Annual Report for Fiscal Year Ending June 30, 2025 (Form 10-K)

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. However, in recent years, we have increased our focus on the origination of commercial real estate loans, multi-family real estate loans and commercial business loans, which generally provide higher returns than one-to four-family residential mortgage loans, have shorter durations and are often originated with adjustable rates of interest.

Our results of operations depend primarily on our net interest income. 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. 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. Noninterest expense consists primarily of compensation and benefits, occupancy and equipment, data processing, professional fees, marketing, office supplies, federal deposit insurance premiums, and foreclosed assets. Our results of operations also may be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.

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.

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. Our non-performing assetstotaled $211,000, or 0.1% of total assets at June 30, 2025, and $173,000, or 0.1% of assets at June 30, 2024.

Other than our loans for the construction of one- tofour-family residential properties and the draw portion of our home equity lines of credit, we do not offer "interest only" mortgage loans on one- tofour-family residential properties (where the borrower pays interest but no principal for an initial period, after which the loan converts to a fully amortizing loan). We also do not offer loans that provide for negative amortization of principal, such as "Option ARM" loans, where the borrower can pay less than the interest owed on their loan, resulting in an increased principal balance during the life of the loan. We do not offer "subprime loans" (loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios) or Alt-A loans(traditionally defined as loans having less than full documentation). We also do not own any private label mortgage-backed securities that are collateralized by Alt-A, lowor 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. 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. For our association this additional limit (or "supplemental limit(s)") for one- tofour-family residential real estate, small business, or small farm loans is 10% of our 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 of its borrowers under the SLLP may not exceed 100% of the Association's capital and surplus. 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.

All of our mortgage-backed securities have been issued by Freddie Mac, Fannie Mae or Ginnie Mae, U.S. government-sponsored enterprises. These entities guarantee the payment of principal and interest on our mortgage-backed securities.

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. 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. An estimate of potential losses inherent in the loan portfolio are determined and an allowance for those losses is established by factors considered by the Company during the evaluation of the overall adequacy of the allowance which 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. 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.

The Company utilizes a current expected credit loss ("CECL") methodology which relies on segmenting the loan portfolio into pools with similar risks, tracking the performance of the pools over time, and using the data to determine pool loss experience. Based on our estimate of the level of allowance for credit losses required, we record a provision for credit losses as a charge to earnings to maintain the allowance for credit losses at an appropriate level. 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 Company also uses the CECL model to calculate the allowance for credit losses on off-balance sheetcredit exposures, such as undrawn amounts on lines of credit. While the allowance for credit losses on loans is reported as a contra-asset asset for loans, the allowance for credit losses on off-balance sheetcredit exposures is reported as a liability.

The allowance for credit losses is evaluated on a regular basis by management and reflects consideration of all significant factors that affect the collectability of the loan portfolio. This evaluation is inherently subjective as it requires estimates that are subject to significant revision as more information becomes available. Actual loan losses may be significantly more than the allowance for credit losses we have established, which could have a material negative effect on our financial results.

Income Tax Accounting.The provision for income taxes is based upon income in our consolidated financial statements, rather than amounts reported on our income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. The effect of a change in tax rates on our deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date. Under GAAP, a valuation allowance is required to be recognized if it is more likely than not that a deferred tax asset will not be realized. The determination as to whether we will be able to realize the deferred tax assets is highly subjective and dependent upon judgment concerning our evaluation of both positive and negative evidence, our forecasts of future income, applicable tax planning strategies, and assessments of current and future economic and business conditions. 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. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. Any required valuation allowance would result in additional income tax expense in the period and could have a significant impact on our future earnings. Positions taken in our tax returns may be subject to challenge by the taxing authorities upon examination. The benefit of an uncertain tax position is initially recognized in the financial statements only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. Differences between our position and the position of tax authorities could result in a reduction of a tax benefit or an increase to a tax liability, which could adversely affect our future income tax expense.

We believe our tax policies and practices are critical accounting policies because the determination of our tax provision and current and deferred tax assets and liabilities have a material impact on our net income and the carrying value of our assets. 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.

Selected Financial Data

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

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. 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.

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-maturitysecurities at June 30, 2025 or June 30, 2024.

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 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.

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. 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. 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-salesecurities, 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.

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.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.

Deposits decreased $5.9 million, or 0.8%, to $721.3 million at June 30, 2025 from $727.2 million at June 30, 2024. 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.

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. 

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. 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. The increase in accumulated other comprehensive income (loss) was primarily due to a decrease in unrealized depreciation on available-for-salesecurities, net of tax. 

Comparison of Operating Results for the Years Ended June 30, 2025 and 2024

General.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. 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. 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. 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. 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. 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 increase in interest income was due to a $2.8 million increase in interest on loans and a $49,000 increase in other interest income, partially offset by a $418,000 decrease in interest income on securities. 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. 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.

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 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.

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. 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.

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. 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.

Provision for Credit Losses. We establish provisions for credit losses, which are charged to operations in order to maintain the allowance for credit losses at a level we consider necessary to absorb potential credit losses inherent in our loan portfolio. The Company recorded a credit for credit losses on loans of $678,000 and a credit for credit losses on off-balancesheet 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-balancesheet credit exposures of $118,000 for a total provision for credit losses of $32,000 for the year ended June 30, 2024. 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-performingloans decreased during the year ended June 30, 2025, to $46,000, from $173,000 at June 30, 2024. During the year ended June 30, 2025, net charge-offs of $194,000 were recognized, while during the year ended June 30, 2024, $210,000 in net recoveries were recognized.

Provision for Credit Losses.

The following table sets forth information regarding the allowance for credit losses and nonperforming assets at the dates indicated:

Noninterest Income. 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. 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-salesecurities, a decrease in mortgage banking income, net, and a decrease in bank-owned life insurance income. 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-salesecurities 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. The increase in customer service fees was due to an increase in the number of overdraft and stop payment fees and the increase in insurance commissions was primarily the result of an increase in contingency commissions. The increase in brokerage commissions was the result of an increase in mutual fund commissions and management fees, while the increase in other noninterest income was mostly due to the receipt of an insurance settlement filed as a result of HELOC check fraud. The decrease in gain (loss) on sale of available-for-salesecurities 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.

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. 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%. 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. 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-offfor HELOC check fraud in the year ended June 30, 2024.

Income Tax Expense. 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.

Asset Quality and Allowance for Credit Losses

For information regarding asset quality and allowance for credit loss activity, see "Item 1. Business-Non-performingand Problem Assets" and "Item 1. Business-Allowance for Credit Losses."

Average Balances and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. Tax-equivalentyield adjustments have not been made for tax-exemptsecurities. All average balances are based on month-endbalances, which management deems to be representative of the operations of Iroquois Federal. Non-accrualloans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated to the changes due to rate and the changes due to volume in proportion to the relationship of the absolute dollar amounts of change in each, and there are no out-of-perioditems or adjustments.

Management of Market Risk

General. Because the majority of our assets and liabilities are sensitive to changes in interest rates, our most significant form of market risk is interest rate risk. We are vulnerable to an increase in interest rates to the extent that our interest-bearing liabilities mature or reprice more quickly than our interest-earning assets. As a result, a principal part of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established an Asset/Liability Management Committee pursuant to our Interest Rate Risk Management Policy that is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.

As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:

We currently do not engage in hedging activities, such as futures, options or swap transactions, or investing in high-risk mortgage derivatives, such as collateralized mortgage obligations, residual interests, real estate mortgage investment conduit residual interests or stripped mortgage backed securities.

In addition, changes in interest rates can affect the fair values of our financial instruments. 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). Earnings at risk represents the underlying threat to earnings associated with the continual repricing of a financial institution's various assets and liabilities in differing amounts, at different times, at different interest rate levels, all within the context of a continually changing, global interest rate environment. Our analysis of our earnings at risk is completed monthly on our net interest income for periods extending twelve and twenty-four months forward. Simulations include a base line analysis with no change in the current interest rate environment and alternative interest rate possibilities including rising and falling interest rates of 100, 200, 300, and 400 basis points in interest rates under ramp, shock, static and dynamic rate environments to generate the estimated impact on net interest income. Value at risk represents the threat to the underlying value of a financial institution's various assets and liabilities, and consequently its capital, given the potential for change in the interest rate structure in which these financial instruments might either reprice, or fail to reprice, in an environment of constantly changing interest rates. Our analysis of our value at risk is completed quarterly and the calculation measures the net effect on the market value of the bank's equity position when quantifying the impact when interest rates rise and fall for the range of -400 basispoints to +400 basis points. Details of our general ledger along with key data from each deposit, loan, investment, and borrowing are downloaded into our forecasting model, which takes into account both market and internal trends. We perform historical backtesting on a regular basis to confirm the validity of the model and assumptions, while third-party testing is done periodically. Details of our interest rate risk analysis are reviewed by the Asset/Liability Management Committee and presented to the Board on a quarterly basis.

The table below illustrates the simulated impact of immediate rate shocks, ranging from -400basis points to +400 basis points on our earnings at risk for net interest income at June 30, 2025 over one-yearand two-yearperiods. 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 -400basis points to +400 basis points.

Earnings at Risk

Net Economic Value of Equity (NEVE) at Risk

Liquidity and Capital Resources

Liquidity is the ability to meet current and future financial obligations of a short-term nature. 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. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. 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. We believe that we have enough sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2025.

We regularly monitor and adjust our investments in liquid assets based upon our assessment of: (i) expected loan demand; (ii) expected deposit flows; (iii) yields available on interest-earning deposits and securities; and (iv) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short- and medium-term securities.

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.

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. 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. Additionally, it is our intention as we continue to grow our commercial real estate portfolio, to emphasize lower cost deposit relationships with these commercial loan customers and thereby replace the higher cost certificates with lower cost deposits. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing activity is originating loans. 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. 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. 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.

Liquidity management is both a daily and long-term function of business management. 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. 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.

Iroquois Federal is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balancesheet items to broad risk categories. A community bank leverage ratio was established at 9% Tier 1 capital to total average assets, effective January 1, 2020. A "qualifying community bank" that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered "well capitalized" under Prompt Corrective Action statutes. 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.

Off-BalanceSheet Arrangements and Aggregate Contractual Obligations

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheetrisks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. For additional information, see Note 18 Commitments and Credit Risk of the notes to the financial statements included in this Annual Report on Form 10-K.

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

Recent Accounting Pronouncements

For a discussion of the impact of recent and future accounting pronouncements, see Note 1 of the notes to our consolidated financial statements beginning on page F-1of this Annual Report on Form 10-K.

Impact of Inflation and Changing Prices

Our consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP. U.S. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration of changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on our performance than the effects of inflation.