EX-99.1 2 l40961exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(CSB BANCORP, INC. LOGO)
CSB BANCORP, INC. REPORTS EARNINGS FOR THIRD QUARTER 2010
Third Quarter and Year to Date Highlights
                 
    Quarter Ended   Nine Months Ended
    September 30, 2010   September 30, 2010
Diluted earnings per share
  $ 0.32     $ 0.93  
 
               
Net Income
  $ 882,000     $ 2,540,000  
 
               
Return on average common equity
    7.41 %     7.25 %
 
               
Return on average assets
    0.78 %     0.77 %
Millersburg, Ohio — October 25, 2010 — CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced third quarter 2010 net income of $882 thousand, or $.32 per basic and diluted share, as compared to $858 thousand, or $.31 per basic and diluted share for the same period in 2009.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 7.41% and 0.78%, respectively, compared with 7.49% and 0.80% for the third quarter of 2009.
“Loan demand and economic activity remain soft in our market,” commented Eddie Steiner, CSB President and CEO. “The recessionary climate and high unemployment levels continue to exert pressure on credit quality and we are reserving for future loan losses that may exceed our historical norm. Our balance sheet remains strong, and while net income is 3% ahead of last year at this time, revenue is basically flat on a year to date basis.”
Total revenue amounted to $4.8 million during the quarter, unchanged from total revenue in the third quarter of 2009. Net interest income of $4.0 million increased $96 thousand or 2.4% over the same quarter of the prior year, and $130 thousand or 3.3% on a linked quarter basis.
Other income of $780 thousand reflects a decrease of $90 thousand or 10.3% from the same quarter in the prior year. The decline was primarily reflective of reduced gains from sales of loans and lower trust income.
Non-interest expense totaled $3.2 million during the quarter, an increase of $27 thousand or 0.9% from third quarter 2009.

 


 

Federal income tax expense was $402 thousand for third quarter 2010, reflecting an effective tax rate of 31.3%, compared to 31.6% for the same quarter in 2009. 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 totaled $446 million for third quarter 2010, an increase of $9 million or 2.1% on a linked quarter basis and up $21 million or 4.9% over third quarter 2009. Total loan balances averaged $315 million during the quarter, up $4 million for the quarter, while $0.8 million or 0.3% below year ago levels. Average commercial loan balances, including commercial real estate, increased $4 million or 2.2% for the quarter, while average balances for residential mortgage and home equity loans declined $0.6 million or 0.5% during the quarter, and installment and other consumer average loan balances decreased $28 thousand, or 0.4%. The Company continues to experience a fair amount of consumer refinancing from existing in-house mortgages to the secondary mortgage market given prevailing low secondary market rates.
As of September 30, 2010, nonperforming assets totaled $5.4 million or 1.71% of period-end loans plus other real estate, compared with $3.7 million or 1.44% at September 30, 2009. Net charge-offs during the quarter amounted to $440 thousand. Year to date net charge-offs total $649 thousand, which equates to an annualized rate of 0.28% of average total loans, as compared to an annualized rate of 0.26% after nine months in the previous year.
The Company’s allowance for loan losses at September 30, 2010 was 1.39% of period end loans and the Company funded $238 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 84% at quarter-end. Steiner remarked, “While charge-off activity year to date is running at about the same pace as last year, nonperforming loan balances remain somewhat elevated above prior year levels.”
Average deposit balances increased $9 million, or 2.7% during the quarter to $336 million. Within the deposit category, average balances for non interest-bearing accounts increased $6 million or 10.6%, while interest bearing checking, money market and savings average balances increased $543 thousand or 0.4% during the quarter and average time deposit balances increased $2.6 million, or 1.7%.
Short-term and other borrowings amounted to $61 million on September 30, a decrease of $1.9 million or 2.9% from June 30.
Shareholders’ equity totaled $47.2 million on September 30, 2010 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.03% 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 $452 million as of September 30, 2010. 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 fourteen banking centers in Holmes, Tuscarawas, Wayne 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)
(Dollars in thousands except per share data)
                                                         
    Quarters     YTD  
    2010     2010     2010     2009     2009     2010     2009  
EARNINGS   3rd Qtr     2nd Qtr     1st Qtr     4th Qtr     3rd Qtr     9 months     9 months  
 
Net interest income FTE (a)
  $ 4,016     $ 3,886     $ 3,935     $ 4,231     $ 3,920     $ 11,837     $ 11,744  
Provision for loan losses
    238       239       519       409       293       996       928  
Other income
    780       889       731       769       870       2,400       2,446  
Other expenses
    3,215       3,150       3,041       3,191       3,188       9,406       9,527  
FTE adjustment (a)
    59       53       54       56       56       166       154  
Net income
    882       921       737       931       858       2,540       2,460  
Diluted EPS
    0.32       0.34       0.27       0.34       0.31       0.93       0.90  
 
                                                       
PERFORMANCE RATIOS
                                                       
Return on average assets (ROA)
    0.78 %     0.85 %     0.67 %     0.84 %     0.80 %     0.77 %     0.78 %
Return on average common equity (ROE)
    7.41 %     7.90 %     6.44 %     8.04 %     7.49 %     7.25 %     7.33 %
Net interest margin FTE (a)
    3.76 %     3.76 %     3.78 %     4.01 %     3.84 %     3.77 %     3.90 %
Efficiency ratio
    66.72 %     67.74 %     64.83 %     63.51 %     66.10 %     66.43 %     67.53 %
Number of full-time equivalent employees
    144       144       140       144       146                  
 
                                                       
MARKET DATA
                                                       
Book value/common share
  $ 17.26     $ 17.10     $ 16.88     $ 16.76     $ 16.67                  
Period-end common share mkt value
    15.95       15.75       14.60       15.25       15.20                  
Market as a % of book
    92.41 %     92.11 %     86.49 %     90.99 %     91.18 %                
PE ratio
    12.56       12.50       12.37       12.30       12.77                  
Cash dividends/common share
  $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.54     $ 0.54  
Common stock dividend payout ratio
    56.25 %     52.94 %     66.67 %     52.94 %     58.06 %                
Average basic common shares
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Average diluted common shares
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Period end common shares outstanding
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799                  
Common shares repurchased
    0       0       0       0       0       0       0  
Common stock market capitalization
  $ 43,620     $ 43,073     $ 39,928     $ 41,706     $ 41,569                  
 
                                                       
ASSET QUALITY
                                                       
Gross charge-offs
  $ 459     $ 20     $ 289     $ 82     $ 82     $ 768     $ 803  
Net charge-offs (recoveries)
    440       (14 )     223       46       (6 )     649       625  
Allowance for loan losses
    4,407       4,608       4,356       4,060       3,697                  
Nonperforming assets (NPAs)
    5,410       6,335       6,492       4,303       4,545                  
Net charge-off/average loans ratio
    0.55 %     (0.02) %     0.29 %     0.06 %     (0.01) %     0.28 %     0.26 %
Allowance for loan losses/period-end loans
    1.39       1.48       1.40       1.29       1.17                  
NPAs/loans and other real estate
    1.71       2.03       2.09       1.37       1.44                  
Allowance for loan losses/nonperforming loans
    83.99       75.69       70.02       98.04       82.05                  
 
                                                       
CAPITAL & LIQUIDITY
                                                       
Period-end tangible equity to assets
    10.03 %     10.16 %     10.15 %     9.73 %     10.26 %                
Average equity to assets
    10.58       10.70       10.44       10.45       10.68                  
Average equity to loans
    14.97       14.99       14.89       14.54       14.38                  
Average loans to deposits
    93.83       95.24       95.35       100.69       105.15                  
 
                                                       
AVERAGE BALANCES
                                                       
Assets
  $ 446,099     $ 436,782     $ 444,916     $ 439,688     $ 425,439     $ 442,590     $ 423,601  
Earning assets
    423,591       414,137       422,487       418,737       404,629       420,076       402,465  
Loans
    315,355       311,647       311,789       315,168       316,149       312,943       317,957  
Deposits
    336,089       327,215       326,986       313,016       300,652       330,061       302,183  
Shareholders’ equity
    47,213       46,724       46,440       45,964       45,449       46,837       44,862  
 
                                                       
ENDING BALANCES
                                                       
Assets
  $ 451,586     $ 441,242     $ 435,622     $ 450,666     $ 427,391                  
Earning assets
    428,895       419,855       413,771       428,301       406,054                  
Loans
    316,909       311,857       310,900       313,482       314,717                  
Deposits
    341,296       329,817       326,204       329,486       302,898                  
Shareholders’ equity
    47,211       46,776       46,171       45,822       45,580                  
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)
                 
    September 30,     September 30,  
    2010     2009  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 10,017,003     $ 8,681,607  
Interest-earning deposits in other banks
    33,267,298       13,258,887  
Federal funds sold
    328,000       0  
 
           
Total cash and cash equivalents
    43,612,301       21,940,494  
Securities
               
Available-for-sale, at fair-value
    72,501,236       72,614,370  
Restricted stock, at cost
    5,463,100       5,463,100  
 
           
Total securities
    77,964,336       78,077,470  
Loans held for sale
    426,900       100,000  
Loans
    316,908,759       314,717,245  
Less allowance for loan losses
    4,407,101       3,696,698  
 
           
Net loans
    312,501,658       311,020,547  
 
               
Goodwill and core deposit intangible
    2,147,172       1,908,399  
Bank owned life insurance
    2,933,453       2,827,263  
Premises and equipment, net
    8,006,587       8,541,328  
Accrued interest receivable and other assets
    3,993,240       2,975,062  
 
           
 
               
TOTAL ASSETS
  $ 451,585,647     $ 427,390,563  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Noninterest-bearing
  $ 63,988,306     $ 46,366,578  
Interest-bearing
    277,307,388       256,531,562  
 
           
Total deposits
    341,295,694       302,898,140  
 
               
Short-term borrowings
    29,534,082       27,056,769  
Other borrowings
    31,656,959       49,857,842  
Accrued interest payable and other liabilities
    1,887,775       1,997,905  
 
           
Total liabilities
    404,374,510       381,810,656  
 
           
Shareholders’ equity
               
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2010 and 2009
    18,628,767       18,628,767  
Additional paid-in capital
    9,993,812       9,992,329  
Retained earnings
    22,209,707       20,707,496  
Treasury stock at cost — 245,803 shares in 2010 and 2009
    (5,014,541 )     (5,014,541 )
Accumulated other comprehensive income
    1,393,392       1,265,856  
 
           
Total shareholders’ equity
    47,211,137       45,579,907  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 451,585,647     $ 427,390,563  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                 
    Quarter ended     Nine months ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Interest and dividend income:
                               
Loans, including fees
  $ 4,383,865     $ 4,565,910     $ 12,971,389     $ 13,768,953  
Taxable securities
    665,217       776,163       2,063,440       2,461,570  
Nontaxable securities
    91,643       84,281       257,672       232,203  
Other
    18,538       7,978       52,040       16,835  
 
                       
Total interest and dividend income
    5,159,263       5,434,332       15,344,541       16,479,561  
Interest expense:
                               
Deposits
    889,351       1,055,241       2,641,606       3,353,042  
Other
    312,564       514,514       1,031,633       1,536,315  
 
                       
Total interest expense
    1,201,915       1,569,755       3,673,239       4,889,357  
 
                               
Net interest income
    3,957,348       3,864,577       11,671,302       11,590,204  
Provision for loan losses
    238,740       292,952       996,640       928,092  
 
                       
Net interest income after provision for loan losses
    3,718,608       3,571,625       10,674,662       10,662,112  
 
                       
Non-interest income
                               
Service charges on deposits accounts
    295,148       313,269       850,612       930,779  
Trust services
    135,414       172,554       401,265       406,930  
Securities gains (losses)
    0       (33,613 )     147,763       81,890  
Gain on sale of loans
    62,489       172,466       153,251       356,925  
Other
    287,186       245,435       847,568       669,841  
 
                       
Total non-interest income
    780,237       870,111       2,400,459       2,446,365  
Non-interest expenses
                               
Salaries and employee benefits
    1,751,102       1,747,309       5,099,625       5,151,886  
Occupancy expense
    196,842       265,563       608,974       739,725  
Equipment expense
    124,212       131,478       375,203       403,175  
Franchise tax expense
    135,000       135,000       405,050       371,370  
Professional and director fees
    133,788       157,137       457,492       485,453  
FDIC deposit insurance
    108,625       105,100       416,965       496,300  
Amortization of intangible assets
    15,750       16,227       47,250       48,772  
Other expenses
    749,786       629,899       1,995,762       1,830,180  
 
                       
Total non-interest expenses
    3,215,105       3,187,713       9,406,321       9,526,861  
 
                       
Income before income tax
    1,283,740       1,254,023       3,668,800       3,581,616  
 
                       
Federal income tax provision
    401,500       395,700       1,128,500       1,121,300  
 
                       
 
                               
Net income
  $ 882,240     $ 858,323     $ 2,540,300     $ 2,460,316  
 
                       
Net income per share
                               
Basic
  $ 0.32     $ 0.31     $ 0.93     $ 0.90  
 
                       
 
                               
Diluted
  $ 0.32     $ 0.31     $ 0.93     $ 0.90  
 
                       
Note: Certain prior year balances have been reclassified to conform to the current year presentation.