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8-K - FORM 8-K - CSB BANCORP INC /OHd858425d8k.htm

Exhibit 99.1

LOGO

CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS

Fourth Quarter Highlights

 

     Quarter Ended
December 31, 2014
    Quarter Ended
December 31, 2013
 

Diluted earnings per share

   $ 0.53      $ 0.45   

Net Income

   $ 1,439,000      $ 1,224,000   

Return on average common equity

     9.99     9.19

Return on average assets

     0.92     0.82

Millersburg, Ohio – January 26, 2015 – CSB Bancorp, Inc. (CSBB) today announced fourth quarter 2014 net income of $1,439,000 or $.53 per basic and diluted share, as compared to $1,224,000 or $.45 per basic and diluted share for the same period in 2013.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 9.99% and 0.92%, respectively, compared with 9.19% and 0.82% for the fourth quarter of 2013.

For the full year of 2014, the Company reported net income of $5.9 million or $2.15 per basic and diluted share, as compared to $5.2 million or $1.91 per basic and diluted share in 2013. Full year ROE and ROA were 10.60% and 0.97%, respectively, compared to 9.93% and 0.90% in 2013.

Eddie Steiner, President and CEO commented, “Economic conditions for businesses and households continue to improve across the markets we serve. Loan demand softened in our commercial markets during the most recent quarter, with loan growth increases continuing within retail loan products. The very low interest rate environment continues to affect margins on earning assets. All things considered, we are pleased with the progress in our financial results for the quarter and the year as a whole.”

Revenue, on a fully-taxable equivalent basis, totaled $6.1 million during the quarter, a 2% increase from the prior-year fourth quarter. Net interest income improved by $65 thousand as


compared to fourth quarter 2013, while other income increased $37 thousand attributable primarily to an increase in debit card interchange fees. Full year revenue of $24.5 million reflects a $954 thousand, or a 4%, increase as compared to full year 2013.

Non-interest expense amounted to $3.8 million during the quarter, a decrease of $205 thousand or 5% from fourth quarter 2013. The Company’s fourth quarter efficiency ratio amounted to 61.3% as compared to 65.7% for the same quarter in the prior year. For the full year ended December 31, 2014, non-interest expense increased $234 thousand or 2% versus 2013, with the majority of the change attributable to increases in other expenses which were partially offset by a decrease in the new Ohio Financial Institutions tax that replaced the Ohio Franchise tax.

Net interest margin amounted to 3.43% for the quarter compared to 3.55% for the prior year’s fourth quarter. The margin decrease resulted from recognition of a purchase discount on a loan that paid off early in December 2013 resulting in a 0.13% favorable margin impact in the prior year quarter that did not recur during fourth quarter 2014. The net interest margin amounted to 3.56% for the full year in 2014 as compared to 3.51% for the prior full year. The margin increase on a year over year basis can be attributed to decreased interest rates on all liabilities and increased average loan and investment volumes.

Federal income tax provision totaled $637 thousand in fourth quarter 2014, compared to $520 thousand for the same quarter in 2013 reflecting an effective tax rate of 31% for current quarter versus 30% for the fourth quarter in 2013.

Average total assets during the quarter amounted to $622 million, an increase of $27 million or 5% above the same quarter of the prior year. Average loan balances of $409 million were $33 million or 9% above prior year fourth quarter, while average securities balances of $144 million decreased $2.9 million or 2% as compared to fourth quarter 2013.

Average commercial loan balances for the quarter, including commercial real estate, increased $27 million or 11% above year ago levels. Average residential mortgage balances increased by $9 million or 13% over the prior year’s quarter. The increase of mortgage balances was the result of the bank originating and retaining some 15 year fixed rate mortgages. Average home equity balances decreased $919 thousand or 2%, and average consumer credit balances increased $1 million or 14% versus the same quarter of the prior year.

Nonperforming assets totaled $3.9 million or 0.96% of total loans plus other real estate, a decrease from the $4.7 million or 1.14% of total loans plus other real estate at September 30, 2014. During first quarter 2014 a $2.9 million commercial relationship was placed on nonaccrual with an assigned specific reserve. The aforementioned commercial relationship was charged-down to estimated secured value during fourth quarter 2014. The charge-down of this single commercial relationship accounts for the reduction in nonperforming assets during the quarter. Delinquent loan balances as of December 31, 2014 amounted to 1.30% of total loans as compared to 1.26% at December 31, 2013.

Net loan charge-offs during fourth quarter 2014, as explained above, were $992 thousand compared to fourth quarter 2013 net loan charge-offs of $202 thousand. Net charge-offs for the twelve month period in 2014 amounted to 0.33% as compared to 0.09% of average loans for the twelve month period in 2013.


The Company funded $185 thousand in loan loss provision during the fourth quarter and the allowance for loan losses amounted to 1.07% of total loans on December 31, 2014. The ratio of the allowance for loan losses to nonperforming loans stood at 110.9% at December 31, 2014.

Average deposit balances grew by $17 million, or 4%, from the prior year’s fourth quarter. Average deposit balances for fourth quarter 2014 totaled $497 million. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $18 million, or 15% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $12 million or 5% from year ago levels, while average time deposit balances decreased $12 million or 9% during the year. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth quarter grew by $2 million or 4% above the average for the same period in the prior year. The repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $57.1 million on December 31, 2014 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.5% on December 31, 2014, as compared to 7.9% on December 31, 2013. The Company declared a common dividend of $.19 per share during the quarter. Based on the December 31, 2014 closing stock price of $22.00 per share, the Company’s annual dividend yield approximates 3.5%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $622 million as of December 31, 2014. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with sixteen banking centers in Holmes, Wayne, Tuscarawas and Stark counties and Trust offices located in Millersburg and Wooster, Ohio.

Forward-Looking Statement

This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

Contact Information:

Paula J. Meiler, SVP & CFO

330-763-2873

paula.meiler@csb1.com


CSB BANCORP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(Unaudited)

(Dollars in thousands except per share data)

 

    Quarters              

EARNINGS

  2014
4th Qtr
    2014
3rd Qtr
    2014
2nd Qtr
    2014
1st Qtr
    2013
4th Qtr
    2014
12 months
    2013
12 months
 

Net interest income FTE (a)

  $ 5,060      $ 5,068      $ 5,115      $ 4,969      $ 5,000      $ 20,212      $ 19,190   

Provision for loan losses

    185        123        150        185        210        643        840   

Other income

    1,061        1,077        1,159        953        1,024        4,250        4,318   

Other expenses

    3,787        3,770        3,848        3,677        3,992        15,082        14,848   

FTE adjustment (a)

    73        71        70        71        78        285        307   

Net income

    1,439        1,507        1,522        1,416        1,224        5,884        5,240   

Diluted earnings per share

    0.53        0.55        0.55        0.52        0.45        2.15        1.91   

PERFORMANCE RATIOS

             

Return on average assets (ROA)

    0.92     0.98     1.02     0.97     0.82     0.97     0.90

Return on average common equity (ROE)

    9.99     10.64     11.09     10.70     9.19     10.60     9.93

Net interest margin FTE (a)

    3.43     3.53     3.66     3.63     3.55     3.56     3.51

Efficiency ratio

    61.34     60.81     62.14     61.55     65.70     61.46     63.01

Number of full-time equivalent employees

    167        168        161        160        157       

MARKET DATA

             

Book value/common share

  $ 20.97      $ 20.55      $ 20.18      $ 19.69      $ 19.15       

Period-end common share mkt value

    22.00        20.01        20.23        19.67        19.00       

Market as a % of book

    104.91     97.37     100.25     99.90     99.22    

Price-to-earnings ratio

    10.23        9.67        9.97        10.19        9.90       

Cash dividends/common share

  $ 0.19      $ 0.19      $ 0.18      $ 0.18      $ 0.18      $ 0.74      $ 0.72   

Common stock dividend payout ratio

    35.85     34.55     32.72     34.62     37.50     34.42     37.70

Average basic common shares

    2,738,869        2,737,927        2,737,085        2,736,634        2,736,634        2,737,636        2,736,473   

Average diluted common shares

    2,741,033        2,739,721        2,739,968        2,739,542        2,738,411        2,739,078        2,738,477   

Period end common shares outstanding

    2,739,405        2,738,355        2,737,085        2,736,634        2,736,634       

Common shares repurchased

    0        0        0        0        0        0        0   

Common stock market capitalization

  $ 60,267      $ 54,794      $ 55,371      $ 53,830      $ 51,996       

ASSET QUALITY

             

Gross charge-offs

  $ 1,033      $ 9      $ 163      $ 217      $ 226      $ 1,422      $ 428   

Net (recoveries) charge-offs

    992        (2     152        205        202        1,347        335   

Allowance for loan losses

    4,381        5,188        5,063        5,065        5,085       

Nonperforming assets (NPAs)

    3,949        4,682        5,031        5,291        3,270       

Net charge-off/average loans ratio

    0.96     0.00     0.15     0.21     0.21     0.33     0.09

Allowance for loan losses/period-end loans

    1.07        1.27        1.23        1.24        1.34       

NPAs/loans and other real estate

    0.96        1.14        1.22        1.30        0.86       

Allowance for loan losses/nonperforming loans

    110.94        110.81        100.64        95.72        155.50       

CAPITAL & LIQUIDITY

             

Period-end tangible equity to assets

    8.46     8.40     8.26     8.12     7.94    

Average equity to assets

    9.19        9.25        9.20        9.08        8.89       

Average equity to loans

    13.97        13.79        13.39        13.55        14.05       

Average loans to deposits

    82.37        84.73        87.67        84.17        78.50       

AVERAGE BALANCES

             

Assets

  $ 621,536      $ 607,445      $ 598,093      $ 590,977      $ 594,736      $ 604,605      $ 581,150   

Earning assets

    584,536        570,319        561,063        555,492        558,155        567,940        546,112   

Loans

    409,113        407,571        411,016        396,028        376,164        405,973        374,821   

Deposits

    496,670        481,017        468,838        470,487        479,174        479,330        468,395   

Shareholders’ equity

    57,134        56,203        55,052        53,681        52,861        55,529        52,787   

ENDING BALANCES

             

Assets

  $ 620,981      $ 610,982      $ 608,892      $ 601,978      $ 596,465       

Earning assets

    582,629        573,701        564,348        559,657        557,482       

Loans

    410,903        409,908        411,930        407,770        379,125       

Deposits

    500,075        486,521        483,672        466,573        480,933       

Shareholders’ equity

    57,450        56,270        55,239        53,879        52,411       

 

NOTES:

(a) - Net Interest income on a fully tax-equivalent (“FTE”) basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. generally accepted accounting principles.

 


CSB BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

dollars in thousands, except per share data

 

     December 31,
2014
    December 31,
2013
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 15,310      $ 15,777   

Interest-earning deposits in other banks

     28,613        26,822   
  

 

 

   

 

 

 

Total cash and cash equivalents

     43,923        42,599   

Securities

    

Available-for-sale, at fair-value

     100,108        101,722   

Held-to-maturity

     38,316        44,350   

Restricted stock, at cost

     4,614        5,463   
  

 

 

   

 

 

 

Total securities

     143,038        151,535   

Loans held for sale

     75        —     

Loans

     410,903        379,125   

Less allowance for loan losses

     4,381        5,085   
  

 

 

   

 

 

 

Net loans

     406,522        374,040   

Goodwill and core deposit intangible

     5,357        5,487   

Bank owned life insurance

     9,815        9,551   

Premises and equipment, net

     8,286        8,690   

Accrued interest receivable and other assets

     3,965        4,563   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 620,981      $ 596,465   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 139,251      $ 120,325   

Interest-bearing

     360,824        360,608   
  

 

 

   

 

 

 

Total deposits

     500,075        480,933   

Short-term borrowings

     46,627        48,671   

Other borrowings

     14,953        12,459   

Accrued interest payable and other liabilities

     1,876        1,991   
  

 

 

   

 

 

 

Total liabilities

     563,531        544,054   
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2014 and 2013

     18,629        18,629   

Additional paid-in capital

     9,884        9,964   

Retained earnings

     34,090        30,232   

Treasury stock at cost - 241,197 shares in 2014 and 243,968 in 2013

     (4,871     (4,958

Accumulated other comprehensive loss

     (282     (1,456
  

 

 

   

 

 

 

Total shareholders’ equity

     57,450        52,411   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 620,981      $ 596,465   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

 

     Quarter ended
December 31,
     Year ended
December 31,
 
     2014      2013      2014      2013  

Interest and dividend income:

           

Loans, including fees

   $ 4,585       $ 4,542       $ 18,290       $ 17,963   

Taxable securities

     675         736         2,857         2,572   

Nontaxable securities

     121         128         466         513   

Other

     20         24         43         90   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     5,401         5,430         21,656         21,138   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest expense:

           

Deposits

     282         374         1,166         1,720   

Other

     132         134         563         535   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     414         508         1,729         2,255   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     4,987         4,922         19,927         18,883   

Provision for loan losses

     185         210         643         840   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     4,802         4,712         19,284         18,043   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest income

           

Service charges on deposits accounts

     332         348         1,269         1,349   

Trust services

     193         186         811         826   

Debit card interchange fees

     242         213         910         779   

Gain on sale of loans

     53         64         198         347   

Gain on sale of securities

     —           —           133         159   

Other

     241         213         929         858   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest income

     1,061         1,024         4,250         4,318   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest expenses

           

Salaries and employee benefits

     2,068         2,142         8,321         8,261   

Occupancy expense

     252         267         1,014         1,026   

Equipment expense

     166         195         715         719   

Franchise tax expense

     42         141         361         581   

Professional and director fees

     197         163         725         628   

Federal deposit insurance

     90         97         358         359   

Amortization of intangible assets

     32         34         129         135   

Other expenses

     940         953         3,459         3,139   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest expenses

     3,787         3,992         15,082         14,848   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax

     2,076         1,744         8,452         7,513   

Federal income tax provision

     637         520         2,568         2,273   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 1,439       $ 1,224       $ 5,884       $ 5,240   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share:

           

Basic

   $ 0.53       $ 0.45       $ 2.15       $ 1.91   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.53       $ 0.45       $ 2.15       $ 1.91