EX-99.1 2 l25747aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
CSB BANCORP, INC. REPORTS INCREASE IN 2007 FIRST QUARTER EARNINGS
First Quarter Highlights
    Net Income of $815,000
 
    Diluted earnings per share of $0.33
 
    Return on average common equity of 9.37%
 
    Return on average assets of 1.02%
Millersburg, Ohio — April 19, 2007 — CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter net income of $815 thousand, or $.33 per basic and diluted share, as compared to $774 thousand, or $.30 per basic and diluted share for the same period in 2006.
Annualized returns on average common equity and average assets for the quarter were 9.37% and 1.02%, respectively, compared with 8.89% and .99% for the first quarter of 2006.
“We continue to focus on cost control and enhancing the customer experience,” commented Eddie Steiner, President and CEO. “Operating efficiencies are noticeably improved from year ago levels and generating increased profit. We opened a new banking center during the quarter to better serve customers in the Orrville area and also expanded availability of electronic remote deposit services for businesses and other organizations.”
Mr. Steiner continued, “Our capital position remains very strong, and core earnings have been increasing with no significant credit quality issues. As a result of this performance, we increased the first quarter cash dividend to $.18 per share, up $.02 from the first quarter dividend declared in 2006.”
Revenue, defined as net interest income on a fully tax-equivalent basis plus non-interest income net of securities transactions, totaled $3.9 million for the first quarter of 2007, an increase of $37,000, or .9% over the same quarter in the prior year.
The Company’s net interest margin held steady for the quarter at 4.40%, the ninth consecutive quarter above 4%. Mr. Steiner noted, “The interest rate environment, with its flat-to-inverted yield curve, continues to exert pressure on margins, and we expect modestly lower net interest margins in the coming quarter. Our goal is to offset the

 


 

expected margin contraction with continued loan growth as well as ongoing emphasis on non-interest income and control of operating expenses.”
Non-interest income during first quarter 2007 totaled $646 thousand, an increase of $75 thousand, or 13.3% over the same quarter in the prior year. Trust services income increased $77 thousand, while service charges related to deposit products declined by $40 thousand.
Non-interest expense totaled $2.6 million during the quarter, a reduction of $88 thousand, or 3.2%, from the same quarter in 2006. Salary and benefit expense declined $84 thousand versus the prior year quarter.
The Company’s efficiency ratio was 66.5% during first quarter 2007, comparing favorably to the prior year’s same quarter ratio of 69.1%. Commenting on the Company’s operating initiatives, Mr. Steiner noted, “We recognize that costs associated with startup of the Orrville Area banking center will likely limit efficiency gains for several quarters, but we remain committed to continued efficiency improvements.”
Federal income tax expense was $389 thousand for the quarter ended March 31, compared to $351 thousand for the same quarter in 2006. The higher tax expense was partially due to increased income, and partially attributable to an increase in effective tax rate from 31.2% to 32.3% on a same quarter basis. The increase in effective tax rate was primarily the result of bond maturities within the Company’s tax-free investment portfolio.
Total assets averaged $323 million during the quarter, an increase of $2.9 million, or .9% over the immediate prior quarter and $6.5 million, or 2.1%, above average asset balances for the same quarter in the prior year. Average loan balances of $233 million for the current quarter reflect an increase of $3.4 million, or 1.5%, above the immediate prior quarter average, and an increase of $16.8 million, or 7.6%, above first quarter 2006. Average securities balances declined $1.0 million, or 1.4% during the quarter and were $9.6 million lower than the average securities balances of the first quarter of 2006, as the Company has funded a portion of its loan growth over the past year with proceeds from maturing securities.
Average commercial loan balances increased $3.4 million, or 2.6% during the quarter, with average residential and home equity balances growing $1.0 million or 1.1%, and average consumer installment loan and credit card balances declining by $900 thousand, or 8.1%.
Nonperforming assets totaled $1.58 million at March 31, 2007, or .67% of period-end loans plus other real estate, compared with $1.51 million, or .65%, at December 31, 2006. Net charge-offs for the quarter totaled $30 thousand, or an annualized rate of .05% of average total loans.

 


 

The Company’s allowance for loan losses at March 31, 2007 was 1.13% of period end loans and the Company funded $78 thousand in loan loss provision during the first quarter. The ratio of allowance for loan losses to nonperforming loans remained unchanged from the prior quarter at 173%.
Average deposit balances increased $1.5 million to $253 million, up .6% from the prior quarter. Interest-bearing checking, money market and savings account average balances increased a combined $1.0 million, or 1.2% for the quarter, with average time deposits and non-interest bearing demand balances up $160 thousand and $100 thousand, respectively.
Shareholders’ equity totaled $34.9 million at March 31, 2007, with 2.46 million common shares outstanding at quarter-end. Tangible equity to assets totaled 10.8% at March 31, 2007.
About CSB Bancorp, Inc.
CSB is a $320 million financial holding company headquartered in Millersburg, Ohio. CSB provides a complete range of banking, trust and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with ten banking centers in Holmes, Tuscarawas and Wayne counties, and can be found on the web at csb1.com.
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  
    2007     2006     2006     2006     2006     2006     2005  
EARNINGS   1st Qtr     4th Qtr     3rd Qtr     2nd Qtr     1st Qtr     12 months     12 months  
 
Net interest income FTE (a)
  $ 3,294     $ 3,354     $ 3,346     $ 3,327     $ 3,350     $ 13,377     $ 12,880  
Provision for loan losses
    78       80       75       115       32       302       283  
Other income
    646       614       676       732       571       2,592       2,581  
Other expenses
    2,619       2,596       2,704       2,908       2,708       10,915       10,803  
FTE adjustment (a)
    39       48       52       55       56       210       334  
Net income
    815       846       813       677       774       3,110       2,873  
Diluted EPS
    0.33       0.34       0.32       0.27       0.30       1.23       1.09  
 
                                                       
PERFORMANCE RATIOS
                                                       
Return on average assets (ROA)
    1.02 %     1.05 %     1.01 %     0.85 %     0.99 %     0.97 %     0.91 %
Return on average common equity (ROE)
    9.37 %     9.65 %     9.42 %     7.83 %     8.89 %     8.95 %     7.92 %
Net interest margin FTE (a)
    4.40 %     4.40 %     4.40 %     4.42 %     4.57 %     4.45 %     4.35 %
Efficiency ratio
    66.47 %     65.42 %     67.23 %     71.64 %     69.06 %     68.35 %     69.87 %
Number of full-time equivalent employees
    124       126       127       130       122                  
 
                                                       
MARKET DATA
                                                       
Book value/common share
  $ 14.18     $ 14.03     $ 13.82     $ 13.41     $ 13.63                  
Period-end common share mkt value
    17.57       19.00       19.00       20.40       20.90                  
Market as a % of book
    123.94 %     135.52 %     137.48 %     152.13 %     153.34 %                
PE ratio
    13.31       13.97       14.84       18.89       17.42       15.45       19.27  
Cash dividends/common share
  $ 0.18     $ 0.16     $ 0.16     $ 0.16     $ 0.16     $ 0.64     $ 0.56  
Common stock dividend payout ratio
    54.55 %     47.06 %     50.00 %     59.26 %     53.33 %                
Average basic common shares
    2,487,087       2,499,356       2,505,785       2,531,456       2,572,089       2,526,914       2,638,697  
Average diluted common shares
    2,487,087       2,503,056       2,507,934       2,535,021       2,576,094       2,532,592       2,642,301  
Period end common shares outstanding
    2,462,931       2,499,181       2,499,476       2,519,734       2,567,405                  
Common shares repurchased
    36,290       295       20,258       47,672       11,094       79,318       66,469  
Common stock market capitalization
  $ 43,274     $ 47,484     $ 47,490     $ 51,403     $ 53,659                  
 
                                                       
ASSET QUALITY
                                                       
Gross charge-offs
  $ 47     $ 107     $ 23     $ 145     $ 35     $ 310     $ 576  
Net charge-offs
    30       10       5       118       7       140       412  
Allowance for loan losses
    2,655       2,607       2,537       2,467       2,471                  
Nonperforming assets (NPAs)
    1,585       1,509       1,471       846       1,070                  
Net charge-off/average loans ratio
    0.05 %     0.02 %     0.01 %     0.21 %     0.01 %     0.06 %     0.19 %
Allowance for loan losses/period-end loans
    1.13       1.12       1.10       1.08       1.12                  
NPAs/loans and other real estate
    0.67       0.65       0.64       0.37       0.48                  
Allowance for loan losses/nonperforming loans
    172.89       172.81       177.26       291.47       368.80                  
 
                                                       
CAPITAL & LIQUIDITY
                                                       
Period-end tangible equity to assets
    10.83 %     10.72 %     10.79 %     10.53 %     10.98 %                
Average equity to assets
    10.91       10.86       10.70       10.79       11.15                  
Average equity to loans
    15.11       15.13       14.97       15.35       16.30                  
Average loans to deposits
    92.12       91.32       93.01       92.57       87.36                  
 
                                                       
AVERAGE BALANCES
                                                       
Assets
  $ 323,327     $ 320,407     $ 320,477     $ 321,299     $ 316,806     $ 319,749     $ 316,612  
Earning assets
    303,899       302,226       301,395       301,956       297,178       300,707       296,405  
Loans
    233,434       230,004       229,042       225,939       216,609       225,445       220,655  
Deposits
    253,398       251,875       246,258       244,082       247,944       247,543       249,007  
Shareholders’ equity
    35,269       34,789       34,298       34,673       35,311       34,766       36,290  
 
                                                       
ENDING BALANCES
                                                       
Assets
  $ 322,358     $ 327,240     $ 320,227     $ 320,899     $ 318,777                  
Earning assets
    305,129       307,682       302,362       300,751       300,254                  
Loans
    235,818       232,432       229,832       228,111       221,365                  
Deposits
    253,531       260,178       249,605       242,823       247,044                  
Shareholders’ equity
    34,915       35,070       34,553       33,799       34,992                  
 
                                                       
 
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)
                 
    March 31,     March 31,  
    2007     2006  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 10,198,513     $ 10,267,739  
Interest-earning deposits in other banks
    26,170       47,167  
Federal funds sold
    0       0  
 
           
Total cash and cash equivalents
    10,224,683       10,314,906  
Securities
               
Available-for-sale, at fair-value
    66,134,517       75,856,687  
Restricted stock, at cost
    3,150,400       2,984,900  
 
           
Total securities
    69,284,917       78,841,587  
Loans
    235,817,903       221,123,243  
Less allowance for loan losses
    2,654,708       2,470,768  
 
           
Net loans
    233,163,195       218,652,475  
Loans held for sale
    0       242,212  
Premises and equipment, net
    7,439,311       7,587,163  
Accrued interest receivable and other assets
    2,246,015       3,138,328  
 
           
     
TOTAL ASSETS
  $ 322,358,121     $ 318,776,671  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Nontinterest-bearing
  $ 40,572,661     $ 36,938,182  
Interest-bearing
    212,958,600       210,106,032  
 
           
Total deposits
    253,531,261       247,044,214  
 
               
Short-term borrowings
    24,687,770       15,307,224  
Other borrowings
    7,325,288       19,852,923  
Accrued interest payable and other liabilities
    1,898,576       1,580,626  
 
           
Total liabilities
    287,442,895       283,784,987  
 
           
Shareholders’ equity
               
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,667,786 shares
    16,673,667       16,673,667  
Additional paid-in capital
    6,439,015       6,416,440  
Retained earnings
    16,619,212       15,115,371  
Treasury stock at cost - 204,855 shares in 2007 and 100,381 shares in 2006
    (4,348,094 )     ( 2,322,410 )
Accumulated other comprehensive loss
    (468,574 )     ( 891,384 )
 
           
Total shareholders’ equity
    34,915,226       34,991,684  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 322,358,121     $ 318,776,671  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)
                                 
    Quarter ended     Twelve months  
    March 31,     December 31,  
    2007     2006     2006     2005  
Interest and dividend income:
                               
Loans, including fees
  $ 4,314,520     $ 3,822,504     $ 16,643,728     $ 14,343,888  
Taxable securities
    750,057       777,800       3,006,055       2,243,081  
Nontaxable securities
    68,511       101,823       382,479       624,911  
Other
    13,194       6,592       12,490       145,395  
 
                       
Total interest and dividend income
    5,146,282       4,708,719       20,044,752       17,357,275  
Interest expense:
                               
Deposits
    1,553,362       1,166,920       5,418,616       4,128,130  
Other
    337,628       247,525       1,458,675       683,566  
 
                       
Total interest expense
    1,890,990       1,414,445       6,877,291       4,811,696  
 
                               
Net interest income
    3,255,292       3,294,274       13,167,461       12,545,579  
Provision for loan losses
    78,005       32,000       301,667       282,664  
 
                       
Net interest income after provision for loan losses
    3,177,287       3,262,274       12,865,794       12,262,915  
 
                       
Non-interest income
                               
Service charges on deposits accounts
    275,471       315,086       1,278,842       1,037,377  
Trust services
    169,638       92,242       540,299       484,468  
Securities gains (losses)
    0       0       (56,800 )     247,047  
Other
    200,992       163,115       829,585       811,597  
 
                       
Total non-interest income
    646,101       570,443       2,591,926       2,580,489  
Non-interest expenses
                               
Salaries and employee benefits
    1,407,180       1,491,005       5,885,857       5,671,149  
Occupancy expense
    184,553       171,213       685,728       677,067  
Equipment expense
    115,918       136,136       498,517       524,112  
Franchise tax expense
    101,338       109,200       430,050       427,435  
Professional and director fees
    141,382       174,021       658,843       677,252  
Other expenses
    669,505       626,236       2,755,620       2,825,750  
 
                       
Total non-interest expenses
    2,619,876       2,707,811       10,914,615       10,802,765  
 
                       
Income before income tax
    1,203,512       1,124,906       4,543,105       4,040,639  
Federal income tax provision
    389,000       351,000       1,433,000       1,168,000  
 
                       
 
                               
Net income
  $ 814,512     $ 773,906     $ 3,110,105     $ 2,872,639  
 
                       
Net income per share
                               
Basic
  $ 0.33     $ 0.30     $ 1.23     $ 1.09  
 
                       
Diluted
  $ 0.33     $ 0.30     $ 1.23     $ 1.09  
Note: Certain prior year balances have been reclassified to conform to the current year presentation.