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Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS

Second Quarter Highlights

 

      Quarter Ended
June 30, 2012
    Quarter Ended
June 30, 2011
 

Diluted earnings per share

   $ .41      $ .35   

Net Income

   $ 1,141,000      $ 972,000   

Return on average common equity

     8.98     8.06

Return on average assets

     0.82     0.87

Millersburg, Ohio – July 24, 2012 – CSB Bancorp, Inc. (OTCBB: CSBB) today announced second quarter 2012 net income of $1.1 million or $.41 per basic and diluted share, as compared to $972 thousand or $.35 per basic and diluted share for the same period in 2011.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 8.98% and 0.82%, respectively, compared with 8.06% and 0.87% for the second quarter of 2011.

Eddie Steiner, President and CEO commented, “We are pleased that second quarter net income was 17% above the year ago level. Commercial loan demand remains above prior year levels and home mortgage refinance activity has been steady in response to lower mortgage rates.”

Revenue totaled $5.5 million for the second quarter of 2012, an increase of 11% from the prior-year second quarter. Increases were reflected in both net interest income and other income. Second quarter net interest income on a fully tax equivalent basis was $4.5 million, a $316 thousand or 8% increase over the second quarter of 2011. Other income totaled $1 million in second quarter 2012, an increase of $250 thousand or 32% compared to second quarter 2011.

Non-interest expense amounted to $3.6 million during the quarter, an increase of $277 thousand or 8% from second quarter 2011.

The Company’s second quarter efficiency ratio was 64.0% as compared to 66.1% for the same quarter in the prior year.


Federal income tax provision totaled $525 thousand for second quarter 2012, compared to $435 thousand for the same quarter in 2011. The quarterly provisions reflect effective tax rates of 31%.

Total assets amounted to $567 million on June 30, 2012, up $15 million or 3% from December 31, 2011. Net loans increased to $340 million, up $20 million or 6% year to date, while securities balances of $132 million increased $4 million or 3% from the prior year-end.

Average total assets during the quarter amounted to $562 million, an increase of $114 million or 25% above the same quarter of the prior year. Average loan balances of $340 million increased $20 million from the prior year second quarter, and average securities balances of $132 million increased $46 million or 53% as compared to second quarter 2011.

Average commercial loan balances, including commercial real estate, increased $8.5 million or 4% during the quarter. Average residential mortgage balances, including home equity line balances, increased by $4.1 million or 4% during the quarter. Average consumer credit balances increased $60 thousand or 1% versus the linked quarter.

Net recoveries on loans for the quarter totaled $19 thousand, or 0.02% of average loans on an annualized basis, as compared to net charge-offs of $164 thousand, or 0.21% for second quarter 2011.

Nonperforming assets totaled $4.0 million or 1.17% of total loans plus other real estate at June 30, 2012 as compared to $3.5 million or 1.08% on December 31, 2011 and $4.0 million or 1.25% at June 30, 2011. Delinquent loan balances as of June 30, 2012 amounted to 1.67% of total loans as compared to 2.04% on December 31, 2011 and 1.70% at June 30, 2011.

The Company funded $205 thousand in loan loss provision during the quarter as compared to $190 thousand during the prior year’s quarter. The allowance for loan losses amounted to 1.30% of total loans on June 30, 2012 as compared to 1.28% at June 30, 2011. The ratio of the allowance for loan losses to nonperforming loans stood at 112% on June 30, 2012 as compared to 117% and 115% at December 31, and June 30, 2011, respectively.

Deposit balances totaled $455 million at quarter-end, an increase of $11 million or 2.5% from December 31, 2011 and an increase of $107 million or 31% from prior year’s quarter-end. The majority of the year-over-year increase is attributable to deposits acquired with the Wooster branch acquisition during fourth quarter 2011. Organic deposit growth without the acquired deposits amounted to $33 million between June 30, 2012 and June 30, 2011 with noninterest bearing, NOW, money market and savings account balances growing and time deposit balances declining due to the low interest rate environment.

The average balance of securities sold under repurchase agreement during the second quarter grew by $10.5 million or 35% above the average for the same period in the prior year. The growth results from a campaign expanding relationships with our business customers. 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 $3 million or 14% 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 $51.2 million on June 30, 2012 with 2.7 million common shares outstanding at year-end. The Company’s capital position remains strong, with tangible equity to assets approximating 8.1% and 8.0% on June 30, 2012 and December 31, 2011, respectively. The Company declared a common dividend of $.18 per share during the quarter. Based on the June 30, 2012 closing stock price of $18.17 per share, the Company’s annual dividend yield approximates 4.0%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $567 million as of June 30, 2012. CSB provides a wide 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, 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        
EARNINGS    2012
2nd Qtr
    2012
1st Qtr
    2011
4th Qtr
    2011
3rd Qtr
    2011
2nd Qtr
    2012
6 months
    2011
6 months
 

Net interest income FTE (a)

   $ 4,474      $ 4,380      $ 4,280      $ 4,163      $ 4,158      $ 8,854      $ 8,153   

Provision for loan losses

     205        206        240        240        190        411        470   

Other income

     1,034        948        920        1,045        784        1,982        1,545   

Other expenses

     3,560        3,544        3,748        3,460        3,283        7,104        6,403   

FTE adjustment (a)

     77        67        67        66        62        144        123   

Net income

     1,141        1,055        820        999        972        2,196        1,868   

Diluted earnings per share

     0.41        0.39        0.30        0.37        0.35        0.80        0.68   

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     0.82     0.77     0.61     0.87     0.87     0.79     0.84

Return on average common equity (ROE)

     8.98     8.46     6.58     8.04     8.06     8.73     7.86

Net interest margin FTE (a)

     3.40     3.38     3.38     3.83     3.93     3.39     3.85

Efficiency ratio

     64.03     65.90     71.47     69.60     66.13     64.93     65.70

Number of full-time equivalent employees

     167        157        154        144        143       

MARKET DATA

              

Book value/common share

   $ 18.71      $ 18.25      $ 18.07      $ 17.99      $ 17.75       

Period-end common share mkt value

     18.17        17.75        16.75        15.00        15.50       

Market as a % of book

     97.11     97.26     92.70     83.38     87.32    

Price-to-earnings ratio

     12.36        12.59        12.41        10.71        11.48       

Cash dividends/common share

   $ 0.18      $ 0.18      $ 0.18      $ 0.18      $ 0.18        0.36        0.36   

Common stock dividend payout ratio

     43.90     46.15     60.00     48.65     51.43    

Average basic common shares

     2,734,799        2,734,799        2,734,799        2,734,799        2,734,799        2,734,799        2,734,799   

Average diluted common shares

     2,736,046        2,735,611        2,735,229        2,734,799        2,734,831        2,735,688        2,734,822   

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

   $ 49,691      $ 48,543      $ 45,808      $ 41,022      $ 42,389       

ASSET QUALITY

              

Gross charge-offs

   $ 85      $ 79      $ 328      $ 192      $ 178      $ 164      $ 494   

Net charge-offs (recoveries)

     (19     41        275        178        164        22        447   

Allowance for loan losses

     4,471        4,246        4,082        4,116        4,054       

Nonperforming assets (NPAs)

     4,010        3,266        3,500        4,000        3,974       

Net charge-off/average loans ratio

     -0.02     0.05     0.34     0.22     0.21     0.01     0.28

Allowance for loan losses/period-end loans

     1.30        1.28        1.26        1.31        1.28       

NPAs/loans and other real estate

     1.17        0.99        1.08        1.27        1.25       

Allowance for loan losses/nonperforming loans

     111.65        130.20        116.96        117.77        115.30       

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     8.11     7.96     8.01     10.33     10.38    

Average equity to assets

     9.09        9.08        9.33        10.84        10.80       

Average equity to loans

     15.04        15.33        15.46        15.60        15.13       

Average loans to deposits

     75.24        73.87        75.78        90.07        91.77       

AVERAGE BALANCES

              

Assets

   $ 562,291      $ 552,407      $ 530,049      $ 454,685      $ 448,205      $ 557,334      $ 450,001   

Earning assets

     528,817        520,802        502,198        431,271        424,925        524,810        426,795   

Loans

     339,829        327,203        319,852        315,750        319,906        333,516        319,777   

Deposits

     451,646        442,973        422,094        350,577        348,601        447,308        349,089   

Shareholders’ equity

     51,125        50,147        49,454        49,265        48,389        50,584        47,929   

ENDING BALANCES

              

Assets

   $ 566,687      $ 560,803      $ 551,233      $ 457,849      $ 449,552       

Earning assets

     530,094        526,942        522,410        435,806        427,281       

Loans

     344,116        331,353        324,182        313,980        316,581       

Deposits

     454,719        450,207        443,553        354,856        347,258       

Shareholders’ equity

     51,176        49,918        49,429        49,191        48,538       

 

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

 

     June 30,
2012
    June 30,
2011
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 14,007      $ 10,004   

Interest-earning deposits in other banks

     53,825        23,234   

Federal funds sold

              
  

 

 

   

 

 

 

Total cash and cash equivalents

     67,832        33,238   

Securities

    

Available-for-sale, at fair-value

     126,690        82,003   

Restricted stock, at cost

     5,463        5,463   
  

 

 

   

 

 

 

Total securities

     132,153        87,466   

Loans held for sale

              

Loans

     344,116        316,581   

Less allowance for loan losses

     4,471        4,054   
  

 

 

   

 

 

 

Net loans

     339,645        312,527   

Goodwill and core deposit intangible

     5,695        2,101   

Bank owned life insurance

     8,175        3,014   

Premises and equipment, net

     8,451        7,727   

Accrued interest receivable and other assets

     4,736        3,479   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 566,687      $ 449,552   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 93,134      $ 64,670   

Interest-bearing

     361,585        282,588   
  

 

 

   

 

 

 

Total deposits

     454,719        347,258   

Short-term borrowings

     41,195        32,387   

Other borrowings

     16,870        19,527   

Accrued interest payable and other liabilities

     2,727        1,842   
  

 

 

   

 

 

 

Total liabilities

     515,511        401,014   
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares;
issued 2,980,602 shares in 2012 and 2011

     18,629        18,629   

Additional paid-in capital

     9,994        9,994   

Retained earnings

     25,602        23,557   

Treasury stock at cost - 245,803 shares in 2012 and 2011

     (5,015     (5,015

Accumulated other comprehensive income

     1,966        1,373   
  

 

 

   

 

 

 

Total shareholders’ equity

     51,176        48,538   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 566,687      $ 449,552   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

 

     Quarter ended
June 30,
     Six months ended
June 30,
 
      2012      2011      2012      2011  

Interest and dividend income:

           

Loans, including fees

   $ 4,272       $ 4,276       $ 8,524       $ 8,512   

Taxable securities

     707         613         1,436         1,208   

Nontaxable securities

     131         102         243         200   

Other

     41         11         80         28   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     5,151         5,002         10,283         9,948   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest expense:

           

Deposits

     590         705         1,230         1,491   

Other

     164         201         343         427   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     754         906         1,573         1,918   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     4,397         4,096         8,710         8,030   

Provision for loan losses

     205         190         411         470   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     4,192         3,906         8,299         7,560   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-interest income

           

Service charges on deposits accounts

     318         279         626         524   

Trust services

     167         190         328         350   

Securities gains (losses), net

                               

Gain on sale of loans

     137         29         193         99   

Other

     412         286         835         572   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-interest income

     1,034         784         1,982         1,545   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-interest expenses

           

Salaries and employee benefits

     1,961         1,793         3,924         3,556   

Occupancy expense

     241         204         487         423   

Equipment expense

     139         123         294         243   

Franchise tax expense

     138         135         277         270   

Professional and director fees

     242         177         449         336   

Federal deposit insurance

     68         108         155         218   

Amortization of intangible assets

     33         16         66         31   

Other expenses

     738         727         1,452         1,326   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-interest expenses

     3,560         3,283         7,104         6,403   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax

     1,666         1,407         3,177         2,702   

Federal income tax provision

     525         435         981         834   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 1,141       $ 972       $ 2,196       $ 1,868   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share:

           

Basic

   $ 0.41       $ 0.35       $ 0.80       $ 0.68   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.41       $ 0.35       $ 0.80       $ 0.68   
  

 

 

    

 

 

    

 

 

    

 

 

 

Note: Certain prior year balances have been reclassified to conform to the current year presentation.