UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 20, 2016
CSB Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Ohio | 0-21714 | 34-1687530 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
91 North Clay Street, P.O. Box 232, Millersburg, Ohio |
44654 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code (330) 674-9015
Not Applicable
(Former Name or former address if changed since last report)
Check the appropriate box below if the Form 8-k filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 20, 2016, CSB Bancorp, Inc. issued a press release announcing its earnings for the three month period ended March 31, 2016. A copy of this press release and related financial tables are furnished herein as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release and Quarterly Report for CSB Bancorp, Inc. for the quarter ended March 31, 2016.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CSB Bancorp, Inc. | ||||||
By: | /s/ Paula J. Meiler | |||||
Paula J. Meiler | ||||||
Senior Vice President and Chief Financial Officer |
Date: April 20, 2016
Exhibit 99.1
CSB BANCORP, INC. REPORTS FIRST QUARTER EARNINGS
First Quarter Highlights
Quarter Ended March 31, 2016 |
Quarter Ended March 31, 2015 |
|||||||
Diluted earnings per share |
$ | 0.54 | $ | 0.49 | ||||
Net Income |
$ | 1,480,000 | $ | 1,342,000 | ||||
Return on average common equity |
9.48 | % | 9.33 | % | ||||
Return on average assets |
0.93 | % | 0.87 | % |
Millersburg, Ohio April 19, 2016 CSB Bancorp, Inc. (CSBB) today announced first quarter 2016 net income of $1,480,000 or $.54 per basic and diluted share, as compared to $1,342,000 or $.49 per basic and diluted share for the same period in 2015.
Annualized returns on average common equity (ROE) and average assets (ROA) for the quarter were 9.48% and 0.93%, respectively, compared with 9.33% and 0.87% for the first quarter of 2015.
Eddie Steiner, President and CEO stated, Economic conditions within our market are relatively stable and increased loan demand has been developing in both consumer and business sectors.
Revenue, on a fully-taxable equivalent basis, totaled $6.4 million during the quarter, a 4% increase from the prior-year first quarter. Net interest income increased $271 thousand in the first quarter of 2016 compared to the same period in 2015, driven primarily by growth in average loans outstanding of $13 million and a lower cost of funds. As a result, the net interest margin improved by .05% to 3.57% during the first three months of 2016 from 3.52% a year earlier. The historically low interest rate environment and flattening of the yield curve following the Federal Reserves December rate hike continue to limit margin expansion.
Noninterest revenue declined by $62 thousand, or 6%, in the first quarter of 2016 compared to 2015. The decline reflects reductions in gains on the sale of securities and mortgage loans and a loss on fixed asset retirement. These reductions were partially offset by increases in interchange fees and trust income.
Noninterest expense amounted to $4 million during the quarter, an increase of $41 thousand or 1% from first quarter 2015. The Companys first quarter efficiency ratio amounted to 62.2% as compared to 64.1% for the same quarter in the prior year. Salary and employee benefits rose $177 thousand, or 8%, on a quarter over prior year quarter with increases in base salary, medical coverage and employment taxes.
Federal income tax provision totaled $644 thousand in first quarter 2016, compared to $584 thousand for the same quarter in 2015 reflecting a stable effective tax rate of 30% for the comparable quarters.
Average total assets during the quarter amounted to $641 million, an increase of $18 million or 3% above the same quarter of the prior year. Average loan balances of $428 million increased $13 million, or 3%, from the prior year first quarter while average securities balances of $161 million increased $14 million or 10% as compared to first quarter 2015.
Average commercial loan balances for the quarter, including commercial real estate, increased $6 million, or 2%, from prior year levels. Average residential mortgage balances increased $3 million, or 3%, over the prior years quarter. Average home equity balances increased $2 million, or 5%, and average consumer credit balances increased $2 million, or 25%, versus the same quarter of the prior year.
Delinquent loan balances as of March 31, 2016 amounted to 0.61% of total loans as compared to 1.08% at March 31, 2015. Nonperforming assets totaled $1.9 million, or 0.44%, of total loans plus other real estate, a decrease from $3.7 million, or 0.88%, of total loans plus other real estate at March 31, 2015. The allowance for loan losses amounted to 1.15% of total loans on March 31, 2016.
Net loan recoveries during first quarter 2016 were $179 thousand (0.17% annualized) compared to first quarter 2015 net loan charge-offs of $81 thousand.
Average deposit balances for first quarter 2016 totaled $512 million, an increase of $15 million, or 3%, from the prior years first quarter. Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $8 million, or 6%, above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $15 million, or 7%, from year ago levels, while average time deposit balances decreased $8 million, or 7%, from first quarter 2015. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter of 2016 increased by $685 thousand, or 1%, above the average for the same period in the prior year. Repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.
Shareholders equity totaled $62.8 million on March 31, 2016 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.1% on March 31, 2016, as compared to 8.6% on March 31, 2015. The Company declared a first quarter dividend of $0.19 per share producing a yield of 3.1% based on the March 31, 2016 closing price of $24.25.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $637 million as of March 31, 2016. 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, North Canton 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 Companys business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Companys 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
Quarters | ||||||||||||||||||||
(Unaudited) | 2016 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||
(Dollars in thousands, except per share data) | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||
EARNINGS |
||||||||||||||||||||
Net interest income FTE (a) |
$ | 5,373 | $ | 5,262 | $ | 5,150 | $ | 5,255 | $ | 5,091 | ||||||||||
Provision for loan losses |
164 | | | 195 | 194 | |||||||||||||||
Other income |
992 | 1,071 | 1,119 | 1,180 | 1,054 | |||||||||||||||
Other expenses |
3,989 | 3,930 | 3,944 | 3,974 | 3,948 | |||||||||||||||
FTE adjustment (a) |
88 | 89 | 82 | 80 | 77 | |||||||||||||||
Net income |
1,480 | 1,607 | 1,556 | 1,517 | 1,342 | |||||||||||||||
Diluted earnings per share |
0.54 | 0.59 | 0.57 | 0.55 | 0.49 | |||||||||||||||
PERFORMANCE RATIOS |
||||||||||||||||||||
Return on average assets (ROA) |
0.93 | % | 0.98 | % | 0.98 | % | 0.97 | % | 0.87 | % | ||||||||||
Return on average common equity (ROE) |
9.48 | % | 10.41 | % | 10.27 | % | 10.23 | % | 9.33 | % | ||||||||||
Net interest margin FTE (a) |
3.57 | % | 3.39 | % | 3.43 | % | 3.58 | % | 3.52 | % | ||||||||||
Efficiency ratio |
62.20 | % | 61.55 | % | 62.42 | % | 61.47 | % | 64.09 | % | ||||||||||
Number of full-time equivalent employees |
162 | 161 | 161 | 163 | 165 | |||||||||||||||
MARKET DATA |
||||||||||||||||||||
Book value/common share |
$ | 22.90 | $ | 22.35 | $ | 22.09 | $ | 21.53 | $ | 21.46 | ||||||||||
Period-end common share mkt value |
24.25 | 24.50 | 24.20 | 25.00 | 23.00 | |||||||||||||||
Market as a % of book |
105.90 | % | 109.62 | % | 109.55 | % | 116.12 | % | 107.18 | % | ||||||||||
Price-to-earnings ratio |
10.78 | 11.14 | 11.31 | 11.79 | 10.85 | |||||||||||||||
Cash dividends/common share |
$ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | ||||||||||
Common stock dividend payout ratio |
35.19 | % | 32.20 | % | 33.33 | % | 34.54 | % | 38.78 | % | ||||||||||
Average basic common shares |
2,741,379 | 2,739,664 | 2,739,405 | 2,739,405 | 2,739,405 | |||||||||||||||
Average diluted common shares |
2,741,379 | 2,741,243 | 2,742,455 | 2,742,738 | 2,741,993 | |||||||||||||||
Period end common shares outstanding |
2,742,242 | 2,740,996 | 2,739,405 | 2,739,405 | 2,739,405 | |||||||||||||||
Common shares repurchased |
0 | 0 | 0 | 0 | 0 | |||||||||||||||
Common stock market capitalization |
$ | 66,499 | $ | 67,154 | $ | 66,294 | $ | 68,485 | $ | 63,006 | ||||||||||
ASSET QUALITY |
||||||||||||||||||||
Gross charge-offs |
$ | 10 | $ | 104 | $ | 95 | $ | 39 | $ | 110 | ||||||||||
Net (recoveries) charge-offs |
(179 | ) | (30 | ) | 25 | 32 | 81 | |||||||||||||
Allowance for loan losses |
5,005 | 4,662 | 4,632 | 4,656 | 4,494 | |||||||||||||||
Nonperforming assets (NPAs) |
1,915 | 1,681 | 2,018 | 3,117 | 3,685 | |||||||||||||||
Net charge-off (recovery) /average loans ratio |
(0.17 | )% | (0.03 | )% | 0.02 | % | 0.03 | % | 0.08 | % | ||||||||||
Allowance for loan losses/period-end loans |
1.15 | 1.10 | 1.12 | 1.12 | 1.07 | |||||||||||||||
NPAs/loans and other real estate |
0.44 | 0.40 | 0.49 | 0.75 | 0.88 | |||||||||||||||
Allowance for loan losses/nonperforming loans |
261.35 | 277.35 | 229.54 | 149.38 | 121.96 | |||||||||||||||
CAPITAL & LIQUIDITY |
||||||||||||||||||||
Period-end tangible equity to assets |
9.11 | % | 8.69 | % | 8.81 | % | 8.69 | % | 8.63 | % | ||||||||||
Average equity to assets |
9.77 | 9.38 | 9.50 | 9.52 | 9.37 | |||||||||||||||
Average equity to loans |
14.63 | 14.99 | 14.73 | 14.25 | 14.07 | |||||||||||||||
Average loans to deposits |
83.55 | 77.95 | 81.21 | 83.61 | 83.34 | |||||||||||||||
AVERAGE BALANCES |
||||||||||||||||||||
Assets |
$ | 640,670 | $ | 652,725 | $ | 632,539 | $ | 625,032 | $ | 622,628 | ||||||||||
Earning assets |
604,911 | 615,725 | 595,806 | 588,464 | 586,464 | |||||||||||||||
Loans |
427,916 | 408,524 | 408,069 | 417,347 | 414,761 | |||||||||||||||
Deposits |
512,192 | 524,078 | 502,514 | 499,157 | 497,646 | |||||||||||||||
Shareholders equity |
62,625 | 61,230 | 60,112 | 59,473 | 58,351 | |||||||||||||||
ENDING BALANCES |
||||||||||||||||||||
Assets |
$ | 637,202 | $ | 650,314 | $ | 632,381 | $ | 622,956 | $ | 625,088 | ||||||||||
Earning assets |
602,306 | 610,251 | 597,476 | 584,510 | 588,174 | |||||||||||||||
Loans |
433,453 | 422,871 | 412,974 | 415,198 | 420,861 | |||||||||||||||
Deposits |
509,980 | 525,042 | 505,088 | 496,404 | 497,333 | |||||||||||||||
Shareholders equity |
62,796 | 61,266 | 60,504 | 58,966 | 58,791 |
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) | March 31, | March 31, | ||||||
(Dollars in thousands, except per share data) | 2016 | 2015 | ||||||
ASSETS |
||||||||
Cash and cash equivalents |
||||||||
Cash and due from banks |
$ | 12,527 | $ | 14,253 | ||||
Interest-earning deposits in other banks |
14,844 | 21,260 | ||||||
Federal Funds Sold |
| 119 | ||||||
|
|
|
|
|||||
Total cash and cash equivalents |
27,371 | 35,632 | ||||||
Securities |
||||||||
Available-for-sale, at fair-value |
122,242 | 106,575 | ||||||
Held-to-maturity |
27,025 | 34,446 | ||||||
Restricted stock, at cost |
4,614 | 4,614 | ||||||
|
|
|
|
|||||
Total securities |
153,881 | 145,635 | ||||||
Loans held for sale |
128 | 299 | ||||||
Loans |
433,453 | 420,861 | ||||||
Less allowance for loan losses |
5,005 | 4,494 | ||||||
|
|
|
|
|||||
Net loans |
428,448 | 416,367 | ||||||
Goodwill and core deposit intangible |
5,202 | 5,326 | ||||||
Bank owned life insurance |
10,152 | 9,881 | ||||||
Premises and equipment, net |
8,032 | 8,248 | ||||||
Accrued interest receivable and other assets |
3,988 | 3,700 | ||||||
|
|
|
|
|||||
TOTAL ASSETS |
$ | 637,202 | $ | 625,088 | ||||
|
|
|
|
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LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Liabilities |
||||||||
Deposits: |
||||||||
Noninterest-bearing |
$ | 145,967 | $ | 137,941 | ||||
Interest-bearing |
364,013 | 359,392 | ||||||
|
|
|
|
|||||
Total deposits |
509,980 | 497,333 | ||||||
Short-term borrowings |
48,787 | 52,133 | ||||||
Other borrowings |
13,332 | 14,788 | ||||||
Accrued interest payable and other liabilities |
2,307 | 2,043 | ||||||
|
|
|
|
|||||
Total liabilities |
574,406 | 566,297 | ||||||
|
|
|
|
|||||
Shareholders equity |
||||||||
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2015 and 2014 |
18,629 | 18,629 | ||||||
Additional paid-in capital |
9,815 | 9,884 | ||||||
Retained earnings |
38,989 | 34,911 | ||||||
Treasury stock at cost - 238,360 shares in 2016 and 241,197 in 2015 |
(4,784 | ) | (4,871 | ) | ||||
Accumulated other comprehensive gain |
147 | 238 | ||||||
|
|
|
|
|||||
Total shareholders equity |
62,796 | 58,791 | ||||||
|
|
|
|
|||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 637,202 | $ | 625,088 | ||||
|
|
|
|
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) | Quarter ended Mar 31, |
|||||||
(Dollars in thousands, except per share data) | 2016 | 2015 | ||||||
Interest and dividend income: |
||||||||
Loans, including fees |
$ | 4,742 | $ | 4,573 | ||||
Taxable securities |
737 | 688 | ||||||
Nontaxable securities |
154 | 130 | ||||||
Other |
28 | 16 | ||||||
|
|
|
|
|||||
Total interest and dividend income |
5,661 | 5,407 | ||||||
|
|
|
|
|||||
Interest expense: |
||||||||
Deposits |
259 | 271 | ||||||
Other |
117 | 122 | ||||||
|
|
|
|
|||||
Total interest expense |
376 | 393 | ||||||
|
|
|
|
|||||
Net interest income |
5,285 | 5,014 | ||||||
Provision for loan losses |
164 | 194 | ||||||
|
|
|
|
|||||
Net interest income after provision for loan losses |
5,121 | 4,820 | ||||||
|
|
|
|
|||||
Noninterest income |
||||||||
Service charges on deposits accounts |
278 | 286 | ||||||
Trust services |
226 | 202 | ||||||
Debit card interchange fees |
262 | 227 | ||||||
Gain on sale of loans |
32 | 70 | ||||||
Gain on sale of securities |
| 35 | ||||||
Other |
194 | 234 | ||||||
|
|
|
|
|||||
Total noninterest income |
992 | 1,054 | ||||||
|
|
|
|
|||||
Noninterest expenses |
||||||||
Salaries and employee benefits |
2,327 | 2,150 | ||||||
Occupancy expense |
244 | 267 | ||||||
Equipment expense |
174 | 167 | ||||||
Professional and director fees |
174 | 290 | ||||||
Software expense |
187 | 189 | ||||||
Marketing and public relations |
85 | 77 | ||||||
Debit card expense |
104 | 99 | ||||||
Other expenses |
694 | 709 | ||||||
|
|
|
|
|||||
Total noninterest expenses |
3,989 | 3,948 | ||||||
|
|
|
|
|||||
Income before income tax |
2,124 | 1,926 | ||||||
Federal income tax provision |
644 | 584 | ||||||
|
|
|
|
|||||
Net income |
$ | 1,480 | $ | 1,342 | ||||
|
|
|
|
|||||
Net income per share: |
||||||||
Basic |
$ | 0.54 | $ | 0.49 | ||||
|
|
|
|
|||||
Diluted |
$ | 0.54 | $ | 0.49 | ||||
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