SCHEDULE: Stilwell Gains IF Bancorp Board Seat, Pushes Sale

Stilwell Activist Fund has reached a standstill agreement with IF Bancorp, Inc., securing a board seat and advancing its proposal for the company's prompt sale.

Summary

• Stilwell Activist Fund (the "Group") has entered into a Standstill Agreement with IF Bancorp, Inc. (the "Issuer") on September 16, 2025.
• The agreement facilitates the appointment of Scott J. Dworschak, the Group's nominee, to the boards of directors of IF Bancorp and its subsidiary, Iroquois Federal Savings and Loan Association (the "Bank").
• The Group withdrew its nomination of Mr. Dworschak and alternate nominee Douglas P. Hutchison Jr. for the 2025 Annual Meeting.
• A key term of the agreement states that if, after March 31, 2026, the Issuer fails to substantially implement the stockholder-approved proposal from the 2024 Annual Meeting (calling for the prompt sale of the Issuer), the Group will select an additional nominee for board appointment.
• The Group beneficially owns an aggregate of 297,399 shares of Common Stock, representing approximately 8.9% of the 3,351,526 shares outstanding as of September 4, 2025.
• The Group's stated purpose in acquiring shares is to profit from share price appreciation by asserting shareholder rights, believing the Issuer's asset value is not adequately reflected in its market price.
• The Federal Reserve Bank of Chicago notified the Group on May 14, 2025, that it would not object to their request to buy additional shares up to 19.99%.
• Stilwell Value LLC, a member of the Group, consented to an SEC administrative cease and desist order on September 25, 2024, for failing to timely file beneficial ownership reports, incurring a $75,000 civil monetary penalty.
• The filing includes a detailed history of Stilwell's activist positions in 77 other publicly-traded companies since 2000, categorized by outcome, such as sales, mergers, or value maximization through other means.

Sentiment

Score: 7

Explanation: The filing indicates a positive development for the activist investor, Stilwell Activist Fund, as they have successfully secured a board seat and a commitment to pursue a stockholder-approved sale. This increases their influence and aligns with their stated goal of maximizing shareholder value. The SEC violation is a minor negative, but it's historical and resolved.

Positives

• Stilwell Activist Fund successfully secured a board seat for its nominee, Scott J. Dworschak, on both IF Bancorp and its subsidiary bank, increasing direct influence.
• The agreement includes a provision for an additional board seat for Stilwell if the company fails to implement the stockholder-approved sale proposal by March 31, 2026, providing strong leverage.
• The Federal Reserve Bank of Chicago approved Stilwell's request to increase its stake in IF Bancorp up to 19.99%, indicating potential for further investment and influence.
• The company's stockholders approved a proposal for the prompt sale of the Issuer at the 2024 Annual Meeting, aligning with Stilwell's objective to maximize shareholder value through a sale.

Negatives

• Stilwell Value LLC, a key entity in the Group, was subject to an SEC cease and desist order and a $75,000 civil monetary penalty for failing to timely file beneficial ownership reports.
• The Standstill Agreement restricts the Group from soliciting proxies against management, initiating shareholder proposals (other than the existing sale proposal), opposing board nominations, or seeking additional board representation beyond the agreed-upon terms, limiting immediate future activist actions.
• The Group is restricted from acquiring additional shares or disposing of its interest to any person who would become a beneficial owner of more than 5% of outstanding shares without the Issuer's consent.
• The ultimate sale of the company is contingent on "substantially implement[ing]" the 2024 stockholder-approved proposal, which leaves room for interpretation and potential delays.

Risks

• The Standstill Agreement limits the Group's ability to exert further pressure or pursue alternative strategies if the board does not "substantially implement" the sale proposal by March 31, 2026.
• The company may face challenges in executing a prompt sale, potentially leading to prolonged uncertainty for shareholders.
• Regulatory hurdles or market conditions could impede the successful sale of the Issuer.
• The SEC violation by Stilwell Value LLC, while resolved, highlights past compliance issues for the activist investor.

Future Outlook

The Group intends to work with IF Bancorp's management and board to maximize shareholder value, particularly by ensuring the substantial implementation of the stockholder-approved proposal for the prompt sale of the Issuer. If this is not achieved by March 31, 2026, the Group will appoint an additional director to the board.

Management Comments

• Our purpose in acquiring shares of Common Stock of the Issuer is to profit from the appreciation in the market price of the shares of Common Stock through asserting shareholder rights.
• We do not believe the value of the Issuer's assets is adequately reflected in the current market price of the Issuer's Common Stock.

Industry Context

The filing highlights the ongoing trend of shareholder activism, particularly in the financial services sector (community banks, bancorps), where activist investors like Stilwell seek to unlock value through strategic changes such as sales, mergers, share repurchases, or second-step conversions. The repeated success of Stilwell in achieving these outcomes across numerous companies suggests a persistent environment for such strategies.

Comparison to Industry Standards

• Stilwell Activist Fund's history of taking activist positions in 77 publicly-traded companies since 2000 demonstrates a consistent strategy of seeking to profit from share price appreciation by asserting shareholder rights and believing asset values are not adequately reflected in market prices. This is a common activist investor strategy.
• The success rate of Stilwell in achieving sales or mergers (26 companies), or seating directors leading to sales/mergers (13 companies), or exiting after value maximization (20 companies) suggests a highly effective activist approach compared to general market averages for such interventions.
• The specific tactics, such as demanding shareholder lists, running slates of directors, proposing sales, advocating for share repurchases, and initiating legal proceedings, are standard tools in activist playbooks.
• The Federal Reserve's non-objection to increasing ownership up to 19.99% is a common regulatory step for significant shareholders in financial institutions, indicating a standard process for such investments.

Management Changes

Corporate Governance

Legal Proceedings

• On September 25, 2024, Stilwell Value LLC consented to the entry of a Securities and Exchange Commission (SEC) administrative cease and desist order that alleged violations of Section 13(d)(1) and 13(d)(2) of the Securities Exchange Act of 1934 and rules 13d-1 and 13d-2 for failing to timely file certain beneficial ownership reports. The Order required Stilwell Value LLC to cease and desist from future violations and imposed a $75,000 civil monetary penalty. Stilwell Value LLC has satisfied the obligations of the Order, and no other member of the Group was implicated.

Stakeholder Impact

• Shareholders: The agreement aims to maximize shareholder value through a potential sale of the company, which was a stockholder-approved proposal. The appointment of an activist nominee could increase confidence in the pursuit of this goal.
• Management/Board: The board is now under increased pressure to execute the stockholder-approved sale, with a clear consequence (additional activist director) if they fail to "substantially implement" it by March 31, 2026.
• Employees: A potential sale or merger could lead to changes in employment, though not explicitly stated in the filing.

Next Steps

• Scott J. Dworschak will be appointed to the boards of directors of IF Bancorp, Inc. and Iroquois Federal Savings and Loan Association.
• IF Bancorp, Inc. is expected to substantially implement the stockholder-approved proposal for its prompt sale by March 31, 2026.
• If the sale proposal is not substantially implemented by March 31, 2026, the Group will select, and the Issuer's board will appoint, an additional nominee to the board.
• The Group may seek to make additional purchases or sales of shares of Common Stock, subject to the Standstill Agreement's restrictions.

Key Dates

Recommendation

The filing indicates a positive step towards unlocking shareholder value through a potential sale, which was a stockholder-approved proposal. The activist investor, Stilwell Activist Fund, has secured a board seat and a mechanism for further influence if the sale is not substantially implemented by March 31, 2026. This provides a clear strategic direction. However, the actual sale is not guaranteed, and the timeline extends into the future. Investors should hold to see the execution of this strategy, as the current agreement sets a clear path but the outcome is not yet realized. The historical SEC violation by Stilwell Value LLC is noted but does not directly impact the current strategic direction of IF Bancorp.

Keywords

IF Bancorp, IFBC, Stilwell Activist Fund, Shareholder Activism, Schedule 13D, Board Appointment, Company Sale, Bank Merger, Corporate Governance, Proxy Contest, Financial Services, Community Bank