Cincinnati Bancorp - FORM 10-Q

Attached files

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EX-32 - EXHIBIT 32 - Cincinnati Bancorp	v445737_ex32.htm
EX-31.2 - EXHIBIT 31.2 - Cincinnati Bancorp	v445737_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - Cincinnati Bancorp	v445737_ex31-1.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

Commission File No. 000-55529

Cincinnati Bancorp

(Exact name of registrant as specified in its charter)

Federal		47-4931771
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

6581 Harrison Avenue, Cincinnati, Ohio		45247
(Address of Principal Executive Offices)		(Zip Code)

(513) 574-3025

(Registrant’s telephone number)

N/A

(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 requirements for the past 90 days.

YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES x NO ¨

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

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company x
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

As of August 8, 2016, 1,719,250 shares of the Registrant’s common stock, par value $0.01 per share, were issued and outstanding, of which 945,587 shares were owned by CF Mutual Holding Company.

Cincinnati Bancorp

Form 10-Q

Index

		Page
Part I. Financial Information

Item 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015	1

	Condensed Consolidated Statements of Income for the Six Months and Three Months Ended June 30, 2016 and 2015 (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income for the Six Months and Three Months Ended June 30, 2016 and 2015 (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (Unaudited)	4

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44

Item 4.	Controls and Procedures	44

Part II. Other Information

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5.	Other Information	44

Item 6.	Exhibits	45

	Signature Page	46

Part I. – Financial Information

Item 1.

Financial Statements

Cincinnati Bancorp

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2016			2015
	(Unaudited)
Assets
Cash and due from banks	$	3,149,480		$	3,401,351
Interest-bearing demand deposits in banks		6,945,207			4,903,188

Cash and cash equivalents		10,094,687			8,304,539

Available-for-sale securities		2,069,867			2,493,300
Loans held for sale		2,941,834			2,444,179
Loans, net of allowance for loan losses of $1,347,264 and $1,366,968, respectively		127,911,665			119,779,931
Premises and equipment, net		2,627,223			2,691,004
Federal Home Loan Bank stock		908,000			888,100
Foreclosed assets held for sale		-			29,666
Interest receivable		384,149			359,103
Mortgage servicing rights		662,684			630,316
Federal Home Loan Bank lender risk account receivable		1,427,553			1,387,411
Bank Owned Life Insurance		3,128,072			3,084,985
Other assets		198,383			149,362

Total assets	$	152,354,117		$	142,241,896

Liabilities and Stockholders' Equity

Liabilities
Deposits
Demand	$	15,924,833		$	14,259,500
Savings		22,212,885			21,747,556
Certificates of Deposits		66,293,822			67,007,664
Total deposits		104,431,540			103,014,720

Federal Home Loan Bank advances		28,286,505			18,813,639
Advances from borrowers for taxes and insurance		625,659			1,281,036
Interest payable		20,283			17,131
Directors deferred compensation		420,508			421,093
Other liabilities		691,080			1,036,877

Total liabilities		134,475,575			124,584,496

Commitments and Contingent Liabilities

Temporary Equity
ESOP Shares subject to mandatory redemption		61,701			41,606

Stockholders' Equity
Preferred stock - authorized 1,000,000 shares, $0.01 par value, none issued		-			-
Common stock - authorized 9,000,000 shares, $0.01 par value 1,719,250 issued and outstanding at June 30, 2016 and December 31, 2015		17,192			17,192
Additional paid-in-capital		6,180,537			6,203,002
Unearned ESOP Shares		(606,573	)		(629,039	)
Retained earnings - substantially restricted		12,445,154			12,269,005
Accumulated other comprehensive loss		(219,469	)		(244,366	)

Total equity		17,816,841			17,615,794

Total liabilities and stockholders' equity	$	152,354,117		$	142,241,896

The accompanying notes are an integral part of these condensed consolidated financial statements.

Cincinnati Bancorp

Condensed Consolidated Statements of Income

Three Months and Six Months Ended June 30, 2016 and 2015 (Unaudited)

	Three Months ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(Unaudited)				(Unaudited)

Interest and Dividend Income
Loans, including fees	$	1,298,774	$	1,230,354	$	2,570,145	$	2,387,693
Securities		5,083		7,464		9,291		16,222
Dividends on Federal Home Loan Bank stock and other		10,243		8,775		20,238		17,740
Total interest and dividend income		1,314,100		1,246,593		2,599,674		2,421,655

Interest Expense
Deposits		309,396		246,526		576,378		464,022
Federal Home Loan Bank advances		68,355		83,902		133,581		155,381
Total interest expense		377,751		330,428		709,959		619,403

Net Interest Income		936,349		916,165		1,889,715		1,802,252

Provision for Loan Losses		-		9,000		-		41,052

Net Interest Income After Provision for Loan Losses		936,349		907,165		1,889,715		1,761,200

Noninterest Income
Gain on sales of loans		505,031		485,894		746,444		832,726
Mortgage servicing fees		39,508		33,746		75,855		68,040
Other		122,247		179,875		230,827		299,409
Total noninterest income		666,786		699,515		1,053,126		1,200,175

Noninterest Expense
Salaries and employee benefits		682,948		656,311		1,318,804		1,270,238
Occupancy and equipment		111,744		99,341		201,921		191,411
Directors compensation		62,500		62,500		135,000		125,000
Data processing		140,667		116,551		267,935		235,452
Professional fees		48,292		41,939		102,047		92,280
Franchise tax		35,250		23,250		69,246		46,500
Deposit insurance premiums		21,308		25,848		46,075		50,345
Advertising		67,798		40,552		102,052		67,276
Software Licenses		18,939		18,511		36,675		36,100
Loan costs		66,490		131,436		128,617		162,749
Net losses on sales of foreclosed assets		-		8,913		637		9,663
Other		142,877		110,797		285,712		231,681
Total noninterest expense		1,398,813		1,335,949		2,694,721		2,518,695

Income Before Income Tax		204,322		270,731		248,120		442,680

Provision for Income Taxes		64,407		82,120		71,971		134,880

Net Income	$	139,915	$	188,611	$	176,149	$	307,800

Earnings per share - basic and diluted		0.08		N/A		0.11		N/A

Weighted-average shares outstanding - basic and diluted		1,657,469		N/A		1,656,908		N/A

The accompanying notes are an integral part of these condensed consolidated financial statements.

Cincinnati Bancorp

Condensed Consolidated Statements of Comprehensive Income

Three Months and Six Months Ended June 30, 2016 and 2015 (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

Net Income	$	139,915		$	188,611		$	176,149		$	307,800

Other Comprehensive Income:
Net unrealized gains (losses) on available-for-sale securities		13,211			(13,078	)		15,781			(702	)
Tax (expense) benefit		(4,492	)		4,447			(5,366	)		239
Changes in directors' retirement plan prior service costs		10,971			1,376			21,942			2,750
Tax expense		(3,730	)		(468	)		(7,461	)		(935	)
Other comprehensive income (loss)		15,960			(7,723	)		24,896			1,352

Comprehensive Income	$	155,875		$	180,888		$	201,045		$	309,152

The accompanying notes are an integral part of these condensed consolidated financial statements.

Cincinnati Bancorp

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2016 and 2015 (Unaudited)

	Six Months Ended June 30,
	2016			2015

Operating Activities
Net income	$	176,149		$	307,800
Items not requiring (providing) cash:
Depreciation and amortization		68,526			66,527
Provision for loan losses		-			41,052
Amortization of premiums and discounts on securities		13,045			15,149
Amortization of deferred prepayment penalty on Federal Home Loan Bank advances		22,866			49,268
Change in deferred income taxes		(44,692	)		68,541
Gain on sale of loans		(746,444	)		(832,726	)
Proceeds from the sale of loans held for sale		24,209,302			25,643,939
Origination of loans held for sale		(23,960,513	)		(26,229,535	)
Net loss on sale of foreclosed assets		637			9,663
Income from Bank Owned Life insurance		(43,087	)		(45,951	)
ESOP shares earned		20,095			-
Changes in:
Interest receivable		(25,046	)		(34,640	)
Mortgage servicing rights		(32,368	)		(119,183	)
Federal Home Loan Bank lender risk account receivable		(40,142	)		(62,428	)
Other assets		(49,021	)		(696,616	)
Interest payable		3,152			3,674
Other liabilities		(292,573	)		199,771
Net cash used in operating activities		(720,114	)		(1,615,695	)

Investing Activities
Proceeds from maturities of available-for-sale securities		426,169			402,538
Purchase of Federal Home Loan Bank stock		(19,900	)		-
Net change in loans		(8,131,734	)		(8,747,020	)
Purchase of premises and equipment		(4,745	)		(166,707	)
Proceeds from sales of foreclosed assets		29,029			184,668
Net cash used in investing activities		(7,701,181	)		(8,326,521	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Cincinnati Bancorp

Condensed Consolidated Statements of Cash Flows (Continued)

Six Months Ended June 30, 2016 and 2015 (Unaudited)

	Six Months Ended June 30,
	2016			2015

Financing Activities
Net increase in deposits		1,416,820			10,488,239
Proceeds from Federal Home Loan Bank advances		65,520,000			11,250,000
Repayment of Federal Home Loan Bank advances		(56,070,000	)		(9,750,000	)
Net decrease in advances from borrowers for taxes and insurance		(655,377	)		(518,773	)
Net cash provided by financing activities		10,211,443			11,469,466

Increase in Cash and Cash Equivalents		1,790,148			1,527,250
Cash and Cash Equivalents, Beginning of Year		8,304,539			7,340,881
Cash and Cash Equivalents, End of Year	$	10,094,687		$	8,868,131

Supplemental Cash Flows Information
Interest paid	$	706,807		$	615,729
Income taxes paid		265,000			(123,392	)
Real estate acquired in settlement of loans		-			135,616

The accompanying notes are an integral part of these condensed consolidated financial statements.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1:

Nature of Operation and Conversion

Cincinnati Bancorp (“Cincinnati Bancorp” and, together with Cincinnati Federal, the “Company”) is the parent holding company of Cincinnati Federal (the “Bank”) and the majority-owned subsidiary of CF Mutual Holding Company (“CF Mutual”), a Federally-chartered mutual holding company.

The Bank is a federally chartered thrift institution and is primarily engaged in providing a full range of banking and financial services to individual and corporate customers in Hamilton County, Ohio and surrounding areas. The Bank is subject to competition from other financial institutions. The Bank is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. During the second quarter of 2016, Cincinnati Federal ceased the operations of the Bank’s wholly-owned subsidiary, Cincinnati Federal Investment Services, LLC. The termination of Cincinnati Federal Investment Services, LLC did not have a material impact on operations.

On October 14, 2015, the Bank completed a mutual-to-stock conversion pursuant to which it became the wholly-owned subsidiary of Cincinnati Bancorp and CF Mutual was established as the mutual holding company of Cincinnati Bancorp. As part of the conversion transaction, Cincinnati Bancorp sold, in a subscription offering and at a price of $10.00 per share, 45% of its common stock to the Bank’s eligible members, to the Bank’s employee stock ownership plan (“ESOP”) and to certain other persons. The total offering value and the number of shares was based on an independent appraiser’s valuation. The remaining 55% of the common stock was issued to CF Mutual. Cincinnati Bancorp’s common stock is currently quoted on the OTCPink Market, operated by OTC Markets Group, Inc., under the symbol “CNNB.”

The accompanying unaudited condensed consolidated financial statements of the Company were prepared in accordance with the instructions for Form 10-Q and Article 8 of Regulation S-X and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company as of December 31, 2015 included in Cincinnati Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2015.

In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included to present fairly the financial position as of June 30, 2016 and the results of operation for the three months and six months ended June 30, 2016 and 2015. All interim amounts have not been audited and results of operations for the three months and six months ended June 30, 2016, included herein are not necessarily indicative of the results of operations to be expected for the entire fiscal year.

The Company evaluates subsequent events through the date of filing with the Securities and Exchange Commission.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Principles of Consolidation

The accompanying condensed consolidated financial statements as of June 30, 2016 and December 31, 2015 and for the three and six months ended June 30, 2016 and 2015 include the accounts of Cincinnati Bancorp and the Bank. All significant intercompany items have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, loan servicing rights and fair values of financial instruments.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 2:

Securities

Available for sale securities are recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

For debt securities with fair value below amortized cost when the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-Sale Securities:

June 30, 2016:
Mortgage-backed securities of government sponsored entities	$	2,056,182	$	19,313	$	(5,628	)	$	2,069,867

December 31, 2015:
Mortgage-backed securities of government sponsored entities	$	2,495,396	$	18,602	$	(20,698	)	$	2,493,300

The Company had no sales of investment securities during the three and six month periods ended June 30, 2016 and 2015. The Company had not pledged any of its investment securities as of June 30, 2016 or December 31, 2015.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The amortized cost and fair value of available-for-sale securities at June 30, 2016 and December 31, 2015, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	June 30, 2016				December 31, 2015
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value

Mortgage-backed securities of government sponsored entities	$	2,056,182	$	2,069,867	$	2,495,396	$	2,493,300

Totals	$	2,056,182	$	2,069,867	$	2,495,396	$	2,493,300

Certain investments in debt securities have fair values at an amount less than their historical cost. The total fair value of these investments at June 30, 2016 and December 31, 2015 was $830,495 and $1,723,706, respectively, which is approximately 40% and 69%, respectively of the Company’s investment portfolio.

The following tables show the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporary impaired, aggregated by investment class and length of time that individual securities have been in continuous unrealized loss position at June 30, 2016 and December 31, 2015:

	Less than 12 Months				12 Months or More					Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

June 30, 2016:
Mortgage-backed securities of government sponsored entities	$	-	$	-	$	830,495	$	(5,628	)	$	830,495	$	(5,628	)

December 31, 2015:
Mortgage-backed securities of government sponsored entities	$	-	$	-	$	1,723,706	$	(20,698	)	$	1,723,706	$	(20,698	)

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 3:

Loans and Allowance for Loan Losses

Categories of loans at June 30, 2016 and December 31, 2015 include:

	June 30,			December 31,
	2016			2015

One to four family mortgage loans -owner occupied	$	71,863,451		$	66,748,890
One to four family - investment		11,139,160			11,954,413
Multi-family mortgage loans		20,273,959			16,525,348
Nonresidential mortgage loans		11,573,848			12,217,500
Construction and land loans		2,672,224			3,111,478
Real estate secured lines of credit		11,617,191			10,439,284
Commercial loans		561,658			402,687
Other consumer loans		17,620			21,551
Total loans		129,719,111			121,421,151

Less:
Net deferred loan costs		(436,894	)		(392,061	)
Undisbursed portion of loans		897,076			666,313
Allowance for loan losses		1,347,264			1,366,968

Net loans	$	127,911,665		$	119,779,931

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables present the activity in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method for the three and six months ended June 30, 2016 and 2015 and year ended December 31, 2015:

	Six Months Ended June 30, 2016 (Unaudited)
	One- to Four- Family Mortgage Loans Owner Occupied			One- to Four- Family Mortgage Loans Investment			Multi-Family Mortgage Loans		Nonresidential Mortgage Loans		Construction & Land Loans			Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans			Total

Allowance for loan losses:
Balance, beginning of period	$	382,596		$	333,627		$	111,876	$	195,810	$	43,540		$	290,813	$	8,390	$	316		$	1,366,968
Provision charged to expense		(13,484	)		(21,628	)		14,726		5,113		(3,140	)		15,046		3,414		(47	)		-
Losses charged off		(19,704	)		-			-		-		-			-		-		-			(19,704	)
Recoveries		-			-			-		-		-			-		-		-			-
Balance, end of period	$	349,408		$	311,999		$	126,602	$	200,923	$	40,400		$	305,859	$	11,804	$	269		$	1,347,264

Ending balance: Individually evaluated for impairment	$	-		$	47,101		$	15,733	$	-	$	-		$	-	$	-	$	-		$	62,834

Ending balance: Collectively evaluated for impairment	$	349,408		$	264,898		$	110,869	$	200,923	$	40,400		$	305,859	$	11,804	$	269		$	1,284,430
Loans:
Ending balance	$	71,863,451		$	11,139,160		$	20,273,959	$	11,573,848	$	2,672,224		$	11,617,191	$	561,658	$	17,620		$	129,719,111

Ending balance: Individually evaluated for impairment	$	667,620		$	1,277,131		$	768,892	$	199,542	$	-		$	39,000	$	-	$	-		$	2,952,185

Ending balance: Collectively evaluated for impairment	$	71,195,831		$	9,862,029		$	19,505,067	$	11,374,306	$	2,672,224		$	11,578,191	$	561,658	$	17,620		$	126,766,926

	Three Months Ended June 30, 2016 (Unaudited)
	One- to Four- Family Mortgage Loans Owner Occupied			One- to Four- Family Mortgage Loans Investment			Multi-Family Mortgage Loans		Nonresidential Mortgage Loans		Construction & Land Loans			Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans			Total

Allowance for loan losses:
Balance, beginning of period	$	362,892		$	333,627		$	111,876	$	195,810	$	43,540		$	290,813	$	8,390	$	316		$	1,347,264
Provision charged to expense		(13,484	)		(21,628	)		14,726		5,113		(3,140	)		15,046		3,414		(47	)		-
Losses charged off		-			-			-		-		-			-		-		-			-
Recoveries		-			-			-		-		-			-		-		-			-
Balance, end of period	$	349,408		$	311,999		$	126,602	$	200,923	$	40,400		$	305,859	$	11,804	$	269		$	1,347,264

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Six Months Ended June 30, 2015 (Unaudited)
	One- to Four- Family Mortgage Loans Owner Occupied			One- to Four- Family Mortgage Loans Investment			Multi-Family Mortgage Loans		Nonresidential Mortgage Loans			Construction & Land Loans		Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans		Total

Allowance for loan losses:
Balance, beginning of year	$	281,369		$	415,496		$	143,919	$	214,671		$	23,855	$	263,535	$	6,905	$	250	$	1,350,000
Provision charged to expense		142,784			(111,192	)		41,734		(63,365	)		22,143		6,835		2,001		112		41,052
Losses charged off		(21,237	)		(7,307	)		-		-			-		-		-		-		(28,544	)
Recoveries		-			12,000			-		-			-		-		-		-		12,000

Balance, end of period	$	402,916		$	308,997		$	185,653	$	151,306		$	45,998	$	270,370	$	8,906	$	362	$	1,374,508

	Three Months Ended June 30, 2015 (Unaudited)
	One- to Four- Family Mortgage Loans Owner Occupied			One- to Four- Family Mortgage Loans Investment			Multi-Family Mortgage Loans		Nonresidential Mortgage Loans			Construction & Land Loans			Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans			Total

Allowance for loan losses:
Balance, beginning of period	$	268,205		$	367,801		$	149,560	$	238,112		$	81,647		$	254,381	$	6,696	$	369		$	1,366,771
Provision charged to expense		135,974			(58,804	)		36,093		(86,806	)		(35,649	)		15,989		2,210		(7	)		9,000
Losses charged off		(1,263	)		-			-		-			-			-		-		-			(1,263	)
Recoveries		-			-			-		-			-			-		-		-			-

Balance, end of period	$	402,916		$	308,997		$	185,653	$	151,306		$	45,998		$	270,370	$	8,906	$	362		$	1,374,508

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

	Year Ended December 31, 2015
	One- to Four- Family Mortgage Loans Owner Occupied			One- to Four- Family Mortgage Loans Investment			Multi-Family Mortgage Loans			Nonresidential Mortgage Loans			Construction & Land Loans		Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans		Total

Allowance for loan losses:
Balance, beginning of year	$	281,369		$	415,496		$	143,919		$	214,671		$	23,855	$	263,535	$	6,905	$	250	$	1,350,000
Provision charged to expense		122,463			(94,021	)		(32,043	)		(18,861	)		19,685		27,278		1,485		66		26,052
Losses charged off		(21,236	)		(7,307	)		-			-			-		-		-		-		(28,543	)
Recoveries		-			19,459			-			-			-		-		-		-		19,459
Balance, end of year	$	382,596		$	333,627		$	111,876		$	195,810		$	43,540	$	290,813	$	8,390	$	316	$	1,366,968

Ending balance: Individually evaluated for impairment	$	-		$	47,101		$	15,733		$	-		$	-	$	-	$	-	$	-	$	62,834

Ending balance: Collectively evaluated for impairment	$	382,596		$	286,526		$	96,143		$	195,810		$	43,540	$	290,813	$	8,390	$	316	$	1,304,134
Loans:
Ending balance	$	66,748,890		$	11,954,413		$	16,525,348		$	12,217,500		$	3,111,478	$	10,439,284	$	402,687	$	21,551	$	121,421,151

Ending balance: Individually evaluated for impairment	$	191,308		$	1,509,223		$	939,852		$	2,348,732		$	298,562	$	246,939	$	-	$	-	$	5,534,616

Ending balance: Collectively evaluated for impairment	$	66,557,582		$	10,445,190		$	15,585,496		$	9,868,768		$	2,812,916	$	10,192,345	$	402,687	$	21,551	$	115,886,535

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company has adopted a standard grading system for all loans.

Definitions are as follows:

Prime (1) loans are of superior quality with excellent credit strength and repayment ability proving a nominal credit risk.

Good (2) loans are of above average credit strength and repayment ability proving only a minimal credit risk.

Satisfactory (3) loans are of reasonable credit strength and repayment ability proving an average credit risk due to one or more underlying weaknesses.

Acceptable (4) loans are of the lowest acceptable credit strength and weakened repayment ability providing a cautionary credit risk due to one or more underlying weaknesses. New borrowers are typically not underwritten within this classification.

Special Mention (5) loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Ordinarily, special mention credits have characteristics which corrective management action would remedy.

Substandard (6) loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful (7) loans have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current known facts, conditions and values, highly questionable and improbable.

Loss (8) loans are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off even though partial recovery may be affected in the future.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables present the credit risk profile of the Company’s loan portfolio based on internal rating category and payment activity as of June 30, 2016 and December 31, 2015:

	June 30, 2016
	(Unaudited)
	One- to Four- Family Mortgage Loans - Owner Occupied		One- to Four- Family Mortgage Loans - Investment		Multi-Family Mortgage Loans		Nonresidential Mortgage Loans		Construction & Land Loans		Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans		Total

Pass	$	71,643,703	$	8,728,642	$	19,627,763	$	10,547,500	$	2,672,224	$	10,760,034	$	561,658	$	17,620	$	124,559,144
Special mention		-		699,563		-		704,110		-		617,789		-		-		2,021,462
Substandard		219,748		1,710,955		646,196		322,238		-		239,368		-		-		3,138,505
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-

Total	$	71,863,451	$	11,139,160	$	20,273,959	$	11,573,848	$	2,672,224	$	11,617,191	$	561,658	$	17,620	$	129,719,111

	December 31, 2015
	One- to Four- Family Mortgage Loans - Owner Occupied		One- to Four- Family Mortgage Loans - Investment		Multi-Family Mortgage Loans		Nonresidential Mortgage Loans		Construction & Land Loans		Real Estate Secured Lines of Credit		Commercial Loans		Other Consumer Loans		Total

Pass	$	66,468,612	$	9,538,767	$	15,874,527	$	11,161,771	$	3,111,478	$	9,633,212	$	402,687	$	21,551	$	116,212,605
Special mention		-		670,292		-		726,526		-		513,462		-		-		1,910,280
Substandard		280,278		1,745,354		650,821		329,203		-		292,610		-		-		3,298,266
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-

Total	$	66,748,890	$	11,954,413	$	16,525,348	$	12,217,500	$	3,111,478	$	10,439,284	$	402,687	$	21,551	$	121,421,151

Pass portfolio within the tables above consists of loans graded Prime (1) through Acceptable (4).

The Company evaluates the loan risk grading system definitions and allowance for loan losses methodology on an ongoing basis. No significant changes were made to either during the three or six months ended June 30, 2016.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables present the loan portfolio aging analysis of the recorded investment in loans as of June 30, 2016 and December 31, 2015:

	June 30, 2016
	(Unaudited)
	30-59 Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing

One to Four-family mortgage loans	$	86,845	$	112,596	$	48,465	$	247,906	$	71,615,545	$	71,863,451	$	-
One to Four Family - Investment		11,980		-		-		11,980		11,127,180		11,139,160		-
Multi-family mortgage loans		-		-		-		-		20,273,959		20,273,959		-
Nonresidential mortgage loans		-		-		-		-		11,573,848		11,573,848		-
Construction & Land Loans		-		-		-		-		2,672,224		2,672,224		-
Real estate secured lines of credit		-		27,913		10,060		37,973		11,579,218		11,617,191		-
Commercial Loans		-		-		-		-		561,658		561,658		-
Other consumer loans		-		-		-		-		17,620		17,620		-

Total	$	98,825	$	140,509	$	58,525	$	297,859	$	129,421,252	$	129,719,111	$	-

	December 31, 2015
	30-59 Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days & Accruing

One to Four-family mortgage loans	$	113,731	$	145,413	$	10,806	$	269,950	$	66,478,940	$	66,748,890	$	-
One to Four Family - Investment		50,445		14,679		-		65,124		11,889,289		11,954,413		-
Multi-family mortgage loans		-		-		-		-		16,525,348		16,525,348		-
Nonresidential mortgage loans		-		-		-		-		12,217,500		12,217,500		-
Construction & Land Loans		-		-		-		-		3,111,478		3,111,478		-
Real estate secured lines of credit		592,090		-		-		592,090		9,847,194		10,439,284		-
Commercial Loans		-		-		-		-		402,687		402,687		-
Other consumer loans		-		6,599		-		6,599		14,952		21,551		-

Total	$	756,266	$	166,691	$	10,806	$	933,763	$	120,487,388	$	121,421,151	$	-

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following tables present impaired loans at June 30, 2016, June 30, 2015 and December 31, 2015:

							For the Three Months Ended				For the Six Months Ended
	As of June 30, 2016						June 30, 2016				June 30, 2016
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
One- to four-family mortgage loans	$	667,620	$	667,620	$	-	$	668,079		1,241	$	668,725	$	5,586
One to Four family - Investment		602,218		602,218		-		605,629		5,930		610,909		19,361
Multi-family mortgage loans		534,098		534,098		-		534,701		9,905		535,998		17,627
Nonresidential mortgage loans		199,542		199,542		-		200,935		3,173		202,874		6,382
Construction & Land loans		-		-		-		-		-		-		-
Real estate secured lines of credit		39,000		39,000		-		39,891		507		40,653		1,022
Commercial Loans		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-
Loans with a specific valuation allowance										-
One- to four-family mortgage loans		-		-		-		-		-		-		-
One to Four family - Investment		674,913		627,812		47,101		677,003		8,891		680,042		18,165
Multi-family mortgage loans		234,794		219,061		15,733		235,353		4,184		236,337		8,727
Nonresidential mortgage loans		-		-		-		-		-		-		-
Construction & Land loans		-		-		-		-		-		-		-
Real estate secured lines of credit		-		-		-		-		-		-		-
Commercial Loans		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-

	$	2,952,185	$	2,889,351	$	62,834	$	2,961,591	$	33,831	$	2,975,538	$	76,870

							For the Three Months Ended				For the Six Months Ended
	As of June 30, 2015						June 30, 2015				June 30, 2015
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
One- to four-family mortgage loans	$	430,760	$	430,760	$	-	$	440,920	$	6,179	$	443,336	$	12,293
One to Four family - Investment		853,598		853,598		-		863,447		14,151		868,082		26,374
Multi-family mortgage loans		716,383		716,383		-		779,913		13,365		782,660		26,044
Nonresidential mortgage loans		2,401,896		2,401,896		-		2,417,020		35,038		2,425,619		70,273
Construction & Land loans		304,226		304,226		-		305,613		4,591		306,519		9,223
Real estate secured lines of credit		247,521		247,521		-		247,660		3,002		247,206		7,034
Commercial Loans		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-
Loans with a specific valuation allowance
One- to four-family mortgage loans		-		-		-		-		-		-		-
One to Four family - Investment		693,046		693,046		47,101		695,718		8,735		697,138		16,466
Multi-family mortgage loans		240,400		240,400		15,733		241,112		3,921		241,635		7,230
Nonresidential mortgage loans		186,000		186,000		14,774		186,738		4,849		187,324		8,144
Construction & Land loans		-		-		-		-		-		-		-
Real estate secured lines of credit		-		-		-		-		-		-		-
Commercial Loans		-		-		-		-		-		-		-
Other consumer loans		-		-		-		-		-		-		-

	$	6,073,830	$	6,073,830	$	77,608	$	6,178,141	$	93,831	$	6,199,519	$	183,081

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

	As of December 31, 2015
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
Loans without a specific valuation allowance
One- to four-family mortgage loans	$	191,308	$	191,307	$	-	$	186,030	$	13,469
One to Four family - Investment		825,707		825,707		-		853,691		49,608
Multi-family mortgage loans		702,483		702,484		-		774,303		53,347
Nonresidential mortgage loans		2,348,732		2,348,732		-		2,345,569		138,788
Construction & Land loans		298,562		298,562		-		303,725		18,280
Real estate secured lines of credit		246,939		246,939		-		247,261		13,360
Commercial Loans		-		-		-		-		-
Other consumer loans		-		-		-		-		-
Loans with a specific valuation allowance
One- to four-family mortgage loans		-		-		-		-		-
One to Four family - Investment		683,516		636,415		47,101		692,815		35,109
Multi-family mortgage loans		237,369		221,636		15,733		240,362		16,247
Nonresidential mortgage loans		-		-		-		-		-
Construction & Land loans		-		-		-		-		-
Real estate secured lines of credit		-		-		-		-		-
Commercial Loans		-		-		-		-		-
Other consumer loans		-		-		-		-		-

	$	5,534,616	$	5,471,782	$	62,834	$	5,643,756	$	338,208

Income recognized on a cash basis was not materially different than interest income recognized on an accrual basis.

The following table presents the nonaccrual loans at June 30, 2016 and December 31, 2015. This table excludes performing troubled debt restructurings which amounted to $1,806,000 and $1,280,000 at June 30, 2016 and December 31, 2015, respectively.

	June 30,		December 31,
	2016		2015

One- to four-family mortgage loans	$	48,565	$	10,806
One to four family - Investment		-		-
Multi-family mortgage loans		-		-
Nonresidential mortgage loans		-		-
Land loans		-		-
Real estate secured lines of credit		10,060		-
Commercial Loans		-		-
Other consumer loans		-		-

Total	$	58,625	$	10,806

At June 30, 2016, the Company had no loans that were modified in troubled debt restructurings and impaired.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

At December 31, 2015, the Company had loans that were modified in troubled debt restructurings and impaired. The modifications of terms included one or a combination of the following: an extension of maturity, a reduction of the stated interest rate or a permanent reduction of the recorded investment in the loan.

The following table presents information regarding troubled debt restructurings by class at June 30, 2016, June 30, 2015 and December 31, 2015.

Newly classified troubled debt restructurings:

	Six Months Ended June 30, 2016 (Unaudited)						Three Months Ended June 30, 2016 (Unaudited)
	Number of Loans		Pre- Modification Recorded Balance		Post- Modification Recorded Balance		Number of Loans		Pre- Modification Recorded Balance		Post- Modification Recorded Balance
Mortgage loans on real estate:
Residential 1-4 family - Owner Occupied		1	$	499,562	$	538,000		1	$	499,562	$	538,000
Residential 1-4 family - Investment		-		-		-		-		-		-
Multifamily		-		-		-		-		-		-
Nonresidential mortgage loans		-		-		-		-		-		-
Construction & Land loans		-		-		-		-		-		-
Construction & Land loans		-		-		-		-		-		-
Real estate secured lines of credit		-		-		-		-		-		-
Commercial Loans		-		-		-		-		-		-
Consumer loans		-		-		-		-		-		-

		1	$	499,562	$	538,000		1	$	499,562	$	538,000

	Six Months Ended June 30, 2015 (Unaudited)						Three Months Ended June 30, 2015 (Unaudited)
	Number of Loans		Pre- Modification Recorded Balance		Post- Modification Recorded Balance		Number of Loans		Pre- Modification Recorded Balance		Post- Modification Recorded Balance
Mortgage loans on real estate:
Residential 1-4 family - Owner Occupied		1	$	16,270	$	16,270		1	$	16,270	$	16,270
Residential 1-4 family - Investment		-		-		-		-		-		-
Multifamily		-		-		-		-		-		-
Nonresidential mortgage loans		-		-		-		-		-		-
Construction & Land loans		-		-		-		-		-		-
Construction & Land loans		-		-		-		-		-		-
Real estate secured lines of credit		-		-		-		-		-		-
Commercial Loans		-		-		-		-		-		-
Consumer loans		-		-		-		-		-		-

		1	$	16,270	$	16,270		1	$	16,270	$	16,270

	December 31, 2015
	Number of Loans		Pre- Modification Recorded Balance		Post- Modification Recorded Balance
Mortgage loans on real estate:
Residential 1-4 family - Owner Occupied		1	$	41,500	$	16,270
Residential 1-4 family - Investment		-		-		-
Multifamily		-		-		-
Nonresidential mortgage loans		-		-		-
Construction & Land loans		-		-		-
Construction & Land loans		-		-		-
Real estate secured lines of credit		-		-		-
Commercial Loans		-		-		-
Consumer loans		-		-		-

		1	$	41,500	$	16,270

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The TDRs described above did not increase the allowance for loan losses or result in any charge-offs during the periods ended June 30, 2016, June 30, 2015 and December 31, 2015.

Newly restructured loans by type of modification at the dates indicated:

	Three and Six Months Ended June 30, 2016 (Unaudited)
	Interest Only		Term		Combination		Total Modification
Mortgage loans on real estate:
Residential 1-4 family - Owner Occupied	$	-	$	-	$	538,000	$	538,000
Residential 1-4 family - Investment		-		-		-		-
Multifamily		-		-		-		-
Nonresidential mortgage loans		-		-		-		-
Construction & Land loans		-		-		-		-
Construction & Land loans		-		-		-		-
Real estate secured lines of credit		-		-		-		-
Commercial Loans		-		-		-		-
Consumer loans		-		-		-		-

	$	-	$	-	$	538,000	$	538,000

	December 31, 2015
	Interest Only		Term		Combination		Total Modification
Mortgage loans on real estate:
Residential 1-4 family - Owner Occupied	$	-	$	-	$	16,270	$	16,270
Residential 1-4 family - Investment		-		-		-		-
Multifamily		-		-		-		-
Nonresidential mortgage loans		-		-		-		-
Construction & Land loans		-		-		-		-
Construction & Land loans		-		-		-		-
Real estate secured lines of credit		-		-		-		-
Commercial Loans		-		-		-		-
Consumer loans		-		-		-		-

	$	-	$	-	$	16,270	$	16,270

There were no troubled debt restructurings modified during the six months ended June 30, 2016 and the year ended December 31, 2015 that subsequently defaulted.

As of June 30, 2016, borrowers with loans designated as TDRs totaling $1,159,000 of residential real estate loans and $647,000 of multifamily loans, met the criteria for placement back on accrual status. This criteria is a minimum of six consecutive months of payment performance under existing or modified terms. As of June 30, 2016, the Bank had no loans that did not meet the criteria for placement back on accrual status.

There was one foreclosed real estate property or consumer mortgage loan in process of foreclosure at June 30, 2016 totaling $37,950. There were no foreclosed real estate properties or consumer mortgage loans in process of foreclosure at December 31, 2015.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 4:

Earnings Per Share

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the Company’s Employee Stock Ownership Plan (“ESOP”) that are unallocated and not committed to be released. There were no dilutive shares at June 30, 2016 or June 30, 2015.

The computations are as follows:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015

Net Income		139,915		N/A		176,149		N/A

Shares Outstanding for basic EPS:

Average shares outstanding:		1,719,250		N/A		1,719,250		N/A
Less: Average Unearned ESOP shares:		61,781		N/A		62,342		N/A
		1,657,469		N/A		1,656,908		N/A

Additional dilutive shares:		-		N/A		-		N/A

Shares outstanding for basic and diluted EPS:		1,657,469		N/A		1,656,908		N/A

Basic and diluted earnings per share:	$	0.08		N/A	$	0.11		N/A

NOTE 5:

Regulatory Matters

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Company’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined) to risk-weighted assets (as defined), common equity Tier I capital (as defined) to risk-weighted assets (as defined) and of Tier I capital to average assets (as defined). Management believes that, as of June 30, 2016 and December 31, 2015, the Company met all capital adequacy requirements to which it was subject at such dates.

Effective January 1, 2015, new regulatory capital requirements commonly referred to as ‘Basel III” were implemented and are reflected below. Management opted out of the accumulated comprehensive income treatment under the new requirements, and as such unrealized gains and losses from available-for-sale securities will continue to be excluded from regulatory capital.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

A new rule requiring a Capital Conservation Buffer began phase-in on January 1, 2016. Under the fully-implemented rule, a financial institution will need to maintain a Capital Conservation Buffer composed of Common Equity Tier 1 Capital of at least 2.5% above its minimum risk-weighted capital requirements to avoid limitations on its ability to make capital distributions, including dividend payments to shareholders and certain discretionary bonus payments to executive officers. A financial institution with a buffer below 2.5% will be subject to increasingly stringent limitations on capital distributions as the buffer approaches zero.

As of the most recent notification from their regulators, the Company and Bank were categorized as "well-capitalized" under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since the last notification that would change the Bank's category.

The Bank’s actual capital amounts and ratios are also presented in the following table:

	Actual					Minimum Capital Requirement					Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)

As of June 30, 2016

Total risk-based capital	$	19,048		18.1	%	$	8,404		8.0	%	$	10,506		10.0	%
(to risk-weighted assets)

Tier I capital		17,735		16.9	%		6,303		6.0	%		8,404		8.0	%
(to risk-weighted assets)

Common Equity Tier I capital		17,735		16.9	%		4,728		4.5	%		6,829		6.5	%
(to risk-weighted assets)

Tier I capital		17,735		11.8	%		6,034		4.0	%		7,543		5.0	%
(to adjusted total assets)

As of December 31, 2015

Total risk-based capital	$	18,772		18.6	%	$	8,067		8.0	%	$	10,083		10.0	%
(to risk-weighted assets)

Tier I capital		17,511		17.4	%		6,050		6.0	%		8,067		8.0	%
(to risk-weighted assets)

Common Equity Tier I capital		17,511		17.4	%		4,537		4.5	%		6,554		6.5	%
(to risk-weighted assets)

Tier I capital		17,511		12.2	%		5,745		4.0	%		7,181		5.0	%
(to adjusted total assets)

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 6:

Disclosure About Fair Values of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1

Quoted prices in active markets for identical assets or liabilities.

Level 2

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 for substantially the full-term of the assets or liabilities.

Level 3

Unobservable inputs supported by little or no market activity and are significant to the fair value of the assets or liabilities.

Recurring Measurements

The following tables present the fair value measurements of assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2016 and December 31, 2015:

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)

June 30, 2016
Mortgage-backed securities of government sponsored entities	$	2,069,867	$	-	$	2,069,867	$	-
Mortgage servicing rights		662,684		-		-		662,684

December 31, 2015
Mortgage-backed securities of government sponsored entities	$	2,493,300	$	-	$	2,493,300	$	-
Mortgage servicing rights		630,316		-		-		630,316

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Level 2 of the valuation hierarchy. In certain cases where Level 1 and Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Mortgage Servicing Rights

Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models having significant inputs of loan balance, weighted average coupon, weighted average maturity, escrow payments, servicing fees, prepayment speeds, float, cost to service, ancillary income, and discount rate. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy.

Mortgage servicing rights are tested for impairment. Management measures mortgage servicing rights through use of a third-party independent valuation. Inputs to the model are reviewed by management.

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements related to mortgage servicing rights recognized in the accompanying balance sheets using significant unobservable (Level 3) inputs:

	Three Months			Three Months		Six Months			Six Months
	Ended			Ended		Ended			Ended
	June 30,			June 30,		June 30,			June 30,
	2016			2015		2016			2015

Fair value as of the beginning of the period	$	629,315		$	569,988	$	630,316		$	513,853
Recognition of mortgage servicing rights on the sale of loans		71,786			49,917		101,615			60,184
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model		(38,417	)		13,131		(69,247	)		58,999

Fair value at the end of the period	$	662,684		$	633,036	$	662,684		$	633,036

Mortgage servicing rights are carried in the balance sheet at fair value and the changes in fair value are reported in other noninterest income in the period in which the changes occur.

Collateral-dependent Impaired Loans, Net of Allowance for Loan Losses

The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by management. Appraisals are reviewed for accuracy and consistency by management. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by management by comparison to historical results.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Foreclosed Assets Held for Sale

Foreclosed assets held for sale are carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell when the real estate is acquired. Estimated fair value of real estate is based on appraisals or evaluations. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy.

Appraisals of real estate are obtained when the real estate is acquired and an appraisal is subsequently deemed necessary by events in the environment by the Chief Financial Officer. Appraisals are reviewed internally for accuracy and consistency in accordance with regulatory requirements. Appraisers are selected from the list of approved appraisers maintained by management.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell at June 30, 2016 and December 31, 2015.

			Fair Value Measurements Using
	Carrying		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)

June 30, 2016

Collateral -dependent impaired loans	$	-	$	-	$	-	$	-
Foreclosed assets		37,950		-		-		37,950

December 31, 2015

Collateral -dependent impaired loans	$	-	$	-	$	-	$	-
Foreclosed assets		-		-		-		-

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Unobservable (Level 3) Inputs

The following tables present quantitative information about unobservable inputs used in recurring Level 3 fair value measurements at June 30, 2016 and December 31, 2015:

Fair Value at
June 30, 2016

Valuation
Technique

Unobservable Inputs

Range
(Weighted
Average)

Impaired loans (collateral dependent)

37,950

Market comparable properties

Marketability discount

10%-15% (12%)

Mortgage servicing rights

662,684

Discounted cash flow

Discount rate PSA prepayment speeds

10%
154%-342%

Fair Value of Financial Instruments

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheets at amounts other than fair value.

Cash and cash equivalents, Federal Home Loan Bank Stock and Interest Receivable

The carrying amount approximates fair value.

Loans Held for Sale

Fair value of loans held for sale is based on quoted market prices, where available, or is determined by discounting estimated cash flows using interest rates approximating the Bank’s current origination rates for similar loans and adjusted to reflect the inherent credit risk.

Loans

The fair value of loans is estimated by discounting the future cash flows using the market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

Federal Home Loan Bank Lender Risk Account Receivable

The fair value of the Federal Home Loan Bank lender risk account receivable is estimated by discounting the estimated remaining cash flows of each strata of the receivable at current rates applicable to each strata for the same remaining maturities.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Deposits

Deposits include demand deposits and savings accounts. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank Advances

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt. Fair value of long-term debt is based on quoted market prices or dealer quotes for the identical liability when traded as an asset in an active market. If a quoted market price is not available, an expected present value technique is used to estimate fair value.

Advances from Borrowers for Taxes and Insurance and Interest Payable

The carrying amount approximates fair value.

Commitments to Originate Loans, Forward Sale Commitments, Letters of Credit and Lines of Credit

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of forward sale commitments is estimated based on current market prices for loans of similar terms and credit quality. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date. At June 30, 2016 and December 31, 2015, the fair value of commitments was not material.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015:

			Fair Value Measurements Using
	Carrying		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)

June 30, 2016
Financial Assets:
Cash and cash equivalents	$	10,094,687	$	10,094,687	$	-	$	-
Loans held for sale		2,941,834		-		2,999,418		-
Loans, net of allowance for loan losses		127,911,665		-		-		133,322,267
Federal Home Loan Bank stock		908,000		908,000		-		-
Interest receivable		384,149		-		384,149		-
Federal Home Loan Bank lender risk account receivable		1,427,553		-		-		1,446,560

Financial Liabilities:
Deposits		104,431,540		38,137,718		67,093,561		-
Federal Home Loan Bank advances		28,286,505		-		28,534,110		-
Advances from borrowers for taxes and insurance		625,659		-		625,659		-
Interest payable		20,283		-		20,283		-

December 31, 2015
Financial Assets:
Cash and cash equivalents	$	8,304,539	$	8,304,539	$	-	$	-
Loans held for sale		2,444,179		-		2,495,247		-
Loans, net of allowance for loan losses		119,779,931		-		-		122,321,686
Federal Home Loan Bank stock		888,100		888,100		-		-
Interest receivable		359,103		-		359,103		-
Federal Home Loan Bank lender risk account receivable		1,387,411		-		-		1,433,904

Financial Liabilities:
Deposits		103,014,720		36,007,056		67,881,776		-
Federal Home Loan Bank advances		18,813,639		-		19,215,565		-
Advances from borrowers for taxes and insurance		1,281,036		-		1,281,036		-
Interest payable		17,131		-		17,131		-

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 7:

Commitments and Credit Risk

Commitments to Originate Loans

Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

Forward sale commitments are commitments to sell groups of residential mortgage loans that the Company originates or purchases as part of its mortgage banking activities. The Company commits to sell the loans at specified prices in a future period. These commitments are acquired to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale since the Company is exposed to interest rate risk during the period between issuing a loan commitment and the sale of the loan into the secondary market.

The dollar amount of commitments to fund fixed rate loans at June 30, 2016 and December 31, 2015 follows:

	June 30,			December, 31
	2016			2015
	(Unaudited)
			Interest Rate			Interest Rate
	Amount		Range	Amount		Range

Commitments to fund fixed-rate loans	$	11,776,592	3.125% - 4.625%	$	2,259,178	3.125% - 4.625%

Lines of Credit

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

Loan commitments outstanding at June 30, 2016 and December 31, 2015 were composed of the following:

	June 30,		December 31,
	2016		2015
	(Unaudited)

Commitments to originate loans	$	1,596,500	$	2,628,860
Forward sale commitments		8,849,202		4,888,038
Lines of credit		9,341,355		8,986,553

NOTE 8:

Accumulated Other Comprehensive Loss

The components of other comprehensive loss by component, net of tax, included in stockholders’ equity for the three months ended June 30, 2016 and the year ended December 31, 2015 are as follows:

	June 30,			December 31,
	2016			2015

Net unrealized (loss) gain on available for sale securities	$	9,032		$	(2,096	)
Directors' Retirement Plan prior service costs		(346,347	)		(368,290	)
Tax benefit		117,846			126,020

Net of tax amount	$	(219,469	)	$	(244,366	)

NOTE 9:

Recent Accounting Pronouncements

FASB ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326)

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU significantly changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. In issuing the standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees. The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019; early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company is currently evaluating the provisions of ASU No. 2016-13 to determine the potential impact the new standard will have on the Company's condensed consolidated financial statements.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

FASB ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718)

In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting.” This ASU includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. Some of the key provisions of this new ASU include: (1) companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital (“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, and APIC pools will be eliminated. The guidance also eliminates the requirement that excess tax benefits be realized before companies can recognize them. In addition, the guidance requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity; (2) increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification for shares used to satisfy the employer’s statutory income tax withholding obligation. The new guidance will also require an employer to classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows (current guidance did not specify how these cash flows should be classified); and (3) permit companies to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated, as required today, or recognized when they occur. ASU No. 2016-09 is effective for interim and annual reporting periods beginning after December 15, 2016. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is currently evaluating the provisions of ASU No. 2016-09 to determine the potential impact the new standard will have on the Company's condensed consolidated financial statements.

FASB ASU 2016-02, Leases (Topic 842)

ASU No. 2016-02 was issued in February 2016 and requires a lessee to recognize in the statement of financial position a liability to make lease payments (“the lease liability”) and a right to use the underlying asset for the lease term, initially measured at the present value of the lease payments. When measuring assets and liabilities arising from a lease, the lessee should include payments to be made in optional periods only if the lessee is reasonably certain, as defined, to exercise an option to the lease or not to exercise an option to terminate the lease. Optional payments to purchase the underlying asset should be included if the lessee is reasonably certain it will exercise the purchase option. Most variable lease payments should be excluded except for those that depend on an index or a rate or are in substance fixed payments.

A lessee shall classify a lease as a finance lease if it meets any of the five listed criteria:

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.

The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

The lease term is for the major part of the remaining economic life of the underlying asset.

The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset.

The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

For finance leases, a lessee shall recognize in the statement of comprehensive income interest on the lease liability separately from the amortization of the right-of-use asset. Amortization of the right-to-use asset shall be on a straight-line basis, unless another basis is more representative of the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits. If the lease does not meet any of the five criteria, the lessee shall classify it as an operating lease and shall recognize a single lease cost on a straight line basis over the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The adoption of this standard is not expected to have a material impact on the Company’s condensed consolidated financial statements.

FASB ASU 2015-11, Transfers and Servicing

Transfers and Servicing (Topic 860), Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures, was issued in June 2015. The amendments in this Update require disclosures for certain transactions comprising a transfer of a financial asset accounted for as a sale and an agreement with the same transferee entered into in contemplation of the initial transfer that results in the transferor retaining substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. This Update also requires certain disclosures for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The accounting changes in this Update were effective for public business entities for the first interim or annual period beginning after December 15, 2015. For public business entities, the disclosure for certain transactions accounted for as a sale is required to be presented for interim and annual periods beginning after December 15, 2015, and for disclosure for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2015, and for interim periods beginning after March 15, 2015. The disclosures are not required to be presented for comparative periods before the effective date. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

Cincinnati Bancorp

Notes to Condensed Consolidated Financial Statements (Unaudited)

FASB ASU 2014-09, Revenue from Contracts with Customers

In May 2015, the FASB issued amended guidance on revenue recognition from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amended guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within the reporting period, and should be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. Early adoption is prohibited. Management is currently in the process of evaluating the impact of the adoption of the amended guidance on the Company’s condensed consolidated financial statements.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis of the financial condition and results of operations at and for the three months and six months ended June 30, 2016 and 2015 is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing in Part I, Item 1 of this quarterly report on Form 10-Q.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements include, but are not limited to:

statements of our goals, intentions and expectations;

statements regarding our business plans, prospects, growth and operating strategies;

statements regarding the asset quality of our loan and investment portfolios; and

estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this Form 10-Q.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

our ability to manage our operations under the current adverse economic conditions nationally and in our market area;

adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values), or in the secondary mortgage markets;

significant increases in our loan losses, including as a result of our inability to resolve classified and non-performing assets or reduce risks associated with our loans, and management’s assumptions in determining the adequacy of the allowance for loan losses;

credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;

the use of estimates in determining fair value of certain of our assets, which may prove to be incorrect and result in significant declines in valuations;

competition among depository and other financial institutions;

our ability to successfully implement our business plan and to grow our franchise to improve profitability;

our ability to attract and maintain deposits, and to obtain FHLB-Cincinnati advances;

changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources, and our ability to originate loans for portfolio and for sale in the secondary market;

fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;

changes in consumer spending, borrowing and savings habits;

declines in the yield on our assets resulting from the current low interest rate environment;

risks related to a high concentration of loans secured by real estate located in our market area;

the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings;

changes in the level of government support of housing finance;

our ability to enter new markets successfully and capitalize on growth opportunities;

changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act and the JOBS Act, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees and compliance costs, particularly the new capital regulations, and the resources we have available to address such changes;

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

changes in our compensation and benefit plans, and our ability to retain key members of our senior management team and to address staffing needs in response to product demand or to implement our strategic plans;

loan delinquencies and changes in the underlying cash flows of our borrowers;

our ability to control costs and expenses, particularly those associated with operating as a publicly traded company;

the failure or security breaches of computer systems on which we depend;

the ability of key third-party service providers to perform their obligations to us;

changes in the financial condition or future prospects of issuers of securities that we own; and

other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing, products and services described elsewhere in this prospectus.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Critical Accounting Policies

There are no material changes to the critical accounting policies disclosed in Cincinnati Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2015.

Comparison of Financial Condition at June 30, 2016 and December 31, 2015

Total Assets. Total assets were $152.4 million at June 30, 2016, an increase of $10.1 million, or 7.1%, over the $142.2 million at December 31, 2015. The increase resulted primarily from increases in cash and cash equivalents of $1.8 million and net loans of $8.1 million, offset in part by a decrease of $423,000 in available-for-sale securities.

Cash and Cash Equivalents. Cash and cash equivalents increased $1.8 million, or 21.6%, to $10.1 million at June 30, 2016 from $8.3 million at December 31, 2015. This increase was primarily the result of additional FHLB borrowings of $9.5 million and checking deposit growth of $1.7 million, offset in part by funding an increase in net loans of $8.1 million and a decrease in certificates of deposits of $714,000.

Net Loans. Net loans increased $8.1 million, or 6.8%, to $127.9 million at June 30, 2016 from $119.8 million at December 31, 2015. During the six months ended June 30, 2016, we originated $12.9 million of loans for portfolio, $5.7 million of which were one- to four- family residential real estate loans, $4.4 million were multi-family loans, $2.2 million were home equity lines of credit, and $258,000 were construction and land loans. In the period ending June 30, 2016, we sold $24.2 million of one to four family residential loans, on both a servicing–retained and servicing–released basis. Subject to market conditions, management intends to continue this sales activity in future periods to generate gain on sale revenue and servicing fee income.

The largest increase in our loan portfolio was in the one- to four-family owner occupied residential real estate loan portfolio. This growth reflects our strategy to grow the portfolio with adjustable-rate loans and mitigate interest rate risk on the balance sheet. We currently sell certain fixed-rate, 15- and 30-year term mortgage loans. We have sold loans on both a servicing-released and servicing-retained basis to: the FHLB-Cincinnati, through its mortgage purchase program; Freddie Mac; and certain private sector third-party buyers.

Loans Held for Sale. Loans held for sale increased $498,000 to $2.9 million at June 30, 2016 from $2.4 million at December 31, 2015 due to increased origination activity.

Available-for-Sale Securities. Available-for-sale securities, which consisted entirely of government-sponsored mortgage-backed securities, decreased $423,000, or 17.0%, to $2.1 million at June 30, 2016 from $2.5 million at December 31, 2015. There were no securities purchases during the period and $426,000 in maturities, the remaining difference was due to the change in market values within the portfolio during the six months ended June 30, 2016.

Deposits. Deposits increased $1.4 million, or 1.38%, to $104.4 million at June 30, 2016 from $103.0 million at December 31, 2015. Core deposits, defined as demand, NOW and savings accounts, increased $2.1 million, or 5.92%, to $38.1 million at June 30, 2016 from $36.0 million at December 31, 2015. The increase was primarily the result of marketing efforts directed at increasing demand deposit accounts. The primary marketing effort during the period involved offering a one-time bonus payment of up to $300 to open a new checking account with direct deposit. Time deposits decreased $714,000, or 1.1%, to $66.3 million at June 30, 2016 from $67.0 million at December 31, 2015. The decrease in time deposits was primarily due to lower CD offering rates on certain terms to decrease CD interest expense. Certificates originated through the National CD Rateline service declined $1.1 million to $19.4 million at June 30, 2016. During the six months ended June 30, 2016, management continued its strategy of pursuing growth in lower cost core deposits, and intends to continue its efforts to increase core deposits.

Stockholders’ Equity. Stockholders’ equity increased $201,000, or 1.1%, to $17.8 million at June 30, 2016 from $17.6 million at December 31, 2015. The increase resulted from net income for the period of $176,000 and an increase in accumulated other comprehensive income of $25,000.

Comparison of Operating Results for the Three Months Ended June 30, 2016 and June 30, 2015

General. Net income for the quarter ended June 30, 2016 was $140,000, compared to net income of $189,000 for the quarter ended June 30, 2015, a decrease of 49,000, or 25.8%. The decrease was primarily due to an $33,000 decrease in noninterest income and a $63,000 increase in noninterest expense partially offset by an increase in net interest income of $20,000 and a decrease in the provision of loan losses of $9,000.

Interest Income. Interest income increased $68,000, or 5.4%, to $1.3 million for the quarter ended June 30, 2016 from the comparable quarter in 2015. Interest income on loans increased $68,000, or 5.6%, to $1.3 million as of June 30, 2016 compared to $1.2 million for the comparable quarter in 2015. The average balance of loans during the three months ended June 30, 2016 increased $12.3 million to $128.4 million, compared to $116.1 million for the three months ended June 30, 2015. The average yield on loans decreased 19 basis points to 4.05% for the three months ended June 30, 2016 from 4.24% for the three months ended June 30, 2015. Interest income on securities available-for-sale decreased $2,000 primarily due to a 3 basis point increase in average yield on the securities portfolio offset by a $942,000 decrease in the balance of the average securities portfolio during the quarter ended June 30, 2016. Interest income on other investments increased $1,000 in the first quarter of 2016 compared to the same quarter in 2015.

Interest Expense. Total interest expense increased 48,000, or 14.6%, to $378,000 for the quarter ended June 30, 2016 from $330,000 for the quarter ended June 30, 2015. Interest expense on deposit accounts increased $63,000, or 25.6%, to $309,000 for the quarter ended June 30, 2016 from $246,000 for the quarter ended June 30, 2015. The increase between comparable quarters in 2016 from 2015 was primarily due to a $15,000 increase in interest expense on certificates of deposit resulting from a $2.6 million, or 3.9%, increase in the average balance of these certificates and a 4 basis point increase in the average cost of certificates. Checking interest expense increased $48,000 from the comparable quarter in 2015. The increase in interest expense in the checking accounts reflects bonus incentives offered on new checking accounts. The bonus promotion program ended at the end of June 2016. The average balances in interest bearing and non-interest bearing accounts during the three months ended June 30, 2016 increased $5.5 million to $17.5 million compared to $12.0 million for the three months ended June 30, 2015. Savings interest expense remained unchanged at $5,000 during the quarter ended June 30, 2016 compared to June 30, 2015.

Interest expense on FHLB advances decreased $15,000, or 17.9%, to $69,000 for the quarter ended June 30, 2016 from $84,000 for the quarter ended June 30, 2015. The average balance of advances remained the same at $21.9 million for the quarters ended June 30, 2016 and June 30, 2015. The average cost of FHLB borrowing decreased 28 basis points to 1.26% from 1.54%. The decrease in the average cost of advances results from the use of lower costing, short term cash management advances.

Net Interest Income. Net interest income increased $20,000, or 2.2%, to $936,000 for the quarter ended June 30, 2016 compared to $916,000 the quarter ended June 30, 2015. Average interest-earning assets increased $16.4 million primarily due to a $12.3 million increase in average outstanding loans during the quarter. In addition, DDA balances held at the Federal Home Loan Bank were reclassified as interest earning as the account was migrated from a compensating balance pricing structure to an explicit pricing structure. The net impact in the current interest rate environment is not significant. Average interest-bearing liabilities increased $2.6 million from the same quarter in 2015 due to the funding needed for the increase in lending during the first quarter of 2016. The interest rate spread decreased 44 basis points to 2.54% for the quarter ended June 30, 2016 compared to 2.98% at quarter ended June 30, 2015. The net interest margin decreased 30 basis points to 2.74% for the second quarter of 2016 from 3.04% for the quarter ended June 30, 2015. The interest rate spread and net interest margin were impacted by a continuation of the low interest rate environment.

Provision for Loan Losses. The provision for loan losses decreased $9,000, or 100.0%, as there was no provision for loan losses recorded for the quarter ended June 30, 2016. The decrease in the provision for loan losses was based on managements’ evaluation and was primarily due to the improving quality of the loan portfolio as total delinquencies and other nonperforming loans decreased.

The allowance for loan losses reflects the estimate we believe to be appropriate to cover probable losses which were inherent in the loan portfolio at June 30, 2016. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, such estimates and assumptions could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions, and the increase in future provisions that may be required may adversely impact our financial condition and results of operations. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for possible loan losses or the recognition of further loan charge-offs, based on judgments different than those of management.

Non-Interest Income. Non-interest income decreased $32,000, or 4.7%, to $667,000 for the quarter ended June 30, 2016 from $700,000 for the comparable quarter in 2015. The decrease was primarily due to a $58,000 decrease in other non-interest income due primarily to a $38,000 decrease in fair value of mortgage servicing rights in the three months ended June 30, 2016 compared to a $13,000 increase in the fair value of mortgage servicing rights for the three months ended June 30, 2015. Offsetting the decrease in non-interest income was an increase on the gain on sale of loans of $19,000 or 3.9% in the quarter. Servicing income on the sold loan portfolio increased $6,000 due to an increase in the total amount of loans serviced, primarily, for the FHLB – Cincinnati and Freddie Mac.

Non-Interest Expense. Non-interest expense increased $63,000, or 4.71%, to $1.4 million for the quarter ended June 30, 2016 compared to $1.3 million for the quarter ended June 30, 2015. The increase was due primarily to a $27,000, or 4.05%, increase in salary and employee benefits to $683,000 in the second quarter of 2016 from $656,000 for the comparable quarter in 2015 caused by increased staffing demands, higher commission payouts to mortgage loan officers, ESOP expense and payroll expense. Data processing expense increased $24,000, or 21.0%, to $141,000 during the quarter ended June 30, 2016 from $117,000 for the quarter ended June 30, 2015. The increase was due to bank growth and a one-time expense for payment card industry compliance assessed by our core data processor. Advertising expense increased $27,000, or 67.19% due to a promotional campaign to acquire new checking account customers. The advertising campaign ended in June. Loan cost expense decreased $65,000 or 49.41% primarily due to a reduction in lender credits given to borrowers due to market conditions. Other non-interest expense increased $32,000, or 28.95%, to $143,000 during the second quarter of 2016 from $111,000 for the comparable quarter in 2015 due primarily to increased costs related to being a public company including legal, transfer agent, printing and filing fees of $29,000 for the three months ended June 30, 2016.

Federal Income Taxes. Federal income taxes decreased $18,000 due to a decreased in pre-tax income of $66,000 for the quarter ending June 30, 2016 compared to pre-tax income for the quarter ended June 30, 2015.

Average Balances and Yields. The following tables set forth average balance sheets, average yields and costs, and certain other information at the dates and for the periods indicated. No tax-equivalent yield adjustments have been made. Any adjustments necessary to present yields on a tax-equivalent basis are insignificant. All average balances are monthly average balances. Management does not believe that the use of month-end balances instead of daily average balances has caused any material differences in the information presented. Non-accrual loans were included in the computation of average balances only. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense.

	For the Three Months Ended June 30,
	2016							2015
	Average Outstanding Balance		Interest		Average Yield/Rate (5)			Average Outstanding Balance		Interest		Average Yield/Rate (5)
		(Dollars in thousands)
Interest-earning assets:
Loans	$	128,357	$	1,299		4.05	%	$	116,128	$	1,230		4.24	%
Securities		2,127		5		0.94			3,069		7		0.91
Other (1)		6,254		10		0.64			1,150		9		3.13
Total interest-earning assets		136,738		1,314		3.84			120,347		1,246		4.14
Non-interest-earning assets		13,428							16,052
Total assets	$	150,166						$	136,399

Interest-bearing liabilities:
Savings	$	22,293	$	5		0.09		$	23,168	$	5		0.09
Interest-bearing demand		3,826		61		6.38			3,567		13		1.46
Certificates of deposit		68,076		243		1.43			65,504		228		1.39
Total deposits		94,865		309		1.30			92,239		246		1.07
Borrowings		21,912		69		1.26			21,882		84		1.54
Total interest-bearing liabilities		116,737		378		1.30			114,121		330		1.16
Non-interest-bearing Demand		13,701							8,482
Other non-interest-bearing liabilities		2,334							2,127
Total non- interest-bearing liabilities		16,035							10,609
Total equity		17,394							11,669
Total liabilities and total equity	$	150,166						$	136,399
Net interest income			$	936						$	916
Net interest rate spread (2)						2.54	%						2.98	%
Net interest-earning assets (3)	$	20,001						$	3,677
Net interest margin (4)						2.74	%						3.04	%
Average interest-earning assets to interest-bearing liabilities						117.13	%						105.46	%

(1)

Consists of FHLB-Cincinnati stock, FHLB DDA, certificates of deposit and cash reserves.

(2)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(3)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)

Net interest margin represents annualized net interest income divided by average total interest-earning assets.

(5)

Annualized

Comparison of Operating Results for the Six Months Ended June 30, 2016 and June 30, 2015

General. Net income for the six months ended June 30, 2016 was $176,000, compared to net income of $308,000 for the six months ended June 30, 2015, a decrease of $132,000, or 42.8%. The decrease was primarily attributable to a $147,000 decrease in non-interest income and a $176,000 increase in non-interest expense, partially offset by a $128,000 increase in net interest income after provision for loan losses.

Interest Income. Interest income increased $178,000, or 7.4%, to $2.6 million for the six months ended June 30, 2016 from the comparable six months in 2015. Interest income on loans increased $182,000 primarily due to a $13.4 million increase in the average balance of loans during the first six months of 2016 compared to the same six months in 2015, partially offset by a 16 basis point decrease in the average yield on loans. Interest income on securities available-for-sale decreased $7,000 primarily due to a 21 basis point decrease in average yield on the securities portfolio and a $916,000 decrease in the average balance of the securities portfolio during the six months ended June 30, 2016. Interest income on other investments increased $2,000 in the first six months of 2016 compared to the same period in 2015. The increase was the result, in part, of FHLB DDA pricing migrating from a compensating balance arrangement to explicit pricing with collected DDA balances earning a daily rate of interest.

Interest Expense. Total interest expense increased $91,000, or 14.6%, to $710,000 for the six months ended June 30, 2016 from $619,000 for the six months ended June 30, 2015. Interest expense on deposit accounts increased $112,000, or 24.2%, to $576,000 for the six months ended June 30, 2016 from $464,000 for the six months ended June 30, 2015. The increase between comparable six month periods in 2016 from 2015 was primarily due to a $69,000 increase in interest expense on checking accounts. The increase in checking account expense reflects a promotional one-time bonus paid to new checking account customers. The checking account promotion ended in June 2016. Interest expense on certificates of deposit increased $44,000 resulting from a $5.7 million, or 9.1%, increase in the average balance of these certificates and a 1 basis point increase in the average cost of certificates of deposit. Interest expense on savings accounts decreased $2,000 during the six months ended June 30, 2016.

Interest expense on FHLB advances decreased $22,000, or 14.0%, to $134,000 for the six months ended June 30, 2016 from $155,000 for the six months ended June 30, 2015. The average balance of advances decreased $353,000 to $20.8 million for the six months ended June 30, 2016 from $21.1 million for the same six months in 2015, while the average cost of these advances decreased 131 basis points to 1.29% from 2.60%. The decrease in the average cost of FHLB Advances was due to the increased use of lower cost, short term cash management borrowings.

Net Interest Income. Net interest income increased $87,000, or 4.9%, to $1.9 million for the six months ended June 30, 2016 compared to $1.8 million the six months ended June 30, 2015. Average interest-earning assets increased $17.7 million primarily due to a $13.4 million increase in average outstanding loans during the six months and the reclassification of FHLB DDA balances as interest earning. Interest-bearing liabilities increased $4.4 million from the same six months in 2015 due to the funding needed for the increase in lending during the first six months of 2016. The interest rate spread declined 35 basis points to 2.68% for the six months ended June 30, 2016 from 3.03% for the comparable six months in 2015. Our net interest margin decreased 27 basis points to 2.81% for the six months ended June 30, 2016 from 3.08% for the six months ended June 30, 2015. The interest rate spread and net interest margin were impacted by a continuation of the low interest rate environment.

Provision for Loan Losses. The provision for loan losses decreased $41,000, or 100.0%. There was no provision for loan losses recorded for the six months ended June 30, 2016 compared to $41,000 for the same six months in 2015. The decrease in the provision for loan losses was due to the improving quality of the loan portfolio as total delinquencies and other nonperforming loans decreased.

Non-Interest Income. Non-interest income decreased $147,000, or 12.2%, to $1.1 million for the six months ended June 30, 2016 from $1.2 million for the comparable six months in 2015. The decrease was primarily due to a decrease of $69,000 in other non-interest income primarily due to a $129,000 decrease in the fair value of mortgage servicing rights for the six months ended June 30, 2016. The fair value of mortgage servicing rights recorded a loss of $69,000 for the six months ended June 30, 2016 compared to a gain of $60,000 for the six months ended June 30, 2015. The decrease in value is principally the result of the increase in projected prepayment speeds due to lower mortgage rates used in the valuation model. The gain on sale of loans declined $86,000 or 10.4% due to slower secondary market activity in the first quarter of 2016 compared to 2015. Servicing fees on loans sold increased $8,000 or 11.5% for the six months ended June 30, 2016 due to an increase in the amount of loans serviced for the FHLB-Cincinnati and Freddie Mac.

Non-Interest Expense. Non-interest expense increased $176,000, or 7.0%, to $2.7 million for the six months ended June 30, 2016 compared to $2.5 million for the six months ended June 30, 2015. The increase was due in part to a $49,000, or 3.8%, increase in salary and employee benefits to $1.3 million in the six months ended June 30, 2016 due to increased lending personnel, higher mortgage loan originator commissions, ESOP expense, and payroll expenses. Data processing expense increased $33,000, or 13.8%, to $268,000 during the six months ended June 30, 2016 from $235,000 for the six months ended June 30, 2015. The increase was due to a one-time assessment for PCI compliance from our core data processor and bank growth. Advertising expense increased $35,000 primarily from a checking account promotional campaign. The promotional campaign ended in June 2016. Franchise tax expense increased $23,000 due to higher capital levels from the stock offering. The state of Ohio assesses franchise tax based on the level of capital. Other non-interest expense increased $54,000, or 23.3%, to $286,000 during the six months ended June 30, 2016 from $232,000 for the comparable six months in 2015 due primarily to increased costs related being a public company including legal, transfer agent, printing and filing fees of $41,000 for the six months ended June 30, 2016.

Federal Income Taxes. Federal income taxes, which are based on operating results, decreased $63,000 due to decreased pre-tax net income for the six months ended June 30, 2016 compared to the six months ended June 30, 2015.

	For the Six Months Ended June 30,
	2016							2015
	Average Outstanding Balance		Interest		Average Yield/Rate (5)			Average Outstanding Balance		Interest		Average Yield/Rate (5)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	125,914	$	2,571		4.08	%	$	112,514	$	2,388		4.24	%
Securities		2,250		9		0.80			3,166		16		1.01
Other (1)		6,348		20		0.63			1,178		18		3.06
Total interest-earning assets		134,512		2,600		3.86			116,858		2,422		4.15
Non-interest-earning assets		12,740							15,963
Total assets	$	147,252						$	132,821

Interest-bearing liabilities:
Savings	$	22,442	$	10		0.09		$	23,708	$	12		0.10
Interest-bearing demand		3,827		87		4.55			3,498		18		1.03
Certificates of deposit		67,981		479		1.41			62,312		435		1.40
Total deposits		94,250		576		1.22			89,518		465		1.04
Borrowings		20,776		134		1.29			21,129		155		1.47
Total interest-bearing liabilities		115,026		710		1.23			110,647		620		1.12
Non-interest-bearing Demand		12,470							8,535
Other non-interest-bearing liabilities		2,408							2,048
Total non- interest-bearing liabilities		14,878							10,583
Total equity		17,348							11,591
Total liabilities and total equity	$	147,252						$	132,821
Net interest income			$	1,890						$	1,802
Net interest rate spread (2)						2.63	%						3.03	%
Net interest-earning assets (3)	$	19,486						$	6,211
Net interest margin (4)						2.81	%						3.08	%
Average interest-earning assets to interest-bearing liabilities						116.94	%						105.61	%

(1)

Consists of FHLB-Cincinnati stock, FHLB DDA, certificates of deposit and cash reserves.

(2)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(3)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)

Net interest margin represents net interest income divided by average total interest-earning assets.

(5)

Annualized where appropriate.

Liquidity and Capital Resources. Liquidity is the ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary source of funds are deposits, principal and interest payments on loans and securities, proceeds from the sale of loans, and proceeds from the sale or maturities of securities. In addition, the Bank may borrow from the FHLB. At June 30, 2016, we had $28.2 million outstanding in advances from the FHLB. At June 30, 2016, we had the capacity to borrow an additional $8.5 million at June 30, 2016. The Bank had additional lines of credit with two commercial banks totaling $6.5 million.

While maturities and scheduled amortization of loans and securities are probable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short term investments including interest-bearing demand deposits. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash used by operating activities was $720,000 for the six months ended June 30, 2016, and $1.6 million for the six months ended June 30, 2015. Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans, proceeds from the sale of securities and proceeds from maturing securities and pay downs on mortgage-backed securities, was $7.7 million for the six months ended June 30, 2016, and $8.3 million for six months ended June 30, 2015. Net cash provided by financing activities, consisting primarily of the activity in deposit accounts and FHLB advances, was $10.2 million for the six months ended June 30, 2016, and $11.5 million for the six months ended June 30, 2015 resulting from our strategy of increasing retail checking and FHLB borrowings to fund loan originations.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained. We also anticipate continued participation in the National CD Rateline Program as a wholesale source of certificates of deposit, and continued use of FHLB-Cincinnati advances.

Cincinnati Bancorp is a separate legal entity from the Bank and must provide for its own liquidity to pay any dividend to its stockholders and for other corporate purposes. Cincinnati Bancorp’s primary source of liquidity is dividend payments, if any, received from the Bank. The Bank’s ability to pay dividends is subject to regulatory restrictions. At June 30, 2016, Cincinnati Bancorp (on an unconsolidated, stand-alone basis) had liquid assets of $350,000.

At June 30, 2016, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $17.7 million, or 11.8% of adjusted total assets, which is above the well-capitalized required level of $7.5 million, or 5.0%; total risk-based capital of $19.0 million, or 18.1% of risk-weighted assets, which is above the well-capitalized required level of $10.5 million, or 10.0%; and common equity tier 1 risk based capital of $17.7 million, or 16.9%, of risk weighted assets, which is above the well-capitalized required level of $6.8 million, or 6.5%. At December 31, 2015, the Bank exceeded all of its regulatory capital requirements with a Tier 1 leverage capital level of $17.5 million, or 12.2% of adjusted total assets, which is above the well-capitalized required level of $7.2 million, or 5.0%; and total risk-based capital of $18.8 million, or 18.6% of risk-weighted assets, which is above the well-capitalized required level of $10.1 million, or 10.0%. Accordingly, Cincinnati Federal was categorized as well capitalized at June 30, 2016, and December 31, 2015. Management is not aware of any conditions or events since the most recent notification that would change its category.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant is a smaller reporting company.

Item 4.

Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2016. Based on that evaluation, the Company’s management, including the Principal Executive Officer and the Principal Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2016, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II – Other Information

Item 1.

Legal Proceedings

The Company is subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A.

Risk Factors

Not applicable, as the Company is a smaller reporting company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(a)

There were no sales of unregistered securities during the period covered by this Report.

(b)

Not applicable.

(c)

There were no issuer repurchases of securities during the period covered by this Report.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits

3.1

Cincinnati Bancorp Stock Holding Company Charter ⁽¹⁾

3.2

Cincinnati Bancorp Bylaws ⁽¹⁾

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following financial information from Cincinnati Bancorp Quarterly Report on Form 10-Q, for the quarter ended June 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the consolidated balance sheets; (ii) the consolidated statements of operations; (iii) the consolidated statements of comprehensive income; (iv) the consolidated statements of cash flows; and (v) notes to consolidated financial statements.

⁽¹⁾ Incorporated by reference to the Company’s Registration Statement on Form S-1, as initially filed on March 11, 2015, as subsequently amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CINCINNATI BANCORP

Date: August 15, 2016		/s/ Joseph V. Bunke
		Joseph V. Bunke
		President
		(Principal Executive Officer)

Date: August 15, 2016		/s/ Herbert C. Brinkman
		Herbert C. Brinkman
		Senior Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

Cincinnati Bancorp - FORM 10-Q - August 15, 2016

Attached files

Cincinnati Bancorp Reports