IF Bancorp, Inc. (IROQ): PESTLE Analysis [Nov-2025 Updated]

You're looking at IF Bancorp, Inc. (IROQ) and wondering how a regional bank, often valued under a $100 million market cap, can weather the 2025 financial storm. The honest truth is, the external pressures-from rising regulatory compliance costs and the relentless demand for digital tech to the Federal Reserve's interest rate uncertainty-are defintely amplified for a bank of this size. We've mapped out the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) forces to show you exactly where the near-term risks lie and, more importantly, the clear, actionable steps IROQ must take right now to protect its Net Interest Margin (NIM) and secure its future.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Political factors

You're watching the political landscape closely, and honestly, the shift in Washington is a major factor for a regional bank like IF Bancorp, Inc. The core takeaway is a move toward deregulation, which should ease some compliance costs, but it also introduces new uncertainties around fiscal policy and the Federal Reserve's independence.

The political environment in 2025 is defined by a Republican-led Congress and a new administration focused on a lighter regulatory touch. This is a double-edged sword: less red tape is a clear win for smaller institutions, but the push for deregulation also carries the risk of encouraging excessive risk-taking across the financial sector, which can destabilize the whole system.

Increased regulatory scrutiny on regional bank liquidity post-2023 sector stress

The immediate post-2023 stress led to talks of tighter liquidity rules, but the political tide has turned. Instead of increased scrutiny, IF Bancorp, Inc. is likely to benefit from a significant deregulatory tailwind. The Office of the Comptroller of the Currency (OCC) is proposing to expand the definition of a community bank to institutions with less than $30 billion in total assets, up from the prior $10 billion threshold. This is a huge win for a bank of IF Bancorp, Inc.'s size, as it means less mandatory policy-based examination requirements and a focus on tailoring supervision to real financial risk, not just process. Less compliance work means better efficiency, and that directly boosts your bottom line.

Also, Federal Reserve officials are actively discussing ways to 'right-size the regulations,' including the potential to exempt U.S. Treasuries from the supplementary leverage ratio (SLR). This would instantly improve the perceived liquidity and capital position of banks holding a significant bond portfolio, like many regional institutions do, without having to raise new capital. It's a political action with a direct, positive financial impact.

Potential for new Federal Deposit Insurance Corporation (FDIC) assessment fees impacting net income

The good news here is that the Deposit Insurance Fund (DIF) is recovering faster than expected, reducing the pressure for a sharp increase in assessment fees. The DIF reserve ratio hit 1.31 percent in the first quarter of 2025 and is projected to reach the statutory minimum of 1.35 percent by the end of fiscal year 2025. This is crucial because a healthy fund reduces the likelihood of the FDIC having to significantly raise assessment rates on banks like IF Bancorp, Inc. to replenish the fund.

However, the FDIC Board has designated a long-term reserve ratio (DRR) goal of 2 percent for 2025, which means assessments will continue until that higher target is met. The industry is already arguing the current ratio of 1.40% (as of Q3 2025) is strong enough to reconsider current assessment levels. Here's the quick math on the DIF's health:

What this estimate hides is the lingering cost of the 2023 bank failures, which is estimated at $22.3 billion and is being recovered via a special assessment. While IF Bancorp, Inc. is smaller, it's still part of the system that pays for this stability.

Shifting federal tax policies could affect corporate tax rates and capital planning

The biggest political action affecting your tax bill in 2025 was the passage of the 'One Big Beautiful Bill Act' in July 2025. This legislation made permanent the corporate income tax rate of 21% established by the 2017 Tax Cuts and Jobs Act (TCJA). This removes a massive layer of uncertainty that was hanging over all corporate capital planning.

For IF Bancorp, Inc., which reported a net income of $4.3 million for the fiscal year ended June 30, 2025, the permanence of the 21% rate provides a clear, stable baseline for future earnings projections. Additionally, the new law made permanent the Qualified Business Income (QBI) deduction (Section 199A) for pass-through entities, which is a key benefit for the bank's shareholders if the holding company is structured as an S-Corp or similar entity. Tax stability is defintely a good thing for investor confidence.

Political stability influencing market confidence in the US banking system

Political stability is a major driver of market confidence, and the current environment is defined by a push-pull between pro-business deregulation and fiscal uncertainty. The new administration's focus on deregulation and a lighter touch from agencies is seen as a positive for bank stock valuations, potentially leading to a wave of mergers and acquisitions in the community bank space.

However, the increased political pressure on the Federal Reserve raises a red flag. The market is pricing in a high probability of a rate cut, which is generally good for bond portfolios, but the long-term risk of a politicized Fed could lead to:

• Higher inflation and a weaker U.S. dollar.
• Distorted capital allocation across the economy.
• Unpredictable shifts in global markets due to protectionist trade agendas.

The banking system is currently stable, with the industry reporting a strong Return on Assets (ROA) of 1.16 percent in Q1 2025, but the political risk is less about the immediate health of the bank and more about the long-term integrity of the monetary policy framework.

Next Step: Management: Model FY2026 net income impact of a 5-basis-point reduction in FDIC assessment fees, reflecting the improved DIF ratio.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Economic factors

Federal Reserve interest rate policy uncertainty directly impacting Net Interest Margin (NIM)

The Federal Reserve's (the Fed's) interest rate policy remains the single largest near-term economic risk for IF Bancorp, Inc. (IROQ), a small, community-focused bank. The CEO noted that the expected easing of short-term rates stalled in the third quarter of fiscal year 2025, which kept the cost of funds high. Still, the bank has managed to expand its Net Interest Margin (NIM) by repricing its loan portfolio and optimizing its funding mix.

For the full fiscal year 2025 (ended June 30, 2025), IF Bancorp's Net Interest Income (NII)-the core measure of a bank's profitability-jumped to $20.8 million, a 17.5% increase from the prior year's $17.7 million. This NII expansion continued into the first quarter of fiscal year 2026 (ended September 30, 2025), reaching $6.2 million, up from $4.8 million in the same period a year earlier. The quick math here shows an annualized run rate above the prior year, but this performance is fragile. A sudden, unexpected Fed rate hike could reverse this NIM recovery instantly, forcing the bank to pay more for deposits without a corresponding immediate increase in loan yields.

Here is a snapshot of the core interest metrics:

Inflationary pressures driving up operating costs for branch networks and employee wages

Inflation is a persistent headwind, particularly for a bank that relies on a physical branch network and local employees. While the bank's core business of lending is improving, the non-interest expenses-what it costs to run the business-are rising consistently. This is a clear sign that inflationary pressures are hitting the bottom line.

The non-interest expense line item grew to $5.5 million in Q1 FY 2026 (up from $5.0 million year-over-year) and was $5.3 million in Q3 FY 2025 (up from $4.8 million year-over-year). Management specifically attributed this increase to higher compensation and professional services costs. This is the cost of doing business in a tight labor market where you have to pay more to attract and keep tellers, loan officers, and support staff. You can't just ignore wage inflation.

Regional economic growth tied to Midwest agricultural and small business cycles

IF Bancorp's lending is heavily concentrated in the central Illinois and Missouri agricultural and small business markets. This local focus, while a strength, ties the bank's loan quality directly to the health of the Midwest farm economy. The outlook for row-crop producers (corn, soybeans, wheat) in 2025 is challenging, which is a major concern for the bank's commercial real estate and farm loan portfolio.

While the national Net Farm Income is forecasted to increase to $180.1 billion in 2025 (a 29.5% rise from 2024), this is largely due to the strength in the livestock/dairy sectors and lower input prices, not necessarily the core row-crop profitability that dominates IF Bancorp's operating region. In fact, states like Nebraska and Iowa saw their GDP drop by 6.1% in the first quarter of 2025. This regional weakness translates into specific risks for the bank:

• Loan Repayment Risk: Declining farm incomes lead to lower repayment rates and increased loan demand from cash-strapped farmers.
• Collateral Valuation: A prolonged downturn in crop profitability could eventually pressure the value of farm real estate, which serves as collateral for many of the bank's loans.
• Small Business Health: The health of local small businesses, which are also a core part of the bank's lending, is directly dependent on the spending power of the agricultural community.

Intensified competition from larger national banks and non-bank lenders for deposits

The competitive environment for deposits is defintely difficult, as noted by IF Bancorp's leadership in both Q2 and Q3 of fiscal year 2025. This pressure forces the bank to raise the interest rates it pays on customer deposits, which is a key driver of the high Interest Expense noted earlier. The competition isn't just from other local banks; it's from larger national banks and non-bank lenders (like money market funds) offering higher, more liquid yields.

The bank experienced a significant deposit decline, falling to $680.3 million by September 30, 2025, from $721.3 million at June 30, 2025. While a large portion of this-about $59.3 million in Q1 FY 2026-was a seasonal withdrawal of public entity tax funds, the underlying competitive pressure is evident in the bank's funding shift. To compensate for the deposit outflow, total borrowings, including repurchase agreements, increased to $87.3 million at September 30, 2025, up from $72.9 million at June 30, 2025. This reliance on higher-cost wholesale funding is a direct consequence of the intensified competition for local, core deposits.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Social factors

Growing customer demand for seamless digital-first banking and mobile services.

You can't ignore the digital shift; it's the biggest social challenge for regional banks like IF Bancorp, Inc. right now. Across the US, customer behavior has fundamentally changed, so the expectation for a seamless digital experience is no longer optional. The data is clear: in 2025, an estimated 77% of U.S. adults manage their bank accounts using a mobile app or computer, and 76% actively use mobile banking apps.

For a bank with only seven full-service branches in Illinois, this digital preference means the competition isn't just the bank down the street-it's every digital-only neobank. The total value of digital payments in the US is anticipated to hit $20.09 trillion in 2025, which shows you the sheer volume of transactions moving away from physical locations. Your core demographic, especially younger customers, expects instant payments and mobile-first tools. If IF Bancorp, Inc. doesn't invest heavily in its online and mobile platforms, it risks losing market share, particularly among the 80% of millennials who prefer digital banking.

Increased emphasis on Environmental, Social, and Governance (ESG) factors in lending and investment decisions.

While large, money-center banks face intense scrutiny on the 'E' (Environmental) and 'G' (Governance) of ESG, for a community-focused institution like IF Bancorp, Inc., the 'S' (Social) factor is paramount. This is where your strength lies. The social component is intrinsically linked to the Community Reinvestment Act (CRA), which mandates that banks serve the needs of all segments of their communities, including low- and moderate-income neighborhoods.

The bank's entire business model-being a community-oriented financial institution with a primary lending market limited to a local radius-is a direct reflection of a strong social commitment. This local focus is your competitive advantage against larger institutions that are often perceived as impersonal. To formalize this, the bank must clearly articulate its social impact, which includes its residential mortgage and small business lending volume, as this is the concrete evidence of its commitment to the local economy.

Demographic shifts in core Illinois and Indiana service areas, including an aging population.

The aging population in your core markets presents both a risk and a significant opportunity. The US population aged 65 and older grew by 3.1% from 2023 to 2024, and this trend is even more pronounced in the Midwest.

In IF Bancorp, Inc.'s key states, the proportion of seniors is substantial, creating a large market for wealth management, trust services, and retirement products. However, this demographic also tends to be less digitally native, which means the bank must maintain a high-touch, personalized service model alongside digital options. You need to look at the numbers closely:

This demographic shift means your loan portfolio composition needs to be defintely managed, as the demand for residential mortgages might shift toward smaller, retirement-focused loans rather than large family home purchases.

Local community reliance on the bank for small business and residential mortgage lending.

IF Bancorp, Inc.'s primary business is intrinsically tied to its local communities, which is a major social asset. The bank's loan portfolio is heavily backed by real estate, and its total Net Loans Receivable stood at $633.6 million as of the end of fiscal year 2025. This substantial lending volume directly supports local economic activity, particularly in residential and commercial real estate.

The bank operates with a local focus, serving communities within a 30- to 100-mile radius of its seven Illinois branches. This model fosters a high degree of local reliance. The stability of your deposit base-which totaled $721.3 million at the end of June 2025-is largely a function of this community trust. This local reliance presents a clear opportunity for the bank to deepen its relationships by offering specialized small business loans and tailored residential products that larger, less localized banks often overlook.

• Deepen small business relationships: Offer targeted products to local businesses, who rely on you.
• Capitalize on community goodwill: Leverage local director involvement to build trust.
• Maintain strong asset quality: Local knowledge helps you underwrite loans better.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Technological factors

The technological landscape presents an existential challenge to IF Bancorp, Inc., a risk underscored by the October 2025 merger agreement with ServBanc Holdco, Inc. for approximately $89.8 million. The need for significant system investment was a clear driver for the transaction, directly addressing the gap between legacy operations and the digital demands of the market.

Substantial need for investment in cybersecurity to defend against sophisticated attacks.

Cybersecurity is no longer a cost center; it is a core business necessity, especially for a regional bank holding sensitive customer data. You're facing a threat landscape where the average cost of a data breach in the financial industry climbed to $6.08 million in 2024. That's a huge operational hit.

The industry consensus for 2025 is clear: you must spend more and spend smarter. A survey of US bank executives found that 88% plan to increase their IT and technology spend by at least 10% in 2025, with enhanced security and fraud mitigation being the top tech spend priority for 56% of respondents. For IF Bancorp, Inc., this means dedicating a significant portion of capital to defense, not just convenience.

Your action plan must prioritize the following areas to mitigate escalating cyber risk:

• Upgrade network architecture, a weak spot for 48% of surveyed organizations.
• Address unpatched software updates, a vulnerability for 57% of firms.
• Invest in AI-enabled fraud detection, a growing necessity.

Adoption of Artificial Intelligence (AI) for improved credit scoring and fraud detection is crucial.

Artificial Intelligence (AI) is rapidly moving from a theoretical concept to a non-negotiable operational tool. Bankers named AI as the top technology trend most likely to affect the financial industry in 2025, cited by 33% of those surveyed. This isn't about chatbots; it's about core risk management.

The US AI in Credit Scoring Market alone is projected to be valued at $757.7 million in 2025, which shows the scale of the shift. AI models can analyze a broader range of data points than traditional FICO scores, leading to faster, more accurate credit decisions and better risk evaluation. You need this efficiency to compete with FinTechs.

The immediate opportunity lies in using AI for real-time fraud detection, which 17% of bankers selected as a top trend for 2025. This technology scans for unusual patterns in transactions and applications, flagging potential scams before they lead to losses. Honestly, if you are not actively experimenting with AI for risk, you are defintely falling behind.

Legacy core banking systems hindering rapid deployment of new customer-facing products.

The main challenge for a long-established institution like IF Bancorp, Inc. is the 'inheritance trap' of legacy core banking systems. These systems, while stable, are built on decades-old code and architecture, making them slow, expensive to maintain, and difficult to integrate with modern, cloud-based applications. The CEO's comments about the need for system investment and excitement over the Servbank platform's technology confirm this internal pressure.

The industry is in a full-scale modernization push: almost all bankers surveyed reported planned strategies to upgrade their core systems, with 62% planning to invest in core or ancillary products that support innovation in 2025. These legacy systems are a key weak spot, cited by 45% of organizations surveyed, because they slow down the deployment of new digital products like instant loan approvals or sophisticated mobile features. Slow systems mean slow service.

Here is the quick math on the modernization imperative:

Competition from FinTech companies offering superior user experience and lower operational costs.

The competitive threat from FinTech is a constant headwind, forcing regional banks to accelerate their digital transformation. The United States FinTech market size reached $58.01 billion in 2025, demonstrating the sheer scale of the disruption. This growth is driven by a superior customer experience (CX) and a lower cost-to-serve.

Neobanking, the branch-free digital model, is projected to be the fastest-growing segment, with a Compound Annual Growth Rate (CAGR) of 21.67% between 2025 and 2030. This growth rate is nearly three times faster than the typical revenue growth for traditional banks. FinTechs leverage this lower operational cost to offer fee-free or higher-yield products, directly challenging IF Bancorp, Inc.'s deposit base and net interest margin. Regional banks are already feeling the heat from deposit outflows to these higher-yielding alternatives.

The immediate threat is in consumer-facing services:

• Digital Payments: This segment captured 47.43% of the US FinTech market share in 2024.
• Mobile Apps: These represented 70.79% of the US FinTech market share by user interface in 2024.

Your concrete next step is to ensure the Servbank platform integration rapidly addresses the mobile and digital payment experience, or you risk losing your younger, digitally-native customer base to rivals growing at a 21.67% CAGR.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Legal factors

The legal environment for IF Bancorp, Inc. is characterized by a high, non-discretionary compliance cost structure and a rapidly shifting landscape of consumer protection and data privacy rules in 2025. You need to focus your resources on adapting to new Consumer Financial Protection Bureau (CFPB) rules and the patchwork of state-level data privacy acts, which are adding significant operational complexity.

Strict compliance with Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations.

Compliance with the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations remains a foundational, non-negotiable cost driver. The financial services sector's total cost for financial crime compliance was estimated to exceed $60 billion per year in a 2024 survey, highlighting the massive industry-wide investment.

For IF Bancorp, Inc., this means dedicating a substantial portion of non-interest expense to Know Your Customer (KYC) procedures, transaction monitoring, and Suspicious Activity Report (SAR) filings. The Financial Crimes Enforcement Network (FinCEN) and the Federal Deposit Insurance Corporation (FDIC) are actively surveying banks on these compliance costs in late 2025, which suggests regulators are looking at potential burden reduction, but the core obligations are not changing yet.

Here's the quick math on the compliance burden. Using the non-interest expense of $15.3 million for the nine months ended March 31, 2025, and the industry-reported range of 2.9% to 8.7% of non-interest expense for compliance duties for similar-sized institutions, the estimated compliance spend is significant. That's a minimum of $0.444 million to a high of $1.331 million over that nine-month period just to keep the lights on in compliance. You just can't skimp here.

Continued high cost of compliance with post-Dodd-Frank regulations for regional institutions.

The legacy of the Dodd-Frank Wall Street Reform and Consumer Protection Act continues to inflate the operating costs of regional banks like IF Bancorp, Inc. While larger banks can spread these costs over a vast asset base, smaller institutions face a disproportionately higher burden. Compliance operating costs have increased by over 60% for retail and corporate banks compared to pre-financial crisis levels.

A key area of focus in 2025 is the CFPB's Section 1071 rule, which mandates the collection and reporting of small business lending data under the Equal Credit Opportunity Act (Regulation B). Although the compliance date is set for January 1, 2028, the CFPB's revised proposal in November 2025 still requires covered institutions to begin planning now.

The complexity is in the details, not the deadline. The rule's coverage threshold is now proposed to be 1,000 covered credit transactions for each of the two preceding calendar years, which is a significant data-capture and IT challenge that needs immediate attention.

Consumer protection laws (e.g., from the Consumer Financial Protection Bureau) governing lending practices.

The CFPB is actively pushing new rules that directly impact IF Bancorp, Inc.'s core lending products, forcing immediate operational changes. The most critical new rule is the Overdraft Lending Rule, which became effective on October 1, 2025.

This rule requires that overdraft fees must be at or below the institution's costs and losses, fundamentally changing the profitability model for a service that has historically been a reliable source of non-interest income.

Other key CFPB actions in 2025 include:

• Regulation B Shakeup: Proposed revisions to the Equal Credit Opportunity Act (ECOA) and Regulation B in November 2025 signal new expectations for how lenders explain automated credit decisions and design special purpose credit programs.
• Higher-Priced Mortgage Loan Threshold: Effective January 1, 2025, the threshold for higher-priced mortgage loans subject to special appraisal requirements increased from $32,400 to $33,500.
• Expedited Funds Availability: Dollar amount adjustments for Regulation CC funds availability rules, required every five years, are effective July 1, 2025, impacting check hold policies.

Data privacy regulations, like state-level acts, requiring enhanced customer data protection protocols.

The absence of a unified federal data privacy law means IF Bancorp, Inc. must navigate a complicated and expanding patchwork of state-level regulations in 2025. In all, eight new states are implementing comprehensive privacy laws this year, including Iowa, Delaware, Nebraska, New Hampshire, New Jersey, Tennessee, Minnesota, and Maryland.

The key challenge is that each law has a slightly different applicability threshold and a distinct set of requirements, despite the banking industry's general exemption under the Gramm-Leach-Bliley Act (GLBA) for certain data. You still need to manage non-GLBA covered data and third-party vendor risk carefully.

The Maryland Online Data Privacy Act, effective October 1, 2025, is particularly stringent, requiring data collection to be only what is 'reasonably necessary and proportionate' to provide the requested service, and it imposes a complete ban on the sale of sensitive data.

Here is a snapshot of the new compliance landscape you are facing in 2025:

The takeaway is simple: your compliance strategy must be state-by-state, defintely not one-size-fits-all, and the cost of managing this complexity rises with every new state law.

IF Bancorp, Inc. (IROQ) - PESTLE Analysis: Environmental factors

You're operating in a world where climate risk is fast becoming a core financial risk, not just a public relations issue. For IF Bancorp, Inc., this means assessing the physical risk from weather events in your loan book and recognizing the clear opportunity in financing the transition to greater energy efficiency across your local footprint.

Growing pressure to assess climate-related financial risks, especially flood risk in mortgage portfolios.

The biggest environmental risk you face is the physical risk associated with your loan portfolio, particularly the exposure to flood events in your primary operating area around Watseka, Illinois. While the Midwest is not coastal, riverine and flash flooding are persistent threats that directly impact the collateral value of your one- to four-family residential and commercial real estate loans, which make up a significant portion of your $619.3 million net loans receivable as of September 30, 2025.

This risk is amplified by the national trend of rising insurance costs and market retrenchment by property and casualty carriers. Nearly a third (30%) of community bank executives reported an increase in insurance coverage lapses in the last two years, which creates a direct, unmitigated collateral exposure for the bank. Regulators are also scrutinizing compliance with the National Flood Insurance Program (NFIP) rules, especially concerning commercial mortgages that use blanket lien or dragnet clauses. You must ensure your collateral monitoring system is defintely robust against these lapses.

Operational focus on reducing energy consumption across the physical branch footprint.

Reducing energy consumption is a clear opportunity to cut non-interest expenses and align with community values. While IF Bancorp, Inc. does not publicly disclose a dedicated Environmental, Social, and Governance (ESG) report, the industry standard for community banks is moving toward operational efficiency.

The focus should be on your physical branch network. Simple upgrades like transitioning to energy-efficient LED lighting and installing modern, high-efficiency HVAC (Heating, Ventilation, and Air Conditioning) systems can deliver long-term cost savings and increase the property value of your owned assets. This is not just about being green; it's smart business that helps offset inflationary pressure on your core operating costs.

Here's the quick math: If IROQ's non-interest expenses, which were trending around $21 million annually for the year ended September 30, 2025, increase by just 5% due to inflation and technology upgrades, that's an extra $1.05 million hitting the bottom line. That's a big bite for a bank of this size. What this estimate hides is the opportunity cost of not investing in tech, which is a much larger risk.

Demand for green lending products for commercial and residential property development.

The market for financing energy-efficient and sustainable property development is growing, and community banks are starting to offer tailored products. This is a clear path to generating new fee and interest income by serving commercial real estate (CRE) and residential clients who want to lower their operating expenses.

Specific green lending models you can adapt include:

• Offering a 1 percent discount on closing costs, up to $10,000, for small business owners purchasing or renovating a commercial property to meet ENERGY STAR or LEED green building standards.
• Providing specialized terms for green-certified properties, such as loan-to-value (LTV) ratios up to 80% and extended loan amortization periods of up to 35 years for multifamily projects.
• Partnering with state or local Commercial Property Assessed Clean Energy (C-PACE) programs to finance energy efficiency and renewable energy upgrades for commercial properties.

Reputational risk tied to financing certain industries (minor for IROQ, but a sector trend).

Given IF Bancorp, Inc.'s focus as a small, local savings and loan association with total assets of $862.3 million, the direct reputational risk from financing large, carbon-intensive industries is minor. However, the broader trend is that community banks are increasingly viewed as leaders in local green innovation, and stakeholders-from customers to employees-expect meaningful action.

The reputational upside of proactively managing your environmental footprint far outweighs the downside risk of being associated with controversial industries. Your primary reputational risk is inaction, which can make you look out-of-step with the broader financial industry's move toward transparency in environmental risk (Task Force on Climate-related Financial Disclosures - TCFD).

So, the immediate next step is clear. Finance: Draft a 2026 capital expenditure plan prioritizing core system upgrades and cybersecurity spending by the end of the quarter.