EX-99.2 3 l37052exv99w2.htm EX-99.2 exv99w2
Exhibit 99.2
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FINANCIAL HIGHLIGHTS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) AT OR FOR THE SIX MONTHS ENDED JUNE 30 2009 2008 Assets $ 422,416 $ 347,104 Net loans $ 314,482 $ 246,825 Securities $ 72,766 $ 68,744 Deposits $ 300,513 $ 248,177 Shareholders’ equity $ 44,678 $ 36,577 Net income $ 1,602 $ 1,880 Earnings per share $ 0.59 $ 0.77 Book value per outstanding share $ 16.34 $ 15.10 KEY RATIOS AT OR FOR THE SIX MONTHS ENDED JUNE 30 2009 2008 Return on average assets 0.76 % 1.10 % Return on average equity 7.24 % 10.14 % Net interest margin (tax equivalent) 3.93 % 4.14 % Loans to deposits 105.78 % 100.55 % Allowance for loan loss to total loans 1.07 % 1.09 % Shareholders’ equity to total assets 10.58 % 10.54 % Efficiency ratio 68.27 % 63.95 % DIRECTORS Robert K. Baker Ronald E. Holtman J. Thomas Lang Daniel J. Miller Jeffery A. Robb, Sr. Eddie L. Steiner John R. Waltman Chairman EXECUTIVE OFFICERS Eddie L. Steiner President and Chief Executive Officer Rick L. Ginther President, The Commercial & Savings Bank Paul D. Greig Chief Operations/Information Officer Paula J. Meiler Chief Financial Officer STOCK PERFORMANCE & DIVIDENDS CASH QUARTER TRADE PRICE CLOSING DIVIDEND ENDING HIGH LOW PRICE DECLARED 9/30/07 19.00 15.95 17.00 0.18 12/31/07 17.75 15.40 17.75 0.18 3/31/08 17.90 15.75 16.14 0.18 6/30/08 18.00 15.75 15.75 0.18 9/30/08 16.25 14.40 15.25 0.18 12/31/08 16.00 14.00 15.00 0.18 3/31/09 14.50 12.25 14.00 0.18 6/30/09 17.00 13.26 16.00 0.18 ADDITIONAL STOCK INFORMATION STOCK LISTING Common: Symbol — CSBB.OB STOCK TRANSFER Registrar & Transfer Company Attn: Investor Relations 10 Commerce Drive Cranford, NJ 07016 (800)368-5948 Copies of CSB Bancorp, Inc. S.E.C. Filings may be obtained by writing: Paula J. Meiler, CFO CSB Bancorp, Inc. 91 North Clay Street Millersburg, OH 44654 (330)674-9015 or (800)654-9015 “Remember to call CSB for all your financial needs, whether to borrow, save or invest.”


 

Exhibit 99.2
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DEAR FELLOW SHAREHOLDER A deep recession continues to suppress economic activity in our market and shows few signs of reversing in the near term. These conditions have dampened our earnings. Our core revenue remains strong and our high levels of capital and liquidity provide stability and a secure foundation for the future. Second quarter net income of $706 thousand is 20% below earnings from the same quarter of the prior year. At the midpoint of 2009, net income of $1.6million is 15% behind year ago levels. The reduced earnings are a result of increased costs for loan losses and FDIC insurance premiums, two headwinds that will likely continue for the remainder of the year. Net loan charge-offs (annualized)during the second quarter approximated 0.50% of average loan balances and year-to-date amount to 0.40%. While the charge-off rate exceeds our historical norm, we believe it is manageable and we have recorded $480 thousand more for loan loss provision expense than was necessary through midpoint of last year. We expect loan charge-offs, and resultant provisioning for loan losses, to remain at similar levels through the balance of 2009 as our customers deal with very tough economic conditions and as we continue to reshape the loan portfolio acquired in the Indian Village transaction. FDIC has substantially increased fees for deposit insurance to all member financial institutions. These higher fees amounted to $377 thousand of increased expense during the first half of 2009 as compared to the prior year. We anticipate FDIC insurance costs will remain somewhat elevated during the second half of 2009 as the FDIC continues to replenish its Deposit Insurance Fund. While the above two items shaved approximately $0.21 per share off of our earnings potential for the first six months of 2009, we continue to believe our core earnings model is solid. Proper management of the credit portfolio and expense control will remain a strong focus in the coming months. Average total loan and deposit balances grew modestly during the quarter. However, our near term outlook for economic recovery remains rather muted and we do not expect a strong resurgence in loan demand during the remainder of 2009. Our strategy of building customer relationships to increase usage of our full range of financial products and services remains an important objective. We also continue to evaluate opportunities to further solidify our position in current and target markets. In September, we plan to open our second Orrville banking center, located on West High Street in the heart of the community. Our existing banking center on State Route 57 will continue to serve the broader Orrville, Marshallville, Dalton and Kidron communities. In spite of the various factors creating earnings challenges, CSB continues to generate strong core earnings and remains well positioned to meet the banking needs of the communities we serve. On behalf of the board of directors, we are pleased to provide this report and a second quarter dividend of $0.18 per share, equaling the quarterly dividend level of the past two years. Thank you for your continued support of CSB Bancorp, Inc. Sincerely, EDDIE STEINER JOHN WALTMAN President and CEO Chairman CSB Bancorp, Inc. CSB Bancorp, Inc. CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA) JUNE 30 2009 2008 ASSETS: Cash and due from banks $ 15,700 $ 11,531 Federal funds sold 1,691 11,000 Securities 72,766 68,744 Loans held for sale 1,164 0 Net loans 314,482 246,825 Premises & equipment, net 8,244 7,077 Other assets 8,369 1,927 TOTAL ASSETS $ 422,416 $ 347,104 LIABILITIES: Deposits $ 300,513 $ 248,177 Securities sold under agreements to repurchase 24,918 25,111 Short-term borrowings 0 2,000 Other borrowings 50,262 33,768 Other liabilities 2,045 1,471 TOTAL LIABILITIES $ 377,738 $ 310,527 SHAREHOLDERS’ EQUITY: Common stock $ 18,629 $ 16,674 Additional paid-in capital 9,990 6,460 Retained earnings 20,341 18,994 Treasury stock (5,015 ) (5,014 ) Accumulated other comprehensive income (loss) 733 (537 ) TOTAL SHAREHOLDERS’ EQUITY $ 44,678 $ 36,577 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 422,416 $ 347,104 CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 2009 2008 2009 2008 INTEREST INCOME: Interest and fees on loans $ 4,582 $ 4,017 $ 9,203 $ 8,430 Interest on securities 877 828 1,833 1,677 Other interest income 6 48 9 70 TOTAL INTEREST INCOME 5,465 4,893 11,045 10,177 INTEREST EXPENSE: Interest on deposits 1,134 1,166 2,297 2,594 Other interest expense 499 441 1,022 917 TOTAL INTEREST EXPENSE 1,633 1,607 3,319 3,511 Net interest income 3,832 3,286 7,726 6,666 Provision for loan losses 394 48 635 155 Net interest income after provision for loan losses 3,438 3,238 7,091 6,511 Noninterest income 780 680 1,576 1,636 Noninterest expense 3,210 2,617 6,339 5,346 Net income before federal income taxes 1,008 1,301 2,328 2,801 Federal income tax provision 302 423 726 921 NET INCOME $ 706 $ 878 $ 1,602 $ 1,880 EARNINGS PER SHARE $ 0.26 $ 0.36 $ 0.59 $ 0.77