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8-K - FORM 8-K - CSB BANCORP INC /OHd663329d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS

Fourth Quarter and Full Year Highlights

 

     Quarter Ended     Full Year Ended  
     December 31, 2013     December 31, 2013  

Diluted earnings per share

   $ 0.45      $ 1.91   

Net Income

   $ 1,224,000      $ 5,240,000   

Return on average common equity

     9.19     9.93

Return on average assets

     0.82     0.90

Millersburg, Ohio – January 24, 2014 – CSB Bancorp, Inc. (CSBB) today announced fourth quarter 2013 net income of $1.2 million or $.45 per basic and diluted share, as compared to $1.1 million or $.41 per basic and diluted share for the same period in 2012.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 9.19% and 0.82%, respectively, compared with 8.50% and 0.77% for the fourth quarter of 2012.

For the full year of 2013, the Company reported net income of $5.2 million or $1.91 per basic and diluted share, as compared to $4.5 million or $1.66 per basic and diluted share in 2012. Full year ROE and ROA were 9.93% and 0.90%, respectively, compared to 8.85% and 0.80% in 2012.

Eddie Steiner, President and CEO commented, “Net interest income increased for the eleventh time out of the past twelve quarters. Our ability to attract and grow customer relationships has been instrumental in driving the revenue stream. This focus on expanding customer relationships will continue to be our core strategy in the coming year.”

Revenue, on a fully-taxable equivalent basis, totaled $6.0 million for the fourth quarter of 2013, a 5.8% increase from the prior-year fourth quarter. Full year revenue of $23.5 million reflects a $1.4 million, or 6.4%, increase as compared to full year 2012.


Non-interest expense amounted to $4 million during the quarter, an increase of $174 thousand or 4.6% from fourth quarter 2012. For the full year ended December 31, 2013, non-interest expense increased $398 thousand or 2.8% versus 2012, with the majority of the change attributable to increases in personnel costs.

The Company’s fourth quarter efficiency ratio amounted to 65.7% as compared to 63.6% for the same quarter in the prior year. The full year 2013 efficiency ratio of 63.0% compares to 64.7% for the full prior year. Net interest margin amounted to 3.55% for the quarter and 3.51% for the full year, compared to 3.33% and 3.36% for the prior year’s fourth quarter and full year, respectively.

Federal income tax provision was $520 thousand for fourth quarter 2013, compared to $475 thousand for the same quarter in 2012. Full year income tax of $2.3 million for 2013 was 14% higher than prior year and reflects an effective tax rate of 30.3% for current year versus 30.4% in 2012.

Average total assets during the quarter amounted to $595 million, an increase of $19 million or 3.3% above the same quarter of the prior year. Average loan balances of $376 million were $20 million or 5.5% above prior year fourth quarter, while average securities balances of $147 million increased $14 million or 10% as compared to fourth quarter 2012.

Total assets amounted to $596 million on December 31, 2013, up $10 million or 1.6% from December 31, 2012. Loans increased to $379 million, up $15 million or 4% from the prior year-end, while securities balances of $152 million were $17 million or 12% higher than year ago balances.

Average commercial loan balances for the quarter, including commercial real estate, increased $12 million or 5% above year ago levels. Average residential mortgage balances increased by $4 million or 5% during the year. The increase of in-house mortgage balances was the result of the bank originating and retaining 15 year fixed rate mortgages. Average home equity balances increased $1 million or 2%, and average consumer credit balances increased $333 thousand or 5% versus the same quarter of the prior year.

Net charge-offs for the quarter and the full year were $202 thousand and $335 thousand, respectively. Net charge-offs equated to 0.09% of average loans during 2013 and 2012.

Nonperforming assets totaled $5.1 million or 0.86% of total loans plus other real estate at December 31, 2013, compared to $4.6 million or 0.92% at the prior year-end. Delinquent loan balances as of year-end 2013 amounted to 1.26% of total loans as compared to 1.25% at the end of 2012.

The Company funded $210 thousand in loan loss provision during the fourth quarter and the allowance for loan losses amounted to 1.34% of total loans on December 31, 2013. The ratio of the allowance for loan losses to nonperforming loans stood at 156% at the end of 2013.


Commenting on the Company’s credit quality, Steiner noted, “Our level of nonperforming assets have declined fairly consistently since peaking during first quarter 2010, with an increase this past quarter related solely to a single credit. Delinquencies as a percentage of the loan portfolio remain low and relatively stable, amounting to 1.26% at year-end 2013.”

Average deposit balances grew by $10 million, or 2%, from the prior linked quarter. Total average deposits of $479 million for the quarter were 3% above the prior year’s fourth quarter average.

Deposit balances totaled $481 million at year-end, an increase of $5 million or 1% from the prior year-end. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $24 million, or 24% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $10 million or 5% from year ago levels, while average time deposit balances decreased $18 million or 12% during the year. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth quarter grew by $6 million or 15% 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 $52.4 million on December 31, 2013 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 7.9% on December 31, 2013, as compared to 8.1% on December 31, 2012. The Company declared a common dividend of $.18 per share during the quarter. Based on the December 31, 2013 closing stock price of $19.00 per share, the Company’s annual dividend yield approximates 3.8%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $596 million as of December 31, 2013. 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)

(Dollars in thousands except per share data)

 

    Quarters              
    2013     2013     2013     2013     2012     2013     2012  

EARNINGS

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

Net interest income FTE (a)

  $ 5,000      $ 4,755      $ 4,668      $ 4,767      $ 4,543      $ 19,190      $ 17,896   

Provision for loan losses

    210        210        210        210        206        840        823   

Other income

    1,024        1,190        1,066        1,038        1,149        4,318        4,204   

Other expenses

    3,992        3,634        3,663        3,559        3,818        14,848        14,450   

FTE adjustment (a)

    78        78        76        75        73        307        290   

Net income

    1,224        1,407        1,247        1,362        1,120        5,240        4,547   

Diluted earnings per share

    0.45        0.51        0.45        0.50        0.41        1.91        1.66   

PERFORMANCE RATIOS

             

Return on average assets (ROA)

    0.82     0.96     0.88     0.96     0.77     0.90     0.80

Return on average common equity (ROE)

    9.19     10.79     9.32     10.43     8.50     9.93     8.85

Net interest margin FTE (a)

    3.55     3.46     3.49     3.56     3.33     3.51     3.36

Efficiency ratio

    65.70     62.11     63.40     60.72     63.61     63.01     64.75

Number of full-time equivalent employees

    157        165        159        164        162       

MARKET DATA

             

Book value/common share

  $ 19.15      $ 19.06      $ 18.78      $ 19.31      $ 19.17       

Period-end common share mkt value

    19.00        19.15        19.25        19.20        17.00       

Market as a % of book

    99.22     100.47     102.50     99.43     88.68    

Price-to-earnings ratio

    9.90        10.19        10.64        10.85        10.24       

Cash dividends/common share

  $ 0.18      $ 0.18      $ 0.18      $ 0.18      $ 0.18      $ 0.72      $ 0.72   

Common stock dividend payout ratio

    37.50     34.62     40.00     36.00     43.90    

Average basic common shares

    2,736,634        2,736,634        2,736,555        2,736,060        2,735,157        2,736,473        2,734,889   

Average diluted common shares

    2,738,411        2,738,638        2,738,708        2,738,300        2,735,328        2,738,477        2,735,141   

Period end common shares outstanding

    2,736,634        2,736,634        2,736,634        2,736,060        2,736,060       

Common shares repurchased

    0        0        0        0        0        0        0   

Common stock market capitalization

  $ 51,996      $ 52,407      $ 52,680      $ 52,532      $ 46,513       

ASSET QUALITY

             

Gross charge-offs

  $ 226      $ 91      $ 95      $ 16      $ 304      $ 428      $ 507   

Net charge-offs (recoveries)

    202        78        69        (14     287        335        325   

Allowance for loan losses

    5,085        5,077        4,945        4,804        4,580       

Nonperforming assets (NPAs)

    3,270        2,368        2,394        2,187        3,362       

Net charge-off/average loans ratio

    0.21     0.08     0.07     (0.02 )%      0.32     0.09     0.09

Allowance for loan losses/period-end loans

    1.34        1.35        1.31        1.29        1.26       

NPAs/loans and other real estate

    0.86        0.63        0.63        0.59        0.92       

Allowance for loan losses/nonperforming loans

    155.50        214.38        206.60        219.66        137.23       

CAPITAL & LIQUIDITY

             

Period-end tangible equity to assets

    7.94     7.92     8.11     8.39     8.06    

Average equity to assets

    8.89        8.89        9.39        9.20        9.11       

Average equity to loans

    14.05        13.81        14.30        14.20        14.70       

Average loans to deposits

    78.50        79.81        81.36        80.57        76.87       

AVERAGE BALANCES

             

Assets

  $ 594,736      $ 582,200      $ 571,569      $ 575,925      $ 575,498      $ 581,150      $ 564,875   

Earning assets

    558,155        545,907        537,165        543,068        542,150        546,112        532,005   

Loans

    376,164        374,579        375,447        373,064        356,555        374,821        342,868   

Deposits

    479,174        469,353        461,488        463,030        463,862        468,395        453,526   

Shareholders’ equity

    52,861        51,745        53,677        52,960        52,415        52,787        51,384   

ENDING BALANCES

             

Assets

  $ 596,465      $ 593,895      $ 571,068      $ 568,852      $ 586,900       

Earning assets

    557,482        554,165        534,806        538,674        544,727       

Loans

    379,125        377,434        378,191        373,367        364,580       

Deposits

    480,933        480,861        462,845        457,530        475,443       

Shareholders’ equity

    52,411        52,149        51,391        52,830        52,453       

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,     December 31,  
     2013     2012  

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 15,777      $ 21,485   

Interest-earning deposits in other banks

     26,822        45,393   

Federal funds sold

     —          —     
  

 

 

   

 

 

 

Total cash and cash equivalents

     42,599        66,878   

Securities

    

Available-for-sale, at fair-value

     101,722        129,291   

Held-to-maturity

     44,350        —     

Restricted stock, at cost

     5,463        5,463   
  

 

 

   

 

 

 

Total securities

     151,535        134,754   

Loans held for sale

     —          —     

Loans

     379,125        364,580   

Less allowance for loan losses

     5,085        4,580   
  

 

 

   

 

 

 

Net loans

     374,040        360,000   

Goodwill and core deposit intangible

     5,487        5,622   

Bank owned life insurance

     9,551        8,298   

Premises and equipment, net

     8,690        8,475   

Accrued interest receivable and other assets

     4,563        2,873   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 596,465      $ 586,900   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 120,325      $ 104,147   

Interest-bearing

     360,608        371,296   
  

 

 

   

 

 

 

Total deposits

     480,933        475,443   

Short-term borrowings

     48,671        43,992   

Other borrowings

     12,459        12,672   

Accrued interest payable and other liabilities

     1,991        2,340   
  

 

 

   

 

 

 

Total liabilities

     544,054        534,447   
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2013 and 2012

     18,629        18,629   

Additional paid-in capital

     9,964        9,974   

Retained earnings

     30,232        26,962   

Treasury stock at cost - 243,968 shares in 2013 and 244,542 in 2012

     (4,958     (4,976

Accumulated other comprehensive (loss) income

     (1,456     1,864   
  

 

 

   

 

 

 

Total shareholders’ equity

     52,411        52,453   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 596,465      $ 586,900   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

 

     Quarter ended      Year ended  
     December 31,      December 31,  
     2013      2012      2013      2012  

Interest and dividend income:

           

Loans, including fees

   $ 4,542       $ 4,397       $ 17,963       $ 17,279   

Taxable securities

     736         599         2,572         2,672   

Nontaxable securities

     128         122         513         486   

Other

     24         35         90         147   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     5,430         5,153         21,138         20,584   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest expense:

           

Deposits

     374         533         1,720         2,323   

Other

     134         150         535         655   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     508         683         2,255         2,978   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     4,922         4,470         18,883         17,606   

Provision for loan losses

     210         206         840         823   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     4,712         4,264         18,043         16,783   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-interest income

           

Service charges on deposits accounts

     348         334         1,349         1,305   

Trust services

     186         168         826         671   

Gain on sale of loans

     64         229         347         591   

Gain on sale of securities

     —           —           159         —     

Other

     426         419         1,637         1,637   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-interest income

     1,024         1,150         4,318         4,204   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-interest expenses

           

Salaries and employee benefits

     2,142         2,051         8,261         7,960   

Occupancy expense

     267         257         1,026         1,025   

Equipment expense

     195         170         719         618   

Franchise tax expense

     141         126         581         542   

Professional and director fees

     163         193         628         814   

Federal deposit insurance

     97         90         359         328   

Amortization of intangible assets

     34         37         135         140   

Other expenses

     953         894         3,139         3,023   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total non-interest expenses

     3,992         3,818         14,848         14,450   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax

     1,744         1,596         7,513         6,537   

Federal income tax provision

     520         475         2,273         1,990   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 1,224       $ 1,121       $ 5,240       $ 4,547   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share:

           

Basic

   $ 0.45       $ 0.41       $ 1.91       $ 1.66   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.45       $ 0.41       $ 1.91       $ 1.66   
  

 

 

    

 

 

    

 

 

    

 

 

 

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