IF Bancorp, Inc. (‘IF Bancorp’) operates as a holding company for Iroquois Federal Savings and Loan Association (‘Iroquois Federal’ or the ‘Association’).
The company is primarily engaged in the business of directing, planning, and coordinating the business activities of Iroquois Federal. The company’s most significant asset is its investment in Iroquois Federal.
The Association’s business consists primarily of taking deposits from the general public and investing those deposits, together with...
IF Bancorp, Inc. (‘IF Bancorp’) operates as a holding company for Iroquois Federal Savings and Loan Association (‘Iroquois Federal’ or the ‘Association’).
The company is primarily engaged in the business of directing, planning, and coordinating the business activities of Iroquois Federal. The company’s most significant asset is its investment in Iroquois Federal.
The Association’s business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in one- to four-family residential mortgage loans, multi-family mortgage loans, commercial real estate loans, including farm loans, commercial business loans, construction loans, and land development loans, and, to a much lesser extent, consumer loans, consisting primarily of automobile loans, and home equity lines of credit. The company also invests in securities, which historically have consisted primarily of securities issued by the U.S. government, the U.S. government agencies, and the U.S. government-sponsored enterprises, as well as mortgage-backed securities issued or guaranteed by the U.S. government-sponsored enterprises. To a lesser extent, the company also invests in municipal obligations.
The company offers a variety of deposit accounts, including savings accounts, certificates of deposit, money market accounts, commercial and personal checking accounts, individual retirement accounts, and health savings accounts. The company also offers alternative delivery channels, including ATMs, online banking and bill pay, mobile banking with mobile deposit and bill pay, ACH origination, remote deposit capture, and telephone banking.
In addition to the company’s traditional banking products and services, the company offers a full line of property and casualty insurance products through Iroquois Federal’s wholly-owned subsidiary, L.C.I. Service Corporation, an insurance agency with offices in Watseka and Danville, Illinois. The company also offers annuities, mutual funds, individual and group retirement plans, life, disability and health insurance, individual securities, managed accounts, and other financial services at all of the company’s locations through Iroquois Financial, a division of Iroquois Federal. Raymond James Financial Services, Inc. serves as the broker-dealer for Iroquois Financial.
Market Area
The company conducts its operations from its full-service banking offices located in the municipalities of Watseka, Danville, Clifton, Hoopeston, Savoy, Bourbonnais, and Champaign, Illinois, and its loan production office in Osage Beach, Missouri. The company’s primary lending market includes the Illinois counties of Vermilion, Iroquois, Champaign, and Kankakee, as well as the adjacent counties in Illinois and Indiana within 30 miles of a branch or loan production office. The company’s loan production office in Osage Beach, Missouri, serves the Missouri counties of Camden, Miller, and Morgan.
The economy in the company’s primary markets is fairly diversified, with employment in services, wholesale/retail trade, and government serving as the basis of the Iroquois County, Vermilion County, Champaign County, and Kankakee County economies. Manufacturing jobs, which tend to be higher-paying jobs, are also a large source of employment in Vermilion, Champaign, and Kankakee Counties, while Iroquois County is heavily influenced by agriculture and agriculture-related businesses.
The company’s Osage Beach, Missouri loan production and wealth management office is located in the Lake of the Ozarks region and serves the Missouri counties of Camden, Miller, and Morgan. Once known primarily as a resort area, this market is becoming an area of permanent residences and a growing retirement community, providing an excellent market for mortgage loans.
Lending Activities
The company’s principal lending activity is the origination of one- to four-family residential mortgage loans, multi-family loans, commercial real estate loans, including farm loans, home equity loans and lines of credit, commercial business loans, consumer loans, consisting primarily of automobile loans, and, to a much lesser extent, construction loans and land development loans.
In addition to loans originated by Iroquois Federal, the company’s loan portfolio includes loan purchases that are secured by single-family homes located primarily in the Midwest. The company’s loan portfolio also includes commercial loan participations that are secured by both real estate and other business assets, primarily within 100 miles of its primary lending market. The company originates a substantial portion of its fixed-rate one- to four-family residential mortgage loans for sale to the Federal Home Loan Bank of Chicago with servicing retained.
One- to Four-Family Residential Mortgage Loans
The company offers residential mortgage loans that conform to Fannie Mae and Freddie Mac underwriting standards, as well as non-conforming loans. The company also offers loans through various agency programs, such as the Mortgage Partnership Finance Program of the Federal Home Loan Bank of Chicago, which are originated for sale.
The company offers fixed-rate conventional mortgage loans with terms of up to 30 years that are fully amortizing with monthly loan payments. The company also offers adjustable-rate mortgage loans that generally provide an initial fixed interest rate of five to seven years and annual interest rate adjustments thereafter. The company’s adjustable-rate mortgage loans amortize over a period of up to 30 years. The company offers one- to four-family residential mortgage loans with loan-to-value ratios up to 102%. Private mortgage insurance or participation in a government-sponsored program is required for all one- to four-family residential mortgage loans with loan-to-value ratios exceeding 90%.
The company’s one- to four-family residential mortgage loans are generally conforming loans. The company generally originates both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency for Fannie Mae and Freddie Mac. Most of the company’s jumbo loans are originated with a seven-year fixed-rate term and an annual adjustable rate thereafter, with up to a 30-year amortization schedule. Occasionally, the company will originate fixed-rate jumbo loans with terms of up to 15 years.
The company offers several types of adjustable-rate mortgage loans secured by residential properties with interest rates that are fixed for an initial period of five to seven years. The company offers adjustable-rate mortgage loans that are fully amortizing. After the initial fixed period, the interest rate on adjustable-rate mortgage loans generally resets every year based upon the weekly average of a one-year U.S. Treasury Securities rate plus an applicable margin, subject to periodic and lifetime limitations on interest rate changes.
In addition to traditional one- to four-family residential mortgage loans, the company offers home equity loans that are secured by a second mortgage on the borrower’s primary or secondary residence.
Commercial Real Estate and Multi-family Real Estate Loans
The company’s commercial real estate mortgage loans are primarily secured by owner-occupied businesses, student housing, retail rentals, churches, office buildings, and farm loans secured by real estate. The rates on the company’s adjustable-rate commercial real estate loans are generally based on the prime rate of interest plus an applicable margin and generally have a specified floor.
The company originates multi-family loans with balloon and adjustable rates for terms of up to seven years with amortization up to 25 years. The rates on the company’s adjustable-rate multi-family loans are generally tied to the prime rate of interest plus or minus an applicable margin and generally have a specified floor.
Commercial real estate and multi-family real estate loans, however, entail greater credit risks compared to the one- to four-family residential mortgage loans the company originates, as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers.
Commercial Business Loans
The company also originates commercial non-mortgage business (term) loans and adjustable lines of credit. The company’s commercial business loans are generally used for working capital purposes or for acquiring equipment, inventory, or furniture, and are primarily secured by business assets other than real estate, such as business equipment and inventory, accounts receivable, or stock. The company also offers agriculture loans that are not secured by real estate.
The commercial business loans that the company offers have fixed interest rates or adjustable rates indexed to the prime rate of interest plus an applicable margin, and with terms ranging from one to seven years. The company’s commercial business loan portfolio consists primarily of secured loans.
Construction Loans
The company also originates construction loans for one- to four-family residential properties and commercial real estate properties, including multi-family properties. The company generally requires that a commitment for permanent financing be in place prior to closing the construction loan.
Consumer Loans
The company also originates consumer loans consisting of loans to individuals. These loans are underwritten utilizing the borrower’s financial history, including the Fair Isaac Corporation (‘FICO’) credit scoring and information as to the underlying collateral. Repayment is expected from the cash flow of the borrower. These loans are generally secured by vehicles, deposit accounts, and other consumer assets. Consumer loans may be underwritten with terms up to seven years, fully amortized. These also include consumer overdraft protection loans.
Investments
The company’s current investment policy permits it to invest only in investment quality securities permitted by Office of the Comptroller of the Currency regulations, including the U.S. Treasury or government-guaranteed securities, the U.S. government agency securities, securities issued or guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae, bank-qualified municipal securities, bank-qualified money market instruments, and bank-qualified corporate bonds.
As of June 30, 2024, the company’s investment portfolio included the U.S. Treasury; the U.S. government and federal agency and government-sponsored enterprises (GSEs); mortgage-backed securities which include GSE residential; Small Business Administration; and state and political subdivisions.
Deposits
The company generates deposits primarily from the areas in which its branch offices are located. The company offers a variety of deposit accounts with a range of interest rates and terms. The company’s deposit accounts consist of statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, individual retirement accounts, and health savings accounts. From time to time, the company utilizes brokered certificates of deposit or non-brokered certificates of deposit obtained through an internet listing service.
As of June 30, 2024, the company’s investment portfolio included noninterest bearing demand, interest-bearing checking or NOW, savings accounts, money market accounts, and certificates of deposit.
Subsidiaries
IF Bancorp conducts its principal business activities through its wholly-owned subsidiary, Iroquois Federal Savings and Loan Association. Iroquois Federal Savings and Loan Association has one wholly-owned subsidiary, L.C.I. Service Corporation, an insurance agency with offices in Watseka and Danville, Illinois.
Regulation and Supervision
Iroquois Federal is subject to regulation, examination, and supervision by the Office of the Comptroller of the Currency (‘OCC’). Iroquois Federal is also regulated, to a lesser extent, by the FDIC with respect to insurance of deposit accounts and the Federal Reserve Board, with respect to reserves to be maintained against deposits, the payment of dividends, and other matters. Iroquois Federal is also a member of and owns stock in the Federal Home Loan Bank (FHLB)-Chicago, which is one of the 11 regional banks in the Federal Home Loan Bank System. As a member of the Federal Home Loan Bank of Chicago, Iroquois Federal is required to acquire and hold shares of capital stock in the Federal Home Loan Bank.
In addition, the company must comply with significant anti-money laundering and anti-terrorism laws and regulations, Community Reinvestment Act laws and regulations, and fair lending laws and regulations.
As a savings and loan holding company, IF Bancorp is required to comply with the rules and regulations of, must file certain reports with, and is subject to examination by the Federal Reserve Board. IF Bancorp is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.
On July 30, 2012, Iroquois Federal received approval from the OCC to participate in the Supplemental Lending Limits Program (SLLP).
As a federal savings bank that has not exercised the covered savings association election, Iroquois Federal must either qualify as a ‘domestic building and loan association’ within the meaning of the Internal Revenue Code or satisfy the Home Owners’ Loan Act qualified thrift lender, or ‘QTL,’ test. Under the QTL test, Iroquois Federal must maintain at least 65% of its ‘portfolio assets’ in ‘qualified thrift investments’ in at least nine months of the most recent 12 months. As of June 30, 2024, Iroquois Federal held 70.35% of its ‘portfolio assets’ in ‘qualified thrift investments’ and satisfied the QTL test.
Iroquois Federal received a ‘satisfactory’ Community Reinvestment Act rating in its most recent performance evaluation.
Iroquois Federal’s authority to extend credit to its directors, executive officers, and 10% stockholders, as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board.
The Deposit Insurance Fund of the FDIC insures deposits at FDIC-insured financial institutions, such as Iroquois Federal. Deposit accounts in Iroquois Federal are insured by the FDIC generally up to a maximum of $250,000 per separately insured depositor and up to a maximum of $250,000 for self-directed retirement accounts.
Iroquois Federal’s operations are also subject to federal laws applicable to credit transactions, such as the Truth-In-Lending Act, the Real Estate Settlement Procedures Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act of 1978, the Fair Debt Collection Act, and the Truth in Savings Act.
The operations of Iroquois Federal are also subject to the Right to Financial Privacy Act, the Electronic Funds Transfer Act, and Regulation E promulgated thereunder, the Check Clearing for the 21st Century Act, also known as ‘Check 21,’ and The USA PATRIOT Act, required compliance programs are intended to supplement existing compliance requirements that also apply to financial institutions under the Bank Secrecy Act and the Office of Foreign Assets Control regulations.
IF Bancorp is a unitary savings and loan holding company within the meaning of the Home Owners’ Loan Act. As such, IF Bancorp is registered with the Federal Reserve Board and is subject to regulations, examinations, supervision, and reporting requirements applicable to savings and loan holding companies.
Under present law, the business activities of IF Bancorp are generally limited to those activities permissible for financial holding companies under Section 4(k) of the Bank Holding Company Act of 1956, as amended, provided certain conditions are met, including electing such status, or for multiple savings and loan holding companies.
Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances, including where, as is the case with IF Bancorp, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’).
IF Bancorp common stock is registered with the SEC under the Exchange Act. IF Bancorp is subject to the information, proxy solicitation, insider trading restrictions, and other requirements under the Exchange Act.
History
IF Bancorp, Inc., a Maryland corporation, was founded in 1883. The company was incorporated in 2011.
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