8-K

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

July 26, 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 of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

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 July 26, 2018, Consumers Bancorp, Inc. issued a press release reporting its results for the fourth fiscal quarter and twelve-month period ended June 30, 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 July 26, 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.

	Consumers Bancorp, Inc.
Date: July 26, 2018	/s/ Ralph J. Lober, II
	Ralph J. Lober, II President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Consumers Bancorp, Inc. Reports:

● Net income increased by $587 thousand, or 19.6%, to $3.6 million for the twelve-month period ended June 30, 2018 compared with the same period last year

● Income before federal income taxes increased by $1.1 million, or 30.1% for the twelve-month period ended June 30, 2018, compared with the same period last year

● Total loans increased by $45.6 million, or 16.7%, for the twelve-month period ended June 30, 2018 compared to June 30, 2017

● Total deposits increased by $55.5 million, or 14.8%, for the twelve-month period ended June 30, 2018 compared to June 30, 2017

● Non-performing loans to total loans declined to 0.34% at June 30, 2018

Minerva, Ohio— July 26, 2018 (OTCQB: CBKM) Consumers Bancorp, Inc. (Consumers) today reported net income of $1.1 million for the fourth quarter of fiscal year 2018, an increase of $277 thousand, or 34.4%, from the same period last year. Earnings per share for the fourth quarter of fiscal year 2018 were $0.40 compared to $0.30 for the same period last year.

For the twelve months ended June 30, 2018, net income was $3.6 million, an increase of $587 thousand, or 19.6%, from the same period last year. Net income was positively impacted by a $1.4 million, or 9.9%, increase in net interest income, which was primarily the result of a $33.6 million increase in average interest-earning assets from the prior year period.

Assets at June 30, 2018 totaled $502.6 million, an increase of $44.7 million, or 9.8%, from June 30, 2017. Loans increased by $45.6 million, or 16.7%, and deposits increased by $55.5 million, or 14.8% for the twelve-month period ended June 30, 2018. During the quarter ended June 30, 2018, the nature of some of our public fund deposit account relationships changed. As a result, $21.2 million in public funds previously reported as other interest-bearing liabilities are now reported as deposit accounts. If not for this change, deposits would have increased by $34.3 million, or 9.2%, for the 12-month period ended June 30, 2018 compared to June 30, 2017.

Net interest income for the twelve months ended June 30, 2018 increased by $1.4 million compared to the same period last year, with interest income increasing by $2.0 million and interest expense increasing by $563 thousand. The increase in interest income was primarily the result of a $33.6 million increase in average interest-earning assets from the 2017 fiscal year. The net interest margin was 3.67% for the 2018 fiscal year and 3.69% for the 2017 fiscal year. The Corporation’s yield on average interest-earning assets was 4.04% for the current fiscal year compared with 3.96% for the prior fiscal year. The Corporation’s cost of funds increased to 0.52% for the current fiscal year from 0.38% for the prior fiscal year.

“Significant increases in net interest income and noninterest income as well as improved asset quality resulted in a 30% increase in fiscal 2018 pre-tax earnings. An increase in commercial lending and mortgage activity contributed to the strong increase in core earnings. In addition, near record low nonperforming assets and continued low loan delinquencies contributed to a 48% decrease in the provision for loan loss expense for the 12-month period ended June 30, 2018, as compared to the previous 12-month period. Strategies implemented to improve core earnings drivers and a significant increase in new customers and deposits are positively impacting earnings,” said Ralph J. Lober, II, President and Chief Executive Officer. “Further, while the quarterly and year-end federal tax provision was higher in fiscal year 2018, the enactment of the Tax Cuts and Jobs Act of 2017 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 the tax rate decrease will be realized,” he continued.

Other income increased by $141 thousand, or 4.3%, for the twelve-month period ended June 30, 2018 compared to the same prior year period 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 $759 thousand, or 5.6%, for the twelve-month period ended June 30, 2018 compared to the same prior year period primarily as a result of increases in salary and incentive expenses.

Non-performing loans were $1.1 million for both June 30, 2018 and June 30, 2017. The allowance for loan losses (ALLL) as a percent of total loans at June 30, 2018 was 1.07% and a net recovery of $25 thousand was recorded for the twelve-month period ended June 30, 2018 compared with an ALLL to loans ratio of 1.13% and net charge-offs of $1.1 million 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.

Consumers Bancorp, Inc.

Consolidated Financial Highlights

(Dollars in thousands, except per share data)	Three Month Period Ended				Twelve Month Period Ended
	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Consolidated Statements of Income
Total interest income	$	4,729	$	4,002	$	17,557	$	15,567
Total interest expense		523		336		1,671		1,108
Net interest income		4,206		3,666		15,886		14,459
Provision for loan losses		60		65		310		596
Other income		878		837		3,391		3,250
Other expenses		3,703		3,451		14,237		13,478
Income before income taxes		1,321		987		4,730		3,635
Income tax expense		239		182		1,149		641
Net income	$	1,082	$	805	$	3,581	$	2,994
Basic and diluted earnings per share	$	0.40	$	0.30	$	1.31	$	1.10

	June 30, 2018		June 30, 2017
Consolidated Statements of Financial Condition
Assets
Cash and cash equivalents	$	7,772	$	9,912
Certificates of deposit in other financial institutions		2,973		3,921
Securities, available-for-sale		144,028		142,086
Securities, held-to-maturity		4,024		4,259
Federal bank and other restricted stocks, at cost		1,459		1,425
Loans held for sale		1,448		1,252
Total loans		318,509		272,867
Less: allowance for loan losses		3,422		3,086
Net loans		315,087		269,781
Other assets		25,828		25,247
Total assets	$	502,619	$	457,883
Liabilities and Shareholders’ Equity
Deposits	$	429,963	$	374,471
Other interest-bearing liabilities		25,123		36,306
Other liabilities		3,772		3,571
Total liabilities		458,858		414,348
Shareholders’ equity		43,761		43,535
Total liabilities and shareholders’ equity	$	502,619	$	457,883

	At or For the Twelve-Month Periods Ended
	June 30, 2018			June 30, 2017
Performance Ratios:
Return on Average Assets		0.75	%		0.67	%
Return on Average Equity		8.15			6.89
Average Equity to Average Assets		9.18			9.79
Net Interest Margin (Fully Tax Equivalent)		3.67			3.69
Market Data:
Book Value to Common Share	$	16.03		$	15.98
Dividends Paid per Common Share (YTD)	$	0.495		$	0.48
Period End Common Shares		2,729,644			2,724,956
Asset Quality:
Net Charge-offs (Recovery) to Total Loans		(0.01	)%		0.39	%
Non-performing Assets to Total Assets		0.22			0.28
ALLL to Total Loans		1.07			1.13