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8-K - FORM 8-K - CSB BANCORP INC /OHd910798d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS

First Quarter Highlights

 

     Quarter Ended
March 31, 2015
    Quarter Ended
March 31, 2014
 

Diluted earnings per share

   $ 0.49      $ 0.52   

Net Income

   $ 1,342,000      $ 1,416,000   

Return on average common equity

     9.33     10.70

Return on average assets

     0.87     0.97

Millersburg, Ohio – April 21, 2015 – CSB Bancorp, Inc. (CSBB) today announced first quarter 2015 net income of $1,342,000 or $.49 per basic and diluted share, as compared to $1,416,000 or $.52 per basic and diluted share for the same period in 2014.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 9.33% and 0.87%, respectively, compared with 10.70% and 0.97% for the first quarter of 2014.

Eddie Steiner, President and CEO commented, “Employment levels continue to increase across the markets we serve, and there is growing confidence among consumers and businesses that the economy will sustain its forward momentum. Home mortgage volumes are noticeably above year ago levels. Businesses are generally doing fairly well although many are remaining cautious and using accumulated cash reserves for expansion in lieu of borrowing.”

Revenue, on a fully-taxable equivalent basis, totaled $6.1 million during the quarter, a 4% increase from the prior-year first quarter. Net interest income improved by $116 thousand as compared to first quarter 2014, while other income increased $101 thousand attributable primarily to an increase in gain on sale of mortgage loans to the secondary market, gain on securities sold and an increase in debit card interchange fees.


Non-interest expense amounted to $3.9 million during the quarter, an increase of $271 thousand or 7% from first quarter 2014. The Company’s first quarter efficiency ratio amounted to 64.1% as compared to 61.6% for the same quarter in the prior year. Salary and employee benefits rose $131 thousand, or 6%, on a quarter over prior year quarter with increases in base salary, medical and employment taxes. During the first quarter in 2015 a one-time expense of $110 thousand was incurred to contract a professional firm to assist the company with the assessment of market opportunities and long-term strategic goals.

Net interest margin amounted to 3.52% for the quarter compared to 3.43% from the linked December quarter and 3.63% for the prior year’s first quarter. On a linked quarter basis, increases were recognized in first quarter 2015 asset yields as well as a 2 basis point decrease in liability costs as compared to the quarter ended December 2014. The margin decrease year over year resulted from a 16 basis point decrease in total interest yield partially offset with a 5 basis point decrease in interest rates on all liabilities. The low interest rate environment and lower than projected commercial and retail loan growth for the quarter is reflected in the lower margins year over year.

Federal income tax provision totaled $584 thousand in first quarter 2015, compared to $573 thousand for the same quarter in 2014 reflecting an effective tax rate of 30% for current quarter versus 29% for the first quarter in 2014. The lower tax rate in 2014 resulted from the recapture of a $35 thousand capital loss carryforward during the quarter.

Average total assets during the quarter amounted to $623 million, an increase of $32 million or 5% above the same quarter of the prior year. Average loan balances of $415 million were $19 million or 5% above prior year first quarter, while average securities balances of $146 million decreased $6 million or 4% as compared to first quarter 2014.

Average commercial loan balances for the quarter, including commercial real estate, increased $9 million or 3% above year ago levels. Average residential mortgage balances increased by $9 million or 12% 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 $147 thousand or less than 1%, and average consumer credit balances increased $1 million or 15% versus the same quarter of the prior year.

Nonperforming assets totaled $3.7 million or 0.88% of total loans plus other real estate, a decrease from $5.3 million or 1.30% of total loans plus other real estate at March 31, 2014. Delinquent loan balances as of March 31, 2015 amounted to 1.08% of total loans as compared to 1.57% at March 31, 2014.

Net loan charge-offs during first quarter 2015 were $81 thousand compared to first quarter 2014 net loan charge-offs of $205 thousand.


The Company funded $194 thousand in loan loss provision during the first quarter and the allowance for loan losses amounted to 1.07% of total loans on March 31, 2015. The ratio of the allowance for loan losses to nonperforming loans increased to 122% at March 31, 2015.

Average deposit balances grew by $27 million, or 6%, from the prior year’s first quarter. Average deposit balances for first quarter 2015 totaled $498 million. Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $22 million, or 19% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $10 million or 4% from year ago levels, while average time deposit balances decreased $4 million or 3% from first quarter 2014. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter of 2015 grew by $1 million or 2% 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 $58.8 million on March 31, 2015 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.6% on March 31, 2015, as compared to 8.1% on March 31, 2014. The Company declared a common dividend of $.19 per share during the quarter. Based on the March 31, 2015 closing stock price of $23.00 per share, the Company’s annual dividend yield approximates 3.3%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $625 million as of March 31, 2015. 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

   2015
1st Qtr
    2014
4th Qtr
    2014
3rd Qtr
    2014
2nd Qtr
    2014
1st Qtr
 

Net interest income FTE (a)

   $ 5,091      $ 5,060      $ 5,068      $ 5,115      $ 4,969  

Provision for loan losses

     194        185        123        150        185   

Other income

     1,054       1,061       1,077       1,159       953  

Other expenses

     3,948        3,787        3,770        3,848        3,677   

FTE adjustment (a)

     77       73       71       70       71  

Net income

     1,342        1,439        1,507        1,522        1,416   

Diluted earnings per share

     0.49       0.53       0.55       0.55       0.52  

PERFORMANCE RATIOS

          

Return on average assets (ROA)

     0.87     0.92     0.98     1.02     0.97

Return on average common equity (ROE)

     9.33     9.99     10.64     11.09     10.70

Net interest margin FTE (a)

     3.52     3.43     3.53     3.66     3.63

Efficiency ratio

     64.09     61.34     60.81     62.14     61.55

Number of full-time equivalent employees

     165       167       168       161       160  

MARKET DATA

          

Book value/common share

   $ 21.46      $ 20.97      $ 20.55      $ 20.18      $ 19.69  

Period-end common share mkt value

     23.00        22.00        20.01        20.23        19.67   

Market as a % of book

     107.18     104.91     97.37     100.25     99.90

Price-to-earnings ratio

     10.85        10.23        9.67        9.97        10.19   

Cash dividends/common share

   $ 0.19      $ 0.19      $ 0.19      $ 0.18      $ 0.18  

Common stock dividend payout ratio

     38.78     35.85     34.55     32.72     34.62

Average basic common shares

     2,739,405       2,738,869       2,737,927       2,737,085       2,736,634  

Average diluted common shares

     2,741,993        2,741,033        2,739,721        2,739,968        2,739,542   

Period end common shares outstanding

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

Common shares repurchased

     0        0        0        0        0   

Common stock market capitalization

   $ 63,006      $ 60,267      $ 54,794      $ 55,371      $ 53,830  

ASSET QUALITY

          

Gross charge-offs

   $ 110      $ 1,033      $ 9      $ 163      $ 217  

Net (recoveries) charge-offs

     81        992        (2     152        205   

Allowance for loan losses

     4,494       4,381       5,188       5,063       5,065  

Nonperforming assets (NPAs)

     3,685        3,949        4,682        5,031        5,291   

Net charge-off/average loans ratio

     0.08     0.96     0.00     0.15     0.21

Allowance for loan losses/period-end loans

     1.07        1.07        1.27        1.23        1.24   

NPAs/loans and other real estate

     0.88       0.96       1.14       1.22       1.30  

Allowance for loan losses/nonperforming loans

     121.96        110.94        110.81        100.64        95.72   

CAPITAL & LIQUIDITY

          

Period-end tangible equity to assets

     8.63     8.46     8.40     8.26     8.12

Average equity to assets

     9.37        9.19        9.25        9.20        9.08   

Average equity to loans

     14.07       13.97       13.79       13.39       13.55  

Average loans to deposits

     83.34        82.37        84.73        87.67        84.17   

AVERAGE BALANCES

          

Assets

   $ 622,628      $ 621,536      $ 607,445      $ 598,093      $ 590,977  

Earning assets

     586,464        584,536        570,319        561,063        555,492   

Loans

     414,761       409,113       407,571       411,016       396,028  

Deposits

     497,646        496,670        481,017        468,838        470,487   

Shareholders’ equity

     58,351       57,134       56,203       55,052       53,681  

ENDING BALANCES

          

Assets

   $ 625,088      $ 620,981      $ 610,982      $ 608,892      $ 601,978  

Earning assets

     588,174        582,629        573,701        564,348        559,657   

Loans

     420,861       410,903       409,908       411,930       407,770  

Deposits

     497,333        500,075        486,521        483,672        466,573   

Shareholders’ equity

     58,791       57,450       56,270       55,239       53,879  

 

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

 

     March 31,
2015
    March 31,
2014
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 14,253      $ 18,640   

Interest-earning deposits in other banks

     21,260        652   

Federal Funds Sold

     119        —     
  

 

 

   

 

 

 

Total cash and cash equivalents

  35,632      19,292   

Securities

Available-for-sale, at fair-value

  106,575      102,934   

Held-to-maturity

  34,446      43,688   

Restricted stock, at cost

  4,614      4,613   
  

 

 

   

 

 

 

Total securities

  145,635      151,235   

Loans held for sale

  299      —     

Loans

  420,861      407,770   

Less allowance for loan losses

  4,494      5,065   
  

 

 

   

 

 

 

Net loans

  416,367      402,705   

Goodwill and core deposit intangible

  5,326      5,455   

Bank owned life insurance

  9,881      9,614   

Premises and equipment, net

  8,248      8,641   

Accrued interest receivable and other assets

  3,700      5,036   
  

 

 

   

 

 

 

TOTAL ASSETS

$ 625,088    $ 601,978   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits:

Noninterest-bearing

$ 137,941    $ 114,844   

Interest-bearing

  359,392      351,729   
  

 

 

   

 

 

 

Total deposits

  497,333      466,573   

Short-term borrowings

  52,133      61,792   

Other borrowings

  14,788      17,406   

Accrued interest payable and other liabilities

  2,043      2,328   
  

 

 

   

 

 

 

Total liabilities

  566,297      548,099   
  

 

 

   

 

 

 

Shareholders’ equity

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2015 and 2014

  18,629      18,629   

Additional paid-in capital

  9,884      9,964   

Retained earnings

  34,911      31,155   

Treasury stock at cost - 241,197 shares in 2015 and 243,968 in 2014

  (4,871   (4,958

Accumulated other comprehensive gain (loss)

  238      (911
  

 

 

   

 

 

 

Total shareholders’ equity

  58,791      53,879   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 625,088    $ 601,978   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

     Quarter ended
March 31,
 
     2015      2014  

Interest and dividend income:

     

Loans, including fees

   $ 4,573       $ 4,429   

Taxable securities

     688         786   

Nontaxable securities

     130         115   

Other

     16         6   
  

 

 

    

 

 

 

Total interest and dividend income

  5,407      5,336   
  

 

 

    

 

 

 

Interest expense:

Deposits

  271      304   

Other

  122      134   
  

 

 

    

 

 

 

Total interest expense

  393      438   
  

 

 

    

 

 

 

Net interest income

  5,014      4,898   

Provision for loan losses

  194      185   
  

 

 

    

 

 

 

Net interest income after provision for loan losses

  4,820      4,713   
  

 

 

    

 

 

 

Noninterest income

Service charges on deposits accounts

  286      297   

Trust services

  202      216   

Debit card interchange fees

  227      198   

Gain on sale of loans

  70      24   

Gain on sale of securities

  35      —     

Other

  234      218   
  

 

 

    

 

 

 

Total noninterest income

  1,054      953   
  

 

 

    

 

 

 

Noninterest expenses

Salaries and employee benefits

  2,150      2,019   

Occupancy expense

  267      266   

Equipment expense

  167      181   

Franchise tax expense

  100      107   

Professional and director fees

  290      182   

Federal deposit insurance

  92      86   

Amortization of intangible assets

  32      32   

Other expenses

  850      804   
  

 

 

    

 

 

 

Total noninterest expenses

  3,948      3,677   
  

 

 

    

 

 

 

Income before income tax

  1,926      1,989   

Federal income tax provision

  584      573   
  

 

 

    

 

 

 

Net income

$ 1,342    $ 1,416   
  

 

 

    

 

 

 

Net income per share:

Basic

$ 0.49    $ 0.52   
  

 

 

    

 

 

 

Diluted

$ 0.49    $ 0.52