CONSUMERS BANCORP INC /OH/ - Quarter Report: 2019 September (Form 10-Q)

 

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

[X]	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2019

 

Commission File No. 033-79130

 

CONSUMERS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

OHIO	34-1771400
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)

 

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)

 

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
	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 Securities Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes ☐ No ☒

 

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

 

There were 2,745,658 shares of Registrant’s common stock, no par value, outstanding as of November 4, 2019.

 

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(Dollars in thousands, except per share data)		September 30, 2019				June 30, 2019
ASSETS
Cash on hand and noninterest-bearing deposits in financial institutions		$	11,642			$	9,322
Federal funds sold and interest-bearing deposits in financial institutions			860				139
Total cash and cash equivalents			12,502				9,461
Certificates of deposit in other financial institutions			1,493				1,983
Securities, available-for-sale			137,603				144,010
Securities, held-to-maturity (fair value of $3,764 at September 30, 2019 and $3,821 at June 30, 2019)			3,686				3,786
Federal bank and other restricted stocks, at cost			1,723				1,723
Loans held for sale			2,436				1,657
Total loans			383,820				369,175
Less allowance for loan losses			(3,909	)			(3,788	)
Net loans			379,911				365,387
Cash surrender value of life insurance			9,245				9,606
Premises and equipment, net			14,539				14,155
Accrued interest receivable and other assets			2,049				2,168
Total assets		$	565,187			$	553,936
LIABILITIES
Deposits
Noninterest-bearing demand		$	122,196			$	116,239
Interest bearing demand			86,887				81,469
Savings			166,937				162,261
Time			111,414				112,205
Total deposits			487,434				472,174
Short-term borrowings			3,754				3,686
Federal Home Loan Bank advances			16,300				22,700
Accrued interest and other liabilities			4,706				4,210
Total liabilities			512,194				502,770
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY
Preferred stock (no par value, 350,000 shares authorized, none outstanding)			—				—
Common stock (no par value, 3,500,000 shares authorized; 2,854,133 shares issued as of September 30, 2019 and June 30, 2019)			14,697				14,656
Retained earnings			37,621				36,487
Treasury stock, at cost (108,475 and 120,288 common shares as of September 30, 2019 and June 30, 2019, respectively)			(1,454	)			(1,543	)
Accumulated other comprehensive income			2,129				1,566
Total shareholders’ equity			52,993				51,166
Total liabilities and shareholders’ equity		$	565,187			$	553,936

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		Three Months ended September 30,
(Dollars in thousands, except per share amounts)		2019				2018
Interest and dividend income
Loans, including fees		$	4,761			$	3,949
Securities, taxable			510				526
Securities, tax-exempt			399				375
Federal bank and other restricted stocks			20				22
Federal funds sold and other interest-bearing deposits			26				23
Total interest and dividend income			5,716				4,895
Interest expense
Deposits			945				514
Short-term borrowings			11				14
Federal Home Loan Bank advances			79				68
Total interest expense			1,035				596
Net interest income			4,681				4,299
Provision for loan losses			130				115
Net interest income after provision for loan losses			4,551				4,184
Noninterest income
Service charges on deposit accounts			373				316
Debit card interchange income			391				358
Bank owned life insurance death benefit			324				—
Bank owned life insurance income			68				69
Securities gains, net			106				587
Other			207				165
Total noninterest income			1,469				1,495
Noninterest expenses
Salaries and employee benefits			2,173				1,975
Occupancy and equipment			532				488
Data processing expenses			385				150
Debit card processing expenses			201				194
Professional and director fees			257				170
FDIC assessments			(7	)			38
Franchise taxes			95				89
Marketing and advertising			181				104
Telephone and network communications			74				72
Other			414				404
Total noninterest expenses			4,305				3,684
Income before income taxes			1,715				1,995
Income tax expense			212				322
Net income		$	1,503			$	1,673
Basic and diluted earnings per share		$	0.55			$	0.61

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		Three Months ended September 30,
		2019				2018
Net income		$	1,503			$	1,673
Other comprehensive income (loss), net of tax:
Net change in unrealized gains (losses) on securities available-for-sale:
Unrealized gains (losses) arising during the period			818				(893	)
Reclassification adjustment for gains included in income			(106	)			(587	)
Net unrealized gains (losses)			712				(1,480	)
Income tax effect			(149	)			312
Other comprehensive income (loss)			563				(1,168	)
Total comprehensive income		$	2,066			$	505

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		Three Months ended September 30,
		2019				2018
Balance at beginning of period		$	51,166			$	43,761
Net income			1,503				1,673
Other comprehensive income (loss)			563				(1,168	)
11,813 and 4,201 shares issued associated with stock awards during the three months ended September 30, 2019 and 2018, respectively			130				59
Common cash dividends			(369	)			(355	)
Balance at the end of the period		$	52,993			$	43,970
Common cash dividends per share		$	0.135			$	0.13

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(Dollars in thousands)		Three Months Ended September 30,
		2019				2018
Cash flows from operating activities
Net cash from operating activities		$	806			$	533
Cash flow from investing activities
Securities available-for-sale
Purchases			(2,318	)			(2,060	)
Maturities, calls and principal pay downs			4,893				4,730
Proceeds from sales			4,460				2,573
Securities held-to-maturity
Principal pay downs			100				95
Net decrease in certificate of deposit in other financial institutions			490				—
Net increase in loans			(14,654	)			(10,247	)
Proceeds from BOLI death benefit			753				—
Acquisition of premises and equipment			(48	)			(350	)
Net cash from investing activities			(6,324	)			(5,259	)
Cash flow from financing activities
Net increase in deposit accounts			15,260				10,576
Net change in short-term borrowings			68				(10,465	)
Proceeds from Federal Home Loan Bank advances			1,500				8,000
Repayments of Federal Home Loan Bank advances			(7,900	)			(17	)
Dividends paid			(369	)			(355	)
Net cash from financing activities			8,559				7,739
Increase in cash or cash equivalents			3,041				3,013
Cash and cash equivalents, beginning of period			9,461				7,772
Cash and cash equivalents, end of period		$	12,502			$	10,785
Supplemental disclosure of cash flow information:
Cash paid during the period:
Interest		$	1,050			$	576
Federal income taxes			—				—
Non-cash items:
Transfer from loans held for sale to portfolio			—				75
Issuance of treasury stock for stock awards			89				59
Right of use assets obtained in exchange for lease liabilities			582				—

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Note 1 – Summary of Significant Accounting Policies:

 

Nature of Operations: Consumers Bancorp, Inc. (the Corporation) is a bank holding company headquartered in Minerva, Ohio that provides, through its banking subsidiary, Consumers National Bank (the Bank), a broad array of products and services throughout its primary market area of Carroll, Columbiana, Jefferson, Stark, Summit, Wayne and contiguous counties in Ohio. The Bank’s business involves attracting deposits from businesses and individual customers and using such deposits to originate commercial, mortgage and consumer loans in its primary market area.

 

Basis of Presentation: The consolidated financial statements for interim periods are unaudited and reflect all adjustments (consisting of only normal recurring adjustments), which, in the opinion of management, are necessary to present fairly the financial position and results of operations and cash flows for the periods presented. The unaudited financial statements are presented in accordance with the requirements of Form 10-Q and do not include all disclosures normally required by accounting principles generally accepted in the United States of America. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation’s Form 10-K for the year ended June 30, 2019. The results of operations for the interim period disclosed herein are not necessarily indicative of the results that may be expected for a full year.

 

The consolidated financial statements include the accounts of the Corporation and the Bank. All significant inter-company transactions and accounts have been eliminated in consolidation.

 

Segment Information: The Corporation is a bank holding company engaged in the business of commercial and retail banking, which accounts for substantially all the revenues, operating income, and assets. Accordingly, all of the Corporation’s operations are recorded in one segment, banking.

 

Reclassifications: Certain items in prior financial statements have been reclassified to conform to the current presentation. Any reclassifications had no impact on prior year net income or shareholders’ equity.

 

Adoption of New Accounting Standards: In February 2016, FASB issued accounting standards update (ASU) 2016-02, Leases (Topic 842). This ASU requires all organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additional qualitative and quantitative disclosures are required so users can understand more about the nature of an entity’s leasing activities. The new guidance was effective for annual reporting periods, and interim reporting periods within those annual periods, beginning after December 15, 2018. The Corporation has several lease agreements, such as branch locations, which were previously considered operating leases, and therefore, not recognized on the Corporation’s consolidated condensed statements of financial condition. The new guidance requires these lease agreements to now be recognized on the consolidated condensed statements of financial condition as a right-of-use asset and a corresponding lease liability. As of July 1, 2019, the Corporation adopted ASU 2016-02 using the modified retrospective method. There was no cumulative-effect adjustment to the opening balance of retained earnings for the period of adoption. At September 30, 2019, the Corporation had contractual operating lease commitments of $555, before considering renewal options that are generally present.

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Recently Issued Accounting Pronouncements Not Yet Effective: In June 2016, Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU adds a new Topic 326 to the codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. Under current U.S. generally accepted accounting principles, companies generally recognize credit losses when it is probable that the loss has been incurred. The revised guidance will remove all current loss recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the corporation expects to collect over the instrument’s contractual life. ASU 2016-13 also amends the credit loss measurement guidance for available-for-sale debt securities and beneficial interests in securitized financial assets. The guidance in ASU 2016-13 is effective for “public business entities,” as defined in the guidance, that are SEC filers for fiscal years and for interim periods within those fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. However, during July 2019, FASB unanimously voted for a proposal to delay this ASU to January 2023 for smaller reporting companies. On October 16, 2019, FASB approved a final ASU delaying the effective date. The new guidance is effective for annual and interim periods beginning after December 15, 2022 for certain entities, including smaller reporting companies. The Corporation is a small reporting company.

 

Note 2 – Acquisition

 

On June 14, 2019, Consumers entered into an Agreement and Plan of Merger (Merger Agreement) with Peoples Bancorp of Mt. Pleasant, Inc. (Peoples) and its wholly owned subsidiary, The Peoples National Bank of Mount Pleasant. Each Peoples shareholder will receive 63.16 common shares of Consumers common stock or $1,200.00 in cash, subject to total consideration being paid 50% in Consumers common shares and 50% cash as provided in the Merger Agreement. Based on Consumers’ 20-day average closing price of $19.07 on June 13, 2019, the aggregate implied transaction value was approximately $10.3 million. On September 30, 2019, Peoples had approximately $72.4 million in total assets, $54.2 million in loans and $62.7 million in deposits at its three banking centers located in Mt. Pleasant, Adena, and Dillonvale, Ohio. The transaction is expected to close in January 2020, pending the completion of customary closing conditions. All necessary shareholder and regulatory approvals have been received.

 

Note 3 – Securities

 

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

 

 

Proceeds from the sale and call of available-for-sale securities were as follows:

 

 

The income tax provision related to the net realized gains amounted to $22 for the three months ended September 30, 2019. The income tax benefit related to the net realized losses amounted to $124 for the three months ended September 30, 2018.

 

The amortized cost and fair values of debt securities at September 30, 2019, by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table summarizes the securities with unrealized losses at September 30, 2019 and June 30, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

 

 

 

Management evaluates securities for other-than-temporary impairment (OTTI) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under FASB ASC Topic 320, Accounting for Certain Investments in Debt and Equity Securities.

 

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

 

The unrealized losses within the securities portfolio as of September 30, 2019 have not been recognized into income because the decline in fair value is not attributed to credit quality and management does not intend to sell, and it is not likely that management will be required to sell, the securities prior to their anticipated recovery. The decline in fair value within the securities portfolio is largely due to changes in interest rates and the fair value is expected to recover as the securities approach maturity. The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does not own any private label mortgage-backed securities.

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Note 4 – Loans

 

Major classifications of loans were as follows:

 

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2019:

 

 

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2018:

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2019. Included in the recorded investment in loans is $764 of accrued interest receivable.

 

 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2019. Included in the recorded investment in loans is $891 of accrued interest receivable.

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents information related to unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of September 30, 2019 and for the three months ended September 30, 2019:

 

 

The following table presents information related to unpaid principal balance, recorded investment and interest income associated with loans individually evaluated for impairment by class of loans as of June 30, 2019 and for the three months ended September 30, 2018:

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2019 and June 30, 2019:

 

 

Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

 

The following table presents the aging of the recorded investment in past due loans as of September 30, 2019 by class of loans:

 

 

The above table of past due loans includes the recorded investment in non-accrual loans of $13 in the 60-89 days category and $431 in the loans not past due category.

 

The following table presents the aging of the recorded investment in past due loans as of June 30, 2019 by class of loans:

 

 

The above table of past due loans includes the recorded investment in non-accrual loans of $198 in the 30-59 days, $80 in the 90 days or greater category and $507 in the loans not past due category.

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Troubled Debt Restructurings (TDR):

The Corporation has certain loans that have been modified in order to maximize collection of loan balances. A modified loan is classified as a TDR if, for economic reasons, management grants a concession to the original terms and conditions of the loan to a borrower who is experiencing financial difficulties that it would not have otherwise considered.

 

At September 30, 2019 and June 30, 2019, the Corporation had $706 and $725, respectively, of loans classified as TDRs which are included in impaired loans above. As of September 30, 2019, the Corporation had not committed to lend any additional funds to customers with outstanding loans that were classified as troubled debt restructurings. As of June 30, 2019, the Corporation had committed to lend an additional $9 to customers with outstanding loans that were classified as troubled debt restructurings. At September 30, 2019 and June 30, 2019, the Corporation had $9 of specific reserves allocated to these loans.

 

During the three-month periods ended September 30, 2019 and 2018, there were no loan modifications completed that were classified as troubled debt restructurings. There were no charge offs from troubled debt restructurings that were completed during the three-month periods ended September 30, 2019 and 2018.

 

There were no loans classified as troubled debt restructurings for which there was a payment default within 12 months following the modification during the three-month periods ended September 30, 2019 and 2018. A loan is considered in payment default once it is 90 days contractually past due under the modified terms.

 

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic trends and other relevant information. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than $100 and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirms the risk ratings for the loans and leases in their respective portfolio on an annual basis. The Corporation uses the following definitions for risk ratings:

 

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

 

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

 

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 or are included in groups of homogeneous loans. These loans are evaluated based on delinquency status, which are disclosed in the previous table within this footnote. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:

 

 

As of June 30, 2019, and based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans is as follows:

 

 

Note 5 - Fair Value

 

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

 

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

 

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

 

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

Financial assets and financial liabilities measured at fair value on a recurring basis include the following: 

 

Securities available-for-sale: When available, the fair values of available-for-sale securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). For securities where quoted market prices are not available, fair values are calculated based on market prices of similar securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other unobservable inputs (Level 3 inputs).

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Assets and liabilities measured at fair value on a recurring basis are summarized below, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

 

 

 

There were no transfers between Level 1 and Level 2 during the three-month periods ended September 30, 2019 or 2018.

 

Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. Financial assets and financial liabilities measured at fair value on a non-recurring basis include the following:

 

Impaired Loans: At the time a loan is considered impaired, it is valued at the lower of cost or fair value. Impaired loans carried at fair value generally receive specific allocations of the allowance for loan losses or are charged down to their fair value. For collateral dependent loans, fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

 

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. There was no other real estate owned being carried at fair value as of September 30, 2019 or June 30, 2019.

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

Financial assets measured at fair value on a non-recurring basis at September 30, 2019 and June 30, 2019 are summarized below: 

 

 

 

Impaired loans, measured for impairment using the fair value of the collateral, had a recorded investment of $55, with no valuation allowance at September 30, 2019. Impaired loans, measured for impairment using the fair value of the collateral, had a recorded investment of $59, with no valuation allowance at June 30, 2019. There was no impact to the provision for loan losses for the three months ended September 30, 2019 and 2018.

 

The following tables presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2019 and June 30, 2019:

 

 

 

 

 

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

 

(Dollars in thousands, except per share amounts)

 

The following table shows the estimated fair values of financial instruments that are reported at amortized cost in the Corporation’s consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: