EX-99.1 2 d550696dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS

Second Quarter Highlights

 

     Quarter Ended
June 30, 2018
    Quarter Ended
June 30, 2017
 

Diluted earnings per share

   $ 0.85     $ 0.63  

Net Income

   $ 2,324,000     $ 1,726,000  

Return on average common equity

     12.94     10.15

Return on average assets

     1.30     1.01

Millersburg, Ohio – July 24, 2018 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2018 net income of $2,324,000, or $.85 per basic and diluted share, as compared to $1,726,000, or $.63 per basic and diluted share, for the same period in 2017. Income before federal income tax amounted to $2.9 million, an increase of 16.1% over the same quarter in the prior year.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.94% and 1.30%, respectively, compared with 10.15% and 1.01% for the second quarter of 2017.

Eddie Steiner, President and CEO stated, “Average loan balances increased for the eleventh consecutive quarter, while net interest margin improved to 3.98%. Average deposit and loan balances have each increased approximately 9% from year ago levels.”

Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $7.9 million during the quarter, an 11% increase from the prior-year second quarter. Net interest income increased $702 thousand, or 12%, in the second quarter of 2018 compared to the same period in 2017.

Loan interest income including fees increased $931 thousand during second quarter 2018 as compared to the same quarter in 2017. Average total loan balances during the current quarter were $44 million higher than the year ago quarter.

The net interest margin was 3.98% compared to 3.75% for second quarter 2017. The tax equivalency effect on the margin dropped to 0.03% from 0.06% a result of the reduction in the corporate income tax rate in 2018.


Noninterest income increased by $108 thousand, or 10%, in the second quarter of 2018 compared to 2017. The increase reflects growth in trust and brokerage income, debit card fee income, and service charges on deposit accounts.

Noninterest expense amounted to $4.6 million during the quarter, an increase of $931 thousand, or 25%, from second quarter 2017. More than half of the comparative increase stems from second quarter 2017 reversal of a $540 thousand provision for unfunded loan commitments due to the impairment of a commercial line of credit. In other categories, salary and employee benefits rose $246 thousand, or 10%, compared to the prior year quarter with increases in headcount, salary, and employment taxes. Marketing and public relations expense increased by $30 thousand, or 34%, on a quarter over quarter basis primarily on expanded channel advertising and increasing community donations. The Company’s second quarter efficiency ratio was 58.4% as compared to 51.5% for the same quarter in the prior year.

Federal income tax provision totaled $553 thousand in second quarter 2018, as compared to $751 thousand tax provision for the same quarter in 2017. The effective tax rate decreased from 30% to 19% a result of the Tax Cuts and Jobs Act enacted on December 22, 2017.

Average total assets during the quarter amounted to $716 million, an increase of $29 million, or 4%, above the same quarter of the prior year. Average loan balances of $535 million increased $44 million, or 9%, from the prior year second quarter while average securities balances of $119 million decreased $14 million, or 10%, as compared to second quarter 2017.

Average commercial loan balances for the quarter, including commercial real estate, increased $32 million, or 9%, from prior year levels. Average residential mortgage balances increased $11 million, or 7%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 11%, versus the same quarter of the prior year.

Nonperforming assets decreased $2 million from December 31, 2017 to $4.4 million, or 0.82%, of total loans plus other real estate at June 30, 2018. The decrease in nonperforming loans is the result of the liquidation of a $1.7 million credit facility during first quarter 2018. At June 30, 2018, approximately $1.8 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of June 30, 2018 declined to 1.06% of total loans as compared to 1.53% at December 31, 2017 and 1.31% at June 30, 2017.

Net loan losses during second quarter 2018 were $39 thousand, or 0.03% annualized, compared to second quarter 2017 net loan losses of $10 thousand. The allowance for loan losses amounted to 1.11% of total loans at June 30, 2018 as compared to 1.08% of total loans on December 31, 2017 and 1.26% at June 30, 2017.

Average deposit balances grew on a year over year comparison by $47 million, or 9%, partially on the strength of customer response to higher rates paid on insured deposits. During the second quarter 2018, increases in average deposit balances over the prior year quarter included interest-bearing demand accounts of $28 million; savings accounts of $11 million; time deposits of $5 million, and non-interest bearing checking accounts of $3 million. The average balance of securities sold under repurchase agreement during the second quarter of 2018 decreased by $14 million, or 25%, compared to the average for the same period in the prior year. During 2017, a new corporate overnight cash management product was established within interest-bearing checking and at June 30, 2018 the new product had balances of $17 million.


Shareholders’ equity totaled $72.6 million on June 30, 2018 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.4% on June 30, 2018 and 9.2% on June 30, 2017. The Company declared a second quarter dividend of $0.24 per share, a $.04 per share increase over second quarter 2017, producing an annualized yield of 2.5% based on the June 30, 2018 closing price of $39.00.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $723 million as of June 30, 2018. 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 fifteen 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 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)    Quarters              

(Dollars in thousands, except per share data)

EARNINGS

   2018
2nd Qtr
    2018
1st Qtr
    2017
4th Qtr
    2017
3rd Qtr
    2017
2nd Qtr
    2018
6 months
    2017
6 months
 

Net interest income FTE (a)

   $ 6,697     $ 6,436     $ 6,532     $ 6,300     $ 6,046     $ 13,133     $ 12,001  

Provision for loan losses

     324       324       180       280       845       648       685  

Other income

     1,168       1,145       1,120       1,054       1,060       2,313       2,166  

Other expenses

     4,619       4,537       4,696       4,286       3,688       9,156       8,334  

FTE adjustment (a)

     45       47       96       96       96       92       189  

Net income

     2,324       2,164       1,779       1,866       1,726       4,488       3,456  

Diluted earnings per share

     0.85       0.79       0.65       0.68       0.63       1.64       1.26  

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     1.30     1.25     0.99     1.05     1.01     1.28     1.03

Return on average common equity (ROE)

     12.94     12.33     10.02     10.62     10.15     12.64     10.34

Net interest margin FTE (a)

     3.98     3.95     3.84     3.77     3.75     3.97     3.80

Efficiency ratio

     58.41     59.52     60.99     57.89     51.49     58.97     58.42

Number of full-time equivalent employees

     174       171       174       169       169      

MARKET DATA

              

Book value/common share

   $ 26.47     $ 25.90     $ 25.72     $ 25.47     $ 25.06      

Period-end common share mkt value

     39.00       35.95       33.11       30.50       30.60      

Market as a % of book

     147.34     138.80     128.73     119.75     122.11    

Price-to-earnings ratio

     13.13       13.07       12.78       11.47       11.81      

Cash dividends/common share

   $ 0.24     $ 0.24     $ 0.22     $ 0.22     $ 0.20     $ 0.48     $ 0.40  

Common stock dividend payout ratio

     28.24     30.38     33.85     32.35     31.75     29.27     31.75

Average basic common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Average diluted common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Period end common shares outstanding

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242      

Common shares repurchased

     0       0       0       0       0      

Common stock market capitalization

   $ 106,947     $ 98,584     $ 90,796     $ 83,638     $ 83,913      

ASSET QUALITY

              

Gross charge-offs

   $ 45     $ 303     $ 19     $ 1,138     $ 34     $ 348     $ 47  

Net (recoveries) charge-offs

     39       295       12       1,133       10       334       (313

Allowance for loan losses

     5,918       5,633       5,604       5,436       6,289      

Nonperforming assets (NPAs)

     4,399       4,622       6,522       4,930       6,036      

Net charge-off (recovery) /average loans ratio

     0.03     0.23     0.01     0.89     0.01     0.13     (0.13 )% 

Allowance for loan losses/period-end loans

     1.11       1.06       1.08       1.07       1.26      

NPAs/loans and other real estate

     0.82       0.87       1.26       0.97       1.21      

Allowance for loan losses/nonperforming loans

     134.52       122.40       85.93       110.27       104.19      

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     9.41     9.50     9.33     9.18     9.20    

Average equity to assets

     10.06       10.16       9.84       9.93       9.93      

Average equity to loans

     13.47       13.50       13.76       13.81       13.90      

Average loans to deposits

     90.77       91.89       88.33       90.30       90.42      

AVERAGE BALANCES

              

Assets

   $ 715,902     $ 700,394     $ 715,799     $ 702,040     $ 686,403     $ 708,198     $ 676,655  

Earning assets

     674,699       660,772       674,234       662,432       646,859       667,777       637,242  

Loans

     534,852       527,315       511,805       504,943       490,359       531,107       485,534  

Deposits

     589,211       573,855       579,433       559,195       542,308       581,576       531,380  

Shareholders’ equity

     72,039       71,173       70,419       69,737       68,184       71,608       67,377  

ENDING BALANCES

              

Assets

   $ 723,299     $ 699,967     $ 707,063     $ 710,824     $ 696,891      

Earning assets

     681,200       662,779       664,365       669,483       657,249      

Loans

     535,427       530,395       516,830       509,458       498,625      

Deposits

     595,073       576,418       583,259       571,626       547,104      

Shareholders’ equity

     72,578       71,019       70,532       69,838       68,726      

 

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)

   June 30,
2018
    June 30,
2017
 

ASSETS

    

Cash and cash equivalents

    

Cash and due from banks

   $ 14,956     $ 15,445  

Interest-earning deposits in other banks

     28,275       23,351  

Federal Funds Sold

     —         —    
  

 

 

   

 

 

 

Total cash and cash equivalents

     43,231       38,796  

Securities

    

Available-for-sale, at fair-value

     90,808       102,974  

Held-to-maturity

     21,882       27,169  

Equity securities

     94       84  

Restricted stock, at cost

     4,614       4,614  
  

 

 

   

 

 

 

Total securities

     117,398       134,841  

Loans held for sale

     100       432  

Loans

     535,427       498,625  

Less allowance for loan losses

     5,918       6,289  
  

 

 

   

 

 

 

Net loans

     529,509       492,336  

Premises and equipment, net

     9,563       8,633  

Goodwill and core deposit intangible

     4,945       5,053  

Bank owned life insurance

     13,384       13,045  

Accrued interest receivable and other assets

     5,169       3,755  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 723,299     $ 696,891  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 178,343     $ 169,241  

Interest-bearing

     416,730       377,863  
  

 

 

   

 

 

 

Total deposits

     595,073       547,104  

Short-term borrowings

     44,155       56,932  

Other borrowings

     8,827       21,781  

Accrued interest payable and other liabilities

     2,666       2,348  
  

 

 

   

 

 

 

Total liabilities

     650,721       628,165  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2018 and 2017

     18,629       18,629  

Additional paid-in capital

     9,815       9,815  

Retained earnings

     50,736       44,987  

Treasury stock at cost — 238,360 shares in 2018 and 2017

     (4,784     (4,784

Accumulated other comprehensive (loss) income

     (1,818     79  
  

 

 

   

 

 

 

Total shareholders’ equity

     72,578       68,726  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 723,299     $ 696,891  
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
June 30,
    Six months ended
June 30,
 
(Dollars in thousands, except per share data)    2018      2017     2018      2017  

Interest and dividend income:

          

Loans, including fees

   $ 6,515      $ 5,584     $ 12,654      $ 11,033  

Taxable securities

     594        598       1,197        1,196  

Nontaxable securities

     152        174       313        339  

Other

     83        57       129        91  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total interest and dividend income

     7,344        6,413       14,293        12,659  
  

 

 

    

 

 

   

 

 

    

 

 

 

Interest expense:

          

Deposits

     560        307       1,014        574  

Other

     132        156       238        273  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total interest expense

     692        463       1,252        847  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income

     6,652        5,950       13,041        11,812  

Provision for loan losses

     324        845       648        685  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net interest income after provision for loan losses

     6,328        5,105       12,393        11,127  
  

 

 

    

 

 

   

 

 

    

 

 

 

Noninterest income

          

Service charges on deposit accounts

     300        268       584        559  

Trust services

     217        152       436        359  

Debit card interchange fees

     323        296       636        584  

Gain on sale of loans

     60        61       137        103  

Gain on sale of securities

     —          —         4        —    

Other

     268        283       516        561  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total noninterest income

     1,168        1,060       2,313        2,166  
  

 

 

    

 

 

   

 

 

    

 

 

 

Noninterest expenses

          

Salaries and employee benefits

     2,718        2,472       5,355        4,931  

Occupancy expense

     214        214       434        424  

Equipment expense

     160        171       316        341  

Professional and director fees

     239        234       551        403  

Marketing and public relations

     119        89       239        167  

Software expense

     221        203       434        413  

Debit card expense

     126        141       242        271  

Provision for unfunded loan commitments

     —          (540     —          —    

Other expenses

     822        704       1,585        1,384  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total noninterest expenses

     4,619        3,688       9,156        8,334  
  

 

 

    

 

 

   

 

 

    

 

 

 

Income before income tax

     2,877        2,477       5,550        4,959  

Federal income tax provision

     553        751       1,062        1,503  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income

   $ 2,324      $ 1,726     $ 4,488      $ 3,456  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income per share:

          

Basic

   $ 0.85      $ 0.63     $ 1.64      $ 1.26  
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted

   $ 0.85      $ 0.63     $ 1.64      $ 1.26