Consumers Bancorp's Net Income Jumps 18% on Strong Net Interest Growth

TL;DR

**CBKM is a buy; strong net interest income growth and asset expansion outweigh rising credit loss provisions.**

AI Summary

CONSUMERS BANCORP INC /OH/ reported a significant increase in net income for the three months ended September 30, 2025, reaching $2.634 million, up 17.8% from $2.236 million in the same period of 2024. This growth was primarily driven by a 18.7% increase in net interest income, which rose to $9.545 million from $8.043 million year-over-year. Total assets expanded to $1.187 billion as of September 30, 2025, an increase of 1.97% from $1.165 billion at June 30, 2025. Loans, including fees, contributed significantly to interest income, growing to $12.086 million in Q3 2025 from $10.939 million in Q3 2024. Deposits also saw a healthy increase, reaching $1.069 billion from $1.036 billion over the quarter. However, the provision for credit losses on loans increased substantially to $320,000 in Q3 2025 from $77,000 in Q3 2024, indicating a potential increase in credit risk. The company's securities available-for-sale portfolio decreased to $268.900 million from $273.875 million, while accumulated other comprehensive loss improved to $(19.255) million from $(22.554) million. Basic and diluted earnings per share rose to $0.84 from $0.72.

Why It Matters

This filing reveals CONSUMERS BANCORP INC /OH/ is demonstrating robust financial performance, with an 18% surge in net income and significant growth in net interest income. For investors, this indicates strong operational efficiency and potential for continued profitability, especially given the increase in earnings per share to $0.84. The expansion in total assets and deposits suggests a growing customer base and market penetration, which could enhance its competitive position against regional banks in Ohio, Pennsylvania, and West Virginia. However, the notable increase in the provision for credit losses on loans warrants investor attention, as it could signal future asset quality concerns. Employees and customers benefit from a financially stable institution, while the broader market sees a regional bank successfully navigating economic conditions.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant increase in the provision for credit losses on loans, which jumped from $77,000 in Q3 2024 to $320,000 in Q3 2025. This 315% increase suggests a potential deterioration in loan portfolio quality or a more conservative lending outlook. Additionally, while accumulated other comprehensive loss improved, the company still holds a substantial amount of securities with unrealized losses, totaling $25.209 million for available-for-sale securities and $47,000 for held-to-maturity securities as of September 30, 2025.

Analyst Insight

Investors should consider initiating or increasing positions in CBKM, focusing on its strong net interest income growth and expanding asset base. However, closely monitor future filings for trends in credit loss provisions and the overall health of its loan portfolio, as this could be a leading indicator of future performance.

Financial Highlights

revenue

$9.545M

total Assets

$1.188B

net Income

$2.634M

eps

$0.84

cash Position

$26.668M

revenue Growth

+18.7%

Revenue Breakdown

Key Numbers

• $2.634M — Net income for Q3 2025 (Increased 17.8% from $2.236M in Q3 2024)
• $9.545M — Net interest income for Q3 2025 (Increased 18.7% from $8.043M in Q3 2024)
• $1.187B — Total assets as of Sep 30, 2025 (Increased 1.97% from $1.165B at Jun 30, 2025)
• $320K — Provision for credit losses on loans for Q3 2025 (Increased 315% from $77K in Q3 2024)
• $0.84 — Basic and diluted earnings per share for Q3 2025 (Increased from $0.72 in Q3 2024)
• $1.069B — Total deposits as of Sep 30, 2025 (Increased from $1.036B at Jun 30, 2025)
• $12.086M — Interest income from loans for Q3 2025 (Increased from $10.939M in Q3 2024)
• $25.209M — Gross unrealized losses on available-for-sale securities (As of September 30, 2025)

Key Players & Entities

• CONSUMERS BANCORP INC /OH/ (company) — Registrant
• Consumers National Bank (company) — Banking subsidiary
• CNB Investment Co. (company) — Wholly-owned subsidiary of the Bank
• SEC (regulator) — Securities and Exchange Commission
• Ohio (location) — State of incorporation and primary market area
• Pennsylvania (location) — Contiguous market area
• West Virginia (location) — Contiguous market area
• Minerva (location) — Headquarters city
• Bloomberg (company) — Financial news provider

FAQ

Risk Factors

• Increased Provision for Credit Losses [high — financial]: The provision for credit losses on loans surged by 315% to $320,000 in Q3 2025 from $77,000 in Q3 2024. This substantial increase indicates a potential rise in perceived credit risk within the loan portfolio, requiring higher reserves.
• Concentration in Loan Portfolio [medium — financial]: While loans are a significant driver of interest income, the concentration of assets in loans, net of allowance for credit losses ($826.173M as of Sep 30, 2025), exposes the bank to credit cycles and potential defaults.
• Securities Portfolio Value Fluctuation [medium — market]: The 'available-for-sale' securities portfolio decreased by $4.975M to $268.900M from $273.875M. While accumulated other comprehensive loss improved, the portfolio's value is subject to market interest rate changes and economic conditions.
• Interest Rate Sensitivity [medium — financial]: Net interest income increased significantly, but the bank's profitability is sensitive to changes in interest rates. A widening gap between interest income and expense, or a shift in the deposit mix, could impact future net interest margins.
• Deposit Growth Management [low — operational]: Total deposits grew to $1.069B from $1.036B. Managing deposit costs and ensuring stable funding sources are crucial, especially with potential shifts in interest-bearing vs. non-interest-bearing balances.

Industry Context

The banking industry continues to navigate a complex environment characterized by evolving interest rate policies and increasing competition for deposits. Banks are focusing on optimizing net interest margins through strategic loan and investment portfolio management. Digitalization and customer experience remain key differentiators, while regulatory scrutiny over capital adequacy and risk management persists.

Regulatory Implications

The substantial increase in the provision for credit losses may attract closer scrutiny from regulators regarding the bank's loan underwriting standards and risk management practices. Compliance with capital adequacy ratios and liquidity requirements remains paramount.

What Investors Should Do

1. Monitor the trend in provision for credit losses.
2. Analyze the drivers of net interest income growth.
3. Evaluate the composition and performance of the securities portfolio.
4. Assess the bank's strategy for managing deposit growth and costs.

Key Dates

• 2025-09-30: End of Q3 2025 — Reporting period for the 10-Q, showing increased net income, net interest income, and total assets.
• 2025-09-30: Consolidated Balance Sheet Date — Reflects total assets of $1.188 billion and total deposits of $1.070 billion.
• 2025-09-30: Provision for Credit Losses — Reported at $320,000 for Q3 2025, a significant increase from the prior year.
• 2024-09-30: End of Q3 2024 — Prior year comparison period, showing lower net income ($2.236M) and net interest income ($8.043M).
• 2025-06-30: End of Q2 2025 — Prior quarter comparison for total assets, showing growth from $1.165 billion.

Glossary

Net interest income

The difference between interest income generated by a bank and the interest paid out to its depositors and lenders. (Key driver of profitability for banks; increased 18.7% to $9.545M, indicating strong performance in core lending and borrowing activities.)

Provision for credit losses

An expense set aside by a financial institution to cover potential losses from loans that may default. (Increased significantly to $320,000, signaling potential concerns about loan quality or a more conservative risk assessment.)

Securities, available-for-sale

Investments in debt or equity securities that are not classified as held-to-maturity or trading securities. Their unrealized gains and losses are reported in other comprehensive income. (The portfolio decreased slightly, and its performance impacts the bank's capital through accumulated other comprehensive loss.)

Accumulated other comprehensive loss

A component of shareholders' equity that includes unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and pension adjustments. (Improved from $(22.554) million to $(19.255) million, suggesting some recovery in the value of the bank's available-for-sale securities.)

Core deposit intangible, net

An intangible asset representing the value of a bank's stable, low-cost deposit base, often arising from acquisitions. (Represents a small portion of assets, decreasing slightly, indicating amortization over time.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, CONSUMERS BANCORP INC /OH/ has demonstrated robust growth, with net income rising 17.8% to $2.634 million and net interest income surging 18.7% to $9.545 million, driven by strong performance in its loan portfolio. Total assets have also seen a modest increase. However, a significant concern is the 315% jump in the provision for credit losses, indicating a potential increase in credit risk that warrants close monitoring.

Filing Documents

• cbkm20250930_10q.htm (10-Q) — 2532KB
• ex_880933.htm (EX-31.1) — 12KB
• ex_880934.htm (EX-31.2) — 12KB
• ex_880935.htm (EX-32.1) — 6KB
• 0001437749-25-033730.txt ( ) — 12313KB
• cbkm-20250930.xsd (EX-101.SCH) — 52KB
• cbkm-20250930_def.xml (EX-101.DEF) — 371KB
• cbkm-20250930_lab.xml (EX-101.LAB) — 336KB
• cbkm-20250930_pre.xml (EX-101.PRE) — 400KB
• cbkm-20250930_cal.xml (EX-101.CAL) — 62KB
• cbkm20250930_10q_htm.xml (XML) — 3711KB

– Financial Information

Part I – Financial Information

– Financial Statements

Item 1 – Financial Statements Consolidated Balance Sheets at September 30, 2025 (unaudited) and June 30, 2025 1 Consolidated Statements of Income for the three months ended September 30, 2025 and 2024 (unaudited) 2 Consolidated Statements of Comprehensive Income for the three months ended September 30, 2025 and 2024 (unaudited) 3 4 Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2025 and 2024 (unaudited) 5 Notes to the Consolidated Financial Statements (unaudited) 6-20

– Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations 21-27

– Not Applicable for Smaller Reporting Companies

Item 3 – Not Applicable for Smaller Reporting Companies

– Controls and Procedures

Item 4 – Controls and Procedures 28

– Other Information

Part II – Other Information

– Legal Proceedings

Item 1 – Legal Proceedings 29

– Not Applicable for Smaller Reporting Companies

Item 1A – Not Applicable for Smaller Reporting Companies 29

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 29

– Defaults Upon Senior Securities

Item 3 – Defaults Upon Senior Securities 29 ,

– Mine Safety Disclosure

Item 4 – Mine Safety Disclosure 29

– Other Information

Item 5 – Other Information 29

– Exhibits

Item 6 – Exhibits 29

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

– Financial Statements

Item 1 – Financial Statements CONSUMERS BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) September 30, 2025 (unaudited) June 30, 2025 ASSETS Cash on hand and noninterest-bearing deposits in financial institutions $ 17,677 $ 19,377 Federal funds sold and interest-bearing deposits in financial institutions 8,991 531 Total cash and cash equivalents 26,668 19,908 Securities, available-for-sale 268,900 273,875 Securities, held-to-maturity (fair value of $ 5,011 at September 30, 2025 and $ 5,026 at June 30, 2025) 5,058 5,167 Equity securities, at fair value 392 392 Federal bank and other restricted stocks, at cost 1,980 2,669 Loans held for sale 476 814 Total loans 834,882 813,458 Less allowance for credit losses ( 8,709 ) ( 8,470 ) Net loans 826,173 804,988 Cash surrender value of life insurance 15,294 13,266 Premises and equipment, net 18,900 18,688 Goodwill 2,452 2,452 Core deposit intangible, net 287 301 Accrued interest receivable and other assets 21,402 22,488 Total assets $ 1,187,982 $ 1,165,008 LIABILITIES Deposits Noninterest-bearing demand $ 247,063 $ 239,692 Interest bearing demand 161,003 153,571 Savings 396,889 379,091 Time 264,688 264,464 Total deposits 1,069,643 1,036,818 Short-term borrowings 19,800 15,511 Federal Home Loan Bank advances 4,038 22,551 Accrued interest and other liabilities 12,879 13,857 Total liabilities 1,106,360 1,088,737 Commitments and contingent liabilities — — SHAREHOLDERS ' EQUITY Preferred stock ( no par value, 350,000 shares authorized, none outstanding) — — Common stock ( no par value, 8,500,000 shares authorized; 3,193,414 shares issued as of September 30, 2025 and June 30, 2025, respectively) 21,669 21,590 Retained earnings 79,791 77,818 Treasury stock, at cost ( 48,639 common shares as of September 30, 2025 and June

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