Exhibit 99.1
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
Paula J. Meiler, SVP & CFO
330-763-2873
paula.meiler@csb1.com
CSB BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands except per share data)
(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
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
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.