Business Context and Reporting Period
Company: Marathon Bancorp, Inc. (MBBC)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and six months ended December 31, 2025
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, with shares trading on the Nasdaq Capital Market.
Key Financial Metrics
| Metric | Six Months Ended Dec 31, 2025 | Six Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2025 | Three Months Ended Dec 31, 2024 |
|---|---|---|---|---|
| Net Income | $945,689 | $226,034 | $501,396 | $51,127 |
| Diluted EPS | $0.35 | $0.08 | $0.19 | $0.02 |
| Total Assets (Dec 31, 2025) | $248.0 million | $238.8 million (June 30, 2025) | N/A | |
| Total Deposits (Dec 31, 2025) | $178.4 million | $175.2 million (June 30, 2025) | ||
| Net Interest Income | $4.01 million | $2.83 million | $2.06 million | $1.41 million |
| Net Interest Margin | 3.56% | 2.84% | 3.66% | 2.85% |
| Allowance for Credit Losses | $1.70 million | $1.70 million (June 30, 2025) | N/A | |
| Non-Performing Assets | $1.19 million | $1.06 million (June 30, 2025) | ||
| Cash Flow from Operations | $1.88 million | $1.06 million | N/A | |
| Stockholders' Equity | $46.9 million | $45.7 million (June 30, 2025) |
Material Changes vs. Prior Period
- Profitability Surge: Net income for the six months ended December 31, 2025, increased by 318.4% ($720,000) compared to the prior year period. This was driven primarily by a $1.2 million increase in net interest income.
- Loan Growth: Gross loans increased by $11.1 million (5.5%) to $213.7 million, led by growth in one-to-four-family residential loans ($7.7 million) and multi-family real estate loans ($3.9 million).
- Net Interest Margin Expansion: The net interest margin improved to 3.56% for the six-month period (up from 2.84% in 2024) due to a 63 basis point increase in the average yield on loans, offset by a slight decrease in deposit costs.
- Provision for Credit Losses: The Company recorded a recovery of credit losses of $7,000 for the six months ended December 31, 2025, compared to a recovery of $147,000 in the prior year. The decrease in recovery was attributed to loan portfolio growth.
- Expense Management: Non-interest expenses increased by $183,000 (5.9%) year-over-year, primarily due to higher salaries (new Brookfield branch) and professional fees, partially offset by a significant decrease in data processing costs due to a new software contract.
Guidance, Outlook, and Risks
- Outlook: Management anticipates sufficient funds to meet current funding commitments. The Company expects to retain a substantial portion of maturing time deposits but may utilize Federal Home Loan Bank (FHLB) advances if necessary.
- Asset Quality: Non-performing assets totaled $1.19 million (0.48% of total assets). This includes $190,000 in non-accrual loans (one-to-four-family residential) and $996,000 in foreclosed assets (OREO). The OREO balance relates to a construction loan foreclosure where a sale contract was terminated in the current quarter; the property has been relisted for $1.5 million.
- Liquidity: The Company maintains strong liquidity with $13.7 million in cash and cash equivalents. It has $75.1 million available to borrow from the FHLB and $16.5 million available from the Federal Reserve Bank.
- Capital: The Bank is classified as "well capitalized" under regulatory frameworks, with a Tier I Capital to Average Assets ratio of 15.27% (minimum required 8.0%).
- Risks: Key risks include changes in interest rates affecting margins, general economic conditions in Wisconsin, real estate market fluctuations, and the ability to sell foreclosed assets at values equal to or greater than their carrying amount.
Investor Verification Checklist
- Foreclosed Asset Resolution: Verify the status of the $996,000 OREO asset (construction loan collateral) and the timeline for its sale at the new listing price of $1.5 million.
- Loan Portfolio Concentration: Review the composition of the loan portfolio, noting that Commercial Real Estate (CRE) and Multi-family loans represent significant portions of the portfolio.
- Deposit Stability: Monitor the shift in deposit mix, specifically the decrease in Certificates of Deposit (CDs) and the increase in demand/money market accounts, to assess funding cost stability.
- Cost Savings Realization: Confirm the realization of the projected $185,000 annual savings from the new core software provider contract.
- Regulatory Capital: Confirm continued compliance with the Community Bank Leverage Ratio (CBLR) framework, where the Bank is currently well above the 9.0% threshold.