Ralph J. Lober II

About Ralph J. Lober II

Ralph J. Lober II (age 58) is President & Chief Executive Officer of Consumers Bancorp, Inc. and Consumers National Bank; he joined the Company in 2007 as EVP/COO, became President and a bank director in January 2008, and was named CEO in September 2008 . He has BSBA and MBA degrees from Duquesne University, is a CPA (Ohio and Pennsylvania), a graduate of the Graduate School of Banking at the University of Wisconsin–Madison, and earned a Certified Exit Planning Advisor (CEPA) certification in November 2024 . Governance: Lober is not independent under Nasdaq rules; the Chair and CEO roles are separated (independent Chair), and he serves on Board committees in management roles (ALCO Chair; Loan and Building Committees), mitigating dual-role concerns . Performance context: Company pay-versus-performance disclosures show TSR rebounded in FY2025 and net income of $8.667M (vs. $8.580M in FY2024), after a decline from FY2023 .

Past Roles

External Roles

Fixed Compensation

Notes:

• All other compensation includes 401(k) contributions, dividends on restricted stock, group term life premiums, and perquisites; Lober’s perquisites were not itemized beyond these categories in FY2025 .
• Directors’ fees: Lober receives no additional compensation for service as a director .

Performance Compensation

• Annual cash incentive plan (structure): CEO payout opportunity is 14%–50% of salary tied to corporate measures: net income, efficiency ratio, delinquency, and growth in total loans and deposits/customer repurchase agreements . No discretionary awards were made in FY2024 or FY2025 .

• FY2025 corporate scorecard (targets vs actuals): | Metric | Threshold | Target | Maximum | FY2025 Actual | |---|---:|---:|---:|---:| | Net income ($) | 8,654,580 | 8,840,700 | 9,864,360 | 8,667,000 | | Efficiency ratio (%) | 73.56 | 72.14 | 67.90 | 70.84 | | Delinquency (%) | 0.72 | 0.88 | 0.92 | 0.19 | | Gross loans ($) | 759,762,240 | 771,633,525 | 811,204,475 | 813,458,000 | | Total deposits & customer repos ($) | 994,032,960 | 1,009,564,725 | 1,061,337,275 | 1,052,329,000 |

• FY2024 corporate scorecard (targets vs actuals): | Metric | Threshold | Target | Maximum | FY2024 Actual | |---|---:|---:|---:|---:| | Net income ($) | 10,606,650 | 10,834,750 | 12,089,300 | 8,580,000 | | Efficiency ratio (%) | 65.74 | 64.47 | 60.67 | 70.46 | | Delinquency (%) | 0.92 | 0.88 | 0.72 | 0.28 | | Gross loans – net of warehouse ($) | 778,891,200 | 791,016,374 | 831,628,625 | 732,995,000 | | Total deposits & customer repos ($) | 996,783,360 | 1,012,358,099 | 974,182,000 | 991,287,000 |

• CEO incentive outcomes: | Year | Threshold Award ($) | Maximum Award ($) | Actual Cash Incentive Paid ($) | |---|---:|---:|---:| | 2025 | 67,126 | 239,735 | 134,731 | | 2024 | 65,171 | 232,752 | 34,913 |

• Long-term incentives:

  • RSUs were granted July 1, 2024 to executives under the 2010 Omnibus Plan with ROAE as the performance target; awards did not vest because the performance target was not achieved .
  • Vesting mechanics: after performance targets are met, RSUs vest on June 30 on a three-year schedule; time-based restricted stock awards vest on three-year anniversary schedule .
  • Equity awards outstanding (Lober):
    • 6/30/2025: 1,373 unvested shares (market value $27,460) and 1,910 unearned performance shares (market value $38,200) from 10/27/2022 grants (valued at $20.00/share) .
    • 6/30/2024: 2,746 unvested shares ($45,034) and 3,821 unearned performance shares ($62,664) from 10/27/2022, plus 1,416 unearned from 9/16/2021; valued at $16.40/share .

Equity Ownership & Alignment

• Hedging/pledging: The Insider Trading Policy prohibits margin purchases, short sales, and derivative transactions; the proxies do not indicate any pledged shares for Lober (no such footnote) .
• Director ownership guideline disclosure was not identified in the proxy; no exceptions were noted.

Employment Terms

• Salary Continuation Program (non-qualified deferred compensation):
  • Provides 180 months of salary continuation based on a percentage of average compensation (3 full calendar years prior to age 65); includes covenants against competition, solicitation, and disclosure of confidential information .
  • Present value (as of June 30): $1,640,217 in FY2024 and $1,808,468 in FY2025 for Lober .
  • Change-in-control economics (double-trigger): upon change in control and termination of employment, payout equals a multiple of (base salary + prior year incentive + prior year equity compensation) plus 100% of the Accrual Balance; multiple for Lober is 2.99x; estimated payout as of 6/30/2025 was $3,643,879 (FY2024: $3,725,106) .
  • Accrual discount rate assumptions: 6.00% (FY2024) and 5.50% (FY2025) .
• No separate stand-alone change-in-control agreements for named executive officers .
• 401(k) plan: Safe harbor match 100% of first 4% contributed, immediately vested; trustees include Lober .

Board Governance

• Board and committee service: Lober has been a director since 2008; he chairs the Asset/Liability Committee and serves on the Loan Committee and Building Committee (management member), but is not independent under Nasdaq rules .
• Independence and leadership structure: All directors except Lober are independent; Chair and CEO roles are separated (independent Chair) .
• Board activity: In FY2025 the Board and all committees met regularly; all directors attended ≥75% of their meetings .
• Director compensation (context): Non-employee directors receive cash retainers and committee fees plus annual RSUs (subject to attendance). Chairman retainer is $9,250/quarter; Vice Chair $8,500/quarter; other directors $6,250/quarter; committee fees as disclosed; RSUs for directors settled annually; Lober, as an employee, receives no director compensation .

Performance & Track Record

• FY2025 incentive scorecard shows strong execution on credit quality (delinquency 0.19%) and balance sheet growth (loans and deposits above targets) with efficiency gains vs target; net income slightly below target, resulting in a mid-range cash bonus outcome .

Compensation Structure Analysis

• Mix and trend: Lober’s equity grant value was concentrated in FY2023 ($246,169), with no stock awards reported in FY2024–FY2025; cash incentive rebounded to $134,731 in FY2025 from $34,913 in FY2024 as scorecard results improved .
• Pay-for-performance: The CEO’s cash incentive is directly tied to net income, efficiency, delinquency, and loan/deposit growth; no discretionary awards in FY2024–FY2025, indicating discipline against overrides during underperformance .
• Clawback/recoupment: No explicit compensation clawback policy was identified in the proxy; the Company discloses anti-hedging and margin/derivative prohibitions for insiders .
• Peer benchmarking: Compensation is targeted to the midpoint of a peer group (Blanchard Consulting Group review in FY2024) .

Related Party Transactions and Red Flags

• Related parties: Routine related-party loans on market terms; immaterial vendor relationships disclosed (e.g., services by Kiko affiliates < $120k in FY2024–FY2025); no adverse features noted .
• Section 16 compliance: One late Form 4 filing was noted for a director (not Lober) in FY2025; FY2024 indicated full compliance .
• Hedging/margin/derivatives: Prohibited for insiders .
• No option repricing, tax gross-ups, or pledging disclosures identified in the proxies .

Equity and Incentive Vesting Schedules (Detail)

Employment Economics (Change-in-Control/Pension)

Investment Implications

• Alignment and retention: Lober owns a meaningful stake (74,298 shares; 2.36%), largely jointly held with family, with no pledging indicated; equity awards are RSU/restricted stock with multi-year vesting and performance gating, and executive hedging/margin/derivative transactions are prohibited—factors supportive of alignment and reduced forced-selling risk .
• Pay-for-performance signals: The incentive plan ties directly to net income, efficiency, credit quality, and growth; 2025 payout moved to mid-range as scorecard outcomes improved, while equity awards did not vest when ROAE targets were missed (favorable discipline) .
• Downside protection and CIC costs: The 2.99x CIC multiple plus full accrual balance is material for a small-cap bank and could be an overhang in a sale scenario; however, a double-trigger requirement moderates immediate cash drain absent termination .
• Execution risk: Results show durable credit performance (low delinquency) and resumed TSR in FY2025 after weaker FY2024 profitability; continued net income growth and ROAE improvement are key to unlocking equity vesting and sustaining incentive payouts .