Marathon Bancorp, Inc. /MD/
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
MBBC$14.18-2.0%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001104659-26-059789
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001104659-26-125239
Item 2. 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 106 previous paragraphs and 87 current paragraphs.
57 unchanged; 27 reworded; 1 added; 12 removed; 10 previous and 2 current paragraphs rearranged.
Tables are not compared: 56 previous and 49 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 (1)
Current report
Deposits. Total deposits increased by $11.3 million, or 5.9%, to $201.0 million at September 30, 2026, from $189.8 million at June 30, 2026 primarily due to an increase in certificates of deposit balances of $10.7 million, or 14.3%. There was also a shift in funds from interest bearing demand, NOW and money market accounts to non-interest bearing demand deposits due to new, non-interest bearing accounts being established, offset by the disbursement of funds held in a money market account.
Removed paragraphs (12)
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. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.
Previous report
Deposits. Total deposits decreased by $1.0 million, or 0.6%, to $174.2 million at March 31, 2026, from $175.2 million at June 30, 2025 primarily due to a decrease in demand, NOW and money market deposits of $1.0 million, or 1.5%, and a decrease in certificates of deposit balances of $639,000, or 1.0%. These decreases were offset by an increase in savings deposits of $576,000, or 1.5%. These changes were attributable to the normal movement of deposits between accounts by the Bank’s customers.
Previous report
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 report
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 report
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 report
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 report
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 report
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 report
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 report
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 report
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 report
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.
Reworded paragraphs (27)
Previous wording
The allowance for credit losses (“ACL”) at March 31, 2026 represents the Company’s current estimate of the lifetime credit losses expected from its loan portfolio. Management estimates the ACL by projecting a lifetime loss rate conditional on a forecast of economic parameters and other qualitative adjustments, for the loans’ expected remaining term.
Current wording
The allowance for credit losses (“ACL”) at September 30, 2026 represents the Company’s current estimate of the lifetime credit losses expected from its loan portfolio. Management estimates the ACL by projecting a lifetime loss
Previous wording
Changes in the Wisconsin unemployment rate, the Wisconsin annual housing price index and the Wisconsin annual gross domestic product could have a material impact on the model’s estimation of the allowance for credit losses. Marathon Bank’s methodology for maintaining its allowance for credit losses includes various levels within each of the aforementioned criteria. Set forth below is a hypothetical change to the next level within Marathon Bank’s allowance calculation. Changing these levels as of March 31, 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%.
Current wording
Changes in the Wisconsin unemployment rate, the Wisconsin annual housing price index and the Wisconsin annual gross domestic product could have a material impact on the model’s estimation of the allowance for credit losses. Marathon Bank’s methodology for maintaining its allowance for credit losses includes various levels within each of the aforementioned criteria. Set forth below is a hypothetical change to the next level within Marathon Bank’s allowance calculation. Changing these levels as of September 30, 2026, from those actually used on September 30, 2026 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $41,000, or 2.2%.
Previous wording
Provision for Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Current wording
Provision for Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
Previous 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.
Current wording
Total Assets. Total assets decreased $2.1 million, or 0.8%, to $258.9 million at September 30, 2026, from $261.0 million at June 30, 2026. The decrease was primarily due to a decrease in cash and cash equivalents of $6.2 million, or 29.8%, which was offset by an increase in loans, net of $4.0 million, or 1.8%. The remaining asset categories showed no significant changes when comparing September 30, 2026 with June 30, 2026.
Previous 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%.
Current wording
Cash and Cash Equivalents. Total cash and cash equivalents decreased $6.2 million, or 29.8%, to $14.6 million at September 30, 2026, from $20.8 million at June 30, 2026, primarily due to repayments on borrowings of $15.0 million, or 75.0% and an increase in loans, net of $4.0 million, or 1.8%. These changes were offset by an increase in deposits of $11.3 million, or 5.9%.
Previous 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.
Current wording
Debt Securities Available for Sale. Total debt securities available for sale decreased by $98,000, or 2.5%, to $3.8 million at September 30, 2026 from $3.9 million at June 30, 2026 due to normal paydowns.
Previous 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.
Current wording
Loans. Gross loans increased $4.0 million, or 1.8%, to $223.2 million at September 30, 2026, from $219.2 million at June 30, 2026. The increase was primarily due to an increase in commercial and multi-family real estate loans of $4.5 million and $2.9 million, respectively. These increases were offset by a decrease in one-to-four-family residential loans of $3.2 million, or 5.1%. The increase in commercial and multi-family real estate loans was due to a strategic decision to grow both of these portfolios. The decrease in one-to-four-family residential loans was due to payoffs including refinancings at other financial institutions. The remaining categories of loans showed no substantial changes.
Previous 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.
Current wording
Federal Home Loan Bank (FHLB) Advances. FHLB advances decreased by $15.0 million to $5.0 million at September 30, 2026 due to three borrowings being paid off during the three months ended September 30, 2026.
Previous 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.
Current wording
Stockholders’ Equity. Total stockholders’ equity increased by $438,000 to $48.4 million when comparing September 30, 2026 with June 30, 2026 primarily due to net income of $453,000.
Previous wording
The following tables set forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans, if applicable, are included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. Loan balances include loans held for sale.
Current wording
The following table sets forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans, if applicable, are included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. Loan balances include loans held for sale.
Previous wording
General*.*Net income was $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.
Current wording
General*.*Net income was $453,000 for the three months ended September 30, 2026, an increase of $9,000, or 2.0%, from net income of $444,000 for the three months ended September 30, 2025. The increase in net income was primarily attributable to an increase in net interest income of $340,000. The increase in net interest income was offset by an increase in non-interest expenses of $237,000 and an increase in the provision for (recovery of ) credit losses to a provision for credit losses of $39,000 for the three months ended September 30, 2026 from a recovery of credit losses for the three months ended September 30, 2025 of $40,000.
Previous 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.
Current wording
Interest Income**.**Interest income increased by $514,000, or 17.9%, to $3.4 million for the three months ended September 30, 2026 as compared to $2.9 million for the three months ended September 30, 2025 primarily due to an increase in loan interest income of $519,000.
Previous 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).
Current wording
Loan interest income increased by $519,000, or 19.8%, to $3.1 million for the three months ended September 30, 2026 as compared to $2.6 million for the three months ended September 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 50 basis points from 5.25% for the three months ended September 30, 2025 to 5.75% for the three months ended September 30, 2026. The average balance of the loan portfolio increased by $19.2 million, or 9.5%, to $221.1 million for the three months ended September 30, 2026 from $201.9 million for the three months ended September 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 (commercial and multi-family real estate loans).
Previous 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.
Current wording
Debt securities interest income decreased by $29,000, or 51.1%, to $28,000 for the three months ended September 30, 2026 from $57,000 for the three months ended September 30, 2025 due to a decrease in the average balance of debt securities of $1.3 million and a decrease in the average yield on the debt securities portfolio of 148 basis points to 2.57% for the three months ended September 30, 2026 from 4.05% for the three months ended September 30, 2025. The decrease in the average balance of debt securities continues to be related to securities calls and paydowns. The decrease 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 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.
Current wording
Interest Expense. Interest expense increased $175,000, or 19.0%, to $1.1 million for the three months ended September 30, 2026 from $922,000 for the three months ended September 30, 2025, due to an increase of $184,000 in interest paid on deposits which was offset by a decrease in interest paid on FHLB borrowings of $9,000. Interest expense on deposits increased by $184,000, or 23.5%, to $966,000 for the three months ended September 30, 2026 from $782,000 for the three months ended September 30, 2025 due to an increase in the average balance of deposits and an increase in the average rate paid on deposits. The average balance of deposits increased by $17.0 million, or 10.7%, from $159.1 million for the three months ended September 30, 2025 to $176.1 million for the three months ended September 30, 2026 due to a $17.5 million increase in the average balance of certificates of deposit. The average rate paid on deposits increased by 24 basis points to 2.20% for the three months ended September 30, 2026 from 1.96% for the three months ended September 30, 2025 due to higher interest rates and a shift in customer funds from more liquid deposit products into fixed-rate certificates of deposit.
Previous 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.
Current wording
Interest paid on FHLB borrowings decreased $9,000, from $140,000 for the three months ended September 30, 2025 to $131,000 for the three months ended September 30, 2026. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $1.3 million to $13.7 million for the three months ended September 30, 2026 from $15.0 million for the three months ended September 30, 2025. This decrease was offset by a slight increase in the average rate paid on borrowings from 3.75% for the three months ended September 30, 2025 to 3.84% for the three months ended September 30, 2026.
Previous 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.
Current wording
Net Interest Income. Net interest income increased by $340,000, or 17.4%, to $2.3 million for the three months ended September 30, 2026 from $2.0 million for the three months ended September 30, 2025. Net interest rate spread increased by 17 basis points to 3.22% for the three months ended September 30, 2026 from 3.05% for the three months ended September 30, 2025, reflecting a 36 basis points increase in the average yield on interest-earning assets which was offset by a 19 basis points increase in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 3.72% for the three months ended September 30, 2026 from 3.49% for the three months ended September 30, 2025. The increase in the average yield on interest earning assets for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to an increase in the average yield of loans 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 $7.6 million, or 15.0%, to $58.2 million for the three months ended September 30, 2026 from $50.6 million for the three months ended September 30, 2025.
Previous 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,
Current wording
Based on our evaluation of the above factors, we recorded a provision for credit losses of $39,000 for the three months ended September 30, 2026 compared to a recovery of credit losses of $40,000 for the three months ended September 30, 2025. The increase in provision when comparing the two periods was primarily related to an increase in the loan portfolio for the three months ended September 30, 2026.
Previous 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.
Current wording
The allowance for credit losses was $1.8 million, or 0.80%, of loans outstanding at September 30, 2026 and $1.7 million, or 0.80%, of loans outstanding at September 30, 2025.
Previous 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.
Current wording
Non-interest income decreased by $2,000 to $188,000 for the three months ended September 30, 2026 from $190,000 for the three months ended September 30, 2025. Other income increased by $10,000 as a result of the Company leasing the top floor of its Brookfield branch to new tenants. The remaining changes in non-interest income were not significant.
Previous 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.
Current wording
Non-interest expenses were $1.9 million for the three months ended September 30, 2026 and $1.6 million for the three months ended September 30, 2025. The increase in non-interest expenses was primarily related to an increase in salaries and employee benefits and professional fees. The salaries and employee benefits increase was related to increased stock compensation expense associated with new stock awards issued in connection with the adoption of the Company’s 2026 Plan and the hiring of additional personnel. The increase in professional fees was related to a consulting fee assessed during the current quarter as well as increased fees related to third party staffing support.
Previous 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.
Current wording
Provision for Income Taxes. Income tax expense was $116,000 for the three months ended September 30, 2026, an increase of $13,000, as compared to income tax expense of $103,000 for the three months ended September 30, 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 September 30, 2026. The effective tax rates were 20.4% and 18.8% for the three months ended September 30, 2026 and 2025, respectively.
Previous 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.
Current wording
Non-performing assets include other real estate owned of $996,000 at September 30, 2026 and June 30, 2026. 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 September 30, 2026 and June 30, 2026 consisted of one one-to four-family residential loan that was fully secured.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At March 31, 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.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At September 30, 2026, we had a $91.4 million line of credit with the Federal Home Loan Bank of Chicago, which had $5.0 million in borrowings outstanding as of that date. The Bank also has $23.4 million available to borrow from the Federal Reserve Bank which is pledged by multi-family loans and an unsecured Federal Funds purchasing limit of $5.0 million with the Bank’s correspondent bank. There were no borrowings under these arrangements at September 30, 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 $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.
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 $1.8 million and $464,000 of cash provided by operating activities for the three months ended September 30, 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 $4.1 million used in investing activities compared to $5.9 million used in investing activities for the three months ended September 30, 2026 and 2025, respectively. Net cash from financing activities, consisting of activity in deposit accounts and borrowings, was $3.9 million used in financing activities compared to $6.5 million being provided by financing activities for the three months ended September 30, 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 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.
Current wording
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At September 30, 2026, we had outstanding commitments to originate loans of $5.1 million, and $209,000 outstanding commitments to sell loans. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from September 30, 2026 totaled $75.3 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.
Previous wording
Impact of Inflation and Changing Price
Current wording
Impact of Inflation and Changing Prices
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
rate conditional on a forecast of economic parameters and other qualitative adjustments, for the loans’ expected remaining term.
Current report — wording carried from elsewhere
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Rearranged previous paragraphs (10)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
The increase in provision when comparing the two periods was primarily related to an increase in the loan portfolio for the three months ended March 31, 2026.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Comparison of Operating Results for the Nine Months Ended March 31, 2026 and 2025
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 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.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
Non-interest Income. Non-interest income information is as follows.
Previous report — wording carried elsewhere
Non-interest Expenses. Non-interest expenses information is as follows.