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8-K - 8-K - CSB BANCORP INC /OHd183109d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS

First Quarter Highlights

 

     Quarter Ended
March 31, 2016
    Quarter Ended
March 31, 2015
 

Diluted earnings per share

   $ 0.54      $ 0.49   

Net Income

   $ 1,480,000      $ 1,342,000   

Return on average common equity

     9.48     9.33

Return on average assets

     0.93     0.87

Millersburg, Ohio – April 19, 2016 – CSB Bancorp, Inc. (CSBB) today announced first quarter 2016 net income of $1,480,000 or $.54 per basic and diluted share, as compared to $1,342,000 or $.49 per basic and diluted share for the same period in 2015.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 9.48% and 0.93%, respectively, compared with 9.33% and 0.87% for the first quarter of 2015.

Eddie Steiner, President and CEO stated, “Economic conditions within our market are relatively stable and increased loan demand has been developing in both consumer and business sectors.”

Revenue, on a fully-taxable equivalent basis, totaled $6.4 million during the quarter, a 4% increase from the prior-year first quarter. Net interest income increased $271 thousand in the first quarter of 2016 compared to the same period in 2015, driven primarily by growth in average loans outstanding of $13 million and a lower cost of funds. As a result, the net interest margin improved by .05% to 3.57% during the first three months of 2016 from 3.52% a year earlier. The historically low interest rate environment and flattening of the yield curve following the Federal Reserve’s December rate hike continue to limit margin expansion.

Noninterest revenue declined by $62 thousand, or 6%, in the first quarter of 2016 compared to 2015. The decline reflects reductions in gains on the sale of securities and mortgage loans and a loss on fixed asset retirement. These reductions were partially offset by increases in interchange fees and trust income.


Noninterest expense amounted to $4 million during the quarter, an increase of $41 thousand or 1% from first quarter 2015. The Company’s first quarter efficiency ratio amounted to 62.2% as compared to 64.1% for the same quarter in the prior year. Salary and employee benefits rose $177 thousand, or 8%, on a quarter over prior year quarter with increases in base salary, medical coverage and employment taxes.

Federal income tax provision totaled $644 thousand in first quarter 2016, compared to $584 thousand for the same quarter in 2015 reflecting a stable effective tax rate of 30% for the comparable quarters.

Average total assets during the quarter amounted to $641 million, an increase of $18 million or 3% above the same quarter of the prior year. Average loan balances of $428 million increased $13 million, or 3%, from the prior year first quarter while average securities balances of $161 million increased $14 million or 10% as compared to first quarter 2015.

Average commercial loan balances for the quarter, including commercial real estate, increased $6 million, or 2%, from prior year levels. Average residential mortgage balances increased $3 million, or 3%, over the prior year’s quarter. Average home equity balances increased $2 million, or 5%, and average consumer credit balances increased $2 million, or 25%, versus the same quarter of the prior year.

Delinquent loan balances as of March 31, 2016 amounted to 0.61% of total loans as compared to 1.08% at March 31, 2015. Nonperforming assets totaled $1.9 million, or 0.44%, of total loans plus other real estate, a decrease from $3.7 million, or 0.88%, of total loans plus other real estate at March 31, 2015. The allowance for loan losses amounted to 1.15% of total loans on March 31, 2016.

Net loan recoveries during first quarter 2016 were $179 thousand (0.17% annualized) compared to first quarter 2015 net loan charge-offs of $81 thousand.

Average deposit balances for first quarter 2016 totaled $512 million, an increase of $15 million, or 3%, from the prior year’s first quarter. Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $8 million, or 6%, above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $15 million, or 7%, from year ago levels, while average time deposit balances decreased $8 million, or 7%, from first quarter 2015. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter of 2016 increased by $685 thousand, or 1%, above the average for the same period in the prior year. Repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $62.8 million on March 31, 2016 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.1% on March 31, 2016, as compared to 8.6% on March 31, 2015. The Company declared a first quarter dividend of $0.19 per share producing a yield of 3.1% based on the March 31, 2016 closing price of $24.25.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $637 million as of March 31, 2016. 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, North Canton 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

 

     Quarters  
(Unaudited)    2016     2015     2015     2015     2015  
(Dollars in thousands, except per share data)    1st Qtr     4th Qtr     3rd Qtr     2nd Qtr     1st Qtr  

EARNINGS

          

Net interest income FTE (a)

   $ 5,373      $ 5,262      $ 5,150      $ 5,255      $ 5,091   

Provision for loan losses

     164        —          —          195        194   

Other income

     992        1,071        1,119        1,180        1,054   

Other expenses

     3,989        3,930        3,944        3,974        3,948   

FTE adjustment (a)

     88        89        82        80        77   

Net income

     1,480        1,607        1,556        1,517        1,342   

Diluted earnings per share

     0.54        0.59        0.57        0.55        0.49   

PERFORMANCE RATIOS

          

Return on average assets (ROA)

     0.93     0.98     0.98     0.97     0.87

Return on average common equity (ROE)

     9.48     10.41     10.27     10.23     9.33

Net interest margin FTE (a)

     3.57     3.39     3.43     3.58     3.52

Efficiency ratio

     62.20     61.55     62.42     61.47     64.09

Number of full-time equivalent employees

     162        161        161        163        165   

MARKET DATA

          

Book value/common share

   $ 22.90      $ 22.35      $ 22.09      $ 21.53      $ 21.46   

Period-end common share mkt value

     24.25        24.50        24.20        25.00        23.00   

Market as a % of book

     105.90     109.62     109.55     116.12     107.18

Price-to-earnings ratio

     10.78        11.14        11.31        11.79        10.85   

Cash dividends/common share

   $ 0.19      $ 0.19      $ 0.19      $ 0.19      $ 0.19   

Common stock dividend payout ratio

     35.19     32.20     33.33     34.54     38.78

Average basic common shares

     2,741,379        2,739,664        2,739,405        2,739,405        2,739,405   

Average diluted common shares

     2,741,379        2,741,243        2,742,455        2,742,738        2,741,993   

Period end common shares outstanding

     2,742,242        2,740,996        2,739,405        2,739,405        2,739,405   

Common shares repurchased

     0        0        0        0        0   

Common stock market capitalization

   $ 66,499      $ 67,154      $ 66,294      $ 68,485      $ 63,006   

ASSET QUALITY

          

Gross charge-offs

   $ 10      $ 104      $ 95      $ 39      $ 110   

Net (recoveries) charge-offs

     (179     (30     25        32        81   

Allowance for loan losses

     5,005        4,662        4,632        4,656        4,494   

Nonperforming assets (NPAs)

     1,915        1,681        2,018        3,117        3,685   

Net charge-off (recovery) /average loans ratio

     (0.17 )%      (0.03 )%      0.02     0.03     0.08

Allowance for loan losses/period-end loans

     1.15        1.10        1.12        1.12        1.07   

NPAs/loans and other real estate

     0.44        0.40        0.49        0.75        0.88   

Allowance for loan losses/nonperforming loans

     261.35        277.35        229.54        149.38        121.96   

CAPITAL & LIQUIDITY

          

Period-end tangible equity to assets

     9.11     8.69     8.81     8.69     8.63

Average equity to assets

     9.77        9.38        9.50        9.52        9.37   

Average equity to loans

     14.63        14.99        14.73        14.25        14.07   

Average loans to deposits

     83.55        77.95        81.21        83.61        83.34   

AVERAGE BALANCES

          

Assets

   $ 640,670      $ 652,725      $ 632,539      $ 625,032      $ 622,628   

Earning assets

     604,911        615,725        595,806        588,464        586,464   

Loans

     427,916        408,524        408,069        417,347        414,761   

Deposits

     512,192        524,078        502,514        499,157        497,646   

Shareholders’ equity

     62,625        61,230        60,112        59,473        58,351   

ENDING BALANCES

          

Assets

   $ 637,202      $ 650,314      $ 632,381      $ 622,956      $ 625,088   

Earning assets

     602,306        610,251        597,476        584,510        588,174   

Loans

     433,453        422,871        412,974        415,198        420,861   

Deposits

     509,980        525,042        505,088        496,404        497,333   

Shareholders’ equity

     62,796        61,266        60,504        58,966        58,791   

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)    March 31,     March 31,  
(Dollars in thousands, except per share data)    2016     2015  

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 12,527      $ 14,253   

Interest-earning deposits in other banks

     14,844        21,260   

Federal Funds Sold

     —          119   
  

 

 

   

 

 

 

Total cash and cash equivalents

     27,371        35,632   

Securities

    

Available-for-sale, at fair-value

     122,242        106,575   

Held-to-maturity

     27,025        34,446   

Restricted stock, at cost

     4,614        4,614   
  

 

 

   

 

 

 

Total securities

     153,881        145,635   

Loans held for sale

     128        299   

Loans

     433,453        420,861   

Less allowance for loan losses

     5,005        4,494   
  

 

 

   

 

 

 

Net loans

     428,448        416,367   

Goodwill and core deposit intangible

     5,202        5,326   

Bank owned life insurance

     10,152        9,881   

Premises and equipment, net

     8,032        8,248   

Accrued interest receivable and other assets

     3,988        3,700   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 637,202      $ 625,088   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 145,967      $ 137,941   

Interest-bearing

     364,013        359,392   
  

 

 

   

 

 

 

Total deposits

     509,980        497,333   

Short-term borrowings

     48,787        52,133   

Other borrowings

     13,332        14,788   

Accrued interest payable and other liabilities

     2,307        2,043   
  

 

 

   

 

 

 

Total liabilities

     574,406        566,297   
  

 

 

   

 

 

 

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

     9,815        9,884   

Retained earnings

     38,989        34,911   

Treasury stock at cost - 238,360 shares in 2016 and 241,197 in 2015

     (4,784     (4,871

Accumulated other comprehensive gain

     147        238   
  

 

 

   

 

 

 

Total shareholders’ equity

     62,796        58,791   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 637,202      $ 625,088   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
Mar 31,
 
(Dollars in thousands, except per share data)    2016      2015  

Interest and dividend income:

     

Loans, including fees

   $ 4,742       $ 4,573   

Taxable securities

     737         688   

Nontaxable securities

     154         130   

Other

     28         16   
  

 

 

    

 

 

 

Total interest and dividend income

     5,661         5,407   
  

 

 

    

 

 

 

Interest expense:

     

Deposits

     259         271   

Other

     117         122   
  

 

 

    

 

 

 

Total interest expense

     376         393   
  

 

 

    

 

 

 

Net interest income

     5,285         5,014   

Provision for loan losses

     164         194   
  

 

 

    

 

 

 

Net interest income after provision for loan losses

     5,121         4,820   
  

 

 

    

 

 

 

Noninterest income

     

Service charges on deposits accounts

     278         286   

Trust services

     226         202   

Debit card interchange fees

     262         227   

Gain on sale of loans

     32         70   

Gain on sale of securities

     —           35   

Other

     194         234   
  

 

 

    

 

 

 

Total noninterest income

     992         1,054   
  

 

 

    

 

 

 

Noninterest expenses

     

Salaries and employee benefits

     2,327         2,150   

Occupancy expense

     244         267   

Equipment expense

     174         167   

Professional and director fees

     174         290   

Software expense

     187         189   

Marketing and public relations

     85         77   

Debit card expense

     104         99   

Other expenses

     694         709   
  

 

 

    

 

 

 

Total noninterest expenses

     3,989         3,948   
  

 

 

    

 

 

 

Income before income tax

     2,124         1,926   

Federal income tax provision

     644         584   
  

 

 

    

 

 

 

Net income

   $ 1,480       $ 1,342   
  

 

 

    

 

 

 

Net income per share:

     

Basic

   $ 0.54       $ 0.49   
  

 

 

    

 

 

 

Diluted

   $ 0.54       $ 0.49