitments to grant loans that are expected to be advanced at the consolidated balance sheet date. In determining the level of the allowance for credit losses, we consider our past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current and future economic conditions, and the levels of non-performing and other classified loans. The amount of the allowance is based on estimates and the ultimate losses may
Previous wording
Based on our evaluation of the above factors, we recorded a recovery of credit losses of approximately $94,000 for the year ended June 30, 2025 compared to a recovery of credit losses of $190,000 for the year ended June 30, 2024.
Current wording
Based on our evaluation of the above factors, we recorded a provision for credit losses of $35,000 for the year ended June 30, 2026 compared to a recovery of credit losses of $94,000 for the year ended June 30, 2025. The increase in the provision when comparing the two periods was primarily related to an increase in the loan portfolio for the year ended June 30, 2026.
Previous wording
The allowance for credit losses was $1.7 million, or 0.84%, of loans outstanding at June 30, 2025 and $1.8 million, or 0.97%, of loans outstanding at June 30, 2024.
Current wording
The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at June 30, 2026 and $1.7 million, or 0.84%, of loans outstanding at June 30, 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 June 30, 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 June 30, 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
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 June 30, 2025, we had a $82.8 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 $17.5 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 June 30, 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 June 30, 2026, we had a $87.0 million line of credit with the Federal Home Loan Bank of Chicago, which had $20.0 million in borrowings outstanding as of that date. The Bank also has $19.6 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 June 30, 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 $1.4 million and $417,000 for the years ended June 30, 2025 and 2024, respectively. Net cash flows provided by (used in) investing activities, which consists primarily of disbursements for loan originations, the purchase of securities and the purchase of bank owned life insurance, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $15.6 million used in investing activities for the year ended June 30, 2025 compared to $17.7 million provided by investing activities for the year ended June 30, 2024. Net cash provided by (used in) financing activities, consisting of activity in stockholders’ equity accounts (capital raise), deposit accounts and borrowings was $18.0 million provided by financing activities compared to $19.4 million used in financing activities for the years ended June 30, 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 $2.5 million and $1.4 million for the years ended June 30, 2026 and 2025, respectively. Net cash flows used in investing activities, which consists primarily of disbursements for loan originations, the purchase of securities and the purchase of bank owned life insurance, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $15.6 million used in investing activities for both years ended June 30, 2026 and 2025. Net cash provided by financing activities, consisting of activity in stockholders’ equity accounts, deposit accounts and borrowings was $19.6 million provided by financing activities for the year ended June 30, 2026 compared to $18.0 million provided by financing activities for the year ended June 30, 2025.
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 June 30, 2025, we had outstanding commitments to originate loans of $4.8 million, and outstanding commitments to sell loans of $329,000. 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 at June 30, 2025 totaled $46.2 million. 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 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 June 30, 2026, we had outstanding commitments to originate loans of $7.0 million, and outstanding commitments to sell loans of $127,000. 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 at June 30, 2026 totaled $63.7 million. 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 Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
vary from such estimates as more information becomes available or conditions change. We assess the allowance for credit losses on a quarterly basis and make provisions for (recovery of) credit losses in order to maintain the allowance.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
allocated to the one- to four-family residential loan portfolio and the commercial real estate and multifamily real estate loan portfolios was $1.1 million and $461,000, respectively, or 65.7% and 32.8%, respectively.
Previous report — wording carried elsewhere
Allowance for Credit Losses on Available for Sale (“AFS”) Securities.* *Prior to implementation of CECL, unrealized losses on AFS debt securities caused by a credit event would require the direct write-down of the AFS security through the other-than-temporary impairment approach; however, the new standard requires credit losses to be presented as an ACL. The Company is still required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance continues to require the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor. This