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Consumers Bancorp reports income of $1.8M

MINERVA — Consumers Bancorp Inc. (Consumers) reported net income of $1.8 million for the second fiscal quarter of 2019, an increase of $1.2 million from the same period last year. Earnings per share for the second fiscal quarter of 2019 were 68 cents compared to 24 cents for the same period last year. Net income for the second fiscal quarter of 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 Dec. 31, 2018.

For the six months ended Dec. 31, 2018, net income was $3.5 million an increase of $1.9 million, or 122.1 percent, from the same period last year. Net income for the 2019 fiscal year was positively impacted by a negative provision for loan loss expense of $775,000 and a net gain on sale of securities of $560,000. In addition, net income was positively impacted by a $960,000, or 12.4 percent, increase in net interest income which was the result of a $38.9 million increase in average interest-earning assets from the prior year period combined with an increase on the yield on interest-earning assets.

Assets at Dec. 31, 2018 totaled $518.0 million, an increase of $15.3 million, or an annualized 6.1 percent, from June 30, 2018. Loans increased by $15.1 million, or an annualized 9.5 percent, and deposits increased by $12.6 million, or an annualized 5.8 percent from June 30, 2018.

“While a full principal recovery of a prior period commercial real estate loss and a securities gain associated with a previously written down holding are reflected in strong three- and six-month results, we believe improvements in other core factors are contributing to asset growth and profitability,” said Ralph J. Lober, II, president and chief executive officer. “Our business bankers, mortgage originators, and retail staff across our markets continue to identify opportunities and win business by clearly defining and delivering on the community bank difference. These efforts are reflected in a $40.0 million, or 13.6 percent, increase in gross loans outstanding over the 12 months ending Dec. 31, 2018, and a 12.4 percent increase in net interest income. Further, residential mortgage production for the six months ended Dec. 31, 2018, increased 41 percent over the same year earlier period. We continue to enhance sales processes as well as internal and customer facing technology to drive new business and efficiencies. Strong economic activity and employment levels are reflected in record low nonaccrual and loan delinquencies; however, the flattening yield curve has lessened the expected increase in net interest income and margin,” he said.

The net interest margin was 3.63 percent for the quarter ended Dec. 31, 2018 and was 3.61 percent for the quarter ended Dec. 31, 2017. The corporation’s yield on average interest-earning assets was 4.20 percent for the three months ended Dec. 31, 2018, an increase from 3.94 percent for the same period last year. The corporation’s cost of funds was 0.79 percent for the three months ended Dec. 31, 2018, and 0.46 percent for the same period last year.

Other income increased by $105,000 to $944,000 for the second quarter of fiscal year 2019 compared with $839,000 for the same period last year. The increase in other income for the second quarter of fiscal year 2019 was primarily a result of increases in gain on sale of mortgage loans and debit card interchange income. These increases were partially offset by a $27,000 loss from the sale of securities.

Other expenses increased by $320,000, or 9.0 percent, for the second fiscal quarter of 2019 from the same period last year. The increase in other expenses was primarily the result of an increase in salary and benefit expenses and marketing expenses.

Non-performing loans were $900,000at Dec. 31, 2018, $1.1 million at June 30, 2018 and $865,000 at Dec. 31, 2017. The allowance for loan losses (ALLL) as a percent of total loans at Dec. 31, 2018, was 1.07 percent and net recoveries totaled $806,000 for the six months ended Dec. 31, 2018. The ALLL to loans ratio was 1.10 percent at Dec. 31, 2017, and annualized net charge-offs to total loans were 0.01 percent for the six-month period ended Dec. 31, 2017.

Consumers provides a complete range of banking and other investment services to businesses and clients through its 14 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 consumersbank.com.

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