IF Bancorp Reports $2.7 Million Net Income for Six Months Ending December 31, 2025

IF Bancorp, Inc. reported its financial results for the six months ending December 31, 2025, revealing a net income of $2.7 million, a significant increase from $1.9 million during the same period in 2024. This growth was primarily driven by a 23.5% rise in net interest income, which reached $12.2 million, compared to $9.8 million in the prior year. The company's net interest margin improved to 2.98%, up from 2.32%, reflecting a favorable shift in the interest rate environment. However, total interest and dividend income decreased slightly to $21.6 million, down from $21.9 million, largely due to a decline in interest income from loans.

In terms of asset management, total assets decreased by 6.5% to $830.4 million, down from $887.7 million at the end of June 2025. This decline was attributed to a $41.3 million reduction in net loans receivable, which fell to $592.3 million. The decrease in loans was driven by significant reductions in multi-family and commercial real estate loans, while one- to four-family loans saw a modest increase. The company also experienced a notable drop in deposits, which fell by 9.9% to $649.6 million, primarily due to the withdrawal of a large public entity's funds.

Operationally, IF Bancorp's non-performing loans increased to $2.0 million, representing 0.3% of total loans, compared to just $46,000 at the end of June 2025. The allowance for credit losses was adjusted to $6.5 million, or 1.09% of total loans, reflecting management's assessment of potential losses in the current economic climate. The company maintained a strong capital position, categorized as "well capitalized" under regulatory requirements, with a Community Bank Leverage Ratio of 10.9%.

Strategically, IF Bancorp announced a merger agreement with ServBanc Holdco, Inc., valued at approximately $89.8 million, expected to close around March 12, 2026. This merger is anticipated to enhance the company's market position and operational capabilities. The company continues to focus on conservative loan underwriting practices, which have historically resulted in low levels of non-performing assets, despite the recent uptick in non-performing loans.

Looking ahead, IF Bancorp's management remains cautious about the economic environment and its potential impact on loan performance and credit quality. The company is committed to maintaining adequate liquidity and capital levels to support its operations and growth strategies, while also navigating the challenges posed by fluctuating market conditions.