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8-K - FORM 8-K - CSB BANCORP INC /OH | d50425d8k.htm |
Exhibit 99.1
CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS
Second Quarter Highlights
Quarter Ended June 30, 2015 |
Quarter Ended June 30, 2014 |
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Diluted earnings per share |
$ | 0.55 | $ | 0.55 | ||||
Net Income |
$ | 1,517,000 | $ | 1,522,000 | ||||
Return on average common equity |
10.23 | % | 11.09 | % | ||||
Return on average assets |
0.97 | % | 1.02 | % |
Millersburg, Ohio July 21, 2015 CSB Bancorp, Inc. (CSBB) today announced second quarter 2015 net income of $1,517,000 or $.55 per basic and diluted share, as compared to $1,522,000 or $.55 per basic and diluted share for the same period in 2014. For the six month period ended June 30, 2015 net income totaled $2,859,000, compared to $2,938,000 for the same period last year a decrease of 3%.
Annualized returns on average common equity (ROE) and average assets (ROA) for the quarter were 10.23% and 0.97%, respectively, compared with 11.09% and 1.02% for the second quarter of 2014.
Eddie Steiner, President and CEO commented, Home mortgage lending has been strong. Business loan growth has slowed as some owners are exercising a fair amount of caution relative to new debt and funding some expansions through business cash flow. Jobs are fairly plentiful in our market and there are emerging signs of increased payroll dollars, which should further boost confidence and economic expansion.
Revenue, on a fully-taxable equivalent basis, totaled $6.4 million during the quarter, a 3% increase from the prior-year second quarter. Net interest income improved by $130 thousand as compared to second quarter 2014, while other income increased $21 thousand attributable primarily to an increase in gain on sale of mortgage loans to the secondary market, Trust and brokerage fees and an increase in debit card interchange fees. These increases were partially offset by a decrease of $112 thousand in gain on sale of securities in 2014 that did not recur in 2015.
Non-interest expense amounted to $4.0 million during the quarter, an increase of $125 thousand or 3% from second quarter 2014. The Companys second quarter efficiency ratio amounted to 61.5% as compared to 62.1% for the same quarter in the prior year. Salary and employee benefits rose $114 thousand, or 5%, on a quarter over prior year quarter with increases in base salary, medical and employment taxes.
Net interest margin amounted to 3.58% for the quarter compared to 3.52% from the linked March quarter and 3.66% for the prior years second quarter. The margin decrease year over year resulted from a 12 basis point decrease in total interest yield partially offset with a 4 basis point decrease in interest rates on all liabilities. The low interest rate environment and lower than projected commercial and retail loan growth for the quarter is reflected in the lower margins year over year. On a linked quarter basis, increases were recognized in asset yields during second quarter 2015, while liability costs were unchanged as compared to the quarter ended March 2015.
Federal income tax provision totaled $669 thousand in second quarter 2015, compared to $683 thousand for the same quarter in 2014 reflecting a stable effective tax rate of 31% for the comparable quarters.
Average total assets during the quarter amounted to $625 million, an increase of $27 million or 5% above the same quarter of the prior year. Average loan balances of $417 million were $6 million or 2% above prior year second quarter, while average securities balances of $148 million increased $2 million or 1% as compared to second quarter 2014.
Average commercial loan balances for the quarter, including commercial real estate, decreased $644 thousand or less than 1% from prior year levels. Average residential mortgage balances increased by $6 million or 8% over the prior years quarter. The increase of mortgage balances was the result of the bank originating and retaining some 15 year fixed rate mortgages. Average home equity balances decreased $519 thousand or 1% and average consumer credit balances increased $1 million or 19% versus the same quarter of the prior year.
Nonperforming assets totaled $3.1 million or 0.75% of total loans plus other real estate, a decrease from $5.0 million or 1.22% of total loans plus other real estate at June 30, 2014. Delinquent loan balances as of June 30, 2015 amounted to 1.06% of total loans as compared to 1.50% at June 30, 2014.
Net loan charge-offs during second quarter 2015 were $32 thousand compared to second quarter 2014 net loan charge-offs of $152 thousand. Annualized net charge-offs equated to 0.03% of average loans in the current quarter.
The Company funded $195 thousand in loan loss provision during the second quarter and the allowance for loan losses amounted to 1.12% of total loans on June 30, 2015. The ratio of the allowance for loan losses to nonperforming loans increased to 149% at June 30, 2015.
Average deposit balances grew by $30 million, or 6%, from the prior years second quarter. Average deposit balances for second quarter 2015 totaled $499 million. Within the deposit category, average noninterest-bearing account balances for the second quarter increased by $21 million, or 18% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $11 million or 5% from year ago levels, while average time deposit balances decreased $2 million or 2% from second quarter 2014. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the second quarter of 2015 grew by $3 million or 7% above the average for the same period in the prior year. The repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.
Shareholders equity totaled $59.0 million on June 30, 2015 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.7% on June 30, 2015, as compared to 8.3% on June 30, 2014. The Company declared a common dividend of $.19 per share during the quarter. Based on the June 30, 2015 closing stock price of $25.00 per share, the Companys annual dividend yield approximates 3.0%.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $623 million as of June 30, 2015. 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 Companys business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Companys 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) (Dollars in thousands, except per share data) |
2015 2nd Qtr |
2015 1st Qtr |
2014 4th Qtr |
2014 3rd Qtr |
2014 2nd Qtr |
2015 6 months |
2014 6 months |
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EARNINGS |
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Net interest income FTE (a) |
$ | 5,255 | $ | 5,091 | $ | 5,060 | $ | 5,068 | $ | 5,115 | $ | 10,346 | $ | 10,084 | ||||||||||||||
Provision for loan losses |
195 | 194 | 185 | 123 | 150 | 389 | 335 | |||||||||||||||||||||
Other income |
1,180 | 1,054 | 1,061 | 1,077 | 1,159 | 2,234 | 2,112 | |||||||||||||||||||||
Other expenses |
3,974 | 3,948 | 3,787 | 3,770 | 3,849 | 7,922 | 7,526 | |||||||||||||||||||||
FTE adjustment (a) |
80 | 77 | 73 | 71 | 70 | 157 | 141 | |||||||||||||||||||||
Net income |
1,517 | 1,342 | 1,439 | 1,507 | 1,522 | 2,859 | 2,938 | |||||||||||||||||||||
Diluted earnings per share |
0.55 | 0.49 | 0.53 | 0.55 | 0.55 | 1.04 | 1.07 | |||||||||||||||||||||
PERFORMANCE RATIOS |
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Return on average assets (ROA) |
0.97 | % | 0.87 | % | 0.92 | % | 0.98 | % | 1.02 | % | 0.92 | % | 1.00 | % | ||||||||||||||
Return on average common equity (ROE) |
10.23 | % | 9.33 | % | 9.99 | % | 10.64 | % | 11.09 | % | 9.79 | % | 10.90 | % | ||||||||||||||
Net interest margin FTE (a) |
3.58 | % | 3.52 | % | 3.43 | % | 3.53 | % | 3.66 | % | 3.55 | % | 3.64 | % | ||||||||||||||
Efficiency ratio |
61.47 | % | 64.09 | % | 61.34 | % | 60.81 | % | 62.14 | % | 62.76 | % | 61.85 | % | ||||||||||||||
Number of full-time equivalent employees |
163 | 165 | 167 | 168 | 161 | |||||||||||||||||||||||
MARKET DATA |
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Book value/common share |
$ | 21.53 | $ | 21.46 | $ | 20.97 | $ | 20.55 | $ | 20.18 | ||||||||||||||||||
Period-end common share mkt value |
25.00 | 23.00 | 22.00 | 20.01 | 20.23 | |||||||||||||||||||||||
Market as a % of book |
116.12 | % | 107.18 | % | 104.91 | % | 97.37 | % | 100.25 | % | ||||||||||||||||||
Price-to-earnings ratio |
11.79 | 10.85 | 10.23 | 9.67 | 9.97 | |||||||||||||||||||||||
Cash dividends/common share |
$ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.18 | $ | 0.38 | $ | 0.36 | ||||||||||||||
Common stock dividend payout ratio |
34.54 | % | 38.78 | % | 35.85 | % | 34.55 | % | 32.72 | % | 36.54 | % | 33.64 | % | ||||||||||||||
Average basic common shares |
2,739,405 | 2,739,405 | 2,738,869 | 2,737,927 | 2,737,085 | 2,739,405 | 2,736,861 | |||||||||||||||||||||
Average diluted common shares |
2,742,738 | 2,741,993 | 2,741,033 | 2,739,721 | 2,739,968 | 2,742,381 | 2,739,436 | |||||||||||||||||||||
Period end common shares outstanding |
2,739,405 | 2,739,405 | 2,739,405 | 2,738,355 | 2,737,085 | |||||||||||||||||||||||
Common shares repurchased |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Common stock market capitalization |
$ | 68,485 | $ | 63,006 | $ | 60,267 | $ | 54,794 | $ | 55,371 | ||||||||||||||||||
ASSET QUALITY |
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Gross charge-offs |
$ | 39 | $ | 110 | $ | 1,033 | $ | 9 | $ | 163 | $ | 149 | $ | 380 | ||||||||||||||
Net (recoveries) charge-offs |
32 | 81 | 992 | (2 | ) | 152 | 113 | 357 | ||||||||||||||||||||
Allowance for loan losses |
4,656 | 4,494 | 4,381 | 5,188 | 5,063 | |||||||||||||||||||||||
Nonperforming assets (NPAs) |
3,117 | 3,685 | 3,949 | 4,682 | 5,031 | |||||||||||||||||||||||
Net charge-off/average loans ratio |
0.03 | % | 0.08 | % | 0.96 | % | 0.00 | % | 0.15 | % | 0.05 | % | 0.18 | % | ||||||||||||||
Allowance for loan losses/period-end loans |
1.12 | 1.07 | 1.07 | 1.27 | 1.23 | |||||||||||||||||||||||
NPAs/loans and other real estate |
0.75 | 0.88 | 0.96 | 1.14 | 1.22 | |||||||||||||||||||||||
Allowance for loan losses/nonperforming loans |
149.37 | 121.96 | 110.94 | 110.81 | 100.64 | |||||||||||||||||||||||
CAPITAL & LIQUIDITY |
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Period-end tangible equity to assets |
8.69 | % | 8.63 | % | 8.46 | % | 8.40 | % | 8.26 | % | ||||||||||||||||||
Average equity to assets |
9.52 | 9.37 | 9.19 | 9.25 | 9.20 | |||||||||||||||||||||||
Average equity to loans |
14.25 | 14.07 | 13.97 | 13.79 | 13.39 | |||||||||||||||||||||||
Average loans to deposits |
83.61 | 83.34 | 82.37 | 84.73 | 87.67 | |||||||||||||||||||||||
AVERAGE BALANCES |
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Assets |
$ | 625,032 | $ | 622,628 | $ | 621,536 | $ | 607,445 | $ | 598,093 | $ | 623,800 | $ | 594,555 | ||||||||||||||
Earning assets |
588,464 | 586,464 | 584,536 | 570,319 | 561,063 | 587,475 | 558,293 | |||||||||||||||||||||
Loans |
417,347 | 414,761 | 409,113 | 407,571 | 411,016 | 416,062 | 403,563 | |||||||||||||||||||||
Deposits |
499,157 | 497,646 | 496,670 | 481,017 | 468,838 | 498,407 | 469,658 | |||||||||||||||||||||
Shareholders equity |
59,473 | 58,351 | 57,134 | 56,203 | 55,052 | 58,912 | 54,371 | |||||||||||||||||||||
ENDING BALANCES |
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Assets |
$ | 622,956 | $ | 625,088 | $ | 620,981 | $ | 610,982 | $ | 608,892 | ||||||||||||||||||
Earning assets |
584,510 | 588,174 | 582,629 | 573,701 | 564,348 | |||||||||||||||||||||||
Loans |
415,198 | 420,861 | 410,903 | 409,908 | 411,930 | |||||||||||||||||||||||
Deposits |
496,404 | 497,333 | 500,075 | 486,521 | 483,672 | |||||||||||||||||||||||
Shareholders equity |
58,966 | 58,791 | 57,450 | 56,270 | 55,239 |
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) | June 30, 2015 |
June 30, 2014 |
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(Dollars in thousands, except per share data) | ||||||||
ASSETS |
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Cash and cash equivalents |
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Cash and due from banks |
$ | 15,244 | $ | 21,446 | ||||
Interest-earning deposits in other banks |
23,672 | 14,908 | ||||||
Federal Funds Sold |
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Total cash and cash equivalents |
38,916 | 36,354 | ||||||
Securities |
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Available-for-sale, at fair-value |
107,409 | 93,389 | ||||||
Held-to-maturity |
33,554 | 38,946 | ||||||
Restricted stock, at cost |
4,614 | 4,613 | ||||||
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Total securities |
145,577 | 136,948 | ||||||
Loans held for sale |
63 | 562 | ||||||
Loans |
415,198 | 411,930 | ||||||
Less allowance for loan losses |
4,656 | 5,063 | ||||||
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Net loans |
410,542 | 406,867 | ||||||
Goodwill and core deposit intangible |
5,295 | 5,422 | ||||||
Bank owned life insurance |
9,948 | 9,681 | ||||||
Premises and equipment, net |
8,374 | 8,503 | ||||||
Accrued interest receivable and other assets |
4,241 | 4,555 | ||||||
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TOTAL ASSETS |
$ | 622,956 | $ | 608,892 | ||||
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Liabilities |
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Deposits: |
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Noninterest-bearing |
$ | 139,603 | $ | 124,768 | ||||
Interest-bearing |
356,801 | 358,904 | ||||||
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Total deposits |
496,404 | 483,672 | ||||||
Short-term borrowings |
51,702 | 50,523 | ||||||
Other borrowings |
13,738 | 17,280 | ||||||
Accrued interest payable and other liabilities |
2,146 | 2,178 | ||||||
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Total liabilities |
563,990 | 553,653 | ||||||
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Shareholders equity |
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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 |
9,884 | 9,950 | ||||||
Retained earnings |
35,908 | 32,184 | ||||||
Treasury stock at cost - 241,197 shares in 2015 and 243,517 in 2014 |
(4,871 | ) | (4,944 | ) | ||||
Accumulated other comprehensive loss |
(584 | ) | (580 | ) | ||||
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Total shareholders equity |
58,966 | 55,239 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 622,956 | $ | 608,892 | ||||
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CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) | Quarter ended June 30, |
Six months ended June 30, |
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(Dollars in thousands, except per share data) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Interest and dividend income: |
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Loans, including fees |
$ | 4,744 | $ | 4,631 | $ | 9,318 | $ | 9,060 | ||||||||
Taxable securities |
670 | 736 | 1,358 | 1,522 | ||||||||||||
Nontaxable securities |
137 | 115 | 266 | 230 | ||||||||||||
Other |
17 | 2 | 33 | 8 | ||||||||||||
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Total interest and dividend income |
5,568 | 5,484 | 10,975 | 10,820 | ||||||||||||
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Interest expense: |
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Deposits |
272 | 289 | 544 | 593 | ||||||||||||
Other |
121 | 150 | 242 | 284 | ||||||||||||
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Total interest expense |
393 | 439 | 786 | 877 | ||||||||||||
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Net interest income |
5,175 | 5,045 | 10,189 | 9,943 | ||||||||||||
Provision for loan losses |
195 | 150 | 389 | 335 | ||||||||||||
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Net interest income after provision for loan losses |
4,980 | 4,895 | 9,800 | 9,608 | ||||||||||||
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Noninterest income |
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Service charges on deposits accounts |
315 | 316 | 601 | 613 | ||||||||||||
Trust services |
243 | 202 | 445 | 418 | ||||||||||||
Debit card interchange fees |
246 | 233 | 473 | 431 | ||||||||||||
Gain on sale of loans |
122 | 44 | 192 | 68 | ||||||||||||
Gain on sale of securities |
21 | 133 | 56 | 133 | ||||||||||||
Other |
233 | 231 | 467 | 449 | ||||||||||||
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Total noninterest income |
1,180 | 1,159 | 2,234 | 2,112 | ||||||||||||
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Noninterest expenses |
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Salaries and employee benefits |
2,224 | 2,110 | 4,374 | 4,129 | ||||||||||||
Occupancy expense |
258 | 240 | 525 | 506 | ||||||||||||
Equipment expense |
165 | 188 | 331 | 369 | ||||||||||||
Franchise tax expense |
100 | 106 | 199 | 213 | ||||||||||||
Professional and director fees |
202 | 214 | 492 | 396 | ||||||||||||
Federal deposit insurance |
90 | 91 | 182 | 177 | ||||||||||||
Amortization of intangible assets |
31 | 33 | 63 | 65 | ||||||||||||
Other expenses |
904 | 867 | 1,756 | 1,671 | ||||||||||||
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Total noninterest expenses |
3,974 | 3,849 | 7,922 | 7,526 | ||||||||||||
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Income before income tax |
2,186 | 2,205 | 4,112 | 4,194 | ||||||||||||
Federal income tax provision |
669 | 683 | 1,253 | 1,256 | ||||||||||||
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Net income |
$ | 1,517 | $ | 1,522 | $ | 2,859 | $ | 2,938 | ||||||||
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Net income per share: |
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Basic |
$ | 0.55 | $ | 0.55 | $ | 1.04 | $ | 1.07 | ||||||||
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Diluted |
$ | 0.55 | $ | 0.55 | $ | 1.04 | $ | 1.07 | ||||||||
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