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 JUNE 30, 1998
-------------------------------
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, CA 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 August 3, 1998, there were 3,820,819 shares of no par Common Stock
issued and outstanding.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Financial Condition
Marathon Bancorp and Subsidiary
<S> <C> <C>
June 30, December 31,
ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1998 1997
------------ --------------
Cash and Due From Banks . . . . . . . . . . . . . . . . . . . . . . . $ 5,081,000 $ 7,327,000
Federal Funds Sold. . . . . . . . . . . . . . . . . . . . . . . . . . 10,100,000 8,700,000
Investment Securities
Securities Available for Sale. . . . . . . . . . . . . . . . . . . 2,754,000 5,249,000
Securities Held to Maturity. . . . . . . . . . . . . . . . . . . . 9,091,000 9,147,000
(Aggregate market value of $9,057,000 at June 30, 1998 and ------------ --------------
$9,079,000 at December 31, 1997)
TOTAL INVESTMENT SECURITIES. . . . . . . . . . . . . . . . . . 11,845,000 14,396,000
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,077,000 46,775,000
Less Allowance for Credit Losses . . . . . . . . . . . . . . . . . (722,000) (747,000)
------------ --------------
NET LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 44,355,000 46,028,000
Premises and Equipment. . . . . . . . . . . . . . . . . . . . . . . . 400,000 416,000
Other Real Estate Owned . . . . . . . . . . . . . . . . . . . . . . . 982,000 1,248,000
Accrued Interest and Other Assets . . . . . . . . . . . . . . . . . . 2,038,000 954,000
------------ --------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . $74,801,000 $ 79,069,000
============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-Bearing. . . . . . . . . . . . . . . . . . . . . . . . $27,604,000 $ 31,932,000
Interest-Bearing . . . . . . . . . . . . . . . . . . . . . . . . . 38,194,000 38,513,000
------------ --------------
TOTAL DEPOSITS. . . . . . . . . . . . . . . . . . . . . . . . 65,798,000 70,445,000
Accrued Interest and Other Liabilities. . . . . . . . . . . . . . . . 755,000 423,000
------------ --------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . 66,553,000 70,868,000
Shareholders' Equity
Preferred Shares - No Par Value, 1,000,000 Shares Authorized,
No Shares Issued and Outstanding. . . . . . . . . . . . . . . . 0 0
Common Shares - No Par Value, 9,000,000 Shares Authorized,
Issued and Outstanding: 3,817,819 in 1998 and 1,589,596 in 1997 13,622,000 13,607,000
Net Unrealized Gain on Securities Available for Sale . . . . . . . 4,000 3,000
Accumulated Deficit. . . . . . . . . . . . . . . . . . . . . . . . (5,378,000) (5,409,000)
------------ --------------
TOTAL SHAREHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . 8,248,000 8,201,000
------------ --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . $74,801,000 $ 79,069,000
============ ==============
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
Marathon Bancorp and Subsidiary
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
------------------- ------------------ ---------- ---------------
INTEREST INCOME
Interest and Fees on Loans . . . . . . . . . . $ 936,000 $ 920,000 $1,852,000 $ 1,796,000
Interest on Investment Securities - Taxable. . 175,000 115,000 344,000 224,000
Other Interest Income. . . . . . . . . . . . . 113,000 103,000 229,000 168,000
------------------- ------------------ ---------- ---------------
TOTAL INTEREST INCOME. . . . . . . . . . . . 1,224,000 1,138,000 2,425,000 2,188,000
INTEREST EXPENSE
Interest on NOW Accounts . . . . . . . . . . . 9,000 13,000 21,000 27,000
Interest on Money Market and Savings . . . . . 156,000 166,000 307,000 319,000
Interest on Time Deposits. . . . . . . . . . . 176,000 137,000 325,000 226,000
Other Interest Expense . . . . . . . . . . . . - 1,000 -
------------------- ------------------ ----------
TOTAL INTEREST EXPENSE . . . . . . . . . . . 341,000 316,000 654,000 572,000
------------------- ------------------ ---------- ---------------
NET INTEREST INCOME. . . . . . . . . . . . . . . . 883,000 822,000 1,771,000 1,616,000
Provision for Credit Losses. . . . . . . . . . . . - - - 150,000
------------------- ------------------ ---------- ---------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES . . . . . . . . . . 883,000 822,000 1,771,000 1,466,000
------------------- ------------------ ---------- ---------------
NONINTEREST INCOME
Service Charges and Fees on Deposits . . . . . 55,000 97,000 116,000 157,000
Other Noninterest Income . . . . . . . . . . . 50,000 4,000 90,000 12,000
------------------- ------------------ ---------- ---------------
'TOTAL NONINTEREST INCOME. . . . . . . . . . 105,000 101,000 206,000 169,000
------------------- ------------------ ---------- ---------------
NONINTEREST EXPENSE
Salaries and Employee Benefits . . . . . . . . 393,000 390,000 785,000 762,000
Occupancy Expenses . . . . . . . . . . . . . . 111,000 135,000 270,000 291,000
Furniture and Equipment. . . . . . . . . . . . 35,000 26,000 58,000 63,000
Professional Services. . . . . . . . . . . . . 31,000 24,000 43,000 78,000
Business Promotion . . . . . . . . . . . . . . 4,000 5,000 20,000 12,000
Stationery and Supplies. . . . . . . . . . . . 7,000 26,000 36,000 54,000
Data Processing Services . . . . . . . . . . . 103,000 141,000 218,000 256,000
Messenger and Courier Services . . . . . . . . 24,000 24,000 46,000 61,000
Insurance and Assessments. . . . . . . . . . . 92,000 89,000 173,000 185,000
Legal Costs. . . . . . . . . . . . . . . . . . 47,000 88,000 85,000 113,000
Customer Checks. . . . . . . . . . . . . . . . 9,000 7,000 20,000 20,000
Net Loss on Sale of OREO . . . . . . . . . . . 43,000 3,000 43,000 3,000
Net Operating Cost of Other Real Estate Owned. 4,000 15,000 16,000 17,000
Other Expenses . . . . . . . . . . . . . . . . 64,000 106,000 132,000 166,000
------------------- ------------------ ---------- ---------------
TOTAL NONINTEREST EXPENSE. . . . . . . . . . 967,000 1,079,000 1,945,000 2,081,000
------------------- ------------------ ---------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . 21,000 ( 156,000) 32,000 ( 446,000)
Income Taxes. . . . . . . . . . . . . . . . . . 1,000 - 1,000 2,000
------------------- ------------------ ---------- ---------------
NET INCOME (LOSS). . . . . . . . . . . . . . . . . $ 20,000 $ ( 156,000) $ 31,000 $ ( 448,000)
=================== ================== ========== ===============
Per Share Data:
Net Income (Loss) - Basic . . . . . . . . . . $ 0.01 $ ( 0.10) $ 0.01 $( 0.31)
Net Income (Loss) - Diluted . . . . . . . . . $ 0.01 $ ( 0.10) $ 0.01 $( 0.31)
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Marathon Bancorp and Subsidiary
<S> <C> <C>
Six Months Ended June 30,
---------------------------
1998 1997
--------------------------- -------------------
OPERATING ACTIVITIES
Net Income (Loss). . . . . . . . . . . . . . . . . . . . . . . $ 31,000 $ ( 448,000)
Adjustments to Reconcile Net Gain (Loss) to Net Cash Provided
by Operating Activities:
Depreciation and Amortization. . . . . . . . . . . . . . 73,000 66,000
Provision for Credit Losses. . . . . . . . . . . . . . . - 150,000
Provision for OREO Losses. . . . . . . . . . . . . . . . - -
Loss (Gain) on Sale of Other Real Estate Owned . . . . . 46,000 ( 3,000)
Net Amortization of Premiums and Discounts
on Investment Securities. . . . . . . . . . . . . . . ( 3,000) 12,000
Net Change in Deferred Loan Origination Fees . . . . . . 11,000 41,000
Net Change in Accrued Interest, Other Assets
and Other Liabilities. . . . . . . . . . . . . . . . ( 752,000) ( 209,000)
--------------------------- -------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES. . . . . ( 594,000) ( 391,000)
INVESTING ACTIVITIES
Net Decrease (Increase) in Interest-Bearing Deposits with
Financial Institutions. . . . . . . . . . . . . . . . . . . - 498,000
Purchases of Available for Sale Securities. . . . . . . . . . ( 2,476,000) ( 102,000)
Purchases of Held to Maturity Securities . . . . . . . . . . . ( 5,986,000) -
Proceeds from Maturities of Available for Sale Securities. . . 6,016,000 -
Proceeds from Maturities of Held to Maturity Securities. . . . 5,000,000 128,000
Net Decrease in Loans. . . . . . . . . . . . . . . . . . . . . 680,000 978,000
Proceeds from Sale of Other Real Estate Owned. . . . . . . . . 1,202,000 1,645,000
Purchases of Furniture, Fixtures and Equipment . . . . . . . . ( 57,000) ( 46,000)
--------------------------- -------------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES . . . . 4,379,000 3,101,000
FINANCING ACTIVITIES
Net Change in Demand Deposits, Money Market and Savings. . . . ( 8,010,000) 1,875,000
Net Change in Time Deposits. . . . . . . . . . . . . . . . . . 3,363,000 ( 188,000)
Proceeds from Issuance of Common shares. . . . . . . . . . . . 16,000 1,319,000
--------------------------- -------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES . . . . ( 4,631,000) 3,006,000
--------------------------- -------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . . . . . . ( 846,000) 5,716,000
Cash and Cash Equivalents at Beginning of Year . . . . . . . . 16,027,000 7,289,000
--------------------------- -------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . . . . . . . $ 15,181,000 $ 13,005,000
=========================== ===================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest Paid. . . . . . . . . . . . . . . . . . . . . . . . . $ 595,000 $ 293,000
Income Taxes Paid (Refunded) . . . . . . . . . . . . . . . . . $ 2,400 $ 2,400
Loans Made to Facilitate the Sale of Other Real Estate Owned . $ 600,000 $ 1,695,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Equity
Marathon Bancorp and Subsidiary
<S> <C> <C> <C> <C> <C>
Net
Unrealized
Appreciation
(Depreciation)
on Available
Common shares Accumulated for Sale
--------------
Shares Amount Deficit Securities Total
-------------- ------------ ------------- ----------- ----------
BALANCE - JANUARY 1, 1998 . 3,811,819 $ 13,607,000 $( 5,409,000) $ 3,000 $8,201,000
Net Income. . . . . . . . . - - 31,000 - 31,000
Issuance of Common Shares . 6,000 15,000 - - 15,000
Net Changes in Unrealized
Appreciation on Available
for Sale Securities . . . - - - 1,000 1,000
-------------- ------------ ------------- ----------- ----------
BALANCE - JUNE 30, 1998 . . 3,817,819 $ 13,622,000 $( 5,378,000) $ 4,000 $8,248,000
============== ============ ============= =========== ==========
</TABLE>
<PAGE>
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 1997 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 June 30, 1998 and December 31, 1997,
results of operations and changes in cash flows for the six-month period ended
June 30, 1998 and 1997. The results of operations for the six-month period
ended June 30, 1998 are not necessarily indicative of what the results of
operations will be for the full year ending December 31, 1998.
(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 were 3,816,566 and 1,592,294 respectively for the three-month period ended
June 30, 1998 and 3,814,206 and 1,434,660 respectively for the six-month period
ended June 30, 1998.
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 1997 Annual Report on Form 10-KSB.
FINANCIAL HIGHLIGHTS OVERVIEW
Marathon Bancorp recorded a fourth consecutive quarterly profit of $20,000
compared to a loss of $156,000 for the second quarter of 1997. For the
six-month period ended June 30, 1998 the Company recorded profits of $31,000
compared to a loss of $448,000 for the first six months of 1997. Assets were
$74,801,000 and deposits were $65,798,000 both increased from the levels
reported in the first quarter although less than the numbers reported for
yearend 1997.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income (the difference between interest income and interest
expense) for the first six months of 1998 increased by $155,000, or 10% over the
same period last year. The increase came about through a number of factors.
The Company has decreased its non-performing assets substantially in 1998 from
the levels of 1997. At June 30, 1998 the Company had $6,000 in loans on
nonaccrual and $982,000 of foreclosed real estate compared to $2,431,000 in
loans on nonaccrual and $1,281,000 of foreclosed real estate at June 30, 1997.
Investments and fed funds sold increased from $13,580,000 at June 30, 1997
to $21,945,000 at the end of this quarter.
Interest income increased for the first six months of 1998 by $237,000 with
the increase coming in all categories of earning assets. The average loan
portfolio size remained fairly constant but the decrease in non-performing loans
helped to increase the interest earned on the portfolio. Increases in
investments and fed funds sold were the reason for the increase in the interest
earned on both of these portfolios. Interest expense for the first six months
of 1998 increased by $82,000, or 14% over the interest expense reported for the
first half of 1997. This was due to an increase in certificates of deposit,
during the later part of 1997.
For the three months ended June 30, 1998 net interest income increased for
the same reasons as for the six-month period. The increase in net interest
income was $61,000, or 7% over the three months ended June 30, 1997. Interest
income was up $86,000 and the interest expense increased $25,000 for the first
quarter of 1998.
The net interest margin for the first six months of 1998 was 5.41% compared
to 5.47% for the first half of 1997 and the net interest margin for the three
months ended June 30, 1998 was 5.30% compared to 5.19% for the same period in
1997.
Noninterest Income
Noninterest income rose for both the six months and three months ended June
30, 1998. For the six months noninterest income grew $37,000, or 22% and for
the three months was up $4,000, or 4%. An increase in fees on commercial
checking accounts in the second quarter of 1997 was a large contributing factor
to the increase in service charges on deposits. An increase in loan noninterest
fees and charges was the reason for the increase in other noninterest income in
both periods in 1998.
Noninterest Expense
The Company was able to reduce the level of noninterest expense in both the
six months and three months ended June 30, 1998. The main areas of cost
reduction were occupancy, data processing, legal costs, office supplies, and
other expense. Occupancy costs were reduced with the subletting of excess
office space at the corporate office. Reduction in other real estate owned
decreased costs during the second quarter of 1998. The reduction in
non-performing assets and other real estate owned (OREO) accounted for the large
reduction in legal costs. The remainder of 1998 should continue to show reduced
legal expense and OREO costs compared to 1997. Also the improvement in the
Bank's condition will reduce the FDIC insurance assessment for the remainder of
1998 by approximately $65,000.
Provision for Credit Losses:
The Bank made no provision for credit losses during the first half of 1998
compared to a provision of $150,000 during the first six months of 1997.
During the first half of 1998, the Bank recorded charge-offs of $105,000
($79,000 in the second quarter) and collected $80,000 in loan loss recoveries
($62,000 in the second quarter) compared to charge-offs of $492,000 and
recoveries of $39,000 in 1997.
The Bank's internally classified loans at June 30, 1998 were $2,081,000, or
4.6% of loans compared to $2,983,000 or 6.4% of loans at December 31, 1997.
The classified loans at June 30, 1998 were only 25.2% of equity capital.
Additionally loans past due 30 days or more at June 30, 1998 were only $37,000,
and nonaccrual loans $6,000.
Based upon these factors and management's assessment of the overall quality
of the loan portfolio, its internal migration analysis and economic conditions
management determined the current level of the reserve for credit losses was
adequate without the need for further provisions.
ASSETS AND LIABILITIES
Assets at the end of 1997 were somewhat inflated with increased deposits
from a number of large customers of the Bank during the last two weeks of the
year which then decreased during the first two weeks of 1998. The Bank's assets
increased $4,532,000, or 6.5% since the end of the first quarter of 1998. The
increase was generated in demand deposits of commercial customers.
The increase in deposits was invested in short-term fed funds sold to
increase earning assets and the liquidity position of the Bank. The other real
estate owned decreased with the sale of three properties totaling $1,248,000 and
the addition of two properties totaling $982,000. Since the end of the second
quarter, the Bank has sold another OREO property in July 1998 totaling $430,000
and recording a $2,000 profit. The sale leaves only one property in the Bank's
OREO portfolio.
LIQUIDITY AND CAPITAL
Asset/Liability Management
The Company's Asset/Liability Committee is responsible for managing the
risks associated with changing interest rates and their impact on earnings, as
well as, the liquidity needs of the Company.
Management monitors its liquidity position continuously in relation to
trends in loans and deposits, and relates the data to short and long term
expectations. In order to serve customers effectively, funds must be available
to meet their credit needs as well as their withdrawals of deposited funds.
Assets that are normally considered liquid are federal funds sold, available for
sale investment securities, cash and due from banks, and securities purchased
under agreements to resell. The ratio of liquid assets to deposits was 24% as
of June 30, 1998 and the loan to deposit ratio was 69%.
Interest rate risk management focuses on the maturity and repricing of
interest earning assets in relationship to the interest bearing liabilities that
fund them. 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.
The Company measures interest rate sensitivity by distributing the
maturities and repricing periods 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.
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 and has the risk that a drop in interest rates will tend to decrease
the net interest income while a increase in interest rates will increase income.
The Bank has implemented interest rate floors on approximately 85% of the
commercial loans and 55% of the real estate loans. This will help to mitigate
the interest lost with a decline in interest rates.
Capital
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.
The Company's capital position is strong. The adequately capitalized
risk-based capital ratio required by the federal regulators is 8.0 percent and
the well capitalized ratio is 10.0 percent. At June 30, 1998 the Company and
the Bank had a risk based capital ratio of 16.2 percent, and a Tier 1 capital
leverage ratio of 11.4 percent.
The Company has been released from the Memorandum of Understanding with the
Federal Reserve Bank and now is under no special regulatory restrictions.
YEAR 2000
The Company is well aware of the issues relating to the century date change
and the impact on computer systems and business operations. The Company started
its analysis of the problem in June 1997 when it sent letters to its vendors
that supplied computer services to the Company on the status of their Year 2000
plans. All the mission critical vendors were well on their way with plans to
make their products Year 2000 compliant. The Company then went on to develop
its own Year 2000 plan. The Company's Year 2000 Plan (the Plan) was submitted to
the Board of Directors for review in January 1998 and approved in February 1998.
The Plan includes the steps necessary for the Company to become year 2000
compliant as well as the steps to be taken to check that the major borrowers and
fund providers of the Company are also working to become compliant. The
Company's main computer processing is supplied by the Fiserv CBS Service Bureau
who has already modified and installed software that is year 2000 compliant and
the Bank, and the user group to which it belongs, will begin testing the
software during the third quarter. The Bank will also be testing other
secondary software programs that have already been modified during the third and
fourth quarters.
At this time the Bank does not foresee any of its vendors not delivering
year 2000 compliant software within a timeframe that will allow for sufficient
testing to insure year 2000 compliance. The Company has a contingency plan to
cover year 2000 issues. The costs to the Company will be both capital costs for
the purchase of new equipment and the expense for the maintenance and testing of
computer software. Some of these costs have already been expensed and others
will be ongoing over the next eighteen months, but they should not have a major
impact on future earnings.
<PAGE>
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.
<PAGE>
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: August 10, 1998 Craig D. Collette
-------------------
Craig D. Collette
President and
Chief Executive Officer
Howard J. Stanke
------------------
Howard J. Stanke
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 5,081
<INT-BEARING-DEPOSITS> 38,194
<FED-FUNDS-SOLD> 10,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,754
<INVESTMENTS-CARRYING> 11,845
<INVESTMENTS-MARKET> 11,811
<LOANS> 45,077
<ALLOWANCE> 722
<TOTAL-ASSETS> 74,801
<DEPOSITS> 65,798
<SHORT-TERM> 0
<LIABILITIES-OTHER> 755
<LONG-TERM> 0
0
0
<COMMON> 13,622
<OTHER-SE> (5,374)
<TOTAL-LIABILITIES-AND-EQUITY> 74,801
<INTEREST-LOAN> 1,852
<INTEREST-INVEST> 344
<INTEREST-OTHER> 229
<INTEREST-TOTAL> 2,425
<INTEREST-DEPOSIT> 653
<INTEREST-EXPENSE> 1
<INTEREST-INCOME-NET> 1,771
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,945
<INCOME-PRETAX> 32
<INCOME-PRE-EXTRAORDINARY> 32
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
<YIELD-ACTUAL> 7.23
<LOANS-NON> 6
<LOANS-PAST> 37
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 747
<CHARGE-OFFS> 105
<RECOVERIES> 80
<ALLOWANCE-CLOSE> 722
<ALLOWANCE-DOMESTIC> 722
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 722
</TABLE>
