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EX-32.1 - EXHIBIT 32.1 - CONSUMERS BANCORP INC /OH/ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - CONSUMERS BANCORP INC /OH/ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - CONSUMERS BANCORP INC /OH/ex31-1.htm
EX-10.1 - EXHIBIT 10.1 - CONSUMERS BANCORP INC /OH/ex10-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X]

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

 

For the quarterly period ended December 31, 2016

 

Or

 

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

 

for the transition period from                                                                    To                                                                

 

Commission File No. 033-79130

 

CONSUMERS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

OHIO

34-1771400

(State or other jurisdiction

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

of incorporation or organization)

 
   

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

44657

(Address of principal executive offices)

(Zip Code)

 

(330) 868-7701

(Registrant’s telephone number)

 

Not applicable

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

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐

 

 

Non-accelerated filer ☐  (Do not check if smaller reporting company)

Smaller reporting company ☒

                     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

                 CommonStock,no par value 

Outstanding at February 10, 2017

2,724,956 Common Shares

    

 

 
 

 

  

CONSUMERS BANCORP, INC.

FORM 10-Q

QUARTER ENDED December 31, 2016

 

Table of Contents

 

Page

Number (s)

Part I – Financial Information

Item 1 – Financial Statements (Unaudited)

 

Consolidated Balance Sheets at December 31, 2016 and June 30, 2016

1

   

Consolidated Statements of Income for the three and six months ended December 31, 2016 and 2015

 2

   

Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2016 and 2015

3

   

Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended December 31, 2016 and 2015

 4

   

Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2016 and 2015

5

   

Notes to the Consolidated Financial Statements

6-30

   

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

 31-40

   

Item 3 – Not Applicable for Smaller Reporting Companies

 
   

Item 4 – Controls and Procedures

41

Part II – Other Information

Item 1 – Legal Proceedings

42

   

Item 1A – Not Applicable for Smaller Reporting Companies

 
   

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

42

   

Item 3 – Defaults Upon Senior Securities

42

   

Item 4 – Mine Safety Disclosure

42

   

Item 5 – Other Information

42

   

Item 6 – Exhibits

42

   

Signatures

43

 

 
 

 

 

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

 

CONSUMERS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

 

(Dollars in thousands, except per share data)

 

December 31,

2016

   

June 30,

2016

 

ASSETS

               

Cash on hand and noninterest-bearing deposits in financial institutions

  $ 8,139     $ 8,164  

Federal funds sold and interest-bearing deposits in financial institutions

    2,711       2,017  

Total cash and cash equivalents

    10,850       10,181  

Certificates of deposit in other financial institutions

    4,916       5,906  

Securities, available-for-sale

    131,285       133,369  

Securities, held-to-maturity (fair value of $4,293 at December 31, 2016 and $3,619 at June 30, 2016)

    4,296       3,494  

Federal bank and other restricted stocks, at cost

    1,396       1,396  

Loans held for sale

    1,774       1,048  

Total loans

    264,804       256,278  

Less allowance for loan losses

    (3,123 )     (3,566 )

Net loans

    261,681       252,712  

Cash surrender value of life insurance

    8,930       6,819  

Premises and equipment, net

    13,451       13,585  

Accrued interest receivable and other assets

    2,856       1,880  

Total assets

  $ 441,435     $ 430,390  
                 

LIABILITIES

               

Deposits

               

Non-interest bearing demand

  $ 100,161     $ 98,224  

Interest bearing demand

    48,991       48,810  

Savings

    140,123       134,606  

Time

    66,170       65,008  

Total deposits

    355,445       346,648  
                 

Short-term borrowings

    19,352       19,129  

Federal Home Loan Bank advances

    20,976       17,281  

Accrued interest and other liabilities

    3,452       3,539  

Total liabilities

    399,225       386,597  

Commitments and contingent liabilities

               
                 

SHAREHOLDERS’ EQUITY

               

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

           

Common stock (no par value, 3,500,000 shares authorized; 2,854,133 shares issued as of December 31, 2016 and June 30, 2016)

    14,630       14,630  

Retained earnings

    29,405       28,432  

Treasury stock, at cost (130,606 and 130,375 common shares as of December 31, 2016 and June 30, 2016, respectively)

    (1,662 )     (1,658 )

Accumulated other comprehensive income

    (163 )     2,389  

Total shareholders’ equity

    42,210       43,793  

Total liabilities and shareholders’ equity

  $ 441,435     $ 430,390  

 

 

See accompanying notes to consolidated financial statements

 

 
1

 

 

CONSUMERS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   

Three Months ended

December 31,

   

Six Months ended

December 31,

 

(Dollars in thousands, except per share amounts)

 

2016

   

2015

   

2016

   

2015

 
                                 

Interest income

                               

Loans, including fees

  $ 3,022     $ 2,789     $ 6,206     $ 5,584  

Securities, taxable

    377       488       779       945  

Securities, tax-exempt

    357       351       708       695  

Federal funds sold and other interest bearing deposits

    30       30       60       54  

Total interest income

    3,786       3,658       7,753       7,278  

Interest expense

                               

Deposits

    183       171       353       347  

Short-term borrowings

    11       10       23       18  

Federal Home Loan Bank advances

    56       40       114       83  

Total interest expense

    250       221       490       448  

Net interest income

    3,536       3,437       7,263       6,830  

Provision for loan losses

    140       192       276       284  

Net interest income after provision for loan losses

    3,396       3,245       6,987       6,546  
                                 

Non-interest income

                               

Service charges on deposit accounts

    314       320       644       634  

Debit card interchange income

    285       240       536       474  

Bank owned life insurance income

    63       49       112       95  

Securities gains, net

    22             125       35  

Loss on disposition of other real estate owned

    (3 )           (3 )      

Other

    116       113       231       219  

Total non-interest income

    797       722       1,645       1,457  
                                 

Non-interest expenses

                               

Salaries and employee benefits

    1,790       1,746       3,528       3,478  

Occupancy and equipment

    478       352       930       694  

Data processing expenses

    145       143       290       287  

Debit card processing expenses

    149       115       282       231  

Professional and director fees

    146       177       278       274  

FDIC assessments

    46       70       101       128  

Franchise taxes

    84       83       168       165  

Marketing and advertising

    65       79       144       172  

Telephone and network communications

    76       75       157       150  

Other

    347       366       734       764  

Total non-interest expenses

    3,326       3,206       6,612       6,343  

Income before income taxes

    867       761       2,020       1,660  

Income tax expense

    145       122       397       294  

Net income

  $ 722     $ 639     $ 1,623     $ 1,366  
                                 
Basic and diluted earnings per share   $ 0.27     $ 0.23     $ 0.60     $ 0.50  

 

 

See accompanying notes to consolidated financial statements

 

 
2

 

 

CONSUMERS BANCORP, INC.

Consolidated statements of comprehensive income

(Unaudited)

 

 

 

(Dollars in thousands)  

Three Months ended

December 31,

   

Six Months ended

December 31,

 
   

2016

   

2015

   

2016

   

2015

 
                                 

Net income

  $ 722     $ 639     $ 1,623     $ 1,366  
                                 

Other comprehensive income (loss), net of tax:

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

Unrealized gains (losses) arising during the period

    (3,319 )     (410 )     (3,742 )     403  

Reclassification adjustment for gains included in income

    (22 )           (125 )     (35 )

Net unrealized gain (losses)

    (3,341 )     (410 )     (3,867 )     368  

Income tax effect

    1,136       139       1,315       (125 )

Other comprehensive income (losses)

    (2,205 )     (271 )     (2,552 )     243  
                                 

Total comprehensive income (loss)

  $ (1,483 )   $ 368     $ (929 )   $ 1,609  

 

 

See accompanying notes to consolidated financial statements.

 

 
3

 

 

CONSUMERS BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

(Dollars in thousands, except per share data)  

Three Months ended

December 31,

   

Six Months ended

December 31,

 
   

2016

   

2015

   

2016

   

2015

 
                                 

Balance at beginning of period

  $ 44,020     $ 42,379     $ 43,793     $ 41,466  
                                 

Net income

    722       639       1,623       1,366  

Other comprehensive income (loss)

    (2,205 )     (271 )     (2,552 )     243  

231 Dividend reinvestment plan shares associated with forfeited and expired restricted stock awards retired to treasury stock during the six months ended December 31, 2016 and 27 and 275 shares during the three and six months ended December 31, 2015, respectively

                       

Common cash dividends

    (327 )     (327 )     (654 )     (655 )
                                 

Balance at the end of the period

  $ 42,210     $ 42,420     $ 42,210     $ 42,420  
                                 

Common cash dividends per share

  $ 0.12     $ 0.12     $ 0.24     $ 0.24  

 

 

See accompanying notes to consolidated financial statements.

 

 
4

 

 

CONSUMERS BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

(Dollars in thousands)

 

Six Months Ended

December 31,

 
   

2016

   

2015

 

Cash flows from operating activities

               

Net cash from operating activities

  $ 2,152     $ 2,068  
                 

Cash flow from investing activities

               

Securities available-for-sale

               

Purchases

    (17,368 )     (14,993 )

Maturities, calls and principal pay downs

    11,753       12,712  

Proceeds from sales of available-for-sale securities

    3,383       1,990  

Securities held-to-maturity

               

Purchases

    (1,000 )      

Principal pay downs

    198       125  

Net (increase) decrease in certificates of deposits in other financial institutions

    990       (945 )

Net increase in loans

    (9,255 )     (12,649 )

Purchase of Bank owned life insurance

    (2,000 )      

Acquisition of premises and equipment

    (252 )     (1,967 )

Sale of other real estate owned

    7        

Net cash from investing activities

    (13,544 )     (15,727 )
                 

Cash flow from financing activities

               

Net increase in deposit accounts

    8,797       9,671  

Net change in short-term borrowings

    223       (184 )

Proceeds from Federal Home Loan Bank advances

    18,325       4,700  

Repayments of Federal Home Loan Bank advances

    (14,630 )     (529 )

Dividends paid

    (654 )     (655 )

Net cash from financing activities

    12,061       13,003  
                 

Increase (decrease) in cash or cash equivalents

    669       (656 )
                 

Cash and cash equivalents, beginning of period

    10,181       10,544  

Cash and cash equivalents, end of period

  $ 10,850     $ 9,888  
                 

Supplemental disclosure of cash flow information:

               

Cash paid during the period:

               

Interest

  $ 484     $ 449  

Federal income taxes

    150       475  

Non-cash items:

               

Transfer from loans to other real estate owned

    10       38  

Expired and forfeited dividend reinvestment plan shares associated with restricted stock awards that were retired to treasury stock

    4       5  

 

 

See accompanying notes to consolidated financial statements.

 

 
5

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

  

Note 1 – Summary of Significant Accounting Policies:

 

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

 

Basis of Presentation: The consolidated financial statements for interim periods are unaudited and reflect all adjustments (consisting of only normal recurring adjustments), which, in the opinion of management, are necessary to present fairly the financial position and results of operations and cash flows for the periods presented. The unaudited financial statements are presented in accordance with the requirements of Form 10-Q and do not include all disclosures normally required by accounting principles generally accepted in the United States of America. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s Form 10-K for the year ended June 30, 2016. The results of operations for the interim period disclosed herein are not necessarily indicative of the results that may be expected for a full year.

 

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

 

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

 

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

 

Recently Issued Accounting Pronouncements Not Yet Effective: In June 2016, FASB Issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.  This ASU adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. GAAP, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all current loss recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the corporation expects to collect over the instrument’s contractual life. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities and beneficial interests in securitized financial assets. The guidance in ASU 2016-13 is effective for “public business entities,” as defined, that are SEC filers for fiscal years and for interim periods with those fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Management is currently evaluating the impact of the adoption of this guidance on the Corporation’s consolidated financial statements and it is too early to estimate any impact.

 

 

 
6

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Note 2 – Securities

 

Available –for-Sale

 

Amortized
Cost

   

Gross
Unrealized

Gains

   

Gross
Unrealized

Losses

   

Fair
Value

 
                                 

December 31, 2016

                               

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

  $ 10,081     $ 69     $ (89 )   $ 10,061  

Obligations of state and political subdivisions

    56,809       520       (668 )     56,661  

Mortgage-backed securities – residential

    56,055       294       (506 )     55,843  

Mortgage-backed securities– commercial

    1,472             (3 )     1,469  

Collateralized mortgage obligations– residential

    6,960       3       (132 )     6,831  

Pooled trust preferred security

    154       266             420  
                                 

Total available-for-sale securities

  $ 131,531     $ 1,152     $ (1,398 )   $ 131,285  

 

Held-to-Maturity

 

Amortized
Cost

   

Gross
Unrecognized

Gains

   

Gross
Unrecognized

Losses

   

Fair
Value

 
                                 

December 31, 2016

                               

Obligations of state and political subdivisions

  $ 4,296     $ 8     $ (11 )   $ 4,293  

 

Available–for-Sale

 

Amortized
Cost

   

Gross
Unrealized

Gains

   

Gross
Unrealized

Losses

   

Fair
Value

 
                                 

June 30, 2016

                               

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

  $ 9,682     $ 362     $     $ 10,044  

Obligations of state and political subdivisions

    53,952       2,010       (8 )     55,954  

Mortgage-backed securities – residential

    58,702       920       (26 )     59,596  

Mortgage-backed securities – commercial

    1,485       41             1,526  

Collateralized mortgage obligations - residential

    5,774       49       (3 )     5,820  

Pooled trust preferred security

    153       276             429  
                                 

Total available-for-sale securities

  $ 129,748     $ 3,658     $ (37 )   $ 133,369  

 

 
7

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Held-to-Maturity

 

Amortized
Cost

   

Gross
Unrecognized

Gains

   

Gross
Unrecognized

Losses

   

Fair
Value

 
                                 

June 30, 2016

                               

Obligations of state and political subdivisions

  $ 3,494     $ 125     $     $ 3,619  

 

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

 

   

Three Months Ended

December 31,

   

Six Months Ended

December 31,

 
   

2016

   

2015

   

2016

   

2015

 

Proceeds from sales

  $ 1,594     $     $ 3,383     $ 1,990  

Gross realized gains

    24             127       35  

Gross realized losses

    2             2        

 

The income tax provision applicable to these net realized gains amounted to $8 and $43 for the three and six months ended December 31, 2016 and $12 for the six months ended December 31, 2015.

 

The amortized cost and fair values of debt securities at December 31, 2016, 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 pooled trust preferred security are shown separately.

 

Available-for-Sale

 

Amortized

Cost

   

Estimated Fair

Value

 

Due in one year or less

  $ 1,484     $ 1,493  

Due after one year through five years

    17,504       17,684  

Due after five years through ten years

    26,182       26,174  

Due after ten years

    21,720       21,371  

Total

    66,890       66,722  
                 

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

    64,487       64,143  

Pooled trust preferred security

    154       420  

Total available-for-sale securities

  $ 131,531     $ 131,285  
                 

Held-to-Maturity

               
                 

Due after five years through ten years

    638       645  

Due after ten years

    3,658       3,648  

Total held-to-maturity securities

  $ 4,296     $ 4,293  

 

 

 
8

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table summarizes the securities with unrealized losses at December 31, 2016 and June 30, 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

 

   

Less than 12 Months

   

12 Months or more

   

Total

 

Available-for-sale

 

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

 

December 31, 2016

                                               

Obligations of US government-sponsored entities and agencies

  $ 6,303     $ (89 )   $     $     $ 6,303     $ (89 )

Obligations of states and political subdivisions

    28,565       (663 )     271       (5 )     28,836       (668 )

Mortgage-backed securities - residential

    35,797       (449 )     3,197       (57 )     38,994       (506 )

Mortgage-backed securities - commercial

    1,469       (3 )                 1,469       (3 )

Collateralized mortgage obligations – residential816(1)——816(1)

    5,590       (117 )     988       (15 )     6,578       (132 )
                                                 

Total temporarily impaired

  $ 77,724     $ (1,321 )   $ 4,456     $ (77 )   $ 82,180     $ (1,398 )

 

   

Less than 12 Months

   

12 Months or more

   

Total

 

Held-to-Maturity

 

Amortized

Cost

   

Gross

Unrecognized
Loss

   

Amortized

Cost

   

Gross

Unrecognized
Loss

   

Amortized

Cost

   

Gross

Unrecognized
Loss

 

December 31, 2016

                                               

Obligations of states and political subdivisions

  $ 933     $ (11 )   $     $     $ 933     $ (11 )

Total temporarily impaired

  $ 933     $ (11 )   $     $     $ 933     $ (11 )

 

   

Less than 12 Months

   

12 Months or more

   

Total

 

Available-for-sale

 

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

   

Fair
Value

   

Unrealized
Loss

 

June 30, 2016

                                               

Obligations of states and political subdivisions

  $ 572     $ (6 )   $ 641     $ (2 )   $ 1,213     $ (8 )

Mortgage-backed securities - residential

    4,899       (12 )     4,836       (14 )     9,735       (26 )

Collateral mortgage obligation - residential

                1,212       (3 )     1,212       (3 )

Total temporarily impaired

  $ 5,471     $ (18 )   $ 6,689     $ (19 )   $ 12,160     $ (37 )

 

 
9

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

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

 

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

 

The unrealized losses within the securities portfolio as of December 31, 2016 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. The decline in fair value within the securities portfolio is largely due to changes in interest rates and the fair value is expected to recover as the securities approach maturity. The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does not own any private label mortgage-backed securities.

 

Note 3 – Loans

 

Major classifications of loans were as follows:

 

   

December 31,

2016

   

June 30,

2016

 

Commercial

  $ 41,938     $ 43,156  

Commercial real estate:

               

Construction

    8,831       7,755  

Other

    153,563       152,766  

1 – 4 Family residential real estate:

               

Owner occupied

    37,652       31,091  

Non-owner occupied

    14,489       14,438  

Construction

    2,981       1,269  

Consumer

    5,350       5,803  

Subtotal

    264,804       256,278  

Allowance for loan losses

    (3,123 )     (3,566 )

Net Loans

  $ 261,681     $ 252,712  

 

Loans presented above are net of deferred loan fees and costs of $310 and $360 for December 31, 2016 and June 30, 2016, respectively.

 

 
10

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2016:

 

                    1-4 Family                  
            Commercial     Residential                  
           

Real

    Real                  
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 510     $ 2,643     $ 411     $ 120     $ 3,684  

Provision for loan losses

    (14 )     157       51       (54 )     140  

Loans charged-off

          (700 )     (23 )     (8 )     (731 )

Recoveries

    1             26       3       30  

Total ending allowance balance

  $ 497     $ 2,100     $ 465     $ 61     $ 3,123  

 

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2016:

  

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 505     $ 2,518     $ 402     $ 141     $ 3,566  

Provision for loan losses

    (9 )     282       78       (75 )     276  

Loans charged-off

          (700 )     (44 )     (12 )     (756 )

Recoveries

    1             29       7       37  

Total ending allowance balance

  $ 497     $ 2,100     $ 465     $ 61     $ 3,123  

 

 

 
11

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended December 31, 2015:

 

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 387     $ 1,727     $ 278     $ 122     $ 2,514  

Provision for loan losses

    10       3       149       30       192  

Loans charged-off

          (2 )     (120 )     (33 )     (155 )

Recoveries

                      4       4  

Total ending allowance balance

  $ 397     $ 1,728     $ 307     $ 123     $ 2,555  

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the six months ended December 31, 2015:

  

                   

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 
                                         

Allowance for loan losses:

                                       

Beginning balance

  $ 316     $ 1,660     $ 289     $ 167     $ 2,432  

Provision for loan losses

    81       73       138       (8 )     284  

Loans charged-off

          (5 )     (120 )     (51 )     (176 )

Recoveries

                      15       15  

Total ending allowance balance

  $ 397     $ 1,728     $ 307     $ 123     $ 2,555  

 

 

 
12

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2016. Included in the recorded investment in loans is $614 of accrued interest receivable.

  

                 

1-4 Family

                 
           

Commercial

   

Residential

                 
           

Real

   

Real

                 
   

Commercial

   

Estate

   

Estate

   

Consumer

   

Total

 

Allowance for loan losses:

                                       

Ending allowance balance attributable to loans:

                                       

Individually evaluated for impairment

  $ 4     $ 56     $ 2     $     $ 62  

Collectively evaluated for impairment

    493       2,044       463       61       3,061  

Total ending allowance balance

  $ 497     $ 2,100     $ 465     $ 61     $ 3,123  
                                         

Recorded investment in loans:

                                       

Loans individually evaluated for impairment

  $ 41     $ 1,482     $ 427     $     $ 1,950  

Loans collectively evaluated for impairment

    41,992       161,271       54,843       5,362       263,468  

Total ending loans balance

  $ 42,033     $ 162,753     $ 55,270     $ 5,362     $ 265,418  

 

 
13

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2016. Included in the recorded investment in loans is $549 of accrued interest receivable net of deferred loans fees and cost of $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

  $     $ 868     $ 6     $     $ 874  

Collectively evaluated for impairment

    505       1,650       396       141       2,692  

Total ending allowance balance

  $ 505     $ 2,518     $ 402     $ 141     $ 3,566  
                                         

Recorded investment in loans:

                                       

Loans individually evaluated for impairment

  $ 1,029     $ 5,105     $ 758     $     $ 6,892  

Loans collectively evaluated for impairment

    42,219       155,734       46,166       5,816       249,935  

Total ending loans balance

  $ 43,248     $ 160,839     $ 46,924     $ 5,816     $ 256,827  

 

 
14

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents information related to average recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of December 31, 2016 and for the six months ended December 31, 2016:

 

   

As of December 31, 2016

   

Six Months ended December 31, 2016

 
   

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

  $     $     $     $ 330     $ 80     $ 80  

Commercial real estate:

                                               

Construction

    7       7             170       6       6  

Other

    1,779       891             1,081       105       105  

1-4 Family residential real estate:

                                               

Owner occupied

    127       127  </