Attached files

file filename
8-K - 8-K - CSB BANCORP INC /OHd696544d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS

Fourth Quarter Highlights

 

     Quarter Ended     Quarter Ended  
     December 31,
2018
    December 31,
2017
 

Diluted earnings per share

   $ 0.91     $ 0.65  

Net Income

   $ 2,492,000     $ 1,779,000  

Return on average common equity

     13.20     10.02

Return on average assets

     1.36     0.99

Millersburg, Ohio – January 25, 2019 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced fourth quarter 2018 net income of $2,492,000, or $.91 per basic and diluted share, as compared to $1,779,000, or $.65 per basic and diluted share, for the same period in 2017. Income before federal income tax amounted to $3.1 million, an increase of 16% over the same quarter in the prior year. For the twelve month period ended December 31, 2018 net income totaled $9,412,000, compared to $7,101,000 for the same period last year, an increase of 33%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 13.20% and 1.36%, respectively, compared with 10.02% and 0.99% for the fourth quarter of 2017.

Eddie Steiner, President and CEO stated, “We are pleased to report record fourth quarter and full year earnings as we continue to grow and increase market share in our primary counties. Average loan balances increased for the thirteenth consecutive quarter, while net interest margin improved for the sixth consecutive quarter. Year-end loan balances reflect 6% growth during 2018, with deposit balances 4% above prior year end.”

Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.2 million during the quarter, a 7% increase from the prior-year fourth quarter. Net interest income increased $474 thousand, or 7%, in the fourth quarter of 2018 compared to the same period in 2017.

Loan interest income including fees increased $720 thousand during fourth quarter 2018 as compared to the same quarter in 2017, an increase of 12%. Average total loan balances during the current quarter were $30 million higher than the year ago quarter an increase of 6%. Loan yields for fourth quarter 2018 averaged 5.03%, an increase of 25 basis points from the 2017 fourth quarter average of 4.78%.


The net interest margin was 4.01% compared to 3.84% for fourth quarter 2017. The tax equivalency effect on the margin dropped to 0.01% from 0.06% a result of the reduction in the corporate income tax rate in 2018.

Noninterest income increased by $150 thousand, or 13%, in the fourth quarter of 2018 compared to 2017. The increase reflects growth in debit card fee income, trust and brokerage income, and service charges on deposit accounts.

Noninterest expense amounted to $4.7 million during the quarter, an increase of $29 thousand, or less than 1%, from fourth quarter 2017. Salary and employee benefit costs increased $188 thousand, or 7%, compared to the prior year quarter, as a result of higher wage and 401k retirement expenses. Debit card expense increased by $24 thousand, or 19%, on a quarter over quarter basis primarily on expanded channel advertising and increasing community donations. The Company’s fourth quarter efficiency ratio was 57.3% as compared to 61.0% for the same quarter in the prior year.

Federal income tax provision was a $619 thousand expense in fourth quarter 2018, as compared to $901 thousand tax expense provision for the same quarter in 2017. The 2017 fourth quarter tax expense included a $101 thousand expense revaluation of the net deferred tax asset at the lower statutory rate. The effective tax rate, exclusive of the revaluation, decreased from 31% to 20% a result of the Tax Cuts and Jobs Act enacted December 2017.

Average total assets during the quarter amounted to $728 million, an increase of $12 million, or 2%, above the same quarter of the prior year. Average loan balances of $541 million increased $30 million, or 6%, from the prior year fourth quarter while average securities balances of $113 million decreased $14 million, or 11%, as compared to fourth quarter 2017.

Average commercial loan balances for the quarter, including commercial real estate, increased $17 million, or 5%, from prior year levels. Average residential mortgage balances increased $8 million, or 7%, over the prior year’s quarter. Average consumer credit balances increased $5 million, or 8%, versus the same quarter of the prior year.

Nonperforming assets decreased $3.1 million from December 31, 2017 to $3.4 million, or 0.62%, of total loans plus other real estate at December 31, 2018. The decrease in nonperforming assets is the result of various commercial loans exiting through liquidation during 2018. At December 31, 2018, approximately $1.1 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of December 31, 2018 declined to 0.84% of total loans as compared to 1.53% at December 31, 2017.

Net loan losses during fourth quarter 2018 were $641 thousand, or 0.47% annualized, compared to fourth quarter 2017 net loan losses of $12 thousand. Full year net charge-offs amounted to 0.19% in 2018 as compared to 0.17% in the prior year. The allowance for loan losses amounted to 1.08% of total loans at December 31, 2018 as compared to 1.08% at December 31, 2017.

Average deposit balances grew on a year over year comparison by $36 million, or 7%, partially on the strength of customer response to higher rates paid on insured deposits. For the full year 2018, the average cost of deposits amounted to 0.40%, as compared to 0.24% in 2017. During the fourth quarter 2018, increases in average deposit balances over the prior year quarter included non-


interest bearing demand accounts of $13 million and savings accounts of $7 million. The average balance of securities sold under repurchase agreement during the fourth quarter of 2018 decreased by $4 million, or 10%, compared to the average for the same period in the prior year. During 2017, a new corporate overnight cash management product was established within interest-bearing checking and at December 31, 2018 the new product had balances of $23 million.

Shareholders’ equity totaled $76.5 million on December 31, 2018 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.9% on December 31, 2018 and 9.3% on December 31, 2017. The Company declared a fourth quarter dividend of $0.26 per share, a $.04 per share increase over fourth quarter 2017, producing an annualized yield of 2.7% based on the December 31, 2018 closing price of $38.50.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $732 million as of December 31, 2018. 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 fifteen 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

 

(Unaudited)    Quarters              

(Dollars in thousands, except per share data)

EARNINGS

   2018
4th Qtr
    2018
3rd Qtr
    2018
2nd Qtr
    2018
1st Qtr
    2017
4th Qtr
    2018
12 months
    2017
12 months
 

Net interest income FTE (a)

   $ 6,934     $ 6,847     $ 6,697     $ 6,436     $ 6,532     $ 26,913     $ 24,833  

Provision for loan losses

     344       324       324       324       180       1,316       1,145  

Other income

     1,270       1,175       1,168       1,145       1,120       4,758       4,340  

Other expenses

     4,725       4,638       4,619       4,537       4,696       18,518       17,316  

FTE adjustment (a)

     24       46       45       47       96       162       381  

Net income

     2,492       2,432       2,324       2,164       1,779       9,412       7,101  

Diluted earnings per share

     0.91       0.88       0.85       0.79       0.65       3.43       2.59  

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     1.36     1.34     1.30     1.25     0.99     1.31     1.02

Return on average common equity (ROE)

     13.20     13.07     12.94     12.33     10.02     12.89     10.33

Net interest margin FTE (a)

     4.01     4.00     3.98     3.95     3.84     3.98     3.80

Efficiency ratio

     57.26     57.45     58.41     59.52     60.99     58.14     58.96

Number of full-time equivalent employees

     170       174       174       171       174      

MARKET DATA

              

Book value/common share

   $ 27.91     $ 26.94     $ 26.47     $ 25.90     $ 25.72      

Period-end common share mkt value

     38.50       40.57       39.00       35.95       33.11      

Market as a % of book

     137.94     150.59     147.34     138.80     128.73    

Price-to-earnings ratio

     11.22       12.80       13.13       13.07       12.78      

Cash dividends/common share

   $ 0.26     $ 0.24     $ 0.24     $ 0.24     $ 0.22     $ 0.98     $ 0.84  

Common stock dividend payout ratio

     28.57     27.27     28.24     30.38     33.85     28.57     32.43

Average basic common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Average diluted common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Period end common shares outstanding

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242      

Common shares repurchased

     0       0       0       0       0      

Common stock market capitalization

   $ 105,576     $ 111,253     $ 106,947     $ 98,584     $ 90,796      

ASSET QUALITY

              

Gross charge-offs

   $ 691     $ 43     $ 45     $ 303     $ 19     $ 1,082     $ 1,204  

Net (recoveries) charge-offs

     641       38       39       295       12       1,013       832  

Allowance for loan losses

     5,907       6,204       5,918       5,633       5,604      

Nonperforming assets (NPAs)

     3,428       5,341       4,399       4,622       6,522      

Net charge-off (recovery) /average loans ratio

     0.47     0.03     0.03     0.23     0.01     0.19     0.17

Allowance for loan losses/period-end loans

     1.08       1.16       1.11       1.06       1.08      

NPAs/loans and other real estate

     0.62       1.00       0.82       0.87       1.26      

Allowance for loan losses/nonperforming loans

     177.45       116.16       134.52       122.40       85.93      

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     9.86     9.77     9.41     9.50     9.33    

Average equity to assets

     10.29       10.25       10.06       10.16       9.84      

Average equity to loans

     13.83       13.72       13.47       13.50       13.76      

Average loans to deposits

     89.88       90.80       90.77       91.89       88.33      

AVERAGE BALANCES

              

Assets

   $ 727,962     $ 720,372     $ 715,902     $ 700,394     $ 715,799     $ 716,243     $ 692,859  

Earning assets

     686,807       679,281       674,699       660,772       674,234       675,474       652,916  

Loans

     541,482       538,182       534,852       527,315       511,805       535,506       497,048  

Deposits

     602,434       592,738       589,211       573,855       579,433       589,646       553,228  

Shareholders’ equity

     74,900       73,844       72,039       71,173       70,419       73,002       68,738  

ENDING BALANCES

              

Assets

   $ 731,722     $ 710,815     $ 723,299     $ 699,967     $ 707,063      

Earning assets

     682,345       668,468       681,200       662,779       664,365      

Loans

     548,974       535,424       535,427       530,395       516,830      

Deposits

     606,498       587,531       595,073       576,418       583,259      

Shareholders’ equity

     76,536       73,877       72,578       71,019       70,532      

 

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,
2018
    December 31,
2017
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 23,214     $ 17,255  

Interest-earning deposits in other banks

     22,350       19,165  
  

 

 

   

 

 

 

Total cash and cash equivalents

     45,564       36,420  

Securities

    

Available-for-sale, at fair-value

     85,528       97,663  

Held-to-maturity

     20,688       25,758  

Equity securities

     83       89  

Restricted stock, at cost

     4,614       4,614  
  

 

 

   

 

 

 

Total securities

     110,913       128,124  

Loans held for sale

     108       246  

Loans

     548,974       516,830  

Less allowance for loan losses

     5,907       5,604  
  

 

 

   

 

 

 

Net loans

     543,067       511,226  

Premises and equipment, net

     9,961       9,244  

Goodwill and core deposit intangible

     4,895       4,996  

Bank owned life insurance

     13,554       13,218  

Accrued interest receivable and other assets

     3,660       3,589  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 731,722     $ 707,063  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 185,871     $ 173,671  

Interest-bearing

     420,627       409,588  
  

 

 

   

 

 

 

Total deposits

     606,498       583,259  

Short-term borrowings

     37,415       39,480  

Other borrowings

     8,525       11,409  

Accrued interest payable and other liabilities

     2,748       2,383  
  

 

 

   

 

 

 

Total liabilities

     655,186       636,531  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2018 and 2017

     18,629       18,629  

Additional paid-in capital

     9,815       9,815  

Retained earnings

     54,288       47,535  

Treasury stock at cost – 238,360 shares in 2018 and 2017

     (4,784     (4,784

Accumulated other comprehensive loss

     (1,412     (663
  

 

 

   

 

 

 

Total shareholders’ equity

     76,536       70,532  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 731,722     $ 707,063  
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
December 31,
     Twelve months ended
December 31,
 
(Dollars in thousands, except per share data)    2018     2017      2018     2017  

Interest and dividend income:

         

Loans, including fees

   $ 6,877     $ 6,157      $ 26,237     $ 23,097  

Taxable securities

     587       578        2,371       2,374  

Nontaxable securities

     144       171        608       680  

Other

     164       108        421       289  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest and dividend income

     7,772       7,014        29,637       26,440  
  

 

 

   

 

 

    

 

 

   

 

 

 

Interest expense:

         

Deposits

     724       402        2,372       1,344  

Other

     138       176        514       644  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest expense

     862       578        2,886       1,988  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income

     6,910       6,436        26,751       24,452  

Provision for loan losses

     344       180        1,316       1,145  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income after provision for loan losses

     6,566       6,256        25,435       23,307  
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest income

         

Service charges on deposits accounts

     296       287        1,182       1,133  

Trust services

     223       207        863       687  

Debit card interchange fees

     351       311        1,316       1,193  

Gain on sale of loans

     107       99        307       296  

Market value change in equity securities

     (4     —          (6     —    

Other

     297       216        1,096       1,031  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest income

     1,270       1,120        4,758       4,340  
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest expenses

         

Salaries and employee benefits

     2,735       2,547        10,895       10,009  

Occupancy expense

     205       209        833       869  

Equipment expense

     137       180        597       665  

Professional and director fees

     280       303        1,029       963  

Software expense

     238       246        893       879  

Marketing and public relations

     145       142        508       401  

Debit card expense

     150       126        537       536  

Other expenses

     835       943        3,226       2,994  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest expenses

     4,725       4,696        18,518       17,316  
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income tax

     3,111       2,680        11,675       10,331  

Federal income tax provision

     619       901        2,263       3,230  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 2,492     $ 1,779      $ 9,412     $ 7,101  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income per share:

         

Basic

   $ 0.91     $ 0.65      $ 3.43     $ 2.59  
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.91     $ 0.65      $ 3.43     $ 2.59