# EDGAR Filing Document

**Accession Number:** 0001006830
**File Stem:** 0001437749-23-001712
**Filing Date:** 2023-1
**Character Count:** 20699
**Document Hash:** dee92c1f5fc40f78cebfc8b0f4621a38
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-001712.hdr.sgml**: 20230125

**ACCESSION NUMBER**: 0001437749-23-001712

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230125

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230125

**DATE AS OF CHANGE**: 20230125

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CONSUMERS BANCORP INC /OH/
- **CENTRAL INDEX KEY:** 0001006830
- **STANDARD INDUSTRIAL CLASSIFICATION:** NATIONAL COMMERCIAL BANKS [6021]
- **IRS NUMBER:** 341771400
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 033-79130
- **FILM NUMBER:** 23549879

**BUSINESS ADDRESS:**
- **STREET 1:** 614 E LINCOLN WAY
- **STREET 2:** PO BOX 256
- **CITY:** MINERVA
- **STATE:** OH
- **ZIP:** 44657-2096
- **BUSINESS PHONE:** 3308687701

**MAIL ADDRESS:**
- **STREET 1:** 614 E LINCOLN WAY
- **STREET 2:** PO BOX 256
- **CITY:** MINERVA
- **STATE:** OH
- **ZIP:** 44657-2095

cbkm20230124_8k.htm

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

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**FORM **8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

**The Securities Exchange Act of 1934**

**January 25, 2023**

(Date of report/date of earliest event reported)

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## CONSUMERS BANCORP, INC.
(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| Ohio | 033-79130 | 34-1771400 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |

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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, including area code)

N/A

(Former name or former address if changed since the 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:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ☐

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**Item 2.02 Results of Operations and Financial Condition**

On January 25, 2023, Consumers Bancorp, Inc. issued a press release reporting its results for the three and six-month periods ended December 31, 2022. 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

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| | |
|:---|:---|
| <u>Exhibit No.</u> | <u>Description</u> |
| 99.1 | [<u>Press Release of Consumers Bancorp, Inc. dated January 25, 2023.</u>](ex_467463.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

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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.** |
| Date: January 25, 2023  | /s/ Ralph J. Lober  |
|  | Ralph J. Lober, II President and Chief |
|  | Executive Officer |

---

## Exhibit 99.1

Exhibit 99.1

Consumers Bancorp, Inc. Reports:

● Net income was $2.8 million, or $0.91 per share, for the three-month period ended December 31, 2022 and $5.3 million, or $1.74 per share, for the six month period ended December 31, 2022.

● An annualized return on average equity of 21.01% and return on average assets of 1.06% for the six- month period ended December 31, 2022.

● Total loans increased by $53.1 million, or an annualized 17.4%, for the six-month period ended December 31, 2022.

● Non-performing loans to total loans remained at a record low of 0.01% at December 31, 2022.

● Total deposits increased by $19.6 million, or an annualized 4.4%, for the six-month period ended December 31, 2022.

Minerva, Ohio — January 25, 2023 (OTCQX: CBKM) Consumers Bancorp, Inc. (Consumers) today reported net income of $2.8 million for the second quarter of fiscal year 2023, a decrease of $353 thousand, or 11.2%, from the same period last year. Earnings per share for the second quarter of fiscal year 2023 were $0.91 compared to $1.04 for the same period last year. Net income for the three months ended December 31, 2022 was positively impacted by a $231 thousand, or 2.7%, increase in net interest income from the same prior year period, which was offset by a $671 thousand increase in other expenses from the same prior year period.

Net income was $5.3 million, or $1.74 per share, for the six months ended December 31, 2022 compared to $5.8 million, or $1.92 per share, for the six months ended December 31, 2021. The annualized return on average equity was 21.01% and the annualized return on average assets was 1.06% for the six-month period ended December 31, 2022.

"Commercial and consumer loan demand remained strong during the current rising rate environment resulting in fiscal year-to-date bank-originated portfolio loan production of $118.7 million, a 15.6% increase over the same year ago period. While this production fueled the bank's 17.4% annualized growth in loan balances, the resulting 10.9% increase in interest income was partially offset by increased funding costs, a result of an increasingly competitive deposit market. Increased competition for new deposits coupled with existing depositors capitalizing on money market and certificate of deposit rates that have not been seen in years, resulted in a 35-basis point increase in the cost of funds for the six-month period ended December 31, 2022 compared with the same year ago period," said Ralph J. Lober II, President and Chief Executive Officer. "Inflation and market rates have also impacted noninterest income and expenses. Through December 31, 2022, fiscal year-to-date mortgage loan volume and gains from mortgage sales decreased 44% and 64%, respectively from the same period last year while increases in salary and benefits and other operating costs contributed to an 8.0% increase in other expenses," he continued.

**Quarterly Operating Results Overview**

Net income was $2.8 million, or $0.91 per share, for the three months ended December 31, 2022, compared to $3.2 million, or $1.04 per share, for the same prior year period.

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Net interest income increased by $231 thousand, or 2.7%, for the three months ended December 31, 2022, compared to the same period last year, with interest income increasing by $1.1 million and interest expense increasing by $912 thousand. The net interest margin was 3.53% for the quarter ended December 31, 2022, 3.48% for the quarter ended September 30, 2022, and 3.77% for the quarter ended December 31, 2021. The yield on average interest-earning assets was 4.03% for the quarter ended December 31, 2022, compared with 3.92% for the same prior year period. Interest income was positively impacted by the $37.4 million, or 4.1%, growth in average interest-earning assets and by the increase in current market interest rates, which more than offset the loss of $1.1 million of interest and fee income that was recognized on the Paycheck Protection Program (PPP) loans during the quarter ended December 31, 2021 since these loans are now fully forgiven. The cost of funds increased to 0.72% for the quarter ended December 31, 2022, from 0.21% for the same prior year period. The cost of funds increased because of higher deposit and borrowing costs as a result of higher market interest rates and an increased competition for deposits.

The provision for loan losses was $225 thousand for the three-month period ended December 31, 2022, compared with $270 thousand for the same period last year. The loan loss provision expense of $225 thousand recorded in the second quarter of fiscal year 2023 was due to the organic growth within the loan portfolio and net charge-offs of $96 thousand that were recorded for the three-month period ended December 31, 2022.

Other income decreased by $66 thousand for the three-month period ended December 31, 2022, compared to the same prior year period primarily due to gains on mortgage banking activity decreasing by $99 thousand, or 57.9%, from the same prior year period. This decline was partially offset by increases in service charges on deposit accounts of $26 thousand, or 7.1%, and debit card interchange income increasing by $12 thousand, or 2.3%.

Other expenses increased by $671 thousand, or 11.9%, for the three-month period ended December 31, 2022, compared to the same prior year period. Increases in salaries, director fees, advertising, and loan related expenses contributed to the increase in other expenses for the three-month period ended December 31, 2022.

**Year-to-Date Operating Results Overview**

Net income was $5.3 million, or $1.74 per share, for the six months ended December 31, 2022 compared to $5.8 million, or $1.92 per share, for the six months ended December 31, 2021.

Net interest income for the six months ended December 31, 2022 increased by $654 thousand, or 4.0%, compared to the same period last year, with interest income increasing by $1.9 million and interest expense increasing by $1.2 million. The increase in interest income was primarily the result of a $44.7 million, or 4.9%, increase in average interest-earning assets from the 2022 fiscal year.

The net interest margin was 3.51% for the first six months of the 2023 fiscal year and 3.70% for the same period of the 2022 fiscal year. The yield on average interest-earning assets was 3.90% for the first six months of current fiscal year compared with 3.85% for the same period of the prior fiscal year. The cost of funds increased to 0.57% for the first six months of the current fiscal year from 0.22% for the same period of the prior fiscal year. Interest income was positively impacted by a $44.7 million, or 4.9%, growth in average interest-earning assets and by the impact of higher current market rates, which more than offset the loss of the $2.1 million of interest and fee income that was recognized on the PPP loans during the six-month period ended December 31, 2021 since these loans are now fully forgiven.

The provision for loan losses increased to $635 thousand for the six-month period ended December 31, 2022 compared with $460 thousand for the same prior year period. The provision for loan loss expense increased due to the organic growth within the loan portfolio and net charge-offs of $120 thousand that were recorded for the six-month period ended December 31, 2022.

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Other income decreased by $208 thousand for the six-month period ended December 31, 2022, compared to the same prior year period primarily due to gains on mortgage banking activity decreasing by $275 thousand, or 64.1%, from the same prior year period. This decline was partially offset by increases in service charges on deposit accounts of $65 thousand, or 9.0%, and debit card interchange income increasing by $44 thousand, or 4.3%.

Other expenses increased by $917 thousand, or 8.0%, for the six-month period ended December 31, 2022 compared to the same prior year period. Salaries and benefits increased by $514 thousand, or 7.9%, for the six-month period ended December 31, 2022 compared to the same prior year period primarily due to merit and cost of living increases, the addition of lending staff, and increases in health care costs.

**Balance Sheet and Asset Quality Overview**

Assets as of December 31, 2022 totaled $1.0 billion, an increase of $35.8 million, or an annualized 7.3%, from June 30, 2022. From June 30, 2022, total loans increased by $53.1 million, or an annualized 17.4%. Total deposits increased by $19.6 million, or an annualized 4.4% from June 30, 2022.

Total available-for-sale securities decreased by $9.2 million to $287.1 million as of December 31, 2022, from $296.3 million as of June 30, 2022. In addition, total shareholders' equity declined to $50.4 million as of December 31, 2022 from $54.0 million as of June 30, 2022. The declines in available-for-sale securities and shareholders' equity were the result of rapidly rising interest rates during 2022 causing the accumulated other comprehensive loss to increase as available-for-sale securities are marked to fair market value. As market interest rates rise, the fair value of fixed-rate securities decline with a corresponding net of tax decline recorded in the accumulated other comprehensive loss portion of equity. This unrealized loss in securities is temporary and is adjusted monthly for additional market interest rate fluctuations, principal paydowns, calls, and maturities.

Non-performing loans were $47 thousand as of December 31, 2022 and $440 thousand as of June 30, 2022. Non-performing loans declined primarily due to two loans being upgraded and returned to accrual status during fiscal year 2023. The allowance for loan and lease losses (ALLL) as a percent of total loans at December 31, 2022 was 1.15% and net charge-offs of $120 thousand were recorded for the six-month period ended December 31, 2022 compared with an ALLL to loans ratio of 1.17% at June 30, 2022 and net recoveries of $1 thousand for the six-month period ended December 31, 2021.

Consumers provides a complete range of banking and other investment services to businesses and clients through its twenty-one full-service locations and one loan production office in Carroll, Columbiana, Jefferson, Mahoning, Stark, and Summit counties in Ohio. Its market includes these counties as well as the sixteen contiguous counties in northeast Ohio, western Pennsylvania, and northern West Virginia. Information about Consumers National Bank can be accessed on the internet at https://www.consumers.bank.

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**<u>Forward-Looking Information</u>**

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The words "may," "continue," "estimate," "intend," "plan," "seek," "will," "believe," "project," "expect," "anticipate" and similar expressions are intended to identify forward-looking statements. These forward-looking statements cover, among other things, anticipated future revenue and expenses and future plans, objectives and strategies of Consumers. 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. Risks and uncertainties that could adversely affect Consumers include, but are not limited to, the following: regional and national economic conditions becoming less favorable than expected, resulting in, among other things, high unemployment rates; rapid fluctuations in market interest rates could result in changes in fair market valuations and net interest income, pricing and liquidity pressures may result; 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; material unforeseen changes in the financial condition or results of Consumers National Bank's (Consumers' wholly-owned bank subsidiary) customers; legal proceedings, including those that may be instituted against Consumers, its board of directors, its executive officers and others; 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 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.

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**Consumers Bancorp, Inc.** <br> **Consolidated Financial Highlights**<br>

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands, except per share data) | **Three Month Periods Ended** | **Three Month Periods Ended** | **Six Month Periods Ended** | **Six Month Periods Ended** |
| **Consolidated Statements of Income** | **Dec. 31,** <br> **2022** | **Dec. 31,** <br> **2021** | **Dec. 31,**<br> **2022** | **Dec. 31,**<br> **2021** |
| Total interest income | $10026 | $8883 | $19100 | $17218 |
| Total interest expense | 1250 | 338 | 1928 | 700 |
| &nbsp;&nbsp;&nbsp; **Net interest income** | 8776 | 8545 | 17172 | 16518 |
| Provision for loan losses | 225 | 270 | 635 | 460 |
| Other income | 1155 | 1221 | 2286 | 2494 |
| Other expenses | 6320 | 5649 | 12398 | 11481 |
| &nbsp;&nbsp;&nbsp; **Income before income taxes** | 3386 | 3847 | 6425 | 7071 |
| Income tax expense | 577 | 685 | 1081 | 1244 |
| &nbsp;&nbsp;&nbsp; **Net income** | $2809 | $3162 | $5344 | $5827 |
| Basic and diluted earnings per share | $0.91 | $1.04 | $1.74 | $1.92 |

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| | | | |
|:---|:---|:---|:---|
| **Consolidated Statements of Financial Condition** | **December 31,** <br> **2022** | **June 30,** <br> **2022** | **December 31,** <br> **2021** |
| **Assets** |  |  |  |
| Cash and cash equivalents | $13302 | $20952 | $21253 |
| Certificates of deposit in other financial institutions | 3264 | 3781 | 4548 |
| Securities, available-for-sale | 287142 | 296347 | 269836 |
| Securities, held-to-maturity | 7338 | 7874 | 7020 |
| Equity securities, at fair value | 367 | 400 | 432 |
| Federal bank and other restricted stocks, at cost | 2583 | 2525 | 2472 |
| Loans held for sale | 100 | 1165 | 838 |
| Total loans | 664969 | 611843 | 623007 |
| &nbsp;&nbsp;&nbsp; Less: allowance for loan losses | 7675 | 7160 | 6932 |
| &nbsp;&nbsp;&nbsp; Net loans | 657294 | 604683 | 616075 |
| Other assets | 41766 | 39586 | 32429 |
| &nbsp;&nbsp;&nbsp; **Total assets** | $1013156 | $977313 | $954903 |
| **Liabilities and Shareholders**' **Equity** |  |  |  |
| Deposits | $906152 | $886562 | $848220 |
| Other interest-bearing liabilities | 49983 | 29551 | 26968 |
| Other liabilities | 6624 | 7230 | 6557 |
| &nbsp;&nbsp;&nbsp; **Total liabilities** | 962759 | 923343 | 881745 |
| Shareholders' equity | 50397 | 53970 | 73158 |
| &nbsp;&nbsp;&nbsp; **Total liabilities and shareholders**' **equity** | $1013156 | $977313 | $954903 |

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| | | |
|:---|:---|:---|
|  | **At or For the Six Months Ended** | **At or For the Six Months Ended** |
| **Performance Ratios:** | **December 31,** <br> **2022** | **December 31, 2021** |
| Return on Average Assets (Annualized) | 1.06% | 1.23% |
| Return on Average Equity (Annualized) | 21.01 | 16.03 |
| Average Equity to Average Assets | 5.07 | 7.67 |
| Net Interest Margin (Fully Tax Equivalent) | 3.51 | 3.70 |
| **Market Data:** |  |  |
| Book Value to Common Share | $16.31 | $23.97 |
| Dividends Paid per Common Share (YTD) | $0.34 | $0.32 |
| Period End Common Shares | 3089361 | 3051492 |
| **Asset Quality:** |  |  |
| Net Charge-offs to Total Loans (Annualized) | 0.04% | —% |
| Non-performing Assets to Total Assets | —% | 0.10 |
| ALLL to Total Loans | 1.15 | 1.11 |

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