SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange act 1934
April 24, 2018
(Date of report/date of earliest event reported)
CONSUMERS BANCORP, INC.
(Exact name of registrant as specified in its charter)
| OHIO | 033-79130 | 34-1771400 |
| (State or other jurisdiction | (Commission File Number) | (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)
(330) 868-7701
(Issuer’s telephone number)
N/A
(Former name of former address, if changes since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
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.☐
Item 2.02 Results of Operations and Financial Condition
On April 24, 2018, Consumers Bancorp, Inc. issued a press release reporting its results for the third fiscal quarter ended March 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
d. Exhibits
| Exhibit No. | Description |
| 99.1 | Press Release of Consumers Bancorp, Inc. dated April 24, 2018. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Consumers Bancorp, Inc. |
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Date: April 24, 2018 |
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/s/ Ralph J. Lober, II |
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Ralph J. Lober, II President and Chief |
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Executive Officer |
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Exhibit 99.1
Consumers Bancorp, Inc. Reports:
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Net income increased by $347 thousand, or 61.3%, for the three-month period ended March 31, 2018 from the same period last year |
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Net income increased by $310 thousand, or 14.2%, for the nine-month period ended March 31, 2018 from the same period last year |
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Total loans increased by $30.6 million, or an annualized 15.0%, for the nine-month period ended March 31, 2018 |
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Non-performing loans declined to 0.27% of total loans at March 31, 2018 |
Minerva, Ohio— April 24, 2018 (OTCQB: CBKM) Consumers Bancorp, Inc. (Consumers) today reported net income of $913 thousand for the third fiscal quarter of 2018, an increase of $347 thousand, or 61.3%, from the same period last year. Earnings per share for the third fiscal quarter of 2018 were $0.33 compared to $0.21 for the same period last year.
For the nine months ended March 31, 2018, net income was $2.5 million, an increase of $310 thousand, or 14.2%, from the same period last year. Net income was positively impacted by an $887 thousand, or 8.2%, increase in net interest income, which was primarily the result of the $33.8 million increase in average interest-earning assets from the prior year period.
Assets at March 31, 2018 totaled $488.5 million, an increase of $30.6 million, or an annualized 8.9%, from June 30, 2017. Loans increased by $30.6 million, or an annualized 15.0%, and deposits increased by $29.6 million, or an annualized 10.5% for the nine-month period ended March 31, 2018.
“Significant increases in net interest income and noninterest income as well as improved asset quality resulted in a 61% increase in third quarter earnings. A $31 million increase in loan balances and increases in market rates resulted in a 12% increase in net interest income while a 52.7% increase in gains from mortgage sales and a 9.4% increase in debit card interchange income contributed to a 7.5% increase in core noninterest income (excluding securities gains and losses). In addition, near record low nonperforming assets and very low loan delinquencies contributed to a 60% decrease in the quarterly allowance for loan loss provision. Strategies implemented to improve these core earnings drivers and a significant increase in new customers and deposits are positively impacting earnings. The customer acquisition trend has accelerated this fiscal year as larger banks have reduced their service network in some of the markets we serve. We expect the trends in earnings and customer growth to continue,” said Ralph J. Lober, II, President and Chief Executive Officer. “Further, while the quarterly and year-to-date federal tax provision was higher in fiscal year 2018, the Tax Cuts and Jobs Act of 2017 has resulted in a lower statutory federal tax rate in fiscal year 2018 and is expected to result in a further reduction in fiscal year 2019, when the full benefit of tax rate decrease will be realized,” he continued.
Net interest income for the third fiscal quarter of 2018 increased by $437 thousand compared to the same period last year, with interest income increasing by $582 thousand and interest expense increasing by $145 thousand. The net interest margin was 3.72% for the quarter ended March 31, 2018 and 3.64% for the quarter ended March 31, 2017. The Corporation’s yield on average interest-earning assets was 4.11% for the three months ended March 31, 2018 an increase from 3.91% for the same period last year. The Corporation’s cost of funds increased to 0.54% for the three months ended March 31, 2018 from 0.39% for the same period last year.
Other income increased by $34 thousand, or 4.4%, for the three-month period ended March 31, 2018 from the same period last year primarily as a result of increases in debit card interchange income and gains from the sale of mortgage loans. These increases were partially offset by a decline in gains from the sale of securities.
Other expenses increased by $166 thousand, or 4.9%, for the three-month period ended March 31, 2018 from the same period last year primarily as a result of increases in salary and incentive expenses.
Non-performing loans were $825 thousand at March 31, 2018, compared with $1.2 million at June 30, 2017 and $3.4 million at March 31, 2017. The allowance for loan losses (ALLL) as a percent of total loans at March 31, 2018 was 1.10% and annualized net charge-offs to total loans were 0.01% for the nine-month period ended March 31, 2018 compared with an ALLL to loans ratio of 1.24% and an annualized net charge-off ratio of 0.35% for the same period last year.
Consumers provides a complete range of banking and other investment services to businesses and clients through its thirteen full service locations and two loan production offices in Carroll, Columbiana, Jefferson, Stark, Summit and Wayne counties in Ohio. Information about Consumers National Bank can be accessed on the internet at http://www.consumersbank.com.
The information contained in this press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond Consumers’ control and could cause actual results to differ materially from those described in such statements. Although Consumers believes that the expectations reflected in such forward-looking statements are reasonable, Consumers can give no assurance that such expectations will prove to be correct. The forward-looking statements included in this discussion speak only as of the date they are made, and, except as required by law, Consumers undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect Consumers’ performance include, but are not limited to: material unforeseen changes in the financial condition or results of Consumers National Bank’s customers; 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 or debtors being unable to meet their obligations; rapid fluctuations in market interest rates could result in changes in fair market valuations and net interest income; pricing and liquidity pressures that may result in a rising market rate environment; competitive pressures on product pricing and services; the economic impact from the oil and gas activity in the region could be less than expected or the timeline for development could be longer than anticipated; and the nature, extent, and timing of government and regulatory actions.
Contact: Ralph J. Lober, President and Chief Executive Officer 1-330-868-7701 extension 1135.
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Consumers Bancorp, Inc. Consolidated Financial Highlights |
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(Dollars in thousands, except per share data) |
Three Month Period Ended |
Nine Month Period Ended |
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Consolidated Statements of Income |
March 31, 2018 |
March 31, 2017 |
March 31, 2018 |
March 31, 2017 |
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Total interest income |
$ | 4,394 | $ | 3,812 | $ | 12,828 | $ | 11,565 | ||||||||
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Total interest expense |
427 | 282 | 1,148 | 772 | ||||||||||||
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Net interest income |
3,967 | 3,530 | 11,680 | 10,793 | ||||||||||||
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Provision for loan losses |
100 | 255 | 250 | 531 | ||||||||||||
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Other income |
802 | 768 | 2,513 | 2,413 | ||||||||||||
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Other expenses |
3,581 | 3,415 | 10,534 | 10,027 | ||||||||||||
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Income before income taxes |
1,088 | 628 | 3,409 | 2,648 | ||||||||||||
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Income tax expense |
175 | 62 | 910 | 459 | ||||||||||||
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Net income |
$ | 913 | $ | 566 | $ | 2,499 | $ | 2,189 | ||||||||
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Basic and diluted earnings per share |
$ | 0.33 | $ | 0.21 | $ | 0.92 | $ | 0.80 | ||||||||
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Consolidated Statements of Financial Condition |
March 31, 2018 |
June 30, 2017 |
March 31, 2017 |
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Assets |
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Cash and cash equivalents |
$ | 17,833 | $ | 9,912 | $ | 12,230 | ||||||
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Certificates of deposit in other financial institutions |
2,973 | 3,921 | 4,166 | |||||||||
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Securities, available-for-sale |
136,133 | 142,086 | 130,871 | |||||||||
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Securities, held-to-maturity |
4,061 | 4,259 | 4,296 | |||||||||
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Federal bank and other restricted stocks, at cost |
1,459 | 1,425 | 1,396 | |||||||||
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Loans held for sale |
558 | 1,252 | 811 | |||||||||
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Total loans |
303,441 | 272,867 | 272,325 | |||||||||
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Less: allowance for loan losses |
3,323 | 3,086 | 3,371 | |||||||||
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Net loans |
300,118 | 269,781 | 268,954 | |||||||||
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Other assets |
25,375 | 25,247 | 25,453 | |||||||||
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Total assets |
$ | 488,510 | $ | 457,883 | $ | 448,177 | ||||||
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Liabilities and Shareholders’ Equity |
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Deposits |
$ | 404,056 | $ | 374,471 | $ | 366,849 | ||||||
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Other interest-bearing liabilities |
37,601 | 36,306 | 35,236 | |||||||||
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Other liabilities |
3,546 | 3,571 | 3,433 | |||||||||
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Total liabilities |
445,203 | 414,348 | 405,518 | |||||||||
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Shareholders’ equity |
43,307 | 43,535 | 42,659 | |||||||||
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Total liabilities and shareholders’ equity |
$ | 488,510 | $ | 457,883 | $ | 448,177 | ||||||
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At or For the Nine Month Periods Ended |
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Performance Ratios: |
March 31, 2018 |
March 31, 2017 |
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Return on Average Assets (Annualized) |
0.70 | % | 0.67 | % | ||||
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Return on Average Equity (Annualized) |
7.54 | 6.72 | ||||||
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Average Equity to Average Assets |
9.35 | 9.91 | ||||||
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Net Interest Margin (Fully Tax Equivalent) |
3.65 | 3.71 | ||||||
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Market Data: |
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Book Value to Common Share |
$ | 15.87 | $ | 15.66 | ||||
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Dividends Paid per Common Share (YTD) |
$ | 0.37 | $ | 0.36 | ||||
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Period End Common Shares |
2,729,644 | 2,724,956 | ||||||
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Asset Quality: |
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Net Charge-offs to Total Loans (Annualized) |
0.01 | % | 0.35 | % | ||||
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Non-performing Assets to Total Assets |
0.17 | 0.76 | ||||||
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ALLL to Total Loans |
1.10 | 1.24 | ||||||