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8-K - FORM 8-K - CSB BANCORP INC /OHl42497e8vk.htm
         
Exhibit 99.1
(CSB BANCORP, INC. LOGO)
CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS
First Quarter Highlights
                 
    Quarter Ended     Quarter Ended  
    March 31, 2011     March 31, 2010  
Diluted earnings per share
  $ .33     $ .27  
Net Income
  $ 896,000     $ 737,000  
Return on average common equity
    7.67 %     6.44 %
Return on average assets
    0.80 %     0.67 %
Millersburg, Ohio — April 25, 2011 — CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter 2011 net income of $896 thousand or $.33 per basic and diluted share, as compared to $737 thousand or $.27 per basic and diluted share for the same period in 2010.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 7.67% and 0.80%, respectively, compared with 6.44% and 0.67% for the first quarter of 2010.
Eddie Steiner, President and CEO commented, “We are pleased that first quarter net income was 21% above the year ago level. Credit quality within our loan portfolio continues to improve, allowing more-normalized provisioning for future loan losses. We are also encouraged by signs of improving business conditions within our commercial customer base; however, it appears high unemployment continues to restrain consumer borrowing and spending.”
Revenue totaled $4.8 million for the first quarter of 2011, an increase of 1.9% from the prior-year first quarter. Increases were reflected in both net interest income and other income. First quarter net interest income on a fully tax equivalent basis was $4.0 million, a $60 thousand or 1.5% increase over the $3.9 million net interest income reported for first quarter 2010. Other income reported for the first quarter 2011 totaled $761 thousand, a $30 thousand or 4.1% increase over the $731 thousand reported for first quarter 2010.
Non-interest expense amounted to $3.1 million during the quarter, an increase of $80 thousand or 2.6% from first quarter 2010.

 


 

The Company’s first quarter efficiency ratio was 65.3% as compared to 64.8% for the same quarter in the prior year.
Federal income tax provision was $399 thousand for first quarter 2011, compared to $315 thousand for the same quarter in 2010. The quarterly provisions reflect effective tax rates of 30.8% and 29.9%, respectively.
Total assets amounted to $445 million on March 31, 2011, down $12 million or 2.6% from December 31, 2010. Loans increased to $322 million, up $6.4 million or 2.0% from the prior year-end, while securities balances of $89 million were up $7.9 million or 9.8% from the prior year-end.
Average total assets during the quarter amounted to $452 million, an increase of $7 million or 1.5% above the same quarter of the prior year. Average loan balances of $320 million increased $7.9 million from the prior year first quarter, and average securities balances of $86 million increased $6.2 million or 7.9% as compared to first quarter 2010.
Average commercial loan balances for the quarter, including commercial real estate, increased $13 million or 6.8% above year ago levels. Average residential mortgage balances declined by $7 million or 8.2% during the year. The decline in portfolio mortgage balances was primarily a result of customers selecting secondary market products due to historically low 15 to 30 year fixed rates. Average home equity balances increased $2 million or 6.1%, and average consumer credit balances declined $0.5 million or 6.3% versus the same quarter of the prior year.
Net charge-offs for the quarter totaled $283 thousand as compared to $223 thousand for first quarter 2010. Net charge-offs equated to 0.36% of average loans during the first quarter 2011 as compared to 0.29% for the prior year’s first quarter.
Nonperforming assets totaled $3.9 million or 1.22% of total loans plus other real estate at March 31, 2011, compared to $6.5 million or 2.09% at March 31, 2010. Delinquent loan balances as of March 31, 2011 amounted to 1.87% of total loans as compared to 2.48% at March 31, 2010.
The Company funded $280 thousand in loan loss provision during the first quarter and the allowance for loan losses amounted to 1.25% of total loans on March 31, 2011. The ratio of the allowance for loan losses to nonperforming loans stood at 103% on March 31, 2011 as compared to 88% and 70% at December 31, and March 31, 2010, respectively.
Commenting on the Company’s credit quality, Steiner noted, “Our ratio of nonperforming assets declined from December 31, 2010, and early stage delinquencies have shown modest improvement in recent months. However, we continue to expect total delinquencies and nonperforming assets to remain somewhat elevated for the foreseeable future.”
Average deposit balances grew by $3.6 million during the first quarter, or 1.0%. Total average deposits of $350 million for the quarter were 6.9% above the prior year’s first quarter average.

 


 

Deposit balances totaled $348 million at quarter-end, a decrease of $5 million or 1.5% during the quarter and an increase of $22 million or 6.8% from the prior year’s first quarter. Average noninterest-bearing account balances decreased $2 million, or 3.2% during the quarter and increased $12.8 million or 24.4% from the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $7 million or 5.1% during the quarter and increased $9 million or 6.9% from the same period in the prior year. Average time deposit balances decreased $.8 million or .5% during the quarter and increased $1.2 million or .8% from first quarter 2010.
The average balance of securities sold under repurchase agreement during the first quarter grew by $2 million or 8.1% above the average for the same period in the prior year. These repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts. Average advances from the Federal Home Loan Bank (“FHLB”) decreased $19 million or 46.1% from the prior year’s quarter as maturing borrowings have been paid down, funded by reducing average balances of Fed funds sold and interest bearing deposits with other banks.
Shareholders’ equity totaled $47.5 million on March 31, 2011 with 2.7 million common shares outstanding at year-end. The Company’s capital position remains strong, with tangible equity to assets approximating 10.2% on March 31, 2011, compared to 9.9% on December 31, 2010. The Company declared a common dividend of $.18 per share during the quarter. Based on the March 31, 2011 closing stock price of $15.20 per share, the Company’s annual dividend yield approximates 4.7%.

 


 

About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $445 million as of March 31, 2011. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial & Savings Bank, with fourteen banking centers in Holmes, Tuscarawas, Wayne 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
    2011   2010   2010   2010   2010
EARNINGS   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   1st Qtr
Net interest income FTE (a)
  $ 3,995     $ 3,959     $ 4,016     $ 3,886     $ 3,935  
Provision for loan losses
    280       239       238       239       519  
Other income
    761       904       780       889       731  
Other expenses
    3,120       3,169       3,215       3,150       3,041  
FTE adjustment (a)
    61       60       59       53       54  
Net income
    896       956       882       921       737  
Diluted earnings per share
    0.33       0.35       0.32       0.34       0.27  
 
                                       
PERFORMANCE RATIOS
                                       
Return on average assets (ROA)
    0.80 %     0.83 %     0.78 %     0.85 %     0.67 %
Return on average common equity (ROE)
    7.67 %     7.95 %     7.41 %     7.90 %     6.44 %
Net interest margin FTE (a)
    3.78 %     3.64 %     3.76 %     3.76 %     3.78 %
Efficiency ratio
    65.29 %     64.84 %     66.72 %     67.74 %     64.83 %
Number of full-time equivalent employees
    142       140       144       144       140  
 
                                       
MARKET DATA
                                       
Book value/common share
  $ 17.35     $ 17.24     $ 17.26     $ 17.10     $ 16.88  
Period-end common share mkt value
    15.20       15.57       15.95       15.75       14.60  
Market as a % of book
    87.61 %     90.31 %     92.41 %     92.11 %     86.49 %
Price-to-earnings ratio
    11.34       12.16       12.56       12.50       12.37  
Cash dividends/common share
  $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18  
Common stock dividend payout ratio
    54.55 %     51.43 %     56.25 %     52.94 %     66.67 %
Average basic common shares
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Average diluted common shares
    2,734,812       2,734,836       2,734,859       2,734,847       2,734,799  
Period end common shares outstanding
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Common shares repurchased
    0       0       0       0       0  
Common stock market capitalization
  $ 41,569     $ 42,581     $ 43,620     $ 43,073     $ 39,928  
 
                                       
ASSET QUALITY
                                       
Gross charge-offs
  $ 316     $ 621     $ 459     $ 20     $ 289  
Net charge-offs (recoveries)
    283       615       440       (14 )     223  
Allowance for loan losses
    4,028       4,031       4,407       4,608       4,356  
Nonperforming assets (NPAs)
    3,943       4,626       5,410       6,335       6,492  
Net charge-off/average loans ratio
    0.36 %     0.77 %     0.55 %     (0.02) %     0.29 %
Allowance for loan losses/period-end loans
    1.25       1.28       1.39       1.48       1.40  
NPAs/loans and other real estate
    1.22       1.47       1.71       2.03       2.09  
Allowance for loan losses/nonperforming loans
    102.93       87.84       83.99       75.69       70.02  
 
                                       
CAPITAL & LIQUIDITY
                                       
Period-end tangible equity to assets
    10.23 %     9.90 %     10.03 %     10.16 %     10.15 %
Average equity to assets
    10.49       10.49       10.58       10.70       10.44  
Average equity to loans
    14.82       15.13       14.97       14.99       14.89  
Average loans to deposits
    91.44       91.15       93.83       95.24       95.35  
 
                                       
AVERAGE BALANCES
                                       
Assets
  $ 451,666     $ 454,657     $ 446,099     $ 436,782     $ 444,916  
Earning assets
    428,686       431,661       423,591       414,137       422,487  
Loans
    319,646       315,348       315,355       311,647       311,789  
Deposits
    349,574       345,962       336,089       327,215       326,986  
Shareholders’ equity
    47,387       47,703       47,213       46,724       46,440  
 
                                       
ENDING BALANCES
                                       
Assets
  $ 445,361     $ 457,056     $ 451,586     $ 441,242     $ 435,622  
Earning assets
    422,793       434,876       428,895       419,855       413,771  
Loans
    322,017       315,647       316,909       311,857       310,900  
Deposits
    348,209       353,491       341,296       329,817       326,204  
Shareholders’ equity
    47,457       47,154       47,211       46,776       46,171  
     
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,     March 31,  
    2011     2010  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 9,792     $ 7,538  
Interest-earning deposits in other banks
    11,898       29,144  
Federal funds sold
    310        
 
           
Total cash and cash equivalents
    22,000       36,682  
Securities
               
Available-for-sale, at fair-value
    83,085       68,264  
Restricted stock, at cost
    5,463       5,463  
 
           
Total securities
    88,548       73,727  
Loans held for sale
    20       669  
Loans
    322,017       310,900  
Less allowance for loan losses
    4,028       4,356  
 
           
Net loans
    317,989       306,544  
 
               
Goodwill and core deposit intangible
    2,116       2,179  
Bank owned life insurance
    2,987       2,880  
Premises and equipment, net
    7,754       8,224  
Accrued interest receivable and other assets
    3,947       4,717  
 
           
 
               
TOTAL ASSETS
  $ 445,361     $ 435,622  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Noninterest-bearing
  $ 60,325     $ 52,607  
Interest-bearing
    287,884       273,597  
 
           
Total deposits
    348,209       326,204  
 
               
Short-term borrowings
    28,382       29,621  
Other borrowings
    19,707       32,210  
Accrued interest payable and other liabilities
    1,606       1,416  
 
           
Total liabilities
    397,904       389,451  
 
           
Shareholders’ equity
               
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2011 and 2010
    18,629       18,629  
Additional paid-in capital
    9,994       9,994  
Retained earnings
    23,077       21,391  
Treasury stock at cost — 245,803 shares in 2011 and 2010
    (5,015 )     (5,015 )
Accumulated other comprehensive income
    772       1,172  
 
           
Total shareholders’ equity
    47,457       46,171  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 445,361     $ 435,622  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
dollars in thousands, except per share data
                 
    Quarter ended  
    March 31,  
    2011     2010  
Interest and dividend income:
               
Loans, including fees
  $ 4,236     $ 4,302  
Taxable securities
    595       751  
Nontaxable securities
    98       84  
Other
    17       19  
 
           
Total interest and dividend income
    4,946       5,156  
 
           
Interest expense:
               
Deposits
    786       876  
Other
    226       399  
 
           
Total interest expense
    1,012       1,275  
 
           
                 
Net interest income
    3,934       3,881  
Provision for loan losses
    280       519  
 
           
Net interest income after provision for loan losses
    3,654       3,362  
 
           
Non-interest income
               
Service charges on deposits accounts
    245       269  
Trust services
    160       141  
Gain on sale of loans
    70       46  
Other
    286       275  
 
           
Total noninterest income
    761       731  
                 
Non-interest expenses
               
Salaries and employee benefits
    1,763       1,604  
Occupancy expense
    219       220  
Equipment expense
    120       127  
Franchise tax expense
    135       135  
Professional and director fees
    159       154  
Federal deposit insurance
    110       145  
Amortization of intangible assets
    15       16  
Other expenses
    599       640  
 
           
Total noninterest expenses
    3,120       3,041  
 
           
Income before income tax
    1,295       1,052  
Federal income tax provision
    399       315  
 
           
                 
Net income
  $ 896     $ 737  
 
           
Net income per share:
               
Basic
  $ 0.33     $ 0.27  
 
           
                 
Diluted
  $ 0.33     $ 0.27  
 
           
     
Note: Certain prior year balances have been reclassified to conform to the current year presentation.