Marathon Bancorp Boosts Capital, Shifts Loan Mix Post-Conversion

TL;DR

**MBBC's strategic conversion and loan portfolio shift to commercial real estate signals a bullish outlook for growth and profitability in competitive Wisconsin markets.**

AI Summary

Marathon Bancorp, Inc. (MBBC) reported total consolidated assets of $238.8 million, total deposits of $175.2 million, and total stockholders' equity of $45.7 million as of June 30, 2025. The company completed its conversion from a mutual holding company to a stock holding company on April 21, 2025, generating gross proceeds of $16.9 million from the sale of 1,693,411 shares of common stock at $10.00 per share, net of $1.7 million in offering expenses. This conversion also led to a new $2.1 million term loan to the Employee Stock Ownership Plan (ESOP). The loan portfolio grew to $202.6 million in 2025 from $185.3 million in 2024, an increase of 9.3%. Commercial real estate loans increased significantly by 23.6% to $91.9 million, and multifamily loans rose by 6.0% to $47.8 million, reflecting the strategic shift towards these higher-yield segments. One-to-four family residential real estate loans decreased by 2.6% to $56.3 million. The company continues to expand its presence in Southeastern Wisconsin, including the Milwaukee metropolitan area, with new branches in Brookfield and Mequon.

Why It Matters

Marathon Bancorp's conversion to a full stock holding company on April 21, 2025, and the subsequent $16.9 million capital infusion, significantly strengthens its financial flexibility for future growth and potential acquisitions, directly impacting investor confidence. The strategic pivot towards higher-yield commercial and multifamily real estate loans, particularly in the competitive Southeastern Wisconsin market, indicates a clear path for enhanced profitability, which could benefit shareholders. For employees, the ESOP's expanded loan of $2.1 million demonstrates continued commitment to employee ownership. Customers in the Wausau and Southeastern Wisconsin areas will likely see continued investment in services and branch expansion, intensifying competition with larger regional banks and fintech companies.

Risk Assessment

Risk Level: medium — The company faces medium risk due to its significant exposure to real estate lending, with commercial and multifamily real estate loans comprising 69.0% of its total loan portfolio at June 30, 2025. Fluctuations in real estate values and market conditions, particularly in its expanding Southeastern Wisconsin market, could adversely impact asset quality. Additionally, intense competition from larger banks and fintech companies in its market areas, as noted by its 0.06% deposit market share in Waukesha County, poses a challenge to deposit growth and profitability.

Analyst Insight

Investors should closely monitor Marathon Bancorp's loan growth in commercial and multifamily real estate, particularly in the Southeastern Wisconsin market, to assess the effectiveness of its strategic shift. Evaluate the impact of rising interest rates on its loan portfolio yield and net interest margin, and observe how the company manages credit quality in these higher-risk loan segments. The recent capital raise from the conversion provides a buffer, but execution on growth and risk management will be key.

Key Numbers

• $238.8 million — Total Consolidated Assets (as of June 30, 2025)
• $175.2 million — Total Deposits (as of June 30, 2025)
• $45.7 million — Total Stockholders' Equity (as of June 30, 2025)
• $16.9 million — Gross Proceeds from Conversion (from selling 1,693,411 shares at $10.00 per share)
• $2.1 million — New ESOP Term Loan (combined with existing loan, to be repaid over 25 years)
• $202.6 million — Total Loans (increased 9.3% from $185.3 million in 2024)
• $91.9 million — Commercial Real Estate Loans (increased 23.6% from $74.3 million in 2024)
• $47.8 million — Multi-family Real Estate Loans (increased 6.0% from $45.1 million in 2024)
• 2.99% — Marathon County Deposit Market Share (ranking ninth out of 17 institutions as of June 30, 2025)
• 0.06% — Waukesha County Deposit Market Share (ranking 34th out of 34 institutions as of June 30, 2025)

Key Players & Entities

• Marathon Bancorp, Inc. (company) — mid-tier holding company
• Marathon Bank (company) — wholly-owned subsidiary
• Nicholas W. Zillges (person) — President and Chief Executive Officer
• Federal Reserve Board (regulator) — regulates Marathon Bancorp
• Wisconsin Department of Financial Institutions (regulator) — regulates Marathon Bancorp
• Nasdaq Capital Market (company) — exchange where MBBC common stock trades
• Employee Stock Ownership Plan (company) — received a $2.1 million term loan
• Wausau, Wisconsin (location) — headquarters of Marathon Bank
• Southeastern Wisconsin (location) — primary lending market expansion area
• Milwaukee metropolitan area (location) — key growth market for Marathon Bank

FAQ

Risk Factors

• Interest Rate Environment [high — market]: Inflation and changes in the interest rate environment can reduce margins and yields, negatively impact mortgage banking revenues, affect the fair value of financial instruments, and decrease loan originations. It can also increase defaults, losses, and prepayments on loans.
• General Economic Conditions [medium — market]: Worse-than-expected general economic conditions, either nationally or within Marathon Bancorp's market areas, could adversely affect the company's financial performance and prospects.
• Loan Portfolio Quality [high — financial]: Changes in the level and direction of loan delinquencies and write-offs, as well as adjustments to the allowance for credit losses, directly impact financial results and risk exposure.
• Real Estate Market Fluctuations [medium — market]: Fluctuations in real estate values and conditions in both residential and commercial real estate markets can affect the value of collateral and the performance of the loan portfolio.
• Cybersecurity Threats [high — operational]: The company faces risks related to cybersecurity, which could lead to data breaches, operational disruptions, and reputational damage.
• Competitive Landscape [medium — market]: Competition among depository and other financial institutions can impact market share, pricing, and profitability.
• Access to Funding [medium — financial]: The ability to access cost-effective funding is crucial for maintaining liquidity and supporting lending activities. Inability to do so could constrain growth.
• Regulatory Environment [high — regulatory]: As a bank holding company, Marathon Bancorp is subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System, which can impact operations and strategic decisions.

Industry Context

Marathon Bancorp operates in the competitive banking sector, particularly in Southeastern Wisconsin. The industry is characterized by a strategic shift towards higher-yield segments like commercial real estate and multifamily loans, alongside a traditional focus on residential real estate. Deposit market share varies significantly by county, indicating localized competition and market penetration challenges.

Regulatory Implications

As a bank holding company regulated by the Federal Reserve, Marathon Bancorp faces significant oversight. Compliance with regulations impacts operational flexibility and strategic initiatives. The recent conversion to a stock holding company may also bring new regulatory considerations and reporting requirements.

What Investors Should Do

1. Monitor loan portfolio growth and composition.
2. Assess the impact of the recent stock conversion.
3. Analyze interest rate sensitivity.
4. Evaluate market share and expansion strategy.

Key Dates

• 2021-04-14: Mutual Holding Company Reorganization and Stock Offering — Established the mutual holding company structure and initiated the public trading of Marathon Bancorp, Inc. shares.
• 2025-04-21: Conversion to Stock Holding Company — Completed the transition from a mutual holding company to a stock holding company, raising $16.9 million in gross proceeds and establishing the ESOP term loan.

Glossary

Mutual Holding Company

A corporate structure where a mutual institution (like a savings bank) reorganizes so that a holding company owns the institution. The holding company can then issue stock to the public. (Marathon Bancorp operated under this structure before its conversion.)

Stock Holding Company

A corporate structure where a holding company owns a bank or other financial institutions, and the holding company's stock is publicly traded. (Marathon Bancorp converted to this structure, allowing for public ownership and capital raising.)

Employee Stock Ownership Plan (ESOP)

A type of employee benefit plan that gives workers ownership interest in the company. (Marathon Bancorp provided a $2.1 million term loan to its ESOP to finance the purchase of company shares as part of the conversion.)

Conversion

The process by which Marathon Bancorp changed its corporate structure from a mutual holding company to a stock holding company. (This was a significant event in 2025, impacting the company's capital structure and ownership.)

Allowance for Credit Losses

An estimate of the amount of loan principal that is expected to be uncollectible. (Changes in this allowance directly affect the company's reported earnings and financial condition.)

Year-Over-Year Comparison

The company's financial position as of June 30, 2025, shows total consolidated assets of $238.8 million, an increase from the prior year. The loan portfolio grew by 9.3% to $202.6 million, driven by a significant 23.6% increase in commercial real estate loans. A key event was the April 21, 2025, conversion from a mutual holding company to a stock holding company, which generated $16.9 million in gross proceeds and established a new $2.1 million ESOP term loan. Specific year-over-year comparisons for revenue, net income, and margins are not detailed in the provided summary, but the loan growth indicates expansionary activity.

Key Financial Figures

• $10.00 — Ownership Plan ("ESOP")) at a price of $10.00 per share to the public. Each outstandi
• $16.9 million — The Company generated gross proceeds of $16.9 million from the Conversion. Offering expenses
• $1.7 million — in connection with the Conversion were $1.7 million which were netted against the gross pro
• $777,212 — outstanding ESOP loan in the amount of $777,212 with this new loan resulting in a new t
• $2.1 million — lting in a new term loan to the ESOP of $2.1 million which will be repaid in annual installm
• $238.8 m — 25, we had total consolidated assets of $238.8 million, total deposits of $175.2 million
• $175.2 million — ts of $238.8 million, total deposits of $175.2 million and total stockholders' equity of $45.7
• $45.7 million — llion and total stockholders' equity of $45.7 million. Our executive office is located at 500
• $76,185 — 5 in Marathon County is estimated to be $76,185. Ozaukee County's total population for
• $96,734 — 25 in Ozaukee County is estimated to be $96,734. Milwaukee County's total population
• $63,185 — in Milwaukee County is estimated to be $63,185. Waukesha County's total population fo
• $104,100 — s market area counties, estimated to be $104,100 for 2025. Unemployment rates as of Jun
• $91.9 million — estate loans. At June 30, 2025, we had $91.9 million in commercial real estate loans, repres
• $84.1 million — utheastern Wisconsin. At June 30, 2025, $84.1 million of our commercial real estate portfolio
• $1,024,000 — of our commercial real estate loans was $1,024,000, and the largest of such loans was a $5

Filing Documents

• mara-20250630x10k.htm (10-K) — 4841KB
• mara-20250630xex3d1.htm (EX-3.1) — 62KB
• mara-20250630xex19.htm (EX-19) — 49KB
• mara-20250630xex21.htm (EX-21) — 7KB
• mara-20250630xex23.htm (EX-23) — 5KB
• mara-20250630xex31d1.htm (EX-31.1) — 12KB
• mara-20250630xex31d2.htm (EX-31.2) — 12KB
• mara-20250630xex32d1.htm (EX-32.1) — 7KB
• mara-20250630xex32d2.htm (EX-32.2) — 7KB
• mara-20250630xex97.htm (EX-97) — 36KB
• 0001104659-25-093884.txt ( ) — 20524KB
• mara-20250630.xsd (EX-101.SCH) — 73KB
• mara-20250630_cal.xml (EX-101.CAL) — 108KB
• mara-20250630_def.xml (EX-101.DEF) — 292KB
• mara-20250630_lab.xml (EX-101.LAB) — 766KB
• mara-20250630_pre.xml (EX-101.PRE) — 609KB
• mara-20250630x10k_htm.xml (XML) — 5372KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 36 Item 1B. Unresolved Staff Comments 36 Item 1C. Cybersecurity 36 Item 2.

Properties

Properties 37 Item 3.

Legal Proceedings

Legal Proceedings 38 Item 4. Mine Safety Disclosure 38 PART II 39 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. Reserved 40 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 53 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 54 Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 98 Item 9A

Controls and Procedures

Controls and Procedures 98 Item 9B. Other Information 99 Item 9C . Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 99 PART III 99 Item 10. Directors, Executive Officers and Corporate Governance 99 Item 11.

Executive Compensation

Executive Compensation 100 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 100 Item 13. Certain Relationships and Related Transactions, and Director Independence 100 Item 14. Principal Accounting Fees and Services 100 PART IV 101 Item 15. Exhibits and Financial Statement Schedules 101 Item 16. Form 10-K Summary 102 2 Table of Contents PART I CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "contemplate," "continue," "potential," "target" and words of similar meaning. These forward-looking statements include, but are not limited to: estimates of our risks and future costs and benefits. These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Annual Report on Form 10-K. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: inflation, tariffs and changes in

: BUSINESS

ITEM 1: BUSINESS BUSINESS OF MARATHON BANCORP, INC. Marathon Bancorp, Inc. (the "Company" or "Marathon Bancorp"), a Maryland corporation, was formed in December 2020 to serve as the mid-tier holding company for Marathon Bank (the "Bank") upon the completion of the Bank's mutual holding company reorganization and offering. On April 14, 2021, the Bank completed its reorganization into the mutual holding company structure and the related stock offering of the Company, the Bank's new holding company. As a result of the reorganization, the Bank became a wholly-owned subsidiary of the Company, the Company issued and sold 45.0% of its outstanding shares of common stock in its stock offering to the public, and the Company issued 55.0% of its outstanding shares of common stock to Marathon MHC ("Mutual Holding Company"), which was the Company's mutual holding company. On April 21, 2025, the Company completed its conversion from the mutual holding company form of organization to the stock holding company form of organization (the "Conversion"). In connection with the Conversion, the Mutual Holding Company ceased to exist. Also, as part of the Conversion, the Company sold 1,693,411 shares of its common stock (which included 135,472 shares issued to the Employee Stock Ownership Plan ("ESOP")) at a price of $10.00 per share to the public. Each outstanding share of Company common stock owned by the public stockholders of the Company (stockholders other than the Mutual Holding Company) were converted into new shares of Company common stock based on an exchange ratio of 1.3728-to-1. Following the completion of the Conversion, the Company's shares of common stock began trading on the Nasdaq Capital Market under the trading symbol "MBBC." The Company generated gross proceeds of $16.9 million from the Conversion. Offering expenses in connection with the Conversion were $1.7 million which were netted against the gross proceeds. In connection with the Conversion, the Company provi

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