Marathon Bancorp Inc(US:MBBC)2025-09-26 20:30Credit Losses and Allowance - As of June 30, 2025, the allowance for credit losses totaled $1.7 million, a slight decrease from $1.8 million as of June 30, 2024[267]. - The allowance for credit losses allocated to the one- to four-family residential loan portfolio was $1.1 million, representing 65.7% of the total allowance[269]. - A hypothetical change in the allowance calculation could result in an increase of $139,000, or 8.1%, based on adjustments to economic indicators[270]. - The company’s methodology for estimating the allowance for credit losses includes evaluations of historical loan losses and current economic conditions[266]. - The provision for credit losses is established through charges to earnings, reflecting management's judgment on collectability[251]. - The allowance for credit losses as a percentage of total loans decreased to 0.84% from 0.97% in the previous year[284]. - The allowance for credit losses was $1.7 million, or 0.84%, of loans outstanding at June 30, 2025, down from $1.8 million, or 0.97%, at June 30, 2024[312]. - The provision for (recovery of) credit losses recorded a recovery of approximately $94,000 for the year ended June 30, 2025, compared to a recovery of $190,000 for the year ended June 30, 2024[310]. Financial Performance - Net income for the year ended June 30, 2025, was $42,000, an increase of $229,000, or 122.7%, from a net loss of $187,000 for the year ended June 30, 2024[301]. - Net interest income rose to $6.043 million in 2025 from $5.840 million in 2024, reflecting an increase in interest income[283]. - Net interest income increased by $203,000, or 3.8%, to $6.0 million for the year ended June 30, 2025, compared to $5.8 million for the year ended June 30, 2024[308]. - Interest income rose by $120,000, or 1.3%, to $9.6 million for the year ended June 30, 2025, primarily due to an increase in other interest income[302]. - The average yield on loans increased by 27 basis points to 4.73% for the year ended June 30, 2025, despite a decrease in the average balance of the loan portfolio by $10.5 million, or 5.4%[303]. - Non-interest income increased by $23,000 to $749,000 for the year ended June 30, 2025, primarily due to an increase in other income related to a settlement of litigation[315]. - Total non-interest expenses decreased by $128,000, or 1.8%, to $6.9 million for the year ended June 30, 2025, compared to $7.0 million for the year ended June 30, 2024[318]. - Interest expense decreased by $83,000, or 2.3%, to $3.5 million for the year ended June 30, 2025, due to a decrease in interest paid on borrowings[305]. - The average rate paid on deposits increased by 12 basis points to 1.97% for the year ended June 30, 2025, driven by higher interest rates and increased competition[306]. Assets and Liabilities - Total assets increased by $19.5 million, or 8.9%, to $238.8 million at June 30, 2025, from $219.3 million at June 30, 2024[286]. - Gross loans increased by $17.3 million, or 9.5%, to $202.6 million at June 30, 2025, primarily driven by a $17.6 million increase in commercial real estate loans, or 23.6%[290]. - Total cash and cash equivalents rose by $3.9 million, or 37.4%, to $14.4 million at June 30, 2025, due to net proceeds from the Company's Conversion and an increase in deposits[287]. - Stockholders' equity increased by $14.4 million, or 46.1%, to $45.7 million, primarily due to net proceeds raised from the Company's Conversion[294]. - Total deposits increased by $2.2 million, or 1.3%, to $175.2 million at June 30, 2025, driven by growth in demand and money market deposits[292]. - Federal Home Loan Bank advances increased by $2.0 million to $15.0 million at June 30, 2025, to support loan growth[293]. Cash Flow and Commitments - Net cash provided by operating activities was $1.4 million for the year ended June 30, 2025, compared to $417,000 for the year ended June 30, 2024[323]. - Net cash used in investing activities was $15.6 million for the year ended June 30, 2025, compared to $17.7 million provided by investing activities for the year ended June 30, 2024[323]. - Net cash provided by financing activities was $18.0 million for the year ended June 30, 2025, compared to $19.4 million used in financing activities for the year ended June 30, 2024[323]. - At June 30, 2025, the company had outstanding commitments to originate loans of $4.8 million and commitments to sell loans of $329,000[326]. - Time deposits scheduled to mature in one year or less totaled $46.2 million as of June 30, 2025, with expectations of substantial renewal[326]. Regulatory and Compliance - The company is classified as "well capitalized" for regulatory capital purposes as of June 30, 2025[325]. - The company anticipates sufficient funds to meet current funding commitments based on deposit retention experience and pricing strategy[324]. - The company recognizes deferred tax assets and liabilities based on enacted tax rates, which may affect future tax expenses[272]. - Fair value measurements are conducted in accordance with FASB standards, ensuring compliance with accounting principles[279]. - The company monitors its liquidity position daily to ensure it can meet financial obligations[324]. Economic Factors - The primary impact of inflation on the company's operations is reflected in increased operating costs, with interest rates having a more significant impact on performance[329].