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We are pleased to enclose your second quarter dividend remittance with this letter and financial summary. The $.16 per share dividend represents an increase of 14%, or $.02 per share, over the second quarter dividend of the prior year.
The Company recorded unaudited net income of $677 thousand for second quarter, 10% above the results of second quarter 2005. Basic and diluted earnings per share were $.27 for the three months ended June 30, 2006, versus $.23 in second quarter 2005, an increase of 17%. For the six months ended June 30, net income of $1.45 million is 13% ahead of last year’s midpoint results.
During the second quarter, net interest margin and noninterest income both increased compared to the prior year, and we again recorded some improvement in the efficiency ratio. Customer response to new cash management services continues to be encouraging and is generating increased revenue and new deposits in 2006.
The economy in our market area, while not robust, appears to be maintaining a steady pace. With the Federal Reserve providing indications that the current cycle of raising targeted rates may be nearing its closing stages, we’ve positioned the balance sheet to be relatively neutral, although slightly favorable, to further rate increases.
The competitive environment remains a significant challenge to growth of both loans and deposits. Average loan balances were 1% higher than the second quarter of 2005, while average deposit balances were virtually unchanged. We believe our current interest rate spread is positioned to yield strong core earnings while competing effectively on both loan and deposit offerings, and we continue to focus our product and service efforts toward those valued by our current and potential customers.
Thank you for your support as a shareholder of CSB Bancorp, Inc. Your Company’s directors, officers and employees remain committed to increasing financial returns to you, our shareholder.
Sincerely, | ||
ROBERT K. BAKER | EDDIE L. STEINER | |
Chairman | President and CEO | |
CSB Bancorp, Inc. | CSB Bancorp, Inc. |
JUNE 30 | |||||||||
2006 | 2005 | ||||||||
ASSETS: | |||||||||
Cash and due from banks | $ | 12,001 | $ | 9,859 | |||||
Federal funds sold | 350 | — | |||||||
Securities | 72,280 | 69,222 | |||||||
Net loans | 225,643 | 221,065 | |||||||
Premises and equipment, net | 7,487 | 7,888 | |||||||
Other assets | 3,138 | 3,137 | |||||||
TOTAL ASSETS | $ | 320,899 | $ | 311,171 | |||||
LIABILITIES: | |||||||||
Deposits | $ | 242,823 | $ | 245,394 | |||||
Securities sold under agreements to repurchase | 18,290 | 12,367 | |||||||
Federal funds purchased | 11,600 | 2,300 | |||||||
Other borrowings | 12,705 | 13,319 | |||||||
Other liabilities | 1,682 | 1,322 | |||||||
TOTAL LIABILITIES | $ | 287,100 | $ | 274,702 | |||||
SHAREHOLDERS’ EQUITY: | |||||||||
Common stock | $ | 16,674 | $ | 16,674 | |||||
Additional paid-in capital | 6,419 | 6,414 | |||||||
Retained earnings | 15,389 | 13,898 | |||||||
Treasury stock | (3,276 | ) | (627 | ) | |||||
Accumulated other comprehensive income (loss) | (1,407 | ) | 110 | ||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 33,799 | $ | 36,469 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 320,899 | $ | 311,171 | |||||
THREE MONTHS ENDED JUNE 30 | SIX MONTHS ENDED JUNE 30 | ||||||||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||
Interest and fees on loans | $ | 4,147 | $ | 3,543 | $ | 7,969 | $ | 6,828 | |||||||||||
Interest on securities | 859 | 676 | 1,739 | 1,364 | |||||||||||||||
Other interest income | 0 | 0 | 7 | 1 | |||||||||||||||
TOTAL INTEREST INCOME | 5,006 | �� | 4,219 | 9,715 | 8,193 | ||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||
Interest on deposits | 1,273 | 994 | 2,440 | 1,863 | |||||||||||||||
Other interest expense | 460 | 197 | 708 | 373 | |||||||||||||||
TOTAL INTEREST EXPENSE | 1,733 | 1,191 | 3,148 | 2,236 | |||||||||||||||
Net interest income | 3,273 | 3,028 | 6,567 | 5,957 | |||||||||||||||
Provision for loan losses | 115 | 106 | 147 | 212 | |||||||||||||||
Net interest income after provision for loan losses | 3,158 | 2,922 | 6,420 | 5,745 | |||||||||||||||
Noninterest income | 720 | 554 | 1,330 | 1,087 | |||||||||||||||
Gain on sale of securities | 0 | 0 | 0 | 247 | |||||||||||||||
Noninterest expense | 2,896 | 2,634 | 5,643 | 5,311 | |||||||||||||||
Net income before federal income taxes | 982 | 842 | 2,107 | 1,768 | |||||||||||||||
Federal income tax provision | 305 | 229 | 656 | 488 | |||||||||||||||
NET INCOME | $ | 677 | $ | 613 | $ | 1,451 | $ | 1,280 | |||||||||||
EARNINGS PER SHARE | $ | 0.27 | $ | 0.23 | $ | 0.57 | $ | 0.48 | |||||||||||
AT OR FOR THE SIX MONTHS | |||||||||
ENDED JUNE 30 | |||||||||
2006 | 2005 | ||||||||
Assets | $ | 320,899 | $ | 311,171 | |||||
Net loans | $ | 225,643 | $ | 221,065 | |||||
Securities | $ | 72,280 | $ | 69,222 | |||||
Deposits | $ | 242,823 | $ | 245,394 | |||||
Shareholders’ equity | $ | 33,799 | $ | 36,469 | |||||
Net income | $ | 1,451 | $ | 1,280 | |||||
Earnings per share | $ | 0.57 | $ | 0.48 | |||||
Book value per outstanding share | $ | 13.41 | $ | 13.79 |
AT OR FOR THE SIX MONTHS | |||||||||
ENDED JUNE 30 | |||||||||
2006 | 2005 | ||||||||
Return on average assets | 0.92 | % | 0.82 | % | |||||
Return on average equity | 8.37 | % | 7.11 | % | |||||
Net interest margin (tax equivalent) | 4.49 | % | 4.20 | % | |||||
Loans to deposits | 93.94 | % | 91.05 | % | |||||
Allowance for loan loss to total loans | 1.08 | % | 1.06 | % | |||||
Shareholders’ equity to total assets | 10.53 | % | 11.72 | % | |||||
Efficiency ratio | 70.48 | % | 71.14 | % |
Robert K. Baker | Jeffery A. Robb, Sr. | |
Chairman | ||
Samuel M. Steimel | ||
Ronald E. Holtman | ||
Eddie L. Steiner | ||
J. Thomas Lang | ||
John R. Waltman | ||
Daniel J. Miller |
President and Chief Executive Officer
President,
The Commercial & Savings Bank
Chief Operations/Information Officer
Chief Financial Officer
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CASH | ||||||||||||||||
QUARTER | TRADE PRICE | CLOSING | DIVIDEND | |||||||||||||
ENDING | HIGH | LOW | PRICE | DECLARED | ||||||||||||
9/30/04 | 20.25 | 17.80 | 20.25 | 0.13 | ||||||||||||
12/31/04 | 21.00 | 19.65 | 20.00 | 0.13 | ||||||||||||
3/31/05 | 21.40 | 19.85 | 20.25 | 0.14 | ||||||||||||
6/30/05 | 21.15 | 20.05 | 20.50 | 0.14 | ||||||||||||
9/30/05 | 22.55 | 20.35 | 22.35 | 0.14 | ||||||||||||
12/31/05 | 25.00 | 21.00 | 21.00 | 0.14 | ||||||||||||
3/31/06 | 21.25 | 20.50 | 20.90 | 0.16 | ||||||||||||
6/30/06 | 20.87 | 20.00 | 20.40 | 0.16 |
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Common:
Symbol — CSBB.OB
Registrar & Transfer Company
Attn: Investor Relations
10 Commerce Drive
Cranford, NJ 07016
(800) 368-5948
CSB Bancorp, Inc.
S.E.C. Filings may be obtained by writing:
CSB Bancorp, Inc.
91 North Clay Street
Millersburg, OH 44654
(330) 674-9015 or
(800) 654-9015