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CB

CONSUMERS BANCORP INC /OH/ (CBKM)·Q2 2025 Earnings Summary

Executive Summary

  • Solid quarter: EPS rose to $0.73, up 12.3% year over year and up sequentially from $0.72; net income grew 13.5% YoY to $2.3M as lower cost of funds and modest balance sheet growth lifted spread income .
  • Net interest margin improved 10 bps q/q to 3.02% as cost of funds fell 11 bps; management cited deposit repricing benefits driving a fourth straight quarter of earnings increases .
  • Mix headwinds persisted: longer-term rates slowed mortgage originations and reduced gain-on-sale income, while expenses rose 5.4% YoY on wage/benefit and marketing/professional spend; net charge-offs increased vs. prior year .
  • Balance sheet stable: loans +$3.7M (annualized +1.0%) since June; deposits +$24.7M (annualized +5.1%); AOCI improved with securities valuation tailwinds; NPLs low at 0.11% (0.03% SBA guaranteed) .
  • No formal guidance or call transcript available; near-term catalysts include continued deposit cost normalization, conversion of $30.3M construction commitments into loans, and the new Massillon, OH branch opening in Feb 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Net interest margin expanded to 3.02% (+10 bps q/q) as cost of funds declined 11 bps; CEO: “ability to reprice… resulted in an 11-basis point decrease in the cost of funds and a 10-basis point increase in the net interest margin… [and] contributed to the fourth straight quarter of increasing earnings” .
    • Positive production trends: business banking originations +$8.4M (+44.6%) q/q; branch and indirect lending +$1.8M (+14%); construction commitments +$7.9M (+35.5%), totaling $30.3M for future balances .
    • Other income rose 9.7% YoY on stronger interchange (+13.2%), BOLI income (+42.9%), and service charges (+2.5%) .

  • What Went Wrong

    • Mortgage headwinds: higher long-term rates slowed residential mortgage lending and reduced gains on loan sales in the quarter .
    • Expense pressure: other expenses +5.4% YoY on salaries/benefits, professional fees, and marketing .
    • Credit costs mixed: provision fell YoY ($125k vs $325k), but quarterly net charge-offs increased to $189k vs $120k in prior-year quarter .

Financial Results

MetricQ2 FY24 (Dec-23)Q4 FY24 (Jun-24)Q1 FY25 (Sep-24)Q2 FY25 (Dec-24)
Net Interest Income ($000)7,964 8,048 8,043 8,319
Other Income ($000)1,242 1,278 1,393 1,362
Provision for Credit Losses ($000)325 137 32 125
Other Expenses ($000)6,431 6,628 6,688 6,781
Pre-tax Income ($000)2,450 2,561 2,716 2,775
Income Tax ($000)435 458 480 488
Net Income ($000)2,015 2,103 2,236 2,287
Diluted EPS ($)0.65 0.67 0.72 0.73

Notes: Company does not present “revenue”; for banks we show Net Interest Income and Other Income separately (primary revenue drivers) .

Margins and spread metrics

Spread MetricQ2 FY24 (Dec-23)Q4 FY24 (Jun-24)Q1 FY25 (Sep-24)Q2 FY25 (Dec-24)
Net Interest Margin (NIM)2.95% 2.99% 2.92% 3.02%
Yield on Avg Earning Assets4.54% 4.81% 4.81% 4.81%
Cost of Funds2.17% 2.48% 2.56% 2.45%

Balance sheet and credit KPIs

KPIQ2 FY24 (Dec-23)Q4 FY24 (Jun-24)Q1 FY25 (Sep-24)Q2 FY25 (Dec-24)
Total Loans ($000)735,227 759,114 766,473 762,795
Total Deposits ($000)948,548 972,980 998,892 997,658
Shareholders’ Equity ($000)63,510 63,685 73,301 69,540
Non-performing Loans ($000)N/A862 919 830
NPLs (% of Total Loans)N/A0.11% 0.12% 0.11% (0.03% SBA guaranteed)
ACL / Total Loans (%)1.09% 1.04% 1.04% 1.03%
Net Charge-offs ($000, quarterly)120 157 59 189
AFS Securities ($000)276,133 264,802 272,757 269,905
AOCI, net loss ($000)N/A28,300 20,600 26,300

Guidance Changes

No formal quantitative guidance was issued in Q2 FY25 press materials or via an earnings call.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/NII/Noninterest incomeFY25/Q3 onwardNoneNoneN/A
Net interest marginFY25NoneNoneN/A
Operating expensesFY25NoneNoneN/A
Credit costs (provision/NCOs)FY25NoneNoneN/A
Tax rateFY25NoneNoneN/A
Capital/OCIFY25NoneNoneN/A
DividendOngoingQuarterly dividends continued (Q1 dividend $0.19; YTD $0.38 through Q2) No changeMaintained

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 FY25.

TopicPrevious Mentions (Q4 FY24)Previous Mentions (Q1 FY25)Current Period (Q2 FY25)Trend
Deposit pricing/cost of fundsStabilizing funding costs; cost of funds 2.48% Competitive pressures easing post-September rate cut; cost of funds 2.56% Cost of funds fell 11 bps to 2.45% on repricing actions Improving
Net interest marginNIM 2.99% NIM 2.92% NIM 3.02% (+10 bps q/q) Improving
Loan production/pipelinesLoan originations below prior levels, but improved in residential/personal; balances +$16.5M q/q Total loan production $43.4M, +18.8% q/q Business banking +$8.4M (+44.6%); consumer/indirect +$1.8M (+14%); construction commitments +$7.9M (+35.5%) Strengthening
Mortgage bankingReinvestment at higher yields; limited commentary Mortgage banking revenue +35.7% YoY (small base) Mortgage lending slowed; lower gains on sale due to higher long-term rates Softening
Asset qualityNPAs/loans low; NCOs manageable NPLs $919k; ACL 1.04% NPLs $830k; ACL 1.03%; NCOs $189k Stable/benign, with higher NCOs
Capital/AOCIAOCI net loss $28.3M; equity +$8.2M YoY AOCI improved to $20.6M; equity up strongly AOCI at $26.3M; equity $69.5M; securities MV improvement contributed Mixed (rate-driven)
Footprint/expansionBroke ground on Massillon (9th Stark County) —Massillon opening Feb 2025; 22nd branch context from CSI PR Expansion

Management Commentary

  • “The bank’s ability to reprice money market accounts and maturing time deposits resulted in an 11-basis point decrease in the cost of funds and a 10-basis point increase in the net interest margin… It also contributed to the fourth straight quarter of increasing earnings.” — Ralph J. Lober II, President & CEO .
  • “Business banking originations increased $8.4 million, or 44.6%… branch loan originations and new indirect installment lending increased $1.8 million, or 14%… new construction lending resulted in a $7.9 million, or 35.5% increase in unfunded construction commitments… We expect the $30.3 million in total outstanding construction commitments to result in future loan balances.” .
  • “The February 2025 opening of our ninth Stark County location in Massillon, Ohio [should] provide additional growth opportunities.” .
  • Longer-term rates “resulted in a slowdown in residential mortgage lending and a decrease in gains from the sale of mortgage loans during the quarter.” .

Q&A Highlights

No earnings call transcript was found for Q2 FY25; as such, no Q&A themes or guidance clarifications were available in primary sources [earnings-call-transcript search returned none].

Estimates Context

  • We attempted to retrieve S&P Global consensus estimates for Q2 FY25 (EPS and revenue). Data could not be retrieved due to an API request limit, and no estimate comparisons are included as a result [GetEstimates error].
  • Given limited micro-cap coverage, CBKM often has sparse Street estimates; portfolio managers should evaluate results on fundamentals (NIM trajectory, funding costs, credit) and internal targets rather than beat/miss framing this quarter .

Key Takeaways for Investors

  • Spread recovery underway: cost of funds down 11 bps q/q and NIM up 10 bps to 3.02%—a constructive setup if deposit repricing tailwinds persist .
  • Earnings durability: four consecutive quarters of earnings growth, aided by funding-cost normalization and stable asset quality; watch expense growth and NCOs as potential offsets .
  • Loan growth pipeline improving: strong q/q originations in business and consumer; $30.3M construction commitments should fuel balances in coming quarters, supporting NII .
  • Mortgage/gains-on-sale remain a headwind as longer rates curb volumes; mix shift favors on-balance-sheet lending and fee streams like interchange .
  • Asset quality remains benign (NPLs 0.11%; ACL 1.03%) despite higher NCOs this quarter; credit normalization bears monitoring but reserve coverage is steady .
  • Capital and AOCI sensitive to rates; recent valuation improvement aids equity, but OCI volatility remains a swing factor (especially if rates back up) .
  • Near-term catalysts: Massillon branch opening (Feb 2025) and continued deposit repricing progress; both can support margin and growth narratives absent Street estimate catalysts .

Sources: Q2 FY25 8‑K and press release (Jan 23, 2025) ; Q1 FY25 8‑K (Oct 21, 2024) ; Q4 FY24 8‑K (Aug 2, 2024) ; CSI/branch expansion press release (Nov 20, 2024) .