Note

– Securities

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30 , 201 7
Obligations of U.S. government-sponsored entities and agencies	$	12,503	$	89	$	(73	)	$	12,519
Obligations of state and political subdivisions		56,231		872		(217	)		56,886
Mortgage-backed securities – residential		59,536		164		(356	)		59,344
Mortgage-backed securities – commercial		1,452		—		(4	)		1,448
Collateralized mortgage obligations – residential		5,738		—		(100	)		5,638
Pooled t rust preferred security		181		366		—			547
Total available-for-sale securities	$	135,641	$	1,491	$	(750	)	$	136,382

Held-to-Maturity	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses		Fair Value
September 30 , 201 7
Obligations of state and political subdivisions	$	4,164	$	94	$	—	$	4,258

Available –for-Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 201 7
Obligations of U.S. government-sponsored entities and agencies	$	12,571	$	90	$	(74	)	$	12,587
Obligations of state and political subdivisions		56,824		890		(254	)		57,460
Mortgage-backed securities – residential		64,092		184		(438	)		63,838
Mortgage-backed securities – commercial		1,459		—		(1	)		1,458
Collateralized mortgage obligations - residential		6,310		1		(100	)		6,211
Pooled t rust preferred security		155		377		—			532
Total available-for-sale securities	$	141,411	$	1,542	$	(867	)	$	142,086

Held-to-Maturity	Amortized Cost		Gross Unre cognized Gains		Gross Unre cognized Losses			Fair Value
June 30, 201 7
Obligations of state and political subdivisions	$	4,259	$	73	$	(3	)	$	4,329

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

(Dollars in thousands, except per share amounts)

Proceeds from the sale of available-for-sale securities

were as follows:

	Three Months Ended September 30 ,
	2017		2016
Proceeds from sales	$	1,586	$	1,789
Gross realized gains		39		103
Gross realized losses		1		—

The income tax provision

related to these net realized gains and losses amounted to

$13

for the

three

months ended

September 30, 2017

and

$35

for the

three

months ended

September 30, 2016.

The

amortized cost and fair values of debt securities at

September 30, 2017,

by expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Securities

not

due at a single maturity date, primarily mortgage-backed securities, collateralized mortgage obligations and the pooled trust preferred security are shown separately.

Available-for-Sale	Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,839	$	2,854
Due after one year through five years		16,018		16,314
Due after five years through ten years		27,350		27,664
Due after ten years		22,527		22,573
Total		68,734		69,405

U.S. Government-sponsored m ortgage-backed and related securities		66,726		66,430
Pooled t rust preferred security		181		547
Total available-for-sale securities	$	135,641	$	136,382

Held-to-Maturity

Due after five years through ten years		601		626
Due after ten years		3,563		3,632
Total held-to-maturity securities	$	4,164	$	4,258

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

The following table summarizes the s

ecurities with unrealized losses at

September 30, 2017

and

June

30,

2017,

aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

(Dollars in thousands, except per share amounts)

	Less than 12 Months					12 Months or more					Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
September 3 0 , 2017
Obligations of US government-sponsored entities and agencies	$	3,921	$	(73	)	$	—	$	—		$	3,921	$	(73	)
Obligations of states and political subdivisions		12,984		(198	)		1,740		(19	)		14,724		(217	)
Mortgage-backed securities - residential		43,781		(307	)		3,381		(49	)		47,162		(356	)
Mortgage-backed securities - commercial		1,448		(4	)		—		—			1,448		(4	)
Collateralized mortgage obligations – residential		5,036		(89	)		602		(11	)		5,638		(100	)
Total temporarily impaired	$	67,170	$	(671	)	$	5,723	$	(79	)	$	72,893	$	(750	)

	Less than 12 Months					12 Months or more					Total
Available-for-sale	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
June 30, 20 1 7
Obligations of US government-sponsored entities and agencies	$	4,336	$	(74	)	$	—	$	—		$	4,336	$	(74	)
Obligations of states and political subdivisions		13,881		(241	)		834		(13	)		14,715		(254	)
Mortgage-backed securities - residential		42,071		(391	)		2,805		(47	)		44,876		(438	)
Mortgage-backed securities - commercial		1,458		(1	)		—		—			1,458		(1	)
Collateral mortgage obligation - residential		5,417		(88	)		654		(12	)		6,071		(100	)
Total temporarily impaired	$	67,163	$	(795	)	$	4,293	$	(72	)	$	71,456	$	(867	)

Management evaluates securities for other-than-temporary impairment (OTTI) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The securities portfolio is evaluated for OTTI by segregating the portfolio into

two

general segments and applying the appropriate OTTI model. Investment securities are generally evaluated for OTTI under FASB ASC Topic

320,

Accounting for Certain Investments in Debt and Equity Securities

In determining OTTI under the ASC Topic

320

model, management considers many factors, including: (

)

the length of time and the extent to which the fair value has been less than cost, (

) the financial condition and near-term prospects of the issuer, (

) whether the market decline was affected by macroeconomic conditions, and (

) whether the entity has the intent to sell the debt security or more likely than

not

will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

CONSUMERS BANCORP, INC.

Notes to the Consolidated Financial Statements

(Unaudited) (continued)

(Dollars in thousands, except per share amounts)

The unrealized losses within the securities portfolio as of

September 30, 2017

have

not

been recognized into income because the decline in fair value is

not

attributed to credit quality, management does

not

intend to sell and it is

not

likely that management will be required to sell the securities prior to their anticipated recovery. The decline in fair value within the securities portfolio is largely due to changes in interest rates and the fair value is expected to recover as the securities approach maturity.

The mortgage-backed securities and collateralized mortgage obligations were primarily issued by Fannie Mae, Freddie Mac and Ginnie Mae, institutions which the government has affirmed its commitment to support. The Corporation does

not

own any private label mortgage-backed securities.