Marathon Bancorp, Inc. Form 8-K Summary
Report date: September 19, 2023. The filing addresses non-reliance on previously issued financial statements and a planned restatement related to deferred tax accounting.
Business Context and Reporting Period
Marathon Bancorp, Inc. is the holding company for Marathon Bank, a thrift institution headquartered in Wausau, Wisconsin. The company reported that its previously issued financial statements for the fiscal year ended June 30, 2022, and specified quarterly periods from September 30, 2021 through March 31, 2023, should no longer be relied upon.
Financial Impact and Key Metrics
- As of July 1, 2021, the company recorded a $481,798 adjustment to opening retained earnings and deferred tax assets to correct an accounting error.
- The error involved an improperly maintained deferred tax liability related to pre-1988 excess tax bad debt deductions.
- At June 30, 2023 and June 30, 2022, the Bank had an unrecaptured pre-1988 federal bad debt reserve of approximately $1.5 million.
- No federal income tax provision was recorded on that reserve because management does not intend to take actions that would cause recapture, including stock redemptions or distributions exceeding earnings and profits.
- The filing does not provide clear values for revenue, net income, cash flow, margins, debt, liquidity, or other operating metrics.
Material Changes Versus Prior Periods
The audit committee concluded, after consulting with management and Bonadio & Co., LLP, that the previously issued financial statements identified in the filing require restatement. The accounting correction reflects the company’s determination that the 1993 conversion from a Mutual Savings and Loan Association charter to a Mutual Savings Bank charter did not eliminate the Bank’s eligibility for special tax treatment available to thrift institutions.
Restatement, Outlook, and Risks
- The company intends to file its Form 10-K for the fiscal year ended June 30, 2023, with restated audited consolidated financial statements for the fiscal year ended June 30, 2022.
- The filing also expects to include selected restated unaudited quarterly financial data for fiscal 2023 and fiscal 2022.
- The timing of the restated filing is described only as “as soon as practicable.”
- Forward-looking statements are subject to risks including economic conditions, inflation, interest-rate changes, COVID-19 impacts, regulatory matters, competition, and other risks disclosed in the company’s SEC filings.
Investor Verification Points
- Verify the final restated financial statements and the effect of the $481,798 correction on retained earnings, deferred tax assets, and related periods.
- Confirm whether any additional accounting errors, tax effects, or control deficiencies are identified in the restated Form 10-K.
- Review the treatment and potential future recapture of the approximately $1.5 million pre-1988 bad debt reserve.
- Confirm the filing date and completeness of the planned fiscal 2023 Form 10-K.
- Assess any changes to reported earnings, regulatory capital, liquidity, dividends, or other investor-relevant metrics after restatement.