8-K
CONSUMERS BANCORP INC /OH/ (CBKM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of **** The Securities Exchange A ct 1934
January 16, 2020
(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) | (IRS Employer |
| of incorporation) | Identification No.) |
614 East Lincoln Way
P.O. Box 256
Minerva, Ohio 44657
(Address of principal executive offices)
(330) 868-7701
(Registrant’s telephone number, including area code)
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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None |
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 January 16, 2020, Consumers Bancorp, Inc. issued a press release reporting its results for the second fiscal quarter ended December 31, 2019. 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 January 16, 2020. |
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: January 16, 2020 | By: | /s/ Ralph J. Lober |
| Ralph J. Lober, II President and Chief<br><br> <br>Executive Officer |
ex_169645.htm
Exhibit 99.1
Consumers Bancorp, Inc. Reports:
| ● | Net income of $1.4 million, or $0.53 per share for the three-month period ended December 31, 2019 |
|---|---|
| ● | Total loans increased by $27.2 million, or an annualized 14.7%, for the six-month period ended December 31, 2019 compared to June 30, 2019 |
| --- | --- |
| ● | Total deposits increased by $15.5 million, or an annualized 6.6%, for the six-month period ended December 31, 2019 compared to June 30, 2019 |
| --- | --- |
| ● | Non-performing loans to total loans declined to 0.11% at December 31, 2019 |
| --- | --- |
Minerva, Ohio— January 16, 2020 (OTCQX: CBKM) Consumers Bancorp, Inc. (Consumers) today reported net income of $1.4 million for the second quarter of fiscal year 2020 compared with $1.8 million for the second quarter of fiscal year 2019. The annualized return on average equity was 10.66% and the annualized return on average assets was 1.01% for the second quarter of fiscal year 2020. Net income for the second quarter of fiscal year 2019 was positively impacted by a negative provision for loan loss expense of $775 thousand primarily as a result of net recoveries of $806 thousand that were collected during the three months ended December 31, 2018.
Assets at December 31, 2019 totaled $574.6 million, an increase of $20.6 million, or an annualized 7.5%, from June 30, 2019. Loans increased by $27.2 million, or an annualized 14.7%, and deposits increased by $15.5 million, or an annualized 6.6%, for the six-month period ended December 31, 2019.
Net interest income for the three months ended December 31, 2019 increased by $422 thousand, or 9.6%, compared to the same period last year, with interest income increasing by $715 thousand and interest expense increasing by $293 thousand. The increase in interest income was primarily the result of a $53.6 million increase in average interest-earning assets from the three months ended December 31, 2018. The net interest margin was 3.62% for the quarter ended December 31, 2019, 3.61% for the quarter ended September 30, 2019 and 3.69% for the quarter ended December 31, 2018.
“I believe strong balance sheet growth, excellent credit quality, and noninterest expense control each contributed to our second quarter of fiscal year 2020 results. Annualized loan growth of 14.7% continues the growth that that the bank reported last fiscal year and reflects increases in each of the commercial, residential mortgage and consumer loan portfolios. Low net charge-offs and declining nonperforming assets; now at 0.07%, continue the trend of low loan loss provision and collection expenses which, along with other operation cost reductions, is reflected in the 1.4% increase in noninterest expenses and declining efficiency ratio,” said Ralph J. Lober II, President and Chief Executive Officer. “We are also pleased that the previously announced merger of The Peoples National Bank of Mount Pleasant has now closed. Our staff is working to expand the product offerings and sales efforts in Ohio’s Jefferson, Harrison, and Belmont counties.”
Other income increased by $81 thousand for the three-month period ended December 31, 2019 compared to the same prior year period. Within other income for the three months ended December 31, 2019, service charges on deposit accounts increased by $39 thousand, or 12.1%, and debit card interchange income increased by $15 thousand, or 4.1%, from the same prior year period.
Other expenses increased by $55 thousand, or 1.4%, for the three-month period ended December 31, 2019 compared to the same prior year period.
Non-performing loans were $428 thousand at December 31, 2019, $786 thousand at June 30, 2019 and $900 thousand at December 31, 2018. The allowance for loan losses (ALLL) as a percent of total loans at December 31, 2019 was 1.02% and net charge-offs of $8 thousand were recorded for the six-month period ended December 31, 2019 compared with an ALLL to loans ratio of 1.07% at December 31, 2018 and net recoveries of $806 thousand for the same period last year.
Consumers provides a complete range of banking and other investment services to businesses and clients through its fifteen full-service locations and one loan production office 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.
Forward-Looking Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). These statements include statements relating to the merger transaction with Peoples Bancorp and the post-merger integration, the combination of their businesses and projected revenue, as well as profitability and earnings outlook. The words “may,” “continue,” “estimate,” “intend,” “plan,” “seek,” “will,” “believe,” “project,” “expect,” “anticipate” and similar expressions are intended to identify forward-looking statements. These statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from those anticipated at the date of this press release. These risks and uncertainties include, but are not limited to, the following: unanticipated difficulties or expenditures relating to the merger; legal proceedings, including those that may be instituted against Consumers, its board of directors, its executive officers and others; disruptions of current plans and operations caused by the merger and the resulting integration of Peoples Bancorp with Consumers; potential difficulties in employee retention due to the merger; any failure to meet expected cost savings, synergies and other financial and strategic benefits in connection with the merger within anticipated time frames or at all; the response of customers, suppliers and business partners to the merger; risks related to diverting management’s attention from Consumers’ ongoing business operations; material unforeseen changes in the financial condition or results of Consumers National Bank’s (Consumers’ wholly-owned bank subsidiary) 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. While the list of factors presented here is, and the Risk Factors starting on page 16 of the registration statement on Form S-4/A filed with the SEC on September 4, 2019 related to the merger of Consumers/Peoples, are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. The forward-looking statements included in this press release speak only as of the date made and Consumers does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Contact: Ralph J. Lober, President and Chief Executive Officer 1-330-868-7701 extension 1135.
| Consumers Bancorp, Inc.<br><br> <br>Consolidated Financial Highlights | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | Three Month Periods Ended | Six Month Periods Ended | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Consolidated Statements of Income | Dec. 31,<br><br> <br>2019 | Dec. 31,<br><br> <br>2018 | Dec. 31,<br><br> <br>2019 | Dec. 31,<br><br> <br>2018 | ||||||
| Total interest income | $ | 5,778 | $ | 5,063 | $ | 11,494 | $ | 9,958 | ||
| Total interest expense | 982 | 689 | 2,017 | 1,285 | ||||||
| Net interest income | 4,796 | 4,374 | 9,477 | 8,673 | ||||||
| Provision for loan losses | 185 | (775 | ) | 315 | (660 | ) | ||||
| Other income | 1,025 | 944 | 2,494 | 2,439 | ||||||
| Other expenses | 3,935 | 3,880 | 8,240 | 7,564 | ||||||
| Income before income taxes | 1,701 | 2,213 | 3,416 | 4,208 | ||||||
| Income tax expense | 261 | 364 | 473 | 686 | ||||||
| Net income | $ | 1,440 | $ | 1,849 | $ | 2,943 | $ | 3,522 | ||
| Basic and diluted earnings per share | $ | 0.53 | $ | 0.68 | $ | 1.07 | $ | 1.29 | ||
| Consolidated Statements of Financial Condition | December 31,<br><br> <br>2019 | June 30,<br><br> <br>2019 | December 31,<br><br> <br>2018 | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| Assets | **** | **** | **** | **** | **** | **** | ||||
| Cash and cash equivalents | $ | 14,028 | $ | 9,461 | $ | 9,749 | ||||
| Certificates of deposit in other financial institutions | 994 | 1,983 | 2,473 | |||||||
| Securities, available-for-sale | 133,082 | 144,010 | 143,833 | |||||||
| Securities, held-to-maturity | 3,580 | 3,786 | 3,824 | |||||||
| Federal bank and other restricted stocks, at cost | 1,723 | 1,723 | 1,459 | |||||||
| Loans held for sale | 3,220 | 1,657 | 1,068 | |||||||
| Total loans | 396,393 | 369,175 | 333,562 | |||||||
| Less: allowance for loan losses | 4,095 | 3,788 | 3,569 | |||||||
| Net loans | 392,298 | 365,387 | 329,993 | |||||||
| Other assets | 25,647 | 25,929 | 25,556 | |||||||
| Total assets | $ | 574,572 | $ | 553,936 | $ | 517,955 | ||||
| Liabilities and Shareholders’ Equity | **** | **** | **** | **** | **** | **** | ||||
| Deposits | $ | 487,645 | $ | 472,174 | $ | 442,530 | ||||
| Other interest-bearing liabilities | 28,170 | 26,386 | 24,699 | |||||||
| Other liabilities | 4,721 | 4,210 | 3,830 | |||||||
| Total liabilities | 520,536 | 502,770 | 471,059 | |||||||
| Shareholders’ equity | 54,036 | 51,166 | 46,896 | |||||||
| Total liabilities and shareholders’ equity | $ | 574,572 | $ | 553,936 | $ | 517,955 | ||||
| At or For the Six Months Ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| Performance Ratios: | December 31,<br><br> <br>2019 | December 31,<br><br> <br>2018 | ||||||||
| Return on Average Assets (Annualized) | 1.04 | % | 1.38 | % | ||||||
| Return on Average Equity (Annualized) | 11.03 | 15.71 | ||||||||
| Average Equity to Average Assets | 9.42 | 8.75 | ||||||||
| Net Interest Margin (Fully Tax Equivalent) | 3.62 | 3.69 | ||||||||
| Market Data: | **** | **** | **** | **** | **** | **** | ||||
| Book Value to Common Share | $ | 19.68 | $ | 17.15 | ||||||
| Dividends Paid per Common Share (YTD) | 0.27 | 0.26 | ||||||||
| Period End Common Shares | 2,745,658 | 2,733,845 | ||||||||
| Asset Quality: | **** | **** | **** | **** | **** | **** | ||||
| Net Charge-offs (Recoveries) to Total Loans (Annualized) | — | (0.48 | )% | |||||||
| Non-performing Assets to Total Assets | 0.07 | % | 0.17 | % | ||||||
| ALLL to Total Loans | 1.02 | 1.07 |