MBBC · Read the filing

ITEM 1A: RISK FACTORS

Not required of a smaller reporting company.

ITEM 1B: UNRESOLVED STAFF COMMENTS

None.

ITEM 2: PROPERTIES

As of June 30, 2021, the net book value of our office properties was $1.8 million. The following table sets forth information regarding our offices.

Leased or Year Acquired Net Book Value of

Location Owned or Leased Real Property

(In thousands)

Main Office:

Other Properties:

1133 E Grand Avenue, Rothschild, WI Leased 2009 74

307 Third Street, Mosinee, WI Owned 1974 62

We believe that current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion.

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ITEM 3: LEGAL PROCEEDINGS

We are not involved in any pending legal proceedings as a defendant other than routine legal proceedings occurring in the ordinary course of business. At June 30, 2021, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations.

ITEM 4: MINE SAFETY DISCLOSURE

Not applicable.

PART II

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is quoted on the OTC Pink Marketplace operated by the OTC Markets Group under the symbol “MBBC.” There were 188 shareholders of record (excluding the number of persons or entities holding stock in street name through various brokerage firms) as of September 27, 2021 and 2,229,497 shares of common stock outstanding. The following table sets forth the quarterly high and low prices for a share of the Company’s common stock since the stock became quoted on the OTC Pink Market Place on April 15, 2021. The information was obtained from the OTC Pink Marketplace. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. No dividend were paid in fiscal 2021.

Market Value of Common Stock

High Low

The Company did not repurchase any shares of its common stock during its fourth fiscal quarter ended June 30, 2021.

Use of Proceeds

On December 11, 2020, the Company filed a Registration Statement on Form S-1 with the Securities and Exchange Commission in connection with the mutual holding company reorganization of Marathon Bank and the related offering of common stock by the Company. The Registration Statement (File No. 333-251314) was declared effective by the Securities and Exchange Commission on February 11, 2021. The Company registered 1,071,225 shares of common stock, par value $0.01 per share, pursuant to the Registration Statement for an aggregate offering price of $10.7 million. The stock offering commenced on February 22, 2021, and ended on April 14, 2021.

Janney Montgomery Scott LLC (“Janney”) was engaged to assist in the marketing of the common stock and for records management services. For its services, Janney received a fee of $285,000. Janney was also reimbursed $84,500 for its reasonable out-of-pocket expenses, inclusive of its legal fees and expenses.

The stock offering resulted in gross proceeds of $10.0 million, through the sale of 1,003,274 shares of common stock at a price of $10.00 per share. Expenses related to the offering were approximately $1.4 million, including $369,500 paid to Janney. Net proceeds of the offering were approximately $8.6 million.

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 net proceeds contributed to the Bank have been invested in cash and short-term instruments and used to make loans. The net proceeds retained by the Company have been deposited with the Bank.

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Dividends

We do not currently intend to pay cash dividends to our stockholders. The payment and amount of any dividend payments will be subject to statutory and regulatory limitations, and will depend upon a number of factors, including the following: regulatory capital requirements; our financial condition and results of operations; our other uses of funds for the long-term value of stockholders; tax considerations; the ability of mutual holding companies to waive dividends; and general economic conditions.

ITEM 6: RESERVED

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis reflects our audited 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 audited consolidated financial statements, which appear beginning on page 50 of this Form 10-K.

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.

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 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.

Income Tax Expense. 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.

Impact of COVID-19 Outbreak

During the first quarter of 2020, global financial markets experienced significant volatility resulting from the spread of COVID-19. In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a National Public Health Emergency. The COVID-19 pandemic has restricted the level of economic activity in our markets. In response to the pandemic, the governments of the state of Wisconsin and of most other states have taken preventative or protective actions, such as imposing restrictions on travel and business operations, advising or requiring individuals to limit or forego time outside of their homes, and ordering temporary closures of businesses that have been deemed to be non-essential. These measures have dramatically increased unemployment in the United States and have negatively impacted many businesses, and thereby threatened the repayment ability of some of our borrowers.

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As of June 30, 2021, some of these restrictions have been removed and many non-essential businesses have been allowed to re-open in a limited capacity, adhering to social distancing and disinfection guidelines. In many instances, vaccines are proving effective and rapidly scaling, bending the pandemic curve in many geographies. A new variant of the coronavirus, generally referred to as the “Delta” variant, has emerged in the United States and remains a significant concern in some regions and potentially, throughout the country. This variant is believed to be significantly more contagious than earlier variants of the coronavirus. Certain previously-relaxed social distancing and safety protocols have been reinstated in some areas of the country and it is possible that such protocols could be reinstated broadly in the future. The economic effects of these varying protocol reinstatement actions on the Company’s operations cannot be determined with certainty at this time. The direct and indirect effects of the COVID-19 pandemic have resulted in dramatic reductions in the level of economic activity in the Company’s market area, as well as in the national and global economies and financial markets, and have severely hampered the ability for certain businesses and consumers to meet their current repayment obligations.

To address the economic impact of COVID-19 in the United States, the CARES Act was signed into law on March 27, 2020. The CARES Act included a number of provisions that affected us, including accounting relief for TDRs. The CARES Act also established the PPP through the SBA, which allowed us to lend money to small businesses to maintain employee payrolls through the crisis with guarantees from the SBA. Under this program, loan amounts may be forgiven if the borrower maintains employee payrolls and meets certain other requirements. At June 30, 2021, we had $10.4 million of PPP loans outstanding.

In response to the COVID-19 pandemic, we implemented protocols and processes to help protect our employees, customers and communities. These measures include:

We have implemented various consumer and commercial loan modification programs to provide our borrowers relief from the economic impacts of COVID-19. Based on guidance in the CARES Act and COVID-19 related legislation, COVID-19 related modifications to loans that were current as of December 31, 2019 are exempt from TDR classification under U.S. GAAP through the earlier of January 1, 2022, or 60 days after the national emergency concerning COVID-19 declared by the President of the United States terminates. In addition, the bank regulatory agencies issued interagency guidance stating that COVID-19 related short-term modifications (i.e., six months or less) granted to loans that were current as of the loan modification program implementation date are not TDRs. As of June 30, 2021, we had granted short-term payment deferrals on 56 loans, totaling approximately $20.0 million in aggregate principal amount. As of June 30, 2021, all of these loans have returned to normal payment status.

Given the unprecedented uncertainty and rapidly evolving economic effects and social impacts of the COVID-19 pandemic, the future direct and indirect impact on our business, results of operations and financial condition are highly uncertain. Should current economic conditions persist or continue to deteriorate, we expect that this macroeconomic environment will have a continued adverse effect on our business and results of operations, which could include, but not be limited to: decreased demand for our products and services, protracted periods of lower interest rates, increased non-interest expenses, including operational losses, and increased credit losses due to deterioration in the financial condition of our consumer and commercial borrowers, including declining asset and collateral values, which may continue to increase our provision for loan losses and net charge-offs.

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Business Strategy

Our business strategy is to operate as a well-capitalized and profitable community bank dedicated to providing personal service to our individual and business customers. We believe that we have a competitive advantage in the markets we serve because of our 118-year history in the community, our knowledge of the local marketplace and our long-standing reputation for providing superior, relationship-based customer service. The following are the key elements of our business strategy:

Increase our commercial real estate lending into the higher growth Southeastern Wisconsin market. As a result of our recent efforts to better balance the overall loan portfolio between commercial and non-commercial lending and expansion into the Southeastern Wisconsin market, including the Milwaukee metropolitan area, our commercial real estate loans, including multifamily loans, increased to $69.4 million, or 47.3% of our loan portfolio, at June 30, 2021, compared to $50.3 million, or 42.4% of our loan portfolio, at June 30, 2020. We intend to retain our presence as a commercial real estate lender (which includes multifamily loans) in our market area and seek to expand our market share in existing and other growth markets in Southeastern Wisconsin, including Milwaukee. We intend to continue to build relationships with small and medium-sized businesses and high net worth individuals in these market areas focusing on lending to manufacturing, wholesale distribution and professional service businesses. We also intend to increase our Southeastern Wisconsin presence by using the capital raised in our stock offering to hire experienced local commercial real estate lenders with credit skills that fit well with our focus on asset quality, as well as possibly expand our branch network, either through acquisitions or organically, in Southeastern Wisconsin. We believe the additional capital raised in the offering will enable us to increase our originations of commercial real estate loans and related lending limits, which will enable us to originate larger loans to new and existing customers. Given their larger balances and the complexity of the underlying collateral, commercial real estate and multifamily real estate loans generally have more risk than the owner-occupied one- to four-family residential real estate loans we originate. Because the repayment of commercial real estate and multifamily real estate loans depends on the successful management and operation of the borrower’s properties or related businesses, repayment of such loans can be affected by adverse conditions in the local real estate market or economy, including the effects of the COVID-19 pandemic.

Continue to originate and sell certain residential real estate loans. Residential mortgage lending has historically been a significant part of our business, and we recognize that originating one- to four-family residential real estate loans is essential to our status as a community-oriented bank. During the year ended June 30, 2021, we originated and sold $51.7 million of one- to four-family residential real estate loans held for sale for gains on sale of loans of $1.0 million. We intend to continue to sell in the secondary market most of the long-term conforming fixed-rate one- to four-family residential real estate loans that we originate for fee income that enhances our non-interest income and mitigates the risks associated with changes in market interest rates (including due to the effects of the COVID-19 pandemic) that may adversely impact our interest income.

Increase our share of lower-cost core deposit growth. We have made a concerted effort to reduce our reliance on higher cost certificates of deposit in favor of obtaining lower cost retail and commercial deposit accounts. We have also made significant investments in our technology-based products. For example, we have enhanced our suite of deposit products, including remote deposit capture, commercial cash management and mobile deposits in order to accommodate business customers. This has had the dual effect of maintaining our concentration of certificates of deposit at approximately 35.4% of total deposits at June 30, 2021 and 2020, while growing our core deposits to $112.7 million at June 30, 2021 from $86.5 million at June 30, 2020. We intend to continue our focus on core deposit growth by offering our retail and commercial customers a full selection of deposit-related services, and making further investments in technology so that we can deliver high-quality, innovative products and services to our customers.

Manage credit risk to maintain a low level of non-performing assets. We believe that credit risk management is paramount to our long-term success. Over the past several years, we have invested significantly in both personnel and software to effectively manage our portfolio, and we have considerably enhanced our controls. We have established an experienced commercial credit team and we have implemented well-defined policies, a thorough and efficient loan underwriting process, and active credit monitoring. As a result of our continued focus on credit risk management, our non-performing loans to total loans was 0.12% and 0.27% as of June 30, 2021 and June 30, 2020, respectively. We

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intend to continue to support our investment in our commercial credit department as we grow our loan portfolio in the future.

Grow organically and through opportunistic bank or branch acquisitions or de novo branching. In addition to organic growth, we will also consider acquisition opportunities that we believe would enhance the value of our franchise and yield potential financial benefits for our stockholders. Although we believe opportunities exist to increase our market share in our historical markets, we expect to continue to expand into Southeastern Wisconsin. We will consider expanding our branch network through acquisitions and/or through establishing de novo branches, although we have no current acquisitions or new branches planned. The recent capital we raised provides us the opportunity to make acquisitions of other financial institutions or branches thereof, and will also help fund improvements in our operating facilities, credit reporting and customer delivery services in order to enhance our competitiveness.

Remain a community-oriented institution and relying on high quality service to maintain and build a loyal local customer base. We were established in 1902 and have been operating continuously since that time in our local community. Through the goodwill we have developed over the years of providing timely, efficient banking services, we believe that we have been able to attract a solid base of local retail customers on which we hope to continue to build our banking business.

Anticipated Increase in Non-interest Expense

Our non-interest expense is expected to increase because of the increased costs associated with operating as a public company, and the increased compensation expenses associated with the allocation of shares of common stock by our employee stock ownership plan and the possible implementation of one or more stock-based benefit plans, if approved by our stockholders, no earlier than six months after the completion of the reorganization and stock offering.

Summary of Significant Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our audited consolidated financial statements, which are prepared in conformity with U.S. GAAP. The preparation of these audited consolidated 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.

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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 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.

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 consolidated 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 consolidated 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.

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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 prospects of the issuer, whether the market decline was affected by macroeconomic conditions and whether the Company 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 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.

Fair Value Measurements. The Company determines the fair value of certain assets in accordance with the provisions of FASB Accounting Standards Codification Topic Accounting Standards Codification 820, Fair Value Measurements, which provides a framework for measuring fair value under generally accepted accounting principles.

Fair value is defined as the exchange price that would be received for an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date. It is required that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. The Standard also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels:

● Level 3 inputs are unobservable inputs related to the asset.

Selected Financial Data

The following selected consolidated financial data sets forth certain financial highlights of the Company and should be read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K for 2021 and the Bank in 2020.

At June 30,

(In thousands)

Selected Financial Condition Data:

Debt securities available for sale 10,910 15,008

Debt securities held to maturity 709 2,841

Federal Home Loan Bank stock, at cost 262 262

Bank owned life insurance 5,969 5,804

Premises and equipment, net 1,850 1,969

Deferred tax asset 270 700

Federal Home Loan advances — 8,000

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For the Years

Ended June 30,

(In thousands)

Selected Operating Data:

Provision for loan losses — 150

Net interest income after provision for loan losses 5,393 4,402

Income before income taxes 1,851 506

Income tax expense 478 88

At or For the Years

Ended June 30,

Performance Ratios:

Return on average assets 0.73 % 0.27 %

Return on average equity 6.14 % 2.08 %

Interest rate spread (1) 2.99 % 2.89 %

Net interest margin (2) 3.10 % 3.08 %

Non-interest expenses to average assets 2.90 % 3.21 %

Capital Ratios (4):

Average equity to average assets 11.88 % 13.19 %

Total capital to risk-weighted assets N/A 14.74 %

Tier 1 capital to risk-weighted assets N/A 13.58 %

Common equity tier 1 capital to risk-weighted assets N/A 13.58 %

Tier 1 capital to average assets 12.47 % 13.12 %

Asset Quality Ratios:

Allowance for loan losses as a percentage of total loans 1.49 % 1.43 %

Non-performing loans as a percentage of total loans 0.12 % 0.27 %

Non-performing loans as a percentage of total assets 0.08 % 0.19 %

Total non-performing assets as a percentage of total assets 0.08 % 0.19 %

Other:

Number of offices 4 4

Number of full-time equivalent employees 36 33

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Comparison of Financial Condition at June 30, 2021 and June 30, 2020

Total Assets. Total assets increased $43.0 million, or 25.2%, to $213.6 million at June 30, 2021 from $170.7 million at June 30, 2020. The increase was primarily due to an increase of $21.8 million, or 89.7%, in cash and cash equivalents, offset in part by a $4.1 million, or 27.3% decrease in debt securities available-for-sale. Net loans also increased by $27.3 million, or 23.3%.

Cash and Cash Equivalents. Total cash and cash equivalents increased $21.8 million, or 89.7%, to $46.0 million at June 30, 2021 from $24.3 million at June 30, 2020, as securities matured, deposits increased and the Company raised $8.6 million from its common stock offering. This increase was partially offset by the use of cash to fund loan originations.

Debt Securities Available for Sale. Total debt securities available for sale decreased $4.1 million, or 27.3%, to $10.9 million at June 30, 2021 from $15.0 million at June 30, 2020. The decrease was primarily due to a decrease of $3.9 million in mortgage-backed securities and $1.2 million in state and municipal obligations as a result of maturities, offset by a purchase of $1.1 million in corporate bonds.

Debt Securities Held to Maturity. Total debt securities held to maturity decreased $2.1 million, or 75.0%, to $709,000 at June 30, 2021 from $2.8 million at June 30, 2020. The decrease was primarily due to a decrease of $2.1 million in mortgage-backed securities as a result of maturities.

Net Loans. Net loans increased $27.3 million, or 23.3%, to $144.2 million at June 30, 2021 from $116.9 million at June 30, 2020. The increase was due to a $11.4 million, or 27.9%, increase in commercial real estate loans to $52.1 million at June 30, 2021 from $40.8 million at June 30, 2020 and an increase in multifamily loans of $7.7 million, or 80.0%, to $17.3 million at June 30, 2021 from $9.6 million at June 30, 2020. One- to four-family residential mortgage loans also increased by $6.7 million, or 16.0%, to $48.4 million at June 30, 2021 from $41.7 million at June 30, 2020. Commercial and industrial loans (including Paycheck Protection Program Loans) increased by $6.3 million, or 47.9%, to $19.3 million at June 30, 2021 from $13.0 million at June 30, 2020. These increases were partially offset by a decrease in construction loans of $3.1 million, or 28.0%, to $8.0 million at June 30, 2021 from $11.1 million at June 30, 2020. The increase in commercial and industrial, commercial real estate and multifamily loans was primarily due to our strategy to enhance our commercial lending in Southeastern Wisconsin and our participation in the PPP. The increase in one- to four-family residential mortgage loans was primarily the result of customers refinancing their loans at lower rates. Construction loans decreased due to a decrease in our construction loan participations.

Deposits. Total deposits increased $37.9 million, or 28.3%, to $172.0 million at June 30, 2021 from $134.0 million at June 30, 2020. The increase in deposits reflected an increase in demand, NOW and money market accounts of $9.5 million, or 27.3%, to $44.4 million at June 30, 2021 from $34.9 million at June 30, 2020 and an increase in savings accounts of $5.4 million, or 13.8%, to $44.7 million at June 30, 2021 from $39.3 million at June 30, 2020. Certificates of deposit also increased by $11.8 million, or 24.8%, to $59.2 million at June 30, 2021 from $47.5 million at June 30, 2020. The increase in all deposit accounts primarily reflected deposit customers increasing cash balances during the COVID-19 pandemic along with the impact of federal stimulus programs and an increase in new customers.

Borrowings. Borrowings decreased by $8.0 million as we paid down our Federal Home Loan Bank advances as the interest rates on these borrowings were higher than what we earn on our investments in Federal funds sold. We increased our borrowings from the Federal Reserve PPP Liquidity Facility by $4.0 million to fund our PPP loans originated after June 30, 2020 such that our total PPP Liquidity Facility borrowings at June 30, 2021 was $10.4 million.

Stockholders’ Equity. Total stockholders’ equity increased by $9.1 million, or 43.6%, to $29.9 million at June 30, 2021 from $20.8 million at June 30, 2020. The increase was due to net income of $1.4 million and the $8.6 million raised from our common stock offering.

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Average Balance Sheets

The following table sets forth average balances, average yields and costs, and certain other information for the years 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. Deferred loan fees accreted to interest income totaled $429,000 and $29,000 for the years ended June 30, 2021 and 2020, respectively.

For the Year Ended June 30,

Average Average Average Average

Outstanding Yield/Rate Outstanding Yield/Rate

Balance Interest Balance Interest

(Dollars in thousands)

Interest-earning assets:

Noninterest-earning assets 13,534 4,985

Interest-bearing liabilities:

Non-interest-bearing demand deposits 16,482 8,870

Other non-interest-bearing liabilities 1,216 1,027

Total stockholders' equity 22,265 20,123

Total liabilities and stockholders' equity $ 187,379 $ 152,577

Net interest income $ 5,393 $ 4,552

Net interest rate spread (1) 2.99 % 2.89 %

Net interest-earning assets (2) $ 26,429 $ 25,035

Net interest margin (3) 3.10 % 3.08 %

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

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

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

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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.

Year Ended June 30,

Increase (Decrease) Due to Total

Increase

Volume Rate (Decrease)

(In thousands)

Interest-earning assets:

Loans (excluding PPP loans) $ 454 $ (7) $ 447

Cash and cash equivalents 77 (141) (64)

Other — 2 2

Total interest-earning assets 548 27 575

Interest-bearing liabilities:

Demand, NOW and money market deposits 32 (31) 1

Savings deposits 7 (14) (7)

Certificates of deposit 62 (342) (280)

Total interest-bearing deposits 101 (387) (286)

FHLB advances and other borrowings 42 (42) —

PPP Liquidity Facility borrowings 27 (7) 20

Total interest-bearing liabilities 170 (436) (266)

Change in net interest income $ 378 $ 463 $ 841

Comparison of Operating Results for the Years Ended June 30, 2021 and 2020

General. Net income was $1.4 million for the year ended June 30, 2021, an increase of $955,000, or 228.6%, from net income of $418,000 for the year ended June 30, 2020. The increase in net income for the year ended June 30, 2021 was primarily attributed to an increase in net interest income of $841,000, a decrease in the provision for loan losses of $150,000, and an increase in non-interest income of $890,000, partially offset by an increase in non-interest expenses of $535,000 and an increase in the provision for income taxes of $390,000.

Interest Income. Interest income increased by $576,000, or 9.7%, to $6.5 million for the year ended June 30, 2021 from $5.9 million for the year ended June 30, 2020, primarily due to an increase in loan interest income which was offset by decreases in debt securities interest income and cash and cash equivalents interest income.

Loan interest income increased by $808,000, or 15.3%, to $6.1 million for the year ended June 30, 2021 from $5.3 million for the year ended June 30, 2020, due primarily to an increase in the average balance of the loan portfolio. The average balance of the loan portfolio increased by $16.3 million, or 14.7%, from $110.8 million for the year ended June 30, 2020 to $127.1 million for the year ended June 30, 2021. The increase in the average balance of loans was primarily due to an increase in the average balances of commercial (including PPP loans) and residential loans offset by a decrease in the average balances of construction and consumer loans. The average yield on the loan portfolio (including PPP loans) was 4.79% and 4.77% for the years ended June 30, 2021 and 2020, respectively.

Debt securities interest income decreased $172,000, or 32.2%, to $362,000 for the year ended June 30, 2021 from $533,000 for the year ended June 30, 2020, primarily due to a decrease of $5.5 million in the average balance of the debt securities portfolio and a decrease in the average yield on the debt securities portfolio of 15 basis points from 2.71% for the year ended June 30, 2020 to 2.56% for the year ended June 30, 2021. The decrease in the average balance of the debt securities portfolio was primarily due to securities paydowns and redemptions in municipal bonds and mortgage-backed securities offset by a purchase of corporate bonds. The decrease in the average yield of debt securities

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was due to paydowns and redemptions of higher rate securities and new investments purchased at lower interest rates as a result of lower market rates since June 30, 2020.

Cash and cash equivalent interest income decreased by $64,000, or 76.2%, to $20,000 for the year ended June 30, 2021 as compared to $84,000 for the year ended June 30, 2020. The average yield decreased to 0.06% for the year ended June 30, 2021 from 0.50% for the year ended June 30, 2020, while the average balance of cash and cash equivalents increased from $16.9 million for the year ended June 30, 2020 to $32.3 million for the year ended June 30, 2021. The decrease in the average yield on cash and cash equivalents was primarily due to lower average rates earned on fed funds, as a result of the decrease in market rates since June 30, 2020. The increase in the average balance of cash and cash equivalents was primarily due to an increase in fed funds that were only partially used to fund loan originations.

Interest Expense. Interest expense decreased $265,000, or 19.6%, to $1.1 million for the year ended June 30, 2021 from $1.4 million for the year ended June 30, 2020 primarily due to a decrease of $285,000 in interest paid on deposits, partially offset by an increase of $20,000 in interest paid on borrowings.

Interest expense on deposits decreased $285,000, or 21.4%, to $1.0 million for the year ended June 30, 2021 as compared to $1.3 million for the year ended June 30, 2020 primarily due to a decrease in interest expense on certificates of deposit. Interest expense on certificates of deposit decreased $280,000, or 24.5%, to $843,000 for the year ended June 30, 2021 as compared to the prior year due to a decrease in the average rate paid on certificates of deposit, offset by a slight increase in the average balance of certificates of deposit. The average rate paid on certificates of deposit decreased 68 basis points to 1.68% for the year ended June 30, 2021 from 2.36% for the year ended June 30, 2020 due to the general drop in short-term interest rates. The average balance of certificates of deposit increased by $2.6 million for the year ended June 30, 2021 compared to the prior year due to the number of new customers added by the Company, offset by our strategic initiative to reduce our higher cost certificates of deposit.

The interest expense on borrowings increased $20,000 to $42,000 for the year ended June 30, 2021 when compared to the year ended June 30, 2020 primarily due to an increase in the average balance of borrowings from the FHLB and the Federal Reserve PPP Liquidity Facility. The average balance of borrowings for the year ended June 30, 2021 was $13.6 million with an average rate of 0.31% compared to an average balance of $2.7 million and an average rate of 0.81% for the year ended June 30, 2020. The increase in the average balance of borrowings was due to additional borrowings that primarily enhanced our liquidity as a result of the COVID-19 pandemic and to participate in the PPP loan program. The 50 basis points decrease in the average rate paid on borrowings was primarily due to the decrease in market rates since June 30, 2020.

Net Interest Income. Net interest income increased $841,000, or 18.5%, to $5.4 million for the year ended June 30, 2021 from $4.6 million for the year ended June 30, 2020. This increase reflected a 10 basis points increase in the net interest rate spread to 2.99% for the year ended June 30, 2021 from 2.89% for the year ended June 30, 2020. The increase in net interest rate spread reflected a 37 basis points decrease in the average rate paid on interest-bearing liabilities offset by a 27 basis points decrease in the average yield on interest-earning assets. The net interest margin increased two basis points to 3.10% for the year ended June 30, 2021 from 3.08% for the year ended June 30, 2020. Net- interest earning assets also increased by $1.4 million, or 5.6%, to $26.4 million for the year ended June 30, 2021 from $25.0 million for the year ended June 30, 2020.

Provision for Loan Losses. We recorded no provision for loan losses for the year ended June 30, 2021 compared to a provision of $150,000 for the year ended June 30, 2020. The decrease in the provision was due primarily to a commercial and industrial loan participation that was impaired during the year ended June 30, 2020 which is no longer impaired. Net recoveries were $486,000 for the year ended June 30, 2021 compared to net charge-offs of $79,000 for the year ended June 30, 2020. Non-performing assets decreased to $178,000, or 0.08% of total assets, at June 30, 2021, compared to $319,000, or 0.19% of total assets, at June 30, 2020. The allowance for loan losses was $2.2 million, or 1.49% of loans outstanding, at June 30, 2021 and $1.7 million, or 1.43% of loans outstanding, at June 30, 2020. We expect economic uncertainty to continue for additional periods which may result in the allowance for loan losses as a percentage of total loans increasing in the future.

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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 June 30, 2021. However, future changes in the factors described herein, 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.

Year Ended

June 30, Change

(Dollars in thousands)

Service charges on deposit accounts $ 168 $ 178 $ (10) (5.6) %

Increase in cash surrender value of BOLI 165 164 1 0.6 %

Gain (loss) on sale of foreclosed real estate 11 (3) 14 1,200.0 %

Non-interest income increased by $890,000, or 88.5%, to $1.9 million for the year ended June 30, 2021 from $1.0 million for the year ended June 30, 2020 due primarily to an increase in mortgage banking income. Mortgage banking income (consisting primarily of sales of fixed-rate one- to four-family residential real estate loans) increased $921,000 as we sold $50.6 million of mortgage loans during the year ended June 30, 2021 compared to $26.6 million of such sales during the year ended June 30, 2020 due to the decrease in market rates, which resulted in increased demand for mortgage loan refinancing.

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

Year Ended

June 30, Change

(Dollars in thousands)

Occupancy and equipment 671 674 (3) (0.4) %

Marketing expenses 63 64 (1) (1.6) %

Debit card expenses 89 80 9 11.3

Non-interest expenses were $5.4 million for the year ended June 30, 2021 as compared to $4.9 million for the year ended June 30, 2020. Salaries and employee benefits increased $323,000 which was primarily related to new hires to assist with the growth of the Company. Professional fees increased $93,000 due to additional costs associated with being a new public reporting company.

Income Tax Expense. Income tax expense increased to $478,000 for the year ended June 30, 2021 from $87,000 for the year ended June 30, 2020 due to an increase in income before income taxes. The effective tax rate was 25.8% for the year ended June 30, 2021 as compared to 17.3% for the year ended June 30, 2020.

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

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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 June 30, 2021, we had a $75.5 million line of credit (subject to providing additional collateral) 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 borrowed $10.4 million to fund PPP loans as of June 30, 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 $1.5 million and $1.1 million for the years ended June 30, 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 $21.3 million compared to $3.5 million provided by investing activities for the years ended June 30, 2021 and 2020, respectively. Net cash provided by financing activities, consisting of activity in deposit accounts and borrowings and net proceeds from our common stock offering, was $41.6 million and $17.1 million for the years ended June 30, 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 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 June 30, 2021, Marathon Bank was classified as “well capitalized” for regulatory capital purposes. See Note 14 in the Notes to the Audited Consolidated Financial Statements.

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 June 30, 2021, we had outstanding commitments to originate loans of $15.2 million, and outstanding commitments to sell loans of $3.8 million. 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 June 30, 2021 totaled $21.2 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 financial statements beginning on page 50 for a description of recent accounting pronouncements that may affect our financial condition and results of operations.

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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 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required of a smaller reporting company.

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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Marathon Bancorp, Inc.

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Report of Independent Registered Public Accounting Firm 51

Financial Statements

Consolidated Balance Sheets 52

Consolidated Statements of Income 53

Consolidated Statements of Comprehensive Income 54

Consolidated Statements of Changes in Stockholders’ Equity 55

Consolidated Statements of Cash Flows 56

Notes to the Consolidated Financial Statements 57

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Marathon Bancorp, Inc.

Wausau, Wisconsin

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Marathon Bancorp, Inc. (the “Company”) as of June 30, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2021, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and 2020, and the results of their operations and their cash flows for each of the years in the two-year period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2020.

/s/ Bonadio & Co., LLP

Syracuse, New York

September 28, 2021

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Marathon Bancorp, Inc.

Consolidated Balance Sheets

June 30, 2021 and 2020

June 30,

Assets

Foreclosed assets — 64,080

Liabilities and Stockholders' Equity

Liabilities

Deposits

Federal Home Loan Bank (FHLB) advances — 8,000,000

Stockholders' Equity

shares issued and outstanding at June 30, 2021 22,295 —

Additional paid-in capital 8,484,019 —

Unearned ESOP shares, at cost (866,499) —

Accumulated other comprehensive income 120,667 66,725

See Notes to Consolidated Financial Statements

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Marathon Bancorp, Inc.

Consolidated Statements of Income

For the Years ended June 30, 2021 and 2020

June 30,

Interest Income

Interest Expense

Provision for Loan Losses — 150,000

Net Interest Income After Provision for Loan Losses 5,392,927 4,401,860

Non-Interest Income

Increase in cash value of life insurance 164,667 163,797

Gain (loss) of sale of foreclosed assets 10,840 (2,708)

Non-Interest Expenses

Net income per common shares-basic and diluted $ 0.64 N/A

See Notes to Consolidated Financial Statements

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Marathon Bancorp, Inc.

Consolidated Statements of Comprehensive Income

For the Years Ended June 30, 2021 and 2020

June 30,

Other comprehensive income (loss)

Unrealized (losses) gains on available for sale debt securities

Unrealized holding (loss) gain arising during the period (100,981) 273,277

See Notes to Consolidated Financial Statements

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Marathon Bancorp, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended June 30, 2021 and 2020

Accumulated

Additional Unearned Other

Preferred Common Paid-in Retained ESOP Comprehensive

Stock Stock Capital Earnings Shares Income (Loss) Total

Other comprehensive income — — — — — 224,679 224,679

Other comprehensive income — — — — — 53,942 53,942

See Notes to Consolidated Financial Statements

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Marathon Bancorp, Inc.

Consolidated Statements of Cash Flows

For the Years Ended June 30, 2021 and 2020

June 30,

Operating Activities

Provision for loan losses — 150,000

ESOP expense 7,808

Net gains and write down on foreclosed assets (10,840) 2,708

Earnings on cash value of life insurance (164,667) (163,797)

(Increase) decrease in interest receivable (52,776) 48,130

Net change in other liabilities (28,213) 277,527

Investing Activities

Purchase of debt securities available for sale (1,112,500) (3,219,305)

Net decrease in restricted stock — 2,700

Proceeds from sale of foreclosed assets 74,920 58,960

Purchases of property and equipment (88,471) (292,253)

Financing Activities

Net cash proceeds from common stock offering 8,505,977 —

Purchase of ESOP shares (873,970) —

Proceeds from FHLB advances — 8,000,000

Repayments of FHLB advances (8,000,000) —

Borrowings (Repayments) of PPPLF funding, net 3,997,250 6,374,898

Supplemental Disclosure of Cash Flow Information

Cash payments for

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Transfer of loans to foreclosed assets $ — $ 125,748

See Notes to Consolidated Financial Statements

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

Note 1 - Significant Accounting Policies

Basis of Presentation and Nature of Operations

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 Bank is a Wisconsin stock savings bank, which conducts its business through four facilities. 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 accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America and prevailing practices within the banking industry. The Company maintains its accounts using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recognized when incurred. The significant accounting policies described below, together with the notes that follow, are an integral part of the consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany transactions and balances have been eliminated in consolidation. The Company, as used in the consolidated financial statements, refers to the consolidated group. Financial information for the periods before the Company’s mutual holding company reorganization and stock offering on April 14, 2021 are those of the Bank.

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

Use of Estimates

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from 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.

Concentrations of Credit Risk

The majority of the Company’s loans and commitments to extend credit have been granted to customers in the Company’s market area. Although the Company’s loan portfolio is diversified, a substantial portion of the Company’s customers’ ability to honor their contracts is dependent upon the local business economy in which the Company operates. The concentration of credit by type of loan is set forth in Note 4.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash and balances due from banks and federal funds sold with other banks, all of which have original maturities of 90 days or less.

Balances in transaction accounts at other financial institutions may exceed amounts covered by federal deposit insurance. Management regularly evaluates the credit risk associated with other financial institutions and believes that the Company is not exposed to any significant credit risks on cash and cash equivalents.

Interest Bearing Deposits in Other Financial Institutions

Interest-bearing deposits with other financial institutions consist of certificates of deposits in other banks with original maturities of less than 90 days.

Debt Securities

The Company classifies its debt securities as available for sale or held to maturity. Debt securities classified as available for sale are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in comprehensive income. Debt securities, which the Company has the positive intent and ability to hold to maturity, are classified as held to maturity and are carried at amortized cost.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

For a debt security transferred into the held to maturity category from the available for sale category, the unrealized holding gain or loss at the date of the transfer is reported in accumulated other comprehensive income and amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount.

The Company follows the accounting guidance related to recognition and presentation of other-than-temporary impairment. This guidance specifies that (a) if the Company does not have the intent to sell a debt security prior to recovery, and (b) it is more likely than not that it will not have to sell the debt security prior to recovery, the security would not be considered other-than-temporarily impaired unless there is a credit loss. When an entity does not intend to sell the

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

security and it is more likely than not that the entity will not have to sell the security before recovery of its cost basis, it will recognize the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.

Investments in Restricted Stock

Investments in restricted stock consist of Federal Home Loan Bank stock. The Bank, as a member of the Federal Home Loan Bank System, is required to hold a specific number of shares of capital stock in the Federal Home Loan Bank of Chicago. Since ownership of this stock is restricted, the stock is carried at cost and evaluated periodically for impairment. The carrying amount of the Bank’s investment in Federal Home Loan Bank stock was $262,200 and $262,200 as of June 30, 2021 and 2020.

Fair Value Measurements

The Company determined the fair value of certain assets in accordance with the provisions of FASB Accounting Standards Codification Topic Accounting Standards Codification 820, Fair Value Measurements, which provides a framework for measuring fair value under generally accepted accounting principles.

● Level 3 inputs are unobservable inputs related to the asset.

See Note 16.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at lower of cost or fair value. For loans carried at the lower of cost or fair value, gains and losses on loan sales (sales proceeds minus carrying value) are recorded in non-interest income, and direct loan origination costs and fees are deferred at origination of the loan and are recognized in non-interest income upon sale of the loan. The Company had $131,000 and $238,000 of loans held for sale as of June 30, 2021 and 2020, included in net loans on the consolidated balance sheet.

Loans

Loans are reported at their outstanding unpaid principal balance adjusted for the allowance for loan losses.

Interest income is accrued on the unpaid principal balance. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. Loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on non-accrual or charged-off is reversed against interest income.

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loan Origination Fees and Costs

Loan origination fees and related direct origination costs associated with loans under the Paycheck Protection Program are deferred and amortized over the life of the loan on a level-yield basis as an adjustment to interest income over the contractual life of the loan.

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, general and unallocated 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 (including COVID-19), 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.

The unallocated component of the allowance for loan losses covers several considerations that are not specifically measurable through either the allocated or general components. For example, at times the Company could face increasing credit risks and uncertainties, not yet reflected in recent historical losses or qualitative factor assessments, associated with unpredictable changes in economic growth or business conditions in our markets or for certain industries in which we have commercial loan borrowers, or unanticipated stresses to the values of real estate held as collateral. Any or all of these additional issues can adversely affect our borrowers’ ability to timely repay their loans. Also, the unallocated component allocation recognizes the inherent imprecision in our allowance for loan loss methodology, or any alternative methodology, for estimating allocated and general loan losses, including the unpredictable timing and amounts of charge-offs, the fact that historical loss averages don’t necessarily correlate to future loss trends, and unexpected changes to specific-credit or general portfolio future cash flows and collateral values which could negatively impact unimpaired portfolio loss factors.

A loan is considered impaired when, based on current information and events, it is probable that the Company 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

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

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.

Troubled debt restructurings (“TDRs”) are individually evaluated for impairment and included in the separately identified impairment disclosures. Loans whose terms are modified are classified as troubled debt restructurings if the Company grants borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a below-market interest rate based on the loan’s risk characteristics, an extension of a loan’s stated maturity date or a significant delay in payment. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for a sustained period after modification. For TDRs that subsequently default, the Company determines the amount of the allowance on that loan in accordance with the accounting policy for the allowance for loan losses on loans individually identified as impaired.

Major categories of loans are further defined by the Company into portfolio segments identified by the Company including commercial and industrial, commercial real estate, construction, one-to-four-family residential, multi-family real estate and consumer loans. Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to-income, collateral type and loan-to-value ratios for consumer loans.

Credit Related Financial Instruments

In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments to grant loans. Such financial instruments are recorded when they are funded.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company – put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership; (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

The recorded investment in 1-4 family owner occupied properties that were in process of foreclosure was $0 and $164,052 at June 30, 2021 and June 30, 2020, respectively. At June 30, 2020, residential real estate property collateralizing 1-4 family owner occupied properties totaling $64,080 was included in foreclosed assets. At June 30, 2020, legal title for all residential real estate property collateralizing 1-4 family owner occupied properties held in foreclosed assets had been transferred to the Company. There were no foreclosed assets at June 30, 2021.

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

Cash Surrender Value Life Insurance

Investment in life insurance contracts is stated at cash surrender value of the various insurance policies. The income on the investment is included in non-interest income.

Mortgage Servicing Rights

Servicing assets are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. Generally, purchased servicing rights are capitalized at the cost to acquire the rights. For sales of mortgage loans, a portion of the cost of originating the loan is allocated to the servicing right based on its fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is recognized through valuation allowance for individual tranches, to the extent that fair value is less than the capitalized amount for the tranches. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. Capitalized servicing rights are included with other assets on the consolidated balance sheet and are amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income.

Loans serviced for others are not included in the consolidated balance sheet. The unpaid principal balances of mortgage loans serviced for others was approximately $80,628,000 and $48,250,000 as of June 30, 2021 and 2020, respectively. The Company had a mortgage servicing right asset of $601,843 and $266,639 as of June 30, 2021 and 2020, included in other assets on the consolidated balance sheets.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation. Software amortization is included in depreciation expense. Buildings and related components are depreciated using the straight-line method over the estimated useful lives of the assets ranging from 5 to 40 years for buildings and improvements and 3 to 10 years for furniture and equipment. Leasehold improvements are amortized over the lesser of the related terms of the leases or their useful lives.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of property and equipment, allowance for loan losses, mortgage servicing rights, and net operating losses for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. 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.

The Company evaluates its tax positions that have been taken or are expected to be taken on income tax returns to determine if an accrual is necessary for uncertain tax positions. As of June 30, 2021 and 2020, the unrecognized tax benefit accrual was zero. The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

Employee Benefit Plans

The Company sponsors a 401(k) salary deferral plan available to substantially all employees. The plan provides for Company-matching contributions based on a percentage of participant contributions as well as Company profit-sharing and safe harbor contributions.

The Company also sponsors an Employee Stock Ownership Plan (“ESOP”) that is available to substantially all employees. Shares are released to employees on a straight-line basis over the loan term and allocated based on participant compensation. See Note 11 of the Notes to Consolidated Financial Statements.

Advertising Costs

Advertising costs are expensed as incurred. Such costs were $62,586 and $64,350 for the years ended June 30, 2021 and 2020, respectively.

Earnings per Common 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 year ended June 30, 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.

Years Ended June 30,

Net income applicable to common stock $ 1,373,059 $ 417,869

Average number of shares outstanding 2,229,497 N/A

Less: Average unallocated ESOP shares 87,023 N/A

Earnings per common share:

Basic $ 0.64 N/A

Diluted 0.64 N/A

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains on available for sale debt securities, reclassification of realized gains on sale of available for sale debt securities, and unrealized loss related to debt securities classified as available for sale transferred to debt securities classified as held to maturity.

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

Reclassifications

Certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements to maintain consistency between periods presented. The reclassification had no impact on net income or equity.

Revenue Recognition

The majority of the Company’s revenues come from interest income on loans and available for sale debt securities that are outside the scope of FASB Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (Topic 606). 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.

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.

Other Recently Adopted Accounting Pronouncements

In March 2017, the FASB issued ASU 2017-08, “Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on certain purchased callable debt securities to the earliest call date. ASU 2017-08 is effective for annual periods beginning after December 15, 2019 with early adoption permitted. The Company adopted this pronouncement beginning July 1, 2020. This ASU did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019. The Company adopted this

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Marathon Bancorp, Inc.

Notes to the Consolidated Financial Statements

June 30, 2021 and 2020

pronouncement on July 1, 2020. This ASU had a minor impact to and simplified the Company’s fair value disclosures with no additional impact to the consolidated financial statements.

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. Early adoption is permitted. The Company will adopt this pronouncement beginning July 1, 2022. The Company’s leases are operating leases and ASU 2016-02 will require the Company to include them in its consolidated balance sheet. The Company’s operating leases are predominately related to real estate. Management is currently evaluating other impacts this guidance will have on the results of operations, financial presentation, and cash flows of the Company.

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.

Marathon Bancorp, Inc. /MD/ MBBC US Equity

MBBC · 10-K · period ended 2021-06-30

ITEM 1A: RISK FACTORS

ITEM 1B: UNRESOLVED STAFF COMMENTS

ITEM 2: PROPERTIES

ITEM 3: LEGAL PROCEEDINGS

ITEM 4: MINE SAFETY DISCLOSURE

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6: RESERVED

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Marathon Bancorp, Inc. /MD/ MBBC US Equity☆

MBBC · 10-K · period ended 2021-06-30

ITEM 1A: RISK FACTORS

ITEM 1B: UNRESOLVED STAFF COMMENTS

ITEM 2: PROPERTIES

ITEM 3: LEGAL PROCEEDINGS

ITEM 4: MINE SAFETY DISCLOSURE

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6: RESERVED

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Marathon Bancorp, Inc. /MD/ MBBC US Equity