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Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS

Second Quarter Highlights

 

     Quarter Ended
June 30, 2017
    Quarter Ended
June 30, 2016
 

Diluted earnings per share

     $0.63       $0.59  

Net Income

   $ 1,726,000     $ 1,611,000  

Return on average common equity

     10.15     10.14

Return on average assets

     1.01     1.00

Millersburg, Ohio – July 25, 2017 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2017 net income of $1,726,000, or $.63 per basic and diluted share, as compared to $1,611,000, or $.59 per basic and diluted share, for the same period in 2016. For the six month period ended June 30, 2017 net income totaled $3,456,000, compared to $3,091,000 for the same period last year an increase of 12%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.15% and 1.01%, respectively, compared with 10.14% and 1.00% for the second quarter of 2016.

Eddie Steiner, President and CEO stated, “Six month revenue is 9% ahead of last year’s midpoint on the strength of 11% growth in average loan balances and an increase in net interest margin. Business, homeowner and consumer lending platforms are all contributing to this loan growth.”

Revenue, on a fully-taxable equivalent basis, totaled $7.1 million during the quarter, a 7% increase from the prior-year second quarter. Net interest income increased $504 thousand, or 9%, in the second quarter of 2017 compared to the same period in 2016. Loan interest income including fees increased $618 thousand during second quarter 2017 as compared to the same quarter in 2016. This increase was driven partially by an increase in average loan volume of $43 million across all categories of loans as well as in increase of 9 basis points in loan yield. The net interest margin of 3.75% compared favorably to 3.65% for second quarter 2016.

Noninterest income declined by $37 thousand, or 3%, in the second quarter of 2017 compared to 2016. The decrease reflects a $66 thousand drop in trust and brokerage fees a result of broker and administrative changes within the unit which have been completed late in second quarter 2017. The decrease in other income was partially offset by growth in cash surrender value of life insurance and increases in debit card fee income. During 2016 a write-down of fixed assets of $25 thousand occurred during second quarter which did not recur in 2017.


Noninterest expense amounted to $3.7 million during the quarter, a decrease of $374 thousand, or 9%, from second quarter 2016. This decrease primarily results from CSB reversing a $540 thousand provision for unfunded loan commitments as a previously impaired commercial line of credit is currently drawn. Salary and employee benefits rose $173 thousand, or 8%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes. The Company’s second quarter efficiency ratio amounted to 51.5% as compared to 60.8% for the same quarter in the prior year and improved to 58.4% for the current six month period as compared to 61.5% in the first six months of 2016.

Federal income tax provision totaled $751 thousand in second quarter 2017, compared to $705 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 $686 million, an increase of $40 million, or 6%, above the same quarter of the prior year. Average loan balances of $490 million increased $43 million, or 10%, from the prior year second quarter while average securities balances of $133 million decreased $17 million, or 12%, as compared to second quarter 2016.

Average commercial loan balances for the quarter, including commercial real estate, increased $19 million, or 6%, from prior year levels. Average residential mortgage balances increased $18 million, or 21%, over the prior year’s quarter. Average home equity balances increased $2 million, or 4%, and average consumer credit balances increased $4 million, or 36%, versus the same quarter of the prior year.

Delinquent loan balances as of June 30, 2017 amounted to 1.31% of total loans as compared to 0.82% at June 30, 2016. Nonperforming assets totaled $6.0 million, or 1.21%, of total loans plus other real estate, an increase of $3 million over June 30, 2016. The allowance for loan losses amounted to 1.26% of total loans on June 30, 2017 as compared to 1.14% at June 30, 2016.

Net loan losses recognized during second quarter 2017 were $10 thousand, or 0.01% annualized, compared to second quarter 2016 net loan losses of $14 thousand.

Average deposit balances for second quarter 2017 totaled $542 million, an increase of $27 million, or 5%, from the prior year’s second quarter. Within the deposit category, average noninterest-bearing account balances for the second quarter increased by $18 million, or 12%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $15 million, or 6%, from year ago levels, while average time deposit balances decreased $6 million, or 5%, from second quarter 2016. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the second quarter of 2017 increased by $4 million, or 8%, 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 $68.7 million on June 30, 2017 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.2% on June 30, 2017 and June 30, 2016. The Company declared a second quarter dividend of $0.20 per share producing an annualized yield of 2.6% based on the June 30, 2017 closing price of $30.60.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $697 million as of June 30, 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     2017     2016     2016     2016     2017     2016  
EARNINGS    2nd Qtr     1st Qtr     4th Qtr     3rd Qtr     2nd Qtr     6 months     6 months  

 

   

 

 

 

Net interest income FTE (a)

   $ 6,046     $ 5,955     $ 6,022     $ 5,597     $ 5,539     $ 12,001     $ 10,912  

Provision for loan losses

     845       (160     —         164       165       685       329  

Other income

     1,060       1,106       1,112       1,095       1,097       2,166       2,089  

Other expenses

     3,688       4,646       4,210       3,994       4,062       8,334       8,051  

FTE adjustment (a)

     96       93       91       100       93       189       181  

Net income

     1,726       1,730       1,953       1,694       1,611       3,456       3,091  

Diluted earnings per share

     0.63       0.63       0.72       0.61       0.59       1.26       1.13  

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     1.01     1.05     1.17     1.03     1.00     1.03     0.97

Return on average common equity (ROE)

     10.15     10.54     11.76     10.29     10.14     10.34     9.83

Net interest margin FTE (a)

     3.75     3.85     3.83     3.61     3.65     3.80     3.61

Efficiency ratio

     51.49     65.39     58.59     59.23     60.76     58.42     61.46

Number of full-time equivalent employees

     169       164       165       165       166      

MARKET DATA

              

Book value/common share

   $ 25.06     $ 24.41     $ 23.85     $ 23.98     $ 23.49      

Period-end common share mkt value

     30.60       31.00       31.00       25.17       25.20      

Market as a % of book

     122.11     127.00     129.98     104.96     107.28    

Price-to-earnings ratio

     11.81       12.16       12.60       10.80       11.00      

Cash dividends/common share

   $ 0.20     $ 0.20     $ 0.20     $ 0.20     $ 0.19     $ 0.40     $ 0.38  

Common stock dividend payout ratio

     31.75     31.75     27.78     32.79     32.20     31.75     33.63

Average basic common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,741,811  

Average diluted common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,741,811  

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

   $ 83,913     $ 85,010     $ 85,010     $ 69,022     $ 69,104      

ASSET QUALITY

              

Gross charge-offs

   $ 34     $ 13     $ 44     $ 346     $ 18     $ 47     $ 28  

Net charge-offs (recoveries)

     10       (323     (289     318       14       (313     (165

Allowance for loan losses

     6,289       5,454       5,291       5,002       5,156      

Nonperforming assets (NPAs)

     6,036       4,909       1,684       2,849       2,806      

Net charge-off (recovery) /average loans ratio

     0.01     (0.27 )%      (0.25 )%      0.27     0.01     (0.13 )%      (0.08 )% 

Allowance for loan losses/period-end loans

     1.26       1.13       1.11       1.08       1.14      

NPAs/loans and other real estate

     1.21       1.02       0.35       0.62       0.62      

Allowance for loan losses/nonperforming loans

     104.19       111.10       314.19       177.61       188.59      

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     9.20     9.17     9.07     9.34     9.19    

Average equity to assets

     9.93       9.98       9.95       10.02       9.88      

Average equity to loans

     13.90       13.85       14.25       14.33       14.29      

Average loans to deposits

     90.42       90.45       87.15       87.89       86.71      

AVERAGE BALANCES

              

Assets

   $ 686,403     $ 666,650     $ 664,158     $ 653,635     $ 646,642     $ 676,655     $ 643,656  

Earning assets

     646,859       627,520       625,320       616,555       610,138       637,242       607,524  

Loans

     490,359       480,656       463,725       456,865       447,009       485,534       437,462  

Deposits

     542,308       531,380       532,102       519,828       515,511       531,380       513,851  

Shareholders’ equity

     68,184       66,560       66,094       65,471       63,877       67,377       63,251  
ENDING BALANCES                                           

Assets

   $ 696,891     $ 679,437     $ 669,978     $ 654,391     $ 649,890      

Earning assets

     657,249       640,113       631,069       617,264       610,221      

Loans

     498,625       480,709       475,449       463,211       450,789      

Deposits

     547,104       542,180       540,785       522,240       516,497      

Shareholders’ equity

     68,726       66,927       65,415       65,751       64,407                  

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,     June 30,  
(Dollars in thousands, except per share data)    2017     2016  

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 15,445     $ 16,859  

Interest-earning deposits in other banks

     23,351       11,268  

Federal Funds Sold

     —         —    
  

 

 

   

 

 

 

Total cash and cash equivalents

     38,796       28,127  

Securities

    

Available-for-sale, at fair-value

     103,058       119,355  

Held-to-maturity

     27,169       23,845  

Restricted stock, at cost

     4,614       4,614  
  

 

 

   

 

 

 

Total securities

     134,841       147,814  

Loans held for sale

     432       350  

Loans

     498,625       450,789  

Less allowance for loan losses

     6,289       5,156  
  

 

 

   

 

 

 

Net loans

     492,336       445,633  

Goodwill and core deposit intangible

     5,053       5,172  

Bank owned life insurance

     13,045       10,222  

Premises and equipment, net

     8,633       8,660  

Accrued interest receivable and other assets

     3,755       3,912  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 696,891     $ 649,890  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 169,241     $ 156,365  

Interest-bearing

     377,863       360,132  
  

 

 

   

 

 

 

Total deposits

     547,104       516,497  

Short-term borrowings

     56,932       54,125  

Other borrowings

     21,781       12,574  

Accrued interest payable and other liabilities

     2,348       2,287  
  

 

 

   

 

 

 

Total liabilities

     628,165       585,483  
  

 

 

   

 

 

 

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

     44,987       40,079  

Treasury stock at cost – 238,360 shares in 2017

    

and 2016

     (4,784     (4,784

Accumulated other comprehensive income

     79       668  
  

 

 

   

 

 

 

Total shareholders’ equity

     68,726       64,407  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 696,891     $ 649,890  
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

     Quarter ended      Year ended  
(Unaudited)    June 30,      June 30,  
(Dollars in thousands, except per share data)    2017     2016      2017      2016  

Interest and dividend income:

          

Loans, including fees

   $ 5,584     $ 4,966      $ 11,033      $ 9,708  

Taxable securities

     598       662        1,196        1,398  

Nontaxable securities

     174       165        339        319  

Other

     57       20        91        49  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     6,413       5,813        12,659        11,474  
  

 

 

   

 

 

    

 

 

    

 

 

 

Interest expense:

          

Deposits

     307       250        574        509  

Other

     156       117        273        234  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total interest expense

     463       367        847        743  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income

     5,950       5,446        11,812        10,731  

Provision for loan losses

     845       165        685        329  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net interest income after provision

          

for loan losses

     5,105       5,281        11,127        10,402  
  

 

 

   

 

 

    

 

 

    

 

 

 

Noninterest income

          

Service charges on deposits accounts

     268       288        559        566  

Trust services

     152       218        359        444  

Debit card interchange fees

     296       271        584        533  

Gain on sale of loans

     61       118        103        150  

Gain on sale of securities

     —         —          —          —    

Other

     283       202        561        396  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total noninterest income

     1,060       1,097        2,166        2,089  
  

 

 

   

 

 

    

 

 

    

 

 

 

Noninterest expenses

          

Salaries and employee benefits

     2,472       2,299        4,931        4,626  

Occupancy expense

     214       233        424        477  

Equipment expense

     171       169        341        343  

Professional and director fees

     234       189        403        363  

Software expense

     203       198        413        384  

Marketing and public relations

     89       143        167        228  

Debit card expense

     141       114        271        218  

Provision for unfunded loan commitments

     (540     —          —          —    

Other expenses

     704       717        1,384        1,412  
  

 

 

   

 

 

    

 

 

    

 

 

 

Total noninterest expenses

     3,688       4,062        8,334        8,051  
  

 

 

   

 

 

    

 

 

    

 

 

 

Income before income tax

     2,477       2,316        4,959        4,440  

Federal income tax provision

     751       705        1,503        1,349  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income

   $ 1,726     $ 1,611      $ 3,456      $ 3,091  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income per share:

          

Basic

   $ 0.63     $ 0.59      $ 1.26      $ 1.13  
  

 

 

   

 

 

    

 

 

    

 

 

 

Diluted

   $ 0.63     $ 0.59      $ 1.26      $ 1.13