x
|
Quarterly Report Pursuant to Section 13 or 15 (d) or the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
for the transition period from
|
to
|
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)
|
Large accelerated filer ¨
|
Accelerated filer ¨
|
|
Non-accelerated filer ¨ (Do not check if smaller reporting company)
|
Smaller reporting company x
|
Page
|
|
Number (s)
|
|
Part I – Financial Information
|
|
Item 1 – Financial Statements (Unaudited)
|
|
Consolidated Balance Sheets at September 30, 2011 and June 30, 2011
|
1
|
Consolidated Statements of Income for the three months ended September 30, 2011 and 2010
|
2
|
Consolidated Statements of Comprehensive Income for the three months ended September 30, 2011 and 2010
|
3
|
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended September 30, 2011 and 2010
|
4
|
Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2011 and 2010
|
5
|
Notes to the Consolidated Financial Statements
|
6-24
|
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
25-34
|
Item 3 – Not Applicable for Smaller Reporting Companies
|
|
Item 4 – Controls and Procedures
|
35
|
Part II – Other Information
|
|
Item 1 – Legal Proceedings
|
36
|
Item 1A – Not Applicable for Smaller Reporting Companies
|
|
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
|
36
|
Item 3 – Defaults Upon Senior Securities
|
36
|
Item 4 – Removed and Reserved
|
|
Item 5 – Other Information
|
36
|
Item 6 – Exhibits
|
36
|
Signatures
|
37
|
September 30,
|
June 30,
|
|||||||
2011 | 2011 | |||||||
ASSETS
|
||||||||
Cash on hand and noninterest-bearing deposits in other banks
|
$ | 8,115 | $ | 5,944 | ||||
Interest-bearing deposits in other banks
|
13,749 | 7,884 | ||||||
Total cash and cash equivalents
|
21,864 | 13,828 | ||||||
Certificates of deposit in other financial institutions
|
3,675 | 4,900 | ||||||
Securities, available-for-sale
|
98,671 | 91,889 | ||||||
Federal bank and other restricted stocks, at cost
|
1,186 | 1,186 | ||||||
Total loans
|
179,901 | 177,551 | ||||||
Less allowance for loan losses
|
(2,087 | ) | (2,101 | ) | ||||
Net Loans
|
177,814 | 175,450 | ||||||
Cash surrender value of life insurance
|
5,462 | 5,411 | ||||||
Premises and equipment, net
|
4,711 | 4,776 | ||||||
Intangible assets
|
48 | 89 | ||||||
Other real estate owned
|
76 | 76 | ||||||
Accrued interest receivable and other assets
|
2,088 | 2,535 | ||||||
Total assets
|
$ | 315,595 | $ | 300,140 | ||||
LIABILITIES
|
||||||||
Deposits
|
||||||||
Non-interest bearing demand
|
$ | 68,670 | $ | 64,657 | ||||
Interest bearing demand
|
17,590 | 14,829 | ||||||
Savings
|
86,820 | 79,816 | ||||||
Time
|
89,274 | 88,944 | ||||||
Total deposits
|
262,354 | 248,246 | ||||||
Short-term borrowings
|
17,636 | 17,012 | ||||||
Federal Home Loan Bank advances
|
7,516 | 7,535 | ||||||
Accrued interest and other liabilities
|
2,042 | 2,023 | ||||||
Total liabilities
|
289,548 | 274,816 | ||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Preferred stock (no par value, 350,000 shares authorized)
|
— | — | ||||||
Common stock (no par value, 3,500,000 shares authorized; 2,180,315 shares issued)
|
5,114 | 5,114 | ||||||
Retained earnings
|
21,342 | 20,881 | ||||||
Treasury stock, at cost (130,442 common shares)
|
(1,659 | ) | (1,659 | ) | ||||
Accumulated other comprehensive income
|
1,250 | 988 | ||||||
Total shareholders’ equity
|
26,047 | 25,324 | ||||||
Total liabilities and shareholders’ equity
|
$ | 315,595 | $ | 300,140 |
Three Months ended
|
||||||||
September 30,
|
||||||||
(Dollars in thousands, except per share amounts)
|
2011
|
2010
|
||||||
Interest income
|
||||||||
Loans, including fees
|
$ | 2,535 | $ | 2,595 | ||||
Securities
|
||||||||
Taxable
|
480 | 425 | ||||||
Tax-exempt
|
245 | 210 | ||||||
Federal funds sold and other interest bearing deposits
|
16 | 10 | ||||||
Total interest income
|
3,276 | 3,240 | ||||||
Interest expense
|
||||||||
Deposits
|
330 | 465 | ||||||
Short-term borrowings
|
11 | 13 | ||||||
Federal Home Loan Bank advances
|
60 | 69 | ||||||
Total interest expense
|
401 | 547 | ||||||
Net interest income
|
2,875 | 2,693 | ||||||
Provision for loan losses
|
92 | 102 | ||||||
Net interest income after provision for loan losses
|
2,783 | 2,591 | ||||||
Non-interest income
|
||||||||
Service charges on deposit accounts
|
356 | 335 | ||||||
Debit card interchange income
|
179 | 150 | ||||||
Bank owned life insurance income
|
51 | 45 | ||||||
Securities gains, net
|
49 | 17 | ||||||
Gain on sale of OREO
|
- | 2 | ||||||
Other
|
37 | 57 | ||||||
Total non-interest income
|
672 | 606 | ||||||
Non-interest expenses
|
||||||||
Salaries and employee benefits
|
1,326 | 1,177 | ||||||
Occupancy and equipment
|
258 | 264 | ||||||
Data processing expenses
|
139 | 136 | ||||||
Professional and director fees
|
94 | 103 | ||||||
FDIC Assessments
|
50 | 78 | ||||||
Franchise taxes
|
65 | 58 | ||||||
Marketing and Advertising
|
76 | 37 | ||||||
Telephone and network communications
|
58 | 52 | ||||||
Debit card processing expenses
|
94 | 84 | ||||||
Amortization of intangible
|
41 | 41 | ||||||
Other
|
361 | 334 | ||||||
Total non-interest expenses
|
2,562 | 2,364 | ||||||
Income before income taxes
|
893 | 833 | ||||||
Income tax expense
|
206 | 200 | ||||||
Net Income
|
$ | 687 | $ | 633 | ||||
Basic and diluted earnings per share
|
$ | 0.34 | $ | 0.31 |
Three Months ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
Net income
|
$ | 687 | $ | 633 | ||||
Other comprehensive income (loss), net of tax:
|
||||||||
Net change in unrealized gains (losses):
|
||||||||
Available-for-sale securities:
|
||||||||
Unrealized gains (losses) arising during the period
|
446 | 272 | ||||||
Reclassification adjustment for gains included in income
|
(49 | ) | (17 | ) | ||||
Net unrealized gain (losses)
|
397 | 255 | ||||||
Income tax effect
|
135 | 87 | ||||||
Other comprehensive income
|
262 | 168 | ||||||
Total comprehensive income
|
$ | 949 | $ | 801 |
Three Months ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
Balance at beginning of period
|
$ | 25,324 | $ | 23,716 | ||||
Comprehensive income
|
||||||||
Net income
|
687 | 633 | ||||||
Other comprehensive income
|
262 | 168 | ||||||
Total comprehensive income
|
949 | 801 | ||||||
Common stock issued for dividend reinvestment and stock purchase plan (2,989 shares for 2010)
|
— | 36 | ||||||
Common cash dividends
|
(226 | ) | (204 | ) | ||||
Balance at the end of the period
|
$ | 26,047 | $ | 24,349 | ||||
Common cash dividends per share
|
$ | 0.11 | $ | 0.10 |
Three Months Ended
|
||||||||
(Dollars in thousands)
|
September 30,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities
|
||||||||
Net cash from operating activities
|
$ | 1,407 | $ | 1,238 | ||||
Cash flow from investing activities
|
||||||||
Securities available-for-sale
|
||||||||
Purchases
|
(17,212 | ) | (13,267 | ) | ||||
Maturities, calls and principal pay downs
|
5,660 | 3,594 | ||||||
Proceeds from sales of available-for-sale securities
|
4,951 | 2,553 | ||||||
Net (increase) decrease in certificates of deposits in other financial institutions
|
1,225 | (980 | ) | |||||
Net increase in loans
|
(2,456 | ) | (255 | ) | ||||
Acquisition of premises and equipment
|
(26 | ) | (447 | ) | ||||
Sale of other real estate owned
|
- | 26 | ||||||
Net cash from investing activities
|
(7,858 | ) | (8,776 | ) | ||||
Cash flow from financing activities
|
||||||||
Net increase in deposit accounts
|
14,108 | 4,311 | ||||||
Net change in short-term borrowings
|
624 | 2,262 | ||||||
Repayments of Federal Home Loan Bank advances
|
(19 | ) | (38 | ) | ||||
Proceeds from dividend reinvestment and stock purchase plan
|
- | 36 | ||||||
Dividends paid
|
(226 | ) | (204 | ) | ||||
Net cash from financing activities
|
14,487 | 6,367 | ||||||
Increase/(decrease) in cash or cash equivalents
|
8,036 | (1,171 | ) | |||||
Cash and cash equivalents, beginning of period
|
13,828 | 13,806 | ||||||
Cash and cash equivalents, end of period
|
$ | 21,864 | $ | 12,635 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid during the period:
|
||||||||
Interest
|
$ | 409 | $ | 550 | ||||
Federal income taxes
|
- | 65 |
Gross
|
Gross
|
|||||||||||||||
Description of Securities |
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||||
Cost |
Gains
|
Losses
|
Value
|
|||||||||||||
September 30, 2011
|
||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 9,701 | $ | 122 | $ | (4 | ) | $ | 9,819 | |||||||
Obligations of state and political subdivisions
|
25,229 | 1,044 | (64 | ) | 26,209 | |||||||||||
Mortgage-backed securities – residential
|
41,774 | 1,108 | (160 | ) | 42,722 | |||||||||||
Collateralized mortgage obligations
|
19,871 | 85 | (99 | ) | 19,857 | |||||||||||
Trust preferred security
|
202 | — | (138 | ) | 64 | |||||||||||
Total securities
|
$ | 96,777 | $ | 2,359 | $ | (465 | ) | $ | 98,671 |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
June 30, 2011
|
||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 16,185 | $ | 98 | $ | (23 | ) | $ | 16,260 | |||||||
Obligations of state and political subdivisions
|
24,725 | 584 | (211 | ) | 25,098 | |||||||||||
Mortgage-backed securities - residential
|
29,424 | 1,172 | — | 30,596 | ||||||||||||
Collateralized mortgage obligations
|
19,856 | 74 | (62 | ) | 19,868 | |||||||||||
Trust preferred security
|
202 | — | (135 | ) | 67 | |||||||||||
Total securities
|
$ | 90,392 | $ | 1,928 | $ | (431 | ) | $ | 91,889 |
Three Months Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
Proceeds from sales
|
$ | 4,951 | 2,553 | |||||
Gross realized gains
|
49 | 44 | ||||||
Gross realized losses
|
— | 27 |
Amortized
|
Estimated Fair
|
|||||||
Cost
|
Value
|
|||||||
Due in one year or less
|
$ | 3,525 | $ | 3,552 | ||||
Due after one year through five years
|
7,220 | 7,360 | ||||||
Due after five years through ten years
|
5,835 | 6,162 | ||||||
Due after ten years
|
18,350 | 18,954 | ||||||
Total
|
34,930 | 36,028 | ||||||
Mortgage-backed securities – residential
|
41,774 | 42,722 | ||||||
Collateralized mortgage obligations
|
19,871 | 19,857 | ||||||
Trust preferred security
|
202 | 64 | ||||||
Total
|
$ | 96,777 | $ | 98,671 |
Less than 12 Months
|
12 Months or more
|
Total
|
||||||||||||||||||||||
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||
Description of Securities |
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
||||||||||||||||||
September 30, 2011
|
||||||||||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 996 | $ | (4 | ) | $ | — | $ | — | $ | 996 | $ | (4 | ) | ||||||||||
Obligations of states and political subdivisions
|
241 | — | 1,436 | (64 | ) | 1,677 | (64 | ) | ||||||||||||||||
Mortgage-backed securities - residential
|
14,288 | (160 | ) | — | — | 14,288 | (160 | ) | ||||||||||||||||
Collateralized mortgage obligations
|
12,117 | (99 | ) | — | — | 12,117 | (99 | ) | ||||||||||||||||
Trust preferred security
|
— | — | 64 | (138 | ) | 64 | (138 | ) | ||||||||||||||||
Total temporarily impaired
|
$ | 27,642 | $ | (263 | ) | $ | 1,500 | $ | (202 | ) | $ | 29,142 | $ | (465 | ) |
Less than 12 Months
|
12 Months or more
|
Total
|
||||||||||||||||||||||
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||||||
Description of Securities
|
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
||||||||||||||||||
June 30, 2011
|
||||||||||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 3,088 | $ | (23 | ) | $ | — | $ | — | $ | 3,088 | $ | (23 | ) | ||||||||||
Obligations of states and political subdivisions
|
3,656 | (81 | ) | 1,221 | (130 | ) | 4,877 | (211 | ) | |||||||||||||||
Collateralized mortgage obligations
|
9,665 | (62 | ) | — | — | 9,665 | (62 | ) | ||||||||||||||||
Trust preferred security
|
— | — | 67 | (135 | ) | 67 | (135 | ) | ||||||||||||||||
Total temporarily impaired
|
$ | 16,409 | $ | (166 | ) | $ | 1,288 | $ | (265 | ) | $ | 17,697 | $ | (431 | ) |
September 30,
|
June 30,
|
|||||||
2011
|
2011
|
|||||||
Commercial
|
$ | 19,034 | $ | 19,297 | ||||
Commercial real estate:
|
||||||||
Construction
|
2,379 | 1,057 | ||||||
Other
|
100,361 | 97,403 | ||||||
1 – 4 Family residential real estate:
|
||||||||
Owner occupied
|
33,251 | 34,488 | ||||||
Non-owner occupied
|
18,505 | 19,098 | ||||||
Construction
|
139 | 597 | ||||||
Consumer
|
6,498 | 5,874 | ||||||
Subtotal
|
180,167 | 177,814 | ||||||
Less: Net deferred loan fees
|
(266 | ) | (263 | ) | ||||
Allowance for loan losses
|
(2,087 | ) | (2,101 | ) | ||||
Net Loans
|
$ | 177,814 | $ | 175,450 |
Commercial
|
Residential
|
|||||||||||||||||||
Real
|
Real
|
|||||||||||||||||||
Commercial
|
Estate
|
Estate
|
Consumer
|
Total
|
||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||
Beginning balance
|
$ | 179 | $ | 882 | $ | 947 | $ | 93 | $ | 2,101 | ||||||||||
Provision for loan losses
|
(82 | ) | 172 | (33 | ) | 35 | 92 | |||||||||||||
Loans charged-off
|
— | — | (69 | ) | (50 | ) | (119 | ) | ||||||||||||
Recoveries
|
— | — | — | 13 | 13 | |||||||||||||||
Total ending allowance balance
|
$ | 97 | $ | 1,054 | $ | 845 | $ | 91 | $ | 2,087 |
Beginning of period
|
$ | 2,276 | ||
Provision
|
102 | |||
Charge-offs
|
(41 | ) | ||
Recoveries
|
20 | |||
Total ending allowance balance
|
$ | 2,357 |
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
|
$ | 10 | $ | 107 | $ | 249 | $ | — | $ | 366 | ||||||||||
Collectively evaluated for impairment
|
87 | 947 | 596 | 91 | 1,721 | |||||||||||||||
Total ending allowance balance
|
$ | 97 | $ | 1,054 | $ | 845 | $ | 91 | $ | 2,087 | ||||||||||
Recorded investment in loans:
|
||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 77 | $ | 1,395 | $ | 1,320 | $ | — | $ | 2,792 | ||||||||||
Loans collectively evaluated for impairment
|
19,010 | 101,359 | 50,711 | 6,488 | 177,568 | |||||||||||||||
Total ending loans balance
|
$ | 19,087 | $ | 102,754 | $ | 52,031 | $ | 6,488 | $ | 180,360 |
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
|
$ | 13 | $ | 126 | $ | 293 | $ | — | $ | 432 | ||||||||||
Collectively evaluated for impairment
|
166 | 756 | 654 | 93 | 1,669 | |||||||||||||||
Total ending allowance balance
|
$ | 179 | $ | 882 | $ | 947 | $ | 93 | $ | 2,101 | ||||||||||
Recorded investment in loans:
|
||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 82 | $ | 1,405 | $ | 1,042 | $ | — | $ | 2,529 | ||||||||||
Loans collectively evaluated for impairment
|
19,254 | 97,093 | 53,279 | 5,868 | 175,494 | |||||||||||||||
Total ending loans balance
|
$ | 19,336 | $ | 98,498 | $ | 54,321 | $ | 5,868 | $ | 178,023 |
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
|
$ | 16 | $ | 16 | $ | — | $ | 17 | $ | — | $ | — | ||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Other
|
635 | 634 | — | 635 | 3 | 3 | ||||||||||||||||||
1-4 Family residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
97 | 97 | — | 97 | 2 | 2 | ||||||||||||||||||
Non-owner occupied
|
64 | 65 | — | 43 | — | — | ||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||
Commercial
|
62 | 61 | 10 | 63 | — | — | ||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Other
|
762 | 761 | 107 | 763 | 5 | 5 | ||||||||||||||||||
1-4 Family residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
220 | 218 | 14 | 218 | 2 | 2 | ||||||||||||||||||
Non-owner occupied
|
940 | 940 | 235 | 871 | — | — | ||||||||||||||||||
Total
|
$ | 2,796 | $ | 2,792 | $ | 366 | $ | 2,707 | $ | 12 | $ | 12 |
As of June 30, 2011
|
Three Months ended September 30, 2010
|
|||||||||||||||||||||||
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
|
$ | 18 | $ | 18 | $ | — | $ | 23 | $ | — | $ | — | ||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Other
|
413 | 412 | — | 493 | — | — | ||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||
Commercial
|
64 | 64 | 13 | 30 | — | — | ||||||||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Other
|
997 | 993 | 126 | 1,263 | 3 | 18 | ||||||||||||||||||
1-4 Family residential real estate:
|
||||||||||||||||||||||||
Owner occupied
|
320 | 319 | 3 | 222 | 2 | — | ||||||||||||||||||
Non-owner occupied
|
724 | 723 | 290 | 775 | — | — | ||||||||||||||||||
Total
|
$ | 2,536 | $ | 2,529 | $ | 432 | $ | 2,806 | $ | 5 | $ | 18 |
September 30, 2011
|
June 30, 2011
|
|||||||||||||||
Loans Past Due |
Loans Past Due
|
|||||||||||||||
Over 90 Days |
Over 90 Days
|
|||||||||||||||
|
Still
|
Still
|
||||||||||||||
Non-accrual
|
Accruing
|
Non-accrual
|
Accruing
|
|||||||||||||
Commercial
|
$ | 62 | $ | — | $ | 64 | $ | — | ||||||||
Commercial real estate:
|
||||||||||||||||
Other
|
950 | — | 754 | — | ||||||||||||
1 – 4 Family residential:
|
||||||||||||||||
Owner occupied
|
358 | — | 219 | — | ||||||||||||
Non-owner occupied
|
649 | — | 723 | — | ||||||||||||
Consumer
|
— | — | — | — | ||||||||||||
Total
|
$ | 2,019 | $ | — | $ | 1,760 | $ | — |
Days Past Due
|
||||||||||||||||||||||||
90 Days or
|
||||||||||||||||||||||||
30 - 59 | 60 – 89 |
Greater &
|
Total
|
Loans Not
|
||||||||||||||||||||
Days
|
Days
|
Non-accrual
|
Past Due
|
Past Due
|
Total
|
|||||||||||||||||||
Commercial
|
$ | 16 | $ | — | $ | 37 | $ | 53 | $ | 19,034 | $ | 19,087 | ||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Construction
|
— | — | — | — | 2,378 | 2,378 | ||||||||||||||||||
Other
|
112 | — | 651 | 763 | 99,613 | 100,376 | ||||||||||||||||||
1-4 Family residential:
|
||||||||||||||||||||||||
Owner occupied
|
— | — | 211 | 211 | 33,172 | 33,383 | ||||||||||||||||||
Non-owner occupied
|
26 | — | — | 26 | 18,482 | 18,508 | ||||||||||||||||||
Construction
|
— | — | — | — | 140 | 140 | ||||||||||||||||||
Consumer
|
28 | — | — | 28 | 6,460 | 6,488 | ||||||||||||||||||
Total
|
$ | 182 | $ | — | $ | 899 | $ | 1,081 | $ | 179,279 | $ | 180,360 |
Days Past Due
|
||||||||||||||||||||||||
90 Days or | ||||||||||||||||||||||||
30 - 59 | 60 - 89 |
Greater &
|
Total
|
Loans Not
|
||||||||||||||||||||
Days
|
Days
|
Non-accrual
|
Past Due
|
Past Due
|
Total
|
|||||||||||||||||||
Commercial
|
$ | — | $ | 1 | $ | — | $ | 1 | $ | 19,335 | $ | 19,336 | ||||||||||||
Commercial real estate:
|
||||||||||||||||||||||||
Construction
|
— | — | — | — | 1,053 | 1,053 | ||||||||||||||||||
Other
|
— | 242 | 412 | 654 | 96,791 | 97,445 | ||||||||||||||||||
1-4 Family residential:
|
||||||||||||||||||||||||
Owner occupied
|
— | 167 | 23 | 190 | 34,438 | 34,628 | ||||||||||||||||||
Non-owner occupied
|
— | 44 | 175 | 219 | 18,877 | 19,096 | ||||||||||||||||||
Construction
|
— | — | — | — | 597 | 597 | ||||||||||||||||||
Consumer
|
26 | — | — | 26 | 5,842 | 5,868 | ||||||||||||||||||
Total
|
$ | 26 | $ | 454 | $ | 610 | $ | 1,090 | $ | 176,933 | $ | 178,023 |
Pre-Modification
|
Post-Modification
|
|||||||||||
Number of
|
Outstanding Recorded
|
Outstanding Recorded
|
||||||||||
Loans
|
Investment
|
Investment
|
||||||||||
Troubled debt restructuring:
|
||||||||||||
1 – 4 Family residential:
|
||||||||||||
Non-owner occupied
|
7 | $ | 534 | $ | 466 | |||||||
Total
|
7 | $ | 534 | $ | 466 |
As of September 30, 2011
|
||||||||||||||||||||
Special
|
Not
|
|||||||||||||||||||
Pass
|
Mention
|
Substandard
|
Doubtful
|
Rated
|
||||||||||||||||
Commercial
|
$ | 17,966 | $ | 775 | $ | 56 | $ | 77 | $ | 213 | ||||||||||
Commercial real estate:
|
||||||||||||||||||||
Construction
|
2,199 | 179 | — | — | — | |||||||||||||||
Other
|
89,028 | 7,220 | 2,218 | 1,395 | 515 | |||||||||||||||
1-4 Family residential real estate:
|
||||||||||||||||||||
Owner occupied
|
4,755 | 370 | 101 | 315 | 27,842 | |||||||||||||||
Non-owner occupied
|
13,677 | 2,650 | 991 | 1,005 | 185 | |||||||||||||||
Construction
|
— | — | — | — | 140 | |||||||||||||||
Consumer
|
— | — | — | — | 6,488 | |||||||||||||||
Total
|
$ | 127,625 | $ | 11,194 | $ | 3,366 | $ | 2,792 | $ | 35,383 |
Fair Value Measurements at
September 30, 2011 Using
|
||||||||||||||||
Balance at
September 30,
2011
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 9,819 | $ | — | $ | 9,819 | $ | — | ||||||||
Obligations of states and political subdivisions
|
26,209 | — | 26,209 | — | ||||||||||||
Mortgage-backed securities – residential
|
42,722 | — | 42,722 | — | ||||||||||||
Collateralized mortgage obligations
|
19,857 | — | 19,857 | — | ||||||||||||
Trust preferred security
|
64 | — | — | 64 |
Fair Value Measurements at
June 30, 2011 Using
|
||||||||||||||||
Balance at
June 30, 2011
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
U.S. government-sponsored entities and agencies
|
$ | 16,260 | $ | — | $ | 16,260 | $ | — | ||||||||
Obligations of states and political subdivisions
|
25,098 | — | 25,098 | — | ||||||||||||
Mortgage-backed securities - residential
|
30,596 | — | 30,596 | — | ||||||||||||
Collateralized mortgage obligations
|
19,868 | — | 19,868 | — | ||||||||||||
Trust preferred security
|
67 | — | — | 67 |
2011
|
2010
|
|||||||
Beginning balance
|
$ | 67 | $ | 422 | ||||
Realized losses included in non-interest income
|
— | — | ||||||
Change in fair value included in other comprehensive income
|
(3 | ) | 19 | |||||
Ending balance, September 30
|
$ | 64 | $ | 441 |
Fair Value Measurements at
September 30, 2011 Using
|
||||||||||||||||
Balance at
September 30,
2011
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Impaired loans:
|
||||||||||||||||
Commercial
|
$ | 51 | $ | — | $ | — | $ | 51 | ||||||||
Commercial real estate:
|
||||||||||||||||
Other
|
654 | — | — | 654 | ||||||||||||
1-4 Family
|
||||||||||||||||
Owner occupied
|
204 | — | — | 204 | ||||||||||||
Non-owner occupied
|
705 | — | — | 705 |
Fair Value Measurements at
June 30, 2011 Using
|
||||||||||||||||
Balance at
June 30, 2011
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Impaired loans:
|
||||||||||||||||
Commercial
|
$ | 51 | $ | — | $ | — | $ | 51 | ||||||||
Commercial real estate:
|
||||||||||||||||
Other
|
871 | — | — | 871 | ||||||||||||
1-4 Family
|
||||||||||||||||
Owner occupied
|
317 | — | — | 317 | ||||||||||||
Non-owner occupied
|
434 | — | — | 434 |
September 30, 2011
|
June 30, 2011
|
|||||||||||||||
Carrying
Amount
|
Estimated
Fair
Value
|
Carrying
Amount
|
Estimated
Fair
Value
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 21,864 | $ | 21,864 | $ | 13,828 | $ | 13,828 | ||||||||
Certificates of deposits in other financial institutions
|
3,675 | 3,675 | 4,900 | 4,900 | ||||||||||||
Securities available-for-sale
|
98,671 | 98,671 | 91,889 | 91,889 | ||||||||||||
Loans, net
|
177,814 | 177,582 | 175,450 | 174,182 | ||||||||||||
Accrued interest receivable
|
1,023 | 1,023 | 980 | 980 | ||||||||||||
Financial Liabilities:
|
||||||||||||||||
Demand and savings deposits
|
(173,080 | ) | (173,080 | ) | (159,302 | ) | (159,302 | ) | ||||||||
Time deposits
|
(89,274 | ) | (90,388 | ) | (88,944 | ) | (89,725 | ) | ||||||||
Short-term borrowings
|
(17,636 | ) | (17,636 | ) | (17,012 | ) | (17,012 | ) | ||||||||
Federal Home Loan Bank advances
|
(7,516 | ) | (7,855 | ) | (7,535 | ) | (7,884 | ) | ||||||||
Accrued interest payable
|
(74 | ) | (74 | ) | (82 | ) | (82 | ) |
2011
|
2010
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
|||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Taxable securities
|
$ | 69,400 | $ | 480 | 2.79 | % | $ | 48,427 | $ | 425 | 3.57 | % | ||||||||||||
Nontaxable securities (1)
|
25,594 | 362 | 5.76 | 21,294 | 307 | 5.83 | ||||||||||||||||||
Loans receivable (1)
|
178,357 | 2,541 | 5.65 | 174,792 | 2,601 | 5.90 | ||||||||||||||||||
Interest bearing deposits and federal funds sold
|
18,528 | 16 | 0.34 | 12,660 | 10 | 0.31 | ||||||||||||||||||
Total interest-earning assets
|
291,879 | 3,399 | 4.65 | % | 257,173 | 3,343 | 5.19 | % | ||||||||||||||||
Noninterest-earning assets
|
13,466 | 12,022 | ||||||||||||||||||||||
Total Assets
|
$ | 305,345 | $ | 269,195 | ||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
NOW
|
$ | 15,720 | $ | 6 | 0.15 | % | $ | 13,791 | $ | 6 | 0.17 | % | ||||||||||||
Savings
|
82,725 | 36 | 0.17 | 67,319 | 42 | 0.25 | ||||||||||||||||||
Time deposits
|
88,511 | 288 | 1.29 | 91,865 | 417 | 1.80 | ||||||||||||||||||
Short-term borrowings
|
16,813 | 11 | 0.26 | 13,177 | 13 | 0.39 | ||||||||||||||||||
FHLB advances
|
7,523 | 60 | 3.16 | 8,272 | 69 | 3.31 | ||||||||||||||||||
Total interest-bearing liabilities
|
211,292 | 401 | 0.75 | % | 194,424 | 547 | 1.12 | % | ||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest-bearing checking accounts
|
66,214 | 48,480 | ||||||||||||||||||||||
Other liabilities
|
1,923 | 2,082 | ||||||||||||||||||||||
Total liabilities
|
279,429 | 244,986 | ||||||||||||||||||||||
Shareholders’ equity
|
25,916 | 24,209 | ||||||||||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 305,345 | $ | 269,195 | ||||||||||||||||||||
Net interest income, interest rate spread (1)
|
$ | 2,998 | 3.90 | % | $ | 2,796 | 4.07 | % | ||||||||||||||||
Net interest margin (net interest as a percent of average interest-earning assets) (1)
|
4.10 | % | 4.34 | % | ||||||||||||||||||||
Federal tax exemption on non-taxable securities and loans included in interest income
|
$ | 123 | $ | 103 | ||||||||||||||||||||
Average interest-earning assets to interest-bearing liabilities
|
138.14 | % | 132.27 | % |
September 30,
2011
|
June 30,
2011
|
September 30,
2010
|
||||||||||
Non-accrual loans
|
$ | 2,019 | $ | 1,760 | $ | 2,804 | ||||||
Loans past due over 90 days and still accruing
|
— | — | — | |||||||||
Total non-performing loans
|
2,019 | 1,760 | 2,804 | |||||||||
Other real estate owned
|
76 | 76 | 1 | |||||||||
Total non-performing assets
|
$ | 2,095 | $ | 1,836 | $ | 2,805 | ||||||
Non-performing loans to total loans
|
1.12 | % | 0.99 | % | 1.61 | % | ||||||
Allowance for loan losses to total non-performing loans
|
103.37 | % | 119.38 | % | 84.06 | % |
|
·
|
regional and national economic conditions becoming less favorable than expected, resulting in, among other things, a deterioration in credit quality of assets and the underlying value of collateral could prove to be less valuable than otherwise assumed;
|
|
·
|
the nature, extent, and timing of government and regulatory actions;
|
|
·
|
material unforeseen changes in the financial condition or results of Consumers National Bank’s customers;
|
|
·
|
changes in levels of market interest rates which could reduce anticipated or actual margins;
|
|
·
|
competitive pressures on product pricing and services; and
|
|
·
|
a continued deterioration in market conditions causing debtors to be unable to meet their obligations.
|
Exhibit
|
||
Number
|
Description
|
|
Exhibit 10.3
|
Lease Agreement entered into between Furey Holdings, LLC and Consumers National Bank on December 23, 2005. Reference is made to Form 10-Q of the Corporation filed February 14, 2006, which is incorporated herein by reference.
|
|
Exhibit 10.6
|
2011 Amendment and Restatement of Salary Continuation agreement entered into with Mr. Lober on February 11, 2011. Reference is made to Form 10-Q of the Corporation filed February 11, 2011, which is incorporated herein by reference.
|
|
Exhibit 10.7
|
Form Noncompetition agreement entered into with Ms. Wood on February 11, 2011. Reference is made to Form 10-Q of the Corporation filed February 11, 2011, which is incorporated herein by reference.
|
|
Exhibit 11
|
Statement regarding Computation of Per Share Earnings (included in Note 1 to the Consolidated Financial Statements).
|
|
Exhibit 31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
Exhibit 31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
Exhibit 32.1
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
|
|
Exhibit 101
|
The following material from Consumers Bancorp, Inc.’s Form 10-Q Report for the quarterly period ended September 30, 2011, formatted in XBRL (Extensible Business Reporting Language) includes: (1) Unaudited Consolidated Balance Sheets, (2) Unaudited Consolidated Statements of Income, (3) Unaudited Consolidated Statements of Comprehensive Income, (4) Unaudited Condensed Consolidated Statement of Changes in Shareholders’ Equity, (5) Unaudited Condensed Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Condensed Consolidated Financial Statements.
|
CONSUMERS BANCORP, INC.
|
||
(Registrant)
|
||
Date: November 10, 2011
|
/s/ Ralph J. Lober
|
|
Ralph J. Lober, II
|
||
President & Chief Executive Officer
|
||
Date: November 10, 2011
|
/s/ Renee K. Wood
|
|
Renee K. Wood
|
||
Chief Financial Officer & Treasurer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Consumers Bancorp, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 10, 2011
|
By: /s/ Ralph J. Lober
|
|
Date
|
Ralph J. Lober, II
|
|
President & Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Consumers Bancorp, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 10, 2011
|
By: /s/ Renee K. Wood
|
|
Date
|
Renee K. Wood
|
|
Chief Financial Officer & Treasurer
|
|
a)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
b)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
Date: November 10, 2011
|
||
/s/ Ralph J. Lober
|
||
Ralph J. Lober, II
|
||
President & Chief Executive Officer
|
||
/s/ Renee K. Wood
|
||
Renee K. Wood
|
||
Chief Financial Officer & Treasurer
|
CONSOLIDATED BALANCE SHEETS [Parenthetical] In Thousands | Sep. 30, 2011 | Jun. 30, 2011 |
---|---|---|
Preferred stock, shares authorized | 350,000 | 350,000 |
Common stock, shares authorized | 3,500,000 | 3,500,000 |
Common stock, shares issued | 2,180,315 | 2,180,315 |
Treasury stock, shares | 130,442 | 130,442 |
DOCUMENT AND ENTITY INFORMATION | 3 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 01, 2011 | |
Entity Registrant Name | CONSUMERS BANCORP INC /OH/ | |
Entity Central Index Key | 0001006830 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | cbkm | |
Entity Common Stock, Shares Outstanding | 2,049,873 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2012 |
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Fair Value | 3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | Note 4 - Fair Value
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Valuation techniques include use of discounted cash flow models and similar techniques.
The Corporation used the following methods and significant assumptions to estimate the fair value of items:
Securities: When available, the fair values of available-for-sale securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). For securities where quoted market prices are not available, fare values are calculated based on market prices of similar securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3 inputs). Discounted cash flows are calculated using spread to the swap and LIBOR curves. Rating agency and industry research reports as well as defaults and deferrals on individual securities are reviewed and incorporated into the calculations.
Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.
Other Real Estate Owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (OREO) are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs in determining fair value.
Assets and liabilities measured at fair value on a recurring basis are summarized below:
The following table presents a reconciliation of the trust preferred security measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30, 2011 and 2010:
Assets and liabilities measured at fair value on a non-recurring basis are summarized below:
Impaired loans, which are generally measured for impairment using the fair value of the collateral for collateral dependant loans, had a principal balance of $1,980, with a valuation allowance of $366 at September 30, 2011. As of June 30, 2011, impaired loans with a principal balance of $2,105 had a valuation allowance of $432. The resulting impact to the provision for loan losses was no additional provision for loan losses being recorded for the three month period ended September 30, 2011 and $79 being recorded for the three month period ended September 30, 2010.
Fair Value of Financial Instruments
The following table shows the estimated fair value at September 30, 2011 and June 30, 2011, and the related carrying value of financial instruments:
For purposes of the above disclosures of estimated fair value, the following assumptions were used. Estimated fair value for cash and cash equivalents, certificates of deposits in other financial institutions, accrued interest receivable and payable, demand and savings deposits and short-term borrowings were considered to approximate carrying value for instruments that reprice frequently and fully. Fair value for loans was estimated for portfolios of loans with similar financial characteristics. For adjustable rate loans that reprice at least annually and for fixed rate commercial loans with maturities of six months or less which possess normal risk characteristics, carrying value was determined to be fair value. Fair value of other types of loans (including adjustable rate loans which reprice less frequently than annually and fixed rate term loans or loans which possess higher risk characteristics) was estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar anticipated maturities. Fair value for impaired loans was based on recent appraisals of the collateral or, if appropriate, using estimated discounted cash flows. The Corporation has not considered market illiquidity in estimating the fair value of loans due to uncertain and inconsistent market pricing being experienced on September 30, 2011.
Fair value of core deposits, including demand deposits, savings accounts and certain money market deposits, was the amount payable on demand. Fair value of fixed-maturity certificates of deposit was estimated using the rates offered at September 30, 2011 and June 30, 2011, for deposits of similar remaining maturities. Estimated fair value does not include the benefit that result from low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market. Fair value of short-term borrowings and accrued interest was determined to be the carrying amounts since these financial instruments generally represent obligations that are due on demand. Fair value of Federal Home Loan Bank advances was estimated using current rates at September 30, 2011 and June 30, 2011 for similar financing.
Federal bank and other restricted stocks include stock acquired for regulatory purposes, such as Federal Home Loan Bank stock and Federal Reserve Bank stock that are accounted for at cost due to restrictions placed on their transferability; and therefore, are not subject to the fair value disclosure requirements. The fair value of unrecorded commitments at September 30, 2011 and June 30, 2011 was not material.
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) In Thousands, except Per Share data | 3 Months Ended | |
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Sep. 30, 2011 | Sep. 30, 2010 | |
Balance at beginning of period | $ 25,324 | $ 23,716 |
Comprehensive income | ||
Net income | 687 | 633 |
Other comprehensive income | 262 | 168 |
Total comprehensive income | 949 | 801 |
Common stock issued for dividend reinvestment and stock purchase plan (2,989 shares for 2010) | 0 | 36 |
Common cash dividends | (226) | (204) |
Balance at the end of the period | $ 26,047 | $ 24,349 |
Common cash dividends per share | $ 0.11 | $ 0.10 |
Summary of Significant Accounting Policies | 3 Months Ended |
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Sep. 30, 2011 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 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 Stark, Columbiana, Carroll 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, 2011. 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: Consumers Bancorp, Inc. is a bank holding company engaged in the business of commercial and retail banking, which accounts for substantially all of the revenues, operating income, and assets. Accordingly, all of its operations are recorded in one segment, banking.
Earnings per Share: Earnings per common share are computed based on the weighted average common shares outstanding. The weighted average number of outstanding shares was 2,049,873 and 2,038,569 for the quarters ended September 30, 2011 and 2010, respectively. The weighted average number of outstanding diluted shares was 2,050,877 for the quarter ended September 30, 2011. There were no dilutive securities as of September 30, 2010.
Reclassifications: Certain items in prior financial statements have been reclassified to conform to the current presentation.
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] | Note 2 – Securities
Proceeds from the sale of available-for-sale securities were as follows:
The amortized cost and fair values of available-for-sale securities at September 30, 2011, 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, collateralized mortgage obligations and the trust preferred security are shown separately.
The following table summarizes the securities with unrealized losses at September 30, 2011 and June 30, 2011, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
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. However, the trust preferred security is evaluated using the model outlined in FASB ASC Topic 325, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transfer in Securitized Financial Assets.
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.
Unrealized losses on U.S. government-sponsored entities and agencies, obligations of state and political subdivisions, residential mortgage-backed securities and collateralized mortgage obligations have not been recognized into income because the decline in fair value is not attributed to credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the securities approach maturity.
Under the ASC Topic 325 model, the present value of the remaining cash flows as estimated at the preceding evaluation date are compared to the current expected remaining cash flows. An OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows. The analysis of the trust preferred security falls within the scope of ASC Topic 325.
The Corporation owns a trust preferred security, which represents collateralized debt obligations (CDOs) issued by other financial and insurance companies. The security is part of a pool of issuers that support a more senior tranche of securities. Due to the illiquidity in the market, it is unlikely the Corporation would be able to recover its investment in this security if the Corporation sold the security at this time.
Due to an increase in principal and/or interest deferrals by the issuers of the underlying securities, the cash interest payments for the trust preferred security are being deferred. On September 30, 2011, the lowest credit rating on this security was Fitch’s rating of C, which is defined as highly speculative. The issuers in this security are primarily banks, bank holding companies and a limited number of insurance companies. The investment security is evaluated using a model to compare the present value of expected cash flows to prior periods expected cash flows to determine if there has been an adverse change in cash flows during the period. The discount rate used to calculate the cash flows is the coupon rate of the security, based on the forward LIBOR curve. The OTTI model considers the structure and term of the CDO and the financial condition of the underlying issuers. Specifically, the model details interest rates, principal balances of note classes and underlying issuers, the timing and amount of interest and principal payments of the underlying issuers, and the allocation of the payments to the note classes. The current estimate of expected cash flows is based on the most recent trustee reports and any other relevant market information including announcements of interest payment deferrals or defaults of underlying trust preferred securities. Assumptions used in the model include expected future default rates and prepayments. We assume no recoveries on defaults and all interest payment deferrals are treated as defaults with an assumed recovery rate of 15% on deferrals. In addition we use the model to “stress” the CDO, or make assumptions more severe than expected activity, to determine the degree to which assumptions could deteriorate before the CDO could no longer fully support repayment of the Corporation’s note class. According to the September 30, 2011 analysis, the expected cash flows were above the recorded amortized cost of the trust preferred security. The accumulated other-than-temporary impairment loss that has been recognized in earnings was $780 at September 30, 2011 and June 30, 2011. If there is further deterioration in the underlying collateral of this security, other-than-temporary impairments may also occur in future periods.
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 3 – Loans
Major classifications of loans were as follows:
The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2011:
A summary of activity in the allowance for loan losses for the three months ended September 30, 2010, was as follows:
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 September 30, 2011. Included in the recorded investment in loans is $(266) of net deferred loan fess and $459 of accrued interest receivable.
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, 2011. Included in the recorded investment in loans is $(263) of net deferred loan fees and $472 of accrued interest receivable.
The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the three months ended September 30, 2011:
The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2011 and for the three months ended September 30, 2010:
The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2011 and June 30, 2011:
Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.
The following table presents the aging of the recorded investment in past due loans as of September 30, 2011 by class of loans:
The above table of past due loans includes the recorded investment in non-accrual loans of $1,120 in the loans not past due category.
The following table presents the aging of the recorded investment in past due loans as of June 30, 2011 by class of loans:
The above table of past due loans includes the recorded investment in non-accrual loans of $410 in the 60 – 89 days past due category and $740 in the loans not past due category.
Troubled Debt Restructurings:
The Corporation allocated $279 and $229 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2011 and June 30, 2011. As of September 30, 2011 and June 30, 2011, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.
During the period ending September 30, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a permanent reduction of the recorded investment in the loan; or a temporary reduction in the payment amount to interest only.
Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 12 months to 6.5 years. Modifications involving an extension of the maturity date were for a period of 6.5 years.
The following table presents loans by class modified as troubled debt restructurings that occurred during the period ending September 30, 2011:
The troubled debt restructurings described above increased the allowance for loan losses by $20 and resulted in charge offs of $63 during the period ending September 30, 2011.
Credit Quality Indicators:
The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than $100 and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans and leases in their respective portfolio on an annual basis. The Corporation uses the following definitions for risk ratings:
Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 or are included in groups of homogeneous loans. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands | 3 Months Ended | |
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Sep. 30, 2011 | Sep. 30, 2010 | |
Net income | $ 687 | $ 633 |
Other comprehensive income (loss), net of tax: | ||
Net change in unrealized gains (losses): | 0 | 0 |
Available-for-sale securities: | ||
Unrealized gains (losses) arising during the period | 446 | 272 |
Reclassification adjustment for gains included in income | (49) | (17) |
Net unrealized gain (losses) | 397 | 255 |
Income tax effect | 135 | 87 |
Other comprehensive income | 262 | 168 |
Total comprehensive income | $ 949 | $ 801 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY [Parenthetical] In Thousands | 3 Months Ended | |
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Sep. 30, 2011 | Sep. 30, 2010 | |
Common shares issued for dividend reinvestment and stock purchase plan (in shares) | 0 | 2,989 |