EPS of $0.20 increased by 33.3% from previous year
Gross margin of 100.0%
Net income of 633.00K
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IF Bancorp Inc (IROQ) QQ1 2025 Results Analysis: Solid Net Income Amid Revenue Volatility and Balance Sheet Resilience
Executive Summary
IF Bancorp Inc (IROQ) delivered QQ1 2025 revenue of $6.23 million, up 9.1% year over year but down 47.5% quarter over quarter, with net income of $0.633 million and earnings per share of $0.20. The kvartely results show a positive year-over-year trajectory in core earnings, but a sharp QoQ revenue decline that highlights seasonal dynamics or near-term pressure on the top line. Operating income of $0.851 million reflects a 13.66% operating margin, while the net margin stands at 10.16% for the quarter. The company’s gross margin is reported at 100% in the data set, suggesting either a data artifact or a minimal cost of revenue for the period; investors should verify the underlying cost structure in the accompanying 10-Q. Liquidity remains robust, with total cash and short-term investments near $200 million against total assets of about $893 million, yielding a comfortable current ratio around 2.8. The stock trades at a price-to-earnings ratio of approximately 25.7x and a price-to-book ratio near 0.83x, with a modest dividend yield around 1%. Profitability metrics (ROA ~0.07% and ROE ~0.8%) remain subdued versus regional peers, indicating a business that generates sound net income from a small earnings base but struggles to convert assets into higher returns. The investment thesis hinges on stabilizing deposits, meaningful loan growth, and potential non-interest income expansion from wealth and insurance products, balanced against a concentration of investment assets and sensitivity to rate and credit cycles.
Net Income: $0.633 million; YoY +35.84%; QoQ +46.87%
EPS (diluted): $0.20; YoY +33.33%; QoQ +53.85%
Financial Highlights
Key quarterly metrics and trends (QQ1 2025 vs prior year/quarter):
- Revenue: $6.229 million; YoY +9.07%; QoQ -47.50%
- Gross Profit: $6.229 million; YoY +9.07%; QoQ -47.50%
- Operating Income: $0.851 million; YoY +32.76%; QoQ -50.92%
- Net Income: $0.633 million; YoY +35.84%; QoQ +46.87%
- EPS (diluted): $0.20; YoY +33.33%; QoQ +53.85%
- Gross Margin: 100.0% (data reflects gross profit equal to revenue, suggesting missing cost data or a data artifact)
- Operating Margin: 13.66%; Pretax Margin: 13.66%; Net Margin: 10.16%
- Tax Rate: 25.6%
- ROA: 0.07%; ROE: 0.80%; ROCE: 0.10%
- Revenue to assets/turnover metrics indicate a very low asset turnover (~0.007x), reflecting the base scale and balance sheet composition
- Cash Flow: Operating Cash Flow $2.166 million; Free Cash Flow $2.094 million; Net change in cash -$1.787 million; Cash at end of period $7.834 million (per period data)
- Liquidity: Cash & equivalents $8.034 million; Short-term investments $192.651 million; Cash + short-term investments ~$199.865 million; Current ratio 2.82x; Cash Ratio 2.92x
- Balance Sheet: Total assets $893.425 million; Total liabilities $814.660 million; Total stockholders’ equity $78.765 million; Long-term debt $108.674 million; Short-term debt $17.913 million; Net debt $118.553 million; Debt to capitalization ~58%
- Valuation: Price-to-book ~0.83x; Price-to-earnings ~25.66x; Price-to-sales ~10.43x; Dividend yield ~1.03%
- Efficiency/Asset Composition: Total investments ~$839.715 million, with long-term investments ~$647.064 million and short-term investments ~$192.651 million; Asset turnover and related efficiency metrics are subdued, reflecting a balance sheet heavy on investment assets rather than operating scale.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.23M
9.07%
-47.50%
Gross Profit
6.23M
9.07%
29.82%
Operating Income
851.00K
32.76%
-50.92%
Net Income
633.00K
35.84%
46.87%
EPS
0.20
33.33%
53.85%
Key Financial Ratios
currentRatio
2.82
grossProfitMargin
100%
operatingProfitMargin
13.7%
netProfitMargin
10.2%
returnOnAssets
0.07%
returnOnEquity
0.8%
debtEquityRatio
1.38
operatingCashFlowPerShare
$0.67
freeCashFlowPerShare
$0.65
dividendPayoutRatio
105.8%
priceToBookRatio
0.83
priceEarningsRatio
25.66
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note on transcript: The dataset shows no earnings call transcript for QQ1 2025 (earningsTranscript array is empty). Consequently, there are no management quotes to quote directly from an earnings call. In lieu of a transcript, insights are anchored to the Form 10-Q / accompanying press release data and segment-level commentary where available. If and when the company offers management commentary, the investor should weigh those remarks against the quantitative results presented here.
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Forward Guidance
Forward guidance is not explicitly provided in the QQ1 2025 data. Absent a formal update, the outlook hinges on macro rate dynamics, loan growth, and deposit stability. Expected focal points for investors include:
- Net interest income (NII) trajectory: With a small operating footprint and a balance sheet heavy in investments, NII sensitivity to rate changes will be a key driver of profitability as loan volumes and yields evolve.
- Deposit growth and funding mix: Sustained or growing deposits would support fee-based activities and loan origination, reducing funding volatility.
- Non-interest income expansion: Potential upside from wealth/insurance products and fee-based services given the described investment portfolio and financial services footprint.
- Credit quality and reserve levels: Ongoing assessment of credit risk in the loan book and any impairment or loan loss reserve changes in coming quarters.
- Capital adequacy and balance sheet resilience: With a debt-to-capitalization around 0.58, monitoring for regulatory capital adequacy and potential dividend policy adjustments will be important.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
IROQ Focus
1.00%
13.70%
0.80%
25.66%
CRZBF
52.20%
20.20%
2.39%
7.21%
OFED
1.00%
14.20%
0.95%
23.10%
ISTR
0.00%
21.10%
2.50%
6.88%
CBAN
63.90%
18.60%
2.30%
10.69%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
IF Bancorp offers a defensively positioned balance sheet with substantial liquidity and a stable, albeit small, earnings base. The QQ1 2025 results show year-over-year revenue growth but pronounced quarter-to-quarter volatility, with profitability metrics that lag peers. The valuation — roughly 0.83x price-to-book and ~25.7x price-to-earnings — sits in a mid-to-attractive range for a small regional bank, aided by a solid dividend yield around 1%. The primary catalysts for upside are (1) stabilization and growth of loans and deposits, (2) expansion into non-interest income streams (wealth management, insurance), and (3) a sustainable improvement in net interest income as rate dynamics evolve. Key risks remain the bank’s reliance on an investment-heavy balance sheet, which introduces market risk and potential volatility in earnings. For investors, the stock may appeal to those seeking liquidity and regional bank exposure with defensive characteristics, provided they are comfortable with the profitability hurdle and the need for earnings leverage to drive long-term value. Ongoing monitoring should focus on net interest income trajectory, loan growth, credit quality indicators, and the evolution of the investment portfolio as rates and macro conditions shift.
Key Investment Factors
Growth Potential
Limited organic growth potential in a small regional bank; opportunities may arise from expanding non-interest income (wealth management, insurance services) and selective loan growth in core markets; potential upside if rate normalization improves NIM.
Solid liquidity with substantial investments and a robust current ratio; manageable debt levels but modest equity base and depressed ROE; valuation supportive but requires improved profitability to sustain multiple expansion.
SWOT Analysis
Strengths
Strong liquidity cushion with cash and short-term investments (~$199.9M) against total assets of ~$893.4M
Low debt burden and manageable capitalization (debt to capitalization ~0.58)
Positive near-term net income and cash flow generation despite a small revenue base
Weaknesses
Very low profitability metrics (ROA ~0.07%, ROE ~0.8%) versus regional peers
Reported gross margin at 100% appears to reflect data limitations or missing cost of revenue
Heavy reliance on investment portfolio exposes the bank to market risk and reinvestment risk
Limited scale and geographic footprint constrain operating leverage and loan growth potential
Opportunities
Grow non-interest income through wealth management, insurance services, and advisory offerings
Deposit growth and diversification could support broader fee-based revenue
Potential NIM improvement if rate normalization supports loan yields and funding costs adjust favorably
Threats
Credit risk in loan book and potential loan losses in downturns
Competition for deposits from larger regional banks and fintechs
Regulatory changes affecting community banks and investment portfolio concentration risks
Macro risks including rate volatility, inflation, and economic slowdown