The summary information presented below at September 30, 2020 and June 30, 2020
and for the three months ended September 30, 2020 and 2019 is derived from the
financial statements of TEB Bancorp, Inc. The financial condition data at June
30, 2020 and 2019 is derived from the audited financial statements of TEB
Bancorp, Inc. The information as of September 30, 2020 and for the three months
ended September 30, 2020 and 2019 is derived from unaudited financial statements
of TEB Bancorp, Inc. and reflects only normal recurring adjustments that are, in
the opinion of management, necessary for a fair presentation of the results for
the interim period presented. The following information is only a summary, and
should be read in conjunction with our audited financial statements and notes as
of and for the year ended June 30, 2020 and our unaudited financial statements
and notes as of and for the three months ended September 30, 2020 and 2019. The
results of operations for the three months ended September 30, 2020 are not
necessarily indicative of the results to be achieved for all of the year ending
June 30, 2020.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS



This quarterly report contains forward-looking statements, which can be
identified by the use of words such as "estimate," "project," "believe,"
"intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may,"
"should," "indicate," "would," "contemplate," "continue," "potential," "target"
and words of similar meaning. These forward-looking statements include, but are
not limited to:

? statements of our goals, intentions and expectations;

? statements regarding our business plans, prospects, growth and operating

strategies;

? statements regarding the quality of our loan and investment portfolios; and

? estimates of our risks and future costs and benefits.




These forward-looking statements are based on our current beliefs and
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. We are under no duty to and do not take any obligation to
update any forward-looking statements after the date of this quarterly report.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements:

adverse changes in the economy or business conditions, either nationally or in

? our markets, including, without limitation, the adverse effects of the COVID-19

pandemic on the global, national, and local economy;

? the effect of the COVID-19 pandemic on the Company's credit quality, revenue,

and business operations;

? general economic conditions, either nationally or in our market areas, that are

worse than expected;

? changes in the level and direction of loan delinquencies and write-offs and

changes in estimates of the adequacy of the allowance for loan losses;

? our ability to access cost-effective funding;

? fluctuations in real estate values and both residential and commercial real

estate market conditions;

? demand for loans and deposits in our market area;

? our ability to implement and change our business strategies;


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? competition among depository and other financial institutions;

inflation and changes in the interest rate environment that reduce our margins

? and yields, our mortgage banking revenues, the fair value of financial

instruments or our level of loan originations, or increase the level of

defaults, losses and prepayments on loans we have made and make;

? adverse changes in the securities or secondary mortgage markets;

? changes in laws or government regulations or policies affecting financial

institutions, including changes in regulatory fees and capital requirements;

? changes in the quality or composition of our loan or investment portfolios;

? technological changes that may be more difficult or expensive than expected, or

the failure or breaches of information technology security systems;

? the inability of third-party providers to perform as expected;

? our ability to manage market risk, credit risk and operational risk in the

current economic environment;

? our ability to enter new markets successfully and capitalize on growth

opportunities;

our ability to successfully integrate into our operations any assets,

? liabilities, customers, systems and management personnel we may acquire and our

ability to realize related revenue synergies and cost savings within expected

time frames, and any goodwill charges related thereto;

? changes in consumer spending, borrowing and savings habits;

changes in accounting policies and practices, as may be adopted by the bank

? regulatory agencies, the Financial Accounting Standards Board, the Securities

and Exchange Commission or the Public Company Accounting Oversight Board;

? our ability to retain key employees; and

? changes in the financial condition, results of operations or future prospects

of issuers of securities that we own.

COVID-19 Outbreak



In December 2019, a coronavirus (COVID-19) was reported in China, and, in March
2020, the World Health Organization declared it a pandemic. On March 12, 2020
the President of the United States declared the COVID-19 outbreak in the United
States a national emergency. The COVID-19 pandemic has caused significant
economic dislocation in the United States as many state and local governments
have ordered non-essential businesses to close and residents to shelter in place
at home. This has resulted in an unprecedented slow-down in economic activity
and a related increase in unemployment. Since the COVID-19 outbreak, millions of
individuals have filed claims for unemployment, and stock markets have declined
in value and in particular bank stocks have significantly declined in value. In
response to the COVID-19 outbreak, the Federal Reserve has reduced the benchmark
fed funds rate to a target range of 0% to 0.25%, and the yields on 10- and
30-year treasury notes have declined to historic lows. Various state governments
and federal agencies are requiring lenders to provide forbearance and other
relief to borrowers (e.g., waiving late payment and other fees). The federal
banking agencies have encouraged financial institutions to prudently work with
affected borrowers and recently passed legislation has provided relief from
reporting loan classifications due to modifications related to the COVID-19
outbreak. Certain industries have been particularly hard-hit, including the
travel and hospitality

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industry, the restaurant industry, and the retail industry. The following table shows the Company's exposure within these hard-hit industries.




                                                                                   Percentage of
Commercial Loan Type                                       September 30, 2020     Portfolio Loans
Restaurant, food service, bar                             $          1,573,888         0.67 %
Retail                                                               2,161,329         0.92 %
Hospitality and tourism                                                      -            - %
                                                          $          3,735,217         1.59 %



The Company's allowance for loan losses remained relatively unchanged at $1.4
million at September 30, 2020 and June 30, 2020. At September 30, 2020 and June
30, 2020, the allowance for loan losses represented 0.58% and 0.57% of total
loans, respectively. In the first quarter of 2020, the Company adjusted the
economic risk factor methodology to incorporate the current economic
implications and rising unemployment rate from the COVID-19 pandemic, leading to
the increase in the allowance for loan losses as a percentage of total loans. In
determining its allowance for loan loss level at September 30, 2020, the Company
considered the quality and composition of its loan portfolio going into the
COVID-19 pandemic. At September 30, 2020, approximately 98.6% of the Company's
loan portfolio is collateralized by real estate. As of September 30, 2020,
approximately 1.6% of the Company's loan portfolio is to borrowers in the more
particularly hard-hit industries (including the restaurant and food service
industries, retail industry, and hospitality and tourism industries) and the
Company has no international exposure.

Finally, the spread of the coronavirus has caused us to modify our business
practices, including employee travel, employee work locations, and cancellation
of physical participation in meetings, events, and conferences. We have many
employees working remotely and we may take further actions as may be required by
government authorities or that we determine are in the best interests of our
employees, customers, and business partners.

Given the ongoing and dynamic nature of the circumstances, it is difficult to
predict the full impact of the COVID-19 outbreak on our business. The extent of
such impact will depend on future developments, which are highly uncertain,
including when the coronavirus can be controlled and abated and when and how the
economy may be reopened. As the result of the COVID-19 pandemic and the related
adverse local and national economic consequences, we could be subject to any of
the following risks, any of which could have a material, adverse effect on our
business, financial condition, liquidity, and results of operations:

? demand for our products and services may decline, making it difficult to grow

assets and income;

if the economy is unable to substantially reopen, and high levels of

? unemployment continue for an extended period of time, loan delinquencies,

problem assets, and foreclosures may increase, resulting in increased charges

and reduced income;

? collateral for loans, especially real estate, may decline in value, which could

cause loan losses to increase;

our allowance for loan losses may have to be increased if borrowers experience

? financial difficulties beyond forbearance periods, which will adversely affect

our net income;

? the net worth and liquidity of loan guarantors may decline, impairing their

ability to honor commitments to us;

as the result of the decline in the Federal Reserve Board's target federal

? funds rate to near 0%, the yield on our assets may decline to a greater extent

than the decline in our cost of interest-bearing liabilities, reducing our net

interest margin and spread and reducing net income;

? our uninsured investment revenues may decline with continuing market turmoil;

? our cyber security risks are increased as the result of an increase in the


   number of employees working remotely;


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we rely on third party vendors for certain services and the unavailability of a

? critical service due to the COVID-19 outbreak could have an adverse effect on

us; and

? Federal Deposit Insurance Corporation premiums may increase if the agency

experiences additional resolution costs.




Moreover, our future success and profitability substantially depends on the
management skills of our executive officers and directors, many of whom have
held officer and director positions with us for many years. The unanticipated
loss or unavailability of key employees due to the outbreak could harm our
ability to operate our business or execute our business strategy. We may not be
successful in finding and integrating suitable successors in the event of key
employee loss or unavailability.

Any one or a combination of the factors identified above could negatively impact our business, financial condition, and results of operations and prospects.



The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed
into law on March 27, 2020 and provides over $2.0 trillion in emergency economic
relief to individuals and businesses impacted by the COVID-19 pandemic. The
CARES Act authorized the Small Business Administration ("SBA") to temporarily
guarantee loans under a new 7(a) loan program call the Paycheck Protection
Program ("PPP"). Although we were not already a qualified SBA lender, we
enrolled in the PPP by completing the required documentation.

An eligible business can apply for a PPP loan up to the lesser of: (1) 2.5 times
its average monthly "payroll costs"; or (2) $10.0 million. PPP loans will have:
(a) an interest rate of 1.0%; (b) a two-year loan term to maturity; and (c)
principal and interest payments deferred for six months from the date of
disbursement. The SBA will guarantee 100% of the PPP loans made to eligible
borrowers. The entire principal amount of the borrower's PPP loan, including any
accrued interest, is eligible to be reduced by the loan forgiveness amount under
the PPP so long as employee and compensation levels of the business are
maintained and 75% of the loan proceeds are used for payroll expenses, with the
remaining 25% of the loan proceeds used for other qualifying expenses.

As of September 30, 2020, the Company originated 17 loans totaling $1.1 million
of loans and generated approximately $44,000 from the processing fees, which
have been recognized. The Company receives a processing fee from the SBA ranging
from 1% to 5% depending on the size of the loan, which is offset by a
third-party servicing agent fee ranging from 0.25% to 1.0%.

To work with customers impacted by COVID-19, the Company is offering short-term
(i.e., three months or less with the potential to extend up to six months, if
necessary) loan modifications on a case by case basis to borrowers who were
current in their payments at the inception of the loan modification program.
Under Section 4013 of the CARES Act, loans less than 30 days past due as of
December 31, 2019 are considered current for COVID-19 modifications. A financial
institution can then suspend the requirements under GAAP for loan modifications
related to COVID-19 that would otherwise be categorized as a TDR, and suspend
any determination of a loan modified as a result of COVID-19 as being a TDR,
including the requirement to determine impairment for accounting purposes.
Financial institutions wishing to utilize this authority must make a policy
election, which applies to any COVID-19 modification made between March 1, 2020
and the earlier of either December 31, 2020 or the 60th day after the end of the
COVID-19 national emergency. Similarly, the Financial Accounting Standards Board
has confirmed that short-term modifications made on a good faith basis in
response to COVID-19 to loan customers who were current prior to any relief are
not TDRs. Lastly, prior to the enactment of the CARES Act, the banking
regulatory agencies provided guidance as to how certain short-term modifications
would not be considered TDRs, and have subsequently confirmed that such guidance
could be applicable for loans that do not qualify for favorable accounting
treatment under Section 4013 of the CARES Act.

As of September 30, 2020, the Company had received requests to modify 89 loans
aggregating $28.0 million. Of these modifications, $27.8 million, or 99.1%, were
performing in accordance with the accounting treatment under Section 4013 of the
CARES Act and therefore did not qualify as TDRs. As of September 30, 2020, 75 of
these modifications totaling $21.2 million have resumed monthly loan payments
and 14 modifications totaling $6.8 million remain in a

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deferred status. Two loans totaling $241,474 were modified and did not qualify
for the favorable accounting treatment under Section 4013 of the CARES Act and
therefore will be reported as a TDR. Management has evaluated the loans and
determined that based on the liquidation value of the collateral, no specific
reserve will be necessary.

The Company's allowance for loan losses remained $1.4 million at September 30,
2020 and June 30, 2020. At September 30, 2020 and June 30, 2020, the allowance
for loan losses represented 0.58% and 0.57% of total loans, respectively. In the
first quarter of 2020, the Company adjusted the economic risk factor methodology
to incorporate the current economic implications and rising unemployment rate
from the COVID-19 pandemic. In determining its allowance for loan loss level at
September 30, 2020, the Company considered the health and composition of its
loan portfolio going into the COVID-19 pandemic. At September 30, 2020,
approximately 98.6% of the Company's loan portfolio is collateralized by real
estate. Approximately 1.6% of the Company's loan portfolio is to borrowers in
the more particularly hard-hit industries (including the restaurant and food
service industries, retail industry, and hospitality and tourism industries) and
the Company has no international exposure.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2020.

Comparison of Financial Condition at September 30, 2020 and June 30, 2020



Total Assets. Total assets decreased $2.7 million, or 0.9%, to $302.8 million at
September 30, 2020 from $305.5 million at June 30, 2020. The decrease in assets
was due to a decrease of $3.6 million in cash and cash equivalents and $4.4
million in net loans held for investment, offset by an increase in loans held
for sale of $4.8 million, described in more detail below.

Cash and Cash Equivalents. Cash and cash equivalents decreased $3.6 million, or
27.8%, to $9.5 million at September 30, 2020 from $13.1 million at June 30,
2020. This fluctuation in cash and cash equivalents is a normal part of business
operations.

Net Loans Held for Investment. Net loans held for investment decreased $4.4
million, or 1.8%, to $232.9 million at September 30, 2020 from $237.3 million at
June 30, 2020, primarily reflecting a decrease in one- to four-family owner
occupied residential real estate loans of $7.9 million, or 7.9%, from $100.5
million at June 30, 2020 to $92.6 million at September 30, 2020. The decrease in
one- to four-family owner occupied residential real estate loans resulted from
loan payoffs and loan refinances during the three months ended September 30,
2020. We currently sell the vast majority of the fixed rate single family loans
we originate. This decrease was partially offset by an increase in multifamily
loans of $6.1 million, or 7.9%, to $82.5 million at September 30, 2020 from
$76.4 million at June 30, 2020.

Loans Held for Sale. Loans held for sale increased $4.8 million, or 25.9%, to
$23.5 million at September 30, 2020 from $18.7 million at June 30, 2020, due to
the increased origination and sale of fixed rate single family loans. The
increase in the origination of these loans is a result of the decrease in
interest rates related to the function of the yield curve due to the current
economic conditions.

Other Real Estate Owned. Other real estate owned remained unchanged at $2.3 million at September 30, 2020 and June 30, 2020.

Interest Bearing Deposits. Interest bearing deposits increased $155,000, or 5.7%, to $2.9 million at September 30, 2020 from $2.7 million at June 30, 2020, due to the maturity of two available for sale securities during the three months.

Available-for-Sale Securities. Available-for-sale securities increased $63,000,
or 0.3%, to $20.4 million at September 30, 2020 from $20.3 million at June 30,
2020, due to the increase in the market rates of the portfolio offset by two
securities maturing.

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Deposits. Total deposits increased $1.8 million, or 0.7%, to $257.9 million at
September 30, 2020 from $256.1 million at June 30, 2020. Savings and NOW
accounts increased $3.3 million, or 4.4%, from $75.4 million at June 30, 2020,
to $78.7 million at September 30, 2020. Demand accounts increased by $2.9
million, or 3.1%, from $93.6 million at June 30, 2020 to $96.5 million at
September 30, 2020. These increases were offset by a decrease in certificates of
deposit of $4.4 million, or 5.0%, to $82.7 million at September 30, 2020 from
$87.0 million at June 30, 2020.

Borrowed Funds. Borrowed funds, consisting solely of Federal Home Loan Bank
advances, decreased $5.0 million, or 55.6%, to $4.0 million at September 30,
2020 from $9.0 million at June 30, 2020. Loan payments and increases in deposits
have reduced our need for borrowings to fund our operations.

Federal Home Loan Bank Stock. Federal home loan bank stock remained unchanged at $1.3 million at September 30, 2020 and June 30, 2020.



Stockholders' Equity. Total stockholders' equity increased $1.8 million or 7.7%,
to $25.3 million at September 30, 2020 from $23.5 million at June 30, 2020. The
increase was due primarily to net income of $1.8 million during the three months
ended September 30, 2020.

Comparison of Operating Results for the Three Months Ended September 30, 2020 and 2019



General. Net income was $1.8 million for the three months ended September 30,
2020, compared to $568,000 for the three months ended September 30, 2019. The
change was primarily due to a $1.8 million increase in gain on sales of mortgage
loans, offset by a decrease of $325,000 in interest income on loans and a
$289,000 increase in compensation and benefits expense, described in more detail
below.

Interest Income. Interest income decreased $363,000, or 11.7%, to $2.8 million
for the three months ended September 30, 2020 compared to $3.1 million for the
three months ended September 30, 2019. Interest income on loans, which is our
primary source of interest income, decreased $325,000, or 11.1%, to $2.6 million
for the three months ended September 30, 2020 compared to $2.9 million for the
three months ended September 30, 2019. Our annualized average yield on loans
decreased nine basis points to 4.47% for the three months ended September 30,
2020 from 4.56% for the three months ended September 30, 2019, primarily due to
the decrease in interest rates related to the function of the yield curve due to
the economic conditions. The average balance of loans decreased $23.6 million,
or 9.2%, to $232.6 million for the three months ended September 30, 2020 from
$256.3 million for the three months ended September 30, 2019.

Interest Expense. Interest expense decreased $296,000, or 44.5%, to $369,000 for
the three months ended September 30, 2020 compared to $664,000 for the three
months ended September 30, 2019, due to decreases in market interest rates
during the period.

Interest expense on deposits decreased $98,000, or 21.2%, to $362,000 for the
three months ended September 30, 2020 from $460,000 for the three months ended
September 30, 2019. Specifically, interest expense on certificates of deposit
decreased $99,000, or 22.7%, to $338,000 for the three months ended September
30, 2020 from $437,000 for the three months ended September 30, 2019. The
decrease resulted from a 29 basis point decrease in the annualized average rate
we paid on certificates of deposit to 1.59% for the three months ended September
30, 2020 from 1.88% for the three months ended September 30, 2019, reflecting
recent decreases in market rates. Additionally, there was a $7.8 million
decrease in the average balance of certificates of deposits to $85.3 million at
September 30, 2020 from $93.1 million for the three months ended September 30,
2019.

Interest expense on FHLB borrowings decreased $198,000 to $6,000 for the three
months ended September 30, 2020 from $204,000 for the three months ended
September 30, 2019. This decrease resulted from decreases in both the average
balance of FHLB borrowings and the average rate we paid on FHLB borrowings. The
average balance of borrowings decreased $26.7 million, or 77.0%, to $8.0 million
for the three months ended September 30, 2020 from $34.6 million for the three
months ended September 30, 2019, and the annualized average rate we paid on
borrowings decreased 205 basis points to 0.31% for the three months ended
September 30, 2020 from 2.36% for the three months ended September 30, 2019. As
described above, Loan payments and increases in deposits have reduced our need
for borrowings to fund our operations.

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Net Interest Income. Net interest income remained relatively stable, decreasing
$67,000, or 2.8%, to $2.4 million for the three months ended September 30, 2020
from the three months ended September 30, 2019. In addition, our net interest
rate spread increased by 20 basis points to 3.52% for the three months ended
September 30, 2020 from 3.33% for the three months ended September 30, 2019, and
our net interest margin increased by 16 basis points to 3.61% for the three
months ended September 30, 2020 from 3.45% for the three months ended September
30, 2019, due to changes in market interest rates.

Provision for Loan Losses. Provisions for loan losses are charged to operations
to establish an allowance for loan losses at a level necessary to absorb known
and inherent losses in our loan portfolio that are both probable and reasonably
estimable at the date of the financial statements. In evaluating the level of
the allowance for loan losses, management analyzes several qualitative loan
portfolio risk factors including, but not limited to, management's ongoing
review and grading of loans, facts and issues related to specific loans,
historical loan loss and delinquency experience, trends in past due and
non-accrual loans, existing risk characteristics of specific loans or loan
pools, changes in the nature, volume and terms of loans, the fair value of
underlying collateral, changes in lending personnel, current economic conditions
and other qualitative and quantitative factors which could affect potential
credit losses. See "Summary of Significant Accounting Policies" for additional
information.

After an evaluation of these factors, and based on management's current
assessment of the increased inherent risk in the loan portfolio due to COVID-19,
no provision was recorded for loan losses for the three months ended September
30, 2020, or September 30, 2019. Our allowance for loan losses was $1.4 million
at September 30, 2020 and June 30, 2020. The allowance for loan losses to total
loans was 0.58% at September 30, 2020 and 0.57% at June 30, 2020, while the
allowance for loan losses to non-performing loans was 106.52% at September 30,
2020 and 100.91% at June 30, 2020. The increase in allowance for loan losses as
a percentage of non-performing loans is due to a $58,000 loan classified as a
non-accrual at June 30, 2020 becoming current as of September 30, 2020.

To the best of our knowledge, we have recorded all loan losses that are both
probable and reasonable to estimate at September 30, 2020. However, future
changes in the factors described above, including, but not limited to, actual
loss experience with respect to our loan portfolio, could result in material
increases in our provision for loan losses. In addition, the WDFI and the
Federal Deposit Insurance Corporation, as an integral part of their examination
process, will periodically review our allowance for loan losses, and as a result
of such reviews, we may have to adjust our allowance for loan losses.

Non-interest Income. Non-interest income increased $1.8 million, or 115.1%, to
$3.3 million for the three months ended September 30, 2020 compared to $1.5
million for the three months ended September 30, 2019. Gain on sale of mortgage
loans (consisting solely of one- to four-family residential real estate loans)
increased $1.8 million, or 140.1%, to $3.0 million for the three months ended
September 30, 2020 compared to $1.3 million for the three months ended September
30, 2019. We originated for sale $142.5 million of mortgage loans during the
2020 period compared to $87.0 million of such originations during the 2019
period.

Non-interest Expenses. Non-interest expenses increased $473,000, or 13.9%, to
$3.9 million for the three months ended September 30, 2020 from $3.4 million for
the three months ended September 30, 2019. Compensation and benefits expense
increased $289,000, or 13.4%, to $2.4 million for the three months ended
September 30, 2020 from $2.1 million for the three months ended September 30,
2019, as we experienced an increase in payroll expense due to higher loan
officer compensation as a result of increased loan origination volume. Other
expenses increased $159,000 or 67.1% to $396,000 for the three months ended
September 30, 2020 compared to $237,000 as of September 30, 2019 due to
increased sold loan volume and the associated loan origination costs that are
recognized over the life of the loan.

Income Tax Expense. We recognized no income tax expense or benefits for the
three months ended September 30, 2020 and for the three months ended September
30, 2019 due to a full valuation allowance being recorded against the Company's
deferred tax assets.

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Average Balance Sheet



The following table sets forth average balance sheets, average yields and costs,
and certain other information at and for the periods indicated. No
tax-equivalent yield adjustments have been made, as the effects would be
immaterial. All average balances are daily average balances. Non-accrual loans
were included in the computation of average balances. The yields set forth below
include the effect of deferred fees, discounts, and premiums that are amortized
or accreted to interest income or interest expense. Loan balances exclude loans
held for sale.




                                                         For the Three Months Ended September 30,
                                                      2020                                        2019
                                       Average                      Average        Average                      Average
                                     Outstanding                     Yield/      Outstanding                     Yield/
                                       Balance        Interest      Rate (1)       Balance        Interest      Rate (1)


Interest-earning assets:
Loans                               $ 232,635,658    $ 2,599,597        4.47 %  $ 256,278,579    $ 2,924,435        4.56 %
Securities                             20,301,633        140,386        2.77 %     20,844,563        147,321        2.83 %
Federal Home Loan Bank of
Chicago stock                           1,345,500         11,604        3.45 %      1,629,423         16,179        3.97 %
Other                                   9,553,405            559

0.02 % 5,249,782 27,237 2.08 % Total interest-earning assets 263,836,196 2,752,146 4.17 % 284,002,347 3,115,172 4.39 % Non-interest-earning assets

            35,449,900                                  26,143,933
Total assets                        $ 299,286,096                               $ 310,146,280

Interest-bearing liabilities:
Demand deposits                     $  55,966,341    $     8,325        0.06 %  $  48,006,251    $     6,531        0.05 %
Savings and NOW deposits               78,460,847         16,234        0.08 %     74,960,162         16,344        0.09 %
Certificates of deposit                85,277,751        337,940        1.59 %     93,101,415        437,361        1.88 %
Total interest-bearing deposits       219,704,939        362,499        0.66 %    216,067,828        460,236        0.85 %
Borrowings                              7,955,556          6,142        0.31 %     34,606,272        203,979        2.36 %
Total interest-bearing
liabilities                           227,660,495        368,641

0.65 % 250,674,100 664,215 1.06 % Non-interest-bearing liabilities 47,705,361


       34,687,273
Total liabilities                     275,365,856                                 285,361,373
Total equity                           23,920,240                                  24,784,907
Total liabilities and equity        $ 299,286,096                               $ 310,146,280
Net interest income                                  $ 2,383,505                                 $ 2,450,957
Net interest rate spread (1)                                            3.52 %                                      3.33 %
Net interest-earning assets (2)     $  36,175,701                               $  33,327,927
Net interest margin (3)                                                 3.61 %                                      3.45 %
Average interest-earning assets
to interest-bearing liabilities            115.89 %                                    113.30 %

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(1) Annualized

Net interest spread represents the difference between the weighted average (2) yield on interest-earning assets and the weighted average rate of

interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less

total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total

interest-earning assets.

Liquidity and Capital Resources



Liquidity describes our ability to meet the financial obligations that arise in
the ordinary course of business. Liquidity is primarily needed to meet the
borrowing and deposit withdrawal requirements of our customers and to fund
current and planned expenditures. Our primary sources of funds are deposits,
principal and interest payments on loans and securities, proceeds from the sale
of loans, and proceeds from maturities of securities. We also have the ability
to borrow from the Federal Home Loan Bank of Chicago and from U.S. Bank. At
September 30, 2020, we had a $124.4 million line of

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credit with the Federal Home Loan Bank of Chicago, and had $4.0 million of borrowings outstanding as of that date. We also had a $5.0 million line of credit with U.S. Bank, with no borrowings outstanding as of that date.



While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions, and competition. Our
most liquid assets are cash and short-term investments including
interest-bearing demand deposits. The levels of these assets are dependent on
our operating, financing, lending, and investing activities during any given
period.

Our cash flows are comprised of three primary classifications: cash flows from
operating activities, investing activities, and financing activities. Net cash
used in operating activities was $6.4 million and $7.5 million for the
three months ended September 30, 2020 and September 30, 2019, respectively. Net
cash provided by investing activities, which consists primarily disbursements
for loan originations and the purchase of securities, offset by principal
collections on loans, and proceeds from maturing securities and pay downs on
securities, was $4.2 million and $8.8 million for the three months ended
September 30, 2020 and September 30, 2019, respectively. Net cash used in
financing activities, consisting of activity in deposit accounts and borrowings,
was $1.4 million and $2.1 million for the three months ended September 30, 2020
and September 30, 2019, respectively.

We are committed to maintaining a strong liquidity position. We monitor our
liquidity position on a daily basis. We anticipate that we will have sufficient
funds to meet our current funding commitments. Based on our deposit retention
experience, current pricing strategy and regulatory restrictions, we anticipate
that a substantial portion of maturing time deposits will be retained, and that
we can supplement our funding with borrowings in the event that we allow these
deposits to run off at maturity.

At September 30, 2020, The Equitable Bank was classified as "well capitalized" for regulatory capital purposes.

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