Marathon Bancorp Inc.

Company Snapshot

• Core Business: Marathon Bancorp, Inc. is a bank holding company for Marathon Bank, a Wisconsin-chartered savings bank. The bank offers a range of financial products and services, primarily focused on taking deposits and investing in commercial and multifamily real estate loans, one- to four-family residential real estate loans, and to a lesser extent, commercial and industrial loans, construction loans, and consumer loans.
• Founding & Headquarters: Marathon Bank was founded in 1902. The company's headquarters are located in Wausau, Wisconsin.
• Fiscal Year End Date: June 30
• Ticker & Exchange: MBBC (OTC Pink Marketplace)
• Recent Launches or Milestones: Opened a new branch in Brookfield, Wisconsin in January 2024.

Financial Highlights

• Total Revenue (Annual): Not explicitly stated in a single figure. Interest income was $9.43 million and interest expense was $3.59 million for the year ended June 30, 2024.
• YoY Revenue Growth: Not explicitly stated. Net interest income decreased by 12.8% to $5.84 million for the year ended June 30, 2024, compared to $6.70 million for the year ended June 30, 2023.
• Gross Margin (%): Not applicable in the traditional sense for a bank. Net interest margin was 2.75% for the year ended June 30, 2024.
• R&D Expenditure: Not applicable.
• Capital Expenditures / Major Investments: $2.26 million for purchases of property and equipment for the year ended June 30, 2024, primarily related to a new branch opening.

Business Segments

• Marathon Bank (Primary Operations):
  • Revenue: Not broken down by segment in the filing.
  • YoY Change: Not broken down by segment in the filing.
  • Notes: The bank's primary lending focus is on commercial real estate (40.1% of total loans at June 30, 2024), followed by one-to-four-family residential real estate (31.2%) and multi-family real estate (24.3%).

Capital Deployment

• Share Buybacks: Adopted a stock repurchase program on December 22, 2023, authorizing the repurchase of up to 107,875 shares. Repurchased 17,082 shares during the three months ended June 30, 2024.
• Dividend Policy: Does not currently intend to pay cash dividends to stockholders.
• Debt Profile:
  • Federal Home Loan Bank (FHLB) advances: $13.0 million outstanding at June 30, 2024, compared to $8.0 million at June 30, 2023.
  • Other Borrowings: $1.96 million in other liabilities at June 30, 2024, compared to $2.24 million at June 30, 2023.
  • Maturities: FHLB advances include term advances maturing in August 2024 and callable/putable advances maturing in August and December 2028.

Strategic Focus

• Growth Strategy: Diversifying the balance sheet by strengthening and modernizing operations, with a particular focus on expanding commercial real estate lending into Southeastern Wisconsin. Enhancing deposit products to accommodate business customers.
• Technology & Innovation Priorities: Upgrades to information technology operations.
• Product & Platform Roadmap: Enhanced suite of deposit products, including remote deposit capture, commercial cash management, and mobile deposits.
• Mergers & Acquisitions: No specific M&A activity mentioned in the filing.

Operational Infrastructure

• Manufacturing & Production Model: Not applicable (financial institution).
• Key Production Partners & Vendors: Uses a third-party vendor for managed IT services, including cybersecurity.
• Facilities & Geographies: Operates from a main office and four branch offices in Marathon and Ozaukee Counties, Wisconsin. Opened a new branch in Brookfield, Wisconsin in January 2024.

Distribution & Customer Base

• Sales Channels & Partners: Origination of residential real estate loans through loan originators, marketing efforts, customer base, walk-ins, and referrals from real estate brokers, builders, accountants, and financial advisors. Commercial and multifamily lending sourced through loan originator contacts, networking, marketing, customer base, and referrals from real estate brokers, accountants, and financial advisors.
• Enterprise & Cloud Relationships: Not applicable.
• Customer Concentration or Highlights: As of June 30, 2023, market share of deposits was 3.63% in Marathon County and 1.09% in Ozaukee County.

Competitive Landscape

• Key Competitors: Large money center and regional banks, community banks, credit unions, savings institutions, mortgage banking firms, consumer finance companies, fintech, and internet banking companies.
• Market Position & Differentiators: Community-oriented bank offering personalized service.

Regulatory, Legal & Geopolitical Factors

• Export/Import Controls: Not applicable.
• Sanctions & Licensing Requirements: Not applicable.
• Geopolitical Exposure: Not applicable.
• Ongoing Legal Proceedings: No material legal proceedings were disclosed as of June 30, 2024.

Key Risks

• Interest Rate Risk: Changes in interest rates can reduce margins, impact mortgage banking revenues, affect the fair value of financial instruments, and influence loan origination levels and default rates.
• Economic Conditions: National and local economic downturns can negatively impact loan delinquencies, write-offs, and the overall financial condition of borrowers.
• Credit Risk: The company's loan portfolio, particularly commercial real estate and multifamily loans, is subject to risks associated with borrower creditworthiness, project feasibility, and economic conditions affecting real estate values and occupancy rates.
• Liquidity Risk: Dependence on deposits as a primary funding source means that deposit outflows, influenced by interest rates and competition, can impact liquidity.
• Cybersecurity Risk: The company is subject to risks from cybersecurity threats and incidents, which could materially affect its operations and financial condition.
• Regulatory Changes: Changes in laws or government regulations affecting financial institutions could adversely impact operations and profitability.

Sustainability & ESG

• Climate Goals & Emissions Targets: Not mentioned.
• Energy Mix & Renewable Use: Not mentioned.
• ESG in Supply Chain: Not mentioned.
• Other Sustainability Initiatives: Not mentioned.

Human Capital

• Total Employees: 35 full-time equivalent employees as of June 30, 2024.
• Technical vs. Non-Technical Split: Not specified.
• Hiring & Retention Strategy: Strives to offer competitive salaries and employee benefits, and commits to developing staff through continuing education.
• Diversity & Inclusion Efforts: Not specified.
• Workforce Flexibility & Remote Policy: Not specified.

Leadership

• Nicholas W. Zillges: President and Chief Executive Officer, Age 47.
• Nora Spatz: Executive Vice President and Chief Administrative Officer, Age 67.
• Michelle Knopf: Executive Vice President/Director of Mortgage Services, Age 53.
• Joy Selting-Buchberger: Senior Vice President and Chief Financial Officer, Age 55.
• Terry Cornish: Senior Vice President and Chief Credit Officer, Age 55.

Intellectual Property & Licensing

• Patent & IP Strategy: Not mentioned.
• Licensing Agreements: Not mentioned.

Cybersecurity & Technology Risk (if disclosed)

• Cyber Risk Management Strategy: The company has an information security program that includes periodic testing of systems, threat exercises, and employee training. Vendor risk is assessed as part of its vendor management process.
• Incidents or Disclosures: To date, no cybersecurity threats or incidents have materially affected the company's business strategy, results of operations, or financial condition.
• Governance Structure for Cybersecurity: Led by the Chief Administrative Officer, in conjunction with Management, the Board of Directors, and the IT Steering Committee. The IT Steering Committee meets quarterly to evaluate risks.

Other Notable Disclosures

• Seasonality / Demand Cycles: Not explicitly mentioned.
• Stockholder Information: 189 shareholders of record as of September 25, 2024. 2,135,412 shares of common stock outstanding. No dividends were paid in fiscal years 2024 or 2023.