Marathon Bancorp, Inc. /MD/
For the period ended Mar 31, 2025. Filed May 14, 2025.
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.
Mar 31, 2025 · Filed May 14, 2025
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-Q
Period ended 2024-12-31; filed 2025-02-13.
0001558370-25-000901
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001558370-25-007658
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 110 previous paragraphs and 112 current paragraphs.
62 unchanged; 38 reworded; 9 added; 7 removed; 3 previous and 3 current paragraphs rearranged.
Tables are not compared: 52 previous and 53 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
Changes in the Wisconsin unemployment rate, the Wisconsin annual housing price index and the Wisconsin annual gross domestic product could have a material impact on the model’s estimation of the allowance for credit losses. Marathon Bank’s methodology for maintaining its allowance for credit losses includes various levels within each of the aforementioned criteria. Set forth below is a hypothetical change to the next level within Marathon Bank’s allowance calculation. Changing these levels as of March 31, 2025, from those actually used on March 31, 2025 to the next highest or lowest level resulted in an increase in Marathon Bank’s allowance for credit losses of $126,000, or 7.8%.
Current report
Total Assets. Total assets increased $17.6 million, or 8.0%, to $236.8 million at March 31, 2025 from $219.2 million at June 30, 2024. The increase was primarily due to an increase in cash and cash equivalents of $13.2 million, or 126.0% and an increase in loans, net of $5.3 million, or 2.9%. These increases were offset by a decrease in debt
Current report
Cash and Cash Equivalents. Total cash and cash equivalents increased $13.2 million, or 126.0%, to $23.7 million at March 31, 2025 from $10.5 million at June 30, 2024, primarily due to an increase in deposits of $13.0 million, or 7.5%, an increase in borrowings of $2.0 million, or 15.4%, an increase in other liabilities of $1.9 million, or 97.9%, and a decrease in debt securities available for sale of $1.4 million, or 21.4%. These increases in cash and cash equivalents were offset by an increase in loans of $5.4 million, or 2.9%.
Current report
Loans. Gross loans increased $5.2 million, or 2.8%, to $190.4 million at March 31, 2025 from $185.2 million at June 30, 2024. The increase was primarily due to an increase in commercial real estate loans of $8.7 million, or 11.8% and an increase in consumer loans of $516,000, or 32.1%. The increase in commercial real estate loans was related to stability in the market, an improvement in our customer’s credit ability and interest rates. The increase in consumer loans was related to growth in home equity loans 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 $2.2 million, or 3.8%. 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 $857,000 was primarily related to construction loans being converted to permanent financings. The remaining categories of loan decreases (multi-family real estate and commercial and industrial) were primarily due to repayments exceeding new loan growth.
Current report
Interest Income**.**Interest income increased by $13,000, or 0.5%, to $2.3 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily due to increases in other interest income of $20,000 and loan interest income of $4,000 which was offset by a decrease in debt securities income of $11,000. 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.
Current report
Loan interest income increased by $4,000, or 0.2%, to $2.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to an increase in the average yield on loans which was
Current report
Non-interest expenses were $1.5 million for the three months ended March 31, 2025 compared to $2.5 million for the three months ended March 31, 2024. The decrease was primarily related to a decrease in foreclosed assets, net. The decrease in expenses associated with foreclosed assets, net was primarily related to the recording of a valuation allowance of $937,100 during the three months ended March 31, 2024 associated with a new appraisal obtained on the Company’s only foreclosed asset.
Current report
Provision for (Recovery of) Income Taxes. Income tax expense was $45,000 for the three months ended March 31, 2025, an increase of $248,000, as compared to an income tax recovery of $203,000 for the three months ended March 31, 2024. The increase in income tax expense was primarily the result of an increase in income (loss) before provision for (recovery of) income taxes. The effective tax rate for the three months ended March 31, 2025 and 2024 was 23.4% and 24.3%, respectively.
Current report
Non-interest income increased by $28,000 to $580,000 for the nine months ended March 31, 2025 from $552,000 for the nine months ended March 31, 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
Removed paragraphs (7)
Previous report
Cash and Cash Equivalents. Total cash and cash equivalents increased $5.7 million, or 54.4%, to $16.2 million at December 31, 2024 from $10.5 million at June 30, 2024, primarily due to a decrease in net loans of $6.5 million which was offset by a decrease in borrowings of $3.0 million.
Previous report
Loans. Gross loans decreased $6.7 million, or 3.6%, to $178.6 million at December 31, 2024 from $185.3 million at June 30, 2024. The decrease was due to a decrease in all categories of loans with the exception of consumer loans which increased slightly by $232,000. Commercial real estate loans decreased by $3.7 million, or 5.0% when comparing December 31, 2024 with June 30, 2024. Multi-family real estate loans decreased by $1.0 million, or 2.3% when comparing December 31, 2024 with June 30, 2024. Construction loans decreased by $1.3 million to no construction loans being held at December 31, 2024 compared to $1.3 million being held at June 30, 2024. The decrease in construction loans was primarily due to all construction loans being converted to permanent financings. Commercial and industrial loans decreased by $444,000, or 8.6% when comparing December 31, 2024 with June 30, 2024. The remaining categories of loan decreases (commercial real estate, multi-family real estate, commercial and industrial and one-to-four-family residential loans) were primarily due to repayments exceeding new loan growth.
Previous report
Loan interest income decreased by $152,000, or 6.9%, to $2.0 million for the three months ended December 31, 2024 as compared to $2.2 million for the three months ended December 31, 2023, due to a decrease in the average balance of the loan portfolio, which was partially offset by an increase in the average yield on loans. The average
Previous report
Interest Income**.**Interest income decreased by $228,000, or 4.7%, to $4.6 million for the six months ended December 31, 2024 as compared to $4.8 million for the six months ended December 31, 2023 primarily due to a
Previous report
decrease in loan interest income of $256,000 offset by an increase in other interest income of $52,000. Income from debt securities decreased slightly by $24,000 during the six months ended December 31, 2024.
Previous report
Non-interest income decreased by $31,000 to $374,000 for the six months ended December 31, 2024 from $405,000 for the six months ended December 31, 2023 due primarily to a decrease in mortgage banking income which was related to higher mortgage rates which led to less loan originations.
Previous report
valuation allowance of $937,100 being recorded during the year ended June 30, 2024. No subsequent valuation allowance was taken at December 31, 2024. We expect a small recovery in connection with a settlement of litigation relating to this property in the quarter ending March 31, 2025.
Reworded paragraphs (38)
Previous wording
Provision for Income Taxes. Our income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.
Current wording
Provision for (Recovery of) Income Taxes. Our income tax expense (recovery) is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.
Previous wording
Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the WDFI, as an integral part of their examination process, periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance for credit losses. However, regulatory agencies are not directly involved in establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.
Current wording
Although we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the FDIC and the WDFI, as an integral part of their examination process, periodically review our allowance for credit losses, and as a result of such reviews, we may have to adjust our allowance
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 (Recovery of) Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Previous wording
Total Assets. Total assets decreased $1.3 million, or 0.6%, to $217.9 million at December 31, 2024 from $219.2 million at June 30, 2024. The decrease was primarily due to a decrease in net loans of $6.5 million, or 3.6%, which was offset by an increase in cash and cash equivalents of $5.7 million, or 54.4%. Debt securities available for sale also decreased by $364,000, from $6.6 million at June 30, 2024 to $6.2 million at December 31, 2024. The remaining asset categories showed no significant changes when comparing December 31, 2024 with June 30, 2024.
Current wording
securities available for sale of $1.4 million, or 21.4%. The remaining asset categories showed no significant changes when comparing March 31, 2025 with June 30, 2024.
Previous wording
Debt Securities Available for Sale. Total debt securities available for sale decreased by $364,000, or 5.5%, from $6.6 million at June 30, 2024 to $6.2 million at December 31, 2024. The decrease was primarily related to municipal bond calls of $240,000.
Current wording
Debt Securities Available for Sale. Total debt securities available for sale decreased by $1.4 million, or 21.4%, from $6.6 million at June 30, 2024 to $5.2 million at March 31, 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 wording
Deposits. Total deposits increased slightly by $436,000, or 0.3%, to $173.4 million at December 31, 2024 from $173.0 million at June 30, 2024. There was also a shift from non-interest bearing deposits to interest bearing deposits of approximately $2.0 million as customers moved their deposits to higher rate products at the Bank.
Current wording
Deposits. Total deposits increased by $13.0 million, or 7.5%, to $186.0 million at March 31, 2025 from $173.0 million at June 30, 2024 due to an increase in demand, NOW and money market deposits of approximately $14.0 million associated with the Company’s Conversion. These deposits were transferred to stockholders’ equity in April, 2025. There was also a shift from non-interest bearing deposits to interest bearing deposits of approximately $4.3 million as customers moved their deposits to higher rate products at the Bank.
Previous wording
Federal Home Loan Bank (FHLB) Advances. FHLB advances decreased $3.0 million to $10.0 million at December 31, 2024 compared to $13.0 million June 30, 2024 as the Bank paid down a term borrowing of $3.0 million that matured in August 2024.
Current wording
Federal Home Loan Bank (FHLB) Advances. FHLB advances increased $2.0 million to $15.0 million at March 31, 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 wording
Stockholders’ Equity. Total stockholders’ equity increased by $390,000 when comparing December 31, 2024 with June 30, 2024 due to net income of $226,000 and a decrease in accumulated other comprehensive loss, net of taxes of $118,000 resulting from an increase in the fair market value of the debt securities available for sale portfolio due to favorable changes in market interest rates.
Current wording
Stockholders’ Equity. Total stockholders’ equity increased by $659,000 when comparing March 31, 2025 with June 30, 2024 due to net income of $374,000 and a decrease in accumulated other comprehensive loss, net of taxes of $176,000 resulting from an increase in the fair market value of the debt securities available for sale portfolio due to favorable changes in market interest rates.
Previous wording
General*.*Net income was $51,000 for the three months ended December 31, 2024, a decrease of $221,000, or 81.2%, from net income of $272,000 for the three months ended December 31, 2023. The decrease in net income was primarily attributable to a change in the provision for (recovery of) credit losses of $143,000 from a recovery of credit losses of $135,000 for the three months ended December 31, 2023 to a provision for credit losses of $8,000 for the three months ended December 31, 2024. Net interest income also decreased by $80,000 and the provision for income taxes increased by $31,000. These decreases were offset by an increase in non-interest income of $4,000 and a decrease in non-interest expenses of $29,000.
Current wording
General*.*Net income was $148,000 for the three months ended March 31, 2025, an increase of $780,000, or 123.5%, from a net loss of $631,000 for the three months ended March 31, 2024. The increase in net income was primarily attributable to a decrease in non-interest expenses of $991,000, an increase in net interest income of $58,000 and an increase in non-interest income of $60,000. These increases were offset by a decrease in the provision for (recovery of) credit losses of $80,000 from a recovery of credit losses of $122,000 for the three months ended March 31, 2024 to a recovery of credit losses of $42,000 for the three months ended March 31, 2025 and an increase in the provision for (recovery of) income taxes of $248,000.
Previous wording
balance of the loan portfolio decreased by $19.8 million, or 10.2%, to $175.7 million for the three months ended December 31, 2024 from $195.5 million for the three months ended December 31, 2023. The decrease in the average balance of the loan portfolio was primarily related to repayments exceeding new loan growth. The average yield on the loan portfolio increased by 16 basis points from 4.52% for the three months ended December 31, 2023 to 4.68% for the three months ended December 31, 2024 as a result of higher interest rates.
Current wording
offset by a decrease in the average balance of the loan portfolio. The average yield on the loan portfolio increased by 32 basis points from 4.53% for the three months ended March 31, 2024 to 4.85% for the three months ended March 31, 2025. The average balance of the loan portfolio decreased by $10.4 million, or 5.4%, to $182.2 million for the three months ended March 31, 2025 from $192.6 million for the three months ended March 31, 2024. The increase in the average yield on the loan portfolio was the result of higher interest rates. The decrease in the average balance of the loan portfolio was primarily related to repayments exceeding new loan growth.
Previous wording
Debt securities interest income decreased by $12,000, or 21.1%, to $45,000 for the three months ended December 31, 2024 from $57,000 for the three months ended December 31, 2023 due to a decrease of $1.9 million in the average balance of debt securities to $6.9 million for the three months ended December 31, 2024 from $8.8 million for the three months ended December 31, 2023. Offsetting the decrease in average balance, was a one basis point increase in the average yield on the debt securities portfolio to 2.61% for the three months ended December 31, 2024 from 2.60% for the three months ended December 31, 2023 as a result of the higher interest rate environment. The average balance of debt securities continued to decrease as a result of securities paydowns.
Current wording
Debt securities interest income decreased by $11,000, or 21.8%, to $39,000 for the three months ended March 31, 2025 from $50,000 for the three months ended March 31, 2024 due to a decrease of $1.6 million in the average balance of debt securities to $5.9 million for the three months ended March 31, 2025 from $7.6 million for the three months ended March 31, 2024. Offsetting the decrease in average balance, was a one basis point increase in the average yield on the debt securities portfolio to 2.69% for the three months ended March 31, 2025 from 2.68% for the three months ended March 31, 2024 as a result of the higher interest rate environment. The average balance of debt securities continued to decrease as a result of securities calls and paydowns.
Previous wording
Interest Expense. Interest expense decreased $55,000, or 6.0%, to $861,000 for the three months ended December 31, 2024 from $916,000 for the three months ended December 31, 2023, due to a decrease of $61,000 in interest paid on FHLB borrowings offset by an increase of $6,000 in interest paid on deposits.
Current wording
Interest Expense. Interest expense decreased $45,000, or 4.9%, to $871,000 for the three months ended March 31, 2025 from $916,000 for the three months ended March 31, 2024, due to a decrease of $100,000 in interest paid on FHLB borrowings offset by an increase of $55,000 in interest paid on deposits.
Previous wording
Interest expense on deposits increased $6,000, or 0.5%, to $764,000 for the three months ended December 31, 2024 from $759,000 for the three months ended December 31, 2023 due to an increase in the average rate paid on all deposit categories, offset by a decrease in the average balances of all deposit categories. The average rate paid on deposits increased by 17 basis points to 2.02% for the three months ended December 31, 2024 from 1.85% for the three months ended December 31, 2023. The increase in the average rate paid on all deposit categories was due to higher interest rates. All categories of deposit average balances decreased when comparing the three months ended December 31, 2024 with the three months ended December 31, 2023 with the average balance of deposits decreasing by $12.6 million, or 7.7%, to $151.2 million for the three months ended December 31, 2024. The decrease in the average balances of all deposits was related to customers who changed banks to obtain higher rates and the Bank being less aggressive in matching competitor interest rates. In addition, we had a $4.2 million brokered certificate of deposit that matured in March 2024.
Current wording
Interest expense on deposits increased $55,000, or 7.9%, to $759,000 for the three months ended March 31, 2025 from $704,000 for the three months ended March 31, 2024 due to an increase in the average rate paid on all deposit categories and an increase in the total average balance of deposits. The average rate paid on deposits increased by 11 basis points to 1.99% for the three months ended March 31, 2025 from 1.88% for the three months ended March 31, 2024. The increase in the average rate paid on all deposit categories was due to higher interest rates and increased competition for deposits. Demand, NOW and money market accounts increased slightly when comparing the three months ended March 31, 2025 with the three months ended March 31, 2024 resulting in the total average balance of deposits increasing by $4.0 million, or 2.6%, to $155.8 million for the three months ended March 31, 2025 from $151.8 million for the three months ended March 31, 2024. The increase in the average balances of demand, NOW and money market balances was related to the deposits temporarily obtained in connection with our Conversion.
Previous wording
Interest paid on FHLB borrowings decreased $61,000, from $158,000 for the three months ended December 31, 2023 to $97,000 for the three months ended December 31, 2024. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $6.3 million to $10.0 million for the three months ended December 31, 2024. Offsetting the decrease in average balance was an increase in the average rate paid on borrowings of seven basis points from 3.87% for the three months ended December 31, 2023 to 3.90% for the three months ended December 31, 2024 due to an increase in borrowing costs.
Current wording
Interest paid on FHLB borrowings decreased $100,000, from $212,000 for the three months ended March 31, 2024 to $112,000 for the three months ended March 31, 2025. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $9.8 million to $11.9 million for the three months ended March 31, 2025 from $21.7 million for the three months ended March 31, 2024 as a result of repayments of borrowings. The average rate paid on borrowings decreased slightly from 3.99% for the three months ended March 31, 2024 to 3.87% for the three months ended March 31, 2025 due to a decrease in the federal funds rate.
Previous wording
Net Interest Income. Net interest income decreased by $80,000, or 5.4%, to $1.4 million for the three months ended December 31, 2024 from $1.5 million for the three months ended December 31, 2023. Net interest-earning assets increased by $993,000, or 2.8%, to $36.4 million for the three months ended December 31, 2024 from $35.4 million for the three months ended December 31, 2023. Net interest rate spread increased by three basis points to 2.49% for the three months ended December 31, 2024 from 2.46% for the three months ended December 31, 2023, reflecting a 14 basis points increase in the average yield on interest-earning assets which was offset by an 11 basis points increase in the average rate paid on interest-bearing liabilities. The net interest margin increased to 2.85% for the three months ended December 31, 2024 from 2.76% for the three months ended December 31, 2023. The increase in the average yield on interest earning assets for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 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 86 basis points due to a drop in the federal funds rate during the latter part of 2024) related to the increase in market interest rates over the past year. The increase in the average interest rate paid on interest-bearing liabilities was due to the Bank raising the interest rates on all deposit categories.
Current wording
Net Interest Income. Net interest income increased by $58,000, or 4.1%, to $1.5 million for the three months ended March 31, 2025 from $1.4 million for the three months ended March 31, 2024. Net interest rate spread increased by 25 basis points to 2.64% for the three months ended March 31, 2025 from 2.39% for the three months ended March 31, 2024, reflecting a 24 basis points increase in the average yield on interest-earning assets and a one basis point decrease in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 2.97% for the three months ended March 31, 2025 from 2.73% for the three months ended March 31, 2024. The increase in the average yield on interest earning assets for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily due to an increase in the average yield of all interest-earning asset categories (with the exception of cash and cash equivalents which decreased by 146 basis points due to a drop in the federal funds rate) related to the increase in market interest rates over the past year and an increase in the percentage of commercial real estate loans making up the total loan portfolio which generally carry higher interest rates then the categories of other loans. Net interest-earning assets decreased by $1.8 million, or 4.9%, to $34.1 million for the three months ended March 31, 2025 from $35.9 million for the three months ended March 31, 2024.
Previous wording
Based on our evaluation of the above factors, we recorded a provision for credit losses of $8,000 for the three months ended December 31, 2024 compared to a recovery of credit losses of $135,000 for the three months ended December 31, 2023. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years and a decline in the loan portfolio due primarily to repayments in the commercial real estate and multi-family real estate loan portfolios, which was impactful to the weighted average life of the loan portfolio. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.
Current wording
Based on our evaluation of the above factors, we recorded a recovery of credit losses of $42,000 for the three months ended March 31, 2025 compared to a recovery of credit losses of $122,000 for the three months ended March 31, 2024. The decrease in recovery when comparing the two periods was primarily related to a decrease in the loan portfolio for the three months ended March 31, 2024. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years, an increase in prepayments in both consumer and commercial loans, which was impactful to the weighted average life of the loan portfolio and the continuous recoveries of two legacy charge-offs. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.
Previous wording
The allowance for credit losses was $1.7 million, or 0.92%, of loans outstanding at December 31, 2024 and $1.9 million, or 0.96%, of loans outstanding at December 31, 2023.
Current wording
The allowance for credit losses was $1.6 million, or 0.85%, of loans outstanding at March 31, 2025 and $1.8 million, or 0.91%, of loans outstanding at March 31, 2024.
Previous wording
Non-interest income increased by $3,000 to $180,000 for the three months ended December 31, 2024 from $177,000 for the three months ended December 31, 2023. There were no significant changes in the components comprising non-interest income when comparing the two periods.
Current wording
Non-interest income increased by $60,000 to $207,000 for the three months ended March 31, 2025 from $147,000 for the three months ended March 31, 2024 primarily due to an increase in other income. The increase in other income was related to a small recovery in connection with a settlement of litigation relating to our foreclosed asset, net (OREO). There were no other significant changes in the components comprising non-interest income when comparing the two periods.
Previous wording
Comparison of Operating Results for the Six Months Ended December 31, 2024 and 2023
Current wording
Comparison of Operating Results for the Nine Months Ended March 31, 2025 and 2024
Previous wording
General*.*Net income was $226,000 for the six months ended December 31, 2024, a decrease of $132,000, or 36.9%, from net income of $358,000 for the six months ended December 31, 2023. The decrease in net income was primarily attributable to a decrease in net interest income of $223,000, a decrease in non-interest income of $31,000 and an increase in non-interest expenses of $62,000. These changes were offset by a decrease in the provision for income taxes of $130,000 and an increase in the recovery of credit losses of $53,000.
Current wording
General*.*Net income was $374,000 for the nine months ended March 31, 2025, an increase of $647,000, or 237.2%, from a net loss of $273,000 for the nine months ended March 31, 2024. The increase in net income was primarily attributable to a decrease in non-interest expenses of $929,000 and an increase in non-interest income of $28,000. Offsetting these increases in net income was a decrease in net interest income of $165,000 and an increase in the provision for (recovery of) income taxes of $118,000.
Previous wording
Interest Income**.**Interest income decreased by $135,000, or 5.6%, to $2.3 million for the three months ended December 31, 2024 as compared to $2.4 million for the three months ended December 31, 2023 primarily due to a decrease in loan interest income of $152,000 offset by an increase in other interest income of $29,000. Income from debt securities decreased slightly by $12,000 during the three months ended December 31, 2024.
Current wording
Interest Income**.**Interest income decreased by $215,000, or 3.0%, to $6.9 million for the nine months ended March 31, 2025 as compared to $7.1 million for the nine months ended March 31, 2024 primarily due to a decrease in loan interest income and debt securities income of $253,000 and $35,000, respectively. Offsetting these decreases was an increase in other interest income of $72,000.
Previous wording
Loan interest income decreased by $256,000, or 5.9%, to $4.1 million for the six months ended December 31, 2024 as compared to $4.4 million for the six months ended December 31, 2023, due to a decrease in the average balance of the loan portfolio of $18.6 million, or 9.5%, which was offset by an increase in the average yield on loans of 19 basis points. The average balance of the loan portfolio decreased by $18.6 million, or 9.5%, to $177.7 million for the six months ended December 31, 2024 from $196.3 million for the six months ended December 31, 2023. The decrease in the average balance of the loan portfolio was primarily related to repayments exceeding new loan growth. The average yield on the loan portfolio increased by 19 basis points from 4.46% for the six months ended December 31, 2023 to 4.65% for the six months ended December 31, 2024 as a result of higher interest rates.
Current wording
Loan interest income decreased by $253,000, or 3.9%, to $6.3 million for the nine months ended March 31, 2025 as compared to $6.5 million for the nine months ended March 31, 2024, due to a decrease in the average balance of the loan portfolio of $15.9 million, or 8.2%, which was offset by an increase in the average yield on loans of 22 basis points. The average balance of the loan portfolio decreased by $15.9 million, or 8.2%, to $179.2 million for the nine months ended March 31, 2025 from $195.1 million for the nine months ended March 31, 2024. The decrease in the average balance of the loan portfolio was primarily related to repayments exceeding new loan growth. The average yield on the loan portfolio increased by 22 basis points from 4.46% for the nine months ended March 31, 2024 to 4.68% for the nine months ended March 31, 2025 as a result of higher interest rates.
Previous wording
Debt securities interest income decreased by $24,000, or 20.6%, to $91,000 for the six months ended December 31, 2024 from $115,000 for the six months ended December 31, 2023 due to a decrease of $2.0 million in the average balance of debt securities to $7.0 million for the six months ended December 31, 2024 from $9.0 million for the six months ended December 31, 2023. Offsetting the decrease in average balance, was a six basis points increase in the average yield on the debt securities portfolio to 2.60% for the six months ended December 31, 2024 from 2.54% for the six months ended December 31, 2023 as a result of the higher interest rate environment. The average balance of debt securities continued to decrease as a result of securities paydowns.
Current wording
Debt securities interest income decreased by $34,000, or 21.0%, to $131,000 for the nine months ended March 31, 2025 from $165,000 for the nine months ended March 31, 2024 due to a decrease of $1.9 million in the average balance of debt securities to $6.6 million for the nine months ended March 31, 2025 from $8.6 million for the nine months ended March 31, 2024. Offsetting the decrease in average balance, was a six basis points increase in the average yield on the debt securities portfolio to 2.64% for the nine months ended March 31, 2025 from 2.58% for the nine months ended March 31, 2024 as a result of the higher interest rate environment. The average balance of debt securities continued to decrease as a result of securities calls and paydowns.
Previous wording
Interest Expense. Interest expense decreased slightly by $5,000, or 0.3%, to $1.8 million for the six months ended December 31, 2024 as compared to the six months ended December 31, 2023, due to a decrease of $18,000 in interest paid on borrowings offset by an increase of $13,000 in interest paid on deposits.
Current wording
Interest Expense. Interest expense decreased by $51,000, or 1.9%, to $2.6 million for the nine months ended March 31, 2025 as compared to the nine months ended March 31, 2024, due to a decrease of $119,000 in interest paid on borrowings offset by an increase of $68,000 in interest paid on deposits.
Previous wording
Interest expense on deposits increased $13,000, or 0.8%, to $1.5 million for the six months ended December 31, 2024 as compared to the six months ended December 31, 2023 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. The average rate paid on deposits increased by 22 basis points to 2.02% for the six months ended December 31, 2024 from 1.80% for the six months ended December 31, 2023. The increase in the average rate paid on deposits was due to higher interest rates. All categories of deposit average balances decreased when comparing the six months ended December 31, 2024 with the six months ended December 31, 2023 with the average balance of deposits decreasing by $16.9 million, or 10.0%, to $151.6 million for the six months ended December 31, 2024. The decrease in the average balances of all deposits was related to customers who changed banks to obtain higher rates and the Bank being less aggressive in matching competitor interest rates. In addition, we had a $4.2 million brokered certificate of deposit that matured in March 2024.
Current wording
Interest expense on deposits increased $68,000, or 3.1%, to $2.3 million for the nine months ended March 31, 2025 as compared to the nine months ended March 31, 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 18 basis points to 2.00% for the nine months ended March 31, 2025 from 1.82% for the nine months ended March 31, 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 nine months ended March 31, 2025 with the nine months ended March 31, 2024 with the total average balance of deposits decreasing by $9.9 million, or 6.1%, to $153.0 million for the nine months ended March 31, 2025. The decrease in the average balances of all deposits (with the exception of demand, NOW and money market deposits) was related to customers who changed banks to obtain higher rates and the Bank being less aggressive in matching competitor interest rates. The increase in the average balance of demand, NOW and money market deposits was related to deposits temporarily obtained in connection with the Company’s Conversion.
Previous wording
Interest paid on FHLB borrowings decreased $18,000, from $236,000 for the six months ended December 31, 2023 to $218,000 for the six months ended December 31, 2024. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $2.2 million to $10.8 million for the six months ended December 31, 2024. Offsetting the decrease in the average balance was an increase in the average rate paid on borrowings of 42 basis points from 3.62% for the six months ended December 31, 2023 to 4.04% for the six months ended December 31, 2024 due to an increase in borrowing costs.
Current wording
Interest paid on FHLB borrowings decreased $119,000, from $449,000 for the nine months ended March 31, 2024 to $330,000 for the nine months ended March 31, 2025. The decrease in interest paid on borrowings was due to the average balance of FHLB advances decreasing by $4.7 million to $11.2 million for the nine months ended March 31, 2025 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 18 basis points from 3.77% for the nine months ended March 31, 2024 to 3.95% for the nine months ended March 31, 2025 due to an increase in borrowing costs.
Previous wording
Net Interest Income. Net interest income decreased by $223,000, or 7.3%, to $2.8 million for the six months ended December 31, 2024 from $3.0 million for the six months ended December 31, 2023. Net interest-earning assets increased by $129,000, or 0.4%, to $36.4 million for the six months ended December 31, 2024 from $36.3 million for the six months ended December 31, 2023. Net interest rate spread decreased by three basis points to 2.47% for the six months ended December 31, 2024 from 2.50% for the six months ended December 31, 2023, reflecting a 22 basis points increase in the average rate paid on interest-bearing liabilities which was offset by a 19 basis points increase in the average yield on interest-earning assets. The net interest margin increased to 2.84% for the six months ended December 31, 2024 compared to 2.80% for the six months ended December 31, 2023. The increase in the average yield on interest earning assets for the six months ended December 31, 2024 compared to the six months ended December 31, 2023 was
Current wording
Net Interest Income. Net interest income decreased by $165,000, or 3.7%, to $4.3 million for the nine months ended March 31, 2025 from $4.5 million for the nine months ended March 31, 2024. Net interest-earning assets decreased by $499,000, or 1.4%, to $35.6 million for the nine months ended March 31, 2025 from $36.1 million for the nine months ended March 31, 2024. Net interest rate spread increased by seven basis points to 2.51% for the nine months ended March 31, 2025 from 2.44% for the nine months ended March 31, 2024, reflecting a 20 basis points increase in the average yield on interest-earning assets which was offset by a 13 basis points increase in the average interest rate paid on interest-bearing liabilities. The net interest margin increased to 2.87% for the nine months ended March 31, 2025 compared to 2.77% for the nine months ended March 31, 2024. The increase in the average yield on interest earning assets for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024 was primarily due to an increase in the average yield of all interest-earning asset categories (with the exception of cash
Previous wording
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 11 basis points due to a drop in the federal funds rate during the later part of 2024) related to the increase in market interest rates over the past year. The increase in the average interest rate paid on interest-bearing liabilities was due to the Bank raising the interest rates on all deposit categories.
Current wording
and cash equivalents which decreased by 49 basis points due to a drop in the federal funds rate) related to the increase in market interest rates over the past year. The increase in the average interest rate paid on interest-bearing liabilities was due to the Bank raising the interest rates on all deposit categories.
Previous wording
Based on our evaluation of the above factors, we recorded a recovery of credit losses of $147,000 for the six months ended December 31, 2024 compared to a recovery of credit losses of $94,000 for the six months ended December 31, 2023. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years and a decline in the loan portfolio due primarily to repayments in the commercial real estate and multi-family real estate loan portfolios, which was impactful to the weighted average life of the loan portfolio. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.
Current wording
Based on our evaluation of the above factors, we recorded a recovery of credit losses of $189,000 for the nine months ended March 31, 2025 compared to a recovery of credit losses of $216,000 for the nine months ended March 31, 2024. The decrease in the recovery when comparing the two periods was primarily related to a decrease in the loan portfolio for the nine months ended March 31, 2024. The recovery was related to the projected future economic conditions in our market area stabilizing over the next two years, an increase in prepayments in both consumer and commercial loans, which was impactful to the weighted average life of the loan portfolio and the continuous recoveries of two legacy charge-offs. These predictions align with the Bank’s historic charge-off history over the past 8-10 years.
Previous wording
The allowance for credit losses was $1.7 million, or 0.92%, of loans outstanding at December 31, 2024 and $1.9 million, or 0.96%, of loans outstanding at December 31, 2023.
Current wording
The allowance for credit losses was $1.6 million, or 0.85%, of loans outstanding at March 31, 2025 and $1.8 million, or 0.91%, of loans outstanding at March 31, 2024.
Previous wording
Non-interest expenses were $1.5 million for the three months ended December 31, 2024 compared to $1.6 million for the three months ended December 31, 2023. The decrease was primarily related to decreases in professional fees, other expenses and foreclosed assets, net expenses partially offset by an increase in salaries and employee benefits related to a new branch which opened in Brookfield, Wisconsin during January 2024.
Current wording
Non-interest expenses were $4.6 million for the nine months ended March 31, 2025 compared to $5.5 million for the nine months ended March 31, 2024. The decrease was related to a decrease in foreclosed assets, net. The decrease in expenses associated with foreclosed assets, net was primarily related to the recording of a valuation allowance of $937,100 during the nine months ended March 31, 2024 associated with a new appraisal obtained on the Company’s only foreclosed asset. 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 wording
Provision for Income Taxes. Income tax expense was $42,000 for the six months ended December 31, 2024, a decrease of $130,000, as compared to income tax expense of $172,000 for the six months ended December 31, 2023. The decrease in income tax expense was primarily the result of 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 six months ended December 31, 2023.
Current wording
Provision for (Recovery of) Income Taxes. Income tax expense was $87,000 for the nine months ended March 31, 2025, an increase of $118,000, as compared to an income tax recovery of $31,000 for the nine months ended March 31, 2024. The increase in income tax expense was primarily related to an increase in income (loss) before provision for (recovery of) income taxes when comparing the nine months ended March 31, 2025 and 2024. This increase 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 nine months ended March 31, 2024.
Previous wording
When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from
Current wording
When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.
Previous wording
Non-performing assets include other real estate owned of $1.4 million, at December 31, 2024 and June 30, 2024. During the three months ended June 30, 2023, the Company foreclosed on collateral supporting a construction loan which was valued at $2.3 million and was included in foreclosed assets, net. The valuation was based on independent appraisals subject to certain discounts less estimated costs to sell. A subsequent independent appraisal was obtained in April 2024 resulting in a new valuation of $2.1 million subject to certain discounts less estimated costs to sell. After adjusting for estimated costs to sell, the revised valuation was $1.4 million resulting in a provision for
Current wording
Non-performing assets include other real estate owned of $1.4 million, at March 31, 2025 and June 30, 2024. During the three months ended June 30, 2023, the Company foreclosed on collateral supporting a construction loan which was valued at $2.3 million and was included in foreclosed assets, net. The valuation was based on independent appraisals subject to certain discounts less estimated costs to sell. A subsequent independent appraisal was obtained in April 2024 resulting in a new valuation of $2.1 million subject to certain discounts less estimated costs to sell. After adjusting for estimated costs to sell, the revised valuation was $1.4 million resulting in a provision for valuation allowance of $937,100 being recorded during the year ended June 30, 2024. No subsequent valuation allowance was taken during the nine months ended March 31, 2025.
Previous wording
The allowance may be affected materially by a variety of qualitative factors that the Company considers to reflect its current judgement of various events and risks that are not measured in our statistical procedures. These qualitative risk factors include: (1) lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; (2) changes in the value of underlying collateral for collateral dependent loans; (3) nature and volume of the portfolio and terms of loans; (4) volume and severity of past due, classified and nonaccrual loans as well as loan modifications; (5) existence and effect of any concentrations of credit and changes in the level of such concentrations; (6) experience, ability, and depth of lending department management and other relevant staff; (7) quality of loan review and board of directors oversight; (8) the effect of other external factors such as competition, legal and regulatory requirements; and (9) changes in national and local economic conditions related to unemployment, house price index, and gross domestic product. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. The level of the allowance is particularly sensitive to changes in the actual and forecasted probability of default of benchmarked banks and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.
Current wording
The allowance may be affected materially by a variety of qualitative factors that the Company considers to reflect its current judgement of various events and risks that are not measured in our statistical procedures. These qualitative risk factors include: (1) lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices; (2) changes in the value of underlying collateral for collateral dependent loans; (3) nature and volume of the portfolio and terms of loans; (4) volume and severity of past due, classified and nonaccrual loans as well as loan modifications; (5) existence and effect of any concentrations of credit and changes in the level of such concentrations; (6) experience, ability, and depth of lending department management and other relevant staff; (7) quality of loan review and board of directors oversight; (8) the effect of other external factors such as competition, legal and regulatory requirements; and (9) changes in national and local economic conditions related to unemployment, house
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At December 31, 2024, we had a $75.7 million line of credit with the Federal Home Loan Bank of Chicago, which had $10.0 million in borrowings outstanding as of that date. The Bank also has $25.0 million available to borrow from the Federal Reserve Bank when pledging acceptable assets and an unsecured Federal Funds purchasing limit of $5.0 million with the Bank’s correspondent bank. At December 31, 2024, the Bank did not borrow any additional funds from the Federal Reserve or from the correspondent bank.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At March 31, 2025, we had a $76.2 million line of credit with the Federal Home Loan Bank of Chicago, which had $15.0 million in borrowings outstanding as of that date. The Bank also has $25.0 million available to borrow from the Federal Reserve Bank when pledging acceptable assets and an unsecured Federal Funds purchasing limit of $5.0 million with the Bank’s correspondent bank. At March 31, 2025, the Bank did not borrow any additional funds from the Federal Reserve or from the correspondent bank.
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 $1.1 million and $990,000 of cash provided by operating activities for the six months ended December 31, 2024 and 2023, respectively. Net cash provided by 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 $7.2 million provided by investing activities compared to $1.3 million provided by investing activities for the six months ended December 31, 2024 and 2023, respectively. Net cash used in financing activities, consisting of activity in deposit accounts and borrowings, was $2.6 million used in financing activities compared to $5.9 million being used in financing activities for the six months ended December 31, 2024 and 2023, 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 $1.9 million and $188,000 of cash provided by operating activities for the nine months ended March 31, 2025 and 2024, respectively. Net cash provided by (used in) investing activities, which consists primarily of disbursements for loan origination, the purchase of securities, and the purchase of premises and equipment offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $3.7 million used in investing activities compared to $8.7 million provided by investing activities for the nine months ended March 31, 2025 and 2024, respectively. Net cash provided by (used in) financing activities, consisting of activity in deposit accounts and borrowings, was $15.0 million provided by financing activities compared to $12.6 million being used in financing activities for the nine months ended March 31, 2025 and 2024, respectively.
Previous wording
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2024, we had outstanding commitments to originate loans of $7.5 million, and $200,000 in outstanding commitments to sell loans. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from December 31, 2024 totaled $46.6 million, which include $4.4 million in brokered certificates of deposit. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize additional Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.
Current wording
Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At March 31, 2025, we had outstanding commitments to originate loans of $17.6 million, and no outstanding commitments to sell loans. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from March 31, 2025 totaled $46.9 million, which include $2.3 million in brokered certificates of deposit. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize additional Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
for credit losses. However, regulatory agencies are not directly involved in establishing the allowance for credit losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.
Current report — wording carried from elsewhere
(OREO). There were no other significant changes in the components comprising non-interest income when comparing the two periods.
Current report — wording carried from elsewhere
price index, and gross domestic product. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available. In evaluating the level of the allowance, we consider a range of possible assumptions and outcomes related to the various factors identified above. The level of the allowance is particularly sensitive to changes in the actual and forecasted probability of default of benchmarked banks and changes in current conditions or reasonably expected future conditions affecting the collectability of loans.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Provision for Income Taxes. Income tax expense was $1,000 for the three months ended December 31, 2024, an increase of $31,000, as compared to income tax benefit of $29,000 for the three months ended December 31, 2023. The increase in income tax expense was primarily the result of an increase in state tax expense. This increase was due to a discreet credit recorded to state tax expense in the three months ended December 31, 2023, to account for a change in Wisconsin tax law that provides for a subtraction from Marathon Bank's state taxable income for loan and fee interest from certain commercial and agricultural loans. Based upon the provisions of this new state tax law, management determined that we are unlikely to incur a material Wisconsin tax liability in the foreseeable future.
Previous report — wording carried elsewhere
Non-interest expenses were $3.1 million for the six months ended December 31, 2024 compared to $3.0 million for the six months ended December 31, 2023. The increase was primarily related to an increase in salaries and employee benefits and occupancy and equipment expenses related to a new branch which opened in Brookfield, Wisconsin during January 2024.
Previous report — wording carried elsewhere
foreclosed assets. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.