EX-99.1 2 d714922dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS

First Quarter Highlights

 

     Quarter Ended
March 31, 2014
    Quarter Ended
March 31, 2013
 

Diluted earnings per share

   $ 0.52      $ 0.50   

Net Income

   $ 1,416,000      $ 1,362,000   

Return on average common equity

     10.70     10.43

Return on average assets

     0.97     0.96

Millersburg, Ohio – April 22, 2014 – CSB Bancorp, Inc. (CSBB) today announced first quarter 2014 net income of $1,416,000 or $.52 per basic and diluted share, as compared to $1,362,000 or $.50 per basic and diluted share for the same period in 2013.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.70% and 0.97%, respectively, compared with 10.43% and 0.96% for the first quarter of 2013.

Eddie Steiner, President and CEO commented, “Loan demand has improved as businesses are investing in plant and equipment and signs of improved housing markets are emerging. We continue to focus on expanding customer relationships within our primary markets.”

Revenue, on a fully-taxable equivalent basis, totaled $5.9 million during the quarter, a 2% increase from the prior-year first quarter. Net interest income improved by $206 thousand as compared to first quarter 2013 while other income declined $85 thousand partially attributable to reduced sales of mortgage originations as the Company chose to retain some fifteen year fixed rate mortgage originations within its loan portfolio.

Non-interest expense amounted to $3.7 million during the quarter, an increase of $118 thousand or 3.3% from first quarter 2013. During first quarter 2013, the Company recovered $43 thousand in prior year legal expenses on two lending relationships, which did not recur during first quarter 2014.


The Company’s first quarter efficiency ratio amounted to 63.5% as compared to 60.7% for the same quarter in the prior year. The current quarter’s efficiency ratio was impacted by the decreased gain on sale of mortgage loans.

Net interest margin amounted to 3.63% for the quarter compared to 3.56% for the prior year’s first quarter. The margin improvement resulted from the combination of a $40 million increase in average balances of higher earning loans and investments, a $27 million average balance decrease in overnight investments, a $19 million average balance increase in noninterest bearing deposits and a 16 basis point decrease in interest rates paid on interest bearing deposits and borrowings.

Federal income tax provision totaled $573 thousand in first quarter 2014, compared to $599 thousand for the same quarter in 2013 reflecting an effective tax rate of 28.8% for current year versus 30.5% in 2013. The effective rate reduction occurred as a valuation allowance booked in prior years against a capital loss was reversed during first quarter 2014.

Average total assets during the quarter amounted to $591 million, an increase of $15 million or 2.6% above the same quarter of the prior year. Average loan balances of $396 million were $23 million or 6.1% above prior year first quarter, while average securities balances of $152 million increased $17 million or 12% as compared to first quarter 2013.

Average commercial loan balances for the quarter, including commercial real estate, increased $22 million or 9% above year ago levels. Average residential mortgage balances increased by $100 thousand or 1% over the prior year’s quarter. The increase of in-house mortgage balances was the result of the bank originating and retaining the aforementioned 15 year fixed rate mortgages. Average home equity balances increased $700 thousand or 2%, and average consumer credit balances increased $250 thousand or 4% versus the same quarter of the prior year.

Net charge-offs during first quarter 2014 were $205 thousand compared to a first quarter 2013 net loan recovery of $14 thousand. Annualized net charge-offs equated to 0.21% of average loans in the current quarter.

Nonperforming assets totaled $5.3 million or 1.30% of total loans plus other real estate at March 31, 2014, compared to $2.2 million or 0.59% at March 31, 2013. Delinquent loan balances as of March 31, 2014 amounted to 1.57% of total loans as compared to 1.00% at March 31, 2013. During first quarter 2014 a $2.9 million commercial relationship was placed on nonaccrual with an assigned specific reserve.

The Company funded $185 thousand in loan loss provision during the first quarter and the allowance for loan losses amounted to 1.24% of total loans on March 31, 2014. The ratio of the allowance for loan losses to nonperforming loans stood at 96% at March 31, 2014.

Average deposit balances grew by $7 million, or 2%, from the prior year’s first quarter. Average deposit balances totaled $470 million at March 31, 2014, reflecting a seasonal decrease of $9 million or 2% from the December 31, 2013 linked quarter. Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $19 million,


or 20% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $14 million or 7% from year ago levels, while average time deposit balances decreased $25 million or 16% during the year. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter grew by $3 million or 8% above the average for the same period in the prior year. The repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $53.9 million on March 31, 2014 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.1% on March 31, 2014, as compared to 8.4% on March 31, 2013. The Company declared a common dividend of $.18 per share during the quarter. Based on the March 31, 2014 closing stock price of $19.67 per share, the Company’s annual dividend yield approximates 3.7%.


About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $602 million as of March 31, 2014. 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 sixteen banking centers in Holmes, Wayne, Tuscarawas 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  
     2014     2013     2013     2013     2013  

EARNINGS

   1st Qtr     4th Qtr     3rd Qtr     2nd Qtr     1st Qtr  

Net interest income FTE (a)

   $ 4,969      $ 5,000      $ 4,755      $ 4,668      $ 4,767   

Provision for loan losses

     185        210        210        210        210   

Other income

     953        1,024        1,190        1,066        1,038   

Other expenses

     3,677        3,992        3,634        3,663        3,559   

FTE adjustment (a)

     71        78        78        76        75   

Net income

     1,416        1,224        1,407        1,247        1,362   

Diluted earnings per share

     0.52        0.45        0.51        0.45        0.50   

PERFORMANCE RATIOS

        

Return on average assets (ROA)

     0.97     0.82     0.96     0.88     0.96

Return on average common equity (ROE)

     10.70     9.19     10.79     9.32     10.43

Net interest margin FTE (a)

     3.63     3.55     3.46     3.49     3.56

Efficiency ratio

     63.53     65.70     62.11     63.40     60.72

Number of full-time equivalent employees

     160        157        165        159        164   

MARKET DATA

        

Book value/common share

   $ 19.69      $ 19.15      $ 19.06      $ 18.78      $ 19.31   

Period-end common share mkt value

     19.67        19.00        19.15        19.25        19.20   

Market as a % of book

     99.90     99.22     100.47     102.50     99.43

Price-to-earnings ratio

     10.19        9.90        10.19        10.64        10.85   

Cash dividends/common share

   $ 0.18      $ 0.18      $ 0.18      $ 0.18      $ 0.18   

Common stock dividend payout ratio

     34.62     37.50     34.62     40.00     36.00

Average basic common shares

     2,736,634        2,736,634        2,736,634        2,736,555        2,736,060   

Average diluted common shares

     2,739,542        2,738,411        2,738,638        2,738,708        2,738,300   

Period end common shares outstanding

     2,736,634        2,736,634        2,736,634        2,736,634        2,736,060   

Common shares repurchased

     0        0        0        0        0   

Common stock market capitalization

   $ 53,830      $ 51,996      $ 52,407      $ 52,680      $ 52,532   

ASSET QUALITY

        

Gross charge-offs

   $ 217      $ 226      $ 91      $ 95      $ 16   

Net charge-offs (recoveries)

     205        202        78        69        (14

Allowance for loan losses

     5,065        5,085        5,077        4,945        4,804   

Nonperforming assets (NPAs)

     5,291        3,270        2,368        2,394        2,187   

Net charge-off/average loans ratio

     0.21     0.21     0.08     0.07     (0.02 )% 

Allowance for loan losses/period-end loans

     1.24        1.34        1.35        1.31        1.29   

NPAs/loans and other real estate

     1.30        0.86        0.63        0.63        0.59   

Allowance for loan losses/nonperforming loans

     95.72        155.50        214.38        206.60        219.66   

CAPITAL & LIQUIDITY

        

Period-end tangible equity to assets

     8.12     7.94     7.92     8.11     8.39

Average equity to assets

     9.08        8.89        8.89        9.39        9.20   

Average equity to loans

     13.55        14.05        13.81        14.30        14.20   

Average loans to deposits

     84.17        78.50        79.81        81.36        80.57   

AVERAGE BALANCES

        

Assets

   $ 590,977      $ 594,736      $ 582,200      $ 571,569      $ 575,925   

Earning assets

     555,492        558,155        545,907        537,165        543,068   

Loans

     396,028        376,164        374,579        375,447        373,064   

Deposits

     470,487        479,174        469,353        461,488        463,030   

Shareholders’ equity

     53,681        52,861        51,745        53,677        52,960   

ENDING BALANCES

        

Assets

   $ 601,978      $ 596,465      $ 593,895      $ 571,068      $ 568,852   

Earning assets

     559,657        557,482        554,165        534,806        538,674   

Loans

     407,770        379,125        377,434        378,191        373,367   

Deposits

     466,573        480,933        480,861        462,845        457,530   

Shareholders’ equity

     53,879        52,411        52,149        51,391        52,830   

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 differs from net interest income under U.S. generally accepted accounting principles.


CSB BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

dollars in thousands, except per share data

 

     March 31,
2014
    March 31,
2013
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 18,640      $ 9,238   

Interest-earning deposits in other banks

     652        27,938   

Federal funds sold

     —          —     
  

 

 

   

 

 

 

Total cash and cash equivalents

     19,292        37,176   

Securities

    

Available-for-sale, at fair-value

     102,934        131,906   

Held-to-maturity

     43,688        —     

Restricted stock, at cost

     4,613        5,463   
  

 

 

   

 

 

 

Total securities

     151,235        137,369   

Loans held for sale

     —          —     

Loans

     407,770        373,367   

Less allowance for loan losses

     5,065        4,804   
  

 

 

   

 

 

 

Net loans

     402,705        368,563   

Goodwill and core deposit intangible

     5,455        5,588   

Bank owned life insurance

     9,614        8,356   

Premises and equipment, net

     8,641        8,349   

Accrued interest receivable and other assets

     5,036        3,451   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 601,978      $ 568,852   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 114,844      $ 92,831   

Interest-bearing

     351,729        364,699   
  

 

 

   

 

 

 

Total deposits

     466,573        457,530   

Short-term borrowings

     61,792        43,551   

Other borrowings

     17,406        12,611   

Accrued interest payable and other liabilities

     2,328        2,330   
  

 

 

   

 

 

 

Total liabilities

     548,099        516,022   
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2014 and 2013

     18,629        18,629   

Additional paid-in capital

     9,964        9,974   

Retained earnings

     31,155        27,831   

Treasury stock at cost - 243,968 shares in 2014 and 244,542 in 2013

     (4,958     (4,976

Accumulated other comprehensive (loss) income

     (911     1,372   
  

 

 

   

 

 

 

Total shareholders’ equity

     53,879        52,830   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 601,978      $ 568,852   
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

 

     Quarter ended
March 31,
 
     2014      2013  

Interest and dividend income:

     

Loans, including fees

   $ 4,429       $ 4,567   

Taxable securities

     786         582   

Nontaxable securities

     115         127   

Other

     6         24   
  

 

 

    

 

 

 

Total interest and dividend income

     5,336         5,300   
  

 

 

    

 

 

 

Interest expense:

     

Deposits

     304         475   

Other

     134         133   
  

 

 

    

 

 

 

Total interest expense

     438         608   
  

 

 

    

 

 

 

Net interest income

     4,898         4,692   

Provision for loan losses

     185         210   
  

 

 

    

 

 

 

Net interest income after provision for loan losses

     4,713         4,482   
  

 

 

    

 

 

 

Noninterest income

     

Service charges on deposits accounts

     297         315   

Trust services

     216         214   

Debit card interchange fees

     198         178   

Gain on sale of loans

     24         114   

Other

     218         217   
  

 

 

    

 

 

 

Total noninterest income

     953         1,038   
  

 

 

    

 

 

 

Noninterest expenses

     

Salaries and employee benefits

     2,019         2,050   

Occupancy expense

     266         258   

Equipment expense

     181         165   

Franchise tax expense

     107         147   

Professional and director fees

     182         117   

Federal deposit insurance

     86         88   

Amortization of intangible assets

     32         34   

Other expenses

     804         700   
  

 

 

    

 

 

 

Total noninterest expenses

     3,677         3,559   
  

 

 

    

 

 

 

Income before income tax

     1,989         1,961   

Federal income tax provision

     573         599   
  

 

 

    

 

 

 

Net income

   $ 1,416       $ 1,362   
  

 

 

    

 

 

 

Net income per share:

     

Basic

   $ 0.52       $ 0.50   
  

 

 

    

 

 

 

Diluted

   $ 0.52       $ 0.50   
  

 

 

    

 

 

 

Note: Certain prior year balances have been reclassified to conform to the current year presentation.