UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-21714
CSB Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Ohio 34-1687530
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6 W. Jackson Street, P.O. Box 232, Millersburg, Ohio 44654
(Address of principal executive offices)
(330) 674-9015
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as
of the latest practicable date.
Common stock, $6.25 par value Outstanding at May 3, 2000:
2,618,177 common shares
FORM 10-Q
QUARTER ENDED MARCH 31, 2000
Table of Contents
Part I - Financial Information
ITEM 1 - FINANCIAL STATEMENTS Page
Consolidated Balance Sheets
Consolidated Statements of Income
Condensed Consolidated Statements of Changes in
Shareholders' Equity
Condensed Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Part II - Other Information
Other Information
Signatures
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
March 31, 2000 |
December 31, 1999 |
| ASSETS |
|
|
| Cash and noninterest-bearing deposits with banks |
$ 8,567,988 |
$ 10,525,878 |
| Interest-bearing deposits with banks |
172,412 |
257,199 |
| Federal funds sold |
-- |
2,484,000 |
| Total cash and cash equivalents |
8,740,400 |
13,267,077 |
| Securities available for sale, at fair value |
28,436,113 |
30,544,038 |
| Securities held to maturity (Fair values of
$71,771,292 in 2000 and $73,631,014 in 1999) |
73,003,866 |
74,843,191 |
| Loans, net |
198,211,646 |
194,861,507 |
| Premises and equipment, net |
8,920,176 |
8,941,975 |
| Accrued interest receivable and other assets |
4,471,615 |
4,088,680 |
| Total assets |
$321,783,816 |
$326,546,468 |
| LIABILITIES |
|
|
| Deposits |
|
|
| Noninterest-bearing |
$ 25,720,167 |
$29,047,575 |
| Interest-bearing |
237,998,061 |
240,891,867 |
| Total deposits |
263,718,228 |
269,939,442 |
| Securities sold under repurchase agreements |
12,471,315 |
12,835,554 |
| Federal funds purchased |
2,658,000 |
-- |
| Federal Home Loan Bank borrowings |
9,206,924 |
9,709,831 |
| Accrued interest payable and other liabilities |
802,090 |
859,963 |
| Total liabilities |
288,856,557 |
293,344,790 |
| SHAREHOLDERS' EQUITY |
|
|
| Common stock, $6.25 par value: 9,000,000 shares
authorized; 2000 - 2,667,787 shares issued; 1999 -
2,667,791 shares issued |
16,673,667 |
16,673,693 |
| Additional paid-in capital |
6,476,438 |
6,387,800 |
| Retained earnings |
11,278,077 |
10,702,853 |
| Treasury stock at cost: 2000 - 33,693 shares; 1999 -
8,807 shares |
(1,022,889) |
(173,802) |
| Accumulated other comprehensive income |
(478,034) |
(388,866) |
| Total shareholders' equity |
32,927,259 |
33,201,678 |
| Total liabilities and shareholders' equity |
$321,783,816 |
$326,546,468 |
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
Three Months Ended
March 31, |
|
2000 |
1999 |
| Interest income |
|
|
| Loans, including fees |
$4,652,677 |
$4,439,609 |
| Taxable securities |
780,087 |
682,516 |
| Nontaxable securities |
613,321 |
535,646 |
| Other |
11,737 |
161,562 |
| Total interest income |
6,057,822 |
5,819,333 |
| Interest expense |
|
|
| Deposits |
2,702,083 |
2,716,183 |
| Other |
291,033 |
217,972 |
| Total interest expense |
2,993,116 |
2,934,155 |
| Net interest income |
3,064,706 |
2,885,178 |
| Provision for loan losses |
230,713 |
647,955 |
| Net interest income after provision for loan losses |
2,833,993 |
2,237,223 |
| Other income |
|
|
| Service charges on deposit accounts |
186,866 |
182,032 |
| Gain on sale of loans |
14,438 |
302,652 |
| Other income |
261,992 |
187,333 |
| Total other income |
463,296 |
672,017 |
| Other expenses |
|
|
| Salaries and employee benefits |
1,067,398 |
862,321 |
| Occupancy expense |
137,876 |
88,039 |
| Equipment expense |
107,878 |
100,253 |
| State franchise tax |
96,722 |
93,960 |
| Other expenses |
711,364 |
597,066 |
| Total other expenses |
2,121,238 |
1,741,639 |
| Income before income taxes |
1,176,051 |
1,167,601 |
| Provision for income taxes |
201,980 |
249,064 |
| Net income |
$ 974,071 |
$ 918,537 |
| Basic and diluted earnings per common share (See
Note 1) |
$ 0.37 |
$ 0.35 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(Unaudited)
|
Three Months Ended
March 31, |
|
2000 |
1999 |
| Balance at beginning of period |
$33,201,678 |
$30,860,099 |
| Net income |
974,071 |
918,537 |
| Other comprehensive income, net of tax |
(89,168) |
(68,627) |
| Comprehensive income |
884,903 |
849,910 |
| Common stock issued under the dividend
reinvestment program and 401(k) plan |
-- |
195,188 |
| Cash dividends ($.15 per share in 2000; $.12 per
share in 1999) |
(398,847) |
(317,916) |
| Purchase of treasury shares (28,705 shares) |
(882,495) |
-- |
| Common stock used for the dividend reinvestment
program and 401(k) plan (reissued 3,818 treasury
shares), net of fractional shares retired |
122,020 |
|
| Balance at end of period |
$32,927,259 |
$31,587,281 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
Three Months Ended
March 31, |
|
2000 |
1999 |
|
|
|
| Net cash from operating activities |
$ 915,055 |
$ 1,109,746 |
| Cash flows from investing activities |
|
|
| Securities available for sale |
|
|
| Proceeds from maturities |
2,000,000 |
5,000,000 |
| Purchases |
-- |
(6,991,982) |
| Securities held to maturity |
|
|
| Proceeds from maturities, calls and repayments |
2,250,000 |
6,100,000 |
| Purchases |
(445,063) |
(5,267,485) |
| Net change in loans |
(4,600,126) |
525,842 |
| Loan sale proceeds |
1,043,500 |
12,972,366 |
| Premises and equipment expenditures, net |
(100,361) |
(1,031,280) |
| Net cash from investing activities |
147,950 |
11,307,461 |
| Cash flows from financing activities |
|
|
| Net change in deposits |
(6,221,214) |
400,878 |
| Net change in securities sold under repurchase
agreements |
(364,239) |
(2,637,275) |
| Net change in federal funds purchased |
2,658,000 |
-- |
| Principal reductions on FHLB borrowings |
(502,907) |
(572,846) |
| Shares issued for 401(k) plan |
-- |
100,999 |
| Cash dividends paid |
(276,827) |
(223,727) |
| Purchase of treasury shares |
(882,495) |
-- |
| Net cash from financing activities |
(5,589,682) |
(2,931,971) |
| Net change in cash and cash equivalents |
(4,526,677) |
9,485,236 |
| Beginning cash and cash equivalents |
13,267,077 |
25,608,187 |
| Ending cash and cash equivalents |
$ 8,740,400 |
$35,093,423 |
| Supplemental disclosures |
|
|
| Interest paid |
$2,966,567 |
$2,906,289 |
| Income taxes paid |
0 |
312,000 |
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include accounts of CSB Bancorp, Inc. and
its wholly-owned subsidiary, The Commercial and Savings Bank (together referred to as the
"Company" or "CSB"). All significant intercompany transactions and balances have been
eliminated.
These interim financial statements are prepared without audit and reflect all adjustments of a
normal recurring nature which, in the opinion of management, are necessary to present fairly the
consolidated financial position of CSB at March 31, 2000, and its results of operations and cash
flows for the periods presented. The accompanying consolidated financial statements do not
contain all financial disclosures required by generally accepted accounting principles that might
otherwise be necessary in the circumstances. The Annual Report for CSB for the year ended
December 31, 1999, contains consolidated financial statements and related notes which should be
read in conjunction with the accompanying consolidated financial statements.
The Company is engaged in the business of commercial and retail banking and trust services,
with operations conducted through its main office and eight branches located in Millersburg,
Ohio, and nearby communities. These communities are the source of substantially all deposit,
loan and trust activities. The majority of the Company's income is derived from commercial and
retail lending activities and investments in securities.
While the Company's chief decision-makers monitor the revenue streams of the various
Company products and services, operations are managed and financial performance is evaluated
on a Company-wide basis. Accordingly, all of the Company's banking operations are considered
by management to be aggregated in one reportable operating segment.
To prepare financial statements in conformity with generally accepted accounting principles,
management makes estimates and assumptions based on available information. These estimates
and assumptions affect amounts reported in the financial statements and the disclosures provided,
and future results could differ. The allowance for loan losses, realization of deferred tax assets,
fair value of certain securities and determination and carrying value of impaired loans are
particularly subject to change.
The allowance for loan losses is a valuation allowance, increased by the provision for loan losses
and decreased by charge-offs less recoveries. Management estimates the allowance required
based on past loan loss experience, known and inherent risks in the portfolio, information about
specific borrower situations and estimated collateral values, economic conditions and other
factors. Allocations of the allowance may be made for specific loans, but the entire allowance is
available for any loan that, in management's judgment, should be charged-off.
Loan impairment is reported when full payment under the loan terms is not expected. If a loan is
impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loan's existing interest rate or at the fair value of
collateral if repayment is expected solely from the collateral. Loans are evaluated for impairment
when payments are delayed, typically 90 days or more, or when the internal grading system
indicates a doubtful classification.
Smaller-balance homogeneous loans are evaluated for impairment in total. Such loans include
residential first-mortgage loans secured by one- to four-family residences, residential
construction loans and automobile, home equity and other consumer loans less than $100,000.
Commercial loans and mortgage loans secured by other properties are evaluated individually for
impairment.
The Company records income tax expense based on the amount of tax due on its tax return plus
deferred taxes computed based on the expected future tax consequences of temporary differences
between the carrying amounts and tax basis of assets and liabilities, using enacted tax rates.
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basic earnings per share ("EPS") is based on net income divided by the weighted average
number of shares outstanding during the period. Diluted EPS shows the dilutive effect of
additional common shares issuable under stock options. The weighted average number of shares
outstanding for basic and diluted EPS computations were as follows:
|
Three Months Ended March 31, |
|
2000 |
1999 |
| Weighted average common shares outstanding
(basic) |
2,655,136 |
2,648,611 |
| Dilutive effect of assumed exercise of stock options |
857 |
971 |
| Weighted average common shares outstanding
(diluted) |
2,655,993 |
2,649,582 |
Statement of Financial Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities" requires companies to record derivatives on the balance sheet as assets
or liabilities, measured at fair value. Gains or losses resulting from changes in the values of
those derivatives would be accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. The key criterion for hedge accounting is that the hedging
relationship must be highly effective in achieving offsetting changes in fair value or cash flows.
SFAS No. 133 does not allow hedging of a security which is classified as held to maturity. Upon
adoption of SFAS No. 133, companies may reclassify any security from held to maturity to
available for sale if they wish to be able to hedge the security in the future. SFAS No. 133, as
amended by SFAS No. 137, is effective for fiscal years beginning after June 15, 2000, with early
adoption encouraged for any fiscal quarter beginning July 1, 1998 or later, with no retroactive
application. Management does not expect the adoption of SFAS No. 133 to have a significant
impact on the Corporation's financial statements.
NOTE 2 - SECURITIES
The amortized cost and fair values of securities are as follows:
|
March 31, 2000 |
|
Amortized
Cost |
Gross
Unrealized
Gains |
Gross
Unrealized
Losses |
Fair Value |
| Available for sale |
|
|
|
|
| Debt securities |
|
|
|
|
| U.S. Treasury securities |
$2,002,350 |
$ -- |
$ (2,936) |
$ 1,999,414 |
| Obligations of U.S.
government corporations and
agencies |
23,935,858 |
-- |
(716,896) |
23,218,962 |
| Mortgage related securities |
1,000,000 |
-- |
(4,463) |
995,537 |
| Total debt securities available
for sale |
26,938,208 |
-- |
(724,295) |
26,213,913 |
| Other securities |
2,222,200 |
-- |
-- |
2,222,200 |
| Total securities available for
sale |
$29,160,408 |
$ -- |
$ (724,295) |
$28,436,113 |
| Held to maturity |
|
|
|
|
| U.S. Treasury securities |
$ 1,101,750 |
$ 16,719 |
$ -- |
$ 1,118,469 |
| Obligations of U.S.
government corporations and
agencies |
20,498,384 |
-- |
(712,296) |
19,786,088 |
| Obligations of states and
political subdivisions |
51,403,732 |
251,679 |
(788,676) |
50,866,735 |
| Total debt securities held to
maturity |
$73,003,866 |
$268,398 |
$(1,500,972) |
$71,771,292 |
NOTE 2 - SECURITIES (Continued)
|
December 31, 1999 |
|
Amortized
Cost |
Gross
Unrealized
Gains |
Gross
Unrealized
Losses |
Fair Value |
| Available for sale |
|
|
|
|
| Debt securities |
|
|
|
|
| U.S. Treasury securities |
$4,005,693 |
$ 3,420 |
$ (90) |
$ 4,009,023 |
| Obligations of U.S.
government corporations and
agencies |
23,939,139 |
1,112 |
(593,482) |
23,346,769 |
| Mortgage related securities |
1,000,000 |
-- |
(154) |
999,846 |
| Total debt securities available
for sale |
28,944,832 |
4,532 |
(593,726) |
28,355,638 |
| Other securities |
2,188,400 |
-- |
-- |
2,188,400 |
| Total securities available for
sale |
$31,133,232 |
$4,532 |
$ (593,726) |
$30,544,038 |
| Held to maturity |
|
|
|
|
| U.S. Treasury securities |
$ 3,104,636 |
$ 15,309 |
$ -- |
$ 3,119,945 |
| Obligations of U.S.
government corporations and
agencies |
20,499,017 |
-- |
(569,065) |
19,929,952 |
| Obligations of states and
political subdivisions |
51,239,538 |
228,859 |
(887,280) |
50,581,117 |
| Total debt securities held to
maturity |
$74,843,191 |
$244,168 |
$(1,456,345) |
$73,631,014 |
There were no sales of investment securities during the first three months of 2000 or 1999.
The amortized cost and fair values of debt securities at March 31, 2000, by contractual maturity,
are shown below.
|
Available-for-sale securities |
Held-to-maturity securities |
|
Amortized
Cost |
Fair Value |
Amortized
Cost |
Fair Value |
| Due in one year or less |
$ 3,002,869 |
$ 2,999,101 |
$ 3,249,110 |
$ 3,259,900 |
| Due from one to five
years |
22,935,339 |
22,219,275 |
34,335,511 |
33,447,907 |
| Due from five to ten
years |
-- |
-- |
27,029,892 |
26,752,844 |
| Due after ten years |
-- |
-- |
8,389,353 |
8,310,641 |
| Mortgage related
securities |
1,000,000 |
995,537 |
-- |
-- |
|
$26,938,208 |
$26,213,913 |
$73,003,866 |
$71,771,292 |
NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES
Loans consisted of the following:
|
March 31, 2000 |
December 31, 1999 |
| Commercial |
$ 86,709,986 |
$ 86,185,570 |
| Commercial real estate |
39,716,313 |
35,690,254 |
| Residential real estate |
52,250,185 |
31,511,348 |
| Residential real estate loans held for sale |
-- |
20,533,301 |
| Installment and credit card |
17,832,129 |
17,644,690 |
| Construction |
6,030,705 |
7,446,805 |
| Subtotal |
202,539,318 |
199,011,968 |
| Allowance for loan losses |
(3,605,936) |
(3,418,797) |
| Net deferred loan fees |
(721,736) |
(731,664) |
|
$198,211,646 |
$194,861,507 |
During the first three months of 2000, the Company received $1.0 million in proceeds from
mortgage loan sales. A gain of $14,438 was recognized on these sales. During the quarter, the
Company reclassified $20.5 million in residential real estate loans held for sale into residential
real estate.
Activity in the allowance for loan losses for the three months ended March 31, 2000 and 1999 is
as follows:
|
2000 |
1999 |
| Beginning balance |
$3,418,797 |
$2,887,721 |
| Provision for loan losses |
230,713 |
647,955 |
| Charge-offs |
(62,761) |
(45,295) |
| Recoveries |
19,187 |
6,246 |
| Balance - March 31 |
$3,605,936 |
$3,496,627 |
NOTE 4 - FEDERAL HOME LOAN BANK BORROWINGS
The Company borrows from the Federal Home Loan Bank (FHLB) to fund certain fixed-rate
residential real estate loans. These borrowings carry fixed interest rates ranging from 5.60% to
7.15% and maturities of 10, 15, and 20 years. Monthly principal and interest payments are due on
the borrowings. In addition, a principal curtailment of 10% of the outstanding principal balance
is due on the anniversary date of each borrowing. FHLB borrowings are collateralized by the
Company's FHLB stock and a blanket pledge on $13.8 million of qualifying mortgage loans at
March 31, 2000.
NOTE 5 - COMMITMENTS, OFF-BALANCE SHEET RISK, AND CONTINGENCIES
The Company is a party to financial instruments with off-balance sheet risk in the normal course
of business to meet customer financing needs. These financial instruments include commitments
to make or purchase loans, undisbursed lines of credit, undisbursed credit card balances and
letters of credit. The Company's exposure to credit loss in case of nonperformance by the other
party to the financial instrument is represented by the contractual amount of those instruments.
The Company follows the same credit policy to make such commitments as it uses for those
loans recorded on the balance sheet.
|
March 31, 2000 |
December 31, 1999 |
| Commitments to make loans (at market rates) |
$ 1,680,000 |
$ 3,888,570 |
| Unused lines of credit and Letters of credit |
41,606,507 |
43,104,664 |
Since many commitments to make loans expire without being used, the aforementioned amounts
do not necessarily represent future cash commitments. Collateral obtained relating to these
commitments is determined using management's credit evaluation of the borrower and may
include real estate, vehicles, business assets, deposits and other items.
The Company sold $1.0 million in residential mortgage loans during the first three months of
2000. The Company has agreed to repurchase individual loans if they become delinquent by
greater than ninety days. A recourse obligation has been established by management based on
past loan loss experience and other factors. This liability is not material.
Occasionally, various contingent liabilities arise that are not recorded in the financial statements,
including claims and legal actions arising in the ordinary course of business. In the opinion of
management, after consultation with legal counsel, ultimate disposition of these matters is not
expected to have a material effect on financial condition or results of operations.
NOTE 6 - OTHER COMPREHENSIVE INCOME
|
Three Months Ended
March 31, |
|
2000 |
1999 |
| Unrealized holding gains (losses) on available
for sale securities |
$(135,104) |
$(103,980) |
| Tax effect |
45,936 |
35,353 |
| Other comprehensive income (loss) |
$ (89,168) |
$ (68,627) |
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion focuses on the consolidated financial condition of CSB Bancorp, Inc.
(the Company) at March 31, 2000, compared to December 31, 1999, and the consolidated results
of operations for the quarterly period ending March 31, 2000 compared to the same period in
1999. The purpose of this discussion is to provide the reader with a more thorough
understanding of the consolidated financial statements. This discussion should be read in
conjunction with the interim consolidated financial statements and related footnotes.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this report that are not historical facts are forward-looking
statements that are subject to certain risks and uncertainties. When used herein, the terms
"anticipates", "plans", "expects", "believes", and similar expressions as they relate to the
Company or its management are intended to identify such forward-looking statements. The
Company's actual results, performance or achievements may materially differ from those
expressed or implied in the forward-looking statements. Risks and uncertainties that could cause
or contribute to such material differences include, but are not limited to, general economic
conditions, interest rate environment, competitive conditions in the financial services industry,
changes in law, governmental policies and regulations, and rapidly changing technology
affecting financial services.
The Company does not undertake, and specifically disclaims any obligation, to publicly revise
any forward-looking statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.
FINANCIAL CONDITION
Total assets were $321.8 million at March 31, 2000, compared to $326.5 million at December
31, 1999, representing a decrease of $4.8 million or 1.5%. Total securities decreased
approximately $3.9 million during the quarter. Since one of the primary functions of the
securities portfolio is to provide a source of liquidity, it is structured such that security maturities
and cash flows satisfy the Company's liquidity needs and asset-liability management
requirements. At March 31, 2000, approximately 6.3% of the securities portfolio matures within
one year.
Total loans increased $3.4 million, or 1.7%, to $198.2 million. This increase was primarily a
result of a $4.0 million, or 11.3%, increase in commercial real estate loans. This more than offset
a $1.4 million, or 19.0%, decrease in construction loans.
As a percentage of loans, the allowance for loan losses was 1.78% at March 31, 2000 and 1.72%
at December 31, 1999. Loans past due more than 90 days and loans placed on nonaccrual status,
were approximately $2.2 million, or 1.12% of total loans at March 31, 2000, compared to $1.5
million, or 0.77% of loans at December 31, 1999. These credits are considered in management's
analysis of the allowance for loan losses.
Premises and equipment decreased $22,000, or 0.2%, during the first quarter of 2000 due to
normal depreciation.
At March 31, 2000, the ratio of net loans to deposits was 75.2%, compared to 72.2% at the end of
1999. This increase is due primarily to the normal deposit activity in the first quarter of the
year.
Total shareholders' equity decreased $274,000, or 0.8%, due to the adopting of a stock buyback
program during the quarter. This resulted in the purchases of $882,000 of treasury stock. This
amount was partially offset by year-to-date net income of $974,000, less $399,000 of cash
dividends declared. The cash dividend represents 40.9% of net income for the first quarter of
2000. Also contributing to capital was the dividend reinvestment program and the purchase of
stock by the Company's 401(k) retirement plan. As a result of these programs, equity increased
approximately $122,000 during the first quarter of 2000 from the reissuance of treasury shares.
The Company and its subsidiary met all regulatory capital requirements at March 31, 2000. The
Company's ratio of total capital to risk-weighted assets was 15.54% at March 31, 2000, while
Tier 1 risk-based capital ratio was 16.80%. Regulatory minimums call for a total risk-based
capital ratio of 8%, at least one-half of which must be Tier 1 capital. The Company's leverage
ratio was 10.30% at March 31, 2000, which exceeds the regulatory minimum of 3% to 5%.
RESULTS OF OPERATIONS
Net income for the quarter ending March 31, 2000, was $974,000, or $0.37 per share, as
compared to $919,000, or $0.35 per share earned during the same period last year, an increase of
$56,000, or 6.0%. The primary factors contributing to this increase was a decrease in the
provision for loan loss, which was partially offset by a decrease in other income and an increase
in other expenses.
Net interest income for the quarter ended March 31, 2000 was $3.1 million, an increase of
$180,000, or 6.2%, over the same period last year. Interest and fees on loans increased $213,000,
or 4.8%. Also, as overnight funds were invested in securities, interest on securities increased
$175,000, and other interest income decreased by $150,000.
Interest expense increased $59,000 to $3.0 million for the quarter ended March 31, 2000,
compared to $2.9 million for the quarter ended March 31, 1999. This increase was the result of
increased average balances on interest-bearing accounts and higher interest rates.
The provision for loan losses was $231,000 during the first quarter of 2000, a decrease of
$417,000 over the first quarter of 1999.
Other income decreased approximately $209,000 primarily as a result of the gain on the sale of
loans during the 1999 period. In the first quarter of 1999, $13.0 million of fixed rate mortgage
loans were sold, resulting in a gain of $303,000. These loans had previously been identified as
held for sale.
Other expenses increased $380,000, or 21.8%, for the three months ended March 31, 2000,
compared to the same period in 1999. Management continues to monitor the Company's
efficiency ratio by maintaining increases in other operating costs at low levels. Salaries and
employee benefits increased by $205,000 or 23.8%, occupancy expense increased $50,000, or
56.6%, and other expenses increased $114,000 or 19.1%. The provision for income taxes of
$202,000 during the first quarter of 2000 reflected an effective rate of 17.2%, as compared to
21.3%, for the first quarter of 1999.
YEAR 2000 ISSUE
The Company experienced no disruption to its operations because of the Year 2000.
Management will continue to monitor activity over the course of the year for possible effects on
its operations and customers. Certain critical dates, as identified by the Company and regulators,
fall in 2000. While these dates have been tested, the Company will review operations during
these periods. Some of these dates fell in the first quarter and no disruption of operations or
systems occurred.
ITEM 3 QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes in the quantitative and qualitative disclosures about market
risks as of March 31, 2000 from that presented in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999.
FORM 10-Q
Quarter ended March 31, 2000
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings:
There are no matters required to be reported under this item.
Item 2 - Changes in Securities:
There are no matters required to be reported under this item.
Item 3 - Defaults Upon Senior Securities:
There are no matters required to be reported under this item.
Item 4 - Submission of Matters to a Vote of Security Holders:
There are no matters required to be reported under this item.
Item 5 - Other Information:
There are no matters required to be reported under this item.
Item 6 - Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit
Number Description of Document
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter for which this
report is filed.
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, thereunto duly authorized.
CSB BANCORP, INC.
(Registrant)
Date: May 3, 2000 /s/ DOUGLAS D. AKINS
Douglas D. Akins
President
Chief Executive Officer
Date: May 3, 2000 /a/ A. LEE MILLER
A. Lee Miller
Senior Vice President
Chief Financial Officer
Index to Exhibits
| Exhibit Number |
Description of Documents |
Sequential
Page |
|
|
|
| 11 |
Statement Regarding Computation of Per Share Earnings |
21 |
| 27 |
Financial Data Schedule |
22 |
CSB BANCORP, INC.
EXHIBIT 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
|
Three Months Ended
March 31, |
|
2000 |
1999 |
| Net income |
$ 974,071 |
$ 918,537 |
| Average basic shares outstanding |
2,635,136 |
2,648,611 |
| Add: Effect of stock options |
857 |
971 |
| Average diluted shares outstanding |
2,655,993 |
2,649,582 |
| Basic and diluted earnings per common share |
$ 0.37 |
$ 0.35 |
|
|
|
