EX-99.1 2 l37052exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(CSB BANCORP, INC. LOGO)
CSB BANCORP, INC. REPORTS EARNINGS FOR SECOND QUARTER 2009
Second Quarter and Year to Date Highlights
                 
    Quarter Ended     Six Months Ended  
    June 30, 2009     June 30, 2009  
Diluted earnings per share
  $ 0.26     $ 0.59  
Net Income
  $ 706,000     $ 1,602,000  
Return on average common equity
    6.32 %     7.24 %
Return on average assets
    0.67 %     0.76 %
Millersburg, Ohio — July 22, 2009 — CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced second quarter 2009 net income of $706 thousand, or $.26 per basic and diluted share, as compared to $878 thousand, or $.36 per basic and diluted share for the same period in 2008.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 6.32% and 0.67%, respectively, compared with 9.46% and 1.03% for the second quarter of 2008.
Eddie Steiner, President and CEO stated, “A deep recession continues to suppress economic activity in our markets and shows few signs of significant recovery in the near term. Loan charge-offs and higher FDIC premiums dampened net earnings during the first half of 2009 and we expect similar headwinds for the next six to twelve months while the economy attempts to regain its footing. Core revenue generation remains strong, however, and our high levels of capital and liquidity provide stability and a secure foundation for the future.”
Total revenue amounted to $4.7 million during the quarter, compared with $4.0 million in the second quarter of 2008, an increase of 16.7%. Net interest income of $3.8 million increased $546 thousand or 16.6% over the same quarter of the prior year, while declining $61 thousand or 1.6% from the immediate prior quarter.
Other income of $780 thousand reflects an increase of $101 thousand from the same quarter in the prior year. Gains on sales of mortgage originations account for $110 thousand of the difference, offset partially by a $43 thousand reduction in trust and brokerage revenues due to declines in market valuations and reduced trading volumes.
Non-interest expense totaled $3.2 million during the quarter, an increase of $593 thousand or 22.7% from second quarter 2008. Of the increase, $211 thousand resulted from higher FDIC

 


 

insurance premiums assessed on all member financial institutions. The majority of the remaining increase in non-interest expense reflects the increased scale of the Company’s operations following the Indian Village acquisition during fourth quarter 2008. That transaction increased the Company’s balance sheet by approximately 20%. The second quarter ratio of operating expenses to revenue increased to 68.8% as compared to 65.5% in the same quarter of 2008. Absent the higher FDIC premiums, the ratio would have declined to 64.3%.
Federal income tax expense was $302 thousand for second quarter 2009, reflecting an effective tax rate of 29.9%, compared to $423 thousand for the same quarter in 2008, or 32.5%. The decrease in the effective tax rate was primarily the result of a higher proportion of tax-exempt securities in the Company’s investment portfolio.
Average asset balances during second quarter 2009 totaled $424 million, an increase of $2.1 million or 0.5% over first quarter 2009. Average gross loan balances of $319 million increased $1.1 million, or 0.34%, during the quarter. Average commercial loan balances, including commercial real estate, increased $3.3 million or 1.8%, while average balances for residential mortgage and home equity loans declined $1.8 million or 1.4% during the quarter, and installment and other consumer average loan balances decreased $402 thousand, or 4.3%.
As of June 30, 2009, nonperforming assets totaled $4.1 million or 1.29% of period-end loans plus other real estate, compared with $4.2 million or 1.31% at March 31, 2009. Net charge-offs for the quarter totaled $398 thousand, or an annualized rate of 0.50% of average total loans. Steiner remarked, “Nonperforming asset balances stabilized during the second quarter and we are actively working with the credit relationships that are struggling to remain current. We anticipate nonperforming asset levels and net charge-offs will remain somewhat elevated through the remainder of 2009 and likely into 2010.”
The Company’s allowance for loan losses at June 30, 2009 was 1.07% of period end loans and the Company funded $394 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 83% at quarter-end.
Average deposit balances grew $3.9 million, or 1.3% during the quarter to $305 million. Within the deposit category, average balances for non interest-bearing accounts increased $653 thousand or 1.5%, while interest bearing checking, money market and savings average balances increased $838 thousand or 0.8% during the quarter and average time deposit balances increased $2.4 million, or 1.6%.
Short-term and other borrowings amounted to $75.2 million as of June 30, an increase of $4.2 million or 5.9% from March 31, with the increase attributable to repurchase agreement balances maintained with customers of the company.
Shareholders’ equity totaled $44.7 million on June 30, 2009 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.16% at quarter-end.
The Company declared a common dividend of $.18 per share during the quarter.

 


 

About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $422 million as of June 30, 2009. 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 thirteen banking centers in Holmes, Tuscarawas, Wayne and Stark counties and Trust offices located in Millersburg and Wooster, Ohio. A fourteenth banking center is scheduled to open this fall on West High Street in Orrville, 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   YTD
    2009   2009   2008   2008   2008   2009   2008
EARNINGS   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   6 months   6 months
Net interest income FTE (a)
  $ 3,884     $ 3,940     $ 3,812     $ 3,473     $ 3,318     $ 7,824     $ 6,724  
Provision for loan losses
    394       241       71       107       48       635       155  
Other income
    780       796       724       674       680       1,576       1,635  
Other expenses
    3,210       3,129       3,303       2,663       2,617       6,339       5,346  
FTE adjustment (a)
    52       46       39       34       32       98       58  
Net income
    706       896       767       890       878       1,602       1,880  
Diluted EPS
    0.26       0.33       0.29       0.37       0.36       0.59       0.77  
 
                                                       
PERFORMANCE RATIOS
                                                       
Return on average assets (ROA)
    0.67 %     0.86 %     0.76 %     1.02 %     1.03 %     0.76 %     1.10 %
Return on average common equity (ROE)
    6.32 %     8.20 %     7.40 %     9.46 %     9.46 %     7.24 %     10.14 %
Net interest margin FTE (a)
    3.88 %     3.99 %     3.98 %     4.19 %     4.09 %     3.93 %     4.14 %
Efficiency ratio
    68.80 %     67.73 %     72.56 %     64.19 %     65.46 %     68.27 %     63.95 %
Number of full-time equivalent employees
    141       139       144       124       128                  
 
                                                       
MARKET DATA
                                                       
Book value/common share
  $ 16.34     $ 16.23     $ 15.89     $ 15.49     $ 15.10                  
Period-end common share mkt value
    16.00       14.00       15.00       15.25       15.75                  
Market as a % of book
    97.92 %     86.26 %     94.40 %     98.45 %     104.29 %                
PE ratio
    12.80       10.37       10.49       10.23       10.71                  
Cash dividends/common share
  $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.36     $ 0.36  
Common stock dividend payout ratio
    69.23 %     54.55 %     62.07 %     48.65 %     50.00 %                
Average basic common shares
    2,734,799       2,734,799       2,629,394       2,422,014       2,432,793       2,734,799       2,438,695  
Average diluted common shares
    2,734,799       2,734,799       2,629,394       2,422,014       2,432,793       2,734,799       2,438,695  
Period end common shares outstanding
    2,734,799       2,734,799       2,734,799       2,421,983       2,422,050                  
Common shares repurchased
    0       0       0       67       18,800       0       25,574  
Common stock market capitalization
  $ 43,757     $ 38,287     $ 41,022     $ 36,935     $ 38,147                  
 
                                                       
ASSET QUALITY
                                                       
Gross charge-offs
  $ 431     $ 290     $ 47     $ 52     $ 33     $ 721     $ 55  
Net charge-offs (recoveries)
    398       233       (84 )     44       21       631       23  
Allowance for loan losses
    3,398       3,402       3,394       2,781       2,718                  
Nonperforming assets (NPAs)
    4,123       4,182       2,722       577       615                  
Net charge-off/average loans ratio
    0.50 %     0.30 %     (0.11) %     0.07 %     0.03 %     0.40 %     0.02 %
Allowance for loan losses/period-end loans
    1.07       1.07       1.07       1.08       1.09                  
NPAs/loans and other real estate
    1.29       1.31       0.86       0.23       0.25                  
Allowance for loan losses/nonperforming loans
    83.47       82.51       124.69       481.98       441.75                  
 
                                                       
CAPITAL & LIQUIDITY
                                                       
Period-end tangible equity to assets
    10.16 %     10.09 %     9.84 %     10.91 %     10.54 %                
Average equity to assets
    10.56       10.50       10.71       10.84       10.94                  
Average equity to loans
    14.06       13.91       13.74       14.74       14.97                  
Average loans to deposits
    104.76       105.76       102.72       102.86       101.48                  
 
                                                       
AVERAGE BALANCES
                                                       
Assets
  $ 423,767     $ 421,694     $ 400,873     $ 345,481     $ 341,297     $ 422,662     $ 342,144  
Earning assets
    401,966       400,356       381,011       330,219       326,435       401,368       326,730  
Loans
    319,421       318,325       293,714       254,104       249,395       318,876       251,827  
Deposits
    304,910       300,993       285,926       247,040       245,767       302,962       248,371  
Shareholders’ equity
    44,918       44,294       41,251       37,446       37,334       44,649       37,261  
 
                                                       
ENDING BALANCES
                                                       
Assets
  $ 422,416     $ 422,390     $ 424,657     $ 343,743     $ 347,104                  
Earning assets
    401,558       402,011       402,225       328,812       329,468                  
Loans
    317,880       319,425       316,290       256,343       249,543                  
Deposits
    300,513       304,591       305,453       245,953       248,177                  
Shareholders’ equity
    44,678       44,392       43,468       37,512       36,577                  
 
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 is not an accounting principle generally accepted in the United States of America.

 


 

CSB BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                 
    June 30,     June 30,  
    2009     2008  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 7,643,710     $ 11,350,478  
Interest-earning deposits in other banks
    8,056,334       181,101  
Federal funds sold
    1,691,000       11,000,000  
 
           
Total cash and cash equivalents
    17,391,044       22,531,579  
Securities
               
Available-for-sale, at fair-value
    67,302,810       65,562,619  
Restricted stock, at cost
    5,463,100       3,181,600  
 
           
Total securities
    72,765,910       68,744,219  
Loans held for sale
    1,164,660       0  
Loans
    317,879,674       249,542,605  
Less allowance for loan losses
    3,397,920       2,717,912  
 
           
Net loans
    314,481,754       246,824,693  
 
               
Goodwill and core deposit intangible
    1,949,483       0  
Bank owned life insurance
    2,800,812       0  
Premises and equipment, net
    8,243,694       7,076,699  
Accrued interest receivable and other assets
    3,618,739       1,926,733  
 
           
 
               
TOTAL ASSETS
  $ 422,416,096     $ 347,103,923  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Noninterest-bearing
  $ 44,083,567     $ 40,794,649  
Interest-bearing
    256,429,380       207,381,737  
 
           
Total deposits
    300,512,947       248,176,386  
 
               
Short-term borrowings
    24,917,661       27,111,134  
Other borrowings
    50,261,780       33,767,797  
Accrued interest payable and other liabilities
    2,045,383       1,471,300  
 
           
Total liabilities
    377,737,771       310,526,617  
 
           
Shareholders’ equity
               
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2009 and 2,667,786 in 2008
    18,628,767       16,673,667  
Additional paid-in capital
    9,889,447       6,459,819  
Retained earnings
    20,341,438       18,994,645  
Treasury stock at cost — 245,803 shares in 2009 and 245,736 shares in 2008
    (5,014,541 )     (5,013,535 )
Accumulated other comprehensive income (loss)
    733,214       (537,290 )
 
           
Total shareholders’ equity
    44,678,325       36,577,306  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 422,416,096     $ 347,103,923  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                 
    Quarter ended     Six months ended  
    June 30,     June 30,  
    2009     2008     2009     2008  
Interest and dividend income:
                               
Loans, including fees
  $ 4,582,288     $ 4,017,256     $ 9,203,044     $ 8,429,960  
Taxable securities
    797,541       772,867       1,685,408       1,577,489  
Nontaxable securities
    79,925       55,544       147,922       99,422  
Other
    6,132       47,664       8,856       69,871  
 
                       
Total interest and dividend income
    5,465,886       4,893,331       11,045,230       10,176,742  
Interest expense:
                               
Deposits
    1,135,407       1,166,153       2,297,802       2,593,911  
Other
    498,412       441,414       1,021,801       917,302  
 
                       
Total interest expense
    1,633,819       1,607,567       3,319,603       3,511,213  
 
                               
Net interest income
    3,832,067       3,285,764       7,725,627       6,665,529  
Provision for loan losses
    394,068       47,677       635,140       154,709  
 
                       
Net interest income after provision for loan losses
    3,437,999       3,238,087       7,090,487       6,510,820  
 
                       
Non-interest income
                               
Service charges on deposits accounts
    324,210       339,256       617,510       626,408  
Trust services
    119,616       162,568       234,375       351,232  
Securities gains (losses)
    (577 )           115,503        
Gain on sale of loans
    116,890       7,176       184,460       271,835  
Other
    219,960       170,946       424,406       385,957  
 
                       
Total non-interest income
    780,099       679,946       1,576,254       1,635,432  
Non-interest expenses
                               
Salaries and employee benefits
    1,696,213       1,527,162       3,404,577       3,064,065  
Occupancy expense
    230,817       184,915       474,162       382,796  
Equipment expense
    137,951       119,320       271,696       244,770  
Franchise tax expense
    126,580       107,380       236,370       214,810  
Professional and director fees
    184,553       140,343       328,316       279,899  
FDIC deposit insurance
    218,300       7,320       391,200       14,585  
Amortization of intangible assets
    16,227       0       32,545       0  
Other expenses
    599,606       530,831       1,200,281       1,144,805  
 
                       
Total non-interest expenses
    3,210,247       2,617,271       6,339,147       5,345,730  
 
                       
Income before income tax
    1,007,851       1,300,762       2,327,594       2,800,522  
 
                       
Federal income tax provision
    301,800       423,000       725,600       921,000  
 
                       
 
                               
 
                               
Net income
  $ 706,051     $ 877,762     $ 1,601,994     $ 1,879,522  
 
                       
Net income per share
                               
Basic
  $ 0.26     $ 0.36       0.59     $ 0.77  
 
                       
 
                               
Diluted
  $ 0.26     $ 0.36       0.59     $ 0.77  
Note: Certain prior year balances have been reclassified to conform to the current year presentation.