Company Quick10K Filing
Consumers Bancorp
Price18.43 EPS2
Shares3 P/E9
MCap50 P/FCF16
Net Debt-13 EBIT10
TEV38 TEV/EBIT4
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-12-31 Filed 2021-02-12
10-Q 2020-09-30 Filed 2020-11-12
10-K 2020-06-30 Filed 2020-09-23
10-Q 2020-03-31 Filed 2020-05-08
10-Q 2019-12-31 Filed 2020-02-12
10-Q 2019-09-30 Filed 2019-11-08
10-K 2019-06-30 Filed 2019-09-12
10-Q 2019-03-31 Filed 2019-05-15
10-Q 2018-12-31 Filed 2019-02-14
10-Q 2018-09-30 Filed 2018-11-14
10-K 2018-06-30 Filed 2018-09-12
10-Q 2018-03-31 Filed 2018-05-15
10-Q 2017-12-31 Filed 2018-02-14
10-Q 2017-09-30 Filed 2017-11-07
10-K 2017-06-30 Filed 2017-09-21
10-Q 2017-03-31 Filed 2017-05-15
10-Q 2016-12-31 Filed 2017-02-14
10-Q 2016-09-30 Filed 2016-11-14
10-K 2016-06-30 Filed 2016-09-22
10-Q 2016-03-31 Filed 2016-05-16
10-Q 2015-12-31 Filed 2016-02-16
10-Q 2015-09-30 Filed 2015-11-16
10-K 2015-06-30 Filed 2015-09-23
10-Q 2015-03-31 Filed 2015-05-15
10-Q 2014-12-31 Filed 2015-02-17
10-Q 2014-09-30 Filed 2014-11-14
10-K 2014-06-30 Filed 2014-09-24
10-Q 2014-03-31 Filed 2014-05-15
10-Q 2013-12-31 Filed 2014-02-14
10-Q 2013-09-30 Filed 2013-11-14
10-K 2013-06-30 Filed 2013-09-24
10-Q 2013-03-31 Filed 2013-05-15
10-Q 2012-12-31 Filed 2013-02-14
10-Q 2012-09-30 Filed 2012-11-14
10-K 2012-06-30 Filed 2012-09-21
10-Q 2012-03-31 Filed 2012-05-14
10-Q 2011-12-31 Filed 2012-02-13
10-Q 2011-09-30 Filed 2011-11-10
10-K 2011-06-30 Filed 2011-09-16
10-Q 2011-03-31 Filed 2011-05-16
10-Q 2010-12-31 Filed 2011-02-11
10-Q 2010-09-30 Filed 2010-11-15
10-K 2010-06-30 Filed 2010-09-22
10-Q 2010-03-31 Filed 2010-05-17
10-Q 2009-12-31 Filed 2010-02-12
8-K 2020-10-29
8-K 2020-10-21
8-K 2020-09-10
8-K 2020-08-13
8-K 2020-08-06
8-K 2020-04-22
8-K 2020-03-13
8-K 2020-03-11
8-K 2020-01-16
8-K 2020-01-01
8-K 2019-10-17
8-K 2019-10-16
8-K 2019-10-15
8-K 2019-07-31
8-K 2019-06-14
8-K 2019-04-18
8-K 2019-01-22
8-K 2019-01-22
8-K 2018-10-18
8-K 2018-10-18
8-K 2018-07-26
8-K 2018-06-13
8-K 2018-04-24
8-K 2018-01-26

CBKM 10Q Quarterly Report

Part I - Financial Information
Item 1 - Financial Statements
Note 1 - Summary of Significant Accounting Policies:
Note 2 - Acquisition
Note 3 - Securities
Note 4 - Loans
Note 5 - Fair Value
Note 6 - Earnings per Share
Note 7 - Accumulated Other Comprehensive Income (Loss)
Note 8 - Covid - 19
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 4 - Controls and Procedures
Part II - Other Information
Item 1 - Legal Proceedings
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 - Defaults Upon Senior Securities
Item 4 - Mine Safety Disclosures
Item 5 - Other Information
Item 6 - Exhibits
EX-10.12 ex_224858.htm
EX-31.1 ex_224859.htm
EX-31.2 ex_224860.htm
EX-32.1 ex_224861.htm

Consumers Bancorp Earnings 2020-12-31

Balance SheetIncome StatementCash Flow
0.60.50.40.20.10.02012201420172020
Assets, Equity
0.10.10.10.00.00.02016201720182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

10-Q 1 cbkm20201231_10q.htm FORM 10-Q cbkm20201231_10q.htm
 


 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

 

Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended December 31, 2020

 

Commission File No. 033-79130

 

CONSUMERS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

OHIO 

34-1771400

(State or other jurisdiction

(I.R.S. Employer Identification No.)

of incorporation or organization)

 

 

614 East Lincoln Way, P.O. Box 256, Minerva, Ohio  

44657

(Address of principal executive offices)  

(Zip Code)

 

(330) 868-7701

(Registrant’s telephone number)

 

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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 filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-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).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-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 Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐   

Accelerated filer ☐  

Non-accelerated filer ☐  

Smaller reporting company ☒

 

Emerging growth company ☐

         

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 Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

 

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

   

 

There were 3,028,100 shares of Registrant’s common stock, no par value, outstanding as of February 10, 2021.

 



 

 

 

CONSUMERS BANCORP, INC.

FORM 10-Q

QUARTER ENDED December 31, 2020

 

Table of Contents

 

 

Page

Number (s)

Part I – Financial Information

 

 

Item 1 – Financial Statements (Unaudited)

 

Consolidated Balance Sheets at December 31, 2020 and June 30, 2020

1

 

 

Consolidated Statements of Income for the three and six months ended December 31, 2020 and 2019

2

 

 

Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2020 and 2019

3

 

 

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended December 31, 2020 and 2019

4

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2020 and 2019

5

 

 

Notes to the Consolidated Financial Statements

6-22

 

 

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

23-31

 

 

Item 3 – Not Applicable for Smaller Reporting Companies

 

 

 

Item 4 – Controls and Procedures

32

Part II – Other Information

Item 1 – Legal Proceedings

33

 

 

Item 1A – Not Applicable for Smaller Reporting Companies

33

 

 

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

33

 

 

Item 3 – Defaults Upon Senior Securities

33

 

 

Item 4 – Mine Safety Disclosure

33

 

 

Item 5 – Other Information

33

 

 

Item 6 – Exhibits

33

 

 

Signatures

34

 

 

 

 

 

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

 

CONSUMERS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

 

(Dollars in thousands, except per share data)

 

December 31,

2020

   

June 30,

2020

 

ASSETS

               

Cash on hand and noninterest-bearing deposits in financial institutions

  $ 8,996     $ 8,429  

Federal funds sold and interest-bearing deposits in financial institutions

    49       1,230  

Total cash and cash equivalents

    9,045       9,659  

Certificates of deposit in other financial institutions

    8,599       11,635  

Securities, available-for-sale

    145,665       143,918  

Securities, held-to-maturity (fair value of $3,605 at December 31, 2020 and $3,868 at June 30, 2020)

    3,336       3,541  

Equity securities, at fair value

    400        

Federal bank and other restricted stocks, at cost

    2,472       2,472  

Loans held for sale

    4,770       3,507  

Total loans

    557,257       542,861  

Less allowance for loan losses

    (5,912

)

    (5,678

)

Net loans

    551,345       537,183  

Cash surrender value of life insurance

    9,573       9,442  

Premises and equipment, net

    14,972       14,901  

Goodwill

    836       836  

Core deposit intangible, net

    242       256  

Accrued interest receivable and other assets

    2,805       3,470  

Total assets

  $ 754,060     $ 740,820  
                 

LIABILITIES

               

Deposits

               

Noninterest-bearing demand

  $ 194,180     $ 190,233  

Interest bearing demand

    104,777       99,173  

Savings

    241,854       228,567  

Time

    107,551       115,382  

Total deposits

    648,362       633,355  
                 

Short-term borrowings

    13,275       6,943  

Federal Home Loan Bank advances

    18,083       31,161  

Accrued interest and other liabilities

    6,632       6,121  

Total liabilities

    686,352       677,580  

Commitments and contingent liabilities

               
                 

SHAREHOLDERS’ EQUITY

               

Preferred stock (no par value, 350,000 shares authorized, none outstanding)

           

Common stock (no par value, 8,500,000 shares authorized; 3,124,053 shares issued as of December 31, 2020 and June 30, 2020)

    20,011       19,974  

Retained earnings

    44,492       40,460  

Treasury stock, at cost (95,953 and 108,475 common shares as of December 31, 2020 and June 30, 2020, respectively)

    (1,324

)

    (1,454

)

Accumulated other comprehensive income

    4,529       4,260  

Total shareholders’ equity

    67,708       63,240  

Total liabilities and shareholders’ equity

  $ 754,060     $ 740,820  

 

See accompanying notes to consolidated financial statements.

 

1

 

 

CONSUMERS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months ended

December 31,

   

Six Months ended

December 31,

 

(Dollars in thousands, except per share amounts)

 

2020

   

2019

   

2020

   

2019

 
                                 

Interest and dividend income

                               

Loans, including fees

  $ 6,583     $ 4,862     $ 13,072     $ 9,623  

Securities, taxable

    344       480       716       990  

Securities, tax-exempt

    427       400       847       799  

Federal bank and other restricted stocks

    21       20       39       40  

Federal funds sold and other interest-bearing deposits

    42       16       89       42  

Total interest and dividend income

    7,417       5,778       14,763       11,494  

Interest expense

                               

Deposits

    487       910       1,064       1,855  

Short-term borrowings

    2       13       6       24  

Federal Home Loan Bank advances

    70       59       141       138  

Total interest expense

    559       982       1,211       2,017  

Net interest income

    6,858       4,796       13,552       9,477  

Provision for loan losses

    130       185       260       315  

Net interest income after provision for loan losses

    6,728       4,611       13,292       9,162  
                                 

Noninterest income

                               

Service charges on deposit accounts

    314       360       621       733  

Debit card interchange income

    445       384       901       775  

Gain on sale of mortgage loans

    246       142       482       276  

Bank owned life insurance death benefit

                      324  

Bank owned life insurance income

    65       66       131       134  

Securities gains, net

    8       4       8       110  

Other

    75       69       151       142  

Total noninterest income

    1,153       1,025       2,294       2,494  
                                 

Noninterest expenses

                               

Salaries and employee benefits

    2,760       2,207       5,451       4,380  

Occupancy and equipment

    636       595       1,276       1,127  

Data processing expenses

    176       141       362       526  

Debit card processing expenses

    216       194       454       395  

Professional and director fees

    249       133       486       390  

FDIC assessments

    87       5       148       (2

)

Franchise taxes

    108       95       217       190  

Marketing and advertising

    116       93       250       274  

Telephone and network communications

    79       70       163       144  

Amortization of intangible

    7             14        

Other

    397       402       809       816  

Total noninterest expenses

    4,831       3,935       9,630       8,240  

Income before income taxes

    3,050       1,701       5,956       3,416  

Income tax expense

    543       261       1,048       473  

Net income

  $ 2,507     $ 1,440     $ 4,908     $ 2,943  
                                 

Basic and diluted earnings per share

  $ 0.83     $ 0.53     $ 1.63     $ 1.07  

 

See accompanying notes to consolidated financial statements.

 

2

 

 

 

CONSUMERS BANCORP, INC.

Consolidated statements of comprehensive income

(Unaudited)

 

(Dollars in thousands)

 

Three Months ended

December 31,

   

Six Months ended

December 31,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Net income

  $ 2,507     $ 1,440     $ 4,908     $ 2,943  
                                 

Other comprehensive income, net of tax:

                               

Net change in unrealized gains (losses) on securities available-for-sale:

                               

Unrealized gains (losses) arising during the period

    278       (28

)

    348       790  

Reclassification adjustment for gains included in income

    (8

)

    (4

)

    (8

)

    (110

)

Net unrealized gains (losses)

    270       (32

)

    340       680  

Income tax effect

    (57

)

    6       (71

)

    (144

)

Other comprehensive income (loss)

    213       (26

)

    269       536  
                                 

Total comprehensive income

  $ 2,720     $ 1,414     $ 5,177     $ 3,479  

 

See accompanying notes to consolidated financial statements.

 

3

 

 

CONSUMERS BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

(Dollars in thousands, except per share data)

 

Common

Stock

   

Retained
Earnings

   

Treasury
Stock

   

Accumulated
Other
Comprehensive
Income (Loss)

   

Total
Shareholders’
Equity

 

Balance, September 30, 2020

  $ 20,011     $ 42,424     $ (1,324

)

  $ 4,316     $ 65,427  

Net income

            2,507                       2,507  

Other comprehensive income

                            213       213  

Cash dividends declared ($0.145 per share)

            (439

)

                    (439

)

Balance, December 31, 2020

  $ 20,011     $ 44,492     $ (1,324

)

  $ 4,529     $ 67,708  
                                         
                                         

Balance, September 30, 2019

  $ 14,697     $ 37,622     $ (1,454

)

  $ 2,128     $ 52,993  

Net income

            1,440                       1,440  

Other comprehensive loss

                            (26

)

    (26

)

Cash dividends declared ($0.135 per share)

            (371

)

                    (371

)

Balance, December 31, 2019

  $ 14,697     $ 38,691     $ (1,454

)

  $ 2,102     $ 54,036  

 

 

(Dollars in thousands, except per share data)

 

Common

Stock

   

Retained
Earnings

   

Treasury
Stock

   

Accumulated
Other
Comprehensive
Income (Loss)

   

Total
Shareholders’
Equity

 

Balance, June 30, 2020

  $ 19,974     $ 40,460     $ (1,454

)

  $ 4,260     $ 63,240  

Net income

            4,908                       4,908  

Other comprehensive income

                            269       269  

12,522 shares associated with vested and expired stock awards

    37               130               167  

Cash dividends declared ($0.29 per share)

            (876

)

                    (876

)

Balance, December 31, 2020

  $ 20,011     $ 44,492     $ (1,324

)

  $ 4,529     $ 67,708  
                                         
                                         

Balance, June 30, 2019

  $ 14,656     $ 36,487     $ (1,543

)

  $ 1,566     $ 51,166  

Net income

            2,943                       2,943  

Other comprehensive income

                            536       536  

11,813 shares associated with vested stock awards

    41               89               130  

Cash dividends declared ($0.27 per share)

            (739

)

                    (739

)

Balance, December 31, 2019

  $ 14,697     $ 38,691     $ (1,454

)

  $ 2,102     $ 54,036  

 

See accompanying notes to consolidated financial statements.

 

4

 

 

CONSUMERS BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

(Dollars in thousands)

 

Six Months Ended

December 31,

 
   

2020

   

2019

 

Cash flows from operating activities

               

Net cash from operating activities

  $ 5,706     $ 2,214  

Cash flow from investing activities

               

Purchases of securities, available-for-sale

    (24,975

)

    (6,678

)

Maturities, calls and principal pay downs of securities, available-for-sale

    20,304       11,902  

Sale of securities, available-for-sale

    2,733       6,110  

Principal pay downs of securities, held-to-maturity

    205       206  

Purchase of equity securities

    (400

)

     

Net decrease in certificate of deposit in other financial institutions

    3,036       989  

Net increase in loans

    (14,431

)

    (27,226

)

Proceeds from BOLI death benefit

          753  

Premises and equipment purchases

    (194

)

    (219

)

Sale of other repossessed assets

    17        

Net cash from investing activities

    (13,705

)

    (14,163

)

Cash flow from financing activities

               

Net increase in deposit accounts

    15,007       15,471  

Net change in short-term borrowings

    6,332       184  

Proceeds from Federal Home Loan Bank advances

    1,300       9,500  

Repayments of Federal Home Loan Bank advances

    (14,378

)

    (7,900

)

Dividends paid

    (876

)

    (739

)

Net cash from financing activities

    7,385       16,516  

Increase (decrease) in cash or cash equivalents

    (614

)

    4,567  

Cash and cash equivalents, beginning of period

    9,659       9,461  

Cash and cash equivalents, end of period

  $ 9,045     $ 14,028  
                 

Supplemental disclosure of cash flow information:

               

Cash paid during the period:

               

Interest

  $ 1,230     $ 2,022  

Federal income taxes

    1,055       350  

Non-cash items:

               

Transfer of loans to other repossessed assets

    9        

Issuance of treasury stock for stock awards

    167       89  

Right of use assets obtained in exchange for lease liabilities

          582  

 

See accompanying notes to consolidated financial statements.

 

5

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited)

 

(Dollars in thousands, except per share amounts)

 

 

Note 1 – Summary of Significant Accounting Policies:

 

Nature of Operations: Consumers Bancorp, Inc. (the Corporation) is a bank holding company headquartered in Minerva, Ohio that provides, through its banking subsidiary, Consumers National Bank (the Bank), a broad array of products and services throughout its primary market area of Carroll, Columbiana, Jefferson, Stark, Summit, Wayne and contiguous counties in Ohio. The Bank’s business involves attracting deposits from businesses and individual customers and using such deposits to originate commercial, mortgage and consumer loans in its primary market area.

 

Basis of Presentation: The consolidated financial statements for interim periods are unaudited and reflect all adjustments (consisting of only normal recurring adjustments), which, in the opinion of management, are necessary to present fairly the financial position and results of operations and cash flows for the periods presented. The unaudited financial statements are presented in accordance with the requirements of Form 10-Q and do not include all disclosures normally required by accounting principles generally accepted in the United States of America. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s Form 10-K for the year ended June 30, 2020. The results of operations for the interim period disclosed herein are not necessarily indicative of the results that may be expected for a full year.

 

The consolidated financial statements include the accounts of the Corporation and the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

 

Segment Information: The Corporation is a bank holding company engaged in the business of commercial and retail banking, which accounts for substantially all the revenues, operating income, and assets. Accordingly, all of the Corporation’s operations are recorded in one segment, banking.

 

Reclassifications: Certain items in prior financial statements have been reclassified to conform to the current presentation. Any reclassifications had no impact on prior year net income or shareholders’ equity.

 

Recently Issued Accounting Pronouncements Not Yet Effective: In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU adds a new Topic 326 to the codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. generally accepted accounting principles, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all current loss recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the corporation expects to collect over the instrument’s contractual life. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities and beneficial interests in securitized financial assets. The guidance in ASU 2016-13 is effective for “public business entities,” as defined in the guidance, that are SEC filers for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. However, during July 2019, FASB unanimously voted for a proposal to delay this ASU to January 2023 for smaller reporting companies. On October 16, 2019, FASB approved a final ASU delaying the effective date. The new guidance is effective for annual and interim periods beginning after December 15, 2022 for certain entities, including smaller reporting companies. The Corporation is a smaller reporting company.

 

 

6

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

In March 2020, the FASB issued ASU 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting". The ASU is intended to provide relief for companies preparing for discontinuation of interest rates based on LIBOR, or other reference rates that may be discontinued, and provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria. The ASU also provides for a one-time sale and/or transfer to AFS or trading to be made for HTM debt securities that both reference an eligible reference rate and were classified as HTM before January 1, 2020. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. The guidance requires companies to apply the guidance prospectively to contract modifications and hedging relationships while the one-time election to sell and/or transfer debt securities classified as HTM may be made any time after March 12, 2020. The Corporation does not expect ASU 2020-04 to have a material impact on its financial statements and disclosures.

 

 

Note 2 – Acquisition

On December 29, 2020, the Bank entered into a Branch Purchase and Assumption Agreement (P&A Agreement) with CFBank National Association (CFBank) to acquire two branches of CFBank in Columbiana County, Ohio. The P&A Agreement provides for the sale and transfer by CFBank to the Bank the land, buildings and other associated assets of CFBank’s drive-up branch location in Wellsville, Ohio and CFBank’s branch location in Calcutta, Ohio (the Branches); approximately $100 million in deposits attributable to the Branches; $15 million in aggregate principal amount of subordinated debt securities issued by unrelated financial institutions; all performing loans attributable to the Branches which are outstanding at closing (totaling approximately $3.1 million in aggregate principal amount as of November 30, 2020); and up to $13.5 million in aggregate principal amount of single family residential mortgage loans and home equity lines of credit to be identified by the parties prior to the closing principally from CFBank’s Northeast Ohio loan portfolio. In addition, CFBank will provide the opportunity for the Corporation to purchase at par at least $15 million in aggregate principal amount of participation interests in commercial and commercial real estate loans originated by and held in CFBank’s portfolio. In exchange, Consumers will pay to CFBank the net book value of the land, building and associated assets of the Branches, a deposit premium equal to 1.75% of the average daily deposits of the Branches for the 30 days preceding the closing, and the par value of the subordinated debt securities and loans acquired by Consumers.

 

The closing of the transactions contemplated by the P&A Agreement is subject to regulatory approval and satisfaction of other customary closing conditions. The parties expect the closing of the transactions to occur early in the third calendar quarter of 2021.

 

On June 14, 2019, the Corporation entered into an Agreement and Plan of Merger with Peoples Bancorp of Mt. Pleasant, Inc. (Peoples) and its wholly owned subsidiary, The Peoples National Bank of Mount Pleasant (Peoples Bank). On January 1, 2020, Consumers completed the acquisition by merger of Peoples in a stock and cash transaction for an aggregate consideration of approximately $10,405. In connection with the acquisition, the Corporation issued 269,920 shares of common stock and paid $5,128 in cash to the former shareholders of Peoples. Immediately following the merger, Peoples Bank, was merged into the Corporation’s banking subsidiary, Consumers National Bank.

 

On December 31, 2019, Peoples had approximately $72,016 in total assets, $55,273 in loans and $60,826 in deposits at its three banking centers located in Mt. Pleasant, Adena, and Dillonvale, Ohio. The assets and liabilities of Peoples were recorded on the Corporation’s Balance Sheet at their estimated fair values as of January 1, 2020, the acquisition date, and Peoples’ results of operations are included in the Corporation’s Consolidated Statements of Income beginning on that date.

 

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition of Peoples. The core deposit intangible will be amortized over ten years on a straight-line basis. Goodwill will not be amortized, but instead will be evaluated for impairment.

 

Consideration Paid

          $ 10,405  

Net assets acquired:

               

Cash and cash equivalents

  $ 833          

Certificates of deposit in other financial institutions

    11,839          

Securities, available-for-sale

    4,051          

Federal bank and other restricted stocks, at cost

    154          

Loans, net

    55,320          

Premises and equipment

    818          

Core deposit intangible

    270          

Accrued interest receivable and other assets

    140          

Noninterest-bearing deposits

    (11,979

)

       

Interest-bearing deposits

    (48,872

)

       

Federal funds purchased

    (2,348

)

       

Federal Home Loan Bank advances

    (491

)

       

Other liabilities

    (166

)

       

Total net assets acquired

            9,569  

Goodwill

          $ 836  

 

The acquired assets and liabilities were measured at estimated fair values. Management made certain estimates and exercised judgement in accounting for the acquisition. The fair value of loans was estimated using discounted contractual cash flows. The book balance of the loans at the time of the acquisition was $55,273 before considering Peoples’ allowance for loan losses, which was not carried over. The fair value disclosed above reflects a credit-related adjustment of $(890) and an adjustment for other factors of $937. Loans evidencing credit deterioration since origination, purchased credit impaired loans, included in loans receivable, were immaterial. Acquisition costs of $827 pre-tax, or $680 after-tax, were recorded during the twelve-month period ended June 30, 2020.

 

7

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

 

Note 3 – Securities

 

 

Available –for-Sale

 

 

Amortized
Cost

   

Gross
Unrealized
Gains

   

Gross
Unrealized
Losses

   

Fair
Value

 

December 31, 2020

                               

U.S. Treasury

  $ 499     $ 2     $     $ 501  

Obligations of U.S. government-sponsored entities and agencies

    7,793       316             8,109  

Obligations of state and political subdivisions

    63,359       3,675             67,034  

U.S. Government-sponsored mortgage-backed securities–residential

    56,757       1,496       (5

)

    58,248  

U.S. Government-sponsored mortgage-backed securities– commercial

    7,004       75       (1

)

    7,078  

U.S. Government-sponsored collateralized mortgage obligations– residential

    4,520       175             4,695  

Total available-for-sale securities

  $ 139,932     $ 5,739     $ (6

)

  $ 145,665  

 

Held-to-Maturity

 

 

Amortized
Cost

   

Gross
Unrecognized
Gains

   

Gross
Unrecognized Losses

   

Fair
Value

 

December 31, 2020

                               

Obligations of state and political subdivisions

  $ 3,336     $ 269     $     $ 3,605  

Total held-to-maturity securities

  $ 3,336     $ 269     $     $ 3,605  

 

Available–for-Sale

 

 

Amortized
Cost

   

Gross
Unrealized
Gains

   

Gross
Unrealized
Losses

   

Fair
Value

 

June 30, 2020

                               

U.S. Treasury

  $ 1,248     $ 8     $     $ 1,256  

Obligations of U.S. government-sponsored entities and agencies

    10,133       399             10,532  

Obligations of state and political subdivisions

    60,343       3,149             63,492  

U.S. government-sponsored mortgage-backed securities - residential

    48,645       1,515       (4

)

    50,156  

U.S. government-sponsored mortgage-backed securities - commercial

    8,444       55       (2

)

    8,497  

U.S. government-sponsored collateralized mortgage obligations - residential

    9,712       285       (12

)

    9,985  

Total available-for-sale securities

  $ 138,525     $ 5,411     $ (18

)

  $ 143,918  

 

Held-to-Maturity

 

 

Amortized
Cost

   

Gross
Unrecognized
Gains

   

Gross
Unrecognized
Losses

   

Fair
Value

 

June 30, 2020

                               

Obligations of state and political subdivisions

  $ 3,541     $ 327     $     $ 3,868  

Total held-to-maturity securities

  $ 3,541     $ 327     $     $ 3,868  

 

8

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Proceeds from the sale and call of available-for-sale securities were as follows:

 

   

Three Months Ended

December 31,

   

Six Months Ended

December 31,

 
   

2020

   

2019

   

2020

   

2019

 

Proceeds from sales and calls

  $ 2,733     $ 1,650       2,733       6,110  

Gross realized gains

    31       4       31       110  

Gross realized losses

    23             23        

 

The income tax provision related to the net realized gain amounted to $2 for the three- and six-month periods ended December 31, 2020. The income tax provision related to the net realized gains amounted to $1 and $22 for the three- and six-month periods ended December 31, 2019, respectively.

 

The amortized cost and fair values of debt securities at December 31, 2020, by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. 

 

 

Available-for-Sale

 

Amortized

Cost

   

Estimated Fair

Value

 

Due in one year or less

  $ 4,930     $ 5,006  

Due after one year through five years

    14,015       14,545  

Due after five years through ten years

    13,700       14,327  

Due after ten years

    39,006       41,766  

Total

    71,651       75,644  
                 

U.S. Government-sponsored mortgage-backed and related securities

    69,281       70,021  

Total available-for-sale securities

  $ 139,932     $ 145,665  
                 

Held-to-Maturity

               

Due after one year through five years

  $ 334     $ 356  

Due after five years through ten years

    667       735  

Due after ten years

    2,335       2,514  

Total held-to-maturity securities

  $ 3,336     $ 3,605  

 

The following table summarizes the securities with unrealized losses at December 31, 2020 and June 30, 2020, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

 

   

Less than 12 Months

   

12 Months or more

   

Total

 

Available-for-sale

 

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

 

December 31, 2020

                                               

U.S. Government-sponsored mortgage-backed securities – residential

    1,198       (5

)

                1,198       (5

)

U.S. Government-sponsored mortgage-backed securities- commercial

    1,422       (1

)

                1,422       (1

)

Total temporarily impaired

  $ 2,620     $ (6

)

  $     $     $ 2,620     $ (6

)

 

9

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

   

Less than 12 Months

   

12 Months or more

   

Total

 

Available-for-sale

 

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

 

June 30, 2020

                                               

U.S. Government-sponsored mortgage-backed securities – residential

                625       (4

)

    625       (4

)

U.S. Government-sponsored mortgage-backed securities – commercial

    1,806       (2

)

                1,806       (2

)

U.S. Government-sponsored collateralized mortgage obligations - residential

    1,700       (12

)

                1,700       (12

)

Total temporarily impaired

  $ 3,506     $ (14

)

  $ 625     $ (4

)

  $ 4,131     $ (18

)

 

Management evaluates securities for other-than-temporary impairment (OTTI) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under FASB ASC Topic 320, Accounting for Certain Investments in Debt and Equity Securities.

 

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

 

The unrealized losses within the securities portfolio as of December 31, 2020 have not been recognized into income because the decline in fair value is not attributed to credit quality and management does not intend to sell, and it is not likely that management will be required to sell, the securities prior to their anticipated recovery. The decline in fair value within the securities portfolio is largely due to increases in mortgage backed and collateralized mortgage obligations prepayment speeds impacting the yield on bonds that were purchased at a premium. The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does not own any private label mortgage-backed securities.

 

 

Note 4 – Loans

 

Major classifications of loans were as follows:

 

   

December 31,

2020

   

June 30,

2020

 

Commercial

  $ 158,911     $ 158,667  

Commercial real estate:

               

Construction

    3,802       16,235  

Other

    250,529       229,029  

1 – 4 Family residential real estate:

               

Owner occupied

    93,726       90,494  

Non-owner occupied

    20,210       19,370  

Construction

    6,026       9,344  

Consumer

    24,230       21,334  

Subtotal

    557,434       544,473  

Net Deferred loan fees and costs

    (177

)

    (1,612

)

Allowance for loan losses

    (5,912

)

    (5,678

)

Net Loans

  $ 551,345     $ 537,183  

 

The commercial loan category in the above table includes PPP loans of $52,539 as of December 31, 2020 and $66,606 as of June 30, 2020 and a mortgage loan warehouse line of credit to another financial institution with an outstanding balance of $47,268 as of December 31, 2020 and $32,869 as of June 30, 2020. The outstanding balance of the warehouse line of credit can fluctuate significantly based on the other financial institution’s funding needs.

 

10

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2020:

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 940     $ 3,694     $ 997     $ 136     $ 5,767  

Provision for loan losses

    (82

)

    122       31       59       130  

Loans charged-off

                      (12

)

    (12

)

Recoveries

          1             26       27  

Total ending allowance balance

  $ 858     $ 3,817     $ 1,028     $ 209     $ 5,912  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2020:

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 947     $ 3,623     $ 989     $ 119     $ 5,678  

Provision for loan losses

    (67

)

    192       39       96       260  

Loans charged-off

    (22

)

                (56

)

    (78

)

Recoveries

          2             50       52  

Total ending allowance balance

  $ 858     $ 3,817     $ 1,028     $ 209     $ 5,912  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2019:

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 649     $ 2,645     $ 550     $ 65     $ 3,909  

Provision for loan losses

    117       6       64       (2

)

    185  

Loans charged-off

                      (7

)

    (7

)

Recoveries

          1       1       6       8  

Total ending allowance balance

  $ 766     $ 2,652     $ 615     $ 62     $ 4,095  

 

11

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2019:

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 660     $ 2,575     $ 494     $ 59     $ 3,788  

Provision for loan losses

    106       75       120       14       315  

Loans charged-off

                      (23

)

    (23

)

Recoveries

          2       1       12       15  

Total ending allowance balance

  $ 766     $ 2,652     $ 615     $ 62     $ 4,095  

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020. Included in the recorded investment in loans is $1,607 of accrued interest receivable.

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 

Allowance for loan losses:

                                       

Ending allowance balance attributable to loans:

                                       

Individually evaluated for impairment

  $ 3     $     $ 6     $     $ 9  

Acquired loans collectively evaluated for impairment

          101       84             185  

Originated loans collectively evaluated for impairment

    855       3,716       938       209       5,718  

Total ending allowance balance

  $ 858     $ 3,817     $ 1,028     $ 209     $ 5,912  
                                         

Recorded investment in loans:

                                       

Loans individually evaluated for impairment

  $ 148     $ 1,151     $ 1,044     $     $ 2,343  

Acquired loans collectively evaluated for impairment

    661       7,824       23,220       8,935       40,640  

Originated loans collectively evaluated for impairment

    158,331       245,489       96,733       15,328       515,881  

Total ending loans balance

  $ 159,140     $ 254,464     $ 120,997     $ 24,263     $ 558,864  

 

12

CONSUMERS BANCORP, INC.
Notes to the Consolidated Financial Statements
(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2020. Included in the recorded investment in loans is $1,936 of accrued interest receivable.

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 

Allowance for loan losses:

                                       

Ending allowance balance attributable to loans:

                                       

Individually evaluated for impairment

  $ 28     $ 6     $     $     $ 34  

Acquired loans collectively evaluated for impairment

          103       94             197  

Originated loans collectively evaluated for impairment

    919       3,514       895       119       5,447  

Total ending allowance balance

  $ 947     $ 3,623     $ 989     $ 119     $ 5,678  
                                         

Recorded investment in loans:

                                       

Loans individually evaluated for impairment

  $ 179     $ 1,045     $ 699     $     $ 1,923  

Acquired loans collectively evaluated for impairment

    1,095       8,072       27,252       12,550       48,969  

Originated loans collectively evaluated for impairment

    156,054       236,840       92,168       8,843       493,905  

Total ending loans balance

  $ 157,328     $ 245,957     $ 120,119     $ 21,393     $ 544,797  

 

The following table presents information related to unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of December 31, 2020 and for the six months ended December 31, 2020:

 

   

As of December 31, 2020

   

Six Months ended December 31, 2020

 
   

Unpaid

           

Allowance for

   

Average

   

Interest

   

Cash Basis

 
   

Principal

   

Recorded

   

Loan Losses

   

Recorded

   

Income

   

Interest

 
   

Balance

   

Investment

   

Allocated

   

Investment

   

Recognized

   

Recognized

 

With no related allowance recorded:

                                               

Commercial real estate:

                                               

Other

  $ 1,286     $ 1,151     $     $ 867     $ 4     $ 4  

1-4 Family residential real estate:

                                               

Owner occupied

    947       797             629       11       11  

Non-owner occupied

    274       217             225              

With an allowance recorded: