EX-99.1 2 l40265exv99w1.htm EX-99.1 exv99w1
         
Exhibit 99.1
(CSB BANCORP, INC. LOGO)
CSB BANCORP, INC. REPORTS EARNINGS FOR SECOND QUARTER 2010
SECOND Quarter Highlights
    Net Income totals $921,000
 
    Diluted earnings per share of $0.34
 
    Return on average common equity of 7.90%
 
    Return on average assets of 0.85%
Millersburg, Ohio – July 20, 2010 – CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced second quarter 2010 net income of $921 thousand, or $.34 per basic and diluted share, as compared to $706 thousand, or $.26 per basic and diluted share for the same period in 2009.
Annualized returns on average common equity and average assets for the quarter were 7.90% and 0.85%, respectively, compared with 6.32% and 0.67% for the second quarter of 2009.
Eddie Steiner, President and CEO stated, “The Company’s balance sheet grew by 1.3% during the quarter as customers increased deposit balances. Demand for new loans remained soft but was sufficient to offset principal paydowns, reversing four consecutive quarters of modest declines in loan balances outstanding. Second quarter earnings are above year ago levels, and the Company continues to generate consistent profitability.”
Net interest income of $3.8 million improved $1 thousand or 0.03% from the same quarter in the prior year. Net interest margin equated to 3.76% for the quarter, as compared to 3.88% during the second quarter of 2009. Total revenue of $4.8 million increased 2.4% compared with revenue of the prior-year second quarter.
Non-interest expense totaled $3.1 million during the quarter, a decrease of $60 thousand, or 1.9%, from second quarter 2009. The Company’s second quarter efficiency ratio was 67.7%, as compared to same quarter results in the prior year of 68.5%.
Federal income tax expense was $412 thousand for second quarter 2010, reflecting an effective tax rate of 30.9%, compared to $302 thousand for the same quarter in 2009, or 29.9%. The higher effective tax rate was primarily the result of a lesser portion of the Company’s revenue coming from tax-exempt securities held in the Company’s investment portfolio.
At June 30, 2010, assets totaled $441 million, up $6 million, or 1.3%, from March 31, 2010. Securities balances increased $3 million, or 3.8% during the quarter while total loan balances grew by $1 million, or 0.3% to $312 million at June 30. Commercial loan balances, including commercial real estate, increased $1.9 million or 1.0% during the three months ended June 30,

 


 

residential mortgage and home equity balances declined $1.0 million, or 0.9% from the prior linked quarter, while consumer installment, and other loan balances increased $121 thousand, or 1.7%.
CSB recognized net loan recoveries of $14 thousand during the quarter, representing an annualized rate of (0.02%) of average loan balances and resulting in a six-month annualized loss rate of 0.14% at the mid point of the Company’s fiscal year.
As of June 30, 2010, nonperforming assets totaled $6.3 million, or 2.03% of period-end loans plus other real estate, compared with $6.5 million, or 2.09%, at the prior quarter-end. Commenting on the Company’s credit quality, Mr. Steiner noted, “Nonperforming assets remain somewhat elevated as difficult economic conditions continue to exert stress on some borrowers. We expect these conditions to continue through 2010 as the economy struggles to regain positive momentum.”
The Company’s allowance for loan losses at June 30, 2010 was 1.48% of period end loans and the Company funded $239 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 76% at quarter-end.
Deposit balances totaled $330 million at June 30, 2010, an increase of $3.6 million, or 1.1% from the prior quarter. Within the deposit category, non interest-bearing account balances increased $5 million, or 8.7%. Interest bearing checking, money market and savings accounts declined $4 million, or 3.3%, from March 31 and time deposit balances increased $3.2 million, or 2.2%.
Short-term and other borrowings amounted to $63 million as of June 30, up $1 million for the quarter as customers increased balances under retail repurchase agreements.
Shareholders’ equity totaled $47 million on June 30, 2010 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.2% at quarter-end. In concluding remarks, Mr. Steiner observed, “The Company’s capital and liquidity positions remain strong and provide stability to effectively meet the financial service needs of the communities we serve.”
The Company declared a common dividend of $0.18 per share during the quarter.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $441 million as of June 30, 2010. 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 fourteen banking centers in Holmes, Tuscarawas, Wayne 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   YTD
    2010   2010   2009   2009   2009   2010   2009
EARNINGS   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr   6 months   6 months
     
Net interest income FTE (a)
  $ 3,886     $ 3,935     $ 4,231     $ 3,920     $ 3,884     $ 7,821     $ 7,824  
Provision for loan losses
    239       519       409       293       394       758       635  
Other income
    889       731       769       870       780       1,620       1,576  
Other expenses
    3,150       3,041       3,191       3,188       3,210       6,191       6,339  
FTE adjustment (a)
    53       54       56       56       52       107       98  
Net income
    921       737       931       858       706       1,658       1,602  
Diluted EPS
    0.34       0.27       0.34       0.31       0.26       0.61       0.59  
 
                                                       
PERFORMANCE RATIOS
                                                       
Return on average assets (ROA)
    0.85 %     0.67 %     0.84 %     0.80 %     0.67 %     0.76 %     0.76 %
Return on average common equity (ROE)
    7.90 %     6.44 %     8.04 %     7.49 %     6.32 %     7.18 %     7.24 %
Net interest margin FTE (a)
    3.76 %     3.78 %     4.01 %     3.84 %     3.88 %     3.77 %     3.93 %
Efficiency ratio
    67.74 %     64.83 %     63.51 %     66.10 %     68.46 %     66.27 %     67.92 %
Number of full-time equivalent employees
    144       140       144       146       141                  
 
                                                       
MARKET DATA
                                                       
Book value/common share
  $ 17.10     $ 16.88     $ 16.76     $ 16.67     $ 16.34                  
Period-end common share mkt value
    15.75       14.60       15.25       15.20       16.00                  
Market as a % of book
    92.11 %     86.49 %     90.99 %     91.18 %     97.92 %                
PE ratio
    12.50       12.37       12.30       12.77       12.80                  
Cash dividends/common share
  $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.18     $ 0.36     $ 0.36  
Common stock dividend payout ratio
    52.94 %     66.67 %     52.94 %     58.06 %     69.23 %                
Average basic common shares
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Average diluted common shares
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799       2,734,799  
Period end common shares outstanding
    2,734,799       2,734,799       2,734,799       2,734,799       2,734,799                  
Common shares repurchased
    0       0       0       0       0       0       0  
Common stock market capitalization
  $ 43,073     $ 39,928     $ 41,706     $ 41,569     $ 43,757                  
 
                                                       
ASSET QUALITY
                                                       
Gross charge-offs
  $ 20     $ 289     $ 82     $ 82     $ 431     $ 309     $ 721  
Net charge-offs (recoveries)
    (14 )     223       46       (6 )     398       209       631  
Allowance for loan losses
    4,608       4,356       4,060       3,697       3,398                  
Nonperforming assets (NPAs)
    6,335       6,492       4,303       4,545       4,123                  
Net charge-off/average loans ratio
    (0.02 )%     0.29 %     0.06 %     (0.01 )%     0.50 %     0.14 %     0.40 %
Allowance for loan losses/period-end loans
    1.48       1.40       1.29       1.17       1.07                  
NPAs/loans and other real estate
    2.03       2.09       1.37       1.44       1.29                  
Allowance for loan losses/nonperforming loans
    75.69       70.02       98.04       82.05       83.47                  
 
                                                       
CAPITAL & LIQUIDITY
                                                       
Period-end tangible equity to assets
    10.16 %     10.15 %     9.73 %     10.26 %     10.16 %                
Average equity to assets
    10.70       10.44       10.45       10.68       10.60                  
Average equity to loans
    14.99       14.89       14.54       14.38       14.06                  
Average loans to deposits
    95.24       95.35       100.69       105.15       104.76                  
 
                                                       
AVERAGE BALANCES
                                                       
Assets
  $ 436,782     $ 444,916     $ 439,688     $ 425,439     $ 423,767     $ 440,838     $ 422,662  
Earning assets
    414,137       422,487       418,737       404,629       401,966       418,289       401,368  
Loans
    311,647       311,789       315,168       316,149       319,421       311,717       318,876  
Deposits
    327,215       326,986       313,016       300,652       304,910       327,092       302,962  
Shareholders’ equity
    46,724       46,440       45,964       45,449       44,918       46,591       44,649  
 
                                                       
ENDING BALANCES
                                                       
Assets
  $ 441,242     $ 435,622     $ 450,666     $ 427,391     $ 422,585                  
Earning assets
    419,855       413,771       428,301       406,054       401,558                  
Loans
    311,857       310,900       313,482       314,717       317,880                  
Deposits
    329,817       326,204       329,486       302,898       300,513                  
Shareholders’ equity
    46,776       46,171       45,822       45,580       44,678                  
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)
                 
    June 30,     June 30,  
    2010     2009  
ASSETS
               
Cash and cash equivalents
               
Cash and due from banks
  $ 8,480,535     $ 7,643,710  
Interest-earning deposits in other banks
    31,096,976       8,056,334  
Federal funds sold
    298,000       1,691,000  
 
           
Total cash and cash equivalents
    39,875,511       17,391,044  
Securities
               
Available-for-sale, at fair-value
    71,075,984       67,302,810  
Restricted stock, at cost
    5,463,100       5,463,100  
 
           
Total securities
    76,539,084       72,765,910  
Loans held for sale
    64,000       1,164,660  
Loans
    311,856,767       317,879,674  
Less allowance for loan losses
    4,608,389       3,397,920  
 
           
Net loans
    307,248,378       314,481,754  
 
               
Goodwill and core deposit intangible
    2,162,922       1,949,483  
Bank owned life insurance
    2,906,380       2,800,812  
Premises and equipment, net
    8,122,007       8,243,694  
Accrued interest receivable and other assets
    4,323,192       3,787,394  
 
           
 
               
TOTAL ASSETS
  $ 441,241,474     $ 422,584,751  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Liabilities
               
Deposits:
               
Noninterest-bearing
  $ 57,204,438     $ 44,083,567  
Interest-bearing
    272,613,003       256,429,380  
 
           
Total deposits
    329,817,441       300,512,947  
 
Short-term borrowings
    31,088,481       24,917,661  
Other borrowings
    31,955,136       50,261,780  
Accrued interest payable and other liabilities
    1,604,820       2,214,038  
 
           
Total liabilities
    394,465,878       377,906,426  
 
           
Shareholders’ equity
               
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2010 and 2009
    18,628,767       18,628,767  
Additional paid-in capital
    9,993,812       9,989,447  
Retained earnings
    21,819,730       20,341,438  
Treasury stock at cost - 245,803 shares in 2010 and 2009
    (5,014,541 )     (5,014,541 )
Accumulated other comprehensive income
    1,347,828       733,214  
 
           
Total shareholders’ equity
    46,775,596       44,678,325  
 
           
 
               
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 441,241,474     $ 422,584,751  
 
           

 


 

CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                 
    Quarter ended     Six months ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Interest and dividend income:
                               
Loans, including fees
  $ 4,285,426     $ 4,582,288     $ 8,587,524     $ 9,203,044  
Taxable securities
    647,818       797,541       1,398,223       1,685,408  
Nontaxable securities
    82,189       79,925       166,029       147,922  
Other
    14,380       6,132       33,502       8,856  
 
                       
Total interest and dividend income
    5,029,813       5,465,886       10,185,278       11,045,230  
Interest expense:
                               
Deposits
    876,253       1,135,407       1,752,255       2,297,802  
Other
    320,298       498,412       719,070       1,021,801  
 
                       
Total interest expense
    1,196,551       1,633,819       2,471,325       3,319,603  
 
                               
Net interest income
    3,833,262       3,832,067       7,713,953       7,725,627  
Provision for loan losses
    238,740       394,068       757,900       635,140  
 
                       
Net interest income after provision for loan losses
    3,594,522       3,437,999       6,956,053       7,090,487  
 
                       
Non-interest income
                               
Service charges on deposits accounts
    286,263       324,210       555,464       617,510  
Trust services
    124,270       119,616       265,851       234,375  
Securities gains
    147,763       (577 )     147,763       115,503  
Gain on sale of loans
    45,037       116,890       90,762       184,460  
Other
    285,453       219,960       560,382       424,406  
 
                       
Total non-interest income
    888,786       780,099       1,620,222       1,576,254  
Non-interest expenses
                               
Salaries and employee benefits
    1,743,937       1,696,213       3,348,523       3,404,577  
Occupancy expense
    192,426       230,817       412,132       474,162  
Equipment expense
    124,238       137,951       250,991       271,696  
Franchise tax expense
    135,000       126,580       270,050       236,370  
Professional and director fees
    169,868       184,553       323,704       328,316  
FDIC deposit insurance
    163,279       218,300       308,340       391,200  
Amortization of intangible assets
    15,750       16,227       31,500       32,545  
Other expenses
    605,866       599,606       1,245,976       1,200,281  
 
                       
Total non-interest expenses
    3,150,364       3,210,247       6,191,216       6,339,147  
 
                       
Income before income tax
    1,332,944       1,007,851       2,385,059       2,327,594  
 
                       
Federal income tax provision
    412,200       301,800       727,000       725,600  
 
                       
 
                               
Net income
  $ 920,744     $ 706,051     $ 1,658,059     $ 1,601,994  
 
                       
Net income per share
                               
Basic
  $ 0.34     $ 0.26     $ 0.61     $ 0.59  
 
                       
 
                               
Diluted
  $ 0.34     $ 0.26     $ 0.61     $ 0.59  
 
                       
Note: Certain prior year balances have been reclassified to conform to the current year presentation.