Business Context and Reporting Period
Company: Marathon Bancorp, Inc. (MBBC)
Reporting Period: Fiscal year ended June 30, 2026
Business Overview: Marathon Bancorp is the holding company for Marathon Bank, a Wisconsin-chartered savings bank. The company operates five branch offices in Marathon, Ozaukee, and Waukesha Counties, with a strategic focus on expanding commercial real estate and multifamily lending in Southeastern Wisconsin. In April 2025, the company completed a conversion from a mutual holding company to a stock holding company, listing on the Nasdaq Capital Market.
Key Financial Metrics
| Metric | June 30, 2026 | June 30, 2025 |
|---|---|---|
| Total Assets | $261.0 million | $238.8 million |
| Total Loans (Net) | $217.4 million | $200.8 million |
| Total Deposits | $189.8 million | $175.2 million |
| Net Interest Income | $8.2 million | $6.0 million |
| Net Income | $1.8 million | $42,000 |
| Diluted EPS | $0.66 | $0.02 |
| Stockholders' Equity | $48.0 million | $45.7 million |
| Allowance for Credit Losses | $1.7 million | $1.7 million |
| Non-Performing Assets | $1.1 million (0.41% of assets) | $1.1 million (0.45% of assets) |
Material Changes vs. Prior Period
- Profitability Surge: Net income increased by 412% to $1.8 million, driven primarily by a $2.2 million increase in net interest income.
- Asset Growth: Total assets grew 9.3% to $261.0 million, fueled by an $16.6 million increase in net loans and a $6.4 million increase in cash equivalents.
- Loan Portfolio Expansion: Gross loans increased 8.3% to $219.3 million. Growth was concentrated in one-to-four-family residential loans (+12.8%), multifamily real estate loans (+12.8%), and commercial real estate loans (+4.4%).
- Deposit Growth: Total deposits rose 8.3% to $189.8 million, with significant increases in demand/money market accounts and certificates of deposit.
- Interest Rate Environment: The average yield on loans increased by 60 basis points to 5.33%, while the cost of interest-bearing liabilities decreased slightly to 2.10%, expanding the net interest margin to 3.59% from 2.96%.
Guidance, Outlook, and Risks
Management Commentary: Management attributes the improved results to strategic loan growth in higher-yielding commercial and multifamily sectors and effective interest rate risk management. The company continues to focus on relationship management to grow core deposits.
Outlook: The company anticipates opening a new branch in New Holstein, Wisconsin, in the fourth quarter of 2026. It expects to retain a substantial portion of maturing time deposits and has sufficient liquidity to meet funding commitments.
Risks and Contingencies:
- Credit Risk: Concentration in commercial real estate (43.7% of loans) exposes the bank to economic downturns in the real estate market. One commercial real estate loan ($648,000) is rated "Special Mention/Watch."
- Interest Rate Risk: While the current environment has been favorable, changes in interest rates could impact margins and the fair value of securities.
- Foreclosed Assets: The bank holds $996,000 in Other Real Estate Owned (OREO) related to a construction loan foreclosure. A sale contract was terminated in late 2025, and the property has been relisted for $1.5 million.
- Regulatory Capital: The bank is "well capitalized" and has elected to use the Community Bank Leverage Ratio (CBLR) framework.
Investor Verification Checklist
- Loan Concentration: Verify the performance of the $95.9 million commercial real estate portfolio, which represents nearly 44% of total loans.
- OREO Resolution: Monitor the status of the $996,000 foreclosed construction asset and the timeline for its sale at the relisted price of $1.5 million.
- Deposit Stability: Assess the retention rate of the $74.9 million in certificates of deposit, particularly those maturing within the next 12 months ($63.7 million).
- Stock Repurchase Program: Review the execution of the $146,931 share repurchase program authorized in April 2026.
- ESOP Loan: Confirm the repayment schedule and interest rate terms of the $2.1 million term loan to the Employee Stock Ownership Plan.