IF Bancorp Reports Strong Year-Over-Year Growth in First Quarter Fiscal 2026 Earnings as Strategic Initiatives Boost Profitability
IF Bancorp, Inc., the holding company for Iroquois Federal Savings and Loan Association, reported significantly improved financial results for the three months ended September 30, 2025. The company posted unaudited net income of $1.4 million, or $0.43 per basic and diluted share, more than double the net income of $633,000, or $0.20 per share, reported during the same quarter a year earlier. The performance reflects a meaningful turnaround in profitability, driven by an expanding net interest margin, disciplined balance sheet management, and strategic adjustments to the company’s lending and funding strategies.
Chief Executive Officer Walter H. “Chip” Hasselbring noted that the quarter’s results demonstrated clear momentum toward enhanced earnings performance. Hasselbring highlighted the company’s recently announced strategic alliance with ServBank, emphasizing that while the partnership represents a forward-looking growth opportunity, it is the company’s underlying operational improvements that are delivering immediate financial results.
The quarterly results move our profitability in the right direction as demonstrated by the expansion of our net interest margin,” Hasselbring stated. “The continued repricing of our loan portfolio and funding mix in the current interest rate environment has contributed to the bottom line. We are encouraged by the progress and remain focused on improving long-term shareholder value.
Strengthened Core Earnings Reflect Repricing Strategy
A key contributor to the improved earnings results was the company’s success in expanding net interest income, which rose sharply year over year. For the quarter ending September 30, 2025, net interest income totaled $6.2 million, an increase from $4.8 million during the same period in 2024. The improvement was driven by both higher yields on earning assets and decreased interest expense.
Interest income increased modestly year over year, rising to $11.1 million from $10.9 million. Meanwhile, interest expense fell considerably, declining to $4.9 million compared to $6.1 million one year earlier. This reduction reflects management’s ongoing efforts to optimize funding costs and rebalance deposit and borrowing strategies in response to a changing rate environment.
The company also recorded a favorable shift in its credit loss provisioning. During the quarter, IF Bancorp recognized a credit of $42,000 to the allowance for credit losses, compared to a provision of $382,000 in the prior year period. This shift suggests stable loan performance and improved credit quality trends across the portfolio.
Noninterest Income and Expenses Show Mixed Trends
Noninterest income declined during the quarter, totaling $1.1 million compared to $1.4 million in the prior-year period. The decrease reflects lower revenue contributions from fee-based and service-related activities. Conversely, noninterest expense increased to $5.5 million, up from $5.0 million last year, driven by rising operational and personnel costs necessary to support growth and strategic initiatives.
Income tax expense also rose, totaling $512,000 compared to $218,000 in the prior-year quarter, corresponding to higher taxable earnings.
Balance Sheet Adjustments Reflect Liquidity and Funding Realignments
Total assets declined over the quarter, decreasing to $862.3 million at September 30, 2025, from $887.7 million at June 30, 2025. Cash and cash equivalents decreased significantly, falling to $8.0 million from $20.1 million, reflecting balance sheet repositioning and changes in deposit and investment levels.
Investment securities rose slightly to $189.8 million, while net loans receivable decreased to $619.3 million from $633.6 million at the end of June. The reduction in loan balances reflects both normal loan amortization activity and select paydowns, as well as a disciplined approach to new loan origination under current rate and credit market conditions.
Deposits declined to $680.3 million, down from $721.3 million at the end of the previous fiscal year. The company attributed most of this decrease to the withdrawal of approximately $59.3 million in municipal deposits tied to real estate tax collection cycles. These funds traditionally fluctuate seasonally, and the reduction does not indicate a decline in core retail or commercial deposit activity.
Total borrowings, including repurchase agreements, increased to $87.3 million from $72.9 million, indicating the company’s strategic use of wholesale funding to support lending and liquidity positioning.
Stockholders’ equity rose to $84.5 million, up from $81.8 million at June 30, 2025. This increase stemmed primarily from net income recorded during the quarter, a $1.8 million reduction in accumulated other comprehensive loss, and continued contributions from company stock plans. These positive factors were partially offset by the accrual of approximately $670,000 in shareholder dividends, reflecting the company’s ongoing commitment to shareholder return strategies.
Legacy and Market Position
IF Bancorp serves as the parent company of Iroquois Federal Savings and Loan Association, a community-focused financial institution with deep roots in Illinois. Chartered in 1883 and headquartered in Watseka, Illinois, the Association operates seven full-service banking offices across Watseka, Danville, Clifton, Hoopeston, Savoy, Champaign, and Bourbonnais, as well as a loan production office in Osage Beach, Missouri. Its wholly owned subsidiary, L.C.I. Service Corporation, expands the company’s financial services offerings through the sale of property and casualty insurance products.
This long-standing community presence provides the company with a stable deposit base and enduring customer relationships, both of which are essential advantages in the current competitive banking environment.
The company included forward-looking statements regarding its strategic direction and anticipated future performance, as defined under the Private Securities Litigation Reform Act of 1995. Management emphasized that future results will depend on a range of economic and regulatory variables, including interest rate movements, real estate market conditions, loan demand, and competitive pressures from both traditional and digital banking platforms.
IF Bancorp noted that external economic uncertainties—ranging from monetary policy changes to geopolitical events—may influence operating results. The company affirmed that it does not undertake to update forward-looking statements except as required by law.
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