Business Context and Reporting Period
Company: Marathon Bancorp, Inc. (MBBC)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and nine months ended March 31, 2026
Business Overview: Marathon Bancorp is the holding company for Marathon Bank, a Wisconsin stock savings bank operating five facilities in Marathon, Ozaukee, and Waukesha Counties. The Company completed a conversion from a mutual holding company to a stock holding company on April 21, 2025, and its common stock trades on the Nasdaq Capital Market.
Key Financial Metrics
| Metric | Three Months Ended March 31, 2026 |
Nine Months Ended March 31, 2026 |
|---|---|---|
| Net Income | $487,863 | $1,433,552 |
| Diluted EPS | $0.18 | $0.53 |
| Total Assets | $249,023,168 | (Balance Sheet Item) |
| Total Loans (Net) | $211,707,097 | (Balance Sheet Item) |
| Total Deposits | $174,151,938 | (Balance Sheet Item) |
| Net Interest Income | $2,056,894 | $6,067,724 |
| Net Interest Margin (NIM) | 3.61% | 3.58% |
| Allowance for Credit Losses | $1,708,584 | (Balance Sheet Item) |
| Stockholders' Equity | $47,535,166 | (Balance Sheet Item) |
Material Changes vs. Prior Period
- Profitability Surge: Net income for the three months ended March 31, 2026, increased by 228.7% to $488,000 compared to $148,000 in the prior year period. For the nine-month period, net income rose 282.9% to $1.43 million from $374,000.
- Net Interest Income Growth: Net interest income increased 40.6% year-over-year for the quarter, driven by a 65 basis point increase in the average yield on loans (to 5.50%) and a 15.7% increase in average loan balances.
- Asset Expansion: Total assets grew 4.3% to $249.0 million, primarily due to a $10.9 million increase in loans, specifically in one-to-four-family residential and multi-family real estate portfolios.
- Expense Management: Non-interest expenses increased 11.3% for the quarter, largely due to higher salaries and employee benefits (linked to ESOP expansion and hiring) and the annual NASDAQ listing fee. However, data processing expenses decreased 24.8% due to a new core software contract.
- Provision for Credit Losses: The Company recorded a provision of $5,000 for the quarter, compared to a recovery of $41,833 in the prior year, reflecting loan portfolio growth.
Outlook, Risks, and Contingencies
- Asset Quality: Non-performing assets totaled $1.186 million (0.48% of total assets), consisting of $190,013 in non-accrual loans (one-to-four-family residential) and $996,373 in foreclosed assets (OREO). There were no classified assets (substandard, doubtful, or loss) as of March 31, 2026.
- Foreclosed Assets: The Company holds a construction property valued at $996,373 (net). A previous sale contract for $1.1 million was terminated in December 2025, and the property has been relisted for $1.5 million.
- Liquidity: The Company maintains strong liquidity with $13.6 million in cash and cash equivalents. It has $75.1 million available to borrow from the Federal Home Loan Bank (FHLB) and $19.8 million available from the Federal Reserve Bank.
- Capital Adequacy: The Bank is classified as "well capitalized" under regulatory frameworks, with a Tier I Capital to Average Assets ratio of 15.35% (exceeding the 9.0% well-capitalized threshold).
- Risk Factors: Key risks include interest rate fluctuations, general economic conditions in Wisconsin, real estate market volatility, and the ability to sell foreclosed assets at carrying value.
Investor Verification Checklist
- Foreclosed Asset Disposition: Verify the status of the $996,000 construction property relisted at $1.5 million and the timeline for its sale.
- Loan Portfolio Concentration: Review the strategic growth in multi-family and one-to-four-family residential loans and associated credit risk metrics.
- Expense Run-Rate: Confirm the annualized savings from the new core software contract ($185,000) against the increased compensation costs from ESOP expansion.
- Deposit Stability: Monitor the composition of deposits, noting the shift from fixed-rate certificates of deposit to variable-rate products and the impact on future interest expense.
- Regulatory Capital: Confirm continued compliance with the Community Bank Leverage Ratio (CBLR) framework as the Company transitions to the new 8% threshold effective July 1, 2026.