10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 000-56269

MARATHON BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	86-2191258
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

500 Scott Street, Wausau, Wisconsin	54403
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (715) 845-7331

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧      No     ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧       No    ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and emerging growth company in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	⌧	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐     No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:

As of February 10, 2022, there were 2,229,497 shares of the registrant’s common stock issued and outstanding.

MARATHON BANCORP, INC.

INDEX

		PAGE NO.
PART I - FINANCIAL INFORMATION		2
Item 1.	Consolidated Balance Sheets as of December 31, 2021 (Unaudited) and June 30, 2021	2
	Consolidated Statements of Income for the Three and Six Months Ended December 31, 2021 and 2020 (Unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended December 31, 2021 and 2020 (Unaudited)	4-5
	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended December 31, 2021 and 2020 (Unaudited)	6
	Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2021 and 2020 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	48
PART II - OTHER INFORMATION		50
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other information	50
Item 6.	Exhibits	50
SIGNATURES		51

1

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MARATHON BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

	Unaudited		June 30,
	December 31, 2021		2021
Assets
Cash and due from banks	$	2,967,480	$	1,989,643
Federal funds sold		26,730,000		44,059,000
Cash and cash equivalents		29,697,480		46,048,643
Interest bearing deposits held in other financial institutions		3,518,465		2,062,463
Debt securities available for sale		12,513,053		10,909,764
Debt securities held to maturity, at amortized cost (fair value $693,083 and $770,438)		626,294		708,949
Loans, net of allowance of $2,188,643 and $2,186,182, respectively		156,324,796		144,169,318
Interest receivable		535,703		552,516
Investment in restricted stock, at cost		262,200		262,200
Cash surrender value life insurance		9,075,364		5,968,734
Premises and equipment, net		1,757,261		1,849,917
Deferred tax asset		94,133		269,715
Other assets		809,079		825,081
Total assets	$	215,213,828	$	213,627,300
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing	$	23,196,979	$	23,633,008
Interest bearing		160,195,803		148,323,109
Paycheck protection program lending facility (PPPLF) funding		149,557		10,372,148
Other liabilities		1,143,534		1,449,884
Total liabilities		184,685,873		183,778,149
Stockholders' Equity
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued		—		—
Common stock, $.01 par value, 20,000,000 shares authorized, 2,229,497
shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively		22,295		22,295
Additional paid-in capital		8,485,653		8,484,019
Retained earnings		22,790,625		22,088,669
Unearned ESOP shares, at cost		(839,010)		(866,499)
Accumulated other comprehensive income		68,392		120,667
Total stockholders' equity		30,527,955		29,849,151
Total liabilities and stockholders' equity	$	215,213,828	$	213,627,300

See accompanying notes to the consolidated financial statements.

2

MARATHON BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited

	Three Months		Three Months		Six Months		Six Months
	Ended December 31,		Ended December 31,		Ended December 31,		Ended December 31,
	2021		2020		2021		2020
Interest Income
Loans, including fees	$	1,610,637	$	1,491,621	$	3,422,801	$	2,839,234
Debt securities		83,034		93,092		163,418		207,200
Other		8,540		7,507		19,515		13,481
Total interest income		1,702,211		1,592,220		3,605,734		3,059,915
Interest Expense
Deposits		226,050		267,215		456,756		549,247
Borrowings and other		2,691		12,195		6,388		24,349
Total interest expense		228,741		279,410		463,144		573,596
Net Interest Income		1,473,470		1,312,810		3,142,590		2,486,319
Provision for Loan Losses		—		—		—		—
Net Interest Income After Provision for Loan Losses		1,473,470		1,312,810		3,142,590		2,486,319
Non-Interest Income
Service charges on deposit accounts		41,670		42,590		83,297		85,868
Mortgage banking income		172,100		403,408		358,066		882,094
Increase in cash value of life insurance		59,902		41,818		106,630		83,590
Net gain on securities transactions		14,000		—		14,000		—
Gain on sale of foreclosed assets		—		11,284		—		10,840
Other income		2,118		7,504		8,369		9,196
Total non-interest income		289,790		506,604		570,362		1,071,588
Non-Interest Expenses
Salaries and employee benefits		741,210		813,797		1,566,350		1,608,457
Occupancy and equipment expenses		185,469		162,950		361,050		324,444
Data processing and office		104,496		118,004		201,304		229,315
Professional fees		172,057		75,098		329,534		134,118
Marketing expenses		27,623		21,093		42,662		33,950
Other expenses		147,930		109,415		276,987		248,441
Total non-interest expenses		1,378,785		1,300,357		2,777,887		2,578,725
Income Before Income Taxes		384,475		519,057		935,065		979,182
Provision for Income Taxes		99,610		128,329		233,109		223,101
Net Income	$	284,865	$	390,728	$	701,956	$	756,081
Net income per common shares-basic and diluted		$0.13		N/A		$0.33		N/A
Weighted average number of common shares outstanding-basic and diluted		2,144,911		N/A		2,144,221		N/A

See accompanying notes to the consolidated financial statements.

3

MARATHON BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

	Three Months Ended
	December 31,
	2021		2020
Net Income	$	284,865	$	390,728
Other comprehensive income (loss)
Unrealized losses on available for sale debt securities
Unrealized holding loss arising during the period		(64,924)		(22,002)
Tax effect		17,684		5,994
Net amount		(47,240)		(16,008)
Reclassification adjustment for gains included in net
income (a)		(14,000)		—
Tax effect		3,815		—
Net amount		(10,185)		—
Amortization of unrealized losses on debt securities
transferred from available for sale to held to maturity (b)		4,217		49,498
Other comprehensive income (loss)		(53,208)		33,490
Comprehensive Income	$	231,657	$	424,218

(a) The reclassification adjustment is included in the Consolidated Statement of Income as Net Gain on Securities Transactions.

(b) The reclassification adjustment is reflected in the Consolidated Statement of Income as Interest Income - Debt Securities.

See accompanying notes to the consolidated financial statements.

4

MARATHON BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

	Six Months Ended
	December 31,
	2021		2020
Net Income	$	701,956	$	756,081
Other comprehensive income (loss)
Unrealized losses on available for sale debt securities
Unrealized holding loss arising during the period		(70,677)		(8,692)
Tax effect		19,251		2,369
Net amount		(51,426)		(6,323)
Reclassification adjustment for gains included in net income (a)		(14,000)		—
Tax effect		3,815		—
Net amount		(10,185)		—
Amortization of unrealized losses on debt securities transferred from available for sale to held to maturity (b)		9,336		88,594
Other comprehensive income (loss)		(52,275)		82,271
Comprehensive Income	$	649,681	$	838,352

(a) The reclassification adjustment is included in the Consolidated Statement of Income as Net Gain on Securities Transactions.

(b) The reclassification adjustment is reflected in the Consolidated Statement of Income as Interest Income - Debt Securities.

See accompanying notes to the consolidated financial statements.

5

MARATHON BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Unaudited

											Accumulated
					Additional				Unearned		Other
	Preferred		Common		Paid-in		Retained		ESOP		Comprehensive
	Stock		Stock		Capital		Earnings		Shares		Income		Total
Balance, July 1, 2020	$	—	$	—	$	—	$	20,715,610	$	—	$	66,725	$	20,782,335
Net income		—		—		—		365,353		—		—		365,353
Other comprehensive income		—		—		—		—		—		48,781		48,781
Balance, September 30, 2020		—		—		—		21,080,963		—		115,506		21,196,469
Net income		—		—		—		390,728		—		—		390,728
Other comprehensive income		—		—		—		—		—		33,490		33,490
Balance, December 31, 2020	$	—	$	—	$	—	$	21,471,691	$	—	$	148,996	$	21,620,687
												Accumulated
						Additional				Unearned		Other
		Preferred		Common		Paid-in		Retained		ESOP		Comprehensive
		Stock		Stock		Capital		Earnings		Shares		Income (Loss)		Total
Balance, July 1, 2021	$	—	$	22,295	$	8,484,019	$	22,088,669	$	(866,499)	$	120,667	$	29,849,151
Net income		—		—		—		417,091		—		—		417,091
Other comprehensive income		—		—		—		—		—		933		933
ESOP shares committed to be released (1,379 shares)		—		—		1,190		—		13,792		—		14,982
Balance, September 30, 2021		—		22,295		8,485,209		22,505,760		(852,707)		121,600		30,282,157
Net income		—		—		—		284,865		—		—		284,865
Other comprehensive loss		—		—		—		—		—		(53,208)		(53,208)
ESOP shares committed to be released (1,370 shares)		—		—		444		—		13,697		—		14,141
Balance, December 31, 2021	$	—	$	22,295	$	8,485,653	$	22,790,625	$	(839,010)	$	68,392	$	30,527,955

See accompanying notes to the consolidated financial statements.

6

MARATHON BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	Six Months Ended
	December 31,
	2021		2020
Operating Activities
Net income	$	701,956	$	756,081
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		101,895		102,276
ESOP expense		29,123		—
Net amortization of discounts and premiums on debt securities		63,794		74,859
Amortization of deferred loan fees, net		(495,351)		(95,284)
Net gain on sale of loans		(223,686)		(702,504)
Realized gain on available for sale debt securities		(14,000)		—
Net gains and write down on foreclosed assets		—		(10,840)
Net change in deferred taxes		198,648		159,795
Earnings on cash value of life insurance		(106,630)		(83,590)
Decrease in interest receivable		16,813		44,667
Originations of loans held for sale		(12,385,042)		(30,937,040)
Proceeds from loans held for sale		12,608,728		31,639,544
Net change in other assets		16,002		(493,806)
Net change in other liabilities		(306,350)		(349,596)
Net Cash from Operating Activities		205,900		104,562
Investing Activities
Net change in interest-bearing deposits in other financial institutions		(1,456,002)		(1,353,358)
Purchase of debt securities available for sale		(3,000,000)		—
Proceeds from sales, maturities, and repayments of debt securities available for sale		1,260,577		2,961,284
Proceeds from maturities and calls of debt securities held to maturity		93,654		1,304,477
Purchase of bank owned life insurance		(3,000,000)		—
Net change in loans		(11,660,127)		(6,141,320)
Proceeds from sale of foreclosed assets		—		74,920
Purchases of property and equipment		(9,239)		(33,993)
Net Cash used in Investing Activities		(17,771,137)		(3,187,990)
Financing Activities
Net change in deposits		11,436,665		5,233,348
Repayments of PPPLF funding, net		(10,222,591)		(1,881,760)
Net Cash from Financing Activities		1,214,074		3,351,588
Net Change in Cash and Cash Equivalents		(16,351,163)		268,160
Cash and Cash Equivalents, Beginning of Year		46,048,643		24,274,747
Cash and Cash Equivalents, End of Year	$	29,697,480	$	24,542,907
Supplemental Disclosure of Cash Flow Information
Cash payments for
Interest	$	471,468	$	567,535
Taxes		46,000		—

See accompanying notes to the consolidated financial statements.

7

MARATHON BANCORP, INC.

NOTES TO CONSLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1- Basis of Presentation

Marathon Bancorp, Inc. (the “Company”) is a Maryland chartered mid-tier stock holding company and was formed in connection with the conversion of Marathon Bank (the “Bank”) from a mutual to the mutual holding company form of organization in April 2021, and it is a subsidiary of Marathon MHC (the “Mutual Holding Company”), a Wisconsin chartered mutual holding company. The Mutual Holding Company owns 1,226,223 shares, or 55.0%, of the Company’s issued stock. In connection with the reorganization, Marathon Bancorp, Inc. sold 1,003,274 shares of common stock to the public at $10.00 per share, representing 45.0% of its outstanding shares of common stock. The stock offering resulted in gross proceeds of $10.0 million, net of offering expenses of $1.4 million, resulting in net proceeds of $8.5 million. The Mutual Holding Company activity is not included in the accompanying consolidated financial statements. Marathon Bank is a wholly owned subsidiary of the Company. The same directors and officers, who manage the Bank, also manage the Company and the Mutual Holding Company.

The Company contributed approximately $4.5 million of the net proceeds of the offering to the Bank. In addition, $874,000 of the net proceeds were used to fund the loan to the employee stock ownership plan and approximately $3.4 million of the net proceeds were retained by the Company.

The Bank is a Wisconsin stock savings bank, which conducts its business through four offices. The Bank operates as a full-service financial institution with a primary market area including, but not limited to, Marathon County and Ozaukee County, Wisconsin. Its primary deposit products are demand deposits, savings, and certificates of deposits; and its primary lending products are commercial real estate, commercial and industrial, construction, one-to-four-family residential, multi-family real estate and consumer loans.

In December 2019, a coronavirus (COVID-19) was reported in China and on March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. Nonetheless, the Company has not incurred any significant disruptions to its business activities.

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences could be material to the financial statements. Additionally, effects of the COVID-19 pandemic may negatively impact significant estimates and the assumptions underlying those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses, valuation of deferred tax assets, other than temporary impairment of debt securities and fair value of financial assets and liabilities.

In the opinion of management, all adjustments considered necessary for fair presentation have been included. Operating results for the three and six month periods ended December 31, 2021 are not necessarily indicative of the results for the year ending June 30, 2022 or any other period. For further information, refer to the consolidated financial statements and notes thereto for the years ended June 30, 2021 and 2020 contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on September 28, 2021.

8

Recent Accounting Pronouncements

This section provides a summary description of recent ASUs issued by the FASB to the ASC that had or that management expects may have an impact on the consolidated financial statements issued upon adoption. The Company is classified as an emerging growth company and has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Effective dates reflect this election.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020 (see below). Early adoption is permitted. The Company will adopt this pronouncement beginning July 1, 2022. The Company’s operating leases are predominately related to real estate. The Company has determined that the provisions of ASU 2016-02 will result in an increase in assets to recognize the present value of the lease obligations with a corresponding increase in liabilities; however, the Company does not expect this new standard to have a material impact on the Company’s results of operations or cash flows because the Company owns most of its facilities and this ASU will apply primarily to its two small operating leases. Management is currently evaluating the appropriate transition method and projected present value of its leases at the adoption date.

In June 2020, the FASB issued ASU No. 2020-05, Coronavirus Disease 2019 (“COVID-19”) in response to the pandemic which has adversely affected the global economy and caused significant and widespread business and capital market disruptions. The FASB is committed to supporting and assisting stakeholders during this difficult time. The FASB issued ASU 2020-05 as a limited deferral of the effective dates of certain ASUs, including ASU 2016-02 (including amendments issued after the issuance of the original) to provide immediate, near-term relief for certain entities for whom these ASUs are either currently effective or imminently effective. The Company plans to defer the adoption of the amendments in ASU 2016-02 to the fiscal year beginning July 1, 2022.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this pronouncement beginning July 1, 2023. Management is currently evaluating the potential impact on its results of operations, financial

9

position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

Note 2- Earnings Per Share

Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. The Company has a simple capital structure as it has not granted any restricted stock awards or stock options and, during the three and six months ended December 31, 2021, had no potentially dilutive common stock equivalents. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released. Set forth below is the calculation of earnings per share.

		For the Three Months				For the Six Months
		Ended December 31,				Ended December 31,
	2021		2020		2021		2020
	(Dollars in thousands)				(Dollars in thousands)
Net income applicable to common stock	$	284,865	$	390,728	$	701,956	$	756,081
Average number of shares outstanding		2,229,497		N/A		2,229,497		N/A
Less: Average unallocated ESOP shares		84,586		N/A		85,276		N/A
Average number of common shares outstanding used to calculate basic earnings per share		2,144,911		N/A		2,144,221		N/A
Earnings per common share:
Basic	$	0.13		N/A	$	0.33		N/A
Diluted		0.13		N/A		0.33		N/A

Note 3- Debt Securities

Debt securities have been classified in the consolidated balance sheet according to management’s intent. The carrying value of securities as of December 31, 2021 and June 30, 2021, consists of the following:

	December 31,				June 30,
		2021		2021
Available for sale debt securities, at fair value		$	12,513,053	$	10,909,764
Held to maturity debt securities, at amortized cost			626,294		708,949
		$	13,139,347	$	11,618,713

10

The amortized cost and fair value of debt securities, with gross unrealized gains and losses, are as follows:

			Gross			Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,649,821	$	37,473	$	(2,272)	$	1,685,022
Mortgage-backed		3,469,716		115,976		(8,349)		3,577,343
Corporate bonds		7,218,135		34,370		(1,817)		7,250,688
	$	12,337,672	$	187,819	$	(12,438)	$	12,513,053
Held to maturity debt securities
Mortgage-backed	$	626,294	$	66,789	$	—	$	693,083

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,830,603	$	60,403	$	(3,999)	$	1,887,007
Mortgage-backed		4,557,465		165,976		(11,873)		4,711,568
Corporate bonds		4,261,638		79,251		(29,700)		4,311,189
	$	10,649,706	$	305,630	$	(45,572)	$	10,909,764
Held to maturity debt securities
Mortgage-backed	$	708,949	$	61,489	$	—	$	770,438

Securities with a carrying value of approximately $869,000 and $1,118,000 as of December 31, 2021 and June 30, 2021, were pledged to secure public deposits and debt.

The amortized cost and fair value of debt securities by contractual maturity at December 31, 2021, follows:

	Available for Sale Debt Securities				Held to Maturity Debt Securities
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
December 31, 2021
Due in one year or less	$	1,135,700	$	1,136,010	$	—	$	—
Due from more than one to five years		4,517,256		4,582,975		—		—
Due from more than five to ten years		2,215,000		2,216,725		—		—
Due for more than ten years		1,000,000		1,000,000		—		—
		8,867,956		8,935,710		—		—
Mortgage-backed securities		3,469,716		3,577,343		626,294		693,083
	$	12,337,672	$	12,513,053	$	626,294	$	693,083

There were no sales of available for sale debt securities during the three and six month periods ended December 31, 2021 and 2020. The Company did recognize a gain of $14,000 on a bond that matured during the three and six months ended December 31, 2021 related to a previous other than temporary impairment charge taken on this security.

The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and

11

length of time that individual securities have been in a continuous unrealized loss position at December 31, 2021 and June 30, 2021:

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(2,272)	$	57,728	$	(2,272)	$	57,728
Mortgage-backed		(737)		125,982		(7,612)		123,935		(8,349)		249,917
Corporate bonds		(1,817)		1,095,294		—		—		(1,817)		1,095,294
	$	(2,554)	$	1,221,276	$	(9,884)	$	181,663	$	(12,438)	$	1,402,939
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(3,999)	$	91,001	$	(3,999)	$	91,001
Mortgage-backed		(3,760)		181,380		(8,113)		159,437		(11,873)		340,817
Corporate bonds		(29,700)		1,080,463		—		—		(29,700)		1,080,463
	$	(33,460)	$	1,261,843	$	(12,112)	$	250,438	$	(45,572)	$	1,512,281
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

There were seven securities in an unrealized loss position in the less than 12 months category and four securities in the 12 months or more category at December 31, 2021. There were four securities in an unrealized loss position in the less than 12 months category and five securities in the 12 months or more category at June 30, 2021. All of these unrealized losses were caused by interest rate changes. The contractual terms of the securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investment. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, the Company does not consider the securities to be other-than-temporarily impaired.

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Note 4- Loans

A summary of loans by major category follows:

	December 31, 2021		June 30, 2021
Commercial real estate	$	63,032,800	$	52,148,065
Commercial and industrial (1)		8,901,181		19,278,477
Construction		8,098,343		7,985,188
One-to-four-family residential		51,680,119		48,404,820
Multi-family real estate		24,615,280		17,268,048
Consumer		2,254,816		1,788,997
Total loans		158,582,539		146,873,595
Deferred loan fees		(69,100)		(518,095)
Allowance for loan losses		(2,188,643)		(2,186,182)
Loans, net	$	156,324,796	$	144,169,318

(1) Paycheck protection loans represent $149,557 and $10,378,681 of the commercial and industrial loans as of December 31, 2021 and June 30, 2021.

The Company maintains a collateral pledge agreement with the FHLB covering secured advances whereby the Company has agreed to retain, free of all other pledges, liens, and encumbrances, commercial and industrial, commercial real estate, and one-to-four family residential loans. The pledged loans are discounted at a factor of 20% to 36% when aggregating the amount of loans required by the pledge agreement. The amount of eligible collateral was $35,667,099 and $35,421,507 as of December 31, 2021 and June 30, 2021, respectively. There was also FHLB stock of $262,200 pledged as of December 31, 2021 and June 30, 2021.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020 and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). This was considered Round 1 of the PPP. Although we were not already a qualified SBA lender, we enrolled in the PPP by completing the required documentation. We subsequently obtained approval as a qualified SBA lender. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and included new funding for the PPP (Round 2). The PPP ended in May 2021.

Commercial and industrial loans include loans originated under the PPP, a specialized low-interest (1%) forgivable loan program funded by the U.S. Treasury Department and administered by the SBA. The SBA guarantees 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and the loan proceeds are used for other qualifying expenses. The Company receives a processing fee from the SBA ranging from 1% to 5% depending on the size of the loan, which is offset by a third-party servicing agent fee ranging from 0.25% to 1.0%. As of December 31, 2021, we had originated 277 PPP loans totaling $18.5 million. As of December 31, 2021, $18.3 million of these PPP loans have been forgiven. As of December 31, 2021, we had 5 PPP loans totaling $149,557 net of remaining deferred fees of $10,694 outstanding. As of June 30, 2021, we had 109 PPP loans totaling $10,378,681 net of remaining deferred fees of $483,484 outstanding.

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The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended December 31, 2021 and 2020, and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2021 and June 30, 2021:

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
December 31, 2021
Allowance for credit losses
Balance at beginning of year	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,124		—		1,124
Provisions		187,549		(89,036)		(9,003)		(53,138)		(47,734)		(102)		11,464		—
Balance at September 30, 2021		1,223,850		68,497		50,646		356,257		86,482		5,918		395,656		2,187,306
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,337		—		1,337
Provisions		64,577		(19,488)		(2,866)		(14,346)		34,871		(1,723)		(61,025)		—
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,288,427		49,009		47,780		341,911		121,353		5,532		334,631		2,188,643
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Loans
Individually evaluated for impairment	$	217,449	$	—	$	—	$	299,084	$	—	$	—	$	—	$	516,533
Collectively evaluated for impairment		62,815,351		8,901,181		8,098,343		51,381,035		24,615,280		2,254,816		—		158,066,006
Balance at end of period	$	63,032,800	$	8,901,181	$	8,098,343	$	51,680,119	$	24,615,280	$	2,254,816	$	—	$	158,582,539

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
June 30, 2021
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,036,301		157,533		59,649		409,395		134,216		4,896		384,192		2,186,182
Balance at end of period	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Loans
Individually evaluated for impairment	$	223,983	$	—	$	—	$	315,440	$	—	$	—	$	—	$	539,423
Collectively evaluated for impairment		51,924,082		19,278,477		7,985,188		48,089,380		17,268,048		1,788,997				146,334,172
Balance at end of period	$	52,148,065	$	19,278,477	$	7,985,188	$	48,404,820	$	17,268,048	$	1,788,997	$	—	$	146,873,595

	Commercial		Commercial				One-to-Four		MultiFamily
December 31, 2020	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses
Balance at beginning of period	$	274,997	$	1,021,083	$	43,858	$	339,449	$	10,057	$	2,003	$	8,530	$	1,699,977
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		73,128		—		—		1,652		—		74,780
Provisions		386,382		(907,851)		10,610		283,716		52,515		9,226		165,402		—
Balance at September 30, 2020		661,379		113,232		127,596		623,165		62,572		12,881		173,932		1,774,757
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		341,388		—		—		—		1,566		—		342,954
Provisions		280,505		(344,174)		2,444		(47,961)		23,163		(3,893)		89,916		—
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		941,884		110,446		130,040		575,204		85,735		10,554		263,848		2,117,711
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Loans
Individually evaluated for impairment	$	230,331	$	—	$	—	$	470,318	$	90,328	$	—	$	—	$	790,977
Collectively evaluated for impairment		47,324,480	11017967	11,017,967		10,080,584		42,803,943		11,431,363		1,986,429		—		124,644,766
Balance at end of period	$	47,554,811	$	11,017,967	$	10,080,584	$	43,274,261	$	11,521,691	$	1,986,429	$	—	$	125,435,743

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Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral adequacy, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as commercial and industrial and commercial real estate loans. This analysis is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:

Pass – Loans classified as pass represent loans that are evaluated and are performing under the stated terms. Pass rated assets are analyzed by the paying capacity, the current net worth, and the value of the loan collateral of the obligor.

Special Mention/Watch – Loans classified as watch possess potential weaknesses that require management attention but do not yet warrant adverse classification. While the status of a loan put on this list may not technically trigger their classification as substandard or doubtful, it is considered a proactive way to identify potential issues and address them before the situation deteriorates further and does result in a loss for the Company.

Substandard – Loans classified as substandard are inadequately protected by the current net worth, paying capacity of the obligor, or by the collateral pledged. Substandard loans must have a well-defined weakness or weaknesses that jeopardize the repayment of the debt as originally contracted. They are characterized by the distinct possibility that the Company will sustain a loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have the weaknesses of those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans in this category are allocated a specific reserve based on the estimated discounted cash flows from the loan (or collateral value less cost to sell for collateral dependent loans) or are charged-off if deemed uncollectible.

Based on the most recent analysis performed, the risk category of loans by class of loans as of December 31, 2021 and June 30, 2021, is as follows:

			Special Mention/
	Pass		Watch		Substandard		Doubtful
December 31, 2021
Commercial real estate	$	61,344,054	$	1,688,746	$	—	$	—
Commercial and industrial		8,901,181		—		—		—
Construction		8,098,343		—		—		—
	$	78,343,578	$	1,688,746	$	—	$	—

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			Special Mention/
	Pass		Watch		Substandard		Doubtful
June 30, 2021
Commercial real estate	$	51,924,082	$	223,983	$	—	$	—
Commercial and industrial		14,245,538		5,032,939		—		—
Construction		7,985,185		—		—		—
	$	74,154,805	$	5,256,922	$	—	$	—

Residential real estate and consumer loans are managed on a pool basis due to their homogeneous nature. Loans that are 90 days or more delinquent or are not accruing interest are considered nonperforming. The following table presents the recorded investments in residential real estate and consumer loans by class based on payment activity as of December 31, 2021 and June 30, 2021:

	Performing		Nonperforming
December 31, 2021
One-to-four-family residential	$	51,520,026	$	160,093
Multi-family real estate		24,615,280		—
Consumer		2,254,816		—
	$	78,390,122	$	160,093

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	Performing		Nonperforming
June 30, 2021
One-to-four-family residential	$	48,226,426	$	178,394
Multi-family real estate		17,268,048		—
Consumer		1,788,997		—
	$	67,283,471	$	178,394

The following table summarizes the aging of the past due loans by loan class within the portfolio segments as of December 31, 2021 and June 30, 2021 (excluding COVID-19 deferrals):

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
December 31, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		631,413		153,725		—		160,093
Multi-family real estate		—		—		—		—
Consumer		3,621		—		—		—
Total	$	635,034	$	153,725	$	—	$	160,093

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
June 30, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		30,165		3,635		—		178,394
Multi-family real estate		—		—		—		—
Consumer		15,119		—		—		—
Total	$	45,284	$	3,635	$	—	$	178,394

Impaired Loans

A loan is considered impaired when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.

The following table summarizes individually impaired loans by class of loans as of December 31, 2021 and June 30, 2021:

								For the Six Months Ended
								December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
December 31, 2021
With no related allowance recorded
Commercial real estate	$	217,449	$	235,516	$	—	$	220,715	$	6,881
One-to-four-family residential		299,084		338,663		—		307,262		15,778
	$	516,533	$	574,179	$	—	$	527,977	$	22,659

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							For the Six Months Ended
							December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
Commercial real estate		—		—		—		—		—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

							For the Year Ended
							June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
June 30, 2021
With no related allowance recorded
Commercial real estate	$	223,983	$	242,050	$	—	$	228,710	$	14,628
One-to-four-family residential		315,440		355,019		—		334,581		20,763
	$	539,423	$	597,069	$	—	$	563,291	$	35,391

								For the Year Ended
								June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

Impaired loans include loans modified in troubled debt restructuring (TDR) where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection.

There were no loans modified as TDRs during the six months ended December 31, 2021 and 2020. The Company has made no commitments to lend additional funds on restructured loans.

To work with customers impacted by COVID-19, the Company is offering short-term (i.e., three months or less with the potential to extend up to six months, if necessary) loan modifications on a case by case basis to borrowers who were current in their payments at the inception of the loan modification program. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 are considered current for COVID-19 modifications. A financial institution can then suspend the requirements under U.S. GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Financial

18

institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either January 1, 2022 or the 60th day after the end of the COVID-19 national emergency. The Company made this policy election. Similarly, the Financial Accounting Standards Board (“FASB”) has confirmed that short-term modifications made on a good faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. Lastly, prior to the enactment of the CARES Act, the banking regulatory agencies provided guidance as to how certain short-term modifications would not be considered TDRs, and have subsequently confirmed that such guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.

The Company received requests to modify loans, primarily consisting of the deferral of principal and interest payments and the extension of the maturity date. Of these modifications, 100% were performing in accordance with the accounting treatment under Section 4013 of the CARES Act and therefore did not qualify as TDRs. As of December 31, 2021, we had granted short-term payment deferrals on 56 loans, totaling approximately $20.0 million in aggregate principal amount. As of December 31, 2021, all of these loans have returned to normal payment status.

Note 5 - Deposits

Major classifications of deposits are as follows as of December 31, 2021 and June 30, 2021.

	Unaudited
	At December 31, 2021				At June 30, 2021
	Amount		Percent		Amount		Percent
Non-interest-bearing demand accounts	$	23,196,979	12.65	%	$	23,633,008	13.74	%
Demand, NOW, money market accounts		55,486,139	30.26	%		44,400,084	25.82	%
Savings accounts		46,200,517	25.19	%		44,688,696	25.99	%
Certificates of deposit		58,509,147	31.90	%		59,234,329	34.45	%
Total	$	183,392,782	100.00	%	$	171,956,117	100.00	%

Note 6- Other Comprehensive Income

The changes in accumulated other comprehensive income by component for the three months and six months ended December 31, 2021 and 2020, follows:

19

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2021
Balance, beginning of period	$	188,558	$	(67,891)	$	120,667
Other comprehensive loss before reclassifications (net of tax)		(4,186)		—		(4,186)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		5,119		5,119
Balance, September 30, 2021		184,372		(62,772)		121,600
Other comprehensive loss before reclassifications (net of tax)		(47,240)		—		(47,240)
Amounts reclassified from accumulated other comprehensive income (net of tax) (a)		(10,185)		—		(10,185)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		4,217		4,217
Balance, December 31, 2021	$	126,947	$	(58,555)	$	68,392

(a) The reclassification adjustment is reflected in the Consolidated Statement of Income as Net Gain on Securities Transactions ($14,000) and Provision for Income Taxes of ($3,815).

(b) The reclassification adjustment is reflected in the Consolidated Statements of Income as Interest Income-Debt Securities.

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2020
Balance, beginning of period	$	262,688	$	(195,963)	$	66,725
Other comprehensive income before reclassifications (net of tax)		9,685		—		9,685
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		39,096		39,096
Balance, September 30, 2020		272,373		(156,867)		115,506
Other comprehensive loss before reclassifications (net of tax)		(16,008)		—		(16,008)
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		49,498		49,498
Balance, December 31, 2020	$	256,365	$	(107,369)	$	148,996

(a) The reclassification adjustment is reflected in the Consolidated Statements of Income as Interest Income-Debt Securities.

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Note 7- Minimum Regulatory Capital Requirements

Bank regulatory authorities in the United States issue risk-based capital standards. These capital standards relate a banking company’s capital to the risk profile of its assets and provide the basis by which all banking companies and banks are evaluated in terms of capital adequacy.

The risk-based capital standards require financial institutions to maintain: (a) a minimum ratio of common equity tier 1 (“CET1”) to risk-weighted assets of at least 4.5%, (b) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%; (c) a minimum ratio of total (that is, tier 1 plus tier 2) capital to risk-weighted assets of at least 8.0%); and (d) a minimum leverage ratio of 3.0%, calculated as the ratio of tier 1 capital balance sheet exposures plus certain off-balance sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter). In addition, the rules also limit a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% above the minimum standards stated in (a) - (c) above.

The CARES Act allows banking organizations to apply a zero percent risk weight to PPP covered loans for risk-based capital requirement purposes. In addition, because of the non-recourse nature of the Federal Reserve’s extension of credit to the banking organization, the banking organization is not exposed to credit or market risk from the pledged PPP covered loans. Therefore, pledged PPP covered loans are excluded from a banking organization’s regulatory capital calculation.

In September 2019, the FDIC finalized a rule to simplify the capital calculation for qualifying community banking organizations (i.e., the community bank leverage ratio (“CBLR framework”)), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. Section 4012 of the CARES Act requires regulatory agencies to temporarily lower the CBLR eligibility requirement from 9.00% to 8.00% through the end of 2020. The associated regulatory interim final rule modified the CBLR framework allowing banks with a leverage ratio of 8.00% or greater to elect to use the CBLR framework. The interim final rule gradually increases the requirement back to 9.00% on January 1, 2022, requiring a ratio of 8.5% for the year beginning January 1, 2021. The interim final rule also provides a two-quarter grace period for qualifying banks whose leverage ratio falls no more than 1.00% below the required ratio for that reporting quarter. The Bank opted into the CBLR framework as of December 31, 2021 and June 30, 2021.

As of December 31, 2021 and June 30, 2021, management believes the Bank has met all capital adequacy requirements to which it is subject. As of December 31, 2021 and June 30, 2021, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Bank’s category.

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The Bank’s actual capital amounts and ratios are presented in the following table (dollars in thousands):

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
December 31, 2021		(Dollars in thousands)
Tier I Capital to Average Assets	$	26,394	12.55	%	$	15,773	>	7.5	%	$	17,876	>	8.5	%

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
June 30, 2021					(Dollars in thousands)
Tier I Capital to Average Assets	$	25,452	12.47	%	$	15,313	>	7.5	%	$	17,355	>	8.5	%

A Wisconsin state-chartered savings bank is required by state law to maintain minimum net worth, as defined, in an amount equal to at least 6.0% of its total assets. At December 31, 2021, the Bank’s net worth was $26,555,579 and general loan loss reserve was $2,188,643, totaling 13.34% of total assets, which meets the state of Wisconsin’s minimum net worth requirements. At June 30, 2021, the Bank’s net worth was $25,842,077 and general loan loss reserve was $2,186,182, totaling 13.12% of total assets, which meets the state of Wisconsin’s minimum net worth requirements.

Note 8 -    Employee Benefit Plans

The Company provides a 401(k) salary deferral plan to substantially all employees. Employees are allowed to make voluntary contributions to the plan up to 15% of their compensation. In addition, the Company provides discretionary matching and profit-sharing contributions as well as a safe harbor contribution.

Effective upon the completion of the Company’s initial public stock offering in April 2021, the Company established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees. The ESOP used $873,970 in proceeds from a term loan obtained from the Company to purchase 87,397 shares of common stock in the initial public offering at a price of $10.00 per share. The ESOP loan will be repaid principally from the Company’s contribution to the ESOP in annual payments through 2045 at a fixed interest rate per annum equal to the Prime Rate (currently 3.25%). Shares are released to participants on a straight-line basis over the loan term and allocated based on participant compensation. The Company recognizes compensation benefit expense as shares are committed for release at their current market price. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated shares, if applicable, are recorded as a reduction of retained earnings and dividends on unallocated shares are recorded as a reduction of debt. The Company recognized $29,123 (upon the release of 2,749 shares) of compensation expense related to this plan for the six months ended December 31, 2021. At December 31, 2021, there were 83,901 shares not yet released having an aggregate market value of approximately $901,936. Participants will become fully vested upon completion of three years of credited service. Eligible employees who were employed with the Company shall receive credit for vesting purposes for each year of continuous employment prior to adoption of the ESOP.

Note 9- Commitments and Contingencies

The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss is represented by the contractual amount of these

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commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

As of December 31, 2021 and June 30, 2021, the following financial instruments were outstanding where contract amounts represent credit risk:

	December 31, 2021		June 30, 2021
Commitments to grant loans	$	3,335,000	$	5,824,000
Unused commitments under lines of credit		8,193,000		9,352,000
MPF credit enhancements		759,439		680,777

Commitments to grant loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Mortgage Partnership Finance (MPF) credit enhancements allow the Company to share the credit risk associated with home mortgage finance with Federal Home Loan Bank (FHLB). MPF provides the Company the ability to originate, sell, and service fixed-rate, residential mortgage loans, and receive a Credit Enhancement Fee based on the performance of the loans. FHLB manages the liquidity, interest rate, and prepayment risks of the loans while the Company manages the credit risk of the loans. The Company will incur an obligation on a foreclosure loss only after a foreclosure loss exceeds the borrower’s equity, any private mortgage insurance, and the funded first loss account. Based on the delinquency results for states where properties are located and the Company’s historical loss experience, the estimated foreclosure losses are immaterial.

The Company, from time to time, may be a defendant in legal proceedings relating to the conduct of its banking business. Most of such legal proceedings are a normal part of the banking business and, in management’s opinion as of December 31, 2021, the financial condition and results of operations of the Company would not be materially affected by the outcome of such legal proceedings.

Note 10- Fair Value of Assets and Liabilities

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Fair value accounting guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

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In accordance with this guidance, the Company groups its financial assets and liabilities generally measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.

Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities may include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table sets forth assets and liabilities measured at fair value on a recurring basis at December 31, 2021 and June 30, 2021:

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,685,022	$	—	$	1,685,022	$	—
Mortgage-backed		3,577,343		—		3,577,343		—
Corporate bonds		7,250,688		—		5,250,688		2,000,000
Total assets	$	12,513,053	$	—	$	10,513,053	$	2,000,000

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,887,007	$	—	$	1,887,007	$	—
Mortgage-backed		4,711,568		—		4,711,568		—
Corporate bonds		4,311,189		—		4,311,189		—
Total assets	$	10,909,764	$	—	$	10,909,764	$	—

For those available for sale debt securities where quoted prices are unavailable, fair values are calculated based on market prices of similar securities and, therefore, are classified as Level 2 within the valuation hierarchy.

The following table represents changes in the Company’s available for sale debt securities measured at fair value on a recurring basis using unobservable inputs (Level 3). The Company had one investment security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2021. This security was purchased during the three months ended September 30, 2021 and was reclassified to Level 3 during the three months ended December 31, 2021 because of the lack of observable market data for this investment. The investment is valued on

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a quarterly basis by a third-party valuation expert. The Level 3 valuation is based on the 5/30 swap curve, floated at 1%, which is considered a significant unobservable input.

Balance at October 1, 2021	$	—
Transfer of security from Level 2 to Level 3		2,000,000
Unrealized gains (losses) included in other comprehensive income (loss)		—
Balance at December 31, 2021	$	2,000,000

Under certain circumstances the Company may make adjustments to fair value for assets and liabilities although they are not measured at fair value on an ongoing basis. The Company had no Level 3 financial assets measured at fair value on a nonrecurring basis.

Financial Disclosures about Fair Value of Financial Instruments

Accounting guidance requires disclosures of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate their fair values. Certain financial instruments and all non-financial instruments are excluded from the scope of the guidance.

The estimated fair values of financial instruments are as follows:

	December 31, 2021				June 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets
Cash and due from banks	$	2,967,480	$	2,967,480	$	1,989,643	$	1,989,643
Federal funds sold		26,730,000		26,730,000		44,059,000		44,059,000
Interest bearing deposits in other financial institutions		3,518,465		3,518,465		2,062,463		2,062,463
Available for sale debt securities		12,513,053		12,513,053		10,909,764		10,909,764
Held to maturity debt securities		626,294		693,083		708,949		770,438
Loans, net		156,324,796		156,284,000		144,169,318		145,596,000
Investment in restricted stock		262,200		262,200		262,200		262,200
Interest receivable		535,703		535,703		552,516		552,516
Financial Liabilities
Deposits	$	183,392,782	$	182,486,000	$	171,956,117	$	174,555,000
Paycheck protection program lending facility		149,557		149,557		10,372,148		10,372,148
Accrued interest payable		19,113		19,113		10,152		10,152

The methods and assumptions that were used to estimate the fair value of financial assets and financial liabilities that are measured at fair value on a recurring and non-recurring basis have been previously disclosed. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below:

Cash and due from banks – Due to their short -term nature, the carrying amount of cash and due from banks approximates fair value and is categorized in level 1 of the fair value hierarchy.

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Federal funds sold – Due to their short-term nature, the carrying amount of federal funds sold approximates the fair value and is categorized in level 1 of the fair value hierarchy.

Interest bearing deposits in other financial institutions- Due to their short -term nature, the carrying amount of interest- bearing deposits in other financial institutions approximates fair value and is categorized in level 1 of the fair value hierarchy.

Available for sale securities – The fair value is estimated using quoted market prices or by using pricing models and is categorized in level 2 of the fair value hierarchy.

Held to maturity debt securities-The fair value is estimated using quoted market prices or by pricing models and is categorized as level 2 of the fair value hierarchy.

Loans– The fair value of variable rate loans that reprice frequently are based on carrying values. The fair value of other loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and is categorized in level 3 of the fair value hierarchy. Loans held for sale are included with loans, net above, with fair value based on commitments on hand from investors or prevailing market prices and is categorized in level 3 of the fair value hierarchy.

Investments in restricted stock – No secondary market exists for FHLB stock. The stock is bought and sold at par by the FHLB and management believes the carrying amount approximates fair value and is categorized in level 2 of the fair value hierarchy.

Paycheck Protection Program Lending Facility-Due to their short-term nature, the carrying amount approximates fair value and is categorized as level 3 of the fair value hierarchy.

Interest receivable – Due to their short -term nature, the carrying amount approximates fair value and is categorized in level 1 of the fair value hierarchy.

Deposits – Fair value of deposits with no stated maturity, such as demand deposits, savings, and money market accounts, by definition, is the amount payable on demand on the reporting date. Fair value of fixed rate time deposits is estimated using discounted cash flows applying interest rates currently offered on similar time deposits. Deposits are categorized in level 2 of the fair value hierarchy.

Paycheck Protection Program Lending Facility (PPPLF) funding – The carrying amount approximates fair value and is categorized in level 2 of the fair value hierarchy.

Accrued interest payable – Due to their short-term nature, the carrying amount approximates fair value and is categorized in level 1 of the fair value hierarchy.

The estimated fair value of fee income on letters of credit at December 31, 2021 and June 30, 2021 is insignificant. Loan commitments on which the committed interest rate is less than the current market rate are also insignificant at December 31, 2021 and June 30, 2021.

Note 11- Revenue Recognition

In accordance with FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) and all subsequent amendments, the Company’s services that fall within the scope of Topic 606 are presented within non-interest income and are recognized as revenue as the Company satisfies its obligation to the customer. All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within non-interest income which includes service charges on deposit accounts and the sale of foreclosed assets.

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A description of the Company’s revenue streams accounted for under Topic 606 follows:

Service Charges on Deposit Accounts: Service charges on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges include, but are not limited to, overdraft fees, non-sufficient fund fees, dormant fees, and monthly service charges. Such fees are recognized concurrent with the event on a daily basis or on a monthly basis depending upon the customer’s cycle date.

Gains (Losses) on Sales of Foreclosed Assets: The Company records a gain or loss from a sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. If the Company finances the sale of foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed asset is derecognized, and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reflects our consolidated financial statements and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the accompanying consolidated financial statements. You should read the information in this section in conjunction with the business and financial information regarding Marathon Bancorp, Inc. provided in this Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended June 30, 2021 as filed with the Securities and Exchange Commission on September 28, 2021.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains certain forward-looking statements, which are included pursuant to the “safeharbor” provisions of the Private Securities Litigation Reform Act of 1995, and reflect management’s beliefs and expectations based on information currently available. These forward-looking statements, 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:

● statements of our goals, intentions and expectations;

● statements regarding our business plans, prospects, growth and operating strategies;

● statements regarding the quality of our loan and investment portfolios; and

● 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 quarterly report on Form 10-Q.

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:

● conditions relating to the COVID-19 pandemic, including the severity and duration of the associated economic slowdown either nationally or in our market areas, that are worse than expected;

● Government action in response to the COVID-19 pandemic and its effects on our business and operations, including vaccination mandates and their effects on our workforce, human capital resources and infrastructure;

● general economic conditions, either nationally or in our market areas, that are worse than expected;

● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

● our ability to access cost-effective funding;

● fluctuations in real estate values and both residential and commercial real estate market conditions;

● demand for loans and deposits in our market area;

● our ability to implement and change our business strategies;

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● competition among depository and other financial institutions;

● inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

● adverse changes in the securities or secondary mortgage markets, including our ability to sell loans in the secondary market;

● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

● changes in the quality or composition of our loan or investment portfolios;

● technological changes that may be more difficult or expensive than expected;

● the inability of third-party providers to perform as expected;

● a failure or breach of our operational or security systems or infrastructure, including cyberattacks;

● our ability to manage market risk, credit risk and operational risk in the current economic environment;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

● changes in consumer spending, borrowing and savings habits;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

● our ability to retain key employees;

● our ability to control operating costs and expenses, including compensation expense associated with equity allocated or awarded to our employees in the future; and

● changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Overview

Net Interest Income. Our primary source of income is net interest income. Net interest income is the difference between interest income, which is the income we earn on our loans and investments, and interest expense, which is the interest we pay on our deposits and borrowings.

Provision for Loan Losses. The allowance for loan losses is a valuation allowance for probable incurred credit losses. The allowance for loan losses is increased through charges to the provision for loan losses. Loans are charged against the allowance when management believes that the collectability of the principal loan amount is not probable. Recoveries on loans previously charged-off, if any, are credited to the allowance for loan losses when realized.

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Non-interest Income. Our primary sources of non-interest income are mortgage banking income, service charges on deposit accounts and net gains in the cash surrender value of bank owned life insurance. Other sources of non-interest income include net gain or losses on sales and calls of securities, net gain or loss on disposal of foreclosed assets and other income.

Non-Interest Expenses. Our non-interest expenses consist of salaries and employee benefits, net occupancy and equipment, data processing and office, professional fees, marketing expenses and other general and administrative expenses, including premium payments we make to the FDIC for insurance of our deposits.

Provision for Income Taxes. Our income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between the carrying amounts and the tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized.

Summary of Significant Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

In 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company” we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.

The following represent our significant accounting policies:

Allowance for Loan Losses. The allowance for loan losses established as losses is estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. General components cover non-impaired loans and are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability, and depth of lending management and other relevant staff;

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changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; changes in the value of the underlying collateral for collateral-dependent loans; concentrations of credit; and the effect of other external factors such as competition and legal and regulatory requirements. As a result of the COVID-19 pandemic, at June 30, 2020, we slightly increased certain of our qualitative loan portfolio risk factors relating to local and national economic conditions as well as industry conditions and concentrations, which have experienced deterioration due to the effects of the COVID-19 pandemic. At December 31, 2021 and June 30, 2021, the qualitative loan portfolio risk factors were slightly reduced in all loan categories except commercial real estate which we believe exhibits the most credit risk related to local and national economic conditions as well as industry conditions and concentrations.

A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reason for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and commercial real estate loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.

As an integral part of their examination process, various regulatory agencies review the allowance for loan losses as well. Such agencies may require that changes in the allowance for loan losses be recognized when such regulatory credit evaluations differ from those of management based on information available to the regulators at the time of their examinations.

Provision for Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We recognize the tax effects from an uncertain tax position in the financial statements only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized, upon ultimate settlement with the relevant tax authority. We recognize interest and penalties accrued or released related to uncertain tax positions in current income tax expense or benefit.

Debt Securities. Available-for-sale and held-to-maturity debt securities are reviewed by management on a quarterly basis, and more frequently when economic or market conditions warrant, for possible other-than-temporary impairment. In determining other-than-temporary impairment, management considers many factors, including the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospectus of the issuer, whether the market decline was affected by macroeconomic conditions and whether the bank has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the statement of income. The assessment of whether other-than-temporary impairment exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. In order to determine other-than-temporary impairment for mortgage-backed securities, asset-backed securities and collateralized mortgage obligations, we compare the present value of the remaining cash flows as estimated at the preceding evaluation

31

date to the current expected remaining cash flows. Other-than-temporary impairment is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.

Comparison of Financial Condition at December 31, 2021 and June 30, 2021

Total Assets. Total assets increased $1.6 million, or 0.7%, to $215.2 million at December 31, 2021 from $213.6 million at June 30, 2021. The increase was primarily due to an increase of $1.6 million, or 14.7%, in debt securities available for sale and a $12.2 million, or 8.4% increase, in loans, net of the allowance for loan losses offset by a decrease of $16.4 million, or 35.5%, in cash and cash equivalents. Interest bearing deposits held in other financial institutions also increased by $1.5 million, or 70.6%. The Company also purchased an additional $3.0 million of bank owned life insurance during the six months ended December 31, 2021.

Cash and Cash Equivalents. Total cash and cash equivalents decreased $16.4 million, or 35.5%, to $29.7 million at December 31, 2021 from $46.1 million at June 30, 2021, primarily due to cash used to fund loan originations, the purchase of $3.0 million of corporate bonds in our debt securities available for sale portfolio and an additional purchase of $3.0 million of bank owned life insurance.

Debt Securities Available for Sale. Total debt securities available for sale increased $1.6 million, or 14.7%, to $12.5 million at December 31, 2021 from $10.9 million at June 30, 2021. The increase was primarily due to the purchase of $3.0 million in corporate bonds offset by paydowns and maturities of our mortgage-backed securities portfolio.

Debt Securities Held to Maturity. Total debt securities held to maturity decreased $83,000, or 11.7%, to $626,000 at December 31, 2021 from $709,000 at June 30, 2021. The decrease was primarily due to a decrease of mortgage-backed securities as a result of maturities.

Net Loans. Net loans increased $12.2 million, or 8.4%, to $156.3 million at December 31, 2021 from $144.1 million at June 30, 2021. The increase was primarily due to a $10.8 million, or 20.9%, increase in commercial real estate loans to $63.0 million at December 31, 2021 from $52.1 million at June 30, 2021, an increase in one- to four-family residential loans of $3.3 million, or 6.8%, to $51.7 million at December 31, 2021 from $48.4 million at June 30, 2021 and an increase in multi-family real estate loans of $7.3 million, or 42.6%, to $24.6 million at December 31, 2021 from $17.3 million at June 30, 2021. Commercial and industrial loans decreased by $10.4 million, or 53.8%, to $8.9 million at December 31, 2021 from $19.3 million at June 30, 2021 primarily due to the repayment by the SBA of forgiven PPP loans. PPP loans totaled $150,000 as of December 31, 2021 as compared to $10.4 million as of June 30, 2021. The increase in commercial and multi-family real estate loans was primarily due to our strategy to enhance our commercial and multi-family real estate lending in Southeastern Wisconsin. One- to four-family residential loans increased due to additional growth with respect to adjustable-rate one- to four-family residential loans.

Deposits. Total deposits increased $11.4 million, or 6.7%, to $183.4 million at December 31, 2021 from $172.0 million at June 30, 2021. The increase in deposits was primarily due to an increase in demand, NOW and money market accounts of $11.1 million, or 25.0%, to $55.5 million at December 31, 2021 from $44.4 million at June 30, 2021. The remaining deposit categories remained virtually unchanged when comparing December 31, 2021 to June 30, 2021. The increase in deposits was primarily related to deposits associated with the origination of Paycheck Protection Program (PPP) loans and consumer stimulus payments.

Borrowings. Our borrowings from the Federal Reserve PPP Liquidity Facility to fund our PPP loans decreased by $10.2 million, or 98.6%, to $150,000 at December 31, 2021 from $10.4 million at June 30, 2021. This decrease was due to the repayment by the SBA of forgiven PPP loans.

Stockholders’ Equity. Total stockholders’ equity increased by $679,000, or 0.7%, to $30.5 million at December 31, 2021 from $29.8 million at June 30, 2021. The increase was primarily due to net income of $702,000 during the six months ended December 31, 2021.

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Average Balance Sheets

The following tables set forth average balances, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense, as applicable. Loan balances include loans held for sale.

	For the Three Months Ended December 31,
	2021							2020
	Average					Average		Average					Average
	Outstanding					Yield/Rate		Outstanding					Yield/Rate
	Balance			Interest		(1)		Balance			Interest		(1)
	(Dollars in thousands)
Interest-earning assets:
Loans (excluding PPP loans)	$	149,327		$	1,501	4.05	%	$	113,168		$	1,409	5.05	%
PPP loans		772			110	69.64	%		4,952			82	6.75	%
Debt securities		12,670			83	2.62	%		14,790			93	2.53	%
Cash and cash equivalents		33,991			7	0.08	%		28,933			5	0.07	%
Other		262			1	1.52	%		262			3	4.63	%
Total interest-earning assets		197,022			1,702	3.47	%		162,105			1,592	3.96	%
Noninterest-earning assets		14,470							11,162
Total assets	$	211,492						$	173,267
Interest-bearing liabilities:
Demand, NOW and money market deposits	$	54,920			47	0.34	%	$	37,631			32	0.34	%
Savings deposits		45,699			17	0.15	%		40,405			16	0.15	%
Certificates of deposit		58,780			162	1.10	%		45,640			219	1.92	%
Total interest-bearing deposits		159,399			226	0.56	%		123,676			267	0.86	%
FHLB advances and other borrowings		—			—	—	%		8,000			6	0.35	%
PPP Liquidity Facility borrowings		895			3	1.34	%		5,484			6	0.44	%
Total interest-bearing liabilities		160,294			229	0.57	%		137,160			279	0.81	%
Non-interest bearing demand deposits		22,761							12,447
Other non-interest bearing liabilities		1,257							2,149
Total liabilities		184,312							151,756
Total stockholders' equity		27,180							21,511
Total liabilities and stockholders' equity	$	211,492						$	173,267
Net interest income				$	1,473						$	1,313
Net interest rate spread (2)						2.90	%						3.15	%
Net interest-earning assets (3)	$	36,728						$	24,945
Net interest margin (4)						3.00	%						3.26	%
Average interest-earning assets to interest-bearing liabilities		122.91	%						118.19	%

(1) Annualized.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total interest-earning assets.

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	For the Six Months Ended December 31,
	2021							2020
	Average					Average		Average					Average
	Outstanding					Yield/Rate		Outstanding					Yield/Rate
	Balance			Interest		(1)		Balance			Interest		(1)
	(Dollars in thousands)
Interest-earning assets:
Loans (excluding PPP loans)	$	144,302		$	2,940	4.08	%	$	111,901		$	2,716	4.89	%
PPP loans		1,912			483	56.33	%		5,899			124	4.22	%
Debt securities		12,667			163	2.57	%		15,993			207	2.59	%
Cash and cash equivalents		38,203			17	0.09	%		26,687			7	0.05	%
Other		262			3	2.28	%		262			6	4.61	%
Total interest-earning assets		197,346			3,606	3.66	%		160,742			3,060	3.82	%
Noninterest-earning assets		13,982							11,701
Total assets	$	211,328						$	172,443
Interest-bearing liabilities:
Demand, NOW and money market deposits	$	52,263			90	0.34	%	$	36,635			66	0.36	%
Savings deposits		45,736			33	0.14	%		40,107			30	0.15	%
Certificates of deposit		59,083			334	1.12	%		46,088			453	1.96	%
Total interest-bearing deposits		157,082			457	0.58	%		122,830			549	1.11	%
FHLB advances and other borrowings		—			—	—	%		8,000			13	0.32	%
PPP Liquidity Facility borrowings		2,538			6	0.47	%		5,945			11	0.37	%
Total interest-bearing liabilities		159,620			463	0.58	%		136,775			573	0.84	%
Non-interest-bearing demand deposits		22,999							12,271
Other non-interest-bearing liabilities		1,161							2,016
Total liabilities		183,780							151,062
Total stockholders' equity		27,548							21,381
Total liabilities and stockholders' equity	$	211,328						$	172,443
Net interest income				$	3,143						$	2,487
Net interest rate spread (2)						3.08	%						2.99	%
Net interest-earning assets (3)	$	37,726						$	23,967
Net interest margin (4)						3.18	%						3.10	%
Average interest-earning assets to interest-bearing liabilities		123.63	%						117.52	%

(1) Annualized.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total interest-earning assets.

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Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.

	Six Months Ended December 31,						Three Months Ended December 31,
	2021 vs. 2020						2021 vs. 2020
	Increase (Decrease) Due to				Total		Increase (Decrease) Due to				Total
					Increase						Increase
	Volume		Rate		(Decrease)		Volume		Rate		(Decrease)
		(In thousands)						(In thousands)
Interest-earning assets:
Loans (excluding PPP loans)	$	396	$	(172)	$	224	$	456	$	(364)	$	92
PPP loans		(42)		401		359		(71)		99		28
Debt securities		(22)		(23)		(45)		(14)		4		(10)
Cash and cash equivalents		2		9		11		1		1		2
Other		—		(4)		(4)		—		(2)		(2)
Total interest-earning assets		334		211		545		372		(262)		110
Interest-bearing liabilities:
Demand, NOW and money market deposits		14		10		24		15		—		15
Savings deposits		2		1		3		1		—		1
Certificates of deposit		64		(183)		(119)		63		(120)		(57)
Total interest-bearing deposits		80		(172)		(92)		79		(120)		(41)
FHLB advances and other borrowings		(7)		(7)		(14)		(6)		—		(6)
PPP Liquidity Facility borrowings		(3)		(2)		(5)		(5)		2		(3)
Total interest-bearing liabilities		70		(181)		(111)		68		(118)		(50)
Change in net interest income	$	264	$	392	$	656	$	304	$	(144)	$	160

Comparison of Operating Results for the Three Months Ended December 31, 2021 and 2020

General. Net income was $285,000 for the three months ended December 31, 2021, a decrease of $106,000, or 27.1%, from net income of $391,000 for the three months ended December 31, 2020. The decrease in net income for the three months ended December 31, 2021 was primarily attributed to a $217,000 decrease in non-interest income and a $78,000 increase in non-interest expenses offset by a $161,000 increase in net-interest income and a $29,000 decrease in the provision for income taxes.

Interest Income. Interest income increased by $110,000, or 6.9%, to $1.7 million for the three months ended December 31, 2021 compared to $1.6 million for the three months ended December 31, 2020 due to an increase in loan interest income, partially offset by a decrease in debt securities interest income.

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Loan interest income increased by $119,000, or 8.0%, to $1.6 million for the three months ended December 31, 2021 from $1.5 million for the three months ended December 31, 2020, due to an increase in the average balance of the loan portfolio partially offset by a decrease in the average yield on loans (excluding PPP loans). The average balance of the loan portfolio (including PPP loans) increased by $32.0 million, or 27.1%, from $118.1 million for the three months ended December 31, 2020 to $150.1 million for the three months ended December 31, 2021. The increase in the average balance of loans was due to our continued efforts to increase commercial and multi-family real estate loans in Southeastern Wisconsin offset by a decrease in the average balance of PPP loans due to the repayment by the SBA of forgiven PPP loans. One-to-four family residential loans also increased. The increase in one- to four-family residential mortgage loans was primarily the result of customers refinancing their loans at lower rates. The average yield on the loan portfolio (excluding PPP loans) decreased by 100 basis points from 5.05% for the three months ended December 31, 2020 to 4.05% for the three months ended December 31, 2021. The decrease in the average yield on loans was primarily due to a decrease in market interest rates since December 31, 2020. In addition, loan interest income was positively impacted by the recognition of deferred fee income of $108,000 during the three months ended December 31, 2021 on the forgiven PPP loans repaid by the SBA compared to $57,000 for the three months ended December 31, 2020. As of December 31, 2021, we had $150,000 of outstanding PPP loans, net of deferred fee income of $10,694. The remaining deferred fee income will be recognized as forgiven PPP loans are repaid by the SBA.

Debt securities interest income decreased $10,000, or 10.8%, to $83,000 for the three months ended December 31, 2021 from $93,000 for the three months ended December 31, 2020 due to a decrease of $2.1 million in the average balance of the debt securities portfolio offset by a nine basis points increase in the average yield on the debt securities portfolio to 2.62% for the three months ended December 31, 2021 from 2.53% for the three months ended December 31, 2020. The decrease in the average balance of the debt securities portfolio was primarily due to securities paydowns which was offset by the purchase of a $1.0 million corporate bond during the three months ended December 31, 2021. The increase in the average yield of debt securities was due to the purchase of the $3.0 million in corporate bonds for the six months ended December 31, 2021.

Interest Expense. Interest expense decreased $51,000, or 18.1%, to $229,000 for the three months ended December 31, 2021 from $279,000 for the three months ended December 31, 2020, due to a decrease of $41,000 in interest paid on deposits and a decrease of $10,000 in interest paid on borrowings.

Interest expense on deposits decreased $41,000, or 15.4%, to $226,000 for the three months ended December 31, 2021 from $267,000 for the three months ended December 31, 2020 due to a decrease in interest expense on certificates of deposit which was offset by an increase in interest expense on interest-bearing core deposits (consisting of demand, NOW, money market and savings accounts). Interest expense on certificates of deposit decreased $57,000, or 26.0%, to $162,000 for the three months ended December 31, 2021 from $219,000 for the three months ended December 31, 2020 due to a decrease in the average rate paid on certificates of deposit which was offset by an increase in the average balance of certificates of deposit. The average rate paid on certificates of deposit decreased 82 basis points to 1.10% for the three months ended December 31, 2021 from 1.92% for the three months ended December 31, 2020 due to the decline in market rates. The average balance of certificates of deposit increased by $13.1 million, to $58.8 million, for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 due to the purchase of $15.1 million in brokered certificates of deposit in March 2021 and an increase in new customers added by the Company. Interest expense on interest-bearing core deposits increased by $17,000, or 36.1%, to $64,000 for the three months ended December 31, 2021 from $47,000 for the three months ended December 31, 2020. The average rate paid on our interest-bearing core deposits increased slightly by 1 basis point to 0.25% for the three months ended December 31, 2021 from 0.24% for the three months ended December 31, 2020. The average balance of our interest-bearing core deposits increased by $22.6 million during the three months ended December 31, 2021 compared to the three months ended December 31, 2020 and was primarily related to deposits associated with the origination of PPP loans and consumer stimulus payments.

Net Interest Income. Net interest income increased $161,000, or 12.2%, to $1.5 million for the three months ended December 31, 2021 from $1.3 million for the three months ended December 31, 2020 due to an increase in net interest-earning assets offset by a decrease in the net interest rate spread. Also included in net interest income for the three months ended December 31, 2021 was the recognition of deferred fee income of $108,000 on the forgiven PPP loans repaid by the SBA compared to $57,000 for the three months ended December 31, 2020. Net interest-earning

36

assets increased by $11.8 million, or 47.2%, to $36.7 million for the three months ended December 31, 2021 from $24.9 million for the three months ended December 31, 2020. Net interest rate spread decreased by 25 basis points to 2.90% for the three months ended December 31, 2021 from 3.15% for the three months ended December 31, 2020, reflecting a 49 basis points decrease in the average yield on interest-earning assets and a 24 basis points decrease in the average rate paid on interest-bearing liabilities. The net interest margin decreased 26 basis points to 3.00% for the three months ended December 31, 2021 from 3.26% for the three months ended December 31, 2020. The decrease in the average yield on interest earning assets for the three months ended December 31, 2021 compared to the three months ended December 31, 2020 was primarily due to a decrease in the average yield of 100 basis points on the loan portfolio (excluding PPP loans) as we continue to book new loans at lower interest rates based on the low current interest rate environment. The decrease in the average interest rate paid on interest-bearing liabilities continues to be due to the decrease in interest rates in response to the economic downturn caused by the COVID-19 pandemic.

Provision for Loan Losses. Provisions for loan losses are charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management analyzes several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, changes in the nature, volume and terms of loans, the fair value of underlying collateral, changes in lending personnel, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. Beginning with the three months ended June 30, 2020, as a result of the COVID-19 pandemic, we increased certain of our qualitative loan portfolio risk factors relating to local and national economic conditions as well as industry conditions and concentrations, which have experienced deterioration due to the effects of the COVID-19 pandemic. At December 31, 2021 and June 30, 2021, the qualitative loan portfolio risk factors were slightly reduced in all loan categories except commercial real estate which we believe exhibits the most credit risk related to local and national economic conditions as well as industry conditions and concentrations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Marathon Bancorp. Inc.—Summary of Significant Accounting Policies” for additional information.

After an evaluation of these factors, we recorded no provision for loan losses for the three months ended December 31, 2021 or 2020. Our allowance for loan losses was $2.2 million and $2.1 million at December 31, 2021 and 2020, respectively. The allowance for loan losses to total loans was 1.38% at December 31, 2021 and 1.69% at December 31, 2020. We recorded net recoveries of $1,000 for the three months ended December 31, 2021 and net recoveries of $343,000 for the three months ended December 31, 2020. Non-performing assets decreased to $160,000, or 0.07% of total assets, at December 31, 2021, compared to $178,000, or 0.08% of total assets, at June 30, 2021.

To the best of our knowledge, we have recorded all loan losses that are both probable and reasonable to estimate at December 31, 2021. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for loan losses. In addition, the WDFI and the FDIC, as an integral part of their examination process, will periodically review our allowance for loan losses, and as a result of such reviews, we may have to adjust our allowance for loan losses.

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Non-interest Income. Non-interest income information is as follows.

	Three Months Ended
	December 31,				Change
	2021		2020		Amount		Percent
	(Dollars in thousands)
Service charges on deposit accounts	$	42	$	43	$	(1)	(2.3)	%
Mortgage banking		172		403		(231)	(57.3)	%
Increase in cash surrender value of BOLI		60		42		18	42.9	%
Gain on sale of foreclosed real estate		—		11		(11)	100.0	%
Net gain on securities transactions		14		—		14	100.0	%
Other		2		8		(6)	(75.0)	%
Total non-interest income	$	290	$	507	$	(217)	(42.8)	%

Non-interest income decreased by $217,000 to $290,000 for the three months ended December 31, 2021 from $507,000 for the three months ended December 31, 2020 due primarily to a decrease in mortgage banking income. Mortgage banking income (consisting primarily of sales of fixed-rate one- to four-family residential real estate loans) decreased by $231,000 as we sold $5.8 million of mortgage loans into the secondary market during the three months ended December 31, 2021 compared to $13.5 million of such sales during the three months ended December 31, 2020 due to an increase in market rates, which resulted in decreased demand for mortgage loan refinancing.

Non-interest Expenses. Non-interest expenses information is as follows.

	Three Months Ended
	December 31,				Change
	2021		2020		Amount		Percent
	(Dollars in thousands)
Salaries and employee benefits	$	741	$	814	$	(73)	(9.0)	%
Occupancy and equipment		185		163		22	13.5	%
Data processing and office		104		118		(14)	(11.9)	%
Professional fees		172		75		97	129.3	%
Marketing expenses		28		21		7	33.3	%
Other		149		109		40	36.7	%
Total non-interest expenses	$	1,379	$	1,300	$	79	6.1	%

Non-interest expenses were $1.4 million for the three months ended December 31, 2021 as compared to $1.3 million for the three months ended December 31, 2020. Professional fees increased $97,000 primarily due to costs associated with being a public company including but not limited to preparing and filing the required periodic reports with the Securities and Exchange Commission. Salaries and employee benefits decreased by $73,000 due primarily to personnel changes.

Provision for Income Taxes. Income tax expense was $100,000 for the three months ended December 31, 2021, a decrease of $28,000, as compared to income tax expense of $128,000 for the three months ended December 31, 2020. The decrease in income tax expense was primarily due to a decrease in income before taxes. The effective tax rate for the three months ended December 31, 2021 and 2020 was 25.9% and 24.7%, respectively. The increase in effective tax rate was primarily related to an increase in non-deductible expenses for income tax purposes.

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Comparison of Operating Results for the Six Months Ended December 31, 2021 and 2020

General. Net income was $702,000 for the six months ended December 31, 2021, a decrease of $54,000, or 7.2%, from net income of $756,000 for the six months ended December 31, 2020. The decrease in net income for the six months ended December 31, 2021 was primarily attributed to a $501,000 decrease in non-interest income, a $199,000 increase in non-interest expenses, and a $10,000 increase in the provision for income taxes. These were offset by a $656,000 increase in net-interest income.

Interest Income. Interest income increased by $546,000, or 17.8%, to $3.6 million for the six months ended December 31, 2021 compared to $3.1 million for the six months ended December 31, 2020 due to an increase in loan interest income, partially offset by a decrease in debt securities interest income. Other interest income also increased by $6,000.

Loan interest income increased by $584,000, or 20.6%, to $3.4 million for the six months ended December 31, 2021 from $2.8 million for the six months ended December 31, 2020, due to an increase in the average balance of the loan portfolio partially offset by a decrease in the average yield on loans (excluding PPP loans). The average balance of the loan portfolio (including PPP loans) increased by $28.4 million, or 24.1%, from $117.8 million for the six months ended December 31, 2020 to $146.2 million for the six months ended December 31, 2021. The increase in the average balance of loans was due to our continued efforts to increase commercial and multi-family real estate loans in Southeastern Wisconsin offset by a decrease in the average balance of PPP loans due to the repayment by the SBA of forgiven PPP loans. One-to-four family residential loans also increased. The increase in one- to four-family residential mortgage loans was primarily the result of customers refinancing their loans at lower rates. The average yield on the loan portfolio (excluding PPP loans) decreased by 81 basis points from 4.89% for the six months ended December 31, 2020 to 4.08% for the six months ended December 31, 2021. The decrease in the average yield on loans was primarily due to a decrease in market interest rates since December 31, 2020. In addition, loan interest income was positively impacted by the recognition of deferred fee income of $473,000 during the six months ended December 31, 2021 on the forgiven PPP loans repaid by the SBA compared to only $95,000 for the six months ended December 31, 2020. As of December 31, 2021, we had $150,000 of outstanding PPP loans, net of deferred fee income of $10,694. The remaining deferred fee income will be recognized as forgiven PPP loans are repaid by the SBA.

Debt securities interest income decreased $44,000, or 21.1%, to $163,000 for the six months ended December 31, 2021 from $207,000 for the six months ended December 31, 2020 due to decreases of $3.3 million in the average balance of the debt securities portfolio and two basis points in the average yield on the debt securities portfolio to 2.57% for the six months ended December 31, 2021 from 2.59% for the six months ended December 31, 2020. The decrease in the average balance of the debt securities portfolio was primarily due to securities paydowns which was offset by the purchase of $3.0 million in corporate bonds during the six months ended December 31, 2021. The decrease in the average yield of debt securities was due to the decrease in the average yield of our collateralized mortgage obligations with inverse floating rates which was partially offset by the higher interest rates on the $3.0 million in corporate bonds purchased during the six months ended December 31, 2021.

Interest Expense. Interest expense decreased $110,000, or 19.3%, to $463,000 for the six months ended December 31, 2021 from $573,000 for the six months ended December 31, 2020, due to a decrease of $92,000 in interest paid on deposits and a decrease of $18,000 in interest paid on borrowings.

Interest expense on deposits decreased $92,000, or 16.8%, to $457,000 for the six months ended December 31, 2021 from $549,000 for the six months ended December 31, 2020 due to a decrease in interest expense on certificates of deposit which was offset by an increase in interest expense on interest-bearing core deposits (consisting of demand, NOW, money market and savings accounts). Interest expense on certificates of deposit decreased $119,000, or 26.3%, to $334,000 for the six months ended December 31, 2021 from $453,000 for the six months ended December 31, 2020 due to a decrease in the average rate paid on certificates of deposit which was offset by an increase in the average balance of certificates of deposit. The average rate paid on certificates of deposit decreased 84 basis points to 1.12% for the six months ended December 31, 2021 from 1.96% for the six months ended December 31, 2020 due to the decline in market

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rates. The average balance of certificates of deposit increased by $13.0 million to $59.1 million, for the six months ended December 31, 2021 compared to the six months ended December 31, 2020 due to the purchase of $15.1 million in brokered certificates of deposit in March 2021 and an increase in new customers added by the Company. Interest expense on interest-bearing core deposits increased by $27,000, or 28.1%, to $123,000 for the six months ended December 31, 2021 from $96,000 for the six months ended December 31, 2020. The average rate paid on our interest-bearing core deposits was 0.25% for the six months ended December 31, 2021 and 2020. The average balance of our interest-bearing core deposits increased by $21.3 million during the six months ended December 31, 2021 compared to the six months ended December 31, 2020 and was primarily related to deposits associated with the origination of PPP loans and consumer stimulus payments.

Net Interest Income. Net interest income increased $656,000, or 26.4%, to $3.1 million for the six months ended December 31, 2021 from $2.5 million for the six months ended December 31, 2020 due to an increase in net interest-earning assets and an increase in the net interest rate spread. Also included in net interest income for the six months ended December 31, 2021 was the recognition of deferred fee income of $473,000 on the forgiven PPP loans repaid by the SBA compared to only $95,000 for the six months ended December 31, 2020. Net interest-earning assets increased by $13.7 million, or 57.4%, to $37.7 million for the six months ended December 31, 2021 from $24.0 million for the six months ended December 31, 2020. Net interest rate spread increased by nine basis points to 3.08% for the six months ended December 31, 2021 from 2.99% for the six months ended December 31, 2020, reflecting a 16 basis points decrease in the average yield on interest-earning assets and a 26 basis points decrease in the average rate paid on interest-bearing liabilities. The net interest margin increased eight basis points to 3.18% for the six months ended December 31, 2021 from 3.10% for the six months ended December 31, 2020. The decrease in the average yield on interest earning assets for the six months ended December 31, 2021 compared to the six months ended December 31, 2020 was primarily due to a decrease in the average yield of 81 basis points on the loan portfolio (excluding PPP loans) as we continue to book new loans at lower interest rates based on the low current interest rate environment. This decrease was offset by the $473,000 in deferred fee income recognized on the forgiven PPP loans repaid by the SBA. The decrease in the average interest rate paid on interest-bearing liabilities continues to be due to the decrease in interest rates in response to the economic downturn caused by the COVID-19 pandemic. The net interest rate spread and net interest margin for the six months ended December 31, 2021 would have been approximately 2.60% and 2.70%, respectively when excluding the $473,000 in deferred fee income recognized on forgiven PPP loans repaid by the SBA.

Provision for Loan Losses. Provisions for loan losses are charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses in our loan portfolio that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management analyzes several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, changes in the nature, volume and terms of loans, the fair value of underlying collateral, changes in lending personnel, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. Beginning with the three months ended June 30, 2020, as a result of the COVID-19 pandemic, we increased certain of our qualitative loan portfolio risk factors relating to local and national economic conditions as well as industry conditions and concentrations, which have experienced deterioration due to the effects of the COVID-19 pandemic. At December 31, 2021 and June 30, 2021, the qualitative loan portfolio risk factors were slightly reduced in all loan categories except commercial real estate which we believe exhibits the most credit risk related to local and national economic conditions as well as industry conditions and concentrations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Marathon Bancorp. Inc.—Summary of Significant Accounting Policies” for additional information.

After an evaluation of these factors, we recorded no provision for loan losses for the six months ended December 31, 2021 or 2020. Our allowance for loan losses was $2.2 million and $2.1 million at December 31, 2021 and 2020, respectively. The allowance for loan losses to total loans was 1.38% at December 31, 2021 and 1.69% at December 31, 2020. We recorded net recoveries of $2,000 for the six months ended December 31, 2021 and net recoveries of $418,000 for the six months ended December 31, 2020. Non-performing assets decreased to $160,000, or 0.07% of total assets, at December 31, 2021, compared to $178,000, or 0.08% of total assets, at June 30, 2021.

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To the best of our knowledge, we have recorded all loan losses that are both probable and reasonable to estimate at December 31, 2021. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for loan losses. In addition, the WDFI and the FDIC, as an integral part of their examination process, will periodically review our allowance for loan losses, and as a result of such reviews, we may have to adjust our allowance for loan losses.

Non-interest Income. Non-interest income information is as follows.

	Six Months Ended
	December 31,				Change
	2021		2020		Amount		Percent
	(Dollars in thousands)
Service charges on deposit accounts	$	83	$	86	$	(3)	(3.5)	%
Mortgage banking		358		882		(524)	(59)	%
Increase in cash surrender value of BOLI		107		84		23	27.4	%
Gain on sale of foreclosed real estate		—		11		(11)	1,200.0	%
Net gain on securities transactions		14		—		14	100.0	%
Other		8		9		(1)	(11.1)	%
Total non-interest income	$	570	$	1,072	$	(502)	(47)	%

Non-interest income decreased by $502,000 to $570,000 for the six months ended December 31, 2021 from $1.1 million for the six months ended December 31, 2020 due primarily to a decrease in mortgage banking income. Mortgage banking income (consisting primarily of sales of fixed-rate one- to four-family residential real estate loans) decreased by $524,000 as we sold $12.4 million of mortgage loans into the secondary market during the six months ended December 31, 2021 compared to $30.9 million of such sales during the six months ended December 31, 2020 due to an increase in market rates, which resulted in decreased demand for mortgage loan refinancing.

Non-interest Expenses. Non-interest expenses information is as follows.

	Six Months Ended
	December 31,				Change
	2021		2020		Amount		Percent
	(Dollars in thousands)
Salaries and employee benefits	$	1,566	$	1,608	$	(42)	(2.6)	%
Occupancy and equipment		361		324		37	11.4	%
Data processing and office		201		229		(28)	(12.2)	%
Professional fees		330		134		196	146.3	%
Marketing expenses		43		34		9	26.5	%
Other		277		250		27	10.8	%
Total non-interest expenses	$	2,778	$	2,579	$	199	7.7	%

Non-interest expenses were $2.8 million for the six months ended December 31, 2021 as compared to $2.6 million for the six months ended December 31, 2020. Professional fees increased $196,000 primarily due to costs associated with being a public company including but not limited to preparing and filing the required periodic reports with the Securities and Exchange Commission. Salaries and employee benefits decreased $42,000 due primarily to personnel changes.

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Provision for Income Taxes. Income tax expense was $233,000 for the six months ended December 31, 2021, an increase of $10,000, as compared to income tax expense of $223,000 for the six months ended December 31, 2020. The effective tax rate for the six months ended December 31, 2021 and 2020 was 24.9% and 22.8%, respectively. The increase in effective tax rate was primarily related to an increase in non-deductible expenses for income tax purposes.

Asset Quality

Loans Past Due and Non-Performing Assets. Loans are reviewed on a regular basis. Management determines that a loan is impaired or non-performing when it is probable at least a portion of the loan will not be collected in accordance with the original terms due to a deterioration in the financial condition of the borrower or the value of the underlying collateral if the loan is collateral dependent. When a loan is determined to be impaired, the measurement of the loan in the allowance for loan losses is based on present value of expected future cash flows, except that all collateral-dependent loans are measured for impairment based on the fair value of the collateral. Non-accrual loans are loans for which collectability is questionable and, therefore, interest on such loans will no longer be recognized on an accrual basis. All loans that become 90 days or more delinquent are placed on non-accrual status unless the loan is well secured and in the process of collection. When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received on a cash basis or cost recovery method.

When we acquire real estate as a result of foreclosure, the real estate is classified as real estate owned. The real estate owned is recorded at the lower of carrying amount or fair value, less estimated costs to sell. Soon after acquisition, we order a new appraisal to determine the current market value of the property. Any excess of the recorded value of the loan satisfied over the market value of the property is charged against the allowance for loan losses, or, if the existing allowance is inadequate, charged to expense of the current period. After acquisition, all costs incurred in maintaining the property are expensed. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.

A loan is classified as a troubled debt restructuring if, for economic or legal reasons related to the borrower’s financial difficulties, we grant a concession to the borrower that we would not otherwise consider. This usually includes a modification of loan terms, such as a reduction of the interest rate to below market terms, capitalizing past due interest or extending the maturity date and possibly a partial forgiveness of the principal amount due. Interest income on restructured loans is accrued after the borrower demonstrates the ability to pay under the restructured terms through a sustained period of repayment performance, which is generally six consecutive months.

The CARES Act, in addition to providing financial assistance to both businesses and consumers, creates a forbearance program for federally-backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the national emergency, and provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The Federal banking regulatory agencies have likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board, and provisions of the CARES Act allow modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as troubled debt restructurings. Modifications may include payment deferrals, fee waivers, extensions of repayment term, or other delays in payment.

To work with customers impacted by COVID-19, the Company offered short-term (i.e., three months or less with the potential to extend up to six months, if necessary) loan modifications on a case by case basis to borrowers who were current in their payments at the inception of the loan modification program. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 are considered current for COVID-19 modifications. A financial institution can then suspend the requirements under U.S. GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification

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made between March 1, 2020 and the earlier of either January 1, 2022 or the 60th day after the end of the COVID-19 national emergency. The Company made this policy election. Similarly, the Financial Accounting Standards Board (“FASB”) has confirmed that short-term modifications made on a good faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. Lastly, prior to the enactment of the CARES Act, the banking regulatory agencies provided guidance as to how certain short-term modifications would not be considered TDRs, and have subsequently confirmed that such guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.

The Company received requests to modify loans, primarily consisting of the deferral of principal and interest payments and the extension of the maturity date. Of these modifications, 100% were performing in accordance with the accounting treatment under Section 4013 of the CARES Act and therefore did not qualify as TDRs. As of December 31, 2021, we had granted short-term payment deferrals on 56 loans, totaling approximately $20.0 million in aggregate principal amount. As of December 31, 2021, all of these loans have returned to normal payment status.

Delinquent Loans. The following table sets forth our loan delinquencies, including non-accrual loans, by type and amount at the dates indicated. We had no PPP loans delinquent at December 31, 2021 or June 30, 2021.

	At December 31, 2021						At June 30, 2021
	30-59		60-89		90 Days		30-59		60-89		90 Days
	Days		Days		or More		Days		Days		or More
	Past Due		Past Due		Past Due		Past Due		Past Due		Past Due
	(In thousands)
Real estate loans:
One- to four-family residential	$	631	$	154	$	160	$	30	$	4	$	178
Multifamily		—		—		—		—		—		—
Commercial		—		—		—		—		—		—
Construction		—		—		—		—		—		—
Commercial and industrial		—		—		—		—		—		—
Consumer		4		—		—		15		—		—
Total	$	635	$	154	$	160	$	45	$	4	$	178

Non-Performing Assets. The following table sets forth information regarding our non-performing assets. Non-accrual loans include non-accruing troubled debt restructurings of $67,000 and $72,000 as of December 31, 2021 and June 30, 2021, respectively. Troubled debt restructurings include loans for which either a portion of interest or principal has been forgiven, or loans modified at interest rates materially less than current market rates.

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	At December 31,			At June 30,
	2021			2021
	(Dollars in thousands)
Non-accrual loans:
Real estate loans:
One- to four-family residential	$	160		$	178
Multifamily		—			—
Commercial		—			—
Construction		—			—
Commercial and industrial		—			—
Consumer		—			—
Total non-accrual loans		160			178
Accruing loans past due 90 days or more		—			—
Real estate owned:
One- to four-family residential		—			—
Multifamily		—			—
Commercial		—			—
Construction		—			—
Commercial and industrial		—			—
Consumer		—			—
Total real estate owned		—			—
Total non-performing assets	$	160		$	178
Total accruing troubled debt restructured loans	$	450		$	468
Total non-performing loans to total loans		0.10	%		0.12	%
Total non-performing loans to total assets		0.07	%		0.08	%
Total non-performing assets to total assets		0.07	%		0.08	%

Classified Assets. Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss allowance is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated as “special mention” or “Watch” by our management.

When an insured institution classifies problem assets as either substandard or doubtful, it may establish general allowances in an amount deemed prudent by management to cover probable accrued losses. General allowances represent loss allowances which have been established to cover probable accrued losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When an insured institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount. An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, which may require the establishment of additional general or specific loss allowances.

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On the basis of our review of our loans our classified and special mention or watch loans at the dates indicated were as follows:

	At December 31,		At June 30,
	2021		2021
		(In thousands)
Classification of Loans:
Substandard	$	—	$	—
Doubtful		—		—
Loss		—		—
Total Classified Loans	$	—	$	—
Special Mention	$	1,689	$	5,257

Allowance for Loan Losses

The allowance for loan losses established as losses is estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. General components cover non-impaired loans and are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability, and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; changes in the value of the underlying collateral for collateral-dependent loans; concentrations of credit; and the effect of other external factors such as competition and legal and regulatory requirements. As a result of the COVID-19 pandemic, at June 30, 2020, we slightly increased certain of our qualitative loan portfolio risk factors relating to local and national economic conditions as well as industry conditions and concentrations, which have experienced deterioration due to the effects of the COVID-19 pandemic. At December 31, 2021 and June 30, 2021, the qualitative loan portfolio risk factors were slightly reduced in all loan categories except commercial real estate which we believe exhibits the most credit risk related to local and national economic conditions as well as industry conditions and concentrations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Marathon Bancorp. Inc.—Summary of Significant Accounting Policies” for additional information.

A loan is considered impaired when, based on current information and events, it is probable that we will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reason for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and commercial real estate loans by either the present value of expected future cash

45

flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.

In addition, the WDFI and the FDIC periodically review our allowance for loan losses and as a result of such reviews, we may have to adjust our allowance for loan losses or recognize further loan charge-offs.

The following table sets forth activity in our allowance for loan losses for the periods indicated.

	For the Three Months Ended						For the Six Months Ended
	December 31,						December 31,
	2021			2020			2021			2020
	(Dollars in thousands)						(Dollars in thousands)
Allowance at beginning of period	$	2,187		$	1,775		$	2,186		$	1,700
Provision for loan losses		—			—			—			—
Charge offs:
Real estate loans:
One- to four-family residential		—			—			—			—
Multifamily		—			—			—			—
Commercial		—			—			—			—
Construction		—			—			—			—
Commercial loans and industrial		—			—			—			—
Consumer		—			—			—			—
Total charge-offs		—			—			—			—
Recoveries:
Real estate loans:		—			—			—			—
One- to four-family residential		—			—			—			—
Multifamily		—			—			—			—
Commercial		—			—			—			—
Construction		—			—			—			73
Commercial and industrial		—			341			—			341
Consumer		1			2			2			4
Total recoveries		1			343			2			418
Net (charge-offs) recoveries		1			343			2			418
Allowance at end of period	$	2,188		$	2,118		$	2,188		$	2,118
Allowance to non-performing loans		1,367.50	%		2,715.38	%		1,367.50	%		2,715.38	%
Allowance to total loans outstanding at the end of the period		1.38	%		1.69	%		1.38	%		1.69	%
Net (charge-offs) recoveries to average loans outstanding during the period		0.00	%		0.29	%		0.00	%		0.35	%

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Allocation of Allowance for Loan Losses. The following table sets forth the allowance for loan losses allocated by loan category and the percent of the allowance in each category to the total allocated allowance at the dates indicated. The allowance for loan losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.

	At December 31, 2021						At June 30, 2021
			Percent of		Percent of Loans				Percent of		Percent of Loans
			Allowance to		In Category to Total				Allowance to		In Category to Total
	Amount		Total Allowance		Loans		Amount		Total Allowance		Loans
Commercial real estate	$	1,288,427	58.9	%	39.7	%	$	1,036,301	47.4	%	35.5	%
Commercial and industrial		49,009	2.2	%	5.5	%		157,533	7.2	%	6.1	%
Construction		47,780	2.2	%	5.1	%		59,649	2.7	%	5.4	%
One-to-four-family residential		341,911	15.6	%	32.6	%		409,395	18.7	%	33.0	%
Multi-family real estate		121,353	5.5	%	15.5	%		134,216	6.1	%	11.8	%
Paycheck Protection Program loans		—	—		0.1	%		—	—		7.1	%
Consumer		5,532	0.3	%	1.4	%		4,896	0.2	%	1.1	%
Unallocated		334,631	15.3	%	—			384,192	17.6	%	—	%
Total	$	2,188,643	100	%	100	%	$	2,186,182	100.0	%	100.0	%

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At December 31, 2021, we had a $72.4 million line of credit with the Federal Home Loan Bank of Chicago, and had no borrowings outstanding as of that date. Under the Federal Reserve PPP Liquidity Facility program, we have outstanding $150,000 to fund PPP loans as of December 31, 2021 which is secured by an equal amount of PPP loans.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-bearing demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $206,000 and $105,000 for the six months ended December 31, 2021 and 2020, respectively. Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on securities, was $17.8 million and $3.2 million for the six months ended December 31, 2021 and 2020, respectively. Net cash provided by financing activities, consisting of activity in deposit accounts and borrowings, was $1.2 million and $3.4 million for the six months ended December 31, 2021 and 2020, respectively.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience, current pricing strategy and regulatory restrictions, we anticipate that a substantial portion of

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maturing time deposits will be retained, and that we can supplement our funding with borrowings in the event that we allow these deposits to run off at maturity.

At December 31, 2021, Marathon Bank was classified as “well capitalized” for regulatory capital purposes.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At December 31, 2021, we had outstanding commitments to originate loans of $11.5 million, and outstanding commitments to sell loans of $844,000. We anticipate that we will have sufficient funds available to meet our current lending commitments. Time deposits that are scheduled to mature in one year or less from December 31, 2021 totaled $24.9 million. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank advances or other borrowings, which may result in higher levels of interest expense.

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

Recent Accounting Pronouncements

Please refer to Note 1 to the consolidated financial statements for a description of recent accounting pronouncements that may affect our financial condition and results of operations.

Impact of Inflation and Changing Price

The financial statements and related data presented herein have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Item 3.       Quantitative and Qualitative Disclosure about Market Risk

A smaller reporting company is not required to provide the information related to this item.

Item 4.       Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”) were effective as of the end of the period covered by this Form 10-Q.

48

Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

49

PART II. OTHER INFORMATION

Item 1.       Legal Proceedings

As of December 31, 2021, the Company is not currently a named party in a legal proceeding, the outcome of which would have a material effect on the financial condition or results of operations of the Company.

Item 1A.       Risk Factors

A smaller reporting company is not required to provide the information related to this item.

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.       Defaults upon Senior Securities

None.

Item 4.       Mine Safety Disclosures

Not applicable.

Item 5.       Other Information

Item 6.       Exhibits

Exhibit No.	Description
31.1	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Executive Officer
31.2	Rule 13a-14(a) / 15d-14(a) Certification of the Chief Financial Officer
32.1	Section 1350 Certification of the Chief Executive Officer
32.2	Section 1350-Certification of the Chief Financial Officer
101	The following materials from Marathon Bancorp, Inc. Form 10-Q for the three and six months ended December 31, 2021 and December 31, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows, and (iv) related notes
104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Marathon Bancorp, Inc.
Date: February 11, 2022	By:	/s/ Nicholas W. Zillges
		Nicholas W. Zillges
		President and Chief Executive
		Officer (Principal Executive Officer)
Date: February 11, 2022	By:	/s/ Joy Selting-Buchberger
		Joy Selting-Buchberger
		Senior Vice President and Chief
		Financial Officer (Principal
		Financial and Accounting Officer)

51

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nicholas W. Zillges, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Marathon Bancorp, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)   Disclosed in this report any change in the registrant's internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:     February 11, 2022	By:	/s/ Nicholas W. Zillges
		Nicholas W. Zillges
		President and Chief Executive
		Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joy Selting-Buchberger, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Marathon Bancorp, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)   Disclosed in this report any change in the registrant's internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 11, 2022	By:	/s/ Joy Selting-Buchberger
		Joy Selting-Buchberger
		Senior Vice President and Chief
		Financial Officer (Principal Financial
		and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Marathon Bancorp, Inc. (the “Company”) for the quarter ended December 31, 2021 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 11, 2022	By:	/s/ Nicholas W. Zillges
		Nicholas W. Zillges
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Marathon Bancorp, Inc. (the “Company”) for the quarter ended December 31, 2021 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 11, 2022	By:	/s/ Joy Selting-Buchberger
		Joy Selting-Buchberger
		Senior Vice President and Chief
		Financial Officer (Principal Financial
		and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2021	Feb. 10, 2022
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2021
Entity File Number	000-56269
Entity Registrant Name	MARATHON BANCORP, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	86-2191258
Entity Address, Address Line One	500 Scott Street
Entity Address, City or Town	Wausau
Entity Address State Or Province	WI
Entity Address, Postal Zip Code	54403
City Area Code	715
Local Phone Number	845-7331
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,229,497
Entity Central Index Key	0001835385
Current Fiscal Year End Date	--06-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Assets
Cash and due from banks	$ 2,967,480	$ 1,989,643
Federal funds sold	26,730,000	44,059,000
Cash and cash equivalents	29,697,480	46,048,643
Interest bearing deposits held in other financial institutions	3,518,465	2,062,463
Debt securities available for sale	12,513,053	10,909,764
Debt securities held to maturity, at amortized cost (fair value $693,083 and $770,438)	626,294	708,949
Loans, net of allowance of $2,188,643 and $2,186,182, respectively	156,324,796	144,169,318
Interest receivable	535,703	552,516
Investment in restricted stock, at cost	262,200	262,200
Cash surrender value life insurance	9,075,364	5,968,734
Premises and equipment, net	1,757,261	1,849,917
Deferred tax asset	94,133	269,715
Other assets	809,079	825,081
Total assets	215,213,828	213,627,300
Deposits
Non-interest bearing	23,196,979	23,633,008
Interest bearing	160,195,803	148,323,109
Paycheck protection program lending facility (PPPLF) funding	149,557	10,372,148
Other liabilities	1,143,534	1,449,884
Total liabilities	184,685,873	183,778,149
Stockholders' Equity
Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued
Common stock, $.01 par value, 20,000,000 shares authorized, 2,229,497 shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively	22,295	22,295
Additional paid-in capital	8,485,653	8,484,019
Retained earnings	22,790,625	22,088,669
Unearned ESOP shares, at cost	(839,010)	(866,499)
Accumulated other comprehensive income	68,392	120,667
Total stockholders' equity	30,527,955	29,849,151
Total liabilities and stockholders' equity	$ 215,213,828	$ 213,627,300

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
CONSOLIDATED BALANCE SHEETS
Held to maturity debt securities	$ 693,083	$ 770,438
Loans allowance	$ 2,188,643	$ 2,186,182
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	2,229,497	2,229,497
Common stock, shares outstanding	2,229,497	2,229,497

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Interest Income
Loans, including fees	$ 1,610,637	$ 1,491,621	$ 3,422,801	$ 2,839,234
Debt securities	83,034	93,092	163,418	207,200
Other	8,540	7,507	19,515	13,481
Total interest income	1,702,211	1,592,220	3,605,734	3,059,915
Interest Expense
Deposits	226,050	267,215	456,756	549,247
Borrowings and other	2,691	12,195	6,388	24,349
Total interest expense	228,741	279,410	463,144	573,596
Net Interest Income	1,473,470	1,312,810	3,142,590	2,486,319
Net Interest Income After Provision for Loan Losses	1,473,470	1,312,810	3,142,590	2,486,319
Non-Interest Income
Service charges on deposit accounts	41,670	42,590	83,297	85,868
Mortgage banking income	172,100	403,408	358,066	882,094
Increase in cash value of life insurance	59,902	41,818	106,630	83,590
Net gain on securities transactions	14,000		14,000
Gain (loss) of sale of foreclosed assets		11,284		10,840
Other income	2,118	7,504	8,369	9,196
Total non-interest income	289,790	506,604	570,362	1,071,588
Non-Interest Expenses
Salaries and employee benefits	741,210	813,797	1,566,350	1,608,457
Occupancy and equipment expenses	185,469	162,950	361,050	324,444
Data processing and office	104,496	118,004	201,304	229,315
Professional fees	172,057	75,098	329,534	134,118
Marketing expenses	27,623	21,093	42,662	33,950
Other expenses	147,930	109,415	276,987	248,441
Total non-interest expenses	1,378,785	1,300,357	2,777,887	2,578,725
Income Before Income Taxes	384,475	519,057	935,065	979,182
Provision for Income Taxes	99,610	128,329	233,109	223,101
Net Income	$ 284,865	$ 390,728	$ 701,956	$ 756,081
Net income per common shares-basic and diluted	$ 0.13		$ 0.33
Weighted average number of common shares outstanding-basic and diluted	2,144,911		2,144,221

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021		Dec. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net Income	$ 284,865	$ 390,728	$ 701,956		$ 756,081
Unrealized (losses) gains on available for sale debt securities
Unrealized holding (loss) gain arising during the period	(64,924)	(22,002)	(70,677)		(8,692)
Tax effect	17,684	5,994	19,251		2,369
Net amount	(47,240)	(16,008)	(51,426)		(6,323)
Reclassification adjustment for gains included in net income (a)	(14,000)		(14,000)
Tax effect	3,815		3,815
Net amount	(10,185)		(10,185)
Amortization of unrealized losses on debt securities transferred from available for sale to held to maturity	4,217	49,498	9,336	[1]	88,594	[1]
Other comprehensive income	(53,208)	33,490	(52,275)		82,271
Comprehensive Income	$ 231,657	$ 424,218	$ 649,681		$ 838,352

[1] (a) The reclassification adjustment is included in the Consolidated Statement of Income as Net Gain on Securities Transactions.

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-in Capital	Retained Earnings	Unearned ESOP Shares	Accumulated Other Comprehensive Income (Loss)	Total
Balance, at beginning at Jun. 30, 2020			$ 20,715,610		$ 66,725	$ 20,782,335
Net income			365,353			365,353
Other comprehensive income (loss)					48,781	48,781
Balance, at ending at Sep. 30, 2020			21,080,963		115,506	21,196,469
Balance, at beginning at Jun. 30, 2020			20,715,610		66,725	20,782,335
Net income						756,081
Balance, at ending at Dec. 31, 2020			21,471,691		148,996	21,620,687
Balance, at beginning at Sep. 30, 2020			21,080,963		115,506	21,196,469
Net income			390,728			390,728
Other comprehensive income (loss)					33,490	33,490
Balance, at ending at Dec. 31, 2020			21,471,691		148,996	21,620,687
Balance, at beginning at Jun. 30, 2021	$ 22,295	$ 8,484,019	22,088,669	$ (866,499)	120,667	29,849,151
Net income			417,091			417,091
Other comprehensive income (loss)					933	933
ESOP shares committed to be released		1,190		13,792		14,982
Balance, at ending at Sep. 30, 2021	22,295	8,485,209	22,505,760	(852,707)	121,600	30,282,157
Balance, at beginning at Jun. 30, 2021	22,295	8,484,019	22,088,669	(866,499)	120,667	29,849,151
Net income						701,956
Balance, at ending at Dec. 31, 2021	22,295	8,485,653	22,790,625	(839,010)	68,392	30,527,955
Balance, at beginning at Sep. 30, 2021	22,295	8,485,209	22,505,760	(852,707)	121,600	30,282,157
Net income			284,865			284,865
Other comprehensive income (loss)					(53,208)	(53,208)
ESOP shares committed to be released		444		13,697		14,141
Balance, at ending at Dec. 31, 2021	$ 22,295	$ 8,485,653	$ 22,790,625	$ (839,010)	$ 68,392	$ 30,527,955

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - shares	3 Months Ended
	Dec. 31, 2021	Sep. 30, 2021
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
ESOP shares committed to be released (in shares)	1,370	1,379

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Operating Activities
Net income	$ 701,956	$ 756,081
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	101,895	102,276
ESOP expense	29,123
Net amortization of discounts and premiums on debt securities	63,794	74,859
Amortization of deferred loan fees, net	(495,351)	(95,284)
Net gain on sale of loans	(223,686)	(702,504)
Realized gain on available for sale debt securities	(14,000)
Net gains and write down on foreclosed assets		(10,840)
Net change in deferred taxes	198,648	159,795
Earnings on cash value of life insurance	(106,630)	(83,590)
Decrease in interest receivable	16,813	44,667
Originations of loans held for sale	(12,385,042)	(30,937,040)
Proceeds from loans held for sale	12,608,728	31,639,544
Net change in other assets	16,002	(493,806)
Net change in other liabilities	(306,350)	(349,596)
Net Cash from Operating Activities	205,900	104,562
Investing Activities
Net change in interest-bearing deposits in other financial institutions	(1,456,002)	(1,353,358)
Purchase of debt securities available for sale	(3,000,000)
Proceeds from sales, maturities, and repayments of debt securities available for sale	1,260,577	2,961,284
Proceeds from maturities and calls of debt securities held to maturity	93,654	1,304,477
Purchase of bank owned life insurance	(3,000,000)
Net change in loans	(11,660,127)	(6,141,320)
Proceeds from sale of foreclosed assets		74,920
Purchases of property and equipment	(9,239)	(33,993)
Net Cash (used in) from Investing Activities	(17,771,137)	(3,187,990)
Financing Activities
Net change in deposits	11,436,665	5,233,348
Repayments of PPPLF funding, net	(10,222,591)	(1,881,760)
Net Cash (used in) from Financing Activities	1,214,074	3,351,588
Net Change in Cash and Cash Equivalents	(16,351,163)	268,160
Cash and Cash Equivalents, Beginning of Year	46,048,643	24,274,747
Cash and Cash Equivalents, End of Year	29,697,480	24,542,907
Supplemental Disclosure of Cash Flow Information
Interest	471,468	$ 567,535
Taxes	$ 46,000

XML

Basis of Presentation

6 Months Ended

Dec. 31, 2021

Basis of Presentation

Basis of Presentation

Note 1- Basis of Presentation

Marathon Bancorp, Inc. (the “Company”) is a Maryland chartered mid-tier stock holding company and was formed in connection with the conversion of Marathon Bank (the “Bank”) from a mutual to the mutual holding company form of organization in April 2021, and it is a subsidiary of Marathon MHC (the “Mutual Holding Company”), a Wisconsin chartered mutual holding company. The Mutual Holding Company owns 1,226,223 shares, or 55.0%, of the Company’s issued stock. In connection with the reorganization, Marathon Bancorp, Inc. sold 1,003,274 shares of common stock to the public at $10.00 per share, representing 45.0% of its outstanding shares of common stock. The stock offering resulted in gross proceeds of $10.0 million, net of offering expenses of $1.4 million, resulting in net proceeds of $8.5 million. The Mutual Holding Company activity is not included in the accompanying consolidated financial statements. Marathon Bank is a wholly owned subsidiary of the Company. The same directors and officers, who manage the Bank, also manage the Company and the Mutual Holding Company.

The Company contributed approximately $4.5 million of the net proceeds of the offering to the Bank. In addition, $874,000 of the net proceeds were used to fund the loan to the employee stock ownership plan and approximately $3.4 million of the net proceeds were retained by the Company.

The Bank is a Wisconsin stock savings bank, which conducts its business through four offices. The Bank operates as a full-service financial institution with a primary market area including, but not limited to, Marathon County and Ozaukee County, Wisconsin. Its primary deposit products are demand deposits, savings, and certificates of deposits; and its primary lending products are commercial real estate, commercial and industrial, construction, one-to-four-family residential, multi-family real estate and consumer loans.

In December 2019, a coronavirus (COVID-19) was reported in China and on March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. Nonetheless, the Company has not incurred any significant disruptions to its business activities.

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences could be material to the financial statements. Additionally, effects of the COVID-19 pandemic may negatively impact significant estimates and the assumptions underlying those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses, valuation of deferred tax assets, other than temporary impairment of debt securities and fair value of financial assets and liabilities.

In the opinion of management, all adjustments considered necessary for fair presentation have been included. Operating results for the three and six month periods ended December 31, 2021 are not necessarily indicative of the results for the year ending June 30, 2022 or any other period. For further information, refer to the consolidated financial statements and notes thereto for the years ended June 30, 2021 and 2020 contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on September 28, 2021.

Recent Accounting Pronouncements

This section provides a summary description of recent ASUs issued by the FASB to the ASC that had or that management expects may have an impact on the consolidated financial statements issued upon adoption. The Company is classified as an emerging growth company and has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Effective dates reflect this election.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020 (see below). Early adoption is permitted. The Company will adopt this pronouncement beginning July 1, 2022. The Company’s operating leases are predominately related to real estate. The Company has determined that the provisions of ASU 2016-02 will result in an increase in assets to recognize the present value of the lease obligations with a corresponding increase in liabilities; however, the Company does not expect this new standard to have a material impact on the Company’s results of operations or cash flows because the Company owns most of its facilities and this ASU will apply primarily to its two small operating leases. Management is currently evaluating the appropriate transition method and projected present value of its leases at the adoption date.

In June 2020, the FASB issued ASU No. 2020-05, Coronavirus Disease 2019 (“COVID-19”) in response to the pandemic which has adversely affected the global economy and caused significant and widespread business and capital market disruptions. The FASB is committed to supporting and assisting stakeholders during this difficult time. The FASB issued ASU 2020-05 as a limited deferral of the effective dates of certain ASUs, including ASU 2016-02 (including amendments issued after the issuance of the original) to provide immediate, near-term relief for certain entities for whom these ASUs are either currently effective or imminently effective. The Company plans to defer the adoption of the amendments in ASU 2016-02 to the fiscal year beginning July 1, 2022.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this pronouncement beginning July 1, 2023. Management is currently evaluating the potential impact on its results of operations, financial

position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

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Earnings Per Share

6 Months Ended

Dec. 31, 2021

Earnings Per Share

Earnings Per Share

Note 2- Earnings Per Share

Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. The Company has a simple capital structure as it has not granted any restricted stock awards or stock options and, during the three and six months ended December 31, 2021, had no potentially dilutive common stock equivalents. Unallocated common shares held by the ESOP are not included in the weighted-average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released. Set forth below is the calculation of earnings per share.

		For the Three Months				For the Six Months
		Ended December 31,				Ended December 31,
	2021		2020		2021		2020
	(Dollars in thousands)				(Dollars in thousands)
Net income applicable to common stock	$	284,865	$	390,728	$	701,956	$	756,081
Average number of shares outstanding		2,229,497		N/A		2,229,497		N/A
Less: Average unallocated ESOP shares		84,586		N/A		85,276		N/A
Average number of common shares outstanding used to calculate basic earnings per share		2,144,911		N/A		2,144,221		N/A
Earnings per common share:
Basic	$	0.13		N/A	$	0.33		N/A
Diluted		0.13		N/A		0.33		N/A

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Debt Securities

6 Months Ended

Dec. 31, 2021

Debt Securities

Debt Securities

Note 3- Debt Securities

Debt securities have been classified in the consolidated balance sheet according to management’s intent. The carrying value of securities as of December 31, 2021 and June 30, 2021, consists of the following:

	December 31,				June 30,
		2021		2021
Available for sale debt securities, at fair value		$	12,513,053	$	10,909,764
Held to maturity debt securities, at amortized cost			626,294		708,949
		$	13,139,347	$	11,618,713

The amortized cost and fair value of debt securities, with gross unrealized gains and losses, are as follows:

			Gross			Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,649,821	$	37,473	$	(2,272)	$	1,685,022
Mortgage-backed		3,469,716		115,976		(8,349)		3,577,343
Corporate bonds		7,218,135		34,370		(1,817)		7,250,688
	$	12,337,672	$	187,819	$	(12,438)	$	12,513,053
Held to maturity debt securities
Mortgage-backed	$	626,294	$	66,789	$	—	$	693,083

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,830,603	$	60,403	$	(3,999)	$	1,887,007
Mortgage-backed		4,557,465		165,976		(11,873)		4,711,568
Corporate bonds		4,261,638		79,251		(29,700)		4,311,189
	$	10,649,706	$	305,630	$	(45,572)	$	10,909,764
Held to maturity debt securities
Mortgage-backed	$	708,949	$	61,489	$	—	$	770,438

Securities with a carrying value of approximately $869,000 and $1,118,000 as of December 31, 2021 and June 30, 2021, were pledged to secure public deposits and debt.

The amortized cost and fair value of debt securities by contractual maturity at December 31, 2021, follows:

	Available for Sale Debt Securities				Held to Maturity Debt Securities
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
December 31, 2021
Due in one year or less	$	1,135,700	$	1,136,010	$	—	$	—
Due from more than one to five years		4,517,256		4,582,975		—		—
Due from more than five to ten years		2,215,000		2,216,725		—		—
Due for more than ten years		1,000,000		1,000,000		—		—
		8,867,956		8,935,710		—		—
Mortgage-backed securities		3,469,716		3,577,343		626,294		693,083
	$	12,337,672	$	12,513,053	$	626,294	$	693,083

There were no sales of available for sale debt securities during the three and six month periods ended December 31, 2021 and 2020. The Company did recognize a gain of $14,000 on a bond that matured during the three and six months ended December 31, 2021 related to a previous other than temporary impairment charge taken on this security.

The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and

length of time that individual securities have been in a continuous unrealized loss position at December 31, 2021 and June 30, 2021:

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(2,272)	$	57,728	$	(2,272)	$	57,728
Mortgage-backed		(737)		125,982		(7,612)		123,935		(8,349)		249,917
Corporate bonds		(1,817)		1,095,294		—		—		(1,817)		1,095,294
	$	(2,554)	$	1,221,276	$	(9,884)	$	181,663	$	(12,438)	$	1,402,939
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(3,999)	$	91,001	$	(3,999)	$	91,001
Mortgage-backed		(3,760)		181,380		(8,113)		159,437		(11,873)		340,817
Corporate bonds		(29,700)		1,080,463		—		—		(29,700)		1,080,463
	$	(33,460)	$	1,261,843	$	(12,112)	$	250,438	$	(45,572)	$	1,512,281
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

There were seven securities in an unrealized loss position in the less than 12 months category and four securities in the 12 months or more category at December 31, 2021. There were four securities in an unrealized loss position in the less than 12 months category and five securities in the 12 months or more category at June 30, 2021. All of these unrealized losses were caused by interest rate changes. The contractual terms of the securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investment. Because the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost bases, which may be maturity, the Company does not consider the securities to be other-than-temporarily impaired.

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Loans

6 Months Ended

Dec. 31, 2021

Loans

Loans

Note 4- Loans

A summary of loans by major category follows:

	December 31, 2021		June 30, 2021
Commercial real estate	$	63,032,800	$	52,148,065
Commercial and industrial (1)		8,901,181		19,278,477
Construction		8,098,343		7,985,188
One-to-four-family residential		51,680,119		48,404,820
Multi-family real estate		24,615,280		17,268,048
Consumer		2,254,816		1,788,997
Total loans		158,582,539		146,873,595
Deferred loan fees		(69,100)		(518,095)
Allowance for loan losses		(2,188,643)		(2,186,182)
Loans, net	$	156,324,796	$	144,169,318

(1) Paycheck protection loans represent $149,557 and $10,378,681 of the commercial and industrial loans as of December 31, 2021 and June 30, 2021.

The Company maintains a collateral pledge agreement with the FHLB covering secured advances whereby the Company has agreed to retain, free of all other pledges, liens, and encumbrances, commercial and industrial, commercial real estate, and one-to-four family residential loans. The pledged loans are discounted at a factor of 20% to 36% when aggregating the amount of loans required by the pledge agreement. The amount of eligible collateral was $35,667,099 and $35,421,507 as of December 31, 2021 and June 30, 2021, respectively. There was also FHLB stock of $262,200 pledged as of December 31, 2021 and June 30, 2021.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020 and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). This was considered Round 1 of the PPP. Although we were not already a qualified SBA lender, we enrolled in the PPP by completing the required documentation. We subsequently obtained approval as a qualified SBA lender. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law and included new funding for the PPP (Round 2). The PPP ended in May 2021.

Commercial and industrial loans include loans originated under the PPP, a specialized low-interest (1%) forgivable loan program funded by the U.S. Treasury Department and administered by the SBA. The SBA guarantees 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and the loan proceeds are used for other qualifying expenses. The Company receives a processing fee from the SBA ranging from 1% to 5% depending on the size of the loan, which is offset by a third-party servicing agent fee ranging from 0.25% to 1.0%. As of December 31, 2021, we had originated 277 PPP loans totaling $18.5 million. As of December 31, 2021, $18.3 million of these PPP loans have been forgiven. As of December 31, 2021, we had 5 PPP loans totaling $149,557 net of remaining deferred fees of $10,694 outstanding. As of June 30, 2021, we had 109 PPP loans totaling $10,378,681 net of remaining deferred fees of $483,484 outstanding.

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended December 31, 2021 and 2020, and the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of December 31, 2021 and June 30, 2021:

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
December 31, 2021
Allowance for credit losses
Balance at beginning of year	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,124		—		1,124
Provisions		187,549		(89,036)		(9,003)		(53,138)		(47,734)		(102)		11,464		—
Balance at September 30, 2021		1,223,850		68,497		50,646		356,257		86,482		5,918		395,656		2,187,306
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,337		—		1,337
Provisions		64,577		(19,488)		(2,866)		(14,346)		34,871		(1,723)		(61,025)		—
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,288,427		49,009		47,780		341,911		121,353		5,532		334,631		2,188,643
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Loans
Individually evaluated for impairment	$	217,449	$	—	$	—	$	299,084	$	—	$	—	$	—	$	516,533
Collectively evaluated for impairment		62,815,351		8,901,181		8,098,343		51,381,035		24,615,280		2,254,816		—		158,066,006
Balance at end of period	$	63,032,800	$	8,901,181	$	8,098,343	$	51,680,119	$	24,615,280	$	2,254,816	$	—	$	158,582,539

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
June 30, 2021
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,036,301		157,533		59,649		409,395		134,216		4,896		384,192		2,186,182
Balance at end of period	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Loans
Individually evaluated for impairment	$	223,983	$	—	$	—	$	315,440	$	—	$	—	$	—	$	539,423
Collectively evaluated for impairment		51,924,082		19,278,477		7,985,188		48,089,380		17,268,048		1,788,997				146,334,172
Balance at end of period	$	52,148,065	$	19,278,477	$	7,985,188	$	48,404,820	$	17,268,048	$	1,788,997	$	—	$	146,873,595

	Commercial		Commercial				One-to-Four		MultiFamily
December 31, 2020	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses
Balance at beginning of period	$	274,997	$	1,021,083	$	43,858	$	339,449	$	10,057	$	2,003	$	8,530	$	1,699,977
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		73,128		—		—		1,652		—		74,780
Provisions		386,382		(907,851)		10,610		283,716		52,515		9,226		165,402		—
Balance at September 30, 2020		661,379		113,232		127,596		623,165		62,572		12,881		173,932		1,774,757
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		341,388		—		—		—		1,566		—		342,954
Provisions		280,505		(344,174)		2,444		(47,961)		23,163		(3,893)		89,916		—
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		941,884		110,446		130,040		575,204		85,735		10,554		263,848		2,117,711
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Loans
Individually evaluated for impairment	$	230,331	$	—	$	—	$	470,318	$	90,328	$	—	$	—	$	790,977
Collectively evaluated for impairment		47,324,480	11017967	11,017,967		10,080,584		42,803,943		11,431,363		1,986,429		—		124,644,766
Balance at end of period	$	47,554,811	$	11,017,967	$	10,080,584	$	43,274,261	$	11,521,691	$	1,986,429	$	—	$	125,435,743

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral adequacy, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non-homogeneous loans such as commercial and industrial and commercial real estate loans. This analysis is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:

Pass – Loans classified as pass represent loans that are evaluated and are performing under the stated terms. Pass rated assets are analyzed by the paying capacity, the current net worth, and the value of the loan collateral of the obligor.

Special Mention/Watch – Loans classified as watch possess potential weaknesses that require management attention but do not yet warrant adverse classification. While the status of a loan put on this list may not technically trigger their classification as substandard or doubtful, it is considered a proactive way to identify potential issues and address them before the situation deteriorates further and does result in a loss for the Company.

Substandard – Loans classified as substandard are inadequately protected by the current net worth, paying capacity of the obligor, or by the collateral pledged. Substandard loans must have a well-defined weakness or weaknesses that jeopardize the repayment of the debt as originally contracted. They are characterized by the distinct possibility that the Company will sustain a loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have the weaknesses of those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans in this category are allocated a specific reserve based on the estimated discounted cash flows from the loan (or collateral value less cost to sell for collateral dependent loans) or are charged-off if deemed uncollectible.

Based on the most recent analysis performed, the risk category of loans by class of loans as of December 31, 2021 and June 30, 2021, is as follows:

			Special Mention/
	Pass		Watch		Substandard		Doubtful
December 31, 2021
Commercial real estate	$	61,344,054	$	1,688,746	$	—	$	—
Commercial and industrial		8,901,181		—		—		—
Construction		8,098,343		—		—		—
	$	78,343,578	$	1,688,746	$	—	$	—

			Special Mention/
	Pass		Watch		Substandard		Doubtful
June 30, 2021
Commercial real estate	$	51,924,082	$	223,983	$	—	$	—
Commercial and industrial		14,245,538		5,032,939		—		—
Construction		7,985,185		—		—		—
	$	74,154,805	$	5,256,922	$	—	$	—

Residential real estate and consumer loans are managed on a pool basis due to their homogeneous nature. Loans that are 90 days or more delinquent or are not accruing interest are considered nonperforming. The following table presents the recorded investments in residential real estate and consumer loans by class based on payment activity as of December 31, 2021 and June 30, 2021:

	Performing		Nonperforming
December 31, 2021
One-to-four-family residential	$	51,520,026	$	160,093
Multi-family real estate		24,615,280		—
Consumer		2,254,816		—
	$	78,390,122	$	160,093

	Performing		Nonperforming
June 30, 2021
One-to-four-family residential	$	48,226,426	$	178,394
Multi-family real estate		17,268,048		—
Consumer		1,788,997		—
	$	67,283,471	$	178,394

The following table summarizes the aging of the past due loans by loan class within the portfolio segments as of December 31, 2021 and June 30, 2021 (excluding COVID-19 deferrals):

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
December 31, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		631,413		153,725		—		160,093
Multi-family real estate		—		—		—		—
Consumer		3,621		—		—		—
Total	$	635,034	$	153,725	$	—	$	160,093

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
June 30, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		30,165		3,635		—		178,394
Multi-family real estate		—		—		—		—
Consumer		15,119		—		—		—
Total	$	45,284	$	3,635	$	—	$	178,394

Impaired Loans

A loan is considered impaired when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.

The following table summarizes individually impaired loans by class of loans as of December 31, 2021 and June 30, 2021:

								For the Six Months Ended
								December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
December 31, 2021
With no related allowance recorded
Commercial real estate	$	217,449	$	235,516	$	—	$	220,715	$	6,881
One-to-four-family residential		299,084		338,663		—		307,262		15,778
	$	516,533	$	574,179	$	—	$	527,977	$	22,659

							For the Six Months Ended
							December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
Commercial real estate		—		—		—		—		—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

							For the Year Ended
							June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
June 30, 2021
With no related allowance recorded
Commercial real estate	$	223,983	$	242,050	$	—	$	228,710	$	14,628
One-to-four-family residential		315,440		355,019		—		334,581		20,763
	$	539,423	$	597,069	$	—	$	563,291	$	35,391

								For the Year Ended
								June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

Impaired loans include loans modified in troubled debt restructuring (TDR) where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance, or other actions intended to maximize collection.

There were no loans modified as TDRs during the six months ended December 31, 2021 and 2020. The Company has made no commitments to lend additional funds on restructured loans.

To work with customers impacted by COVID-19, the Company is offering short-term (i.e., three months or less with the potential to extend up to six months, if necessary) loan modifications on a case by case basis to borrowers who were current in their payments at the inception of the loan modification program. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 are considered current for COVID-19 modifications. A financial institution can then suspend the requirements under U.S. GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Financial

institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either January 1, 2022 or the 60th day after the end of the COVID-19 national emergency. The Company made this policy election. Similarly, the Financial Accounting Standards Board (“FASB”) has confirmed that short-term modifications made on a good faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. Lastly, prior to the enactment of the CARES Act, the banking regulatory agencies provided guidance as to how certain short-term modifications would not be considered TDRs, and have subsequently confirmed that such guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.

The Company received requests to modify loans, primarily consisting of the deferral of principal and interest payments and the extension of the maturity date. Of these modifications, 100% were performing in accordance with the accounting treatment under Section 4013 of the CARES Act and therefore did not qualify as TDRs. As of December 31, 2021, we had granted short-term payment deferrals on 56 loans, totaling approximately $20.0 million in aggregate principal amount. As of December 31, 2021, all of these loans have returned to normal payment status.

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Deposits

6 Months Ended

Dec. 31, 2021

Deposits

Deposits

Note 5 - Deposits

Major classifications of deposits are as follows as of December 31, 2021 and June 30, 2021.

	Unaudited
	At December 31, 2021				At June 30, 2021
	Amount		Percent		Amount		Percent
Non-interest-bearing demand accounts	$	23,196,979	12.65	%	$	23,633,008	13.74	%
Demand, NOW, money market accounts		55,486,139	30.26	%		44,400,084	25.82	%
Savings accounts		46,200,517	25.19	%		44,688,696	25.99	%
Certificates of deposit		58,509,147	31.90	%		59,234,329	34.45	%
Total	$	183,392,782	100.00	%	$	171,956,117	100.00	%

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Other Comprehensive Income

6 Months Ended

Dec. 31, 2021

Other Comprehensive Income

Other Comprehensive Income

Note 6- Other Comprehensive Income

The changes in accumulated other comprehensive income by component for the three months and six months ended December 31, 2021 and 2020, follows:

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2021
Balance, beginning of period	$	188,558	$	(67,891)	$	120,667
Other comprehensive loss before reclassifications (net of tax)		(4,186)		—		(4,186)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		5,119		5,119
Balance, September 30, 2021		184,372		(62,772)		121,600
Other comprehensive loss before reclassifications (net of tax)		(47,240)		—		(47,240)
Amounts reclassified from accumulated other comprehensive income (net of tax) (a)		(10,185)		—		(10,185)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		4,217		4,217
Balance, December 31, 2021	$	126,947	$	(58,555)	$	68,392

(a) The reclassification adjustment is reflected in the Consolidated Statement of Income as Net Gain on Securities Transactions ($14,000) and Provision for Income Taxes of ($3,815).

(b) The reclassification adjustment is reflected in the Consolidated Statements of Income as Interest Income-Debt Securities.

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2020
Balance, beginning of period	$	262,688	$	(195,963)	$	66,725
Other comprehensive income before reclassifications (net of tax)		9,685		—		9,685
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		39,096		39,096
Balance, September 30, 2020		272,373		(156,867)		115,506
Other comprehensive loss before reclassifications (net of tax)		(16,008)		—		(16,008)
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		49,498		49,498
Balance, December 31, 2020	$	256,365	$	(107,369)	$	148,996

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Minimum Regulatory Capital Requirements

6 Months Ended

Dec. 31, 2021

Minimum Regulatory Capital Requirements

Minimum Regulatory Capital Requirements

Note 7- Minimum Regulatory Capital Requirements

Bank regulatory authorities in the United States issue risk-based capital standards. These capital standards relate a banking company’s capital to the risk profile of its assets and provide the basis by which all banking companies and banks are evaluated in terms of capital adequacy.

The risk-based capital standards require financial institutions to maintain: (a) a minimum ratio of common equity tier 1 (“CET1”) to risk-weighted assets of at least 4.5%, (b) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%; (c) a minimum ratio of total (that is, tier 1 plus tier 2) capital to risk-weighted assets of at least 8.0%); and (d) a minimum leverage ratio of 3.0%, calculated as the ratio of tier 1 capital balance sheet exposures plus certain off-balance sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter). In addition, the rules also limit a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% above the minimum standards stated in (a) - (c) above.

The CARES Act allows banking organizations to apply a zero percent risk weight to PPP covered loans for risk-based capital requirement purposes. In addition, because of the non-recourse nature of the Federal Reserve’s extension of credit to the banking organization, the banking organization is not exposed to credit or market risk from the pledged PPP covered loans. Therefore, pledged PPP covered loans are excluded from a banking organization’s regulatory capital calculation.

In September 2019, the FDIC finalized a rule to simplify the capital calculation for qualifying community banking organizations (i.e., the community bank leverage ratio (“CBLR framework”)), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. Section 4012 of the CARES Act requires regulatory agencies to temporarily lower the CBLR eligibility requirement from 9.00% to 8.00% through the end of 2020. The associated regulatory interim final rule modified the CBLR framework allowing banks with a leverage ratio of 8.00% or greater to elect to use the CBLR framework. The interim final rule gradually increases the requirement back to 9.00% on January 1, 2022, requiring a ratio of 8.5% for the year beginning January 1, 2021. The interim final rule also provides a two-quarter grace period for qualifying banks whose leverage ratio falls no more than 1.00% below the required ratio for that reporting quarter. The Bank opted into the CBLR framework as of December 31, 2021 and June 30, 2021.

As of December 31, 2021 and June 30, 2021, management believes the Bank has met all capital adequacy requirements to which it is subject. As of December 31, 2021 and June 30, 2021, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios are presented in the following table (dollars in thousands):

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
December 31, 2021		(Dollars in thousands)
Tier I Capital to Average Assets	$	26,394	12.55	%	$	15,773	>	7.5	%	$	17,876	>	8.5	%

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
June 30, 2021					(Dollars in thousands)
Tier I Capital to Average Assets	$	25,452	12.47	%	$	15,313	>	7.5	%	$	17,355	>	8.5	%

A Wisconsin state-chartered savings bank is required by state law to maintain minimum net worth, as defined, in an amount equal to at least 6.0% of its total assets. At December 31, 2021, the Bank’s net worth was $26,555,579 and general loan loss reserve was $2,188,643, totaling 13.34% of total assets, which meets the state of Wisconsin’s minimum net worth requirements. At June 30, 2021, the Bank’s net worth was $25,842,077 and general loan loss reserve was $2,186,182, totaling 13.12% of total assets, which meets the state of Wisconsin’s minimum net worth requirements.

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Employee Benefit Plans

6 Months Ended

Dec. 31, 2021

Employee Benefit Plans

Employee Benefit Plans

Note 8 -    Employee Benefit Plans

The Company provides a 401(k) salary deferral plan to substantially all employees. Employees are allowed to make voluntary contributions to the plan up to 15% of their compensation. In addition, the Company provides discretionary matching and profit-sharing contributions as well as a safe harbor contribution.

Effective upon the completion of the Company’s initial public stock offering in April 2021, the Company established an Employee Stock Ownership Plan (“ESOP”) for all eligible employees. The ESOP used $873,970 in proceeds from a term loan obtained from the Company to purchase 87,397 shares of common stock in the initial public offering at a price of $10.00 per share. The ESOP loan will be repaid principally from the Company’s contribution to the ESOP in annual payments through 2045 at a fixed interest rate per annum equal to the Prime Rate (currently 3.25%). Shares are released to participants on a straight-line basis over the loan term and allocated based on participant compensation. The Company recognizes compensation benefit expense as shares are committed for release at their current market price. The difference between the market price and the cost of shares committed to be released is recorded as an adjustment to additional paid-in capital. Dividends on allocated shares, if applicable, are recorded as a reduction of retained earnings and dividends on unallocated shares are recorded as a reduction of debt. The Company recognized $29,123 (upon the release of 2,749 shares) of compensation expense related to this plan for the six months ended December 31, 2021. At December 31, 2021, there were 83,901 shares not yet released having an aggregate market value of approximately $901,936. Participants will become fully vested upon completion of three years of credited service. Eligible employees who were employed with the Company shall receive credit for vesting purposes for each year of continuous employment prior to adoption of the ESOP.

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 9- Commitments and Contingencies

The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. The Company’s exposure to credit loss is represented by the contractual amount of these

commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

As of December 31, 2021 and June 30, 2021, the following financial instruments were outstanding where contract amounts represent credit risk:

	December 31, 2021		June 30, 2021
Commitments to grant loans	$	3,335,000	$	5,824,000
Unused commitments under lines of credit		8,193,000		9,352,000
MPF credit enhancements		759,439		680,777

Commitments to grant loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Mortgage Partnership Finance (MPF) credit enhancements allow the Company to share the credit risk associated with home mortgage finance with Federal Home Loan Bank (FHLB). MPF provides the Company the ability to originate, sell, and service fixed-rate, residential mortgage loans, and receive a Credit Enhancement Fee based on the performance of the loans. FHLB manages the liquidity, interest rate, and prepayment risks of the loans while the Company manages the credit risk of the loans. The Company will incur an obligation on a foreclosure loss only after a foreclosure loss exceeds the borrower’s equity, any private mortgage insurance, and the funded first loss account. Based on the delinquency results for states where properties are located and the Company’s historical loss experience, the estimated foreclosure losses are immaterial.

The Company, from time to time, may be a defendant in legal proceedings relating to the conduct of its banking business. Most of such legal proceedings are a normal part of the banking business and, in management’s opinion as of December 31, 2021, the financial condition and results of operations of the Company would not be materially affected by the outcome of such legal proceedings.

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Fair Value of Assets and Liabilities

6 Months Ended

Dec. 31, 2021

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Note 10- Fair Value of Assets and Liabilities

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument.

Fair value accounting guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

In accordance with this guidance, the Company groups its financial assets and liabilities generally measured at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.

Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities may include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table sets forth assets and liabilities measured at fair value on a recurring basis at December 31, 2021 and June 30, 2021:

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,685,022	$	—	$	1,685,022	$	—
Mortgage-backed		3,577,343		—		3,577,343		—
Corporate bonds		7,250,688		—		5,250,688		2,000,000
Total assets	$	12,513,053	$	—	$	10,513,053	$	2,000,000

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,887,007	$	—	$	1,887,007	$	—
Mortgage-backed		4,711,568		—		4,711,568		—
Corporate bonds		4,311,189		—		4,311,189		—
Total assets	$	10,909,764	$	—	$	10,909,764	$	—

For those available for sale debt securities where quoted prices are unavailable, fair values are calculated based on market prices of similar securities and, therefore, are classified as Level 2 within the valuation hierarchy.

The following table represents changes in the Company’s available for sale debt securities measured at fair value on a recurring basis using unobservable inputs (Level 3). The Company had one investment security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at December 31, 2021. This security was purchased during the three months ended September 30, 2021 and was reclassified to Level 3 during the three months ended December 31, 2021 because of the lack of observable market data for this investment. The investment is valued on

a quarterly basis by a third-party valuation expert. The Level 3 valuation is based on the 5/30 swap curve, floated at 1%, which is considered a significant unobservable input.

Balance at October 1, 2021	$	—
Transfer of security from Level 2 to Level 3		2,000,000
Unrealized gains (losses) included in other comprehensive income (loss)		—
Balance at December 31, 2021	$	2,000,000

Under certain circumstances the Company may make adjustments to fair value for assets and liabilities although they are not measured at fair value on an ongoing basis. The Company had no Level 3 financial assets measured at fair value on a nonrecurring basis.

Financial Disclosures about Fair Value of Financial Instruments

Accounting guidance requires disclosures of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate their fair values. Certain financial instruments and all non-financial instruments are excluded from the scope of the guidance.

The estimated fair values of financial instruments are as follows:

	December 31, 2021				June 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets
Cash and due from banks	$	2,967,480	$	2,967,480	$	1,989,643	$	1,989,643
Federal funds sold		26,730,000		26,730,000		44,059,000		44,059,000
Interest bearing deposits in other financial institutions		3,518,465		3,518,465		2,062,463		2,062,463
Available for sale debt securities		12,513,053		12,513,053		10,909,764		10,909,764
Held to maturity debt securities		626,294		693,083		708,949		770,438
Loans, net		156,324,796		156,284,000		144,169,318		145,596,000
Investment in restricted stock		262,200		262,200		262,200		262,200
Interest receivable		535,703		535,703		552,516		552,516
Financial Liabilities
Deposits	$	183,392,782	$	182,486,000	$	171,956,117	$	174,555,000
Paycheck protection program lending facility		149,557		149,557		10,372,148		10,372,148
Accrued interest payable		19,113		19,113		10,152		10,152

The methods and assumptions that were used to estimate the fair value of financial assets and financial liabilities that are measured at fair value on a recurring and non-recurring basis have been previously disclosed. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below:

Cash and due from banks – Due to their short -term nature, the carrying amount of cash and due from banks approximates fair value and is categorized in level 1 of the fair value hierarchy.

Federal funds sold – Due to their short-term nature, the carrying amount of federal funds sold approximates the fair value and is categorized in level 1 of the fair value hierarchy.

Interest bearing deposits in other financial institutions- Due to their short -term nature, the carrying amount of interest- bearing deposits in other financial institutions approximates fair value and is categorized in level 1 of the fair value hierarchy.

Available for sale securities – The fair value is estimated using quoted market prices or by using pricing models and is categorized in level 2 of the fair value hierarchy.

Held to maturity debt securities-The fair value is estimated using quoted market prices or by pricing models and is categorized as level 2 of the fair value hierarchy.

Loans– The fair value of variable rate loans that reprice frequently are based on carrying values. The fair value of other loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and is categorized in level 3 of the fair value hierarchy. Loans held for sale are included with loans, net above, with fair value based on commitments on hand from investors or prevailing market prices and is categorized in level 3 of the fair value hierarchy.

Investments in restricted stock – No secondary market exists for FHLB stock. The stock is bought and sold at par by the FHLB and management believes the carrying amount approximates fair value and is categorized in level 2 of the fair value hierarchy.

Paycheck Protection Program Lending Facility-Due to their short-term nature, the carrying amount approximates fair value and is categorized as level 3 of the fair value hierarchy.

Interest receivable – Due to their short -term nature, the carrying amount approximates fair value and is categorized in level 1 of the fair value hierarchy.

Deposits – Fair value of deposits with no stated maturity, such as demand deposits, savings, and money market accounts, by definition, is the amount payable on demand on the reporting date. Fair value of fixed rate time deposits is estimated using discounted cash flows applying interest rates currently offered on similar time deposits. Deposits are categorized in level 2 of the fair value hierarchy.

Paycheck Protection Program Lending Facility (PPPLF) funding – The carrying amount approximates fair value and is categorized in level 2 of the fair value hierarchy.

Accrued interest payable – Due to their short-term nature, the carrying amount approximates fair value and is categorized in level 1 of the fair value hierarchy.

The estimated fair value of fee income on letters of credit at December 31, 2021 and June 30, 2021 is insignificant. Loan commitments on which the committed interest rate is less than the current market rate are also insignificant at December 31, 2021 and June 30, 2021.

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Revenue Recognition

6 Months Ended

Dec. 31, 2021

Revenue Recognition

Revenue Recognition

Note 11- Revenue Recognition

In accordance with FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606) and all subsequent amendments, the Company’s services that fall within the scope of Topic 606 are presented within non-interest income and are recognized as revenue as the Company satisfies its obligation to the customer. All of the Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within non-interest income which includes service charges on deposit accounts and the sale of foreclosed assets.

A description of the Company’s revenue streams accounted for under Topic 606 follows:

Service Charges on Deposit Accounts: Service charges on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges include, but are not limited to, overdraft fees, non-sufficient fund fees, dormant fees, and monthly service charges. Such fees are recognized concurrent with the event on a daily basis or on a monthly basis depending upon the customer’s cycle date.

Gains (Losses) on Sales of Foreclosed Assets: The Company records a gain or loss from a sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. If the Company finances the sale of foreclosed asset to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed asset is derecognized, and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

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Basis of Presentation (Policies)

6 Months Ended

Dec. 31, 2021

Basis of Presentation

Nature of Operations

The Company contributed approximately $4.5 million of the net proceeds of the offering to the Bank. In addition, $874,000 of the net proceeds were used to fund the loan to the employee stock ownership plan and approximately $3.4 million of the net proceeds were retained by the Company.

The Bank is a Wisconsin stock savings bank, which conducts its business through four offices. The Bank operates as a full-service financial institution with a primary market area including, but not limited to, Marathon County and Ozaukee County, Wisconsin. Its primary deposit products are demand deposits, savings, and certificates of deposits; and its primary lending products are commercial real estate, commercial and industrial, construction, one-to-four-family residential, multi-family real estate and consumer loans.

In December 2019, a coronavirus (COVID-19) was reported in China and on March 12, 2020, the President of the United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic dislocation. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. Nonetheless, the Company has not incurred any significant disruptions to its business activities.

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences could be material to the financial statements. Additionally, effects of the COVID-19 pandemic may negatively impact significant estimates and the assumptions underlying those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses, valuation of deferred tax assets, other than temporary impairment of debt securities and fair value of financial assets and liabilities.

In the opinion of management, all adjustments considered necessary for fair presentation have been included. Operating results for the three and six month periods ended December 31, 2021 are not necessarily indicative of the results for the year ending June 30, 2022 or any other period. For further information, refer to the consolidated financial statements and notes thereto for the years ended June 30, 2021 and 2020 contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on September 28, 2021.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

This section provides a summary description of recent ASUs issued by the FASB to the ASC that had or that management expects may have an impact on the consolidated financial statements issued upon adoption. The Company is classified as an emerging growth company and has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Effective dates reflect this election.

Recently Issued, But Not Yet Effective Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Topic 842 was subsequently amended by ASU 2018-10, “Codification Improvements to Topic 842, Leases” and ASU 2018-11, “Leases (Topic 842)”. The amendments in this update increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. For leases with a term of 12 months or less, the amendments permit lessees to make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. For finance leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of operations; (3) classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows. For operating leases, the amendments in this update require a lessee to (1) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on the balance sheet; (2) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis; (3) classify all cash payments within operating activities in the statement of cash flows. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the amendments are effective for fiscal years beginning after December 15, 2020 (see below). Early adoption is permitted. The Company will adopt this pronouncement beginning July 1, 2022. The Company’s operating leases are predominately related to real estate. The Company has determined that the provisions of ASU 2016-02 will result in an increase in assets to recognize the present value of the lease obligations with a corresponding increase in liabilities; however, the Company does not expect this new standard to have a material impact on the Company’s results of operations or cash flows because the Company owns most of its facilities and this ASU will apply primarily to its two small operating leases. Management is currently evaluating the appropriate transition method and projected present value of its leases at the adoption date.

In June 2020, the FASB issued ASU No. 2020-05, Coronavirus Disease 2019 (“COVID-19”) in response to the pandemic which has adversely affected the global economy and caused significant and widespread business and capital market disruptions. The FASB is committed to supporting and assisting stakeholders during this difficult time. The FASB issued ASU 2020-05 as a limited deferral of the effective dates of certain ASUs, including ASU 2016-02 (including amendments issued after the issuance of the original) to provide immediate, near-term relief for certain entities for whom these ASUs are either currently effective or imminently effective. The Company plans to defer the adoption of the amendments in ASU 2016-02 to the fiscal year beginning July 1, 2022.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.” Topic 326 was subsequently amended by ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses; ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses”; and ASU 2019-05, “Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief.” This ASU replaces the current incurred loss impairment methodology with a methodology that reflected expected credit losses measured at amortized cost and certain other instruments, including loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. On October 16, 2019, the FASB approved the proposal to delay the effective date for this standard for private and all other entities. Due to the Company’s extended transition period election, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this pronouncement beginning July 1, 2023. Management is currently evaluating the potential impact on its results of operations, financial

position, and cash flows; however, due to the significant differences in the revised guidance from existing U.S. GAAP, the implementation of this guidance may result in material changes in the Company’s accounting for credit losses on financial instruments.

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2021

Earnings Per Share

Schedule of calculation of earnings per share

		For the Three Months				For the Six Months
		Ended December 31,				Ended December 31,
	2021		2020		2021		2020
	(Dollars in thousands)				(Dollars in thousands)
Net income applicable to common stock	$	284,865	$	390,728	$	701,956	$	756,081
Average number of shares outstanding		2,229,497		N/A		2,229,497		N/A
Less: Average unallocated ESOP shares		84,586		N/A		85,276		N/A
Average number of common shares outstanding used to calculate basic earnings per share		2,144,911		N/A		2,144,221		N/A
Earnings per common share:
Basic	$	0.13		N/A	$	0.33		N/A
Diluted		0.13		N/A		0.33		N/A

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Debt Securities (Tables)

6 Months Ended

Dec. 31, 2021

Debt Securities

Schedule of carrying value of securities

	December 31,				June 30,
		2021		2021
Available for sale debt securities, at fair value		$	12,513,053	$	10,909,764
Held to maturity debt securities, at amortized cost			626,294		708,949
		$	13,139,347	$	11,618,713

Schedule of amortized cost and fair value of debt securities, with gross unrealized gains and losses

			Gross			Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,649,821	$	37,473	$	(2,272)	$	1,685,022
Mortgage-backed		3,469,716		115,976		(8,349)		3,577,343
Corporate bonds		7,218,135		34,370		(1,817)		7,250,688
	$	12,337,672	$	187,819	$	(12,438)	$	12,513,053
Held to maturity debt securities
Mortgage-backed	$	626,294	$	66,789	$	—	$	693,083

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,830,603	$	60,403	$	(3,999)	$	1,887,007
Mortgage-backed		4,557,465		165,976		(11,873)		4,711,568
Corporate bonds		4,261,638		79,251		(29,700)		4,311,189
	$	10,649,706	$	305,630	$	(45,572)	$	10,909,764
Held to maturity debt securities
Mortgage-backed	$	708,949	$	61,489	$	—	$	770,438

Schedule of debt securities by contractual maturity

	Available for Sale Debt Securities				Held to Maturity Debt Securities
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
December 31, 2021
Due in one year or less	$	1,135,700	$	1,136,010	$	—	$	—
Due from more than one to five years		4,517,256		4,582,975		—		—
Due from more than five to ten years		2,215,000		2,216,725		—		—
Due for more than ten years		1,000,000		1,000,000		—		—
		8,867,956		8,935,710		—		—
Mortgage-backed securities		3,469,716		3,577,343		626,294		693,083
	$	12,337,672	$	12,513,053	$	626,294	$	693,083

Schedule of securities in continuous unrealized loss position

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
December 31, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(2,272)	$	57,728	$	(2,272)	$	57,728
Mortgage-backed		(737)		125,982		(7,612)		123,935		(8,349)		249,917
Corporate bonds		(1,817)		1,095,294		—		—		(1,817)		1,095,294
	$	(2,554)	$	1,221,276	$	(9,884)	$	181,663	$	(12,438)	$	1,402,939
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

	Less than 12 Months				12 Months or More				Total
	Gross				Gross				Gross
	Unrealized				Unrealized				Unrealized
	Losses		Fair Value		Losses		Fair Value		Losses		Fair Value
June 30, 2021
Available for sale debt securities
States and municipalities	$	—	$	—	$	(3,999)	$	91,001	$	(3,999)	$	91,001
Mortgage-backed		(3,760)		181,380		(8,113)		159,437		(11,873)		340,817
Corporate bonds		(29,700)		1,080,463		—		—		(29,700)		1,080,463
	$	(33,460)	$	1,261,843	$	(12,112)	$	250,438	$	(45,572)	$	1,512,281
Held to maturity debt securities
Mortgage-backed securities	$	—	$	—	$	—	$	—	$	—	$	—

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Loans (Tables)

6 Months Ended

Dec. 31, 2021

Loans and Leases Receivable Disclosure [Line Items]

Summary of loans by major category

A summary of loans by major category follows:

	December 31, 2021		June 30, 2021
Commercial real estate	$	63,032,800	$	52,148,065
Commercial and industrial (1)		8,901,181		19,278,477
Construction		8,098,343		7,985,188
One-to-four-family residential		51,680,119		48,404,820
Multi-family real estate		24,615,280		17,268,048
Consumer		2,254,816		1,788,997
Total loans		158,582,539		146,873,595
Deferred loan fees		(69,100)		(518,095)
Allowance for loan losses		(2,188,643)		(2,186,182)
Loans, net	$	156,324,796	$	144,169,318

(1) Paycheck protection loans represent $149,557 and $10,378,681 of the commercial and industrial loans as of December 31, 2021 and June 30, 2021.

Schedule of changes in the allowance for loan losses

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
December 31, 2021
Allowance for credit losses
Balance at beginning of year	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,124		—		1,124
Provisions		187,549		(89,036)		(9,003)		(53,138)		(47,734)		(102)		11,464		—
Balance at September 30, 2021		1,223,850		68,497		50,646		356,257		86,482		5,918		395,656		2,187,306
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		1,337		—		1,337
Provisions		64,577		(19,488)		(2,866)		(14,346)		34,871		(1,723)		(61,025)		—
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,288,427		49,009		47,780		341,911		121,353		5,532		334,631		2,188,643
Balance at end of period	$	1,288,427	$	49,009	$	47,780	$	341,911	$	121,353	$	5,532	$	334,631	$	2,188,643
Loans
Individually evaluated for impairment	$	217,449	$	—	$	—	$	299,084	$	—	$	—	$	—	$	516,533
Collectively evaluated for impairment		62,815,351		8,901,181		8,098,343		51,381,035		24,615,280		2,254,816		—		158,066,006
Balance at end of period	$	63,032,800	$	8,901,181	$	8,098,343	$	51,680,119	$	24,615,280	$	2,254,816	$	—	$	158,582,539

	Commercial		Commercial				One-to-Four		MultiFamily
	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
June 30, 2021
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		1,036,301		157,533		59,649		409,395		134,216		4,896		384,192		2,186,182
Balance at end of period	$	1,036,301	$	157,533	$	59,649	$	409,395	$	134,216	$	4,896	$	384,192	$	2,186,182
Loans
Individually evaluated for impairment	$	223,983	$	—	$	—	$	315,440	$	—	$	—	$	—	$	539,423
Collectively evaluated for impairment		51,924,082		19,278,477		7,985,188		48,089,380		17,268,048		1,788,997				146,334,172
Balance at end of period	$	52,148,065	$	19,278,477	$	7,985,188	$	48,404,820	$	17,268,048	$	1,788,997	$	—	$	146,873,595

	Commercial		Commercial				One-to-Four		MultiFamily
December 31, 2020	Real Estate		and Industrial		Construction		Residential		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses
Balance at beginning of period	$	274,997	$	1,021,083	$	43,858	$	339,449	$	10,057	$	2,003	$	8,530	$	1,699,977
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		—		73,128		—		—		1,652		—		74,780
Provisions		386,382		(907,851)		10,610		283,716		52,515		9,226		165,402		—
Balance at September 30, 2020		661,379		113,232		127,596		623,165		62,572		12,881		173,932		1,774,757
Charge-offs		—		—		—		—		—		—		—		—
Recoveries		—		341,388		—		—		—		1,566		—		342,954
Provisions		280,505		(344,174)		2,444		(47,961)		23,163		(3,893)		89,916		—
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		941,884		110,446		130,040		575,204		85,735		10,554		263,848		2,117,711
Balance at end of period	$	941,884	$	110,446	$	130,040	$	575,204	$	85,735	$	10,554	$	263,848	$	2,117,711
Loans
Individually evaluated for impairment	$	230,331	$	—	$	—	$	470,318	$	90,328	$	—	$	—	$	790,977
Collectively evaluated for impairment		47,324,480	11017967	11,017,967		10,080,584		42,803,943		11,431,363		1,986,429		—		124,644,766
Balance at end of period	$	47,554,811	$	11,017,967	$	10,080,584	$	43,274,261	$	11,521,691	$	1,986,429	$	—	$	125,435,743

Summary of aging of the past due loans by loan class within the portfolio segments

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
December 31, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		631,413		153,725		—		160,093
Multi-family real estate		—		—		—		—
Consumer		3,621		—		—		—
Total	$	635,034	$	153,725	$	—	$	160,093

	Still Accruing
	30-59 Days		60-89 Days		Over 90 Days		Nonaccrual
	Past Due		Past Due		Past Due		Balance
June 30, 2021
Commercial real estate	$	—	$	—	$	—	$	—
Commercial and industrial		—		—		—		—
Construction		—		—		—		—
One-to-four-family residential		30,165		3,635		—		178,394
Multi-family real estate		—		—		—		—
Consumer		15,119		—		—		—
Total	$	45,284	$	3,635	$	—	$	178,394

Summary of individually impaired loans by class of loans

								For the Six Months Ended
								December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
December 31, 2021
With no related allowance recorded
Commercial real estate	$	217,449	$	235,516	$	—	$	220,715	$	6,881
One-to-four-family residential		299,084		338,663		—		307,262		15,778
	$	516,533	$	574,179	$	—	$	527,977	$	22,659

							For the Six Months Ended
							December 31, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
Commercial real estate		—		—		—		—		—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

							For the Year Ended
							June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
June 30, 2021
With no related allowance recorded
Commercial real estate	$	223,983	$	242,050	$	—	$	228,710	$	14,628
One-to-four-family residential		315,440		355,019		—		334,581		20,763
	$	539,423	$	597,069	$	—	$	563,291	$	35,391

								For the Year Ended
								June 30, 2021
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance (1)		Allowance		Investment		Recognized
With an allowance recorded
Commercial and industrial	$	—	$	—	$	—	$	—	$	—
One-to-four-family residential		—		—		—		—		—
Consumer		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—

(1) Represents the borrower's loan obligation, gross of any previously charged-off amounts.

Commercial Real Estate And Commercial Portfolio

Loans and Leases Receivable Disclosure [Line Items]

Summary of credit quality information by loan portfolio

			Special Mention/
	Pass		Watch		Substandard		Doubtful
December 31, 2021
Commercial real estate	$	61,344,054	$	1,688,746	$	—	$	—
Commercial and industrial		8,901,181		—		—		—
Construction		8,098,343		—		—		—
	$	78,343,578	$	1,688,746	$	—	$	—

			Special Mention/
	Pass		Watch		Substandard		Doubtful
June 30, 2021
Commercial real estate	$	51,924,082	$	223,983	$	—	$	—
Commercial and industrial		14,245,538		5,032,939		—		—
Construction		7,985,185		—		—		—
	$	74,154,805	$	5,256,922	$	—	$	—

Residential Real Estate And Consumer Portfolio

Loans and Leases Receivable Disclosure [Line Items]

Summary of credit quality information by loan portfolio

	Performing		Nonperforming
December 31, 2021
One-to-four-family residential	$	51,520,026	$	160,093
Multi-family real estate		24,615,280		—
Consumer		2,254,816		—
	$	78,390,122	$	160,093

	Performing		Nonperforming
June 30, 2021
One-to-four-family residential	$	48,226,426	$	178,394
Multi-family real estate		17,268,048		—
Consumer		1,788,997		—
	$	67,283,471	$	178,394

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Deposits (Tables)

6 Months Ended

Dec. 31, 2021

Deposits

Schedule of major classifications of deposits

	Unaudited
	At December 31, 2021				At June 30, 2021
	Amount		Percent		Amount		Percent
Non-interest-bearing demand accounts	$	23,196,979	12.65	%	$	23,633,008	13.74	%
Demand, NOW, money market accounts		55,486,139	30.26	%		44,400,084	25.82	%
Savings accounts		46,200,517	25.19	%		44,688,696	25.99	%
Certificates of deposit		58,509,147	31.90	%		59,234,329	34.45	%
Total	$	183,392,782	100.00	%	$	171,956,117	100.00	%

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Other Comprehensive Income (Tables)

6 Months Ended

Dec. 31, 2021

Other Comprehensive Income

Schedule of changes in accumulated other comprehensive income by component

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2021
Balance, beginning of period	$	188,558	$	(67,891)	$	120,667
Other comprehensive loss before reclassifications (net of tax)		(4,186)		—		(4,186)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		5,119		5,119
Balance, September 30, 2021		184,372		(62,772)		121,600
Other comprehensive loss before reclassifications (net of tax)		(47,240)		—		(47,240)
Amounts reclassified from accumulated other comprehensive income (net of tax) (a)		(10,185)		—		(10,185)
Amortization of amounts transferred from debt securities available for sale to held to maturity (b)		—		4,217		4,217
Balance, December 31, 2021	$	126,947	$	(58,555)	$	68,392

(a) The reclassification adjustment is reflected in the Consolidated Statement of Income as Net Gain on Securities Transactions ($14,000) and Provision for Income Taxes of ($3,815).

(b) The reclassification adjustment is reflected in the Consolidated Statements of Income as Interest Income-Debt Securities.

	Unrealized
	Gains and		Unrealized
	Losses on		Losses on
	Available		Held to
	for Sale Debt		Maturity Debt
Unaudited	Securities		Securities		Total
Six Months Ended December 31, 2020
Balance, beginning of period	$	262,688	$	(195,963)	$	66,725
Other comprehensive income before reclassifications (net of tax)		9,685		—		9,685
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		39,096		39,096
Balance, September 30, 2020		272,373		(156,867)		115,506
Other comprehensive loss before reclassifications (net of tax)		(16,008)		—		(16,008)
Amortization of amounts transferred from debt securities available for sale to held to maturity (a)		—		49,498		49,498
Balance, December 31, 2020	$	256,365	$	(107,369)	$	148,996

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Minimum Regulatory Capital Requirements (Tables)

6 Months Ended

Dec. 31, 2021

Minimum Regulatory Capital Requirements

Summary of actual capital amounts and ratios

The Bank’s actual capital amounts and ratios are presented in the following table (dollars in thousands):

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
December 31, 2021		(Dollars in thousands)
Tier I Capital to Average Assets	$	26,394	12.55	%	$	15,773	>	7.5	%	$	17,876	>	8.5	%

										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
June 30, 2021					(Dollars in thousands)
Tier I Capital to Average Assets	$	25,452	12.47	%	$	15,313	>	7.5	%	$	17,355	>	8.5	%

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Commitments and Contingencies (Tables)

6 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Summary of outstanding financial instruments

	December 31, 2021		June 30, 2021
Commitments to grant loans	$	3,335,000	$	5,824,000
Unused commitments under lines of credit		8,193,000		9,352,000
MPF credit enhancements		759,439		680,777

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Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Dec. 31, 2021

Fair Value of Assets and Liabilities

Schedule of assets and liabilities measured at fair value on a recurring basis

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
December 31, 2021
Available for sale debt securities
States and municipalities	$	1,685,022	$	—	$	1,685,022	$	—
Mortgage-backed		3,577,343		—		3,577,343		—
Corporate bonds		7,250,688		—		5,250,688		2,000,000
Total assets	$	12,513,053	$	—	$	10,513,053	$	2,000,000

			Quoted Prices in		Other Observable		Unobservable
			Active Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
June 30, 2021
Available for sale debt securities
States and municipalities	$	1,887,007	$	—	$	1,887,007	$	—
Mortgage-backed		4,711,568		—		4,711,568		—
Corporate bonds		4,311,189		—		4,311,189		—
Total assets	$	10,909,764	$	—	$	10,909,764	$	—

Schedule of available for sale debt securities measured at fair value on a recurring basis using unobservable inputs

a quarterly basis by a third-party valuation expert. The Level 3 valuation is based on the 5/30 swap curve, floated at 1%, which is considered a significant unobservable input.

Balance at October 1, 2021	$	—
Transfer of security from Level 2 to Level 3		2,000,000
Unrealized gains (losses) included in other comprehensive income (loss)		—
Balance at December 31, 2021	$	2,000,000

Schedule of estimated fair values of financial instruments

	December 31, 2021				June 30, 2021
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets
Cash and due from banks	$	2,967,480	$	2,967,480	$	1,989,643	$	1,989,643
Federal funds sold		26,730,000		26,730,000		44,059,000		44,059,000
Interest bearing deposits in other financial institutions		3,518,465		3,518,465		2,062,463		2,062,463
Available for sale debt securities		12,513,053		12,513,053		10,909,764		10,909,764
Held to maturity debt securities		626,294		693,083		708,949		770,438
Loans, net		156,324,796		156,284,000		144,169,318		145,596,000
Investment in restricted stock		262,200		262,200		262,200		262,200
Interest receivable		535,703		535,703		552,516		552,516
Financial Liabilities
Deposits	$	183,392,782	$	182,486,000	$	171,956,117	$	174,555,000
Paycheck protection program lending facility		149,557		149,557		10,372,148		10,372,148
Accrued interest payable		19,113		19,113		10,152		10,152

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Basis of Presentation - Narrative (Details)	6 Months Ended
	Dec. 31, 2021 USD ($) facility $ / shares shares
Investment owned, shares | shares	1,226,223
Sale of stock, percentage of ownership before transaction	55.00%
Shares of common stock issued | shares	1,003,274
Share Price | $ / shares	$ 10.00
Sale of stock, percentage of ownership after transaction	45.00%
Proceeds from offering	$ 10,000,000.0
Offering expenses	1,400,000
Net cash proceeds from common stock offering	8,500,000
Purchase of ESOP shares	$ 874,000
Number of business facilities | facility	4
Retained Earnings
Net cash proceeds from common stock offering	$ 3,400,000
Bank [Member]
Net cash proceeds from common stock offering	$ 4,500,000

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Earnings per Common Share (Details) - USD ($)	3 Months Ended				6 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share
Net income	$ 284,865	$ 417,091	$ 390,728	$ 365,353	$ 701,956	$ 756,081
Average number of shares outstanding	2,229,497				2,229,497
Less: Average unallocated ESOP shares	84,586				85,276
Average number of common shares outstanding used to calculate basic earnings per share	2,144,911				2,144,221
Earnings per common share:
Basic	$ 0.13				$ 0.33
Diluted	$ 0.13				$ 0.33

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Earnings per Common Share - Narrative (Details)	3 Months Ended
	Dec. 31, 2021 shares
Earnings per common share:
Antidilutive securities excluded from computation of earnings per share amount	0

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Debt Securities (Details)	3 Months Ended		6 Months Ended
	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)	Jun. 30, 2021 USD ($) loan
Debt Securities
Securities pledged as collateral	$ 869,000		$ 869,000		$ 1,118,000
Sales of available for sale debt securities	0	$ 0	0	$ 0
Realized gain on bonds	$ 14,000		$ 14,000
Number of securities in unrealized loss position in less than 12 months | loan	7		7		4
Number of securities in unrealized loss position over 12 months | loan	4		4		5

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Debt Securities - Carrying value of securities (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Debt Securities
Available for sale debt securities, at fair value	$ 12,513,053	$ 10,909,764
Held to maturity debt securities, at amortized cost	626,294	708,949
Total	$ 13,139,347	$ 11,618,713

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Debt Securities - Fair Value to Amortized Cost (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Available for sale debt securities
Amortized cost	$ 12,337,672	$ 10,649,706
Gross Unrealized Gains	187,819	305,630
Gross Unrealized Losses	(12,438)	(45,572)
Available for sale debt securities, at fair value	12,513,053	10,909,764
Held to maturity debt securities
Amortized cost	626,294	708,949
Fair Value	693,083	770,438
States and municipalities
Available for sale debt securities
Amortized cost	1,649,821	1,830,603
Gross Unrealized Gains	37,473	60,403
Gross Unrealized Losses	(2,272)	(3,999)
Available for sale debt securities, at fair value	1,685,022	1,887,007
Mortgage-backed
Available for sale debt securities
Amortized cost	3,469,716	4,557,465
Gross Unrealized Gains	115,976	165,976
Gross Unrealized Losses	(8,349)	(11,873)
Available for sale debt securities, at fair value	3,577,343	4,711,568
Held to maturity debt securities
Amortized cost	626,294	708,949
Gross Unrealized Gains	66,789	61,489
Fair Value	693,083	770,438
Corporate bonds
Available for sale debt securities
Amortized cost	7,218,135	4,261,638
Gross Unrealized Gains	34,370	79,251
Gross Unrealized Losses	(1,817)	(29,700)
Available for sale debt securities, at fair value	$ 7,250,688	$ 4,311,189

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Debt Securities - Contractual maturity (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Available for sale securities, Amortized cost
Due in one year or less	$ 1,135,700
Due from more than one to five years	4,517,256
Due from more than five to ten years	2,215,000
Due for more than ten years	1,000,000
Total amortized cost with maturity	8,867,956
Amortized cost	12,337,672	$ 10,649,706
Available for sale securities, Fair value
Due in one year or less	1,136,010
Due from more than one to five years	4,582,975
Due from more than five to ten years	2,216,725
Due for more than ten years	1,000,000
Total fair value with maturity	8,935,710
Fair Value	12,513,053	10,909,764
Held to maturity securities, Amortized cost
Amortized cost	626,294	708,949
Held to maturity securities, Fair value
Fair Value	693,083	770,438
Mortgage-backed
Available for sale securities, Amortized cost
Without single maturity	3,469,716
Amortized cost	3,469,716	4,557,465
Available for sale securities, Fair value
Without single maturity	3,577,343
Fair Value	3,577,343	4,711,568
Held to maturity securities, Amortized cost
Without single maturity	626,294
Amortized cost	626,294	708,949
Held to maturity securities, Fair value
Without single maturity	693,083
Fair Value	$ 693,083	$ 770,438

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Debt Securities - Continuous unrealized loss position (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Debt Securities, Available-for-sale, Unrealized losses
Less than 12 months	$ (2,554)	$ (33,460)
Over 12 months	(9,884)	(12,112)
Total gross unrealized losses	(12,438)	(45,572)
Debt Securities, Available-for-sale, Fair value
Less than 12 months	1,221,276	1,261,843
Over 12 months	181,663	250,438
Fair value	1,402,939	1,512,281
States and municipalities
Debt Securities, Available-for-sale, Unrealized losses
Over 12 months	(2,272)	(3,999)
Total gross unrealized losses	(2,272)	(3,999)
Debt Securities, Available-for-sale, Fair value
Over 12 months	57,728	91,001
Fair value	57,728	91,001
Mortgage-backed
Debt Securities, Available-for-sale, Unrealized losses
Less than 12 months	(737)	(3,760)
Over 12 months	(7,612)	(8,113)
Total gross unrealized losses	(8,349)	(11,873)
Debt Securities, Available-for-sale, Fair value
Less than 12 months	125,982	181,380
Over 12 months	123,935	159,437
Fair value	249,917	340,817
Corporate bonds
Debt Securities, Available-for-sale, Unrealized losses
Less than 12 months	(1,817)	(29,700)
Total gross unrealized losses	(1,817)	(29,700)
Debt Securities, Available-for-sale, Fair value
Less than 12 months	1,095,294	1,080,463
Fair value	$ 1,095,294	$ 1,080,463

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Loans - Summary of loans (Details) - USD ($)	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020
Loans and Leases Receivable Disclosure [Line Items]
Total loans	$ 158,582,539		$ 146,873,595	$ 125,435,743
Deferred loan fees	(69,100)		(518,095)
Allowance for loan losses	(2,188,643)	$ (2,187,306)	(2,186,182)	(2,117,711)	$ (1,774,757)	$ (1,699,977)
Loans, net	156,324,796		144,169,318
Paycheck Protection Loans
Loans and Leases Receivable Disclosure [Line Items]
Deferred loan fees			(483,484)
Loans, net	149,557		10,378,681
Commercial and industrial
Loans and Leases Receivable Disclosure [Line Items]
Deferred loan fees	(10,694)
Commercial and industrial | Paycheck Protection Loans
Loans and Leases Receivable Disclosure [Line Items]
Loans, net	149,557		10,378,681
Commercial real estate [Member] | Commercial real estate
Loans and Leases Receivable Disclosure [Line Items]
Total loans	63,032,800		52,148,065	47,554,811
Allowance for loan losses	(1,288,427)	(1,223,850)	(1,036,301)	(941,884)	(661,379)	(274,997)
Commercial [Member] | Commercial and industrial
Loans and Leases Receivable Disclosure [Line Items]
Total loans	8,901,181		19,278,477	11,017,967
Allowance for loan losses	(49,009)	(68,497)	(157,533)	(110,446)	(113,232)	(1,021,083)
Commercial [Member] | Construction
Loans and Leases Receivable Disclosure [Line Items]
Total loans	8,098,343		7,985,188	10,080,584
Allowance for loan losses	(47,780)	(50,646)	(59,649)	(130,040)	(127,596)	(43,858)
Residential [Member] | One-to-four-family residential
Loans and Leases Receivable Disclosure [Line Items]
Total loans	51,680,119		48,404,820	43,274,261
Allowance for loan losses	(341,911)	(356,257)	(409,395)	(575,204)	(623,165)	(339,449)
Residential [Member] | Multi-family real estate
Loans and Leases Receivable Disclosure [Line Items]
Total loans	24,615,280		17,268,048	11,521,691
Allowance for loan losses	(121,353)	(86,482)	(134,216)	(85,735)	(62,572)	(10,057)
Consumer Loans [Member] | Consumer
Loans and Leases Receivable Disclosure [Line Items]
Total loans	2,254,816		1,788,997	1,986,429
Allowance for loan losses	$ (5,532)	$ (5,918)	$ (4,896)	$ (10,554)	$ (12,881)	$ (2,003)

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Loans - Paycheck Protection Program (Details)	6 Months Ended	12 Months Ended
	Dec. 31, 2021 USD ($) loan	Jun. 30, 2021 USD ($) loan
Loans and Leases Receivable Disclosure [Line Items]
Eligible collateral	$ 35,667,099	$ 35,421,507
Pledged amount	262,200	262,200
Deferred loan fees	$ 69,100	$ 518,095
Minimum
Loans and Leases Receivable Disclosure [Line Items]
Discount factor	20.00%
Maximum
Loans and Leases Receivable Disclosure [Line Items]
Discount factor	36.00%
Paycheck Protection Loans
Loans and Leases Receivable Disclosure [Line Items]
Number of loans provided | loan	277
Number of loans outstanding | loan	5	109
Loans provided	$ 18,500,000
Deferred loan fees		$ 483,484
Paycheck Protection Loans | Minimum
Loans and Leases Receivable Disclosure [Line Items]
Percentage of processing fees	1.00%
Percentage of third party servicing agent fees	0.25%
Paycheck Protection Loans | Maximum
Loans and Leases Receivable Disclosure [Line Items]
Percentage of processing fees	5.00%
Percentage of third party servicing agent fees	1.00%
Principal Forgiveness | Paycheck Protection Loans
Loans and Leases Receivable Disclosure [Line Items]
Loans provided	$ 18,300,000
Commercial and industrial
Loans and Leases Receivable Disclosure [Line Items]
Deferred loan fees	$ 10,694

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Loans - Activity in the allowance for loan losses by portfolio segment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2021
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	$ 2,187,306	$ 2,186,182	$ 1,774,757	$ 1,699,977
Recoveries	1,337	1,124	342,954	74,780
Balance at end of year	2,188,643	2,187,306	2,117,711	1,774,757
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	2,188,643		2,117,711		$ 2,186,182
Loans and Leases Receivable, Allowance	2,188,643	2,187,306	2,117,711	1,774,757	2,186,182
Loans - Individually evaluated for impairment	516,533		790,977		539,423
Loans - Collectively evaluated for impairment	158,066,006		124,644,766		146,334,172
Loans and Leases Receivable, Gross	158,582,539		125,435,743		146,873,595
Commercial real estate [Member] | Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	1,223,850	1,036,301	661,379	274,997
Provisions	64,577	187,549	280,505	386,382
Balance at end of year	1,288,427	1,223,850	941,884	661,379
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	1,288,427		941,884		1,036,301
Loans and Leases Receivable, Allowance	1,288,427	1,223,850	941,884	661,379	1,036,301
Loans - Individually evaluated for impairment	217,449		230,331		223,983
Loans - Collectively evaluated for impairment	62,815,351		47,324,480		51,924,082
Loans and Leases Receivable, Gross	63,032,800		47,554,811		52,148,065
Commercial [Member] | Commercial and industrial
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	68,497	157,533	113,232	1,021,083
Recoveries			341,388
Provisions	(19,488)	(89,036)	(344,174)	(907,851)
Balance at end of year	49,009	68,497	110,446	113,232
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	49,009		110,446		157,533
Loans and Leases Receivable, Allowance	49,009	68,497	110,446	113,232	157,533
Loans - Collectively evaluated for impairment	8,901,181		11,017,967		19,278,477
Loans and Leases Receivable, Gross	8,901,181		11,017,967		19,278,477
Commercial [Member] | Construction
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	50,646	59,649	127,596	43,858
Recoveries				73,128
Provisions	(2,866)	(9,003)	2,444	10,610
Balance at end of year	47,780	50,646	130,040	127,596
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	47,780		130,040		59,649
Loans and Leases Receivable, Allowance	47,780	50,646	130,040	127,596	59,649
Loans - Collectively evaluated for impairment	8,098,343		10,080,584		7,985,188
Loans and Leases Receivable, Gross	8,098,343		10,080,584		7,985,188
Residential [Member] | One-to-four-family residential
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	356,257	409,395	623,165	339,449
Provisions	(14,346)	(53,138)	(47,961)	283,716
Balance at end of year	341,911	356,257	575,204	623,165
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	341,911		575,204		409,395
Loans and Leases Receivable, Allowance	341,911	356,257	575,204	623,165	409,395
Loans - Individually evaluated for impairment	299,084		470,318		315,440
Loans - Collectively evaluated for impairment	51,381,035		42,803,943		48,089,380
Loans and Leases Receivable, Gross	51,680,119		43,274,261		48,404,820
Residential [Member] | Multi-family real estate
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	86,482	134,216	62,572	10,057
Provisions	34,871	(47,734)	23,163	52,515
Balance at end of year	121,353	86,482	85,735	62,572
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	121,353		85,735		134,216
Loans and Leases Receivable, Allowance	121,353	86,482	85,735	62,572	134,216
Loans - Individually evaluated for impairment			90,328
Loans - Collectively evaluated for impairment	24,615,280		11,431,363		17,268,048
Loans and Leases Receivable, Gross	24,615,280		11,521,691		17,268,048
Consumer Loans [Member] | Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	5,918	4,896	12,881	2,003
Recoveries	1,337	1,124	1,566	1,652
Provisions	(1,723)	(102)	(3,893)	9,226
Balance at end of year	5,532	5,918	10,554	12,881
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	5,532		10,554		4,896
Loans and Leases Receivable, Allowance	5,532	5,918	10,554	12,881	4,896
Loans - Collectively evaluated for impairment	2,254,816		1,986,429		1,788,997
Loans and Leases Receivable, Gross	2,254,816		1,986,429		1,788,997
Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
Balance at beginning of year	395,656	384,192	173,932	8,530
Provisions	(61,025)	11,464	89,916	165,402
Balance at end of year	334,631	395,656	263,848	173,932
Financing Receivable, Allowance for Credit Loss, Additional Information [Abstract]
Collectively evaluated for impairment	334,631		263,848		384,192
Loans and Leases Receivable, Allowance	$ 334,631	$ 395,656	$ 263,848	$ 173,932	$ 384,192

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Loans - Risk category of loans (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 158,582,539	$ 146,873,595	$ 125,435,743
Commercial real estate [Member] | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	63,032,800	52,148,065	47,554,811
Commercial real estate [Member] | Commercial real estate | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	61,344,054	51,924,082
Commercial real estate [Member] | Commercial real estate | Special Mention/Watch
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,688,746	223,983
Commercial [Member] | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	78,343,578	74,154,805
Commercial [Member] | Special Mention/Watch
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	1,688,746	5,256,922
Commercial [Member] | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,901,181	19,278,477	11,017,967
Commercial [Member] | Commercial and industrial | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,901,181	14,245,538
Commercial [Member] | Commercial and industrial | Special Mention/Watch
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans		5,032,939
Commercial [Member] | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,098,343	7,985,188	10,080,584
Commercial [Member] | Construction | Pass
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,098,343	7,985,185
Consumer Loans [Member] | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 2,254,816	$ 1,788,997	$ 1,986,429

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Loans - loans by class based on payment activity (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 158,582,539	$ 146,873,595	$ 125,435,743
Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	78,390,122	67,283,471
Non-performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	160,093	178,394
Commercial real estate [Member] | Commercial real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	63,032,800	52,148,065	47,554,811
Commercial [Member] | Commercial and industrial
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,901,181	19,278,477	11,017,967
Commercial [Member] | Construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	8,098,343	7,985,188	10,080,584
Residential [Member] | One-to-four-family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	51,680,119	48,404,820	43,274,261
Residential [Member] | One-to-four-family residential | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	51,520,026	48,226,426
Residential [Member] | One-to-four-family residential | Non-performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	160,093	178,394
Residential [Member] | Multi-family real estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	24,615,280	17,268,048	11,521,691
Residential [Member] | Multi-family real estate | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	24,615,280	17,268,048
Consumer Loans [Member] | Consumer
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	2,254,816	1,788,997	$ 1,986,429
Consumer Loans [Member] | Consumer | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Total loans	$ 2,254,816	$ 1,788,997

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Loans - Summary of aging of the past due loans (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Financing Receivable, Past Due [Line Items]
Nonaccrual Balance	$ 160,093	$ 178,394
30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total Past Due	635,034	45,284
60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total Past Due	153,725	3,635
Residential [Member] | One-to-four-family residential
Financing Receivable, Past Due [Line Items]
Nonaccrual Balance	160,093	178,394
Residential [Member] | One-to-four-family residential | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total Past Due	631,413	30,165
Residential [Member] | One-to-four-family residential | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Total Past Due	153,725	3,635
Consumer Loans [Member] | Consumer | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Total Past Due	$ 3,621	$ 15,119

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Loans - Summary of individually impaired loans (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2021	Jun. 30, 2021
Recorded Investment
Recorded Investment - With no related allowance	$ 516,533	$ 539,423
Unpaid Principal Balance
Unpaid Principal Balance - With no related allowance	574,179	597,069
Average Recorded Investment
Average Recorded Investment - With no related allowance	527,977	563,291
Interest Income Recognized
Interest Income Recognized - With no related allowance	22,659	35,391
Commercial real estate [Member] | Commercial real estate
Recorded Investment
Recorded Investment - With no related allowance		223,983
Unpaid Principal Balance
Unpaid Principal Balance - With no related allowance		242,050
Average Recorded Investment
Average Recorded Investment - With no related allowance		228,710
Interest Income Recognized
Interest Income Recognized - With no related allowance		14,628
Commercial real estate [Member] | Commercial and industrial
Recorded Investment
Recorded Investment - With no related allowance	217,449
Unpaid Principal Balance
Unpaid Principal Balance - With no related allowance	235,516
Average Recorded Investment
Average Recorded Investment - With no related allowance	220,715
Interest Income Recognized
Interest Income Recognized - With no related allowance	6,881
Residential [Member] | One-to-four-family residential
Recorded Investment
Recorded Investment - With no related allowance	299,084	315,440
Unpaid Principal Balance
Unpaid Principal Balance - With no related allowance	338,663	355,019
Average Recorded Investment
Average Recorded Investment - With no related allowance	307,262	334,581
Interest Income Recognized
Interest Income Recognized - With no related allowance	$ 15,778	$ 20,763

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Loans - Loan modification (Details)	6 Months Ended
	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans modified	0	0
Commitments to lend additional funds on restructured loans	$ 0
Threshold loan modification period due to COVID19	3 months
Loan modification potential extension period, maximum, due to COVID 19	6 months
Number of payment deferral loans returned to normal status | loan	56
Payment Deferral
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans provided | loan	56
Loans provided	$ 20,000,000.0
Paycheck Protection Loans
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of loans provided | loan	277
Loans provided	$ 18,500,000

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Deposits (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Deposits
Non-interest-bearing demand accounts	$ 23,196,979	$ 23,633,008
Demand, NOW, money market accounts	55,486,139	44,400,084
Savings accounts	46,200,517	44,688,696
Certificates of deposit	58,509,147	59,234,329
Total	$ 183,392,782	$ 171,956,117
Non-interest-bearing demand accounts (in percent)	12.65%	13.74%
Demand, NOW, money market accounts (in percent)	30.26%	25.82%
Savings accounts (in percent)	25.19%	25.99%
Certificates of deposit (in percent)	31.90%	34.45%
Total (in percent)	100.00%	100.00%

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Other Comprehensive Income (Details) - USD ($)		3 Months Ended				6 Months Ended
		Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2021
Other Comprehensive Income
Balance, at beginning		$ 30,282,157	$ 29,849,151	$ 21,196,469	$ 20,782,335	$ 29,849,151
Balance, at ending		30,527,955	30,282,157	21,620,687	21,196,469	30,527,955
Net gain on securities transactions		14,000				14,000
Provision for income taxes		3,815
Accumulated Other Comprehensive Income (Loss)
Other Comprehensive Income
Balance, at beginning		121,600	120,667	115,506	66,725	120,667
Other comprehensive income (loss) before reclassifications (net of tax)		(47,240)	(4,186)	(16,008)	9,685
Amortization of amounts transferred from debt securities available for sale to held to maturity	[1]	4,217	5,119	49,498	39,096
Amounts reclassified from accumulated other comprehensive income (net of tax)		(10,185)
Balance, at ending		68,392	121,600	148,996	115,506	68,392
Unrealized Gains and Losses on Available for Sale Debt Securities
Other Comprehensive Income
Balance, at beginning		184,372	188,558	272,373	262,688	188,558
Other comprehensive income (loss) before reclassifications (net of tax)		(47,240)	(4,186)	(16,008)	9,685
Amounts reclassified from accumulated other comprehensive income (net of tax)		(10,185)
Balance, at ending		126,947	184,372	256,365	272,373	126,947
Unrealized Losses on Held to Maturity Debt Securities
Other Comprehensive Income
Balance, at beginning		(62,772)	(67,891)	(156,867)	(195,963)	(67,891)
Amortization of amounts transferred from debt securities available for sale to held to maturity	[1]	4,217	5,119	49,498	39,096
Balance, at ending		$ (58,555)	$ (62,772)	$ (107,369)	$ (156,867)	$ (58,555)

[1] (a) The reclassification adjustment is included in the Consolidated Statement of Income as Net Gain on Securities Transactions.

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Minimum Regulatory Capital Requirements (Details)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
Tier I Capital to Average Assets
Actual, Amount	$ 26,394,000	$ 25,452,000
Actual, Ratio	12.55	12.47
Minimum Capital Requirements, Amount	$ 15,773,000	$ 15,313,000
Minimum Capital Requirements, Ratio	7.5	7.5
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 17,876,000	$ 17,355,000
Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	8.5	8.5
Net worth of the entity	$ 26,555,579	$ 25,842,077
General loan loss reserve		$ 2,186,182
Net worth of the entity, Percent of total assets	13.34%	13.12%

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Employee Benefit Plans (Details)	3 Months Ended	6 Months Ended
	Dec. 31, 2021 USD ($) shares	Dec. 31, 2021 USD ($) $ / shares shares
Employee Benefit Plans
Maximum employee contribution		15.00%
Proceeds from term loan | $		$ 873,970
Purchase of ESOP shares | shares		87,397
Average price | $ / shares		$ 10.00
Fixed interest rate	3.25%	3.25%
Compensation expense | $	$ 29,123	$ 29,123
Shares released | shares	2,749	2,749
Number of shares not yet released | shares	83,901	83,901
Aggregate market value | $	$ 901,936	$ 901,936
Vesting period		3 years

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Commitments and Contingencies (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Commitments to grant loans
Other Commitments [Line Items]
Other commitments	$ 3,335,000	$ 5,824,000
Unused commitments under lines of credit
Other Commitments [Line Items]
Other commitments	8,193,000	9,352,000
MPF credit enhancements
Other Commitments [Line Items]
Other commitments	$ 759,439	$ 680,777

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Fair Value of Assets and Liabilities - Recurring Basis (Details) - Recurring - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 12,513,053	$ 10,909,764
States and municipalities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,685,022	1,887,007
Mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	3,577,343	4,711,568
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	7,250,688	4,311,189
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	10,513,053	10,909,764
Level 2 | States and municipalities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	1,685,022	1,887,007
Level 2 | Mortgage-backed
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	3,577,343	4,711,568
Level 2 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	5,250,688	$ 4,311,189
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	2,000,000
Level 3 | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 2,000,000

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Fair Value of Assets and Liabilities - Level 3 (Details)	3 Months Ended	6 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Fair Value of Assets and Liabilities
Beginning balance	$ 0
Transfer of security from Level 2 to Level 3	2,000,000
Unrealized gains (losses) included in other comprehensive income (loss)	0
Ending balance	$ 2,000,000	$ 2,000,000
Significant unobservable input		The Level 3 valuation is based on the 5/30 swap curve
Significant unobservable input, float	1.00%	1.00%

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Fair Value of Assets and Liabilities - Financial Instruments (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Financial Assets
Available for sale debt securities, at fair value	$ 12,513,053	$ 10,909,764
Held to maturity debt securities	693,083	770,438
Carrying Value
Financial Assets
Cash and due from banks	2,967,480	1,989,643
Federal funds sold	26,730,000	44,059,000
Interest bearing deposits in other financial institutions	3,518,465	2,062,463
Available for sale debt securities, at fair value	12,513,053	10,909,764
Held to maturity debt securities	626,294	708,949
Loans, net	156,324,796	144,169,318
Investment in restricted stock	262,200	262,200
Interest receivable	535,703	552,516
Financial Liabilities
Deposits	183,392,782	171,956,117
Payroll protection program lending facility	149,557	10,372,148
Accrued interest payable	19,113	10,152
Fair Value.
Financial Assets
Cash and due from banks	2,967,480	1,989,643
Federal funds sold	26,730,000	44,059,000
Interest bearing deposits in other financial institutions	3,518,465	2,062,463
Available for sale debt securities, at fair value	12,513,053	10,909,764
Held to maturity debt securities	693,083	770,438
Loans, net	156,284,000	145,596,000
Investment in restricted stock	262,200	262,200
Interest receivable	535,703	552,516
Financial Liabilities
Deposits	182,486,000	174,555,000
Payroll protection program lending facility	149,557	10,372,148
Accrued interest payable	$ 19,113	$ 10,152