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8-K - FORM 8-K - CSB BANCORP INC /OHd159582d8k.htm

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS

First Quarter Highlights

 

     Quarter Ended
March 31, 2017
    Quarter Ended
March 31, 2016
 

Diluted earnings per share

   $ 0.63     $ 0.54  

Net Income

   $ 1,730,000     $ 1,480,000  

Return on average common equity

     10.54     9.48

Return on average assets

     1.05     0.93

Millersburg, Ohio – April 19, 2017 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced first quarter 2017 net income of $1,730,000, or $.63 per basic and diluted share, as compared to $1,480,000, or $.54 per basic and diluted share, for the same period in 2016.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.54% and 1.05%, respectively, compared with 9.48% and 0.93% for the first quarter of 2016.

Eddie Steiner, President and CEO stated, “We are pleased to report strong first quarter earnings. Demand for business and consumer loans remains steady, resulting in higher loan balances and increased earnings.”

Revenue, on a fully-taxable equivalent basis, totaled $7.1 million during the quarter, an 11% increase from the prior-year first quarter. Net interest income increased $577 thousand, or 11%, in the first quarter of 2017 compared to the same period in 2016. Loan interest income including fees increased $707 thousand during first quarter 2017 as compared to the same quarter in 2016. This increase was driven partially by an increase in average loan volume of $53 million across all categories of loans as well as in increase of 14 basis points in loan yield. The net interest margin of 3.85% compared favorably to 3.57% for first quarter 2016.

Noninterest income increased by $114 thousand, or 11%, in the first quarter of 2017 compared to 2016. The increase reflects growth in cash surrender value of life insurance, increases in debit card fee income, growth in service charges on deposit accounts, and the gain on sale of mortgage loans. During 2016 a write-down of fixed assets of $39 thousand occurred during first quarter which did not recur in 2017. The increases were partially offset by a decrease in trust and brokerage fee income.


Noninterest expense amounted to $4.6 million during the quarter, an increase of $657 thousand, or 16%, from first quarter 2016. This increase is attributable to CSB providing a $540 thousand provision for unfunded loan commitments due to the impairment of a commercial line of credit. Salary and employee benefits rose $132 thousand, or 6%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes. The Company’s first quarter efficiency ratio amounted to 65.4% as compared to 62.2% for the same quarter in the prior year.

Federal income tax provision totaled $752 thousand in first quarter 2017, compared to $644 thousand for the same quarter in 2016 reflecting a slightly decreased effective tax rate in 2017 from an increase in nontaxable income.

Average total assets during the quarter amounted to $667 million, an increase of $26 million, or 4%, above the same quarter of the prior year. Average loan balances of $481 million increased $53 million, or 12%, from the prior year first quarter while average securities balances of $133 million decreased $27 million, or 17%, as compared to first quarter 2016.

Average commercial loan balances for the quarter, including commercial real estate, increased $28 million, or 10%, from prior year levels. Average residential mortgage balances increased $16 million, or 19%, over the prior year’s quarter. Average home equity balances increased $4 million, or 9%, and average consumer credit balances increased $4 million, or 41%, versus the same quarter of the prior year.

Delinquent loan balances as of March 31, 2017 amounted to 1.25% of total loans as compared to 0.63% at March 31, 2016. Nonperforming assets totaled $4.9 million, or 1.02%, of total loans plus other real estate, an increase of $3 million over March 31, 2016. The allowance for loan losses amounted to 1.13% of total loans on March 31, 2017 as compared to 1.15% at March 31, 2016.

Net loan recoveries recognized during first quarter 2017 were $323 thousand, or 0.27% annualized, compared to first quarter 2016 net loan recoveries of $179 thousand.

Average deposit balances for first quarter 2017 totaled $531 million, an increase of $19 million, or 4%, from the prior year’s first quarter. Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $24 million, or 17%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $2 million, or 1%, from year ago levels, while average time deposit balances decreased $7 million, or 6%, from first quarter 2016. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter of 2017 increased by $3 million, or 6%, compared to 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 $66.9 million on March 31, 2017 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.2% on March 31, 2017, as compared to 9.1% on March 31, 2016. The Company declared a first quarter dividend of $0.20 per share producing an annualized yield of 2.6% based on the March 31, 2017 closing price of $31.00.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $680 million as of March 31, 2017. 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, North Canton, 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)    2017     2016     2016     2016     2016  

EARNINGS

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

Net interest income FTE (a)

   $ 5,955     $ 6,022     $ 5,597     $ 5,539     $ 5,373  

Provision for loan losses

     (160     —         164       165       164  

Other income

     1,106       1,112       1,095       1,097       992  

Other expenses

     4,646       4,210       3,994       4,062       3,989  

FTE adjustment (a)

     93       91       100       93       88  

Net income

     1,730       1,953       1,694       1,611       1,480  

Diluted earnings per share

     0.63       0.72       0.61       0.59       0.54  

PERFORMANCE RATIOS

          

Return on average assets (ROA)

     1.05     1.17     1.03     1.00     0.93

Return on average common equity (ROE)

     10.54     11.76     10.29     10.14     9.48

Net interest margin FTE (a)

     3.85     3.83     3.61     3.65     3.57

Efficiency ratio

     65.39     58.59     59.23     60.76     62.20

Number of full-time equivalent employees

     164       165       165       166       162  

MARKET DATA

          

Book value/common share

   $ 24.41     $ 23.85     $ 23.98     $ 23.49     $ 22.90  

Period-end common share mkt value

     31.00       31.00       25.17       25.20       24.25  

Market as a % of book

     127.00     129.98     104.96     107.28     105.90

Price-to-earnings ratio

     12.16       12.60       10.80       11.00       10.78  

Cash dividends/common share

   $ 0.20     $ 0.20     $ 0.20     $ 0.19     $ 0.19  

Common stock dividend payout ratio

     31.75     27.78     32.79     32.20     35.19

Average basic common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,741,379  

Average diluted common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,741,379  

Period end common shares outstanding

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Common shares repurchased

     0       0       0       0       0  

Common stock market capitalization

   $ 85,010     $ 85,010     $ 69,022     $ 69,104     $ 66,499  

ASSET QUALITY

          

Gross charge-offs

   $ 13     $ 44     $ 346     $ 18     $ 10  

Net (recoveries) charge-offs

     (323     (289     318       14       (179

Allowance for loan losses

     5,454       5,291       5,002       5,156       5,005  

Nonperforming assets (NPAs)

     4,909       1,684       2,849       2,806       1,915  

Net charge-off (recovery) /average loans ratio

     (0.27 )%      (0.25 )%      0.27     0.01     (0.17 )% 

Allowance for loan losses/period-end loans

     1.13       1.11       1.08       1.14       1.15  

NPAs/loans and other real estate

     1.02       0.35       0.62       0.62       0.44  

Allowance for loan losses/nonperforming loans

     111.10       314.19       177.61       188.59       261.35  

CAPITAL & LIQUIDITY

          

Period-end tangible equity to assets

     9.17     9.07     9.34     9.19     9.11

Average equity to assets

     9.98       9.95       10.02       9.88       9.77  

Average equity to loans

     13.85       14.25       14.33       14.29       14.63  

Average loans to deposits

     90.45       87.15       87.89       86.71       83.55  

AVERAGE BALANCES

          

Assets

   $ 666,650     $ 664,158     $ 653,635     $ 646,642     $ 640,670  

Earning assets

     627,520       625,320       616,555       610,138       604,911  

Loans

     480,656       463,725       456,865       447,009       427,916  

Deposits

     531,380       532,102       519,828       515,511       512,192  

Shareholders’ equity

     66,560       66,094       65,471       63,877       62,625  

ENDING BALANCES

          

Assets

   $ 679,437     $ 669,978     $ 654,391     $ 649,890     $ 637,202  

Earning assets

     640,113       631,069       617,264       610,221       602,306  

Loans

     480,709       475,449       463,211       450,789       433,453  

Deposits

     542,180       540,785       522,240       516,497       509,980  

Shareholders’ equity

     66,927       65,415       65,751       64,407       62,796  

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)    March 31,
2017
    March 31,
2016
 
(Dollars in thousands, except per share data)     

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 13,911     $ 12,527  

Interest-earning deposits in other banks

     24,476       14,844  

Federal Funds Sold

     —         —    
  

 

 

   

 

 

 

Total cash and cash equivalents

     38,387       27,371  

Securities

    

Available-for-sale, at fair-value

     102,158       122,242  

Held-to-maturity

     27,892       27,025  

Restricted stock, at cost

     4,614       4,614  
  

 

 

   

 

 

 

Total securities

     134,664       153,881  

Loans held for sale

     264       128  

Loans

     480,709       433,453  

Less allowance for loan losses

     5,454       5,005  
  

 

 

   

 

 

 

Net loans

     475,255       428,448  

Goodwill and core deposit intangible

     5,082       5,202  

Bank owned life insurance

     12,959       10,152  

Premises and equipment, net

     8,656       8,032  

Accrued interest receivable and other assets

     4,170       3,988  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 679,437     $ 637,202  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 171,235     $ 145,967  

Interest-bearing

     370,945       364,013  
  

 

 

   

 

 

 

Total deposits

     542,180       509,980  

Short-term borrowings

     54,022       48,787  

Other borrowings

     12,304       13,332  

Accrued interest payable and other liabilities

     4,004       2,307  
  

 

 

   

 

 

 

Total liabilities

     612,510       574,406  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2017 and 2016

     18,629       18,629  

Additional paid-in capital

     9,815       9,815  

Retained earnings

     43,810       38,989  

Treasury stock at cost - 238,360 shares in 2017 and 2016

     (4,784     (4,784

Accumulated other comprehensive (loss) gain

     (543     147  
  

 

 

   

 

 

 

Total shareholders’ equity

     66,927       62,796  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 679,437     $ 637,202  
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
March 31,
 
(Dollars in thousands, except per share data)    2017     2016  

Interest and dividend income:

    

Loans, including fees

   $ 5,449     $ 4,742  

Taxable securities

     598       737  

Nontaxable securities

     165       154  

Other

     34       28  
  

 

 

   

 

 

 

Total interest and dividend income

     6,246       5,661  
  

 

 

   

 

 

 

Interest expense:

    

Deposits

     267       259  

Other

     117       117  
  

 

 

   

 

 

 

Total interest expense

     384       376  
  

 

 

   

 

 

 

Net interest income

     5,862       5,285  

Provision for loan losses

     (160     164  
  

 

 

   

 

 

 

Net interest income after provision for loan losses

     6,022       5,121  
  

 

 

   

 

 

 

Noninterest income

    

Service charges on deposits accounts

     291       278  

Trust services

     207       226  

Debit card interchange fees

     288       262  

Gain on sale of loans

     42       32  

Gain on sale of securities

     —         —    

Other

     278       194  
  

 

 

   

 

 

 

Total noninterest income

     1,106       992  
  

 

 

   

 

 

 

Noninterest expenses

    

Salaries and employee benefits

     2,459       2,327  

Occupancy expense

     210       244  

Equipment expense

     170       174  

Professional and director fees

     169       174  

Software expense

     210       187  

Marketing and public relations

     78       85  

Debit card expense

     130       104  

Provision for unfunded loan commitments

     540       —    

Other expenses

     680       694  
  

 

 

   

 

 

 

Total noninterest expenses

     4,646       3,989  
  

 

 

   

 

 

 

Income before income tax

     2,482       2,124  

Federal income tax provision

     752       644  
  

 

 

   

 

 

 

Net income

   $ 1,730     $ 1,480  
  

 

 

   

 

 

 

Net income per share:

    

Basic

   $ 0.63     $ 0.54  
  

 

 

   

 

 

 

Diluted

   $ 0.63     $ 0.54