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What changed in IF Bancorp, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of IF Bancorp, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+295 added−318 removedSource: 10-K (2025-09-11) vs 10-K (2024-09-11)

Top changes in IF Bancorp, Inc.'s 2025 10-K

295 paragraphs added · 318 removed · 268 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

147 edited+11 added−21 removed168 unchanged
Biggest changeWe had one loan that was delinquent 90 days or greater and still accruing interest at June 30, 2024, and we had no loans that were delinquent 90 days or greater and still accruing interest at June 30, 2023. 11 Table of Contents At June 30, 2024 2023 (Dollars in thousands) Non-accrual loans: Real estate loans: One- to four-family (1) $ — $ — Multi-family — — Commercial 150 — Home equity lines of credit — — Construction — — Commercial — 115 Consumer — 2 Total non-accrual loans 150 117 Loans delinquent 90 days or greater and still accruing: Real estate loans: One- to four-family (1) — — Multi-family — — Commercial — — Home equity line of credit — — Construction — — Commercial — — Consumer 23 — Total loans delinquent 90 days or greater and still accruing 23 — Total non-performing loans 173 117 Performing troubled debt restructurings n/a 215 Performing loan modifications for borrowers with financial difficulties 385 n/a Total non-performing loans and performing troubled debt restructurings or loan modifications for borrowers with financial difficulties $ 558 $ 332 Other real estate owned and foreclosed assets: Real estate loans: One- to four-family (1) — 25 Multi-family — — Commercial — — Home equity lines of credit — — Construction — — Commercial — — Consumer — 6 Total other real estate owned and foreclosed assets — 31 Total non-performing assets $ 173 $ 148 Ratios: Non-performing loans to total loans 0.03 % 0.02 % Non-performing assets to total assets 0.02 % 0.02 % (1) Includes home equity loans.
Biggest changeAt June 30, 2025 2024 (Dollars in thousands) Non-accrual loans: Real estate loans: One- to four-family $ — $ — Multi-family — — Commercial — 150 Home equity lines of credit — — Construction — — Commercial — — Consumer 17 — Total non-accrual loans 17 150 Loans delinquent 90 days or greater and still accruing: Real estate loans: One- to four-family 29 — Multi-family — — Commercial — — Home equity line of credit — — Construction — — Commercial — — Consumer — 23 Total loans delinquent 90 days or greater and still accruing 29 23 Total non-performing loans 46 173 Performing loan modifications for borrowers with financial difficulties — 385 Total non-performing loans and performing loan modifications for borrowers with financial difficulties $ 46 $ 558 Other real estate owned and foreclosed assets: Real estate loans: One- to four-family 165 — Multi-family — — Commercial — — Home equity lines of credit — — Construction — — Commercial — — Consumer — — Total other real estate owned and foreclosed assets 165 — Total non-performing assets $ 211 $ 173 Ratios: Non-performing loans to total loans 0.01 % 0.03 % Non-performing assets to total assets 0.02 % 0.02 % At June 30, 2025, our non-accrual loans totaled $17,000.
In addition, the total outstanding amount of the Association’s loans or extensions of credit or parts of loans and extensions of credit made to all of its borrowers under the SLLP may not exceed 100% of the Association’s capital and surplus.
In addition, the total outstanding amount of the Association’s loans or extensions of credit or parts of loans and extensions of credit made to all its borrowers under the SLLP may not exceed 100% of the Association’s capital and surplus.
We require title insurance on all of our one- to four-family residential mortgage loans, and we also require that borrowers maintain fire and extended coverage casualty insurance in an amount at least equal to the lesser of the loan balance or the replacement cost of the improvements. We also require flood insurance, as applicable.
We require title insurance on all our one- to four-family residential mortgage loans, and we also require that borrowers maintain fire and extended coverage casualty insurance in an amount at least equal to the lesser of the loan balance or the replacement cost of the improvements. We also require flood insurance, as applicable.
When making commercial business loans, we consider the financial statements, lending history and debt service capabilities of the borrower (generally requiring a minimum ratio of 120%), the projected cash flows of the business and the value of the collateral, if any. Virtually all of our loans are guaranteed by the principals of the borrower.
When making commercial business loans, we consider the financial statements, lending history and debt service capabilities of the borrower (generally requiring a minimum ratio of 120%), the projected cash flows of the business and the value of the collateral, if any. Virtually all our loans are guaranteed by the principals of the borrower.
The operations of Iroquois Federal also are subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; 28 Table of Contents • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; • The USA PATRIOT Act, which requires savings banks to, among other things, establish broadened anti-money laundering compliance programs, and due diligence policies and controls to ensure the detection and reporting of money laundering.
The operations of Iroquois Federal also are subject to the: • Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; 28 Table of Contents • Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; • Check Clearing for the 21 st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; • The USA PATRIOT Act, which requires savings banks to, among other things, establish broadened anti-money laundering compliance programs, and due diligence policies and controls to ensure the detection and reporting of money laundering.
The Federal Reserve Board is prohibited from approving any acquisition that would result in a multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions: • the approval of interstate supervisory acquisitions by savings and loan holding companies; and • the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.
The Federal Reserve Board is prohibited from approving any acquisition that would result in multiple savings and loan holding company controlling savings institutions in more than one state, subject to two exceptions: • the approval of interstate supervisory acquisitions by savings and loan holding companies; and • the acquisition of a savings institution in another state if the laws of the state of the target savings institution specifically permit such acquisition.
Assets (or portions of assets) classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that do not expose us to risk sufficient to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve our close attention, are required to be designated as watch.
Assets (or portions of assets) classified as loss are considered uncollectible and of such little value that their continuance as assets is not warranted. Assets that do not expose us to sufficient risk to warrant classification in one of the aforementioned categories, but which possess potential weaknesses that deserve our close attention, are required to be designated as watch.
Non-performing and Problem Assets For all of our loans, once a loan is 15 days delinquent, a past due notice is mailed. Past due notices continue to be mailed monthly in the event the account is not brought current. Prior to the time a loan is 30 days past due, we attempt to contact the borrower by telephone.
Non-performing and Problem Assets For all our loans, once a loan is 15 days delinquent, a past due notice is mailed. Past due notices continue to be mailed monthly in the event the account is not brought current. Prior to the time a loan is 30 days past due, we attempt to contact the borrower by telephone.
Such required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. Holding Company Regulation General . IF Bancorp is a unitary savings and loan holding company within the meaning of Home Owners’ Loan Act.
Such required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. Holding Company Regulations General. IF Bancorp is a unitary savings and loan holding company within the meaning of Home Owners’ Loan Act.
Federal savings banks are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.
Federal savings banks are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtains some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.
Although the effective date of the final rule is April 1, 2024, the applicability date for most of the provisions is January 1, 2026, with certain other requirements becoming applicable on January 1, 2027. Transactions with Related Parties.
Although the effective date of the final rule was April 1, 2024, the applicability date for most of the provisions is January 1, 2026, with certain other requirements becoming applicable on January 1, 2027. Transactions with Related Parties.
In assessing an institution’s capital adequacy, the OCC takes into consideration, not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual associations where necessary In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet all three of its minimum risk-based capital requirements: Common Equity Tier 1, Tier 1 capital and total capital.
In assessing an institution’s capital adequacy, the OCC takes into consideration, not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual associations where necessary. 23 Table of Contents In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions, including dividend payments and stock repurchases, and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet all three of its minimum risk-based capital requirements: Common Equity Tier 1, Tier 1 capital and total capital.
We periodically review current prepayment speeds to determine whether prepayment estimates require modification that could cause amortization or accretion adjustments. Also classified as agency mortgage-backed securities, are securities backed by debentures/loans for working capital to small businesses with limited or no access to private venture capital, and regulated by the Small Business Administration (SBA).
We periodically review current prepayment speeds to determine whether prepayment estimates require modification that could cause amortization or accretion adjustments. Also classified as agency mortgage-backed securities, are securities backed by debentures/loans for working capital to small businesses with limited or no access to private venture capital, and regulated by the Small Business Administration (“SBA”).
By Association policy, participation of any credit facilities in the SLLP is to be infrequent and all credit facilities are to be with prior Board approval. We originate a substantial portion of our fixed-rate one- to four-family residential mortgage loans for sale to the Federal Home Loan Bank of Chicago with servicing retained.
By Association policy, participation of any credit facilities in the SLLP is to be infrequent and all credit facilities are to be with prior Board approval. We originate a substantial portion of our fixed-rate one- to four-family residential mortgage loans for sale to the Federal Home Loan Bank of Chicago (“FHLB-Chicago”) with servicing retained.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Iroquois Federal opted into the community bank leverage ratio framework effective with the quarter ended March 31, 2020. At June 30, 2024, Iroquois Federal’s capital exceeded all applicable requirements. Loans to One Borrower.
A qualifying institution may opt in and out of the community bank leverage ratio framework on its quarterly call report. Iroquois Federal opted into the community bank leverage ratio framework effective with the quarter ended March 31, 2020. At June 30, 2025, Iroquois Federal’s capital exceeded all applicable requirements. Loans to One Borrower.
A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to regulatory approval, and certain additional activities authorized by federal regulations. As of June 30, 2024, IF Bancorp, Inc. has not elected financial holding company status.
A multiple savings and loan holding company is generally limited to activities permissible for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, subject to regulatory approval, and certain additional activities authorized by federal regulations. As of June 30, 2025, IF Bancorp, Inc. has not elected financial holding company status.
A savings bank must file an application for approval of a capital distribution if: • the total capital distributions for the applicable calendar year exceed the sum of the savings bank’s net income for that year to date plus the savings bank’s retained net income for the preceding two years; • the savings bank would not be at least adequately capitalized (as defined in the prompt corrective action regulations discussed below) following the distribution; • the distribution would violate any applicable statute, regulation, agreement or regulatory condition; or • the savings bank is not eligible for expedited treatment of its filings.
A savings bank must file an application for approval of a capital distribution if: • the total capital distributions for the applicable calendar year exceed the sum of the savings bank’s net income for that year to date plus the savings bank’s retained net income for the preceding two years; 24 Table of Contents • the savings bank would not be at least adequately capitalized (as defined in the prompt corrective action regulations discussed below) following the distribution; • the distribution would violate any applicable statute, regulation, agreement or regulatory condition; or • the savings bank is not eligible for expedited treatment of its filings.
See “—Loan Originations, Purchases, Sales, Participations and Servicing.” The Association’s legal lending limit to any one borrower is 15% of unimpaired capital and surplus. On July 30, 2012 our bank received approval from the Comptroller of the Currency to participate in the Supplemental Lending Limits Program (SLLP).
See “—Loan Originations, Purchases, Sales, Participations and Servicing.” The Association’s legal lending limit to any one borrower is 15% of unimpaired capital and surplus. On July 30, 2012 our bank received approval from the Comptroller of the Currency to participate in the Supplemental Lending Limits Program (“SLLP”).
Iroquois Federal uses the supplemental limit for its loans to one borrower infrequently, and all such credit facilities must receive prior approval by the Board of Directors. As of June 30, 2024, Iroquois Federal was in compliance with its loans-to-one borrower limitations. Qualified Thrift Lender Test.
Iroquois Federal uses the supplemental limit for its loans to one borrower infrequently, and all such credit facilities must receive prior approval by the Board of Directors. As of June 30, 2025, Iroquois Federal was in compliance with its loans-to-one borrower limitations. Qualified Thrift Lender Test.
At that date, our largest multi-family real estate loan had a balance of $11.9 million, was secured by an apartment building with a first floor retail space, and was performing in accordance with its terms. Home Equity Lines of Credit.
At that date, our largest multi-family real estate loan had a balance of $11.6 million, was secured by an apartment building with a first floor retail space and was performing in accordance with its terms. Home Equity Lines of Credit.
Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated other comprehensive income, up to 45% of net unrealized gains 23 Table of Contents on available-for-sale equity securities with readily determinable fair market values.
Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated other comprehensive income, up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values.
The following table sets forth the composition of our loan portfolio, including loans held for sale, by type of loan at the dates indicated. Amounts shown for one- to four-family loans include no loans held for sale at June 30, 2024 and 2023, respectively.
The following table sets forth the composition of our loan portfolio, including loans held for sale, by type of loan at the dates indicated. Amounts shown for one- to four-family loans include no loans held for sale at June 30, 2025 and 2024, respectively.
At June 30, 2024, Iroquois Federal met the criteria for being considered “well-capitalized.” “Undercapitalized” institutions must adhere to growth, capital distribution (including dividend) and other limitations and are required to submit a capital restoration plan.
At June 30, 2025, Iroquois Federal met the criteria for being considered “well-capitalized.” “Undercapitalized” institutions must adhere to growth, capital distribution (including dividend) and other limitations and are required to submit a capital restoration plan.
We also invest in securities, which historically have consisted primarily of securities issued by the U.S. government, U.S. government agencies and U.S. government-sponsored enterprises, as well as mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises. To a lesser extent, we also invest in municipal obligationsns.
We also invest in securities, which historically have consisted primarily of securities issued by the U.S. government, U.S. government agencies and U.S. government-sponsored enterprises, as well as mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises. To a lesser extent, we also invest in municipal obligations.
At June 30, 2024, the Company had two loan modifications for borrowers experiencing financial difficulties totaling $385,000, which consisted of $252,000 in commercial real estate loans and $133,000 in commercial business loans.
At June 30, 2025, the Company had no loan modifications for borrowers experiencing financial difficulties. At June 30, 2024, the Company had two loan modifications for borrowers experiencing financial difficulties totaling $385,000, which consisted of $252,000 in commercial real estate loans and $133,000 in commercial business loans.
The allowance for credit losses on most loans is measured on a collective (pool) basis for loans with similar risk characteristics. The Company estimates the appropriate level of allowance for credit losses for collateral-dependent loans by evaluating them individually.
The allowance for credit losses on most loans is measured on a collective (pool) basis for loans with similar risk characteristics. The Company estimates the appropriate level of allowance for credit losses for collateral-dependent loans by evaluating them separately.
The economy in our primary markets is fairly diversified, with employment in services, wholesale/retail trade, and government serving as the basis of the Iroquois County, Vermilion County, Champaign County and Kankakee County economies.
The economy in our primary market is fairly diversified, with employment in services, wholesale/retail trade, and government serving as the basis of the Iroquois County, Vermilion County, Champaign County and Kankakee economies.
Estimated fair value generally represents the sale price a buyer would be willing to pay on the basis of current market conditions, including normal terms from other financial institutions, less the estimated costs to sell the property. Holding costs and declines in fair value result in charges to expense after acquisition.
Estimated fair value generally represents the sale price a buyer would be willing to pay based on current market conditions, including normal terms from other financial institutions, less the estimated costs to sell the property. Holding costs and declines in fair value result in charges to expense after acquisition.
Iroquois Federal’s investment policy allows it to purchase municipal securities of credit-worthy issuers, and does not permit it to invest more than 10% of Iroquois Federal’s capital in the bonds of any single issuer. At June 30, 2024, we held $3.1 million of municipal securities, all of which were issued by local governments and school districts within our market area.
Iroquois Federal’s investment policy allows it to purchase municipal securities of credit-worthy issuers and does not permit it to invest more than 10% of Iroquois Federal’s capital in the bonds of any single issuer. At June 30, 2025, we held $1.7 million of municipal securities, all of which were issued by local governments and school districts within our market area.
For additional information regarding retained risk associated with these loans, see “Allowance for Credit Losses—Other Credit Risk.” 10 Table of Contents Loan Approval Procedures and Authority. Our lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by our Board of Directors.
For additional information regarding retained risk associated with these loans, see “Allowance for Credit Losses—Other Credit Risk.” Loan Approval Procedures and Authority. Our lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by our Board of Directors.
The following table sets forth the allowance for credit losses allocated by loan category and the percent of loans in each category to total loans at the dates indicated.
The following table sets forth the allowance for credit losses allocated by loan category and the percentage of loans in each category to total loans at the dates indicated.
Like other agency mortgage-backed securities, they are backed by the full faith and credit of the United States Government. They have zero risk weighting for purposes of calculating our risk-based capital level. With ten year maturities, these fixed rate bullet debentures pay interest semi-annually and principal at maturity.
Like other agency mortgage-backed securities, they are backed by the full faith and credit of the U.S. Government. They have zero risk weighting for purposes of calculating our risk-based capital level. With ten-year maturities, these fixed rate bullet debentures pay interest semi-annually and principal at maturity.
We generally originate both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac, which for our primary market area is currently $766,550 for single-family homes.
We generally originate both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac, which for our primary market area is currently $806,500 for single-family homes.
Iroquois Federal is also regulated, to a lesser extent, by the FDIC with respect to insurance of deposit accounts and the Federal Reserve Board, with respect to reserves to be maintained against deposits, the payment of dividends and other matters.
Iroquois Federal is also regulated, to a lesser extent, by the FDIC with respect to insurance of deposit accounts and the Board of Governors of the Federal Reserve (the “Federal Reserve Board”), with respect to reserves to be maintained against deposits, the payment of dividends and other matters.
We seek to minimize these risks through our underwriting standards. At June 30, 2024, our largest commercial business loan outstanding was for $4.5 million and was a commercial line of credit secured by business assets. At June 30, 2024, this loan was performing in accordance with its terms. Construction Loans.
We seek to minimize these risks through our underwriting standards. At June 30, 2025, our largest commercial business loan outstanding was for $5.8 million and was a commercial line of credit secured by business assets. At June 30, 2025, this loan was performing in accordance with its terms. Construction Loans.
IF Bancorp is an affiliate of Iroquois Federal because of its control of Iroquois Federal. In general, covered transactions between an insured depository institution and its affiliates are subject to certain quantitative limits and collateral requirements.
IF Bancorp is an affiliate of Iroquois Federal because of its control of Iroquois Federal. In general, covered transactions between an insured depository institution and its affiliates are subject to 25 Table of Contents certain quantitative limits and collateral requirements.
At June 30, 2024, substantially all of our commercial real estate and multi-family real estate loans were secured by properties located in Illinois, Indiana and Missouri. 7 Table of Contents Our commercial real estate mortgage loans are primarily secured by owner-occupied businesses, student housing, retail rentals, churches, office buildings, and farm loans secured by real estate.
At June 30, 2025, substantially all of our commercial real estate and multi-family real estate loans were secured by properties located in Illinois, Indiana and Missouri. 7 Table of Contents Our commercial real estate mortgage loans are primarily secured by owner-occupied businesses, retail rentals, churches, office buildings and farm loans secured by real estate.
We recognized interest income of $29,000 and $19,000 on such modified loans for the years ended June 30, 2024 and 2023, respectively. Delinquent Loans. The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates indicated.
We recognized interest income of $38,000 and $29,000 on such modified loans for the years ended June 30, 2025 and 2024, respectively. Delinquent Loans. The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates indicated.
See “—Loan Originations, Purchases, Sales, Participations and Servicing.” Our loan portfolio also includes commercial loan participations which are secured by both real estate and other business assets, primarily within 100 miles of our primary lending market. As of June 30, 2024 and 2023, the amount of such loans equaled $51.8 million and $46.1 million, respectively.
See “—Loan Originations, Purchases, Sales, Participations and Servicing.” Our loan portfolio also includes commercial loan participations which are secured by both real estate and other business assets, primarily within 100 miles of our primary lending market. As of June 30, 2025 and 2024, the amount of such loans equaled $55.8 million and $51.8 million, respectively.
In addition to loans originated by Iroquois Federal, our loan portfolio includes loan purchases which are secured by single family homes located primarily in the Midwest. As of June 30, 2024 and 2023, the amount of such loans equaled $253,000 and $652,000, respectively.
In addition to loans originated by Iroquois Federal, our loan portfolio includes loan purchases which are secured by single family homes located primarily in the Midwest. As of June 30, 2025 and 2024, the amount of such loans equaled $198,000 and $253,000, respectively.
When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received and only after the loan is returned to accrual status. The loans are typically returned to accrual status if unpaid principal and interest are repaid so that the loan is current. Non-Performing Assets.
When loans are placed on non-accrual status, unpaid accrued interest is fully reversed, and further income is recognized only to the extent received and only after the loan is returned to accrual status. The loans are typically returned to accrual status if unpaid principal and interest are repaid so that the loan is current. 11 Table of Contents Non-Performing Assets.
At June 30, 2024, we had $29.0 million in brokered certificates of deposit and no non-brokered certificates of deposit obtained through an internet listing service. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis.
At June 30, 2025, we had $29.7 million in brokered certificates of deposit and no non-brokered certificates of deposit obtained through an internet listing service. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis.
We generally underwrite our one- to four-family residential mortgage loans based on the applicant’s employment and credit history and the appraised value of the subject property. We also offer loans through various agency programs, such as the Mortgage Partnership Finance Program of the Federal Home Loan Bank of Chicago, which are originated for sale.
We generally underwrite our one- to four-family residential mortgage loans based on the applicant’s employment and credit history and the appraised value of the subject property. We also offer loans through various agency programs, such as the Mortgage Partnership Finance Program of the FHLB-Chicago, which are originated for sale.
After the initial fixed period, the interest rate will generally have a floor that is equal to the initial rate, but no less than 4.0% on our five and seven year adjustable-rate mortgage loans.
After the initial fixed period, the interest rate will generally have a floor that is equal to the initial rate, but no less than 4.0% on our five and seven year adjustable-rate mortgage loans. Adjustable-rate mortgage loans generally present different credit risks than fixed-rate mortgage loans.
Personnel At June 30, 2024, the Association had 109 full-time employees and 7 part-time employees, none of whom is represented by a collective bargaining unit. Iroquois Federal believes that its relationship with its employees is good. Subsidiaries IF Bancorp conducts its principal business activities through its wholly-owned subsidiary, Iroquois Federal Savings and Loan Association.
Personnel At June 30, 2025, the Association had 102 full-time employees and five part-time employees, none of whom is represented by a collective bargaining unit. Iroquois Federal believes that its relationship with its employees is good. Subsidiaries IF Bancorp conducts its principal business activities through its wholly-owned subsidiary, Iroquois Federal Savings and Loan Association.
We currently offer fixed-rate conventional mortgage loans with terms of up to 30 years that are fully amortizing with monthly loan payments. We also offer adjustable-rate mortgage loans that generally provide an initial fixed interest rate of five to seven years and annual interest rate adjustments thereafter.
We currently offer fixed-rate conventional mortgage loans with terms of up to 30 years that are fully amortizing with monthly loan payments. We also offer adjustable-rate mortgage loans that generally provide an initial fixed interest rate of five to seven years and annual interest rate adjustments thereafter. Our adjustable-rate mortgage loans amortize over a period of up to 30 years.
At June 30, 2024, our largest commercial real estate loan had an outstanding balance of $9.5 million, was secured by an industrial warehouse, and was performing in accordance with its terms.
At June 30, 2025, our largest commercial real estate loan had an outstanding balance of $9.1 million, was secured by an industrial warehouse, and was performing in accordance with its terms.
Assets classified as doubtful have all of the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
Assets classified as doubtful have all of the 13 Table of Contents weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full, based on currently existing facts, conditions and values, highly questionable and improbable.
Federal Securities Laws IF Bancorp common stock is registered with the SEC under the Exchange Act. IF Bancorp is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Exchange Act.
Federal Securities Laws IF Bancorp common stock is registered with the SEC under the Exchange Act. IF Bancorp is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Exchange Act. 30 Table of Contents
After the initial fixed period, the interest rate on adjustable-rate mortgage loans generally resets every year based upon the weekly average of a one-year U.S. Treasury Securities rate plus an applicable margin, subject to periodic and lifetime limitations on interest rate changes.
We offer adjustable-rate mortgage loans that are fully amortizing. After the initial fixed period, the interest rate on adjustable-rate mortgage loans generally resets every year based upon the weekly average of a one-year U.S. Treasury Securities rate plus an applicable margin, subject to periodic and lifetime limitations on interest rate changes.
Unemployment rates in our primary market have increased slightly over the last year. According to the Illinois Department of Employment Security, unemployment, on a non-seasonally adjusted basis, increased from 4.5% to 5.2% in Iroquois County, from 5.9% to 7.5% in Vermilion County, from 4.7% to 5.4% in Champaign County, and from 5.7% to 6.5% in Kankakee County.
Unemployment rates in our primary market have decreased over the last year. According to the Illinois Department of Employment Security, unemployment, on a non-seasonally adjusted basis, decreased from 5.2% to 3.8% in Iroquois County, from 7.5% to 4.6% in Vermilion County, from 5.4% to 3.2% in Champaign County, and from 6.5% to 4.5% in Kankakee County .
We sell a portion of our fixed-rate residential mortgage loans to the Federal Home Loan Bank of Chicago under its Mortgage Partnership Finance Xtra Program and its Mortgage Partnership Finance Original Program. We retain servicing on all loans sold under these programs.
We sell a portion of our fixed-rate residential mortgage loans to the FHLB-Chicago under its Mortgage Partnership Finance Xtra Program and its Mortgage Partnership Finance Original Program. We retain servicing on all loans sold under these programs.
At June 30, 2024, Iroquois Federal held 70.35% of its “portfolio assets” in “qualified thrift investments,” and satisfied the QTL Test. 24 Table of Contents Capital Distributions. Federal regulations govern capital distributions by a federal savings bank, which include cash dividends, stock repurchases, and other transactions charged to the capital account.
At June 30, 2025, Iroquois Federal held 70.64% of its “portfolio assets” in “qualified thrift investments,” and satisfied the QTL Test. Capital Distributions. Federal regulations govern capital distributions by a federal savings bank, which include cash dividends, stock repurchases, and other transactions charged to the capital account.
Iroquois Federal Savings and Loan Association has one wholly-owned subsidiary, L.C.I. Service Corporation, an insurance agency with offices in Watseka and Danville, Illinois. REGULATION AND SUPERVISION General Iroquois Federal is subject to regulation, examination and supervision by the Office of the Comptroller of the Currency (“OCC”).
Iroquois Federal Savings and Loan Association has one wholly-owned subsidiary, L.C.I. Service Corporation, an insurance agency with offices in Watseka and Danville, Illinois. REGULATION AND SUPERVISION General Iroquois Federal is subject to regulation, examination and supervision by the OCC.
At June 30, 2024, we had $14.9 million invested in bank-owned life insurance, which was 15.8% of our Tier 1 capital plus our allowance for credit losses. 19 Table of Contents Portfolio Maturities and Yields. The composition and maturities of the investment securities portfolio at June 30, 2024 are summarized in the following table.
At June 30, 2025, we had $15.3 million invested in bank-owned life insurance, which was 15.6 % of our Tier 1 capital plus our allowance for credit losses. 19 Table of Contents Portfolio Maturities and Yields. The composition and maturities of the investment securities portfolio at June 30, 2025 are summarized in the following table.
At June 30, 2024 and June 30, 2023, we had no deposits that were uninsured for any reason other than being in excess of the Federal Deposit Insurance Corporation limit. 21 Table of Contents The following table sets forth the maturity of our uninsured certificates of deposit at June 30, 2024.
At June 30, 2025 and June 30, 2024, we had no deposits that were uninsured for any reason other than being in excess of the FDIC limit. 21 Table of Contents The following table sets forth the maturity of our uninsured certificates of deposit at June 30, 2025.
The balance of loans sold under this program equaled approximately $133.8 million and $133.2 million as of June 30, 2024 and 2023, respectively. See “—One- to Four-Family Residential Real Estate Lending” below for more information regarding the origination of loans for sale to the Federal Home Loan Bank of Chicago. 4 Table of Contents Loan Portfolio Composition.
The balance of loans sold under this program equaled approximately $134.3 million and $133.8 million as of June 30, 2024 and 2024, respectively. See “—One- to Four-Family Residential Real Estate Lending” below for more information regarding the origination of loans for sale to the FHLB-Chicago. 4 Table of Contents Loan Portfolio Composition.
The Company’s most significant asset is its investment in Iroquois Federal. At June 30, 2024 and 2023, we had consolidated assets of $887.7 million and $849.0 million, consolidated deposits of $727.2 million and $735.3 million and consolidated equity of $73.9 million and $71.8 million, respectively. Iroquois Federal is a federally chartered savings association headquartered in Watseka, Illinois.
The Company’s most significant asset is its investment in Iroquois Federal. At June 30, 2025 and 2024, we had consolidated assets of $887.7 million and $887.7 million, consolidated deposits of $721.3 million and $727.2 million and consolidated equity of $81.8 million and $73.9 million, respectively. Iroquois Federal is a federally chartered savings association headquartered in Watseka, Illinois.
For the year ended June 30, 2024, gross interest income that would have been recorded had our loan modifications for borrowers experiencing financial difficulties been performing in accordance with their original terms was $29,000, while for the year ended June 30, 2023, gross interest income that would have been recorded had our troubled debt restructurings been performing in accordance with their original terms was $19,000.
For the year ended June 30, 2025, gross interest income that would have been recorded had our loan modifications for borrowers experiencing financial difficulties been performing in accordance with their original terms was $38,000, while for the year ended June 30, 2024, gross interest income that would have been recorded had our loan modifications for borrowers experiencing financial difficulties been performing in accordance with their original terms was $29,000.
In addition, our one- to four-family residential mortgage loans generally incorporate Fannie Mae, Freddie Mac or Federal Home Loan Bank of Chicago underwriting guidelines, as applicable. We originate both adjustable-rate and fixed-rate loans.
In addition, our one- to four-family residential mortgage loans generally incorporate Fannie Mae, Freddie Mac or FHLB-Chicago underwriting guidelines, as applicable. We originate both adjustable-rate and fixed-rate loans.
Loan Portfolio Maturities and Yields. The following table summarizes the scheduled repayments of our loan portfolio at June 30, 2024. We had no demand loans or loans having no stated repayment schedule or maturity at June 30, 2024.
The following table summarizes the scheduled repayments of our loan portfolio at June 30, 2025. We had no demand loans or loans having no stated repayment schedule or maturity at June 30, 2025.
In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period. In addition, as an integral part of their examination process, the Office of the Comptroller of the Currency will periodically review our allowance for credit losses.
In addition, a forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period. 15 Table of Contents In addition, as an integral part of their examination process, the OCC will periodically review our allowance for loan losses.
As a member of the Federal Home Loan Bank of Chicago, Iroquois Federal is required to acquire and hold shares of capital stock in the Federal Home Loan Bank. As of June 30, 2024, Iroquois Federal was in compliance with this requirement.
As a member of the FHLB-Chicago, Iroquois Federal is required to acquire and hold shares of capital stock in the FHLB-Chicago. As of June 30, 2025, Iroquois Federal was in compliance with this requirement.
At June 30, 2024, $26.9 million or 21.4% of our multi-family loans had adjustable rates. The rates on our adjustable-rate multi-family loans are generally tied to the prime rate of interest plus or minus an applicable margin and generally have a specified floor.
At June 30, 2025, $32.7 million or 25.9% of our multi-family loans had adjustable rates. The rates on our adjustable-rate multi-family loans are generally tied to the prime rate of interest plus or minus an applicable margin and generally have a specified floor.
Federal Home Loan Bank Stock. At June 30, 2024, we held $4.5 million of Federal Home Loan Bank of Chicago common stock in connection with our borrowing activities totaling $33.0 million. The common stock of the Federal Home Loan Bank is carried at cost and classified as a restricted equity security. Bank-Owned Life Insurance.
Federal Home Loan Bank Stock. At June 30, 2025, we held $5.2 million of FHLB-Chicago common stock in connection with our borrowing activities totaling $54.1 million. The common stock of the FHLB-Chicago is carried at cost and classified as a restricted equity security. Bank-Owned Life Insurance.
We have sold a substantial majority of our fixed-rate one- to four-family residential mortgage loans with terms of 15 years or greater. We sell fixed-rate residential mortgages to the Federal Home Loan Bank of Chicago, with servicing retained, under its Mortgage Partnership Finance Program.
We have sold a substantial majority of our fixed-rate one- to four-family residential mortgage loans with terms of 15 years or greater. We sell fixed-rate residential mortgages to the FHLB-Chicago, with servicing retained, under its Mortgage Partnership Finance Program. Since December 2008, we have sold loans to the FHLB-Chicago under its Mortgage Partnership Finance Xtra Program.
Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and 15 Table of Contents composition of nonaccrual, past due and loan modifications to borrowers experiencing financial difficulties, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates.
Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and troubled debt restructurings, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates.
On July 30, 2012, Iroquois Federal received approval from the OCC to participate in the Supplemental Lending Limits Program (SLLP).
On July 30, 2012, Iroquois Federal received approval from the OCC to participate in the SLLP.
Our deposit sources are primarily concentrated in the communities surrounding our banking offices located in Iroquois and Vermilion Counties, Illinois. As of June 30, 2023, the latest date for which FDIC data is available, we ranked second of 12 bank and thrift institutions with offices in Iroquois County with a 20.55% deposit market share.
Our deposit sources are primarily concentrated in the communities surrounding our banking offices located in Iroquois and Vermilion Counties, Illinois. As of June 30, 2024, the latest date for which Federal Deposit Insurance Corporation (“FDIC”) data is available, we ranked second of 12 bank and thrift institutions with offices in Iroquois County with a 21.47% deposit market share.
One- to Four-Family Residential Mortgage Loans . At June 30, 2024, $177.3 million, or 27.4% of our total loan portfolio, consisted of one- to four-family residential mortgage loans. We offer residential mortgage loans that conform to Fannie Mae and Freddie Mac underwriting standards (conforming loans) as well as non-conforming loans.
At June 30, 2025, $179.0 million, or 28.0% of our total loan portfolio, consisted of one- to four-family residential mortgage loans. We offer residential mortgage loans that conform to Fannie Mae and Freddie Mac underwriting standards (conforming loans) as well as non-conforming loans.
At June 30, 2024, approximately $3.4 million, or 1.9% of our one- to four-family mortgage loans were home equity loans secured by a second mortgage. Home equity loans secured by second mortgages have greater risk than one- to four-family residential mortgage loans or home equity loans secured by first mortgages.
At June 30, 2025, approximately $3.5 million, or 2.0% of our one- to four-family mortgage loans were home equity loans secured by a second mortgage. Home equity loans secured by second mortgages have greater risk than one- to four-family residential mortgage loans or home equity loans secured by first mortgages.
We sold $12.7 million in 14 Table of Contents loans under this program in the year ended June 30, 2024, and we continue to service approximately $93.6 million of these loans, for which our maximum potential credit risk is approximately $2.0 million.
We sold $14.6 million in loans under this program in the year ended June 30, 2025, and we continue to service approximately $98.7 million of these loans, for which our maximum potential credit risk is approximately $2.3 million.
Net recoveries for the year ended June 30, 2024 involved recoveries for commercial business loans and consumers loans, partially offset by a charge-off for consumer loans, while charge-offs during the year ended June 30, 2023, involved commercial business loans and consumer loans. In addition, non-performing loans increased to $173,000 at June 30, 2024 from $117,000 at June 30, 2023.
Net recoveries for the year ended June 30, 2024 involved recoveries for commercial business loans and consumers loans, partially offset by a charge-off for consumer loans. In addition, non-performing loans decreased to $46,000 at June 30, 2025 from $173,000 at June 30, 2024.
Our adjustable rate mortgage loans amortize over a period of up to 30 years. We offer one- to four-family residential mortgage loans with loan-to-value ratios up to 102%. Private mortgage insurance or participation in a government sponsored program is required for all one- to four-family residential mortgage loans with loan-to-value ratios exceeding 90%.
We offer one- to four-family residential mortgage loans with loan-to-value ratios up to 102%. Private mortgage insurance or participation in a government sponsored program is required for all one- to four-family residential mortgage loans with loan-to-value ratios exceeding 90%.
We also originate construction loans for one- to four-family residential properties and commercial real estate properties, including multi-family properties. At June 30, 2024, $33.7 million, or 5.2%, of our total loan portfolio, consisted of construction loans, which were secured by one- to four-family residential real estate, multi-family real estate properties and commercial real estate properties.
We also originate construction loans for one- to four-family residential properties and commercial real estate properties, including multi-family properties. At June 30, 2025, $22.9 million, or 3.6%, of our total loan portfolio, consisted of construction loans, which were secured by one- to four-family residential real estate, multi-family real estate properties and commercial real estate properties.
Census Bureau, Iroquois County had an estimated population of 26,000 in July 2023, a decrease of 12.1% since April 2010, Vermilion County had an estimated population of 72,000 in July 2023, a decrease of 12.2% since April 2010, and Kankakee County had an estimated population of 106,000 in July 2023, a decrease of 6.6% since April 2010, while Champaign County had an estimated population of 206,000 in July 2023, an increase of 2.3% since April 2010.
Census Bureau, Iroquois County had an estimated population of 26,000 in July 2024, a decrease of 12.3% since April 2010, Vermilion County had an estimated population of 71,000 in July 2024, a decrease of 12.9% since April 2010, and Kankakee County had an estimated population of 106,000 in July 2024, a decrease of 6.2% since April 2010, while Champaign County had an estimated population of 212,000 in July 2024, an increase of 5.6% since April 2010.
We invest in mortgage-backed securities insured or guaranteed by the U.S. Government or government sponsored enterprises. Mortgage-backed securities are created by pooling mortgages and issuing a security with an interest rate that is less than the interest rate on the underlying mortgages. Some securities pools are guaranteed as to payment of principal and interest to investors.
Mortgage-backed securities are created by pooling mortgages and issuing a security with an interest rate that is less than the interest rate on the underlying mortgages. Some securities pools are guaranteed as to payment of principal and interest to investors.
At June 30, 2024 and 2023, the amount of commercial loan participations totaled $51.8 million and $46.1 million, respectively, of which $34.9 million and $29.0 million, at June 30, 2024 and 2023 were outside our primary market area.
At June 30, 2025 and 2024, the amount of commercial loan participations totaled $55.8 million and $51.8 million, respectively, of which $38.9 million and $34.9 million, at June 30, 2025 and 2024 were outside our primary market area.
These also include consumer overdraft protection loans. At June 30, 2024, $7.7 million, or 1.2%, of our total loan portfolio, consisted of consumer loans. Loan Originations, Purchases, Participations, Sales and Servicing. Lending activities are conducted primarily by our loan personnel operating in each office. All loans that we originate are underwritten pursuant to our standard policies and procedures.
At June 30, 2025, $5.9 million, or 0.9%, of our total loan portfolio, consisted of consumer loans Loan Originations, Purchases, Participations, Sales and Servicing. Lending activities are conducted primarily by our loan personnel operating in each office. All loans that we originate are underwritten pursuant to our standard policies and procedures.
As of the same date, we ranked first of 15 bank and thrift institutions with offices in Vermilion County with a 26.96% deposit market share, we ranked 17 th of 29 bank and thrift institutions with offices in Champaign County, with a 0.83% deposit market share and we ranked 11 th of 13 bank and thrift institutions with offices in Kankakee County, with a 2.27% deposit market share.
As of the same date, we ranked first of 14 bank and thrift institutions with offices in Vermilion County with a 26.87% deposit market share, we ranked 18 th of 29 bank and thrift institutions with offices in Champaign County, with a 0.73% deposit market share and we ranked 11 th of 13 bank and thrift institutions with offices in Kankakee County, with a 2.40% deposit market share.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA deterioration in economic conditions, especially local conditions, could have the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations, and could more negatively affect us compare to a financial institution that operates with more geographic diversity: • demand for our products and services may decline; • loan delinquencies, problem assets and foreclosures may increase; • collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets and collateral associated with existing loans; and • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us.
Biggest changeAny deterioration in economic conditions, whether caused by national or local concerns, in particular any further economic slowdown in the markets we operate in, could result in the following consequences, any of which could hurt our business materially: loan delinquencies may increase; problem assets and foreclosures may increase; demand for our products and services may decrease; low cost or non-interest bearing deposits may decrease; and collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers’ borrowing power, and reducing the value of assets and collateral associated with our existing loans. 34 Table of Contents Our success significantly depends upon the growth in population, income levels, deposits, and housing starts in our markets.
The application of these capital requirements could, among other things, result in lower returns on equity, and result in regulatory actions if we are unable to comply with such requirements. In addition, our ability to pay dividends to could be limited if we do not meet a minimum capital conservation buffer required by the capital rules.
The application of these capital requirements could, among other things, result in lower returns on equity, and result in regulatory actions if we are unable to comply with such requirements. In addition, our ability to pay dividends could be limited if we do not meet a minimum capital conservation buffer required by the capital rules.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.” Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in the level of interest rates also may negatively affect the value of our assets and ultimately affect our earnings.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.” Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Changes in interest rates also may negatively affect the value of our assets and ultimately affect our earnings.
As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These additional sources consist primarily of FHLB advances, certificates of deposit and brokered certificates of deposit and, to a lesser extent, repurchase agreements.
As a part of our liquidity management, we use a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These additional sources consist primarily of FHLB-Chicago advances, certificates of deposit and brokered certificates of deposit and, to a lesser extent, repurchase agreements.
In addition, any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide security and authentication necessary to effect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.
In addition, any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide security and authentication necessary to affect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.
Threats to information security also exist in the processing of customer information through various other vendors and their personnel. The occurrence of any systems failures, interruptions, or breach of security could damage our reputation and result in a loss of customers and business thereby subjecting us to additional regulatory scrutiny, or could expose us to litigation and possible financial liability.
Threats to information security also exist in the processing of customer information through various other vendors and their personnel. 33 Table of Contents The occurrence of any systems failures, interruptions, or breach of security could damage our reputation and result in a loss of customers and business thereby subjecting us to additional regulatory scrutiny, or could expose us to litigation and possible financial liability.
Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery.
Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, breaches of our internal control systems and 32 Table of Contents compliance requirements, and business continuation and disaster recovery.
In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, we could suffer financial loss, face regulatory action, and/or suffer damage to our reputation. 32 Table of Contents Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation.
In the event of a breakdown in our internal control systems, improper operation of systems or improper employee actions, we could suffer financial loss, face regulatory action, and/or suffer damage to our reputation. Cyber-attacks or other security breaches could adversely affect our operations, net income or reputation.
Any of these events could have a material adverse effect on our financial condition and results of operations. 33 Table of Contents While our Board of Directors takes an active role in cybersecurity risk tolerance, we rely to a large degree on management and outside consultants in overseeing cybersecurity risk management.
Any of these events could have a material adverse effect on our financial condition and results of operations. While our Board of Directors takes an active role in cybersecurity risk tolerance, we rely to a large degree on management and outside consultants in overseeing cybersecurity risk management.
These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operations of a savings association, the classification of assets by a savings 36 Table of Contents association, and the adequacy of a savings association’s allowance for loan losses.
These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operations of a savings association, the classification of assets by a savings association, and the adequacy of a savings association’s allowance for loan losses.
If we are not able to compete effectively in our market area, our profitability may be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. Government responses to economic conditions may adversely affect our operations, financial condition and earnings.
If we cannot compete effectively in our market area, our profitability may be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitors may also limit our ability to increase our interest-earning assets. Government responses to economic conditions may adversely affect our operations, financial condition and earnings.
Because the repayment of commercial real estate, multi-family and commercial business 30 Table of Contents loans depends on the successful management and operation of the borrower’s properties or businesses, repayment of such loans can be affected by adverse conditions in the local real estate market or economy.
Because the repayment of commercial real estate, multi-family and commercial business loans depends on the successful management and operation of the borrower’s properties or businesses, repayment of such loans can be affected by adverse conditions in the local real estate market or economy.
If our underwriting of these participation loans is not sufficient, our non-performing loans may increase and our earnings may decrease. If our non-performing loans and other non-performing assets increase, or the value of our foreclosed assets decreases our earnings will decrease.
If our underwriting of these participation loans is not sufficient, our non-performing loans may increase and our earnings may decrease. 31 Table of Contents If our non-performing loans and other non-performing assets increase, or the value of our foreclosed assets decreases our earnings will decrease.
At June 30, 2024, our non-performing assets (which consist of non-accrual loans, loans 90 days or more delinquent and still accruing, and real estate owned) totaled $173,000. Our non-performing assets adversely affect our net income in various ways.
At June 30, 2025, our non-performing assets (which consist of non-accrual loans, loans 90 days or more delinquent and still accruing, and real estate owned) totaled $211,000. Our non-performing assets adversely affect our net income in various ways.
At June 30, 2024, our loan participations totaled $51.8 million, or 8.0% of our gross loans, most of which are within 100 miles of our primary lending market and consist primarily of multi-family, commercial real estate and commercial loans. Additionally, we expect to continue to use loan participations as a way to effectively deploy our capital.
At June 30, 2025, our loan participations totaled $55.8 million, or 8.7% of our gross loans, most of which are within 100 miles of our primary lending market and consist primarily of multi-family, commercial real estate and commercial loans. Additionally, we expect to continue to use loan participations as a way to effectively deploy our capital.
Our allowance for credit losses was 1.16% of total loans at June 30, 2024. Additions to our allowance could materially decrease our net income.
Our allowance for credit losses was 1.04% of total loans at June 30, 2025. Additions to our allowance could materially decrease our net income.
For example, as of June 30, 2024, 2.4% of our loans had remaining maturities of, or reprice after, 5 years or longer, while 90.4% of our certificates of deposit had remaining maturities of, or reprice in, one year or less. This imbalance can create significant earnings volatility because market interest rates change over time.
For example, as of June 30, 2025, 1.9% of our loans had remaining maturities of, or reprice after, 5 years or longer, while 87.1% of our certificates of deposit had remaining maturities of, or reprice in, one year or less. This imbalance can create significant earnings volatility because market interest rates change over time.
These risks could affect the performance and value of our loan and investment securities portfolios, which also would negatively affect our financial performance. We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations.
These risks could affect the performance and value of our loan and investment securities portfolios, which also would negatively affect our financial performance. We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations. We are subject to extensive regulation, supervision, and examination by the OCC and the FDIC.
In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions.
Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations. In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions.
We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
We may experience significant loan losses, which may have a material adverse effect on our operating results. We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
There could be substantial costs and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, brand or image, or our financial condition and results of our operations. Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.
There could be substantial costs and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, brand or image, or our financial condition and results of our operations. 36 Table of Contents
We are subject to extensive regulation, supervision, and examination by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation. Federal regulations govern the activities in which we may engage, and are primarily for the protection of depositors and the Deposit Insurance Fund.
Federal regulations govern the activities in which we may engage and are primarily for the protection of depositors and the Deposit Insurance Fund.
Adoption of the CECL methodology has substantially changed how the Company calculates its allowance for credit losses, and the ongoing impact of the adoption is dependent on various factors, including credit quality, macroeconomic forecasts and conditions, composition of our loans and securities porfolios, and other management judgements.
The Company utilizes the CECL methodology analysis to calculate its allowance for credit losses, and this model is dependent on various factors, including credit quality, macroeconomic forecasts and conditions, composition of our loans and securities portfolios, and other management judgements.
At June 30, 2024, $200.0 million, or 30.9%, of our total loan portfolio consisted of commercial real estate loans, $126.0 million, or 19.5%, of our total loan portfolio consisted of multi-family loans, and $91.8 million, or 14.2%, of our total loan portfolio consisted of commercial business loans.
At June 30, 2025, $201.6 million, or 31.5%, of our total loan portfolio consisted of commercial real estate loans, $126.1 million, or 19.71%, of our total loan portfolio consisted of multi-family loans, and $94.0 million, or 14.7%, of our total loan portfolio consisted of commercial business loans.
Further, the resolution of non-performing assets requires the active involvement of management, which can distract us from the overall supervision of operations and other income-producing activities of Iroquois Federal.
Further, the resolution of non-performing assets requires the active involvement of management, which can distract us from the overall supervision of operations and other income-producing activities of Iroquois Federal. Finally, if our estimate of the allowance for credit losses is inadequate, we will have to increase the allowance accordingly by recording a provision for credit losses.
Our customers may not repay their loans according to the original terms, and the collateral, if any, securing the payment of these loans may be insufficient to pay any remaining loan balance. We may experience significant loan losses, which may have a material adverse effect on our operating results.
If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings will decrease. Our customers may not repay their loans according to the original terms, and the collateral, if any, securing the payment of these loans may be insufficient to pay any remaining loan balance.
We operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions.
See “Regulation and Supervision—Federal Banking Regulation—Capital Requirements.” We face significant operational risks because the financial services business involves a high volume of transactions. We operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.” Increased interest rates and changes in secondary mortgage market conditions could reduce our earnings from our mortgage banking operations.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of Market Risk.” Changes in economic conditions, in particular an economic slowdown in the markets we operate in, could materially and negatively affect our business.
As a result, a prolonged period of secondary market illiquidity may reduce our loan mortgage production volume and could have a material adverse effect on our financial condition and results of operations. 34 Table of Contents Declines in the value of securities held in the investment portfolio may negatively affect the Company’s earnings, capital and liquidity.
Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which has and could continue to adversely affect our results of operations and financial condition. Declines in the value of securities held in the investment portfolio may negatively affect the Company’s earnings, capital and liquidity.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Strong traditional and non-traditional competition within our market areas may limit our growth and profitability. We face intense competition in making loans and attracting deposits.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Interruption of our customers’ supply chains and federal funding could negatively impact their business and operations and impact their ability to repay their loans.
Removed
Since our mutual-to-stock conversion in 2011 we have emphasized the origination of our commercial loans.
Added
Our business is directly impacted by factors such as economic, political and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies and inflation, all of which are beyond our control.
Removed
Finally, if our estimate of the allowance for credit losses is inadequate, we will have to increase the allowance accordingly by recording a provision for credit losses. 31 Table of Contents If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings will decrease.
Added
If the communities in which we operate do not grow or if prevailing economic conditions locally or nationally are unfavorable, our business may not succeed. An economic downturn or prolonged recession may result in the deterioration of the quality of our loan portfolio and reduce our level of deposits, which in turn would hurt its business.
Removed
The Company adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , effective July 1, 2023, which replaced the previous “incurred loss” model for measuring credit losses with an “expected life of loan loss” model referred to as the CECL model.
Added
If we experience an economic downturn or a prolonged economic recession occurs in the economy as a whole, borrowers will be less likely to repay their loans as scheduled. Unlike many larger institutions, we are not able to spread the risks of unfavorable local economic conditions across a large number of diversified economies.
Removed
See “Regulation and Supervision—Federal Banking Regulation—Capital Requirements.” Changes in accounting standards could affect reported earnings. The bodies responsible for establishing accounting standards, including the Financial Accounting Standards Board, the SEC and other regulatory bodies, periodically change the financial accounting and reporting guidance that governs the preparation of our financial statements.
Added
An economic downturn could, therefore, result in losses that materially and adversely affect our business. Inflation has had and may continue to have a negative effect on our results of operations and financial condition.
Removed
These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply new or revised guidance retroactively. We face significant operational risks because the financial services business involves a high volume of transactions.
Added
Inflation rose sharply at the end of 2021 and remained elevated through the first half of calendar 2024, before beginning to moderate in the latter half of 2024 and into calendar 2025. However, inflation levels continue to exceed the Federal Reserve’s long-term target of 2.0%.
Removed
Our mortgage banking income varies with movements in interest rates, and increases in interest rates could negatively affect our ability to originate loans in the same volume as we have in past years.
Added
Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
Removed
In addition to being affected by interest rates, the secondary mortgage markets are also subject to investor demand for residential mortgage loans and increased investor yield requirements for these loans. These conditions may fluctuate or worsen in the future. In light of current conditions, there is greater risk in retaining mortgage loans pending their sale to investors.
Added
Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of operations and financial condition.
Removed
The State of Illinois has significant financial difficulties, and this could adversely impact certain of our borrowers and the economic vitality of the state, which would have a negative impact on our business. The State of Illinois has significant financial difficulties, including material pension funding shortfalls.
Added
Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business, such as those resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, reductions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers’ supply chains, could have a negative impact on their business and ability to repay their borrowings with us.
Removed
Although the State of Illinois’ debt rating has been recently upgraded, it remains the lowest in the country.
Added
In the event of disruptions in our customers’ supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all.
Removed
These issues could impact the economic vitality of the state and the businesses operating there, encourage businesses to leave the State of Illinois, discourage new employers from starting or moving businesses to the state, and could result in an increase in the Illinois state income tax rate.
Added
Additionally, changes in distribution of federal funds or freezing of federal funds, including reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits. 35 Table of Contents Strong traditional and non-traditional competition within our market areas may limit our growth and profitability.
Removed
In addition, population outflow from the State of Illinois could affect our ability to attract and retain customers. Some of the markets we are in include significant university and healthcare presence, which rely heavily on state funding and contracts.
Added
We face intense competition in making loans and attracting deposits.
Removed
Payment delays by the State of Illinois to its vendors and government sponsored entities may have significant, negative effects on our markets, which could in turn adversely affect our financial condition and results of operations. In addition, adverse changes in agribusiness and capital goods exports could materially adversely affect downstate Illinois markets, which are heavily reliant upon these industries.
Removed
Delays in the payment of accounts receivable owed to borrowers that are employed by or who do business with these industries or the State of Illinois could impair their ability to repay their loans when due and negatively impact our business.
Removed
A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
Removed
Local economic conditions have a significant impact on the ability of our borrowers to repay loans and the value of the collateral securing loans.
Removed
Moreover, a significant decline in general economic conditions caused by inflation, recession, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond our control could further impact these local economic conditions and could 35 Table of Contents further negatively affect the financial results of our banking operations.
Removed
In addition, deflationary pressures, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance. Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations.
Removed
Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts. Consumers and businesses also may change their behavior on their own as a result of these concerns.
Removed
We and our customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns. We and our customers may face cost increases, asset value reductions, operating process changes, and the like.
Removed
The impact on our customers will likely vary depending on their specific attributes, including reliance on or role in carbon intensive activities. Among the impacts to us could be a drop in demand for our products and services, particularly in certain sectors.
Removed
In addition, we could face reductions in creditworthiness on the part of some customers or in the value of assets securing loans.
Removed
Our efforts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, may not be effective in protecting us from the negative impact of new laws and regulations or changes in consumer or business behavior. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe EVP and Information Security Officer and EVP Chief Operating Officer each have over 20 years’ experience managing information security and cybersecurity programs. 38 Table of Contents
Biggest changeThe EVP and Information Security Officer and EVP Chief Operating Officer each have over 20 years’ experience managing information security and cybersecurity programs Notwithstanding our defensive measures and processes, the threat posed by cyber-attacks is severe.
ITEM 1C. CYBERSECURITY The Company has established an Information Security Program (ISP) and various related policies, controls and procedures, to assess, identify and mitigate risks from cybersecurity threats. The ISP is based on the National Institute of Standards and Technology Cybersecurity Framework.
ITEM 1C. CYBERSECURITY The Company has established an Information Security Program (“ISP”) and various related policies, controls and procedures, to assess, identify and mitigate risks from cybersecurity threats. The ISP is based on the National Institute of Standards and Technology Cybersecurity Framework.
Critical information assets and processes have been identified, and internal and third-party controls have been implemented to prevent and detect external attacks. 37 Table of Contents These controls include computer scanning, intrusion prevention services, firewalls, end-point detection and response, data loss prevention, access controls, internal and external penetration testing, security monitoring, anti-virus, internet content filtering, server event logging, and firewall event management.
Critical information assets and processes have been identified, and internal and third-party controls have been implemented to prevent and detect external attacks. These controls include computer scanning, intrusion prevention services, firewalls, end-point detection and response, data loss prevention, access controls, internal and external penetration testing, security monitoring, anti-virus, internet content filtering, server event logging, and firewall event management.
Added
Our internal systems, processes and controls are designed to mitigate loss from cyber-attacks and, to date, risks from cybersecurity threats have not materially affected the Company. 37 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Year Opened Owned/ Leased Main Office: 201 East Cherry Street Watseka, Illinois 60970 1964 Owned Branches: 619 North Gilbert Street Danville, Illinois 61832 1973 Owned 175 East Fourth Avenue Clifton, Illinois 60927 1977 Owned 655 South Dixie Highway Hoopeston, Illinois 60942 2023 Owned 108 Arbours Drive Savoy, Illinois 61874 2014 Owned 421 Brown Boulevard Bourbonnais, Illinois 60914 2017 Owned 2411 Village Green Place Champaign, Illinois 61822 2018 Owned Loan Production Office: 3535 Highway 54 Osage Beach, Missouri 65065 2006 Owned Administrative Office: 204 East Cherry Street Watseka, Illinois 60970 2001 Owned Data Center: 183 Bethel Drive Bourbonnais, Illinois 60914 2019 Leased (expires March 31, 2025)
Biggest changeLocation Year Opened Owned/ Leased Main Office: 201 East Cherry Street Watseka, Illinois 60970 1964 Owned Branches: 619 North Gilbert Street Danville, Illinois 61832 1973 Owned 175 East Fourth Avenue Clifton, Illinois 60927 1977 Owned 655 South Dixie Highway Hoopeston, Illinois 60942 2023 Owned 108 Arbours Drive Savoy, Illinois 61874 2014 Owned 421 Brown Boulevard Bourbonnais, Illinois 60914 2017 Owned 2411 Village Green Place Champaign, Illinois 61822 2018 Owned Loan Production Office: 3535 Highway 54 Osage Beach, Missouri 65065 2006 Owned Administrative Office: 204 East Cherry Street Watseka, Illinois 60970 2001 Owned Data Center: 183 Bethel Drive Bourbonnais, Illinois 60914 2019 Leased (expires March 31, 2028) 38 Table of Contents
ITEM 2. PROPERTIES We operate from our main office, six branch offices, an administrative office, and a data center located in Iroquois, Vermilion, Champaign and Kankakee Counties, Illinois, and a loan production office in Osage Beach, Missouri. The net book value of our premises, land and equipment was $10.6 million at June 30, 2024.
ITEM 2. PROPERTIES We operate from our main office, six branch offices, an administrative office, and a data center located in Iroquois, Vermilion, Champaign and Kankakee Counties, Illinois, and a loan production office in Osage Beach, Missouri. The net book value of our premises, land and equipment was $10.2 million at June 30, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. 39 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeWe are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 40 PART II 40 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 40 ITEM 6. [RESERVED] 40 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 41 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 39 PART II 39 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 39 ITEM 6. [RESERVED] 39 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 40 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 51 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed2 unchanged
Biggest changeThe Company paid dividends of $0.20 per share in October 2022 and April 2023 and $0.20 per share in October 2023 and April 2024. The payment of dividends in the future will depend upon a number of factors, including capital requirements, the Company’s financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions.
Biggest changeThe Company paid dividends of $0.20 per share in October 2023 and April 2024 and $0.20 per share in October 2024 and April 2025. The payment of dividends in the future will depend upon a number of factors, including capital requirements, the Company’s financial condition and results of operations, tax considerations, statutory and regulatory limitations and general economic conditions.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and Dividend Information. The Company’s common stock is listed on the Nasdaq Capital Market (“NASDAQ”) under the trading symbol “IROQ.” Holders. As of September 1, 2024, there were 322 holders of record of the Company’s common stock. Dividends.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and Dividend Information. The Company’s common stock is listed on the Nasdaq Capital Market (“NASDAQ”) under the trading symbol “IROQ.” Holders. As of September 1, 2025, there were 298 holders of record of the Company’s common stock. Dividends.
There were no share repurchases during the year ended June 30, 2024. The Company does not have an active stock repurchase plan in place.
There were no share repurchases during the quarter ended June 30, 2025. The Company does not have an active stock repurchase plan in place.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

80 edited+4 added−7 removed48 unchanged
Biggest changeFor The Twelve Months Ended June 30, 2024 2023 Difference Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate (Dollars in thousands) Interest-earning assets: Loans: Real estate loans: One- to four-family (1) $ 173,701 $ 9,045 5.21 % $ 150,343 $ 6,675 4.44 % $ 23,358 $ 2,370 0.77 % Multi-family 113,146 5,216 4.61 95,481 3,990 4.18 17,665 1,226 0.43 Commercial 201,306 9,902 4.92 187,519 8,213 4.38 13,787 1,689 0.54 Home equity lines of credit 9,152 633 6.92 7,192 414 5.76 1,960 219 1.16 Construction loans 47,955 3,411 7.11 41,267 2,045 4.96 6,688 1,366 2.15 Commercial business loans 85,424 6,171 7.22 76,538 4,380 5.72 8,886 1,791 1.50 Consumer loans 8,070 448 5.55 9,021 389 4.31 (951 ) 59 1.24 Total loans 638,754 34,826 5.45 567,361 26,106 4.60 71,393 8,720 0.85 Securities: U.S. government, federal agency and government-sponsored enterprises 21,299 558 2.62 25,069 593 2.37 (3,770 ) (35 ) 0.25 U.S. government sponsored mortgage-backed securities 169,375 4,887 2.89 179,326 4,766 2.66 (9,951 ) 121 0.23 State and political subdivisions 3,222 97 3.01 3,550 106 2.99 (328 ) (9 ) 0.02 Total securities 193,896 5,542 2.86 207,945 5,465 2.63 (14,049 ) 77 0.23 Other 11,052 616 5.57 10,788 501 4.64 264 115 0.93 Total interest-earning assets 843,702 40,984 4.86 786,094 32,072 4.08 57,608 8,912 0.78 Noninterest-earning assets 39,711 41,149 (1,438 ) Total assets $ 883,413 $ 827,243 $ 56,170 Interest-bearing liabilities: Interest-bearing checking or NOW $ 102,926 153 0.15 $ 117,672 191 0.16 $ (14,746 ) (38 ) (0.01 ) Savings accounts 60,550 371 0.61 70,129 275 0.39 (9,579 ) 96 0.22 Money market accounts 161,591 4,827 2.99 171,990 2,476 1.44 (10,399 ) 2,351 1.55 Certificates of deposit 310,866 12,302 3.96 266,418 5,055 1.90 44,448 7,247 2.06 Total interest-bearing deposits 635,933 17,653 2.78 626,209 7,997 1.28 9,724 9,656 1.50 Borrowings and repurchase agreements 119,099 5,602 4.70 63,224 2,078 3.29 55,875 3,524 1.41 Total interest-bearing liabilities 755,032 23,255 3.08 689,433 10,075 1.46 65,599 13,180 1.62 Noninterest-bearing deposits 51,894 57,445 (5,551 ) Noninterest-bearing liabilities 5,898 9,284 (3,386 ) Total liabilities 812,824 756,162 56,662 Equity 70,589 71,081 (492 ) Total liabilities and equity 883,413 827,243 56,170 Net interest income $ 17,729 $ 21,997 $ (4,268 ) Net interest rate spread (2) 1.78 % 2.62 % (0.84 )% Net interest-earning assets (3) $ 88,670 $ 96,661 $ (7,991 ) Net interest margin (4) 2.10 % 2.80 % (0.70 )% Average interest-earning assets to interest-bearing liabilities 1.12 % 1.14 % (0.02 )% (1) Includes home equity loans.
Biggest changeFor The Twelve Months Ended June 30, 2025 2024 Difference Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate Average Outstanding Balance Interest Yield/ Rate (Dollars in thousands) Interest-earning assets: Loans: Real estate loans: One- to four-family $ 177,416 $ 10,025 5.65 % $ 173,701 $ 9,045 5.21 % $ 3,715 $ 980 0.44 % Multi-family 126,144 6,497 5.15 113,146 5,216 4.61 12,998 1,281 0.54 Commercial 203,670 10,671 5.24 201,306 9,902 4.92 2,364 769 0.32 Home equity lines of credit 10,023 708 7.06 9,152 633 6.92 871 75 0.15 Construction loans 29,156 2,264 7.77 47,955 3,411 7.11 (18,799 ) (1,147 ) 0.65 Commercial business loans 94,410 7,030 7.45 85,424 6,171 7.22 8,986 859 0.22 Consumer loans 6,769 433 6.40 8,070 448 5.55 (1,301 ) (15 ) 0.85 Total loans 647,588 37,628 5.81 638,754 34,826 5.45 8,834 2,802 0.36 Securities: U.S. government, federal agency and government-sponsored enterprises 17,567 443 2.52 21,299 558 2.62 (3,732 ) (115 ) (0.10 ) U.S. government sponsored mortgage-backed securities 166,160 4,592 2.76 169,375 4,887 2.89 (3,215 ) (295 ) (0.13 ) State and political subdivisions 2,812 89 3.17 3,222 97 3.01 (410 ) (8 ) 0.16 Total securities 186,539 5,124 2.75 193,896 5,542 2.86 (7,357 ) (418 ) (0.11 ) Other 9,818 665 6.77 11,052 616 5.57 (1,234 ) 49 1.20 Total interest-earning assets 843,945 43,417 5.14 843,702 40,984 4.86 243 2,433 0.28 Noninterest-earning assets 39,369 39,711 (342 ) Total assets $ 883,314 $ 883,413 $ (99 ) Interest-bearing liabilities: Interest-bearing checking or NOW $ 102,462 153 0.15 $ 102,926 153 0.15 $ (464 ) — 0.00 Savings accounts 56,030 170 0.30 60,550 371 0.61 (4,520 ) (201 ) (0.31 ) Money market accounts 158,797 4,414 2.78 161,591 4,827 2.99 (2,794 ) (413 ) (0.21 ) Certificates of deposit 318,849 13,128 4.12 310,866 12,302 3.96 7,983 826 0.16 Total interest-bearing deposits 636,138 17,865 2.81 635,933 17,653 2.78 205 212 0.03 Borrowings and repurchase agreements 114,236 4,738 4.15 119,099 5,602 4.70 (4,863 ) (864 ) (0.55 ) Total interest-bearing liabilities 750,374 22,603 3.01 755,032 23,255 3.08 (4,658 ) (652 ) (0.07 ) Noninterest-bearing deposits 47,674 51,894 (4,220 ) Noninterest-bearing liabilities 7,231 5,898 1,333 Total liabilities 805,279 812,824 (7,545 ) Equity 78,035 70,589 7,446 Total liabilities and equity 883,314 883,413 (99 ) Net interest income $ 20,814 $ 17,729 $ 3,085 Net interest rate spread (1) 2.13 % 1.78 % 0.35 % Net interest-earning assets (2) $ 93,571 $ 88,670 $ 4,901 Net interest margin (3) 2.47 % 2.10 % 0.37 % Average interest-earning assets to interest-bearing liabilities 1.12 % 1.12 % 0.00 % (1) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
The decrease was due to a decrease in net interest income and an increase in provisions for credit losses, partially offset by an increase in noninterest income, and a decrease in noninterest expense. Net Interest Income.
The increase was due to an increase in net interest income, an increase in noninterest income, and a decrease in provisions for credit losses, partially offset by an increase in noninterest expense. Net Interest Income.
The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns.
The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns.
Our results of operations also are affected by our provision for credit losses, noninterest income and noninterest expense. Noninterest income consists primarily of customer service fees, brokerage commission income, insurance commission income, net realized gains on loan sales, mortgage banking income, and income on bank-owned life insurance.
Our results of operations also are affected by our provision for loan losses, noninterest income and noninterest expense. Noninterest income consists primarily of customer service fees, brokerage commission income, insurance commission income, net realized gains on loan sales, mortgage banking income, and income on bank-owned life insurance.
The Association “opted in” to elect the Community Bank Leverage Ratio, effective with the quarter ended March 31, 2020. At June 30, 2024, Iroquois Federal exceeded all regulatory capital requirements. Iroquois Federal is considered “well capitalized” under regulatory guidelines. See Note 11 Regulatory Matters of the notes to the financial statements included in this Annual Report on Form 10-K .
The Association “opted in” to elect the Community Bank Leverage Ratio, effective with the quarter ended March 31, 2020. At June 30, 2025, Iroquois Federal exceeded all regulatory capital requirements. Iroquois Federal is considered “well capitalized” under regulatory guidelines. See Note 11 Regulatory Matters of the notes to the financial statements included in this Annual Report on Form 10-K .
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Overview We have grown our organization to $887.7 million in assets at June 30, 2024 from $377.2 million in assets at June 30, 2009. We have increased our assets primarily through increased investment securities and loan growth. Historically, we have operated as a traditional thrift institution.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Overview We have grown our organization to $887.7 million in assets at June 30, 2025 from $377.2 million in assets at June 30, 2009, primarily through increased investment securities and loan growth. Historically, we have operated as a traditional thrift institution.
Asset Quality and Allowance for Credit Losses For information regarding asset quality and allowance for credit loss activity, see “Item 1. Business—Non-performing and Problem Assets” and “Item 1. Business—Allowance for Credit Losses.” 47 Table of Contents Average Balances and Yields The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.
Asset Quality and Allowance for Credit Losses For information regarding asset quality and allowance for credit loss activity, see “Item 1. Business—Non-performing and Problem Assets” and “Item 1. Business—Allowance for Credit Losses.” 46 Table of Contents Average Balances and Yields The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated.
The decrease in premises and equipment was the result of ordinary depreciation, the decrease in deferred income taxes was mostly due to a decrease in unrealized losses on available-for-sale securities, and the decrease in other assets was primarily due to the receipt of a large accounts receivable item in the year ended June 30, 2024.
The decrease in premises and equipment was the result of ordinary depreciation, the decrease in deferred income taxes was mostly due to a decrease in unrealized losses on available-for-sale securities, and the decrease in other assets was primarily due to the receipt of a large accounts receivable item in the year ended June 30, 2025.
For additional information regarding the fair values of our assets and liabilities, see Note 16 to the Notes to our Consolidated Financial Statements. Interest Rate Risk Analysis We also perform an interest rate risk analysis that assesses our earnings at risk and our value at risk (or net economic value of equity at risk).
For additional information regarding the fair values of our assets and liabilities, see Note 18 to the Notes to our Consolidated Financial Statements. Interest Rate Risk Analysis We also perform an interest rate risk analysis that assesses our earnings at risk and our value at risk (or net economic value of equity at risk).
The table below illustrates the simulated impact of immediate rate shocks, ranging from -400 basis points to +400 basis points on our earnings at risk for net interest income at June 30, 2024 over one-year and two-year periods.
The table below illustrates the simulated impact of immediate rate shocks, ranging from -400 basis points to +400 basis points on our earnings at risk for net interest income at June 30, 2025 over one-year and two-year periods.
Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors. 51 Table of Contents Liquidity management is both a daily and long-term function of business management.
Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors, and by other factors. 50 Table of Contents Liquidity management is both a daily and long-term function of business management.
The net economic value of equity at risk table below sets forth our calculation of the estimated changes in our net economic value of equity at June 30, 2024 resulting from immediate rate shocks ranging from -400 basis points to +400 basis points.
The net economic value of equity at risk table below sets forth our calculation of the estimated changes in our net economic value of equity at June 30, 2025 resulting from immediate rate shocks ranging from -400 basis points to +400 basis points.
As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk: (i) sell the majority of our long-term, fixed-rate one- to four-family residential mortgage loans that we originate; (ii) lengthen the weighted average maturity of our liabilities through retail deposit pricing strategies and through longer-term wholesale funding sources such as brokered certificates of deposit and fixed-rate advances from the Federal Home Loan Bank of Chicago; (iii) invest in shorter- to medium-term investment securities and interest-earning time deposits; 49 Table of Contents (iv) originate commercial mortgage loans, including multi-family loans and land loans, commercial loans and consumer loans, which tend to have shorter terms and higher interest rates than one- to four-family residential mortgage loans, and which generate customer relationships that can result in larger noninterest-bearing demand deposit accounts; and (v) maintain adequate levels of capital.
As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk: (i) sell the majority of our long-term, fixed-rate one- to four-family residential mortgage loans that we originate; (ii) lengthen the weighted average maturity of our liabilities through retail deposit pricing strategies and through longer-term wholesale funding sources such as brokered certificates of deposit and fixed-rate advances from the FHLB-Chicago; (iii) invest in shorter- to medium-term investment securities and interest-earning time deposits; 48 Table of Contents (iv) originate commercial mortgage loans, including multi-family loans and land loans, commercial loans and consumer loans, which tend to have shorter terms and higher interest rates than one- to four-family residential mortgage loans, and which generate customer relationships that can result in larger noninterest-bearing demand deposit accounts; and (v) maintain adequate levels of capital.
Positive evidence includes the existence of taxes paid in available carryback years as well as the probability that taxable income will be generated in future periods, while negative evidence includes any cumulative losses in the current year and prior two years and general business and economic trends.
Positive evidence includes the existence of taxes paid in available carryback years as well as the probability that 41 Table of Contents taxable income will be generated in future periods, while negative evidence includes any cumulative losses in the current year and prior two years and general business and economic trends.
We believe our tax liabilities and assets are properly recorded in the consolidated financial statements at June 30, 2024 and no valuation allowance was necessary.
We believe our tax liabilities and assets are properly recorded in the consolidated financial statements at June 30, 2025 and no valuation allowance was necessary.
Our primary sources of funds consist of deposit inflows, loan sales and repayments, advances from the Federal Home Loan Bank of Chicago, and maturities of securities. We also utilize brokered certificates of deposit, internet funding, borrowings from the Federal Reserve Discount Window and BTFP, and sales of securities, when appropriate.
Our primary sources of funds consist of deposit inflows, loan sales and repayments, advances from the FHLB-Chicago, and maturities of securities. We also utilize brokered certificates of deposit, internet funding, borrowings from the Federal Reserve Discount Window and BTFP, and sales of securities, when appropriate.
We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2024.
We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2025.
In addition, the total outstanding amount of the Association’s loans or extensions of credit or parts of loans and extensions of credit made to all of its borrowers under the SLLP may not exceed 100% of the Association’s capital and surplus.
In addition, the total 40 Table of Contents outstanding amount of the Association’s loans or extensions of credit or parts of loans and extensions of credit made to all of its borrowers under the SLLP may not exceed 100% of the Association’s capital and surplus.
The increase in accumulated other comprehensive income (loss) was primarily due to a decrease in unrealized depreciation on available-for-sale securities, net of tax. 45 Table of Contents Comparison of Operating Results for the Years Ended June 30, 2024 and 2023 General.
The increase in accumulated other comprehensive income (loss) was primarily due to a decrease in unrealized depreciation on available-for-sale securities, net of tax. 44 Table of Contents Comparison of Operating Results for the Years Ended June 30, 2025 and 2024 General.
Equity increased primarily due to net income of $1.8 million, an increase of $1.1 million in accumulated other comprehensive income (loss), net of tax, and ESOP and stock equity plan activity of $563,000, partially offset by the accrual of approximately $1.3 million in dividends to our shareholders.
Equity increased primarily due to net income of $4.3 million, an increase of $4.3 million in accumulated other comprehensive income (loss), net of tax, and ESOP and stock equity plan activity of $608,000, partially offset by the accrual of approximately $1.3 million in dividends to our shareholders.
Our net income for the year ended June 30, 2024 was $1.8 million, compared to a net income of $4.7 million for the year ended June 30, 2023. Our emphasis on conservative loan underwriting has resulted in relatively low levels of non-performing assets.
Our net income for the year ended June 30, 2025 was $4.3 million, compared to a net income of $1.8 million for the year ended June 30, 2024. Our emphasis on conservative loan underwriting has resulted in relatively low levels of non-performing assets.
This program allows eligible savings associations to make additional residential real estate loans or extensions of credit to one borrower, small business loans or extensions of 41 Table of Contents credit to one borrower, or small farm loans or extensions of credit to one borrower.
This program allows eligible savings associations to make additional residential real estate loans or extensions of credit to one borrower, small business loans or extensions of credit to one borrower, or small farm loans or extensions of credit to one borrower.
Net interest income is the difference between the interest income we earn on our interest-earning assets, consisting primarily of loans, investment securities and other interest-earning assets, and the interest paid on our interest-bearing liabilities, consisting primarily of savings and transaction accounts, certificates of deposit, repurchase agreements, and Federal Home Loan Bank of Chicago advances.
Net interest income is the difference between the interest income we earn on our interest-earning assets, consisting primarily of loans, investment securities and other interest-earning assets, and the interest paid on our interest-bearing liabilities, consisting primarily of savings and transaction accounts, certificates of deposit, repurchase agreements, and FHLB-Chicago advances.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary 42 Table of Contents differences are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
At June 30, 2024, our investment in bank-owned life insurance was $14.9 million, an increase of $131,000 from $14.8 million at June 30, 2023. We invest in bank-owned life insurance to provide us with a funding source for our benefit plan obligations. Bank-owned life insurance also generally provides us noninterest income that is non-taxable.
At June 30, 2025, our investment in bank-owned life insurance was $15.3 million, an increase of $456,000 from $14.9 million at June 30, 2024. We invest in bank-owned life insurance to provide us with a funding source for our benefit plan obligations. Bank-owned life insurance also generally provides us with noninterest income that is non-taxable.
Our Asset/Liability Management Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. For the years ended June 30, 2024 and 2023, our liquidity ratio averaged 25.9% and 29.3% of our total assets, respectively.
Our Asset/Liability Management Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists to meet the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. For the years ended June 30, 2025 and 2024, our liquidity ratio averaged 24.1% and 25.9% of our total assets, respectively.
Our most liquid assets are cash and cash equivalents. The levels of these assets are affected by our operating, financing, lending and investing activities during any given period. At June 30, 2024, cash and cash equivalents totaled $9.6 million.
Our most liquid assets are cash and cash equivalents. The levels of these assets are affected by our operating, financing, lending and investing activities during any given period. At June 30, 2025, cash and cash equivalents totaled $20.1 million.
Certificates of deposit due within one year of June 30, 2024 totaled $289.1 million, or 39.8% of total deposits. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before June 30, 2025.
Certificates of deposit due within one year of June 30, 2025 totaled $272.6 million, or 37.8% of total deposits. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit due on or before June 30, 2026.
Federal regulations generally limit our investment in bank-owned life insurance to 25% of the Association’s Tier 1 capital plus our allowance for credit losses. At June 30, 2024, our investment of $14.9 million in bank-owned life insurance was 15.8% of our Tier 1 capital plus our allowance for credit losses.
Federal regulations generally limit our investment in bank-owned life insurance to 25% of the Association’s Tier 1 capital plus our allowance for credit losses. At June 30, 2025, our investment of $15.3 million in bank-owned life insurance was 15.6% of our Tier 1 capital plus our allowance for credit losses.
Our non-performing assets totaled $173,000, or 0.1% of total assets at June 30, 2024, and $148,000, or 0.1% of assets at June 30, 2023.
Our non-performing assets totaled $211,000, or 0.1% of total assets at June 30, 2025, and $173,000, or 0.1% of assets at June 30, 2024.
We recorded a provision for income tax of $565,000 for the year ended June 30, 2024, compared to a provision for income tax of $1.6 million for the year ended June 30, 2023, reflecting effective tax rates of 24.0% and 25.6%, respectively.
We recorded a provision for income tax of $1.6 million for the year ended June 30, 2025, compared to a provision for income tax of $565,000 for the year ended June 30, 2024, reflecting effective tax rates of 27.2% and 24.00%, respectively.
Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Statements of Cash Flows included in our financial statements. At June 30, 2024, we had $8.3 million in loan commitments outstanding, and $71.2 million in unused lines of credit to borrowers.
Our cash flows are derived from operating activities, investing activities and financing activities as reported in our Statements of Cash Flows included in our financial statements. At June 30, 2025, we had $7.6 million in loan commitments outstanding, and $69.7 million in unused lines of credit to borrowers.
At June 30, 2024 2023 2022 (In thousands) Selected Financial Condition Data: Total assets $ 887,745 $ 848,976 $ 857,558 Cash and cash equivalents 9,571 10,988 75,811 Investment securities available for sale 190,475 201,299 220,906 Federal Home Loan Bank of Chicago stock 4,499 3,127 3,142 Loans held for sale — — 227 Loans receivable, net 639,297 587,457 518,704 Foreclosed assets held for sale — 31 120 Bank-owned life insurance 14,892 14,761 14,373 Deposits 727,177 735,314 752,020 Federal Home Loan Bank of Chicago advances 32,999 19,500 15,000 Federal Reserve Bank Term Funding Program (BTFP) 25,250 — — Total equity 73,916 71,753 71,658 43 Table of Contents For the Fiscal Year Ended June 30, 2024 2023 2022 (In thousands) Selected Operating Data: Interest income $ 40,984 $ 32,072 $ 24,792 Interest expense 23,255 10,075 2,529 Net interest income 17,729 21,997 22,263 Provision for credit losses 32 (228 ) 492 Net interest income after provision (credit) for credit losses 17,697 22,225 21,771 Noninterest income 4,386 4,069 5,504 Noninterest expense 19,728 20,034 19,448 Income before income tax expense 2,355 6,260 7,827 Income tax expense 565 1,600 2,043 Net income $ 1,790 $ 4,660 $ 5,784 At or For the Fiscal Years Ended June 30, 2024 2023 2022 Selected Financial Ratios and Other Data: Performance Ratios: Return on average assets (net income as a percentage of average total assets) 0.20 % 0.56 % 0.74 % Return on average equity (net income as a percentage of average equity) 2.54 % 6.56 % 7.07 % Interest rate spread (1) 1.78 % 2.62 % 2.87 % Net interest margin (2) 2.10 % 2.80 % 2.93 % Efficiency ratio (3) 89.21 % 76.86 % 70.04 % Dividend payout ratio 70.18 % 26.67 % 18.62 % Noninterest expense to average total assets 2.23 % 2.42 % 2.49 % Average interest-earning assets to average interest-bearing liabilities 111.74 % 114.02 % 119.13 % Average equity to average total assets 7.99 % 8.59 % 10.46 % Asset Quality Ratios: Non-performing assets to total assets 0.02 % 0.02 % 0.15 % Non-performing loans to total loans 0.03 % 0.02 % 0.22 % Allowance for credit losses to non-performing loans 4329.57 % 6101.71 % 600.68 % Allowance for credit losses to total loans 1.16 % 1.20 % 1.34 % Net charge-offs (recoveries) to average loans (0.03 )% 0.01 % 0.01 % Capital Ratios: Community Bank Leverage Ratio: Company (4) 10.1 % 10.5 % 10.7 % Association (4) 9.2 % 9.5 % 9.8 % Tier 1 capital (to adjusted total assets): Company 10.1 % 10.5 % 10.7 % Association 9.2 % 9.5 % 9.8 % Tangible capital (to adjusted total assets): Company 10.1 % 10.5 % 10.7 % Association 9.2 % 9.5 % 9.8 % Other Data: Number of full-service offices 7 7 7 Full time equivalent employees 113 107 112 (1) The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
At June 30, 2025 2024 2023 (In thousands) Selected Financial Condition Data: Total assets $ 887,659 $ 887,745 $ 848,976 Cash and cash equivalents 20,092 9,571 10,988 Investment securities available for sale 187,753 190,475 201,299 Federal Home Loan Bank of Chicago stock 5,174 4,499 3,127 Loans receivable, net 633,603 639,297 587,457 Foreclosed assets held for sale 165 — 31 Bank-owned life insurance 15,348 14,892 14,761 Deposits 721,258 727,177 735,314 Federal Home Loan Bank of Chicago advances 54,124 32,999 19,500 Federal Reserve Bank Term Funding Program (BTFP) — 25,250 — Total equity 81,837 73,916 71,753 42 Table of Contents For the Fiscal Year Ended June 30, 2025 2024 2023 (In thousands) Selected Operating Data: Interest income $ 43,417 $ 40,984 $ 32,072 Interest expense 22,603 23,255 10,075 Net interest income 20,814 17,729 21,997 Provision (credit) for credit losses (701 ) 32 (228 ) Net interest income after provision (credit) for credit losses 21,515 17,697 22,225 Noninterest income 4,944 4,386 4,069 Noninterest expense 20,542 19,728 20,034 Income before income tax expense 5,917 2,355 6,260 Income tax expense 1,613 565 1,600 Net income $ 4,304 $ 1,790 $ 4,660 At or For the Fiscal Years Ended June 30, 2025 2024 2023 Selected Financial Ratios and Other Data: Performance Ratios: Return on average assets (net income as a percentage of average total assets) 0.49 % 0.20 % 0.56 % Return on average equity (net income as a percentage of average equity) 5.52 % 2.54 % 6.56 % Interest rate spread (1) 2.13 % 1.78 % 2.62 % Net interest margin (2) 2.47 % 2.10 % 2.80 % Efficiency ratio (3) 79.75 % 89.21 % 76.86 % Dividend payout ratio 29.2 % 70.18 % 26.67 % Noninterest expense to average total assets 2.33 % 2.23 % 2.42 % Average interest-earning assets to average interest-bearing liabilities 112.47 % 111.74 % 114.02 % Average equity to average total assets 8.83 % 7.99 % 8.59 % Asset Quality Ratios: Non-performing assets to total assets 0.02 % 0.02 % 0.02 % Non-performing loans to total loans 0.01 % 0.03 % 0.02 % Allowance for credit losses to non-performing loans 14406.52 % 4329.57 % 6101.71 % Allowance for credit losses to total loans 1.04 % 1.16 % 1.20 % Net charge-offs (recoveries) to average loans 0.03 % (0.03 )% 0.01 % Capital Ratios: Community Bank Leverage Ratio: Company (4) 10.7 % 10.1 % 10.5 % Association (4) 10.0 % 9.2 % 9.5 % Tier 1 capital (to adjusted total assets): Company 10.7 % 10.1 % 10.5 % Association 10.0 % 9.2 % 9.5 % Tangible capital (to adjusted total assets): Company 10.7 % 10.1 % 10.5 % Association 10.0 % 9.2 % 9.5 % Other Data: Number of full-service offices 7 7 7 Full time equivalent employees 105 113 107 (1) The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
The increase was primarily due to an increase in gain on sale of loans, an increase in net realized gain (loss) on sale of available-for-sale securities, an increase in insurance commissions, and an increase in bank-owned life insurance, partially offset by a decrease in brokerage commissions.
The increase was primarily due to an increase in customer service fees, an increase in insurance commissions, an increase in brokerage commissions, and an increase in other noninterest income, partially offset by a decrease in net realized gain (loss) on sale of available-for-sale securities, a decrease in mortgage banking income, net, and a decrease in bank-owned life insurance income.
We had a net decrease in total deposits of $8.1 million for the year ended June 30, 2024, and a net decrease in total deposits of $16.7 million for the year ended June 30, 2023.
We had a net decrease in total deposits of $5.9 million for the year ended June 30, 2025, and a net decrease in total deposits of $8.1 million for the year ended June 30, 2024.
The allowance for credit losses was $7.5 million, or 1.16% of total loans, at June 30, 2024, compared to $7.1 million, or 1.20% of total loans, at June 30, 2023. Non-performing loans increased during the year ended June 30, 2024, to $173,000, from $117,000 at June 30, 2023.
The allowance for credit losses was $6.6 million, or 1.04% of total loans, at June 30, 2025, compared to $7.5 million, or 1.16% of total loans, at June 30, 2024. Non-performing loans decreased during the year ended June 30, 2025, to $46,000, from $173,000 at June 30, 2024.
Our net interest rate spread (the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities) was 1.78% and 2.62% for the years ended June 30, 2024 and 2023, respectively. Net interest income decreased to $17.7 million for the year ended June 30, 2024, from $22.0 million for the year ended June 30, 2023.
Our net interest rate spread (the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities) was 2.13% and 1.78% for the year ended June 30, 2025 and 2024, respectively. Net interest income increased to $20.8 million for the year ended June 30, 2025, from $17.7 million for the year ended June 30, 2024.
We also do not own any private label mortgage-backed securities that are collateralized by Alt-A, low or no documentation or subprime mortgage loans. The Association’s legal lending limit to any one borrower is 15% of unimpaired capital and surplus.
We also do not own any private label mortgage-backed securities that are collateralized by Alt-A, low or no documentation or subprime mortgage loans. The Association’s legal lending limit to any one borrower is 15% of unimpaired capital and surplus. On July 30, 2012 the Association received approval from the OCC to participate in the SLLP.
Investment securities, consisting entirely of securities available for sale, decreased $10.8 million, or 5.4%, to $190.5 million at June 30, 2024 from $201.3 million at June 30, 2023. We had no held-to-maturity securities at June 30, 2024 or June 30, 2023.
Investment securities, consisting entirely of securities available for sale, decreased $2.7 million, or 1.4%, to $187.8 million at June 30, 2025 from $190.5 million at June 30, 2024. We had no held-to-maturity securities at June 30, 2025 or June 30, 2024.
During the year ended June 30, 2024, net recoveries of $210,000 were recognized, while during the year ended June 30, 2023, $12,000 in net charge-offs were recognized. 46 Table of Contents The following table sets forth information regarding the allowance for credit losses and nonperforming assets at the dates indicated: Year Ended June 30, 2024 Year Ended June 30, 2023 Allowance to non-performing loans 4329.57 % 6101.71 % Allowance to total loans outstanding at the end of the period 1.16 % 1.20 % Net charge-offs (recoveries) to average total loans outstanding during the period, annualized (0.03 )% 0.01 % Total non-performing loans to total loans 0.03 % 0.02 % Total non-performing assets to total assets 0.02 % 0.02 % Noninterest Income.
The following table sets forth information regarding the allowance for credit losses and nonperforming assets at the dates indicated: Year Ended June 30, 2025 Year Ended June 30, 2024 Allowance to non-performing loans 14406.52 % 4329.57 % Allowance to total loans outstanding at the end of the period 1.04 % 1.16 % Net charge-offs (recoveries) to average total loans outstanding during the period, annualized 0.03 % (0.03 )% Total non-performing loans to total loans 0.01 % 0.03 % Total non-performing assets to total assets 0.02 % 0.02 % Noninterest Income.
The increase in net loans receivable during this period was due primarily to a $36.4 million, or 40.6%, increase in multi-family loans, a $13.4 million, or 8.2%, increase in one- to four-family loans, a $12.1 million, or 15.2%, increase in commercial business loans, a $6.3 million, or 3.3%, increase in commercial real estate loans, and a $1.8 million, or 22.2%, increase in home equity lines of credit, partially offset by a $17.3 million, or 33.9%, decrease in construction loans, and a $655,000, or 7.8%, decrease in consumer loans.
The decrease in net loans receivable during this period was due primarily to a $10.8 million, or 32.0%, decrease in construction loans, and a $1.9 million, or 24.2%, decrease in consumer loans, partially offset by a $1.7 million, or 1.0%, increase in one- to four-family loans, a $1.5 million, or 0.8%, increase in commercial real estate loans, a $2.2 million, or 2.4%, increase in commercial business loans, $96,000, or 0.1%, increase in multi-family loans, and a $628,000, or 6.4%, increase in home equity lines of credit.
This increase was due to an increase in the average balance of borrowings to $119.1 million for the year ended June 30, 2024 from $63.2 million for the year ended June 30, 2023, and by a 141 basis point increase in the average cost of such borrowings to 4.70% for the year ended June 30, 2024 from 3.29% for the year ended June 30, 2023.
This decrease was due to a decrease in the average balance of borrowings to $114.2 million for the year ended June 30, 2025 from $119.1 million for the year ended June 30, 2024, and by a 55 basis point decrease in the average cost of such borrowings to 4.15% for the year ended June 30, 2025 from 4.70% for the year ended June 30, 2024.
This increase was due to a 150 basis point, or 117.4% increase in the average cost of interest-bearing deposits to 2.78% from 1.28%, and a $9.7 million increase in the average balance of interest-bearing deposits to $635.9 million for the year ended June 30, 2024, from $626.2 million for the year ended June 30, 2023.
This increase was due to a three basis point, or 1.2% increase in the average cost of interest-bearing deposits to 2.81% from 2.78%, and a $205,000 increase in the average balance of interest-bearing deposits to $636.1 million for the year ended June 30, 2025, from $635.9 million for the year ended June 30, 2024.
The increase in accrued interest receivable was primarily the result of an increase in the average balance and the average yield of interest-earning assets, and the increase in FHLB stock was the result of an increased stock requirement due to an increase in FHLB advances.
The increase in accrued interest receivable was primarily the result of an increase in the average balance and average yield of interest-earning assets, the increase in FHLB-Chicago stock was the result of an increased stock requirement due to an increase in FHLB-Chicago advances, and the increase in foreclosed assets held for sale was due to the foreclosure of eight properties for one customer.
We recorded a provision for credit losses of $32,000 for the year ended June 30, 2024, which includes a provision for credit losses on loans of $150,000 and a credit for credit losses on off-balance sheet credit exposures of $(118,000), compared to a provision (credit) for credit losses of $(228,000) for the year ended June 30, 2023.
The Company recorded a credit for credit losses on loans of $678,000 and a credit for credit losses on off-balance sheet credit exposures of $23,000, for a total credit for credit losses of $701,000 for the year ended June 30, 2025, compared to a provision for credit losses on loans of $150,000 and a credit for credit losses on off-balance sheet credit exposures of $118,000 for a total provision for credit losses of $32,000 for the year ended June 30, 2024.
Interest expense on interest-bearing deposits increased $9.7 million, or 120.7%, to $17.7 million for the year ended June 30, 2024, from $8.0 million for the year ended June 30, 2023.
Interest expense on interest-bearing deposits increased $212,000, or 1.2%, to $17.9 million for the year ended June 30, 2025, from $17.7 million for the year ended June 30, 2024.
At June 30, 2024, we had the ability to borrow up to an additional $73.2 million from the Federal Home Loan Bank of Chicago based on our collateral, we had $14.0 million available from CIBC Bank, and had the ability to borrow an additional $35.1 million from the Federal Reserve based upon current collateral pledged.
At June 30, 2025, we had the ability to borrow up to an additional $62.7 million from the FHLB-Chicago based on our collateral, we had $14.0 million available from a correspondent bank, and had the ability to borrow an additional $35.3 million from the Federal Reserve Bank of Chicago based upon current collateral pledged.
Noninterest income increased $317,000, or 7.8%, to $4.4 million for the year ended June 30, 2024 from $4.1 million for the year ended June 30, 2023.
Noninterest income increased $558,000, or 12.7%, to $4.9 million for the year ended June 30, 2025 from $4.4 million for the year ended June 30, 2024.
Our interest rate spread decreased 84 basis points to 1.78% for the year ended June 30, 2024 from 2.62% for the year ended June 30, 2023, and our net interest margin decreased by 70 basis points to 2.10% for the year ended June 30, 2024 from 2.80% for the year ended June 30, 2023. Interest and Dividend Income.
Our interest rate spread increased 35 basis points to 2.13% for the year ended June 30, 2025 from 1.78% for the year ended June 30, 2024, and our net interest margin increased by 37 basis points to 2.47% for the year ended June 30, 2025 from 2.10% for the year ended June 30, 2024. Interest and Dividend Income.
The increase was due to a 162 basis point increase in the cost of interest-bearing liabilities to 3.08% for the year ended June 30, 2024 from 1.46% for the year ended June 30, 2023, and a $65.6 million increase in the average balance of interest-bearing liabilities to $755.0 million for the year ended June 30, 2024 from $689.4 million for the year ended June 30, 2023.
The decrease was due to a seven basis point decrease in the cost of interest-bearing liabilities to 3.01% for the year ended June 30, 2025 from 3.08% for the year ended June 30, 2024, and a $4.7 million decrease in the average balance of interest-bearing liabilities to $750.4 million for the year ended June 30, 2025 from $755.0 million for the year ended June 30, 2024.
An increase of $8.7 million, or 33.4%, in interest on loans resulted from an 85 basis point, or 18.5%, increase in the average yield on loans to 5.45% from 4.60%, and a $71.4 million, or 12.6%, increase in the average balance of loans to $638.8 million for the year ended June 30, 2024 from $567.4 million for the year ended June 30, 2023.
An increase of $2.8 million, or 8.0%, in interest on loans resulted from a 36 basis point, or 6.6%, increase in the average yield on loans to 5.81% from 5.45%, and a $8.8 million, or 1.4%, increase in the average balance of loans to $647.6 million for the year ended June 30, 2025 from $638.8 million for the year ended June 30, 2024.
In addition, we issued 314,755 shares of our common stock to the Iroquois Federal Foundation. Critical Accounting Policies We consider accounting policies that require management to exercise significant judgment or discretion or make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies.
Critical Accounting Policies We consider accounting policies that require management to exercise significant judgment or discretion or make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies. We consider the following to be our critical accounting policies. Allowance for Credit Losses.
Net interest income decreased by $4.3 million, or 19.4%, to $17.7 million for the year ended June 30, 2024 from $22.0 million for the year ended June 30, 2023. The decrease was due to an increase of $13.2 million in interest expense, partially offset by an increase of $8.9 million in interest and dividend income.
Net interest income increased by $3.1 million, or 17.4%, to $20.8 million for the year ended June 30, 2025 from $17.7 million for the year ended June 30, 2024. The increase was due to an increase of $2.4 million in interest and dividend income and a decrease of $652,000 in interest expense.
During the years ended June 30, 2024 and 2023, we originated $215.2 million and $202.2 million of loans, respectively. Financing activities consist primarily of activity in deposit accounts and Federal Home Loan Bank advances and other borrowings.
During the years ended June 30, 2025 and 2024, we originated $163.1 million and $215.2 million of loans, respectively. Financing activities consist primarily of activity in deposit accounts and FHLB-Chicago advances.
(4) Net interest margin represents net interest income divided by average total interest-earning assets. 48 Table of Contents Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume).
(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. (3) Net interest margin represents net interest income divided by average total interest-earning assets. 47 Table of Contents Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated.
We consider the following to be our critical accounting policies. Allowance for Credit Losses. The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of the consolidated financial statements.
The Company believes the allowance for credit losses for loans is the critical accounting policy that requires the most significant judgments and assumptions used in the preparation of the consolidated financial statements. The allowance for credit losses for loans represents the best estimate of losses inherent in the existing loan portfolio.
A $65.6 million, or 9.5%, increase in the average balance of interest-bearing liabilities was partially offset by a $57.6 million, or 7.3%, increase in the average balance of interest earning assets.
A $243,000, or 0.1%, increase in the average balance of interest-earning assets was partially offset by a $4.7 million, or 0.6%, decrease in the average balance of interest-bearing liabilities.
Deposits decreased $8.1 million, or 1.1%, to $727.2 million at June 30, 2024 from $735.3 million at June 30, 2023.
Deposits decreased $5.9 million, or 0.8%, to $721.3 million at June 30, 2025 from $727.2 million at June 30, 2024.
The increase in gain (loss) on sale of available-for-sale securities was the result of securities sold at a larger loss in the year ended June 30, 2023, while the increase in insurance commissions was due to an increase in personal lines commissions, and the increase in bank-owned life insurance income was due to the receipt of death benefit proceeds in the year ended June 30, 2024.
The decrease in gain (loss) on sale of available-for-sale securities was due to a few securities sold at a net loss in the year ended June 30, 2025, the decrease in mortgage banking income, net was primarily due to a decrease in the valuation of mortgage servicing rights in the year ended June 30, 2025, and the decrease in bank-owned life insurance income was due to the receipt of death benefit proceeds in the year ended June 30, 2024.
Total equity increased $2.2 million, or 3.0%, to $73.9 million at June 30, 2024 from $71.8 million at June 30, 2023.
Total equity increased $7.9 million, or 10.7%, to $81.8 million at June 30, 2025 from $73.9 million at June 30, 2024.
Net income decreased $2.9 million, or 61.6%, to $1.8 million net income for the year ended June 30, 2024 from $4.7 million net income for the year ended June 30, 2023.
Net income increased $2.5 million, or 140.4%, to $4.3 million net income for the year ended June 30, 2025 from $1.8 million net income for the year ended June 30, 2024.
Savings, NOW, and money market accounts decreased $39.9 million, or 11.6%, to $304.2 million, noninterest bearing demand accounts decreased $4.3 million, or 4.0%, to $103.3 million, certificates of deposit, excluding brokered certificates of deposit, increased $26.6 million, or 10.1%, to $290.6 million, and brokered certificates of deposit increased $9.5 million, or 48.4%, to $29.0 million.
Savings, NOW, and money market accounts decreased $485,000, or 0.2%, to $303.7 million, noninterest bearing demand accounts increased $1.1 million, or 1.1%, to $104.4 million, certificates of deposit, excluding brokered certificates of deposit, decreased $7.3 million, or 2.5%, to $283.4 million, and brokered certificates of deposit increased $717,000, or 2.5%, to $29.7 million.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period. (3) The efficiency ratio represents noninterest expense as a percentage of the sum of net interest income and noninterest income. (4) Leverage Ratio (CBLR) is a capital requirement which became effective for the Association for the quarter ended March 31, 2020.
(2) The net interest margin represents net interest income as a percentage of average interest-earning assets for the period. (3) The efficiency ratio represents noninterest expense as a percentage of the sum of net interest income and noninterest income.
Between June 30, 2023 and June 30, 2024, accrued interest receivable increased $676,000 to $3.5 million, and Federal Home Loan Bank (FHLB) stock increased $1.4 million to $4.5 million, while premises and equipment decreased $512,000 to $10.6 million, deferred income taxes decreased $554,000 to $10.5 million, and other assets decreased $921,000 to $2.8 million.
Between June 30, 2024 and June 30, 2025, accrued interest receivable increased $88,000 to $3.5 million, FHLB-Chicago stock increased $675,000 to $5.2 million, and foreclosed assets held for sale increased $165,000 to $165,000, while premises and equipment decreased $379,000 to $10.2 million, deferred income taxes decreased $1.8 million to $8.7 million, and other assets decreased $1.3 million to $1.4 million.
Interest Expense. Interest expense increased $13.2 million, or 130.8%, to $23.3 million for the year ended June 30, 2024 from $10.1 million for the year ended June 30, 2023.
Interest Expense. Interest expense decreased $652,000, or 2.8%, to $22.6 million for the year ended June 30, 2025 from $23.3 million for the year ended June 30, 2024.
The CBLR is the ratio of Tier 1 capital to average assets. 44 Table of Contents Comparison of Financial Condition at June 30, 2024 and June 30, 2023 Total assets increased $38.8 million, or 4.6%, to $887.7 million at June 30, 2024 from $849.0 million at June 30, 2023.
(4) The Community Bank Leverage Ratio is the ratio of Tier 1 capital to average assets. 43 Table of Contents Comparison of Financial Condition at June 30, 2025 and June 30, 2024 Total assets were $887.7 million at both June 30, 2025 and 2024.
Interest expense on borrowings, including FHLB advances, the discount window and the BTFP at the Federal Reserve Bank, and repurchase agreements, increased $3.5 million, or 169.6%, to $5.6 million for the year ended June 30, 2024 from $2.1 million for the year ended June 30, 2023.
Interest expense on borrowings, including FHLB-Chicago advances, borrowings from the Federal Reserve Bank of Chicago, and repurchase agreements, decreased $864,000, or 15.4%, to $4.7 million for the year ended June 30, 2025 from $5.6 million for the year ended June 30, 2024.
The increase was primarily due to a $51.8 million increase in net loans, partially offset by a $10.8 million decrease in investments, and a $1.4 million decrease in cash and cash equivalents. Cash and cash equivalents decreased by $1.4 million to $9.6 million at June 30, 2024, from $11.0 million at June 30, 2023.
A $10.5 million increase in cash and cash equivalents, was mostly offset by a $5.7 million decrease in net loans and a $2.7 million decrease in investments. Cash and cash equivalents increased by $10.5 million to $20.1 million at June 30, 2025, from $9.6 million at June 30, 2024.
Interest on securities increased $77,000, or 1.4%, due to a 23 basis point, or 8.8%, increase in the average yield on securities to 2.86% for the year ended June 30, 2024 from 2.63% for the year ended June 30, 2023, partially offset by a $14.0 million decrease in the average balance of securities to $193.9 million at June 30, 2024 from $207.9 million at June 30, 2023.
Interest on securities decreased $418,000, or 7.5%, due to an 11 basis point, or 3.9%, decrease in the average yield on securities to 2.75% for the year ended June 30, 2025 from 2.86% for the year ended June 30, 2024, and by a $7.4 million decrease in the average balance of securities to $186.5 million at June 30, 2025 from $193.9 million at June 30, 2024.
If we require funds beyond our ability to generate them internally, borrowing agreements, which provide an additional source of funds, exist with the Federal Home Loan Bank of Chicago, Federal Reserve Discount Window, Federal Reserve BTFP, and CIBC Bank USA.
If we require funds beyond our ability to generate them internally, borrowing agreements, which provide an additional source of funds, exist with the FHLB-Chicago, Federal Reserve Bank of Chicago, and a correspondent bank. Borrowings at June 30, 2025 consisted of $54.1 million in FHLB-Chicago advances.
Repurchase agreements increased $7.0 million, or 64.8%, to $17.8 million. FHLB advances increased $13.5 million, or 69.2%, to $33.0 million at June 30, 2024 from $19.5 million at June 30, 2023. Borrowings from Federal Reserve BTFP increased $25.3 million to $25.3 million at June 30, 2024 from $0 at June 30, 2023.
Repurchase agreements increased $1.0 million, or 5.8%, to $18.8 million. FHLB-Chicago advances increased $21.1 million, or 64.0%, to $54.1 million at June 30, 2025 from $33.0 million at June 30, 2024. Borrowings from the Federal Reserve Bank of Chicago decreased $25.3 million to $0 at June 30, 2025 from $25.3 million at June 30, 2024.
Net loans receivable, including loans held for sale, increased by $51.8 million, or 8.8%, to $639.3 million at June 30, 2024 from $587.5 million at June 30, 2023.
Net loans receivable decreased by $5.7 million, or 0.9%, to $633.6 million at June 30, 2025 from $639.3 million at June 30, 2024.
The decrease in brokerage commissions was the result of a decrease in the amount of renewal commissions and management fees. Noninterest Expense. Noninterest expense decreased $306,000, or 1.5%, to $19.7 million for the year ended June 30, 2024 from $20.0 million for the year ended June 30, 2023.
Noninterest Expense. Noninterest expense increased $814,000, or 4.1%, to $20.5 million for the year ended June 30, 2025 from $19.7 million for the year ended June 30, 2024.
Our federal deposit insurance premium increased as a result of FDIC increasing the initial base deposit insurance assessment rate and other expenses increased as a result of a large charge-off for HELOC check fraud for which we have filed an insurance claim. Income Tax Expense .
Our federal deposit insurance premium decreased due to a decrease in the quarterly assessment multiplier as a result of improvement in the sum of financial ratio contributions to assessment rate, and other expenses decreased as a result of a large charge-off for HELOC check fraud in the year ended June 30, 2024. Income Tax Expense .
Interest and dividend income increased $8.9 million, or 27.8%, to $41.0 million for the year ended June 30, 2024 from $32.1 million for the year ended June 30, 2023. The increase in interest income was due to a $8.7 million increase in interest on loans, $77,000 increase in interest income on securities, and a $115,000 increase in other interest income.
Interest and dividend income increased $2.4 million, or 5.9%, to $43.4 million for the year ended June 30, 2025 from $41.0 million for the year ended June 30, 2024.
The largest components of this decrease were compensation and benefits, which decreased $700,000, or 5.5%, equipment expense, which decreased $314,000, or 12.6%, advertising, which decreased $129,000, or 24.0%, and supervisory examinations, which decreased $72,000, or 41.6%, and were partially offset by federal deposit insurance premium, which increased $241,000, or 72.4%, and other expense, which increased $668,000, or 40.8%.
The largest components of this increase were compensation and benefits, which increased $1.2 million, or 9.9%, equipment expense, which increased $102,000, or 4.7%, and professional services, which increased $94,000, or 22.1%, and were partially offset by federal deposit insurance premium, which decreased $98,000, or 17.1%, and other expenses, which decreased $574,000, or 24.9%.
For the year ended June 30, 2024, gains on the sale of loans increased $94,000 to $266,000, net realized gain (loss) on sale of available-for-sale securities increased $171,000 to $0, insurance commissions increased $94,000 to $745,000, and bank-owned life insurance increased $118,000 to $506,000, while brokerage commissions decreased $123,000 to $650,000.
For the year ended June 30, 2025, customer service fees increased $65,000 to $481,000, insurance commissions increased $122,000 to $867,000, brokerage commissions increased $70,000 to $720,000 and other noninterest income increased $457,000 to $1.7 million, while net realized gain (loss) on sale of available-for-sale securities decreased $71,000 to $(71,000), mortgage banking income, net decreased $64,000 to $274,000, and bank-owned life insurance income decreased $48,000 to $458,000 from the year ended June 30, 2024.
Earnings at Risk Change in Interest % Change in Net Interest Income Rates (basis points) One Year Two Years +400 (4.34 ) 1.37 +300 (2.73 ) 1.51 +200 (1.30 ) 1.55 +100 0.40 1.71 0 -100 1.26 (0.33 ) -200 2.71 (0.18 ) -300 4.82 0.45 -400 9.11 3.42 50 Table of Contents Net Economic Value of Equity (NEVE) at Risk Change in Interest Rates (basis points) Estimated NEVE % Change NEVE +400 93,968 (9.96 ) +300 96,401 (7.63 ) +200 99,017 (5.12 ) +100 102,053 (2.22 ) 0 104,365 -100 106,482 2.03 -200 108,727 4.18 -300 111,727 6.44 -400 112,716 8.00 Liquidity and Capital Resources Liquidity is the ability to meet current and future financial obligations of a short-term nature.
Earnings at Risk Change in Interest % Change in Net Interest Income Rates (basis points) One Year Two Years +400 0.56 3.36 +300 0.52 2.76 +200 0.48 2.02 +100 0.32 1.11 0 -100 (2.47 ) (3.38 ) -200 (2.93 ) (4.87 ) -300 (2.25 ) (5.27 ) -400 0.01 (4.07 ) 49 Table of Contents Net Economic Value of Equity (NEVE) at Risk Change in Interest Rates (basis points) Estimated NEVE % Change NEVE +400 111,526 (6.63 ) +300 113,103 (5.31 ) +200 114,794 (3.90 ) +100 117,008 (2.05 ) 0 119,451 -100 120,541 0.91 -200 122,226 2.32 -300 123,057 3.02 -400 123,476 3.37 Liquidity and Capital Resources Liquidity is the ability to meet current and future financial obligations of a short-term nature.
Fiscal Years Ended June 30, 2024 vs. 2023 Increase (Decrease) Due to Total Increase (Decrease) Volume Rate (In thousands) Interest-earning assets: Loans $ 3,532 $ 5,188 $ 8,720 Securities (383 ) 460 77 Other 12 103 115 Total interest-earning assets $ 3,161 $ 5,751 $ 8,912 Interest-bearing liabilities: Interest-bearing checking or NOW $ (25 ) $ (13 ) $ (38 ) Savings accounts (41 ) 137 96 Certificates of deposit 967 6,280 7,247 Money market accounts (159 ) 2,510 2,351 Total interest-bearing deposits 742 8,914 9,656 Federal Home Loan Bank advances 2,373 1,151 3,524 Total interest-bearing liabilities $ 3,115 $ 10,065 $ 13,180 Change in net interest income $ 46 $ (4,314 ) $ (4,268 ) Management of Market Risk General .
Fiscal Years Ended June 30, 2025 vs. 2024 Increase (Decrease) Due to Total Increase (Decrease) Volume Rate (In thousands) Interest-earning assets: Loans $ 485 $ 2,317 $ 2,802 Securities (208 ) (210 ) (418 ) Other (74 ) 123 49 Total interest-earning assets $ 203 $ 2,230 $ 2,433 Interest-bearing liabilities: Interest-bearing checking or NOW $ — $ — $ — Savings accounts (26 ) (175 ) (201 ) Certificates of deposit 321 505 826 Money market accounts (82 ) (331 ) (413 ) Total interest-bearing deposits 213 (1 ) 212 Federal Home Loan Bank advances (224 ) (640 ) (864 ) Total interest-bearing liabilities $ (11 ) $ (641 ) $ (652 ) Change in net interest income $ 214 $ 2,871 $ 3,085 Management of Market Risk General .
Compensation and benefits decreased due to a decrease in 401(k) profit sharing and annual incentive plan expenses, equipment expense decreased as a result of a decrease in the cost of core processing, advertising decreased as a result of an ad campaign that ran in the year ended June 30, 2023, and supervisory examinations decreased as a result of a reduction in assessments for community banks by the OCC.
Compensation and benefits increased due to normal salary increases, annual incentive plan increase and an increase in medical costs, while equipment expense increased as a result of an increase in the cost of core processing, and professional services increased due to additional legal and consulting services received during the year ended June 30, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item is incorporated herein by reference to Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operation .” 52 Table of Contents
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this item is incorporated herein by reference to Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operation .” 51 Table of Contents

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