Marathon Bancorp Inc(MBBC) - 2026 Q1 - Quarterly Report

Financial Performance - Net income for the three months ended September 30, 2025, was $444,000, an increase of $269,000, or 154.0%, from $175,000 for the same period in 2024[166]. - Interest income increased by $563,000, or 24.4%, to $2.9 million for the three months ended September 30, 2025, primarily due to a $545,000 increase in loan interest income[167]. - Net interest income rose by $533,000, or 37.5%, to $2.0 million for the three months ended September 30, 2025, compared to $1.4 million for the same period in 2024[173]. - The net interest margin increased to 3.49% for the three months ended September 30, 2025, up from 2.85% for the same period in 2024[173]. - Non-interest income decreased slightly by $3,000 to $190,000 for the three months ended September 30, 2025, from $193,000 for the same period in 2024[179]. - Total non-interest expenses increased by $82,000, or 5.3%, to $1.6 million for the three months ended September 30, 2025, compared to $1.5 million for the same period in 2024[182]. - Income tax expense was $103,000 for the three months ended September 30, 2025, an increase of $62,000 from $41,000 for the same period in 2024[183]. Asset and Liability Management - Total assets increased by $7.2 million, or 3.0%, to $246.0 million at September 30, 2025, from $238.8 million at June 30, 2025[152]. - Loans increased by $5.5 million, or 2.7%, contributing to the overall asset growth[152]. - Total deposits increased by $6.5 million, or 3.7%, to $181.7 million at September 30, 2025, primarily due to an 8.1% increase in demand, NOW, and money market deposits[158]. - Gross loans increased by $5.5 million, or 2.7%, to $208.0 million at September 30, 2025, driven by a 6.1% increase in multi-family real estate loans and a 4.6% increase in one-to-four-family residential loans[154]. - Total stockholders' equity increased by $572,000 to $46.3 million at September 30, 2025, primarily due to net income[159]. - FHLB advances remained unchanged at $15.0 million at September 30, 2025[159]. - Foreclosed assets remained unchanged at $996,000 at September 30, 2025[157]. Credit Losses and Allowance - The allowance for credit losses at September 30, 2025, reflects the company's estimate of lifetime credit losses expected from its loan portfolio[141]. - A hypothetical change in the allowance for credit losses could result in an increase of $108,000, or 6.3%[144]. - The company assesses the allowance for credit losses quarterly, considering historical loan loss experience and current economic conditions[133]. - The allowance for credit losses was $1.7 million, or 0.80%, of loans outstanding at September 30, 2025, compared to $1.7 million, or 0.92%, at September 30, 2024[176]. - A recovery of credit losses of $40,000 was recorded for the three months ended September 30, 2025, compared to a recovery of $155,000 for the same period in 2024[175]. - The provision for credit losses for the three months ended September 30, 2025, was a recovery of $40,000, compared to a recovery of $155,000 for the same period in 2024[200]. - The allowance to non-performing loans ratio was 878.42% at September 30, 2025, indicating a strong coverage of non-performing loans[200]. Cash Flow and Financing Activities - Net cash provided by operating activities was $464,000 for the three months ended September 30, 2025, compared to $945,000 for the same period in 2024, showing a decline of approximately 50.1%[206]. - Net cash used in investing activities was $5.9 million for the three months ended September 30, 2025, compared to $7.5 million provided by investing activities in the same period of 2024[206]. - Net cash provided by financing activities was $6.5 million for the three months ended September 30, 2025, compared to $3.9 million used in financing activities for the same period in 2024[206]. - At September 30, 2025, the company had a $83.4 million line of credit with the Federal Home Loan Bank of Chicago, with $15.0 million in borrowings outstanding[204]. Economic Conditions and Risks - The company is subject to various economic uncertainties that could impact its financial performance, including inflation and changes in interest rates[129]. - The primary impact of inflation on the company's operations is reflected in increased operating costs, with interest rates having a more significant effect on performance[212]. - The company is subject to off-balance-sheet risks, including commitments to extend credit, which may expire without being drawn upon[209]. - Management expects a substantial portion of maturing time deposits to be renewed, but if not, additional borrowings may lead to higher interest expenses[209]. - As of September 30, 2025, the company had outstanding commitments to originate loans totaling $7.5 million[209].