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8-K - 8-K - CSB BANCORP INC /OHd15327d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS

Fourth Quarter Highlights

 

     Quarter Ended
December 31, 2015
    Quarter Ended
December 31, 2014
 

Diluted earnings per share

   $ 0.59      $ 0.53   

Net Income

   $ 1,607,000      $ 1,439,000   

Return on average common equity

     10.41     9.99

Return on average assets

     0.98     0.92

Millersburg, Ohio – January 26, 2016 – CSB Bancorp, Inc. (CSBB) today announced fourth quarter 2015 net income of $1,607,000 or $.59 per basic and diluted share, as compared to $1,439,000 or $.53 per basic and diluted share for the same period in 2014. For the twelve month period ended December 31, 2015 net income totaled $6,022,000, compared to $5,884,000 for the same period last year.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.41% and 0.98%, respectively, compared with 9.99% and 0.92% for the fourth quarter of 2014.

For the full year of 2015, the Company reported net income of $6.0 million or $2.20 per basic and diluted share, as compared to $5.9 million or $2.15 per basic and diluted share in 2014. Full year ROE and ROA were 10.07% and 0.95% respectively, compared to 10.60% and 0.97% in 2014.

Eddie Steiner, President and CEO stated, “Total revenue has now increased for twenty consecutive quarters when compared to the same period in the prior year. Loan demand in our core business sectors and geographic markets appears to be increasing as we head into 2016.”

Revenue, on a fully-taxable equivalent basis, totaled $6.3 million during the quarter, a 3% increase from the prior-year fourth quarter. Net interest income improved by $202 thousand as compared to fourth quarter 2014, while other income increased $10 thousand. Full year revenue of $25.2 million reflects a $720 thousand, or a 3%, increase as compared to full year 2014.


Non-interest expense amounted to $3.9 million during the quarter, an increase of $143 thousand or 4% from fourth quarter 2014. The Company’s fourth quarter efficiency ratio amounted to 61.6% as compared to 61.3% for the same quarter in the prior year. Salary and employee benefits rose $155 thousand, or 8%, on a quarter over prior year quarter with increases in base salary, medical coverage and employment taxes. For the full year ended December 31, 2015, non-interest expense increased $714 thousand or 5% versus 2014, with the majority of the change attributable to increases in salary and benefit expense.

Net interest margin for the quarter amounted to 3.39% compared to 3.43% from the linked September quarter and 3.43% for the prior year’s fourth quarter. The margin decrease year over year resulted from a 7 basis point decrease in average yield on earning assets partially offset with a 3 basis point decrease in average interest costs on all liabilities. The sustained low interest rate environment with resultant periodic rate decreases on certain long-term loans with scheduled rate repricing, along with deposit growth outpacing loan growth in the past year, have contributed to the lower margin trend.

Net interest margin amounted to 3.48% for the full year in 2015 as compared to 3.56% for the prior full year. The margin decrease on a year over year basis was largely attributable to an increase in low yielding overnight funds through the end of the fourth quarter in 2015 as growth in average loan and securities balances during the year was outpaced by growth in average deposit balances. The lower yields on earning assets were partially offset by a 4 basis point decline in liability costs.

Federal income tax provision totaled $707 thousand in fourth quarter 2015, compared to $637 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 $653 million, an increase of $31 million or 5% above the same quarter of the prior year. Average loan balances of $409 million declined $589 thousand, or less than 1%, from the prior year fourth quarter while average securities balances of $163 million increased $18 million or 13% as compared to fourth quarter 2014.

Average commercial loan balances for the quarter, including commercial real estate, decreased $3 million or 1% from prior year levels. Average residential mortgage balances decreased $1 million or 1% over the prior year’s quarter. Average home equity balances increased $1 million or 3% and average consumer credit balances increased $2 million or 21% versus the same quarter of the prior year.

The Company did not fund a loan loss provision during the fourth quarter 2015 due to declines in delinquent loans and nonperforming assets. Delinquent loan balances as of December 31, 2015 amounted to 0.65% of total loans as compared to 1.30% at December 31, 2014. Nonperforming assets totaled $1.7 million or 0.40% of total loans plus other real estate, a decrease from $3.9 million or 0.96% of total loans plus other real estate at December 31, 2014. The allowance for loan losses amounted to 1.10% of total loans on December 31, 2015.


Net loan recoveries during fourth quarter 2015 were $30 thousand (0.03% annualized) compared to fourth quarter 2014 net loan charge-offs of $1 million. Net charge-offs for full year 2015 amounted to $108 thousand or 0.03% of average loans.

Average deposit balances for fourth quarter 2015 totaled $524 million, an increase of $27 million, or 6%, from the prior year’s fourth quarter. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $19 million, or 14% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $14 million or 6% from year ago levels, while average time deposit balances decreased $6 million or 5% from fourth quarter 2014. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth quarter of 2015 increased by $2 million or 4% 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 $61.3 million on December 31, 2015 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.7% on December 31, 2015, as compared to 8.5% on December 31, 2014. The Company declared a common dividend of $.19 per share during the quarter. Based on the December 31, 2015 closing stock price of $24.50 per share, the Company’s annual dividend yield approximates 3.1%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $650 million as of December 31, 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 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)    2015     2015     2015     2014     2014     2015     2014  

EARNINGS

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

Net interest income FTE (a)

   $ 5,262      $ 5,150      $ 5,255      $ 5,091      $ 5,060      $ 20,758      $ 20,212   

Provision for loan losses

     —          —          195        194        185        389        643   

Other income

     1,071        1,119        1,180        1,054        1,061        4,424        4,250   

Other expenses

     3,930        3,944        3,974        3,948        3,787        15,796        15,082   

FTE adjustment (a)

     89        82        80        77        73        328        285   

Net income

     1,607        1,556        1,517        1,342        1,439        6,022        5,884   

Diluted earnings per share

     0.59        0.57        0.55        0.49        0.53        2.20        2.15   

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     0.98     0.98     0.97     0.87     0.92     0.95     0.97

Return on average common equity (ROE)

     10.41     10.27     10.23     9.33     9.99     10.07     10.60

Net interest margin FTE (a)

     3.39     3.43     3.58     3.52     3.43     3.48     3.56

Efficiency ratio

     61.55     62.42     61.47     64.09     61.34     62.37     61.46

Number of full-time equivalent employees

     161        161        163        165        167       

MARKET DATA

              

Book value/common share

   $ 22.35      $ 22.09      $ 21.53      $ 21.46      $ 20.97       

Period-end common share mkt value

     24.50        24.20        25.00        23.00        22.00       

Market as a % of book

     109.62     109.55     116.12     107.18     104.91    

Price-to-earnings ratio

     11.14        11.31        11.79        10.85        10.23       

Cash dividends/common share

   $ 0.19      $ 0.19      $ 0.19      $ 0.19      $ 0.19      $ 0.76      $ 0.74   

Common stock dividend payout ratio

     32.20     33.33     34.54     38.78     35.85     34.55     34.42

Average basic common shares

     2,739,664        2,739,405        2,739,405        2,739,405        2,738,869        2,739,470        2,737,636   

Average diluted common shares

     2,741,243        2,742,455        2,742,738        2,741,993        2,741,033        2,742,108        2,739,078   

Period end common shares outstanding

     2,740,996        2,739,405        2,739,405        2,739,405        2,739,405       

Common shares repurchased

     0        0        0        0        0        0        0   

Common stock market capitalization

   $ 67,154      $ 66,294      $ 68,485      $ 63,006      $ 60,267       

ASSET QUALITY

              

Gross charge-offs

   $ 104      $ 95      $ 39      $ 110      $ 1,033      $ 348      $ 1,422   

Net (recoveries) charge-offs

     (30     25        32        81        992        108        1,347   

Allowance for loan losses

     4,662        4,632        4,656        4,494        4,381       

Nonperforming assets (NPAs)

     1,681        2,018        3,117        3,685        3,949       

Net charge-off (recovery) /average loans ratio

     (0.03 )%      0.02     0.03     0.08     0.96     0.03     0.33

Allowance for loan losses/period-end loans

     1.10        1.12        1.12        1.07        1.07       

NPAs/loans and other real estate

     0.40        0.49        0.75        0.88        0.96       

Allowance for loan losses/nonperforming loans

     277.35        229.54        149.38        121.96        110.93       

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     8.69     8.81     8.69     8.63     8.46    

Average equity to assets

     9.38        9.50        9.52        9.37        9.19       

Average equity to loans

     14.99        14.73        14.25        14.07        13.97       

Average loans to deposits

     77.95        81.21        83.61        83.34        82.37       

AVERAGE BALANCES

              

Assets

   $ 652,725      $ 632,539      $ 625,032      $ 622,628      $ 621,536      $ 633,298      $ 604,605   

Earning assets

     615,725        595,806        588,464        586,464        584,536        596,705        567,940   

Loans

     408,524        408,069        417,347        414,761        409,113        412,147        405,973   

Deposits

     524,078        502,514        499,157        497,646        496,670        505,913        479,330   

Shareholders’ equity

     61,230        60,112        59,473        58,351        57,134        59,799        55,529   

ENDING BALANCES

              

Assets

   $ 650,314      $ 632,381      $ 622,956      $ 625,088      $ 620,981       

Earning assets

     610,251        597,476        584,510        588,174        582,629       

Loans

     422,871        412,974        415,198        420,861        410,903       

Deposits

     525,042        505,088        496,404        497,333        500,075       

Shareholders’ equity

     61,266        60,504        58,966        58,791        57,450       

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)    December 31,     December 31,  
(Dollars in thousands, except per share data)    2015     2014  

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 17,341      $ 15,310   

Interest-earning deposits in other banks

     20,931        28,613   

Federal Funds Sold

     —          —     
  

 

 

   

 

 

 

Total cash and cash equivalents

     38,272        43,923   

Securities

    

Available-for-sale, at fair-value

     127,969        100,108   

Held-to-maturity

     33,819        38,316   

Restricted stock, at cost

     4,614        4,614   
  

 

 

   

 

 

 

Total securities

     166,402        143,038   

Loans held for sale

     47        75   

Loans

     422,871        410,903   

Less allowance for loan losses

     4,662        4,381   
  

 

 

   

 

 

 

Net loans

     418,209        406,522   

Goodwill and core deposit intangible

     5,232        5,357   

Bank owned life insurance

     10,085        9,815   

Premises and equipment, net

     8,209        8,286   

Accrued interest receivable and other assets

     3,858        3,965   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 650,314      $ 620,981   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 151,549      $ 139,251   

Interest-bearing

     373,493        360,824   
  

 

 

   

 

 

 

Total deposits

     525,042        500,075   

Short-term borrowings

     48,598        46,627   

Other borrowings

     13,465        14,953   

Accrued interest payable and other liabilities

     1,943        1,876   
  

 

 

   

 

 

 

Total liabilities

     589,048        563,531   
  

 

 

   

 

 

 

Shareholders’ equity

    

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

     9,846        9,884   

Retained earnings

     38,030        34,090   

Treasury stock at cost - 239,606 shares in 2015 and 241,197 in 2014

     (4,822     (4,871

Accumulated other comprehensive loss

     (417     (282
  

 

 

   

 

 

 

Total shareholders’ equity

     61,266        57,450   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 650,314      $ 620,981   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
Dec 31,
     Twelve months ended
Dec 31,
 
(Dollars in thousands, except per share data)    2015      2014      2015      2014  

Interest and dividend income:

           

Loans, including fees

   $ 4,618       $ 4,585       $ 18,548       $ 18,290   

Taxable securities

     749         675         2,790         2,857   

Nontaxable securities

     154         121         563         466   

Other

     38         20         96         43   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     5,559         5,401         21,997         21,656   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest expense:

           

Deposits

     266         282         1,081         1,166   

Other

     120         132         486         563   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     386         414         1,567         1,729   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income

     5,173         4,987         20,430         19,927   

Provision for loan losses

     —           185         389         643   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net interest income after provision for loan losses

     5,173         4,802         20,041         19,284   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest income

           

Service charges on deposits accounts

     287         332         1,203         1,269   

Trust services

     217         193         860         811   

Debit card interchange fees

     265         242         988         910   

Gain on sale of loans

     57         53         363         198   

Gain on sale of securities

     —           —           56         133   

Other

     245         241         954         929   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest income

     1,071         1,061         4,424         4,250   
  

 

 

    

 

 

    

 

 

    

 

 

 

Noninterest expenses

           

Salaries and employee benefits

     2,223         2,068         8,819         8,321   

Occupancy expense

     251         252         1,027         1,014   

Equipment expense

     166         166         663         715   

Professional and director fees

     165         197         830         725   

Software expense

     202         216         801         727   

Marketing and public relations

     133         111         419         378   

Debit card expense

     103         125         413         421   

Other expenses

     687         652         2,824         2,781   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest expenses

     3,930         3,787         15,796         15,082   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before income tax

     2,314         2,076         8,669         8,452   

Federal income tax provision

     707         637         2,647         2,568   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 1,607       $ 1,439       $ 6,022       $ 5,884   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share:

           

Basic

   $ 0.59       $ 0.53       $ 2.20       $ 2.15   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.59       $ 0.53       $ 2.20       $ 2.15