UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended

September 30, 2018

 

OR

 

¨

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. 000-55732

 

COMMUNITY SAVINGS BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

Maryland		81-3840964
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)
425 Main Street
Caldwell, Ohio		43724
(Address of principal		(Zip Code)
executive office)

(740) 732-5678

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

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

Yes x       No ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes     ¨    No

 

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

 

Large accelerated filer ¨    Accelerated filer ¨     Non-accelerated filer x    Smaller reporting company x

 

Emerging growth company x

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

 

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 November 13, 2018, the latest practicable date, 441,290 shares of the registrant’s common stock, $0.01 par value, were issued and outstanding. 

 

 

Community Savings Bancorp, Inc.

 

Index to Quarterly Report on Form 10-Q

 

PART I – FINANCIAL INFORMATION	3
Item 1 Interim Financial Statements (Unaudited)	3
Consolidated Balance Sheets as of September 30, 2018 and June 30, 2018	3
Consolidated Statements of Operations for the Three Months Ended September 30, 2018 and 2017	4
Consolidated Statements of Comprehensive Loss  for the Three Months Ended September 30, 2018 and 2017	5
Consolidated Statements of Changes in Shareholders’ Equity for the  Three Months Ended September 30, 2018 and 2017	6
Consolidated Statements of Cash Flows for the Three Months Ended  September 30, 2018 and 2017	7
Notes to Consolidated Financial Statements	8
Item 2 Management’s Discussion and Analysis of Financial Condition  and Results of Operations	36
Item 3 Quantitative and Qualitative Disclosures About Market Risk	42
Item 4 Controls and Procedures	42
PART II – OTHER INFORMATION	43
Item 1  Legal Proceedings	43
Item 1A  Risk Factors	43
Item 2  Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3  Defaults Upon Senior Securities	43
Item 4  Mine Safety Disclosures	43
Item 5  Other Information	43
Item 6  Exhibits	44
SIGNATURES	45

 

 

Part I – Financial Information

Item 1. Interim Financial Statements (Unaudited)

Community Savings Bancorp, Inc.

Consolidated Balance Sheets

September 30, 2018 and June 30, 2018

(In thousands except share data)

 

		September 30,				June 30,
		2018				2018
			(Unaudited)
Assets
Cash and due from banks		$	1,588			$	2,222
Interest-earning demand deposits in other financial institutions			711				2,082
Cash and cash equivalents			2,299				4,304
Interest-earning time deposits in other financial institutions			4,595				4,595
Investment securities available-for-sale, at fair value			6,205				6,651
Other investment securities			940				940
Loans			34,116				31,888
Less: allowance for loan losses			(253	)			(253	)
Loans, net			33,863				31,635
Premises and equipment, net			414				422
Foreclosed assets, net			9				9
Accrued interest receivable			141				135
Bank owned life insurance			775				769
Other assets			487				508
Total assets		$	49,728			$	49,968
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand		$	10,218			$	10,406
Savings and money market			22,614				22,067
Time			7,289				7,926
Total deposits			40,121				40,399
Federal Home Loan Bank advances			1,000				1,000
Payments by borrowers for taxes and insurance			155				92
Other liabilities			231				190
Total liabilities			41,507				41,681
Shareholders' Equity
Preferred stock - par value $0.01 per share, 5,000,000 shares authorized, none issued			-				-
Common stock - par value $0.01 per share, 50,000,000 shares authorized, 441,290 shares issued and outstanding as of June 30, 2018 and 2017, respectively			4				4
Additional paid in capital			3,264				3,264
Unearned employee stock ownership plan (ESOP) shares			(311	)			(311	)
Retained earnings			5,378				5,424
Accumulated other comprehensive loss			(114	)			(94	)
Total shareholders' equity			8,221				8,287
Total liabilities and shareholders' equity		$	49,728			$	49,968

 

See Notes to Condensed Consolidated Financial Statements

 

 

Community Savings Bancorp, Inc.

Consolidated Statements of Operations

For the Three Months Ended September 30, 2018 and 2017

(In thousands except share data)

 

		Three Months Ended September 30,
		2018				2017
		(Unaudited)
Interest Income
Loans, including fees		$	377			$	346
Taxable securities			25				31
Tax exempt securities			10				10
Interest-earning deposits			51				39
Total interest income			463				426
Interest Expense
Deposits			30				32
Federal Home Loan Bank advances			10				15
Total interest expense			40				47
Net Interest Income			423				379
Provision for Loan Losses			-				-
Net Interest Income After Provision for Loan Losses			423				379
Noninterest Income
Service charges and fees			81				65
Increase in cash surrender value-bank owned life insurance			6				1
Other income			4				-
Total noninterest income			91				66
Noninterest Expense
Salaries, employee benefits, and directors fees			212				223
Occupancy and equipment			34				25
Data processing			81				86
Correspondent bank service charges			55				54
Franchise taxes			18				13
FDIC insurance premiums			5				3
Professional services			84				80
Advertising			7				7
Office supplies			22				25
Other expense			52				39
Total noninterest expense			570				555
Loss Before Federal Income Tax Benefit			(55	)			(110	)
Federal Income Tax Benefit			(9	)			(31	)
Net loss		$	(46	)		$	(79	)
Loss per share - basic and diluted		$	(0.11	)		$	(0.20	)
Weighted-average shares outstanding - basic and diluted			410,236				408,602

 

See Notes to Condensed Consolidated Financial Statements

 

 

Community Savings Bancorp, Inc.

Consolidated Statements of Comprehensive Loss

For the Three Months Ended September 30, 2018 and 2017

(In thousands)

 

		Three Months Ended September 30,
		2018				2017
		(Unaudited)
Net loss		$	(46	)		$	(79	)
Other comprehensive loss:
Unrealized holding losses on securities available for sale		$	(25	)			(10	)
Tax effect			5				3
Total other comprehensive loss			(20	)			(7	)
Comprehensive loss		$	(66	)		$	(86	)

 

See Notes to Condensed Consolidated Financial Statements

 

 

Community Savings Bancorp, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended September 30, 2018 and 2017

(In thousands)

 

Three Months Ended September 30, 2018
																						Accumulated
										Additional				Unearned								Other
		Preferred				Common				Paid in				ESOP				Retained				Comprehensive
		Stock				Stock				Capital				Shares				Earnings				Loss				Total
Balance at July 1, 2018		$	-			$	4			$	3,264			$	(311	)		$	5,424			$	(94	)		$	8,287
Net loss			-				-				-				-				(46	)			-				(46	)
Other comprehensive loss			-				-				-				-				-				(20	)			(20	)
Balance at September 30, 2018		$	-			$	4			$	3,264			$	(311	)		$	5,378			$	(114	)		$	8,221

 

Three Months Ended September 30, 2017
																						Accumulated
										Additional				Unearned								Other
		Preferred				Common				Paid in				ESOP				Retained				Comprehensive
		Stock				Stock				Capital				Shares				Earnings				Income (Loss)				Total
														(Unaudited)
Balance at July 1, 2017		$	-			$	4			$	3,258			$	(327	)		$	6,433			$	25			$	9,393
Net loss			-				-				-				-				(79	)			-				(79	)
Other comprehensive loss			-				-				-				-				-				(7	)			(7	)
Balance at September 30, 2017		$	-			$	4			$	3,258			$	(327	)		$	6,354			$	18			$	9,307

 

See Notes to Condensed Consolidated Financial Statements

 

 

Community Savings Bancorp, Inc.

Consolidated Statements of Cash Flows

For the Three Months Ended September 30, 2018 and 2017

(In thousands)

 

		Three Months Ended September 30,
		2018				2017
Cash Flows from Operating Activities
Net loss		$	(46	)		$	(79	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			17				17
Deferred income tax expense			(35	)			(31	)
Amortization of premiums and discounts on securities, net			21				35
Net changes in:
Accrued interest receivable			(6	)			15
Bank owned life insurance-cash surrender value			(6	)			(1	)
Other assets			60				57
Other liabilities			43				69
Net cash provided by operating activities			48				82
Cash Flows from Investing Activities
Net change in interest-earning time deposits in other financial institutions			-				(502	)
Principal repayments of available for sale mortgage-backed securities			399				535
Net change in loans			(2,228	)			(505	)
Purchase of premises and equipment			(9	)			-
Purchase of bank owned life insurance			-				(750	)
Net cash used in investing activities			(1,838	)			(1,222	)
Cash Flows from Financing Activities
Net change in deposits			(278	)			(1,483	)
Repayment of Federal Home Loan Bank advances			-				(3,500	)
Payments by borrowers for taxes and insurance			63				68
Net cash used in financing activities			(215	)			(4,915	)
Net Change in Cash and Cash Equivalents			(2,005	)			(6,055	)
Beginning Cash and Cash Equivalents			4,304				8,699
Ending Cash and Cash Equivalents		$	2,299			$	2,644
Supplemental Disclosure of Cash Flow Information
Cash paid during the year for:
Interest on deposits and borrowings		$	40			$	47

 

See Notes to Condensed Consolidated Financial Statements

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Note 1:    Basis of Presentation

 

Community Savings Bancorp, Inc. (the “Company”), headquartered in Caldwell, Ohio, was formed to serve as the stock holding company for Community Savings (the “Bank”) following its mutual-to-stock conversion. The conversion was completed effective January 10, 2017.  The Company issued 441,290 shares at an offering price of $10.00 per share.

 

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of the unaudited financial statements have been included to present fairly the financial position as of September 30, 2018 and the results of operations and cash flows for the three months ended September 30, 2018 and 2017. All interim amounts have not been audited and the results of operations for the three months ended September 30, 2018, herein are not necessarily indicative of the results of operations to be expected for the entire fiscal year.

 

The accompanying consolidated balance sheet as of June 30, 2018 has been derived from audited financial statements included in the Company’s Form 10-K. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. Accordingly, these consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company as of and for the year ended June 30, 2018 included in the Company’s Form 10-K.

 

Principles of Consolidation

 

The consolidated financial statements as of and for the periods ended September 30, 2018 and at June 30, 2018, include Community Savings Bancorp, Inc. and its wholly-owned subsidiary, Community Savings (the “Bank”), together referred to as the “Company.” Intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. 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, valuation of deferred tax assets, and fair values of financial instruments.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Note 2:   Securities

 

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
		(In thousands)
Available-for-sale Securities:
September 30, 2018
Mortgage-backed securities of U.S. government sponsored entities - residential		$	3,878			$	4			$	(105	)		$	3,777
Collateralized mortgage obligations of government sponsored entities - residential			205				1				(6	)			200
State and political subdivisions
Taxable			812				1				(3	)			810
Nontaxable			1,454				-				(36	)			1,418
		$	6,349			$	6			$	(150	)		$	6,205
June 30, 2018
Mortgage-backed securities of U.S. government sponsored entities - residential		$	4,280			$	6			$	(94	)		$	4,192
Collateralized mortgage obligations  of government sponsored entities - residential			218				1				(5	)			214
State and political subdivisions
Taxable			815				1				(3	)			813
Nontaxable			1,457				1				(26	)			1,432
		$	6,770			$	9			$	(128	)		$	6,651

  

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The amortized cost and fair value of available-for-sale securities at September 30, 2018, 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. Securities not due at a single maturity date are shown separately.

 

		Amortized				Fair
		Cost				Value
		(In thousands)
Within one year		$	552			$	552
One to five years			-				-
Five to ten years			289				286
Beyond ten years			1,425				1,390
			2,266				2,228
Mortgage-backed securities of U.S.  government sponsored entities - residential			3,878				3,777
Collateralized mortgage obligations  of government sponsored entities - residential			205				200
Totals		$	6,349			$	6,205

 

The Company had no sales of investment securities during the three-month periods ended September 30, 2018 and 2017.

 

The Company had pledged $1.6 million and $1.7 million of its investment securities at September 30, 2018 and June 30, 2018, respectively, and $635,000 of interest-earning time deposits at September 30, 2018 and June 30, 2018. The Company also had pledged $125,000 of interest-earning demand deposits at September 30, 2018 and June 30, 2018, primarily to secure public deposits.

 

The Company’s other investment securities consist of $915,000 of stock in the FHLB and $25,000 of stock in the Company’s data service provider at both September 30, 2018 and June 30, 2018.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table shows the Company’s investments’ gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and June 30, 2018:

 

		Less than 12 Months								12 Months or Longer								Total
Description of Securities		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(In thousands)
September 30, 2018
Available-for-sale Securities:
Mortgage-backed securities of U.S. government sponsored entities - residential		$	1,139			$	(14	)		$	2,235			$	(91	)		$	3,374			$	(105	)
Collateralized mortgage obligations of government sponsored entities - residential			-				-				115				(6	)			115				(6	)
State and political subdivisions
Taxable			-				-				507				(3	)			507				(3	)
Nontaxable			861				(7	)			357				(29	)			1,218				(36	)
		$	2,000			$	(21	)		$	3,214			$	(129	)		$	5,214			$	(150	)

 

June 30, 2018
Available-for-sale Securities:
Mortgage-backed securities of U.S. government sponsored entities - residential		$	1,777			$	(31	)		$	1,568			$	(63	)		$	3,345			$	(94	)
Collateralized mortgage obligations of government sponsored entities - residential			121				(5	)			-				-				121				(5	)
State and political subdivisions
Taxable			-				-				510				(3	)			510				(3	)
Nontaxable			531				(3	)			363				(23	)			894				(26	)
		$	2,429			$	(39	)		$	2,441			$	(89	)		$	4,870			$	(128	)

 

Other-than-temporary Impairment

 

At September 30, 2018 and June 30, 2018, the decline in fair value of the Company’s investment securities is attributable to changes in interest rates and not credit quality. At September 30, 2018 there were a total of twenty-six securities in a loss position. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before recovery of their amortized cost bases, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2018 and June 30, 2018.

 

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Note 3:

Loans and Allowance for Loan Losses

 

Loans at September 30, 2018 and June 30, 2018 include:

 

		September 30,				June 30,
		2018				2018
		(In thousands)
Real estate
One- to four-family residential		$	24,811			$	25,127
Home equity lines of credit			1,919				1,979
Commercial and multi-family			1,903				1,927
Consumer and other			5,483				2,855
Total loans			34,116				31,888
Allowance for loan losses			(253	)			(253	)
Net loans		$	33,863			$	31,635

 

The premium on loans purchased is included in the loan balances of consumer and other. The amounts of the premiums were $73,000 and $81,000 at September 30, 2018 and June 30, 2018, respectively.

 

The risk characteristics applicable to each segment of the loan portfolio are described below:

 

Residential Real Estate and Home Equity Lines of Credit

 

Residential mortgage loans and home equity lines of credit are secured by one-to four-family residences and are comprised of owner-occupied and non-owner-occupied loans. Construction real estate loans (immaterial for the periods presented) are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. The Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values or residential properties. Risk is mitigated by the fact that loans are of smaller individual amounts and spread over a large number of borrowers.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Multi-family Residential Real Estate

 

Multi-family real estate loans generally involve a greater degree of credit risk than one-to four- family residential mortgage loans and carry larger loan balances. This increased credit risk is a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the effects of general economic conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Furthermore, the repayment of loans secured by multi-family real estate is typically dependent upon the successful operation of the related real estate property. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

 

Commercial Real Estate

 

Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk.

 

Consumer Loans

 

Consumer loans entail greater credit risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly, such as automobiles. In such cases, repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and the remaining deficiency often does not warrant further substantial collection efforts against the borrower. In particular, amounts realizable on the sale of repossessed automobiles may be significantly reduced based upon the condition of the automobiles and the lack of demand for used automobiles.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents, by portfolio segment, the activity in the allowance for loan losses for the three months ended September 30, 2018 and the recorded investment in loans and impairment method as of September 30, 2018:

 

		September 30, 2018
		Real Estate
		1-4 Family Residential				Home Equity Lines of Credit				Commercial and Multi- Family				Consumer and Other				Unallocated				Total
		(In thousands)
Allowance for loan losses:
Balance, July 1, 2018		$	171			$	13			$	10			$	23			$	36			$	253
Provision for loan losses			(13	)			-				-				24				(11	)			-
Charge-offs			-				-				-				-				-				-
Recoveries			-				-				-				-				-				-
Balance, September 30, 2018		$	158			$	13			$	10			$	47			$	25			$	253
Allowance for loan losses:
Ending balance, individually evaluated for impairment		$	7			$	-			$	-			$	-			$	-			$	7
Ending balance, collectively evaluated for impairment		$	151			$	13			$	10			$	47			$	25			$	246
Loans:
Ending balance		$	24,811			$	1,919			$	1,903			$	5,483							$	34,116
Ending balance; individually evaluated for impairment		$	406			$	5			$	85			$	-							$	496
Ending balance; collectively evaluated for impairment		$	24,405			$	1,914			$	1,818			$	5,483							$	33,620

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents, by portfolio segment, the activity in the allowance for loan losses for the three months ended September 30, 2017:

 

		September 30, 2017
		Real Estate
		1-4 Family Residential				Home Equity Lines of Credit				Commercial and Multi- Family				Consumer and Other				Unallocated				Total
		(In thousands)
Three Months Ended September 30, 2017
Allowance for loan losses:
Balance, July 1, 2017		$	162			$	21			$	8			$	20				42			$	253
Provision for loan losses			10				(6	)			1				-				(5	)			-
Charge-offs			-				-				-				-				-				-
Recoveries			-				-				-				-				-				-
Balance, September 30, 2017		$	172			$	15			$	9			$	20			$	37			$	253

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents, by portfolio segment, the allowance for loan losses, the recorded investment in loans and impairment method as of June 30, 2018:

 

		June 30, 2018
		Real Estate
		1-4 Family Residential				Home Equity Lines of Credit				Commercial and Multi- Family				Consumer and Other				Unallocated				Total
		(In thousands)
Allowance for loan losses:
Ending balance, individually evaluated for impairment		$	7			$	-			$	-			$	-			$	-			$	7
Ending balance, collectively evaluated for impairment		$	164			$	13			$	10			$	23			$	36			$	246
Loans:
Ending balance		$	25,127			$	1,979			$	1,927			$	2,855							$	31,888
Ending balance; individually evaluated for impairment		$	366			$	5			$	87			$	-							$	458
Ending balance; collectively evaluated for impairment		$	24,761			$	1,974			$	1,840			$	2,855							$	31,430

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Internal Risk Categories

 

The Company has adopted a standard loan grading system for all loans. Loans are selected for a grading review based on certain characteristics, including credit concentrations, subprime criteria, and delinquency of 90 days or more. Definitions are as follows:

 

Pass: These are higher quality loans that do not fit any of the other categories described below.

 

Special Mention: The loans identified as special mention have an obvious flaw or a potential weakness that deserves special management attention, but which has not yet impacted collectability. These flaws or weaknesses, if left uncorrected, may result in the deterioration of the prospects of repayment or the deterioration of the Company’s credit position.

 

Substandard: These are loans with a well-defined weakness, where the Company has a serious concern about the borrower’s ability to make full repayment if the weaknesses are not corrected. The loan may contain a flaw, which could impact the borrower’s ability to repay, or the borrower’s continuance as a “going concern.” When collateral values are not sufficient to secure the loan and other weaknesses are present, the loan may be rated substandard. A loan will also be rated substandard when full repayment is expected, but it must come from the liquidation of collateral.

 

One-to-four family residential real estate loans and home equity loans that are past due 90 days or more with loan to value ratios greater than 60 percent are classified as substandard.

 

Doubtful: These are loans with major defined weaknesses, where future charge-off of a part of the credit is highly likely. The primary repayment source is no longer viable and the viability of the secondary source of repayment is in doubt. The amount of loss is uncertain due to circumstances within the credit that are not yet fully developed and the loan is rated “Doubtful” until the loss can be accurately estimated.

 

Loss: These are near term charge-offs. Loans classified as loss are considered uncollectible and of such little value that it is not desirable to continue carrying them as assets on the Company’s financial statements, even though partial recovery may be possible at some future time.

 

 

Community Savings Bancorp, Inc.

Notes to 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 September 30, 2018 and June 30, 2018:

 

		Real Estate
		1-4 Family Residential				Home Equity Lines of Credit				Commercial and Multi- Family				Consumer and Other				Total
		(In thousands)
September 30, 2018
Pass		$	24,105			$	1,868			$	1,818			$	5,483			$	33,274
Special mention			-				-				-				-				-
Substandard			706				51				85				-				842
Doubtful			-				-				-				-				-
Total		$	24,811			$	1,919			$	1,903			$	5,483			$	34,116
June 30, 2018
Pass		$	24,507			$	1,941			$	1,840			$	2,855			$	31,143
Special mention			-				-				-				-				-
Substandard			620				38				87				-				745
Doubtful			-				-				-				-				-
Total		$	25,127			$	1,979			$	1,927			$	2,855			$	31,888

 

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 past year.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of September 30, 2018 and June 30, 2018:

 

																										Total Loans
										90 Days and																90 Days and
		30-59 Days				60-89 Days				Greater				Total								Total Loans				Greater and
		Past Due				Past Due				Past Due				Past Due				Current				Receivable				Accruing
		(In thousands)
September 30, 2018
Real estate
1-4 family residential		$	447			$	59			$	176			$	682			$	24,129			$	24,811			$	-
Home equity lines of credit			4				8				-				12				1,907				1,919				-
Commercial and multi-family			72				-				13				85				1,818				1,903				-
Consumer and other			27				-				-				27				5,456				5,483				-
Total		$	550			$	67			$	189			$	806			$	33,310			$	34,116			$	-
June 30, 2018
Real estate
1-4 family residential		$	271			$	3			$	65			$	339			$	24,788			$	25,127			$	-
Home equity lines of credit			-				4				-				4				1,975				1,979				-
Commercial and multi-family			74				-				13				87				1,840				1,927				-
Consumer and other			12				34				-				46				2,809				2,855				-
Total		$	357			$	41			$	78			$	476			$	31,412			$	31,888			$	-

 

A loan is considered impaired when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans, but also include loans modified in troubled debt restructurings.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents impaired loan information as of and for the three months ended September 30, 2018:

 

														For the Three Months Ended
		As of September 30, 2018												September 30, 2018
		Recorded Investment				Unpaid Principal Balance				Allowance for Loan Losses Allocated				Average Recorded Investment				Interest Income Recognized
		(In thousands)
Loans with no related allowance recorded:
Real estate
1-4 family residential		$	339			$	339			$	-			$	328			$	-
Home equity lines of credit			5				5				-				5				-
Commercial and multi-family			85				85				-				85				-
Consumer and other			-				-				-				-				-
Loans with an allowance recorded:
Real estate
1-4 family residential			68				71				7				71				1
Home equity lines of credit			-				-				-				-				-
Commercial and multi-family			-				-				-				-				-
Consumer and other			-				-				-				-				-
Totals		$	497			$	500			$	7			$	489			$	1

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents impaired loan information as of June 30, 2018 and for the three months ended September 30, 2017:

 

														For the Three Months Ended
		As of June 30, 2018												September 30, 2017
		Recorded Investment				Unpaid Principal Balance				Allowance for Loan Losses Allocated				Average Recorded Investment				Interest Income Recognized
		(In thousands)
Loans with no related allowance recorded:
Real estate
1-4 family residential		$	305			$	305			$	-			$	307			$	-
Home equity lines of credit			5				5				-				16				-
Commercial and multi-family			87				87				-				92				-
Consumer and other			-				-				-				4				-
Loans with an allowance recorded:
Real estate
1-4 family residential			69				71				7				90				1
Home equity lines of credit			-				-				-				-				-
Commercial and multi-family			-				-				-				-				-
Consumer and other			-				-				-				-				-
Totals		$	466			$	468			$	7			$	509			$	1

 

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.  Interest income recognized on a cash basis was not materially different than interest income recognized. 

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

The following table presents the Company’s nonaccrual loans at September 30, 2018 and June 30, 2018. The table excludes performing troubled debt restructurings.

 

		September 30,				June 30,
		2018				2018
		(In thousands)
Real estate
1-4 family residential		$	339			$	305
Home equity lines of credit			5				5
Commercial and multi-family			85				87
Consumer and other			-				-
Total nonaccrual		$	429			$	397

 

At September 30, 2018 and June 30, 2018, the Company had certain loans that were modified in previous years in troubled debt restructurings and impaired. The modification of terms of such loans 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 Company had loans modified, in previous years, in a troubled debt restructuring totaling $68,000 and $69,000 at September 30, 2018 and June 30, 2018, respectively. Troubled debt restructured loans had specific allowances totaling $7,000 at September 30, 2018 and June 30, 2018, respectively. At September 30, 2018, the Company had no commitments to lend additional funds to borrowers with troubled debt restructured loans.

 

No loans were modified as troubled debt restructurings during either the three months ended September 30, 2018 or 2017.

 

The Company had no troubled debt restructurings modified during the twelve months ended September 30, 2018 or 2017 that subsequently defaulted during the three-month periods ended September 30, 2018 or 2017. A troubled debt restructured loan is considered to be in payment default once it is 30 days contractually past due under the loan’s modified terms.

 

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

 

  

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Note 4:

Regulatory Matters

 

The Bank 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Bank’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 Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier I capital, and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of leverage capital to adjusted average total assets (as defined).

 

Management believes, as of September 30, 2018 and June 30, 2018, that the Bank meets all capital adequacy requirements to which it is subject.

 

Basel III requires the Bank to maintain minimum amounts and ratios of common equity Tier 1 capital to risk-weighted assets, as defined in the regulation. Under the Basel III rules, in order to avoid limitations on capital distributions, including dividends, the Bank must hold a capital conservation buffer above the adequately capitalized common equity Tier 1 capital to risk-weighted assets ratio. The capital conservation buffer is being phased in from zero percent to 2.50 percent by 2019. Under Basel III, the Bank elected to opt-out of including accumulated other comprehensive income in regulatory capital.

 

As of September 30, 2018 and June 30, 2018, the most recent notification categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total capital, Tier I capital, common equity Tier I capital and leverage capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

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

 

		Actual								For Capital Adequacy Purposes								To Be Well Capitalized Under Prompt Corrective Action Provisions
		Amount				Ratio				Amount				Ratio				Amount				Ratio
		(Dollars in thousands)
As of September 30, 2018
Total Capital (to Risk-Weighted Assets)
Company		$	8,581				36.8	%		$	1,868				8.0	%			N/A				N/A
Bank		$	7,844				33.6	%		$	1,868				8.0	%		$	2,335				10.0	%
Tier I Capital (to Risk-Weighted Assets)
Company		$	8,328				35.7	%		$	1,401				6.0	%			N/A				N/A
Bank		$	7,591				32.5	%		$	1,401				6.0	%		$	1,868				8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Company		$	8,328				35.7	%		$	1,052				4.5	%			N/A				N/A
Bank		$	7,591				32.5	%		$	1,052				4.5	%		$	1,517				6.5	%
Leverage Capital (to Adjusted Average Total Assets)
Company		$	8,328				16.3	%		$	2,047				4.0	%			N/A				N/A
Bank		$	7,591				14.8	%		$	2,047				4.0	%		$	2,559				5.0	%
As of June 30, 2018
Total Capital (to Risk-Weighted Assets)
Company		$	8,634				37.0	%		$	1,868				8.0	%			N/A				N/A
Bank		$	7,849				33.6	%		$	1,868				8.0	%		$	2,335				10.0	%
Tier I Capital (to Risk-Weighted Assets)
Company		$	8,381				35.9	%		$	1,401				6.0	%			N/A				N/A
Bank		$	7,596				32.5	%		$	1,401				6.0	%		$	1,868				8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Company		$	8,381				35.9	%		$	1,051				4.5	%			N/A				N/A
Bank		$	7,596				32.5	%		$	1,051				4.5	%		$	1,517				6.5	%
Leverage Capital (to Adjusted Average Total Assets)
Company		$	8,381				16.4	%		$	2,047				4.0	%			N/A				N/A
Bank		$	7,596				14.8	%		$	2,047				4.0	%		$	2,559				5.0	%

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Note 5:

Disclosures about Fair Value of Assets and Liabilities

 

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or 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 (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2

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

Level 3

Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Recurring Measurements

 

The following table presents the fair value measurement of assets recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2018 and June 30, 2018:

 

						Fair Value Measurement Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(In thousands)
September 30, 2018
Mortgage-backed securities of U.S. government sponsored entities - residential		$	3,777			$	-			$	3,777			$	-
Collateralized mortgage obligations of government sponsored entities - residential			200				-				200				-
State and political subdivisions
Taxable			810				-				810				-
Nontaxable			1,418				-				1,418				-
		$	6,205			$	-			$	6,205			$	-
June 30, 2018
Mortgage-backed securities of U.S. government sponsored entities - residential		$	4,192			$	-			$	4,192			$	-
Collateralized mortgage obligations of government sponsored entities - residential			214				-				214				-
State and political subdivisions
Taxable			813				-				813				-
Nontaxable			1,432				-				1,432				-
		$	6,651			$	-			$	6,651			$	-

 

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There were no assets classified within Level 3 of the fair value hierarchy measured on a recurring basis. There were no transfers between Level 1 and Level 2 during the three-month periods ended September 30, 2018 and 2017.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

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 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 flow. Such securities are classified within Level 2 of the valuation hierarchy.

 

Nonrecurring Measurements

 

The following table presents fair value measurements of assets measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which fair value measurements fall at September 30, 2018 and June 30, 2018:

 

						Fair Value Measurement Using
		Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(In thousands)
September 30, 2018
Impaired loans
Real estate
1-4 family residential		$	61			$	-			$	-			$	61
Forclosed assets
Residential real estate		$	9			$	-			$	-			$	9
June 30, 2018
Impaired loans
Real estate
1-4 family residential		$	62			$	-			$	-			$	62
Foreclosed assets
Residential real estate		$	9			$	-			$	-			$	9

 

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Impaired Loans (Collateral Dependent)

 

The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the borrower and borrower’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

 

Foreclosed Assets

 

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

 

Appraisals for collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of management reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Unobservable (Level 3) Inputs

 

The following table presents quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements:

 

		Fair Value				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
		(In thousands)
September 30, 2018
Impaired loans (collateral dependent) - residential real estate		$	61			Sales comparison approach		Adjustment for differences between the comparable real estate sales			13	%
Foreclosed assets - residential real estate		$	9			Sales comparison approach		Adjustment for differences between the comparable real estate sales			52	%
June 30, 2018
Impaired loans (collateral dependent) - residential real estate		$	62			Sales comparison approach		Adjustment for differences between the comparable real estate sales			13	%
Foreclosed assets - residential real estate		$	9			Sales comparison approach		Adjustment for differences between the comparable real estate sales			52	%

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Fair Value of Financial Instruments

 

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not carried at fair value and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2018 and June 30, 2018.

 

						Fair Value Measurement Using
		Carrying Amount				Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
		(In thousands)
September 30, 2018
Financial assets
Cash and cash equivalents		$	2,299			$	2,299			$	-			$	-			$	2,299
Interest-earning time deposits			4,595				4,595				-				-				4,595
Other investment securities			940				-				-				940				940
Loans, net			33,863				-				-				34,083				34,083
Accrued interest receivable			141				-				141				-				141
Bank owned life insurance			775				-				775				-				775
Financial liabilities
Deposits			40,121				32,831				7,056				-				39,887
Federal Home Loan Bank advances			1,000				-				1,004				-				1,004
Payments by borrowers for taxes and insurance			155				-				155				-				155
June 30, 2018
Financial assets
Cash and cash equivalents		$	4,304			$	4,304			$	-			$	-			$	4,304
Interest-earning time deposits			4,595				4,595				-				-				4,595
Other investment securities			940				-				-				940				940
Loans, net			31,635				-				-				32,195				32,195
Accrued interest receivable			135				-				135				-				135
Bank owned life insurance			769				-				769				-				769
Financial liabilities
Deposits			40,399				32,473				7,682				-				40,155
Federal Home Loan Bank advances			1,000				-				1,008				-				1,008
Payments by borrowers for taxes and insurance			92				-				92				-				92

 

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

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Cash and Cash Equivalents and Interest-earning Time Deposits

 

The carrying amount of cash, short-term instruments and time deposits approximate fair value and are classified as Level 1.

 

Other Investment Securities

 

Due to restrictions placed on their transferability, the FHLB and COCC stock are carried at cost, which approximates fair value based on redemption provisions resulting in a Level 3 classification.

 

Loans

 

Fair values of loans are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values, resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality, resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value of collateral as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

 

Accrued Interest Receivable and Payable

 

The carrying amounts of accrued interest approximate fair value, resulting in a Level 2 classification.

 

Bank Owned Life Insurance

 

The fair value of bank owned life insurance approximates the cash surrender value of the policies, resulting in a level 2 classification.

 

Deposits

 

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits, resulting in a Level 2 classification.

 

Federal Home Loan Bank Advances

 

The fair values of FHLB advances are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements, resulting in a Level 2 classification.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Payments by Borrowers for Taxes and Insurance

 

The fair value of escrow accounts is estimated to approximate the carrying amount resulting in a Level 2 classification.

 

Off-Balance Sheet Instruments

 

Fair values of off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

 

Note 6:

Accumulated Other Comprehensive Loss

 

Changes in accumulated other comprehensive loss by component, net of tax, for the three months ended September 30, 2018 and 2017 are as follows:

 

		Three Months Ended September 30,
		2018				2017
		(In thousands)
Beginning balance		$	(94	)		$	25
Other comprehensive loss before tax effect			(25	)			(10	)
Tax effect			5				3
Net current period other comprehensive loss			(20	)			(7	)
Ending balance		$	(114	)		$	18

 

There were no material items reclassified from accumulated other comprehensive income (loss) to the consolidated statement of operations for the three months ended September 30, 2018 and 2017.

 

Note 7:

Recent Accounting Pronouncements

 

FASB ASU 2014-09, Revenue from Contracts with Customers. In May 2014, the Financial Accounting Standards Board (“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, as to the Company, for annual reporting periods beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019, 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. ASU 2014-09 may require the Company to change how it recognizes certain components of noninterest income, but the Company does not believe it will have a material impact on the Company’s financial statements or disclosures.

 

  

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

FASB ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. In January 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

 

The amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption of the amendments in this update is not permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have not yet been issued or, by all other entities, that have not yet been made available for issuance are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company does not believe it will have a material impact on the Company’s financial statements or disclosures.

 

FASB ASU 2016-02, Leases. In February 2016, the FASB issued ASU 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

 

●

A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

 

●

A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

 

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers.

 

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing.

 

The amendments in ASU 2016-02 are effective, as to the Company, for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted for all public business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

 

FASB ASU 2016-13, Financial Instruments-Credit Losses. In June 2016, the FASB issued ASU 2016-13. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective, as to the Company, for annual reporting periods beginning after December 15, 2020 and for interim periods beginning after December 31, 2021. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations.

 

FASB ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs. In March 2017, the FASB issued ASU 2017-08. The amendment shortens the amortization period for certain callable debt securities purchased at a premium. Upon adoption of the standard, premiums on these qualifying callable debt securities will be amortized to the earliest call date. Discounts on purchased debt securities will continue to be accreted to maturity. This ASU will become effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. Upon transition, entities should apply the guidance on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and provide the disclosures required for a change in accounting principle. Management has not determined the expected effect of the adoption of ASU 2017-08 on the Company’s financial statements.

 

FASB ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value. In August, 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which changes the fair value measurement disclosure requirements of ASC 820. The ASU amends ASC 820 to add, remove, and modify certain fair value measurement disclosure requirements, primarily related to Level 3 fair value measurements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. Management is evaluating the new ASU, but does not expect the ASU to have a material effect on the Company's financial position or results of operations.

 

 

Community Savings Bancorp, Inc.

Notes to Consolidated Financial Statements (unaudited)

Note 8:

Loss Per Share

 

Basic loss per share (“LPS”) is calculated by dividing net loss applicable to common stock by the weighted-average number of shares of common stock outstanding during the period. Unallocated common shares held by the Company’s Employee Stock Ownership Plan (the “ESOP”) are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for basic and diluted LPS calculations until they are committed to be released.

 

Loss per share for the three months ended September 30, 2018 was $(0.11), calculated using 441,290 shares issued, less 31,054 unallocated shares held by the ESOP. The Company had no dilutive or potentially dilutive securities at September 30, 2018. Loss per share for the three months ended September 30, 2017 was $(0.20), calculated using 441,290 shares issued, less 32,688 unallocated shares held by the ESOP. The Company had no dilutive or potentially dilutive securities at September 30, 2017.

 

Note 9:

Employee Stock Ownership Plan (ESOP)

 

As part of the Company’s stock conversion, shares were purchased by the ESOP with a loan from Community Savings Bancorp, Inc. All employees of the Bank meeting certain tenure requirements are entitled to participate in the ESOP. Compensation expense related to the ESOP was $6,000 for the three months ended September 30, 2018 and 2017.

 

The stock price at the formation date was $10.00. The aggregate fair value of the 31,054 unallocated shares was $450,000 based on the $14.50 closing price of our common stock on September 30, 2018.

 

 

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

 

Management’s discussion and analysis of the financial condition at September 30, 2018 and results of operations for the three months ended September 30, 2018 and 2017, 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 consolidated financial statements and the notes thereto, appearing in Part I, Item 1 of this quarterly report on Form 10-Q.

 

Forward-Looking Statements

 

This document contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and similar expressions. These forward-looking statements include: statements of goals, intentions and expectations, statements regarding prospects and business strategy, statements regarding asset quality and market risk, and estimates of future costs, benefits and results.

 

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, among other things, the following: (1) general economic conditions, (2) competitive pressure among financial services companies, (3) changes in interest rates, (4) deposit flows, (5) loan demand, (6) changes in legislation or regulation, (7) changes in accounting principles, policies and guidelines and (8) other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.

 

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. We have no obligation to update or revise any forward-looking statements to reflect any changed assumptions, any unanticipated events or any changes in the future.

 

Comparison of Financial Condition at September 30, 2018 and June 30, 2018

 

Total Assets. Total assets decreased $240,000, or 0.5%, to $49.7 million at September 30, 2018 from $50.0 million at June 30, 2018. The decrease was due primarily to a decrease in cash and cash equivalents of $2.0 million, and a decrease of $445,000 in investment securities available-for-sale, partially offset by a $2.2 million increase in loans.

 

Cash and Cash Equivalents. Cash and cash equivalents decreased $2.0 million, or 46.5%, to $2.3 million at September 30, 2018. The decrease in cash and cash equivalents was due primarily to an increase in consumer loans of $2.2 million and $278,000 decrease in deposits, partially offset by a $445,000 decrease in investments available-for-sale securities.

 

Interest-earning Time Deposits in Other Financial Institutions. Interest-earning time deposits in other financial institutions were $4.6 million at September 30, 2018 and June 30, 2018, respectively.

 

Securities available-for-sale. Investment securities available-for-sale decreased $445,000, or 6.7%, to $6.2 million at September 30, 2018 from $6.7 million at June 30, 2018. The decrease in securities available-for-sale was primarily due to principal repayments on mortgage-backed securities totaling $399,000.

 

 

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

Net Loans. Net loans increased $2.2 million, or 6.9%, to $33.9 million at September 30, 2018 from $31.6 million at June 30, 2018. The increase in net loans was due primarily to an increase of $2.6 million, or 92.0%, in consumer loans to $5.5 million at September 30, 2018 from $2.9 million at June 30, 2018, partially offset by a decrease of $316,000, or 1.3%, in one-to four-family mortgages to $24.8 million at September 30, 2018 from $25.1 million at June 30, 2018. Loans originated during the three months ended September 30, 2018 totaled $3.5 million, of which $2.9 million were auto loans and $608,000 were loans secured by one-to four-family residential real estate.

 

Deposits. Deposits decreased $278,000, or 0.7%, to $40.1 million at September 30, 2018 from $40.4 million at June 30, 2018. The decrease resulted primarily from a decrease in certificate of deposit accounts of $637,000, or 8.0%, and in demand deposit accounts of $188,000, or 1.8%, partially offset by an increase in savings and money market accounts of $546,000, or 2.5%.

 

Bank Owned Life Insurance. Cash surrender value of Bank Owned Life Insurance increased $6,000, or 0.8%, to $775,000 at September 30, 2018 from $769,000 at June 30, 2018.

 

FHLB Advances. FHLB advances were $1.0 million at September 30, 2018 and June 30, 2018, respectively.

 

Shareholders’ Equity. Shareholders’ equity decreased $66,000, or 0.8%, to $8.2 million at September 30, 2018 from $8.3 million at June 30, 2018. The decrease was due primarily to a net loss of $46,000 and a decrease in accumulated other comprehensive income of $20,000 during the period.

 

Comparison of Operating Results for the Three-Month Periods Ended September 30, 2018 and 2017

 

General. For the three months ended September 30, 2018, we had a net loss of $46,000 compared to a net loss of $79,000 for the three months ended September 30, 2017, a decrease in net loss of $33,000. The decrease in net loss resulted primarily from an increase in net interest income of $44,000, and an increase of $25,000 in noninterest income, which were offset in part by an increase of $15,000 in noninterest expense and a decrease of $22,000 in federal income tax benefits.

 

Average Balance Sheets. The following table sets forth average balance sheets, average yields and costs, and certain other information for the three month periods ended September 30, 2018 and 2017. All average balances are daily average balances. Nonaccrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of net deferred costs, discounts and premiums that are accreted to interest income.

 

 

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

		For the Three Months Ended September 30,
		2018												2017
		Average Outstanding Balance				Interest				Yield/Rate				Average Outstanding Balance				Interest				Yield/Rate
		(Dollars in thousands)
Interest-earning assets:
Loans		$	32,560			$	377				4.63	%		$	32,276			$	346				4.29	%
Investment securities			6,515				35				2.15	%			8,566				41				1.91	%
Other interest-earning assets (1)			7,769				51				2.62	%			8,666				39				1.80	%
Total interest-earning assets			46,844				463				3.96	%			49,508				426				3.44	%
Noninterest-earning assets			4,143												3,058
Allowance for loan losses			(253	)											(253	)
Total assets		$	50,734											$	52,313
Interest-bearing liabilities:
Demand accounts		$	2,288				1				0.17	%		$	2,229				1				0.18	%
Savings and money market accounts			22,446				15				0.27	%			22,858				16				0.28	%
Certificates of deposit			7,630				14				0.73	%			8,203				15				0.73	%
Total deposits			32,364				30				0.37	%			33,290				32				0.38	%
FHLB advances			1,000				10				4.00	%			2,141				15				2.80	%
Total interest-bearing liabilities			33,364				40				0.48	%			35,431				47				0.53	%
Noninterest-bearing liabilities			9,107												7,504
Total liabilities			42,471												42,935
Equity			8,263												9,378
Total liabilities and equity		$	50,734											$	52,313
Net interest income						$	423											$	379
Net interest rate spread (2)											3.48	%											2.91	%
Net interest-earning assets (3)		$	13,480											$	14,077
Net interest margin (4)											3.62	%											3.06	%
Average interest-earning assets to interest-bearing liabilities			140.40	%											139.73	%

 

(1)

Consists of stock in the FHLB and interest-bearing deposits in other banks.

(2)

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

(3)

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

(4)

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

 

 

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

Interest Income. Interest income increased $37,000, or 8.7%, to $463,000 for the three months ended September 30, 2018 from $426,000 for the three months ended September 30, 2017. The increase resulted primarily from a $31,000 increase in loan interest income and an increase of $12,000 in interest on other interest earning deposits, offset by a decrease of $6,000 in interest income from investment securities. The average balance of investment securities decreased $2.1 million, or 24.4%, to $6.5 million during the three months ended September 30, 2018 from $8.6 million during the three months ended September 30, 2017, which was partially offset by an increase in the average yield on investment securities of 24 basis points to 2.15% for the 2018 period from 1.91% for the 2017 period. The average balance of loans receivable increased $284,000, or 0.8%, to $32.6 million during the three months ended September 30, 2018 from $32.3 million during the three months ended September 30, 2017, while the average yield on loans increased 34 basis points to 4.63% during the three months ended September 30, 2018 from 4.29% during the year earlier period, reflecting higher market interest rates.

 

Interest Expense. Interest expense decreased $7,000, or 14.9%, to $40,000 for the three months ended September 30, 2018 from $47,000 for the three months ended September 30, 2017. Interest expense on deposits decreased $2,000, or 6.3%, to $30,000 for the three months ended September 30, 2018 from $32,000 for the three months ended September 30, 2017. The decrease was primarily due to a decrease in the average cost of deposits of one basis point to 0.37% from 0.38% for the three months ended September 30, 2018 and 2017, respectively, and a decrease of $926,000, or 2.8%, in the average balance of interest-bearing deposits to $32.4 million for the three month period in 2018 from $33.3 million for the comparable period in 2017. Interest expense on borrowings decreased $5,000, or 33.3%, to $10,000 for the three months ended September 30, 2018 from $15,000 for the three months ended September 30, 2017. The average balance of FHLB advances decreased $1.1 million, or 52.4%, to $1.0 million for the three months ended September 30, 2018 from $2.1 million at September 30, 2017 while the average cost of these advances increased 120 basis points to 4.00% from 2.80% period-to-period.

 

Net Interest Income. Net interest income increased $44,000, or 11.6%, to $423,000 for the three months ended September 30, 2018 from $379,000 for the three months ended September 30, 2017. Our net interest rate spread increased to 3.48% for the three months ended September 30, 2018 from 2.91% for the three months ended September 30, 2017, and our net interest margin increased to 3.62% for the three months ended September 30, 2018 from 3.06% for the comparable three-month period in 2017.

 

Provision for Loan Losses. The Company did not record a provision for loan losses for either of the three months ended September 30, 2018 or 2017. The allowance for loan losses was $253,000, or 0.74% of total loans at September 30, 2018, compared to $253,000, or 0.78% of total loans at September 30, 2017. Total nonperforming loans were $429,000 at September 30, 2018, compared to $454,000 at September 30, 2017. Classified (substandard, doubtful and loss) loans were $842,000 at September 30, 2018, compared to $994,000 at September 30, 2017, and total loans past due greater than 30 days were $806,000 and $407,000 at September 30, 2018 and 2017, respectively. The Bank had no net charge-offs during either of the three months ended September 30, 2018 and 2017. As a percentage of nonperforming loans, the allowance for loan losses was 59.0% at September 30, 2018 compared to 55.7% at September 30, 2017.

 

The allowance for loan losses reflects the estimate we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at September 30, 2018 and 2017. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, 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.

 

  

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

 

Noninterest Income. Noninterest income increased $25,000, or 37.9%, to $91,000 for the three months ended September 30, 2018 from $66,000 for the three months ended September 30, 2017. Service charges and fees were $81,000 during the three months ended September 30, 2018 compared to $65,000 for the same period in 2017.

 

Noninterest Expense. Noninterest expense increased $15,000, or 2.7%, to $570,000 for the three months ended September 30, 2018 compared to $555,000 for the three months ended September 30, 2017. Salaries and benefits decreased $11,000, or 4.9%, to $212,000 for the three months ended September 30, 2018 from $223,000 for the three months ended September 30, 2017. Data processing decreased by $5,000, or 5.8% and office supplies decreased $3,000, or 12.0%. Financial institution taxes increased $5,000, or 38.4%, primarily due to the increase in capital as a result of the initial stock offering. Occupancy and equipment increased $9,000 and professional services increased $4,000. Other expenses increased $13,000, or 33.3%, to $52,000 from $39,000 during the three months ended September 30, 2017, due primarily to an increase in loan expense of $10,000, most of which is associated with the startup of our new indirect auto lending program.

 

Federal Income Taxes. We recognized a federal income tax benefit of $9,000 for the three months ended September 30, 2018, compared to a tax benefit of $31,000 for the three months ended September 30, 2017, due primarily to the $55,000 decrease in the net loss before taxes period to period.

 

Liquidity and Capital Resources

 

Our primary sources of funds are deposits, principal and interest payments on loans, and advances from the FHLB-Cincinnati. While maturities and scheduled amortization of loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments including interest-earning 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 provided by operating activities was $47,000 and $82,000 for the three months ended September 30, 2018 and 2017, respectively. Net cash used in investing activities was $(1.8 million) and $(1.2 million) for the three months ended September 30, 2018 and 2017, respectively. The change in cash flows in investing activities resulted primarily from the increase in net loans of $2.2 million, which were partially offset by principal repayments of mortgage backed securities of $399,000. Cash used in financing activities was $(214,000) and $(4.9 million) in the three months ended September 30, 2018 and 2017, respectively. This change resulted primarily from the repayments of FHLB advances of $3.5 million and a decrease in deposits of $1.5 million for the three months ended September 30, 2017.

 

  

Community Savings Bancorp, Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

 

Community Savings is subject to various regulatory capital requirements, including a risk-based capital measure. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At September 30, 2018, Community Savings exceeded all regulatory capital requirements and was categorized as “well-capitalized” under regulatory guidelines.

 

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

 

Commitments. At September 30, 2018, we had outstanding commitments to originate loans of $289,000, we had commitments under undisbursed construction loans of $787,000 and commitments under home equity lines of credit of $1.8 million. We anticipate that we will have sufficient funds available to meet our current loan origination commitments.

 

Certificates of deposit that are scheduled to mature in less than one year from September 30, 2018 totaled $3.4 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize FHLB-Cincinnati advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

 

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for equipment, and agreements with respect to borrowed funds and deposit liabilities.

 

  

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

ITEM 4.

Controls and Procedures

 

(a)

Evaluation of disclosure controls and procedures.

 

Under the supervision and with the participation of the Registrant’s management, including our Chief Executive Officer and Principal Financial Officer, the Registrant evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Principal Financial Officer have concluded that the Company's disclosure controls and procedures were effective.

 

(b)

Changes in internal controls.

 

There has been no change made in the Registrant’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

 

Community Savings Bancorp, Inc.

Part II

Other Information

 

ITEM 1.

Legal Proceedings

 

We are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. At September 30, 2018, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations.

 

ITEM 1A.

Risk Factors

 

Not applicable.

 

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

 

Exhibit
Number		Description
3.1		Articles of Incorporation of Community Savings Bancorp, Inc. (incorporated by reference to Registrant’s Form S-1 filed on September 9, 2016, Exhibit 3.1 (File No. 333-213561))
3.2		Bylaws of Community Savings Bancorp, Inc. (incorporated by reference to Registrant’s Form S-1 filed on September 9, 2016, Exhibit 3.2 (File No. 333-213561))
31.1		Certification of Chief 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
32		Written Statement of Chief Executive Officer and Principal Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

  

 

Community Savings Bancorp, Inc.

 

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.

 

				Community Savings Bancorp, Inc.
Date:	November 14, 2018		By:	/s/Alvin B. Parmiter
				Alvin B. Parmiter
				President and Chief Executive Officer
Date:	November 14, 2018		By:	/s/Sherman E. Crum
				Sherman E. Crum
				Controller and Principal Financial Officer