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8-K - 8-K - CSB BANCORP INC /OHd72498d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS THIRD QUARTER EARNINGS

Third Quarter Highlights

 

     Quarter
Ended
September 30,
2015
    Quarter
Ended
September 30,
2014
 

Diluted earnings per share

   $ 0.57      $ 0.55   

Net Income

   $ 1,556,000      $ 1,507,000   

Return on average common equity

     10.27     10.64

Return on average assets

     0.98     0.98

Millersburg, Ohio – October 21, 2015 – CSB Bancorp, Inc. (CSBB) today announced third quarter 2015 net income of $1,556,000 or $.57 per basic and diluted share, as compared to $1,507,000 or $.55 per basic and diluted share for the same period in 2014. For the nine month period ended September 30, 2015 net income totaled $4,415,000, compared to $4,445,000 for the same period last year.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.27% and 0.98%, respectively, compared with 10.64% and 0.98% for the third quarter of 2014.

Eddie Steiner, President and CEO stated, “Revenue growth remains somewhat constrained by relatively slow economic expansion in our markets, aggressive competition among lenders, and very low interest rates. Average loan balances declined during the quarter but remained above year-ago levels, and credit quality as indicated by the percentage of nonperforming loans has improved to its best level in seven years.”

Revenue, on a fully-taxable equivalent basis, totaled $6.3 million during the quarter, a 2% increase from the prior-year third quarter. Net interest income improved by $71 thousand as compared to third quarter 2014, while other income increased $42 thousand attributable primarily to an increase in gain on sale of mortgage loans to the secondary market and an increase in debit card interchange fees.


Non-interest expense amounted to $3.9 million during the quarter, an increase of $174 thousand or 5% from third quarter 2014. The Company’s third quarter efficiency ratio amounted to 62.4% as compared to 60.8% for the same quarter in the prior year. Salary and employee benefits rose $99 thousand, or 5%, on a quarter over prior year quarter with increases in base salary, medical and employment taxes.

Net interest margin amounted to 3.43% for the quarter compared to 3.58% from the linked June quarter and 3.53% for the prior year’s third quarter. The margin decrease year over year resulted from a 14 basis point decrease in average yield on earning assets partially offset with a 4 basis point decrease in average interest costs on all liabilities. The sustained low interest rate environment with resultant periodic rate decreases on certain long-term loans with scheduled rate repricing, and deposit growth which has outpaced loan growth over the past year, have contributed to the lower margins year over year. On a linked quarter basis, decreases were recognized in asset yields and loan balances during third quarter 2015, while deposit balances increased and liability costs were unchanged as compared to the quarter ended June 2015.

Federal income tax provision totaled $687 thousand in third quarter 2015, compared to $674 thousand for the same quarter in 2014 reflecting a stable effective tax rate of 31% for the comparable quarters.

Average total assets during the quarter amounted to $633 million, an increase of $25 million or 4% above the same quarter of the prior year. Average loan balances of $408 million were $0.5 million or less than 1% above prior year third quarter, while average securities balances of $148 million increased $10 million or 7% as compared to third quarter 2014.

Average commercial loan balances for the quarter, including commercial real estate, decreased $3 million or 1% from prior year levels. Average residential mortgage balances increased by $3 million or 4% 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 $538 thousand or 1% and average consumer credit balances increased $1 million or 16% versus the same quarter of the prior year.

The Company did not fund a loan loss provision during the third quarter 2015 due to declines in delinquent loans and nonperforming assets. Delinquent loan balances as of September 30, 2015 amounted to 0.7% of total loans as compared to 1.5% at September 30, 2014. Nonperforming assets totaled $2.0 million or 0.49% of total loans plus other real estate, a decrease from $4.7 million or 1.14% of total loans plus other real estate at September 30, 2014. The allowance for loan losses amounted to 1.12% of total loans on September 30, 2015.

Net loan charge-offs during third quarter 2015 were $25 thousand compared to third quarter 2014 net loan recoveries of $2 thousand. Annualized net charge-offs equated to 0.02% of average loans in the current quarter.


Average deposit balances for third quarter 2015 totaled $503 million, an increase of $21 million, or 4%, from the prior year’s third quarter. Within the deposit category, average noninterest-bearing account balances for the third quarter increased by $18 million, or 14% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $9 million or 4% from year ago levels, while average time deposit balances decreased $5 million or 4% from third quarter 2014. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the third quarter of 2015 grew by $3 million or 6% 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 $60.5 million on September 30, 2015 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.8% on September 30, 2015, as compared to 8.4% on September 30, 2014. The Company declared a common dividend of $.19 per share during the quarter. Based on the September 30, 2015 closing stock price of $24.20 per share, the Company’s annual dividend yield approximates 3.1%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $632 million as of September 30, 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)    Quarters              
(Dollars in thousands, except per share data)    2015     2015     2015     2014     2014     2015     2014  

EARNINGS

   3rd Qtr     2nd Qtr     1st Qtr     4th Qtr     3rd Qtr     9 months     9 months  

Net interest income FTE (a)

   $ 5,150      $ 5,255      $ 5,091      $ 5,060      $ 5,068      $ 15,496      $ 15,152   

Provision for loan losses

     —          195        194        185        123        389        458   

Other income

     1,119        1,180        1,054        1,061        1,077        3,353        3,189   

Other expenses

     3,944        3,974        3,948        3,787        3,770        11,866        11,295   

FTE adjustment (a)

     82        80        77        73        71        239        212   

Net income

     1,556        1,517        1,342        1,439        1,507        4,415        4,445   

Diluted earnings per share

     0.57        0.55        0.49        0.53        0.55        1.61        1.62   

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     0.98     0.97     0.87     0.92     0.98     0.94     0.99

Return on average common equity (ROE)

     10.27     10.23     9.33     9.99     10.64     9.95     10.81

Net interest margin FTE (a)

     3.43     3.58     3.52     3.43     3.53     3.51     3.60

Efficiency ratio

     62.42     61.47     64.09     61.34     60.81     62.64     61.50

Number of full-time equivalent employees

     161        163        165        167        168       

MARKET DATA

              

Book value/common share

   $ 22.09      $ 21.53      $ 21.46      $ 20.97      $ 20.55       

Period-end common share mkt value

     24.20        25.00        23.00        22.00        20.01       

Market as a % of book

     109.55     116.12     107.18     104.91     97.37    

Price-to-earnings ratio

     11.31        11.79        10.85        10.23        9.67       

Cash dividends/common share

   $ 0.19      $ 0.19      $ 0.19      $ 0.19      $ 0.19      $ 0.57      $ 0.55   

Common stock dividend payout ratio

     33.33     34.54     38.78     35.85     34.55     35.40     33.95

Average basic common shares

     2,739,405        2,739,405        2,739,405        2,738,869        2,737,927        2,739,405        2,737,220   

Average diluted common shares

     2,742,455        2,742,738        2,741,993        2,741,033        2,739,721        2,742,407        2,738,981   

Period end common shares outstanding

     2,739,405        2,739,405        2,739,405        2,739,405        2,738,355       

Common shares repurchased

     0        0        0        0        0       

Common stock market capitalization

   $ 66,294      $ 68,485      $ 63,006      $ 60,267      $ 54,794       

ASSET QUALITY

              

Gross charge-offs

   $ 95      $ 39      $ 110      $ 1,033      $ 9      $ 244      $ 389   

Net (recoveries) charge-offs

     25        32        81        992        (2     138        355   

Allowance for loan losses

     4,632        4,656        4,494        4,381        5,188       

Nonperforming assets (NPAs)

     2,018        3,117        3,685        3,949        4,682       

Net charge-off/average loans ratio

     0.02     0.03     0.08     0.96     0.00     0.04     0.12

Allowance for loan losses/period-end loans

     1.12        1.12        1.07        1.07        1.27       

NPAs/loans and other real estate

     0.49        0.75        0.88        0.96        1.14       

Allowance for loan losses/nonperforming loans

     229.54        149.38        121.96        110.93        110.80       

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     8.81     8.69     8.63     8.46     8.40    

Average equity to assets

     9.50        9.52        9.37        9.19        9.25       

Average equity to loans

     14.73        14.25        14.07        13.97        13.79       

Average loans to deposits

     81.21        83.61        83.34        82.37        84.73       

AVERAGE BALANCES

              

Assets

   $ 632,539      $ 625,032      $ 622,628      $ 621,536      $ 607,445      $ 626,745      $ 598,899   

Earning assets

     595,806        588,464        586,464        584,536        570,319        590,279        562,346   

Loans

     408,069        417,347        414,761        409,113        407,571        413,368        404,914   

Deposits

     502,514        499,157        497,646        496,670        481,017        499,791        473,486   

Shareholders’ equity

     60,112        59,473        58,351        57,134        56,203        59,316        54,988   

ENDING BALANCES

              

Assets

   $ 632,381      $ 622,956      $ 625,088      $ 620,981      $ 610,982       

Earning assets

     597,476        584,510        588,174        582,629        573,701       

Loans

     412,974        415,198        420,861        410,903        409,908       

Deposits

     505,088        496,404        497,333        500,075        486,521       

Shareholders’ equity

     60,504        58,966        58,791        57,450        56,270       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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)    September 30,     September 30,  
(Dollars in thousands, except per share data)    2015     2014  

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 11,940      $ 14,578   

Interest-earning deposits in other banks

     27,896        22,232   

Federal Funds Sold

     —          —     
  

 

 

   

 

 

 

Total cash and cash equivalents

     39,836        36,810   

Securities

    

Available-for-sale, at fair-value

     115,231        98,836   

Held-to-maturity

     36,621        38,110   

Restricted stock, at cost

     4,614        4,614   
  

 

 

   

 

 

 

Total securities

     156,466        141,560   

Loans held for sale

     140        —     

Loans

     412,974        409,908   

Less allowance for loan losses

     4,632        5,188   
  

 

 

   

 

 

 

Net loans

     408,342        404,720   

Goodwill and core deposit intangible

     5,263        5,390   

Bank owned life insurance

     10,016        9,748   

Premises and equipment, net

     8,290        8,395   

Accrued interest receivable and other assets

     4,028        4,359   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 632,381      $ 610,982   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 146,001      $ 131,498   

Interest-bearing

     359,087        355,023   
  

 

 

   

 

 

 

Total deposits

     505,088        486,521   

Short-term borrowings

     50,823        48,713   

Other borrowings

     13,602        17,118   

Accrued interest payable and other liabilities

     2,364        2,360   
  

 

 

   

 

 

 

Total liabilities

     571,877        554,712   
  

 

 

   

 

 

 

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        9,918   

Retained earnings

     36,944        33,171   

Treasury stock at cost - 241,197 shares in 2015 and 242,247 in 2014

     (4,871     (4,905

Accumulated other comprehensive loss

     (82     (543
  

 

 

   

 

 

 

Total shareholders’ equity

     60,504        56,270   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 632,381      $ 610,982   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

     Quarter ended      Nine months ended  
(Unaudited)    Sept 30,      Sept 30,  
(Dollars in thousands, except per share data)    2015      2014      2015      2014  

Interest and dividend income:

           

Loans, including fees

   $ 4,612       $ 4,645       $ 13,930       $ 13,705   

Taxable securities

     683         661         2,041         2,182   

Nontaxable securities

     142         115         408         345   

Other

     25         14         58         23   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     5,462         5,435         16,437         16,255   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest expense:

           

Deposits

     271         291         815         884   

Other

     123         147         365         431   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     394         438         1,180         1,315   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     5,068         4,997         15,257         14,940   

Provision for loan losses

     —           123         389         458   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     5,068         4,874         14,868         14,482   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest income

           

Service charges on deposits accounts

     315         324         916         937   

Trust services

     198         199         643         617   

Debit card interchange fees

     250         236         723         667   

Gain on sale of loans

     114         77         306         145   

Gain on sale of securities

     —           —           56         133   

Other

     242         241         709         690   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest income

     1,119         1,077         3,353         3,189   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest expenses

           

Salaries and employee benefits

     2,222         2,123         6,596         6,253   

Occupancy expense

     252         255         777         761   

Equipment expense

     166         180         497         549   

Franchise tax expense

     106         107         305         320   

Professional and director fees

     173         132         665         528   

Federal deposit insurance

     90         90         272         267   

Amortization of intangible assets

     31         32         94         97   

Other expenses

     904         851         2,660         2,520   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest expenses

     3,944         3,770         11,866         11,295   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax

     2,243         2,181         6,355         6,376   

Federal income tax provision

     687         674         1,940         1,931   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 1,556       $ 1,507       $ 4,415       $ 4,445   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share:

           

Basic

   $ 0.57       $ 0.55       $ 1.61       $ 1.62   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.57       $ 0.55       $ 1.61       $ 1.62