EX-99.1 2 l31145aexv99w1.htm EX-99.1 EX-99.1
 

         
 
       
EXHIBIT 99.1
(CSB BANCORP, INC. LOGO)
CSB BANCORP, INC. REPORTS INCREASED EARNINGS IN FIRST QUARTER 2008
First Quarter Highlights
    Net Income of $1,002,000
 
    Diluted earnings per share of $0.41
 
    Return on average common equity of 10.89%
 
    Return on average assets of 1.17%
Millersburg, Ohio – April 22, 2008 – CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter 2008 net income of $1.0 million, or $.41 per basic and diluted share, as compared to $815 thousand, or $.33 per basic and diluted share for the same period in 2007.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.89% and 1.17%, respectively, compared with 9.37% and 1.02% for the first quarter of 2007.
Net interest income of $3.4 million increased $124 thousand or 3.8% over the same quarter in the prior year, while declining by $26 thousand or 0.8% from the immediate prior quarter.
Revenue (defined as net interest income on a fully tax-equivalent basis plus non-interest income net of securities transactions) totaled $4.3 million for the first quarter of 2008, compared with $3.9 million in the prior-year first quarter, an increase of 10.7%.
Eddie Steiner, President and CEO stated, “We have maintained earnings momentum through active management of our balance sheet. During the past quarter we sold our credit card portfolio, which represented less than 1% of total loans outstanding and was yielding unacceptably low returns for the associated risks. We continue to avoid sub-prime exposure and our net interest margin of 4.19% was accomplished without adding undue risk to the investment or loan portfolios.”
Non-interest expense totaled $2.7 million during the quarter, an increase of $109 thousand, or 4.1%, from first quarter 2007. The Company’s first quarter efficiency ratio (defined as operating expenses divided by revenue) improved to 62.6% as compared to same quarter results in the prior year of 66.5%.

 


 

Federal income tax expense was $498 thousand for first quarter 2008, reflecting an effective tax rate of 33.2%, compared to $389 thousand for the same quarter in 2007, or 32.3%. The increase in the effective tax rate was primarily the result of comparatively lower tax-free interest income due to sales and maturities of bonds within the Company’s tax-free investment portfolio during 2007 and 2008.
Total assets averaged $343 million during the quarter, an increase of $20 million, or 6.1% above the same quarter in the prior year. Average loan balances of $254 million reflect an increase of $21 million, or 8.9%, over first quarter of the prior year, while average securities balances declined $692 thousand, or 1.0% as compared to first quarter 2007.
At March 31, 2008, assets totaled $345 million, up $22 million, or 6.9% from March 31, 2007. Quarter-end loans of $247 million were $11 million, or 4.7%, above total loans at the end of the same quarter in 2007. Quarter-end securities investment balances of $66 million reflect a decrease of $3 million, or 4.2% from the same quarter of the prior year.
Average commercial loans, including commercial real estate, increased $5.4 million or 3.6% during the quarter, residential mortgage and home equity average balances grew $75 thousand, or 0.1% during the quarter, while consumer installment, credit card and other average loan balances declined by $565 thousand, or 6.3% primarily due to the sale of the Company’s $2.0 million credit card portfolio.
As of March 31, 2008, nonperforming assets totaled $432 thousand, or .17% of period-end loans plus other real estate, compared with $673 thousand, or .26%, at the prior quarter-end. Net charge-offs for the quarter totaled $2 thousand, or an annualized rate of .00% of average total loans. Steiner continued, “Nonperforming assets have declined in each of the past three quarters and, combined with very modest charge-offs, continue to provide earnings stability and financial strength to the Company during this period of lagging economic conditions.”
The Company’s allowance for loan losses at March 31, 2008 was 1.09% of period end loans and the Company funded $107 thousand in loan loss provision during the first quarter. The ratio of allowance for loan losses to nonperforming loans stood at 624% at quarter-end.
Liabilities totaled $308 million at March 31, 2008, down $6 million or 2.0% from the prior quarter-end. Deposit balances totaled $247 million at quarter-end, a decrease of $12 million, or 4.8% from the prior quarter-end. Short-term and other borrowings amounted to $58 million as of March 31, an increase of $5 million or 9.7% for the quarter as the company took advantage of favorable borrowing rates to lower its total cost of funds.

 


 

Average deposit balances of $251 million declined $5 million during the quarter, or 1.8%. Within the deposit category, average non interest-bearing account balances decreased $3.4 million, or 7.8%. Average balances for interest bearing checking, money market and savings accounts declined a total of $0.8 million, or 0.9%, while average time deposit balances declined $.4 million, or 0.3% during the quarter.
Shareholders’ equity totaled $37 million on March 31, 2008 with 2.4 million common shares outstanding at quarter-end. CSB’s capital position remains strong, with tangible equity to assets at 10.8% on March 31, 2008, compared to 10.4% on December 31, 2007. Commenting on the current economic environment, Steiner noted, “We expect volatile interest rates, soft housing demand, and general economic difficulties to continue through much of 2008. We remain vigilant, and are actively exploring opportunities to strategically leverage our strong capital position into expanded presence in current and nearby markets.”
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 $340 million as of March 31, 2008. 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 ten banking centers in Holmes, Tuscarawas and Wayne 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
    2008   2007   2007   2007   2007
EARNINGS   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   1st Qtr
 
Net interest income FTE (a)
  $ 3,406     $ 3,437     $ 3,426     $ 3,313     $ 3,294  
Provision for loan losses
    107       119       151       124       78  
Other income
    955       725       762       902       646  
Other expenses
    2,728       2,713       2,722       2,647       2,619  
FTE adjustment (a)
    26       31       36       38       39  
Net income
    1,002       880       863       956       815  
Diluted EPS
    0.41       0.35       0.35       0.39       0.33  
 
                                       
PERFORMANCE RATIOS
                                       
Return on average assets (ROA)
    1.17 %     1.05 %     1.04 %     1.17 %     1.02 %
Return on average common equity (ROE)
    10.89 %     9.54 %     9.55 %     10.85 %     9.37 %
Net interest margin FTE (a)
    4.19 %     4.34 %     4.37 %     4.30 %     4.40 %
Efficiency ratio
    62.55 %     65.36 %     65.00 %     62.88 %     66.47 %
Number of full-time equivalent employees
    126       127       135       128       124  
 
                                       
MARKET DATA
                                       
Book value/common share
  $ 15.22     $ 14.82     $ 14.60     $ 14.26     $ 14.18  
Period-end common share mkt value
    16.14       17.75       17.00       17.75       17.57  
Market as a % of book
    106.05 %     119.76 %     117.42 %     124.48 %     123.94 %
PE ratio
    9.84       12.68       12.14       11.38       13.31  
Cash dividends/common share
  $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18  
Common stock dividend payout ratio
    43.90 %     51.43 %     51.43 %     46.15 %     54.55 %
Average basic common shares
    2,444,597       2,455,938       2,462,885       2,461,918       2,487,087  
Average diluted common shares
    2,444,642       2,456,250       2,462,885       2,463,240       2,487,087  
Period end common shares outstanding
    2,440,850       2,447,624       2,462,880       2,462,888       2,462,931  
Common shares repurchased
    6,774       15,216       8       43       36,290  
Common stock market capitalization
  $ 39,395     $ 43,445     $ 42,209     $ 43,716     $ 43,274  
 
                                       
ASSET QUALITY
                                       
Gross charge-offs
  $ 22     $ 153     $ 33     $ 379     $ 47  
Net charge-offs
    2       87       23       353       30  
Allowance for loan losses
    2,691       2,586       2,554       2,426       2,655  
Nonperforming assets (NPAs)
    431       673       1,092       1,635       1,585  
Net charge-off/average loans ratio
    0.00 %     0.14 %     0.04 %     0.59 %     0.05 %
Allowance for loan losses/period-end loans
    1.09       1.01       1.04       1.00       1.13  
NPAs/loans and other real estate
    0.17       0.26       0.44       0.67       0.67  
Allowance for loan losses/nonperforming loans
    623.64       452.77       233.80       152.99       172.89  
 
                                       
CAPITAL & LIQUIDITY
                                       
Period-end tangible equity to assets
    10.77 %     10.36 %     10.89 %     10.72 %     10.83 %
Average equity to assets
    10.79       11.01       10.88       10.82       10.91  
Average equity to loans
    14.56       14.67       14.65       14.72       15.11  
Average loans to deposits
    101.28       97.52       96.68       95.45       92.12  
 
                                       
AVERAGE BALANCES
                                       
Assets
  $ 343,023     $ 332,243     $ 329,448     $ 326,665     $ 323,327  
Earning assets
    326,966       314,236       310,884       308,703       303,899  
Loans
    254,277       249,394       244,675       240,208       233,434  
Deposits
    251,060       255,729       253,073       251,660       253,398  
Shareholders’ equity
    37,021       36,582       35,852       35,348       35,269  
 
                                       
ENDING BALANCES
                                       
Assets
  $ 344,808     $ 350,270     $ 330,121     $ 327,465     $ 322,406  
Earning assets
    327,711       331,267       311,860       309,484       305,129  
Loans
    246,984       256,659       245,626       242,485       235,818  
Deposits
    247,029       259,386       253,594       250,365       253,531  
Shareholders’ equity
    37,148       36,278       35,948       35,119       34,915  
 
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,  
    2008     2007  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 10,445,660     $ 10,198,513  
Interest-earning deposits in other banks
    40,052       70,670  
Federal funds sold
    14,300,000       0  
 
           
Total cash and cash equivalents
    24,785,712       10,269,183  
Securities
               
Available-for-sale, at fair-value
    63,243,672       66,134,517  
Restricted stock, at cost
    3,142,900       3,105,900  
 
           
Total securities
    66,386,572       69,240,417  
Loans
    246,983,893       235,817,903  
Less allowance for loan losses
    2,690,830       2,654,708  
 
           
Net loans
    244,293,063       233,163,195  
 
Premises and equipment, net
    7,235,361       7,423,736  
Accrued interest receivable and other assets
    2,107,609       2,309,077  
 
           
 
               
TOTAL ASSETS
  $ 344,808,317     $ 322,405,608  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Nontinterest-bearing
  $ 38,665,336     $ 40,572,661  
Interest-bearing
    208,364,076       212,958,600  
 
           
Total deposits
    247,029,412       253,531,261  
 
Short-term borrowings
    24,604,161       24,687,771  
Other borrowings
    33,875,513       7,325,288  
Accrued interest payable and other liabilities
    2,151,610       1,946,062  
 
           
Total liabilities
    307,660,696       287,490,382  
 
           
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
    6,455,819       6,439,015  
Retained earnings
    18,552,852       16,619,212  
Treasury stock at cost - 226,936 shares in 2008 and 204,855 shares in 2007
    (4,712,735 )     (4,348,094 )
Accumulated other comprehensive loss
    178,018       (468,574 )
 
           
Total shareholders’ equity
    37,147,621       34,915,226  
 
           
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 344,808,317     $ 322,405,608  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                 
    Quarter ended  
    March 31,  
    2008     2007  
Interest and dividend income:
               
Loans, including fees
  $ 4,412,704     $ 4,314,520  
Taxable securities
    804,622       750,057  
Nontaxable securities
    43,878       68,511  
Other
    22,207       13,194  
 
           
Total interest and dividend income
    5,283,411       5,146,282  
Interest expense:
               
Deposits
    1,427,758       1,553,362  
Other
    475,888       337,628  
 
           
Total interest expense
    1,903,646       1,890,990  
 
               
Net interest income
    3,379,765       3,255,292  
Provision for loan losses
    107,032       78,005  
 
           
Net interest income after provision for loan losses
    3,272,733       3,177,287  
 
           
Non-interest income
               
Service charges on deposits accounts
    287,152       275,471  
Trust services
    188,664       169,638  
Securities gains
    0       0  
Other
    479,670       200,992  
 
           
Total non-interest income
    955,486       646,101  
Non-interest expenses
               
Salaries and employee benefits
    1,536,903       1,407,180  
Occupancy expense
    197,881       184,553  
Equipment expense
    125,450       115,918  
Franchise tax expense
    107,430       101,338  
Professional and director fees
    139,556       141,382  
Other expenses
    621,239       669,505  
 
           
Total non-interest expenses
    2,728,459       2,619,876  
 
           
Income before income tax
    1,499,760       1,203,512  
Federal income tax provision
    498,000       389,000  
 
           
 
               
Net income
  $ 1,001,760     $ 814,512  
 
           
Net income per share
               
Basic
  $ 0.41     $ 0.33  
 
           
 
               
Diluted
  $ 0.41     $ 0.33  
 
Note: Certain prior year balances have been reclassified to conform to the current year presentation.