SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

For the quarterly period ended September 30, 20182019

OR

For the transition period from _______________ to _______________

Commission FileNo. 333-227223001-38778

1895 Bancorp of Wisconsin, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(414)421-8200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

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 requirements for the past 90 days.    YesYES  ☒    NO  ☐    No  ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    YesYES  ☒    NoNO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act. (Check one)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).     YesYES  ☐    NoNO  ☒

No4,876,677 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding as of December21, 2018.September 30, 2019.

1895 Bancorp of Wisconsin, Inc.

Form10-Q

Table of Contents

EXPLANATORY NOTE

1895 Bancorp of Wisconsin, Inc. (the “Company,” “we” or “our”) is beingwas formed in January 2019 to serve as themid-tier stock holding company for PyraMax Bank, FSB (“PyraMax Bank”) upon the reorganization of PyraMax Bank into thetwo-tier mutual holding company structure. As of September 30, 2018, theThe reorganization had not been completed. As of September 30, 2018,was completed on January 8, 2019. Prior to January 8, 2019, the Company had no assets or liabilities and had not conducted any business activities other than organizational activities. Accordingly, the unaudited financial statements and other financial information contained in this Quarterly Report on Form10-Q relaterelates solely to PyraMax Bank.Bank for any period prior to January 8, 2019.

The unaudited financial statements and other financial information contained in this Quarterly Report on Form10-Q should be read in conjunction with the audited financial statements, and related notes, of PyraMax Bankthe Company at and for the year ended December 31, 20172018 contained in the Company’s definitive prospectus dated November 6, 2018 (the “Prospectus”),Annual Report Form10-K, as filed with the Securities and Exchange Commission pursuant to Securities Act Rule 424(b)(3) on November 15, 2018.April 1, 2019.

PART I – FINANCIAL INFORMATION

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

See accompanying notes to financial statements.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)thousands, except per share amounts)

See accompanying notes to financial statements.

PYRAMAX BANK, FSB

1895 BANCORP OF WISCONSIN, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/INCOME (LOSS)

(In thousands)

See accompanying notes to financial statements.

PYRAMAX BANK, FSB

STATEMENTS1895 BANCORP OF CASH FLOWSWISCONSIN, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

See accompanying notes to financial statements.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

See accompanying notes to financial statements.

1895 BANCORP OF WISCONSIN, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(in thousands)

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

1895 Bancorp of Wisconsin, Inc. (the “Company”) was formed in January 2019 to serve as themid-tier stock holding company for PyraMax Bank, FSB (the “Bank”) upon the reorganization of the Bank into thetwo-tier mutual holding company structure (the “Reorganization”). As of December 31, 2018, the Reorganization had not been completed, and therefore, the Company had no assets or liabilities and had not conducted any business activities other than organizational activities as of and for the year ended December 31, 2018. Accordingly, the financial information contained in these financial statements relates solely to the Bank for periods prior to January 8, 2019.

PyraMax Bank, FSB (the “Bank”) is chartered as a federal mutual savings bank. The Bank operates as a full-service financial institution, providing a full range of financial services, including the granting of commercial, residential, and consumer loans and acceptance of deposits from individual customers and small businesses in the metropolitan Milwaukee, Wisconsin, area. The Bank is subject to competition from other financial institutions and nonfinancial institutions providing financial products. In addition, the Bank is subject to the regulations of certain regulatory agencies and undergoes periodic examination by those regulatory agencies.

On September 5, 2018, the Board of Directors of the Bank adopted a Plan of Reorganization from a Mutual Savings Bank to a Mutual Holding Company and Stock Issuance Plan (the “Plan”). The Plan has beenwas approved by the Board of Governors of the Federal Reserve System by letter dated October 17, 2018, by the Office of the Comptroller of the Currency by letter dated October 18, 2018, and by the Federal Deposit Insurance Corporation by letter dated October 31, 2018. The Plan must also be approved by the affirmative vote of at least a majority of the total votes eligible to be cast by the voting members of the Bank at a special meeting of members to be held on December 21, 2018.meeting. Pursuant to the Plan, on January 8, 2019, the Bank proposes to reorganize into a mutual holding company form of ownership. The Bank will convertconverted to a stock savings bank and issueissued all of its outstanding stock to a new holding company, named 1895 Bancorp of Wisconsin, Inc. Pursuant to the Plan, the new holding company sold 2,145,738 shares of common stock (including 175,528 shares to be issued to the Bank’s employee stock ownership plan “ESOP”) at $10.00 per share, for gross offering proceeds of approximately $21.5 million in its subscription offering. In addition, on January 8, 2019, 48,767 shares and $100,000 were contributed to a newly formed charitable foundation, 1895 Bancorp of Wisconsin Community Foundation. 1895 Bancorp of Wisconsin, Inc. was organized as a corporation under the laws of the United States which will be named 1895 Bancorpand offered 45% of Wisconsin, Inc (the “Company”). Pursuant to the Plan, the Company will sellits common stock to the public, with the total offering value and number of shares of common stock based upon an independent appraiser’s valuation. The stock will be priced at $10.00 per share. In addition, the Bank’s Board of Directors will adopt an employee stock ownership plan (the “ESOP”), which will subscribe for up to 3.92% of the common stock of the new holding company to be outstanding upon the completion of the reorganization and stock issuance. the Company will offer 45% of itsto-be-outstanding common on a priority basis to the Bank’s eligible members, the ESOP, a charitablecommunity foundation and certain other persons. 1895 Bancorp of Wisconsin, MHC will bewas organized as a mutual holding company under the laws of the United States and will own the remainingowns 55% of theto-be-outstanding outstanding common stock of the Company upon completion1895 Bancorp of the reorganization and stock issuance.

The costs of the reorganization and the issuing of the common stock will be deferred and deducted from the sales proceeds of the offering. If the conversion is unsuccessful, all deferred costs will be charged to operations. As of September 30, 2018, the Bank had incurred deferred reorganization costs of $413.Wisconsin, Inc.

The accompanying unaudited interim financial statements and the notes thereto have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In the opinion of management, the accompanying unaudited interim financial statements contain all normal recurring adjustments necessary to present fairly the financial positions results of operations, changes in equity and cash flows for the periods presented.

The accompanying unaudited financial statements and related notes should be read in conjunction with the audited annual financial statements and the notes thereto included in the Company’s definitive prospectus, dated November 6,Annual Report on Form10-K for the year ended December 31, 2018, (the “Prospectus”), as filed with the Securities and Exchange Commission on November 15, 2018.April 1, 2019.

In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet, and reported amounts of revenues and expenses during the reporting period. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan and lease losses, the fair values of securities, financial instruments and mortgage servicing rights, and the valuation of deferred income tax assets. Actual results could differ from those estimates.

On April 5, 2012, theJumpstart Our Business Startups Act (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies and define an “emerging growth company.” As an emerging growth company, the Company may delay adoption of new or revised financial accounting standards until such date that the standards are required to be adopted bynon-issuer companies. If such standards would not apply tonon-issuer companies, no deferral would be applicable. The Company intends to take advantage of the benefits of the extended transition periods allowed under the JOBS Act.

Accordingly, the Company’s financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. The effective dates of the following recent accounting standards reflect those that relate tonon-issuer companies.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(in thousands)

NOTE 2 – RECENT ACCOUNTING STANDARDS

The Bank recently adopted the following Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”):

ASU2018-02,2014-09,Income Statement – Reporting Comprehensive IncomeRevenue from Contracts with Customers (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income606). This ASU allows entitiesamendment supersedes and replaces nearly all existing revenue recognition guidance. Under the amended guidance, an entity should recognize revenue to reclassify from accumulated other comprehensive incomedepict the transfer of promised goods or services to retained earnings stranded tax effectscustomers in an amount that result fromre-measuring deferred tax assets and liabilities relatedreflects the consideration to accumulated other comprehensive incomewhich the entity expects to be entitled in exchange for the newly enacted federal corporate income tax rate. The Bankthose goods or services. Management adopted this new accounting standard forbeginning with the yearinterim period ended DecemberMarch 31, 2017. As a result, the Bank elected to reclassify $130 of stranded tax effects from accumulated other comprehensive income to undivided profits as of December 31, 2017.

ASU2017-08,Receivables –Non-Refundable Fees and Other Costs (Subtopic310-20): Premium Amortization on Purchased Callable Debt Securities. This ASU requires premiums on callable debt securities to be amortized to the earliest call date. The Bank adopted this accounting standard for the year ended December 31, 2017.

The following ASUs have been issued by the FASB and may2019, with no material impact the Bank’s financial statements in future reporting periods:

ASU2016-13,Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Bank is currently assessing the impact of adopting ASU2016-13 on its financial statements.

ASU2016-02,Leases (Topic 842). This ASU affects any entity that enters into a lease, and is intended to increase the transparency and comparability of financial reporting. The ASU requires, among other changes, a lessee to recognize on its balances sheet a lease asset and a lease liability for those leases previously classified as operating leases. The lease asset will represent the right to use the underlying asset for the lease term, and the lease liability will represent the discounted value of the required lease payments to the lessor. The ASU will also require entities to disclose key information about leasing arrangements. ASU2016-02 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. Management is currently evaluating the impact of adopting ASU2016-02 on the Bank’s financial statements.

ASU2016-01,Financial Instruments – Overall (Subtopic825-10): Recognition and Measurement of Financial Assets and Liabilities. This ASU applies to all entities that hold financial assets or owe financial liabilities, and is intended to provide more useful information on the recognition, measurement, presentation and disclosure of financial instruments. Among other things, this ASU 1) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; 2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; 3) eliminates the requirement to disclose the fair values of financial instruments measured at amortized cost for entities that are not public business entities; 4) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair values required to be disclosed for financial instruments measured at amortized cost; 5) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; 6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and 7) clarifies that an entity should evaluate the need for a valuation allowance on deferred tax assets related toavailable-for-sale securities in combination with the entity’s other deferred tax assets. The amendments inManagement adopted this ASU are effective for fiscal yearsnew accounting standard beginning after December 15, 2018, andwith the interim period within fiscal years beginning after Decemberended March 31, 2019. Early adoption is permitted. The adoption of ASU2016-01 is not expected to have a2019, with no material impact on the Bank’s financial statements.

The following ASUs have been issued by the FASB and may impact the Bank’s financial statements in future reporting periods:

ASU2016-13,Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU2016-13 requires organizations to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption will be permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. In addition, at their October 16, 2019 meeting, the FASB affirmed its decision on the amendment of the effective date of this standard as initially outlined in the ASU proposed at their July 17, 2019 meeting. Upon approval of the final ASU, it is expected that the effective date for this standard will be delayed by one year, and will be effective for reporting periods beginning after December 15, 2022. Management is currently evaluating the impact of adopting ASU2016-13 on the Bank’s financial statements, as well as the impact of the FASB’s proposed ASU.

ASU2016-02,Leases (Topic 842). This ASU affects any entity that enters into a lease, and is intended to increase the transparency and comparability of financial reporting. The ASU requires, among other changes, a lessee to recognize on its balance sheet a lease asset and a lease liability for those leases previously classified as operating leases. The lease asset will represent the right to use the underlying asset for the lease term, and the lease liability will represent the discounted value of the required lease payments to the lessor. The ASU will also require entities to disclose key information about leasing arrangements. ASU2016-02 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. In addition, at their October 16, 2019 meeting, the FASB affirmed its decision on the amendment of the effective date of this standard as initially outlined in the ASU proposed at their July 17, 2019 meeting. Upon approval of the final ASU, it is expected that the effective date for this standard will be delayed by one year, and will be effective for reporting periods beginning after December 15, 2020. Management is currently evaluating the impact of adopting ASU2016-02 on the Bank’s financial statements, as well as the impact of the FASB’s proposed ASU.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(in thousands)

ASU2014-09,Revenue from Contracts with Customers (Topic 606). NOTE 3 – SUBSEQUENT EVENT

The amendment supersedesCompany announced that the Bank plans to close and replaces nearly all existing revenue recognition guidance. Underconsolidate its branch offices located at 8001 W. National Avenue in West Allis, Wisconsin and 318 N. Water Street in Milwaukee, Wisconsin. The branches will be closed by the amended guidance, an entity should recognize revenue to depict the transferend of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual and interim periods beginning afterbusiness December 15, 2018. Adoption of ASUNo. 2014-09 is not expected to have a material impact on the Bank’s financial statements.31, 2019.

NOTE 34 – SECURITIESAVAILABLE-FOR-SALE

The amortized costs and fair values of securitiesavailable-for-sale were as follows:

The amortized costs and fair values of securitiesavailable-for-sale, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. In addition, expected maturities will differ from contractual maturities for mortgage-backed securities and asset-backed securities, as the expected repayment terms may be less than the underlying mortgage pool contractual maturities. Therefore, these securities are not included in the maturity categories in the maturity summary below.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(in thousands)

NOTE 3 – SUBSEQUENT EVENT (continued)

Gross unrealized losses on securitiesavailable-for-sale and the fair values of the related securities, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position were as follows:

At September 30, 20182019 and December 31, 2017,2018, respectively, the Bank had 5622 and 4859 debt securities with unrealized losses representing aggregate depreciation of approximately 4%0.7% and 2%3.6% from their respective amortized cost bases. These unrealized losses relate principally to changes in interest rates and were not caused by changes in the financial condition of the issuers, the quality of any underlying assets or applicable credit enhancements. In analyzing whether unrealized losses on debt securities are other-than-temporary, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts’ reports, the financial condition and performance of the issuer and the quality of any underlying assets or credit enhancements. As management has the intent and ability to hold these debt securities to projected recovery, none of these declines are deemed to be other-than-temporary.

The following table provides a summary of the proceeds from sales of securitiesavailable-for-sale, as well as gross gains and losses, for the periods presented:

There were no sales of securitiesavailable-for-sale during the three months ended September 30, 2019 and 2018.

PYRAMAX BANK, FSB1895 BANCORP OF WISCONSIN, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

(in thousands)

NOTE 45 – LOANS

Major classifications of loans are summarized as follows:

The Bank provides several types of loans to its customers, including commercial, residential, construction and consumer loans. Significant loan concentrations are considered to exitexist for a financial institution when there are amounts loaned to one borrower or to multiple borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. While the Bank’s credit risks are geographically concentrated within the metropolitan Milwaukee, Wisconsin area, there are no concentrations with individual borrowers or groups of related borrowers.

During the normal course of business, the Bank may transfer a portion of a loan as a participation loan to another financial institution in order to manage portfolio risk. In order to be eligible for sales treatment, all cash flows from the loan must be divided proportionately, and rights of each loan holder must have the same priority, the loan holders must have no recourse to the transferor other than standard representations and warranties, and no loan holder can have the right to pledge or exchange the entire loan. As of September 30, 20182019 and December 31, 2017,2018, respectively, the Bank had transferred $6,200$87,121 and $9,074$61,328 in participation loans which were eligible for sales treatment to other financial institutions, all of which were being serviced by the Bank.

An analysis of past due loans is presented below: