IF Bancorp(IROQ) - 2022 Q4 - Annual Report

Financial Position - As of June 30, 2022, IF Bancorp had consolidated assets of $857.6 million, consolidated deposits of $752.0 million, and consolidated equity of $71.7 million[18]. - The company ranked second in Iroquois County with a 20.96% deposit market share and first in Vermilion County with a 25.56% deposit market share as of June 30, 2021[30]. - Total deposits increased to $660.748 million as of June 30, 2022, up from $608.268 million in 2021, representing an increase of 8.5%[143]. - Iroquois Federal's capital exceeded all applicable regulatory requirements as of June 30, 2022[165]. - As of June 30, 2022, Iroquois Federal was classified as "well-capitalized" with a total risk-based capital ratio of 10.0% or greater[181]. Loan Portfolio Composition - The loan portfolio composition as of June 30, 2022, included one- to four-family loans at $132.5 million (25.20%), multi-family loans at $88.2 million (16.78%), and commercial loans at $167.4 million (31.84%)[37]. - As of June 30, 2022, the total loan portfolio included $132.5 million in one- to four-family residential mortgage loans, representing 25.2% of the total[43]. - Commercial real estate loans comprised $167.4 million, or 31.8% of the total loan portfolio, while multi-family real estate loans accounted for $88.2 million, or 16.8%[54]. - At June 30, 2022, commercial business loans outstanding were $80.4 million, representing 15.3% of the total loan portfolio[64]. - Construction loans made up $41.3 million, or 7.9% of the total loan portfolio, as of June 30, 2022[68]. Loan Performance and Risk - The total non-performing loans amounted to $1.174 million, a significant increase from $152,000 in 2021[84]. - The total delinquent loans increased to $1.339 million at June 30, 2022, up from $204,000 at June 30, 2021, primarily due to two purchased loans that received COVID-19 modifications[93]. - At June 30, 2022, troubled debt restructurings were approximately $998,000, down from $1.3 million in 2021[88]. - Non-performing assets totaled $1.294 million at June 30, 2022, compared to $411,000 in 2021[84]. - The ratio of non-performing loans to total loans was 0.22% at June 30, 2022, compared to 0.03% in 2021[85]. Allowance for Loan Losses - The allowance for loan losses increased by $453,000 to $7.1 million at June 30, 2022, compared to $6.6 million at June 30, 2021, due to loan growth and changes in the loan portfolio mix[113]. - The allowance for loan losses methodology includes specific allowances for impaired loans and a general allowance based on estimated credit losses inherent in the loan portfolio[104]. - The allowance for loan losses represented 1.34% of total loans at June 30, 2022, up from 1.27% at June 30, 2021[125]. - The allowance for loan losses to non-performing loans at the end of the period was 600.68% at June 30, 2022, compared to 4341.45% at June 30, 2021[124]. - The company's net charge-offs for the entire portfolio total was 0.04% as of June 30, 2022, down from 0.06% in 2021[116]. Economic and Market Conditions - The unemployment rate in Iroquois County decreased from 4.7% to 3.9%, and in Vermilion County from 7.2% to 5.5% over the past year[26]. - Future growth opportunities will be influenced by economic and demographic characteristics of the primary market area, particularly in Champaign County, which has experienced population growth[26]. - The economic impact of the COVID-19 pandemic has caused significant disruptions, affecting the company's financial condition and operations[203]. - The Federal Reserve Board's target federal funds rate was 1.50% to 1.75% at June 30, 2022, which may impact net interest margin and income[210]. - The company may face challenges in maintaining sufficient funding sources to support future growth, relying on FHLB advances and brokered certificates of deposit[211]. Regulatory Environment - Iroquois Federal received a "satisfactory" rating under the Community Reinvestment Act in its most recent federal examination[171]. - The FDIC insures deposits at Iroquois Federal up to a maximum of $250,000 per depositor[182]. - The OCC has the authority to take enforcement actions against Iroquois Federal for non-compliance with safety and soundness standards[176]. - Federal regulations permit Iroquois Federal to establish branches in any state, subject to OCC approval[179]. - The Dodd-Frank Act requires savings and loan holding companies to act as a source of strength for their subsidiaries, impacting capital management strategies[198].