UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10- QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission file number 0-12510
MARATHON BANCORP
(Exact name of registrant as specified in its charter)
California 95-3770539
(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification No.)
11150 West Olympic Boulevard, Los Angeles,California 90064
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310)996-9100
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of November 10, 1997, there were 3,811,819 shares of
no par Common Stock issued and outstanding.
Consolidated Statements of Financial Condition
Marathon Bancorp and Subsidiary
September 30, December 31,
(Unaudited) 1997 1996
Assets
Cash and Due from Banks 3,761,000 4,789,000
Federal funds sold 3,678,000 2,500,000
Cash and cash equivalents 7,439,000 7,289,000
Interest-bearing deposits with financial institutions 100,000 996,000
Securities available for sale 3,256,000 1,031,000
Securities held to maturity (aggregate market value of
$8,207,000 and $5,823,000 at September 30, 1997 and
December 31, 1996 respectively) 8,283,000 6,089,000
Loans 48,717,000 47,696,000
Reserve for credit losses (969,000) (1,088,000)
Net Loans 47,748,000 46,608,000
Other real estate owned, net 929,000 3,085,000
Premises and equipment, net 434,000 453,000
Accrued interest receivable 398,000 432,000
Other assets 434,000 410,000
Total Assets 69,021,000 66,393,000
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $30,119,000 $25,840,000
Interest-bearing 30,354,000 37,041,000
Total deposits 60,473,000 62,881,000
Accrued interest payable 74,000 114,000
Other liabilities 318,000 355,000
Total liabilities 60,865,000 63,350,000
Shareholders' equity:
Preferred shares - no par value, 1,000,000 shares
authorized,no shares issued and outstanding
Common shares - no par value, 9,000,000 shares authorized,
3,811,819 and 1,284,764 shares issued and outstanding
at September 30,1997 and December 31, 1996 respectively
13,606,000 8,080,000
Deficit (5,466,000) (5,045,000)
Net unrealized gain (loss) on securities
available for sale 16,000 8,000
Total shareholders' equity 8,156,000 3,043,000
Total Liabilities and Shareholders' Equity $69,021,000 $66,393,000
See accompanying notes to unaudited consolidated financial
statements.
Consolidated Statements of Operations
Marathon Bancorp and Subsidiary
Three months ended Nine months ended
September 30 September 30
(Unaudited) 1997 1996 1997 1996
Interest income:
Loans, including fees $1,199,000 $1,163,000 $2,995,000 $3,344,000
Investment securities - taxable 160,000 113,000 384,000 36,000
Federal funds sold 134,000 168,000 278,000 496,000
Deposits with financial institutions 2,000 14,000 26,000 33,000
Total interest income 1,495,000 1,458,000 3,683,000 4,240,000
Interest expense:
Deposits 265,000 308,000 837,000 894,000
Total interest expense 265,000 308,000 837,000 894,000
Net interest income before provisions
for loan losses 1,230,000 1,150,000 2,846,000 3,346,000
Provision for loan losses 15,000 25,000 165,000 25,000
Net interest income after provisions
for loan losses 1,215,000 1,125,000 2,681,000 3,321,000
Other operating income:
Service charges on deposit accounts 67,000 43,000 224,000 146,000
Other service charges and fees 17,000 6,000 29,000 12,000
Total other operating income 84,000 49,000 253,000 158,000
Other operating expenses:
Salaries and employee benefits 472,000 467,000 1,380,000 1,431,000
Net operating cost of other real
estate owned 13,000 211,000 31,000 272,000
Occupancy 135,000 62,000 426,000 235,000
Furniture and equipment 20,000 30,000 74,000 92,000
Professional services 181,000 117,000 347,000 456,000
Data processing services 74,000 122,000 246,000 360,000
Messenger and courier services 22,000 46,000 60,000 125,000
Insurance and assessments 101,000 44,000 286,000 239,000
Other expenses 255,000 73,000 504,000 266,000
Total other operating expenses 1,273,000 1,172,000 3,354,000 3,476,000
Income (loss) before income taxes $26,000 $2,000 $(420,000) $3,000
Income taxes 0 0 2,000 0
Net Income (loss) $26,000 $2,000 $(418,000) $3,000
Net income (loss) per share: $ 0.01 $ 0.00 $( .21) $ 0.00
Book value per share $ 2.14 $ 3.18
See accompanying notes to unaudited consolidated financial
statements.
Consolidated Statements of Cash Flows
Marathon Bancorp and Subsidiary
(Unaudited) Nine months ended
September 30,
Increase (decrease) in cash and cash equivalents 1997 1996
Cash flows from operating activities:
Interest received $3,664,000 $4,039,000
Service charges on deposit accounts and other fees received
253,000 158,000
Interest paid (877,000) (908,000)
Cash paid to suppliers and employees (3,436,000) (3,671,000)
Net cash (used) provided by operating activities (396,000) (382,000)
Cash flows from investing activities:
Net decrease (increase) in interest-bearing deposits with other
financial institutions 896,000 (497,000)
Proceeds from maturities of securities available for sale
20,000 2,257,000
Purchase of securities available for sale (2,116,000) 0
Proceeds from maturities of securities held to maturity
1,468,000 459,000
Purchase of securities held to maturity (3,710,000) 0
Net (increase) decrease in loans made to customers (1,229,000) 615,000
Proceeds from sale of other real estate owned 2,156,000 1,082,000
Purchases of furniture, fixtures and equipment (76,000) (1,000)
Net cash provided by investing activities (2,591,000) 3,745,000
Cash flows from financing activities:
Net decrease in noninterest-bearing and interest-bearing demand
deposits and money market and savings accounts (2,802,000) (195,000)
Net decrease in time certificates of deposits 412,000 (678,000)
Proceeds from the sale of common stock 5,527,000 0
Net cash provided (used) by financing activities 3,137,000 (873,000)
Net increase in cash and cash equivalents 150,000 2,490,000
Cash and cash equivalents at beginning of year 7,289,000 22,850,000
Cash and cash equivalents at end of period $7,439,000 $25,340,000
See accompanying notes to unaudited consolidated financial
statements.
(Continued)
Consolidated Statements of Cash Flows (Continued)
Marathon Bancorp and Subsidiary
(Unaudited) Nine months ended
September 30,
Reconciliation of net income (loss) to net cash provided (used)
by operating activities 1997 1996
Net income (loss) $(422,000) $3,000
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization expense 95,000 84,000
(Gain) loss on sale of other real estate owned (8,000) 69,000
Provision for REO losses 0 0
Provision for loan losses 165,000 25,000
Amortization of premiums and discounts on securities,
net 17,000 16,000
Change in deferred loan origination fees, net 14,000 (101,000)
Change in accrued interest receivable (50,000) 189,000
Change in accrued interest payable (40,000) (15,000)
Change in income tax receivable 0 0
Change in other assets (110,000) (625,000)
Change in other liabilities (57,000) (27,000)
Total adjustments 26,000 (385,000)
Net cash (used) provided by operating activities $(396,000) $(382,000)
Supplemental cash flow information:
Transfer from loans to other real estate owned $185,000 $295,000
Loans made to facilitate the sale of other real
estate owned $1,695,000 $704,000
See accompanying notes to unaudited consolidated financial
statements.
Consolidated Statements of Changes in Shareholders' Equity
Marathon Bancorp and Subsidiary
Net
Unrealized
Gain (loss)
on Securities
Preferred Common shares Accumulated Available
Shares Shares Amount Deficit for Sale Total
Balance,
December 31, 1996 --- 1,248,764 $8,080,000 $(5,045,000) $8,000 $3,043,000
Net Loss (421,000) (421,000)
Net change in unrealized gain on securities
on securities available for sale 8,000 8,000
Proceeds from the sale of
common stock 3/25/97 340,832 767,000 767,000
Proceeds from the sale of
common stock 6/30/97 245,555 552,000 552,000
Proceeds from the sale of
common stock 8/1/97 1,976,668 4,447,000 4,447,000
Costs of public offering (240,000) (240,000)
Balance, September 30, 1997 ---
--- 3,811,819 $13,606,000 $(5,466,000) $16,000 $8,156,000
See accompanying notes to unaudited consolidated financial
statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of presentation and management representations
The unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and,
therefore, do not include all footnotes normally required for
complete financial disclosure. While the Company believes that
the disclosures presented are sufficient to make the information
not misleading, reference may be made to the consolidated
financial statements and notes thereto included in the Company's
1996 Annual Report on Form 10-KSB.
The accompanying consolidated statements of financial condition
and the related consolidated statements of operations and cash
flows reflect, in the opinion of management, all material
adjustments necessary for fair presentation of the Company's
financial position as of September 30, 1997 and December 31,
1996, results of operations and changes in cash flows for the
three-month and nine-month periods ended September 30, 1997 and
1996. The results of operations for the nine-month period ended
September 30, 1997 are not necessarily indicative of what the
results of operations will be for the full year ending December
31, 1997.
(2) Income or loss per share
Income or loss per share is computed using the weighted average
number of common shares outstanding during the period. Loss per
share calculations exclude common share equivalents (stock
options) since their effect would be to increase the income per
share and reduce the loss per share. Accordingly, the weighted
average number of shares used to compute the net income or loss
per share was 3,145,768 for the three-month and 2,011,297 for
the nine-month period ended September 30, 1997 and 1,248,764 for
the three-month and nine-month periods ended September 30, 1996.
(3) Sale of common stock
During the first quarter of 1997, the Company successfully
completed a private placement offering and issued 340,832 shares
of common stock at $2.25 per share and contributed the net
proceeds of $766,900 to the Company's wholly-owned subsidiary,
Marathon National Bank (the "Bank") as equity capital. During
the second quarter the Company began a public offering to sell
2,222,223 shares at $2.25 per share to raise $5,000,000 in new
capital. The offering was successful and the additional capital
brings the Bank and Company into compliance with its'
regulatory agreements. The Company made a contribution of
capital to the Bank of $4,734,000.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion is intended to provide additional
information about Marathon Bancorp (the Company), its financial
condition and results of operations which is not otherwise
apparent from the consolidated financial statements. Since
Marathon National Bank (the Bank) represents a substantial
portion of the Company's activities and investments, the
following relates primarily to the financial condition and
operations of the Bank. It should be read in conjunction with
the Company's 1996 Annual Report on Form 10-KSB. Averages
presented are daily average balances.
Summary
Marathon Bancorp recorded a profit for the three-month period
ended September 30, 1997 of $26,000, or $0.01 per common share,
compared with net income of $2,000, or $0.0 per common share,
for the same period in 1996. The major reasons for the increase
in earnings was a increase in noninterest income.
At September 30, 1997, the Company had total assets of
$69,021,000, total loans of $48,717,000 and total deposits of
$60,473,000. This compares to total assets of $66,393,000,
total loans of $47,696,000 and total deposits of $62,881,000 at
December 31, 1996.
Operating Performance
The following discussion explains in greater detail the
consolidated financial condition and results of operations of
the Company. This discussion should be read in conjunction with
the accompanying consolidated financial statements and noted
thereto as well as the Company's 1996 Annual Report on Form
10-KSB .
Net Interest Income: Net interest income (the amount by which
interest generated from earning assets exceeds interest expense
on interest-bearing liabilities) is the most significant
component of Marathon's earnings. The Company's diverse
portfolio of earning assets is comprised of its core business
of loan underwriting, augmented by liquid overnight federal
funds sold, short term interest-bearing deposits with other
financial institutions and investment securities. These earning
assets are financed through a combination of interest-bearing
and noninterest-bearing sources of funds.
Interest income for the first nine months of 1997 decreased
$557,000, or 15% as compared to the first nine months of 1996.
The reasons for this decline were decreases in the rate of
interest earned on loans due to non-accruals and a decrease in
the rate of interest earned on earning assets. Interest paid on
deposits decreased $57,000, or 6% from the same period in 1996,
which did not offset the decrease in income. Loans earned at
an average rate of 8.6% percent in 1997 as compared to 8.9% in
1996. In addition, average loans outstanding declined
$3,584,000 or 7.1 percent between 1996 and 1997. Average
interest-bearing liabilities decreased $4,966,000 or 11.6
percent.
The Bank analyzes its performance using the concepts of
interest rate spread and net yield on earning assets. The
interest rate spread represents the difference between the yield
on earning assets and the interest rate paid on interest-bearing
liabilities. The net yield on earning assets is the net
interest income divided by the earning assets.
The Company's interest rate spread for the nine-month period of
1997 was 4.9 percent compared to 5.2 percent in 1996. The 1997
decrease was due to an decrease in the yield on interest-earning
assets while the cost of interest-bearing liabilities slightly
increased. The net yield on earning assets was 6.1% percent in
the nine-month period of 1997 and 6.3 percent in 1996.
For the third quarter of 1997 net interest income before credit
loss provision increased by $90,000, or 7.4%. This again was
attributable to both an increase in loan and investment income
as well as a decrease in interest cost due to lower interest
bearing deposits. With the additional capital the Company has
raised through its' public offering, the Company will be
increasing the deposits and assets and leveraging the new
capital to increase profits.
The Bank's net yield on earning assets remains high in
comparison with the Company's interest rate spread due to the
significant volume of noninterest-bearing demand deposits
relative to total funding sources (represented by total deposits
and shareholders' equity). While these deposits are
noninterest- bearing, they are not without cost. However, the
Bank believes that they remain the lowest cost source of funds
available in the marketplace (see "Liquidity and Interest Rate
Sensitivity Management").
Other Operating Income: Other operating income increased 60
percent in the nine-month period of 1997 from $158,000 in 1996
to $253,000. The increase is the result of higher service
charge income generated on deposit accounts.
For the quarter ended September 30 , 1997 other income
increased $35,000, or 71% over the like period of 1996. Service
charges on deposit accounts increased with the Bank's emphasis
on collection of charges on commercial checking accounts that
are under service charge analysis programs and other fees for
Bank services.
Provision for Loan Losses: Implicit in lending activities is the
fact that losses will be experienced and that the amount of such
losses will vary from time to time, depending upon the risk
characteristics of the portfolio as affected by economic
conditions and the financial experience of borrowers.
Management of the Bank has instituted stringent credit policies
designed to minimize the level of losses and nonaccrual loans.
These policies require extensive evaluation of new credit
requests and continuing review of existing credits in order to
identify, monitor and quantify evidence of deterioration of
quality or potential loss in a timely manner. Management's
reviews are based upon previous loan loss experience, current
economic conditions, composition of the loan portfolio, the
value of collateral and other relative factors. The Bank's
lending is concentrated in Los Angeles County and surrounding
areas, which have experienced adverse economic conditions over
the last several years, including declining real estate values.
These factors have adversely affected some borrowers' ability to
repay loans.
The Bank's past due and nonaccrual loans at September 30,
1997 amounted to $4,425,000 compared to $3,592,000 at September
30 1996.
The allowance for loan losses, which provides a financial
buffer for the risk of losses inherent in the lending process,
is increased by the provision for loan losses charged against
income, decreased by the amount of loans charged off and
increased by recoveries. There is no precise method of
predicting specific losses which ultimately may be charged off
and the conclusion that a loan may become uncollectible, in
whole or in part, is a matter of judgment. Similarly, the
adequacy of the allowance and accompanying provision for loan
losses can be determined only on a judgmental basis after full
review, including consideration of economic conditions and their
effects on specific borrowers, borrowers' financial data, and
evaluation of underlying collateral for secured lending.
Based upon management's assessment of the overall quality of
the loan portfolio, and of external economic conditions, the
Bank made a provision for loan losses of $165,000 in the nine
months of 1997 and no provision in the second quarter compared
to a $25,000 provision in the first nine months of 1996. Loans
totaling $552,000 were charged off during the first nine months
of 1997 and $268,000 was recovered. Loans charged off amounted
to $300,000 in the nine month period of 1996, while recoveries
totaled $16,000. The allowance for loan losses reflects
management's perception of the lending environment in which it
operates. Although management believes that the allowance for
possible loan losses is adequate, there can be no reasonable
assurance that further deterioration will not occur. As a
result, future provisions will be subject to continuing
evaluation of inherent risk in the loan portfolio.
At September 30th other real estate owned (OREO), consisting of
properties received in settlement of loans totaled $929,000, a
decrease of $2,156,000 or 69.9% from December 31, 1996.
Other Operating Expenses: Other operating expenses totaled
$3,354,000 for the nine-month period of 1997, a decrease of
$122,000 or 3.5 percent from $3,476,000 in 1996. For the third
quarter, operating expenses were up $105,000, or 8.2% over that
reported for 1996. OREO expenses, data proccesing, personnel
costs , proffessional services and equipment expense decreased
for the nine-months of 1997. The category that showed a large
increase was occupancy expense which increased $199,000 with
the Company's move back to its' permanent quarters after the
repairs from the Northridge earthquake. The Company is
negotiating with the landlord for a reimbursement of the costs
associated with the relocation.
Expenses for the third quarter also were reflective of the move
back into the Company's offices and the expense related thereto
when compared to last year. The Company has been working hard
to reorganize and reduce expense. These efforts have trimmed a
lot of the expense and will continue to lower expense into next
year.
Income Taxes: Deferred income taxes are computed using the
liability method based on differences between the financial
reporting and tax basis of assets and liabilities, and are
measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. A
valuation allowance is established to reduce the deferred tax
asset to the level at which it is "more likely than not" that
the tax asset or benefits will be realized. Realization of tax
benefits of deductible temporary differences and operating loss
carryforwards depends on having sufficient taxable income of an
appropriate character within the carryforward periods
The Company had income tax expense of $2,000 and no benefit
that it can account for currently at September 30, 1997. At
December 31, 1996 for federal income tax purposes, the Company
had a net operating loss carryforward of approximately
$3,727,000 beginning to expire in 2008 - 2011. For state income
tax purposes, the Company has incurred a net operating loss of
approximately $5,252,000 which is available as a carryforward
through 2001 to offset future taxes payable, adjusted for the
fifty percent reduction, as required by state tax law.
Assets and Liabilities
Assets increased during the first nine months of 1997 by
$2,712,000, or 4%. This growth that was funded by the increased
capital was invested in loans and investment securities to
increase the overall yield on assets, which increased from 7.2%
at June 30th to 7.9% at September 30th. The loan portfolio
increased by $1,027,000 during 1997 and investment securities
increased $4,418,000. The Company was able to make significant
progress in the reduction of other real estate owned reducing
the outstanding balance to $929,000 which represents only two
properties. This reduction helped to increase the overall
portfolio of earning assets.
Increased assets were funded by the capital infusion from the
public stock offering. Interst bearing deposits have declined
from year end 1996 by $6,687,000 in mostly money market
accounts. The noninterest bearing deposits increased $4,279,000
from yearend 1996 helping reduce the overall cost of funds.
Liquidity and Interest Rate-Sensitivity Management
The primary function of asset liability management is to ensure
adequate liquidity and to maintain an appropriate balance
between rate sensitive assets and rate sensitive liabilities.
Liquidity management involves matching sources and uses of the
Company's funds in order to effectively meet the cash flow needs
of our customers, as well as the cash flow requirements of the
Company itself. Interest rate sensitivity management seeks to
stabilize net interest income during periods of changing
interest rates.
Liquidity: Management monitors its liquidity position
continuously in relation to trends of loans and deposits, and
relates the data to short and long term expectations. In order
to serve Marathon's customers effectively, funds must be
available to meet their credit needs as well as their
withdrawals of deposited funds. Liquidity from assets is
provided by the receipt of loan payments and by the maturity of
other earning assets as further described below. Liquidity from
liabilities is attained primarily by obtaining new deposits.
Liquid assets are defined to include federal funds sold,
interest-bearing deposits with other financial institutions,
unpledged investment securities and cash and due from banks.
The Company's liquidity ratio (the sum of liquid assets divided
by total deposits) was 31 percent at September 30, 1997 and 23
percent at December 31, 1996. The loan to deposit ratio was 80
percent and 75 percent for September 30, 1997 and December 31,
1996, respectively.
On the liability side, Marathon's liquidity position is
enhanced by sizable core deposits. As stable core deposits
(which include all deposits except time certificates of deposit)
are generated, the need for other sources of liquidity
diminishes. This derives from the fact that the Bank's primary
liquidity requirement generally arises from the need to meet
maturities of time certificates of deposit. Absent
extraordinary conditions, the bulk of stable core deposits do
not require significant amounts of liquidity to meet the net
short or intermediate term withdrawal demands of customers.
While demand deposits are noninterest-bearing, the account
relationships are not without cost as the Bank provides
messenger, courier, accounting and data processing services in
connection with some of its commercial customers.
Interest Rate-Sensitivity Management: Interest rate sensitivity
management focuses, as does liquidity management, on the
maturities of earning assets and funding sources. In addition,
interest rate sensitivity management takes into consideration
those assets and liabilities whose interest rates are subject to
change prior to maturity. Net interest income can be vulnerable
to fluctuations arising from a change in the general level of
interest rates to the extent that the average yield on earning
assets responds differently to such a change than does the
average cost of funds. In an effort to maintain consistent
earnings performance, Marathon manages the repricing
characteristics of its assets and liabilities to control net
interest sensitivity.
The Company measures interest rate sensitivity by distributing
the rate maturities of assets and supporting funding liabilities
into interest sensitivity periods, summarizing interest rate
risk in terms of the resulting interest sensitivity gaps. A
positive gap indicates that more interest sensitive assets than
interest sensitive liabilities will be repriced during a
specified period, while a negative gap indicates the opposite
condition.
Balance sheet items are categorized according to contractual
maturity or repricing dates, as appropriate. Reference rate
indexed loans, federal funds sold and money market deposits
constitute the bulk of the floating rate category. Determining
the interest rate sensitivity of noncontractual items is arrived
at in a more qualitative manner. Demand deposits are considered
to be a mix of short and long term funds, based upon historical
behavior. Savings deposits are viewed as susceptible to
competitive factors brought on by deregulation and, therefore,
classified as intermediate funds.
It is the Bank's policy to maintain an adequate balance of rate
sensitive assets to rate sensitive liabilities. Due to the fact
that the Bank has a large portfolio of noninterest bearing
demand deposits the Company has historically been asset
sensitive with a positive gap. Currently the Company is still
asset sensitive which means the Company will have increased
income in a rising rate environment and decreased income in a
falling rate scenario.
Capital Resources And Dividends
The Bank is required to meet certain minimum risk-based capital
guidelines and leverage ratios promulgated by the bank
regulatory authorities. The risk based capital standards
establish capital requirements that are more sensitive to risk
differences between various assets, consider off balance sheet
activities in assessing capital adequacy, and minimize the
disincentives to holding liquid, low risk assets. The leverage
ratio consists of tangible Tier 1 capital divided by average
total assets.
On September 20, 1995, the Bank entered into a formal agreement
with the Office of the Comptroller of Currency (OCC) under which
the Bank agreed to submit a three year strategic plan by
November 1, 1995. The plan included, among other things, action
plans to accomplish the following: a) achieve and maintain the
desired capital ratios, as set forth below; b) attain
satisfactory profitability; and c) reduce other real estate
owned. The Plan was accepted by the OCC on January 30, 1996.
The agreement increased the minimum Tier 1 risk based capital
ratio to 8.5 percent from 4.0 percent and the Tier 1 capital
leverage ratio to 6.0 percent from 4.0 percent. At September
30, 1997, the Company and the Bank had a Tier 1 risk based
capital ratio of 15.1 percent, and a Tier 1 capital leverage
ratio of 11.5 percent. The Bank has met all of the terms of the
formal agreement.
The Company has raised additional capital during the period of
June 25, 1997 through July 31, 1997 which it has invested in the
Bank. The total capital raised was $5,000,000 (less expenses
of approximately $240,000) of which $4,734,000 was invested in
the Bank .
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
MARATHON BANCORP
Date: November 13, 1997 Craig D. Collette
Craig D. Collette
President and Chief
Executive Officer
Howard J. Stanke
Howard J. Stanke
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated statements of income and consolidated balance sheets
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,761
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<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,256
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<INVESTMENTS-MARKET> 8,207
<LOANS> 48,717
<ALLOWANCE> 969
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0
0
<COMMON> 13,606
<OTHER-SE> 5,450
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<INTEREST-INCOME-NET> 2,846
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<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,354
<INCOME-PRETAX> (420)
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> (422)
<CHANGES> 0
<NET-INCOME> (422)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
<YIELD-ACTUAL> 6.1
<LOANS-NON> 2,470
<LOANS-PAST> 1,459
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,088
<CHARGE-OFFS> 552
<RECOVERIES> 268
<ALLOWANCE-CLOSE> 969
<ALLOWANCE-DOMESTIC> 969
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 969
</TABLE>
