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CSB BANCORP, INC. REPORTS EARNINGS FOR FIRST QUARTER 2009
First Quarter Highlights
• | Net Income totals $896,000 | ||
• | Diluted earnings per share of $0.33 | ||
• | Return on average common equity of 8.20% | ||
• | Return on average assets of 0.86% |
Millersburg, Ohio — April 22, 2009 — CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter 2009 net income of $896 thousand, or $.33 per basic and diluted share, as compared to $1.0 million, or $.41 per basic and diluted share for the same period in 2008.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 8.20% and 0.86%, respectively, compared with 10.89% and 1.17% for the first quarter of 2008.
Eddie Steiner, President and CEO stated, “The first quarter results reflect a solid start to what we anticipate will be a difficult year for bank earnings. Both revenue and net income increased over the prior quarter. Additionally, the results reflect an increase over the prior year’s first quarter core revenue and income after excluding last year’s nonrecurring gain from sale of the Company’s credit card portfolio. All of this was accomplished during the first full quarter of operations after acquiring Indian Village Bancorp, Inc. That transaction increased our balance sheet by 20% and added three new banking centers in Tuscarawas and Stark counties. Customer and shareholder response in these new markets has been favorable, and the acquired group of banking centers posted a positive contribution to Company earnings during the quarter.”
Net interest income of $3.9 million increased $514 thousand or 15.2% over the same quarter in the prior year, and by $121 thousand or 3.2% over the immediate prior quarter. Total revenue amounted to $4.7 million during the quarter, compared with $4.4 million in the prior-year first quarter, an increase of 8.6%.
Non-interest expense totaled $3.1 million during the quarter, an increase of $401 thousand, or 14.7%, from first quarter 2008. The Company’s first quarter efficiency ratio (defined as operating expenses divided by revenue) was 67.7%, as compared to same quarter results in the prior year of 62.6%.
Federal income tax expense was $424 thousand for first quarter 2009, reflecting an effective tax rate of 32.1%, compared to $498 thousand for the same quarter in 2008, or 33.2%. The decrease in the effective tax rate was primarily the result of a higher proportion of tax-exempt securities in the Company’s investment portfolio.
At March 31, 2009, assets totaled $422 million, down $2 million, or 0.5%, from December 31, 2008. Gross loan balances of $319 million reflected an increase of $3 million, or 1.0%, for the quarter. Commercial loan balances, including commercial real estate, increased $5.1 million or 2.8% during the quarter ended March 31, residential mortgage and home equity balances declined $1.9 million, or 1.5% during the quarter, while consumer installment, and other loan balances decreased $85 thousand, or 0.9%.
As of March 31, 2009, nonperforming assets totaled $4.2 million, or 1.31% of period-end loans plus other real estate, compared with $2.7 million, or 0.86%, at the prior quarter-end. Net charge-offs for the quarter totaled $233 thousand, or an annualized rate of 0.30% of average total loans. Steiner remarked, “Nonperforming assets have increased sharply in the past few months, with the majority of these balances originating from the former Indian Village portfolio. We anticipate that continuing difficult economic conditions will somewhat limit the pace of resolution for some of the involved credits. Therefore, we expect that levels of nonperforming assets and net charge-offs will remain somewhat elevated through much of 2009 when compared to the relatively low levels we have experienced in recent years.”
The Company’s allowance for loan losses at March 31, 2009 was 1.07% of period end loans and the Company funded $241 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 81% at quarter-end.
Deposit balances totaled $305 million at quarter-end, a decrease of $862 thousand, or 0.3% from the prior quarter-end. Within the deposit category, non interest-bearing account balances decreased $6 million, or 13.0%. Interest bearing checking, money market and savings accounts increased a total of $1 million, or 1.0%, during the quarter while time deposit balances increased $4 million, or 2.9%.
Short-term and other borrowings amounted to $71 million as of March 31, a decrease of $3 million or 3.9% from December 31 as the company repaid certain federal home loan bank advances that matured during the quarter.
Shareholders’ equity totaled $44 million on March 31, 2009 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.1% at quarter-end. Steiner noted in conclusion, “A number of earnings headwinds are buffeting the banking industry and appear likely to remain in effect for some time as the contracting economy, rising unemployment and increased FDIC premiums exert pressure against income. CSB’s strong capital and liquidity positions afford continued stability and security, and provide the foundation needed to effectively meet the financial service needs within the communities we serve.”
The Company declared a common dividend of $.18 per share during the quarter.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $422 million as of March 31, 2009. 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 thirteen 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 | ||||||||||||||||||||
2009 | 2008 | 2008 | 2008 | 2008 | ||||||||||||||||
EARNINGS | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||
Net interest income FTE (a) | $ | 3,940 | $ | 3,812 | $ | 3,473 | $ | 3,318 | $ | 3,406 | ||||||||||
Provision for loan losses | 241 | 71 | 107 | 48 | 107 | |||||||||||||||
Other income | 796 | 724 | 674 | 680 | 955 | |||||||||||||||
Other expenses | 3,129 | 3,303 | 2,663 | 2,617 | 2,728 | |||||||||||||||
FTE adjustment (a) | 46 | 39 | 34 | 32 | 26 | |||||||||||||||
Net income | 896 | 767 | 890 | 878 | 1,002 | |||||||||||||||
Diluted EPS | 0.33 | 0.29 | 0.37 | 0.36 | 0.41 | |||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||
Return on average assets (ROA) | 0.86 | % | 0.76 | % | 1.02 | % | 1.03 | % | 1.17 | % | ||||||||||
Return on average common equity (ROE) | 8.20 | % | 7.40 | % | 9.46 | % | 9.46 | % | 10.89 | % | ||||||||||
Net interest margin FTE (a) | 3.99 | % | 3.98 | % | 4.19 | % | 4.09 | % | 4.19 | % | ||||||||||
Efficiency ratio | 67.73 | % | 72.56 | % | 64.19 | % | 65.46 | % | 62.55 | % | ||||||||||
Number of full-time equivalent employees | 139 | 144 | 124 | 128 | 126 | |||||||||||||||
MARKET DATA | ||||||||||||||||||||
Book value/common share | $ | 16.23 | $ | 15.89 | $ | 15.49 | $ | 15.10 | $ | 15.22 | ||||||||||
Period-end common share mkt value | 14.00 | 15.00 | 15.25 | 15.75 | 16.14 | |||||||||||||||
Market as a % of book | 86.26 | % | 94.40 | % | 98.45 | % | 104.29 | % | 106.05 | % | ||||||||||
PE ratio | 11.11 | 10.49 | 10.36 | 10.94 | 9.84 | |||||||||||||||
Cash dividends/common share | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | ||||||||||
Common stock dividend payout ratio | 54.55 | % | 62.07 | % | 48.65 | % | 50.00 | % | 43.90 | % | ||||||||||
Average basic common shares | 2,734,799 | 2,629,394 | 2,422,014 | 2,432,793 | 2,444,597 | |||||||||||||||
Average diluted common shares | 2,734,799 | 2,629,394 | 2,422,014 | 2,432,793 | 2,444,642 | |||||||||||||||
Period end common shares outstanding | 2,734,799 | 2,734,799 | 2,421,983 | 2,422,050 | 2,440,850 | |||||||||||||||
Common shares repurchased | 0 | 0 | 67 | 18,800 | 6,774 | |||||||||||||||
Common stock market capitalization | $ | 38,287 | $ | 41,022 | $ | 36,935 | $ | 38,147 | $ | 39,395 | ||||||||||
ASSET QUALITY | ||||||||||||||||||||
Gross charge-offs | $ | 290 | $ | 47 | $ | 52 | $ | 33 | $ | 22 | ||||||||||
Net charge-offs | 233 | -84 | 44 | 21 | 2 | |||||||||||||||
Allowance for loan losses | 3,402 | 3,394 | 2,781 | 2,718 | 2,691 | |||||||||||||||
Nonperforming assets (NPAs) | 4,182 | 2,722 | 577 | 615 | 431 | |||||||||||||||
Net charge-off/average loans ratio | 0.30 | % | -0.11 | % | 0.07 | % | 0.03 | % | 0.00 | % | ||||||||||
Allowance for loan losses/period-end loans | 1.07 | 1.07 | 1.08 | 1.09 | 1.09 | |||||||||||||||
NPAs/loans and other real estate | 1.31 | 0.86 | 0.23 | 0.25 | 0.17 | |||||||||||||||
Allowance for loan losses/nonperforming loans | 81.35 | 124.69 | 481.98 | 441.75 | 623.64 | |||||||||||||||
CAPITAL & LIQUIDITY | ||||||||||||||||||||
Period-end tangible equity to assets | 10.09 | % | 9.84 | % | 10.91 | % | 10.54 | % | 10.77 | % | ||||||||||
Average equity to assets | 10.50 | 10.71 | 10.84 | 10.94 | 10.79 | |||||||||||||||
Average equity to loans | 13.91 | 13.74 | 14.74 | 14.97 | 14.56 | |||||||||||||||
Average loans to deposits | 105.76 | 102.72 | 102.86 | 101.48 | 101.28 | |||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||
Assets | $ | 421,694 | $ | 400,873 | $ | 345,481 | $ | 341,297 | $ | 343,023 | ||||||||||
Earning assets | 400,356 | 381,011 | 330,219 | 326,435 | 326,966 | |||||||||||||||
Loans | 318,325 | 293,714 | 254,104 | 249,395 | 254,277 | |||||||||||||||
Deposits | 300,993 | 285,926 | 247,040 | 245,767 | 251,060 | |||||||||||||||
Shareholders’ equity | 44,294 | 41,251 | 37,446 | 37,334 | 37,021 | |||||||||||||||
ENDING BALANCES | ||||||||||||||||||||
Assets | $ | 422,390 | $ | 424,657 | $ | 343,743 | $ | 347,104 | $ | 344,808 | ||||||||||
Earning assets | 402,011 | 402,225 | 328,812 | 329,468 | 327,711 | |||||||||||||||
Loans | 319,425 | 316,290 | 256,343 | 249,543 | 246,984 | |||||||||||||||
Deposits | 304,591 | 305,453 | 245,953 | 248,176 | 247,029 | |||||||||||||||
Shareholders’ equity | 44,392 | 43,468 | 37,512 | 36,577 | 37,148 |
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)
March 31, | March 31, | |||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | ||||||||
Cash and due from banks | $ | 7,479,007 | $ | 10,445,660 | ||||
Interest-earning deposits in other banks | 12,072,028 | 40,052 | ||||||
Federal funds sold | 0 | 14,300,000 | ||||||
Total cash and cash equivalents | 19,551,035 | 24,785,712 | ||||||
Securities | ||||||||
Available-for-sale, at fair-value | 65,282,581 | 63,243,672 | ||||||
Restricted stock, at cost | 5,231,800 | 3,142,900 | ||||||
Total securities | 70,514,381 | 66,386,572 | ||||||
Loans | 319,424,751 | 246,983,893 | ||||||
Less allowance for loan losses | 3,401,888 | 2,690,830 | ||||||
Net loans | 316,022,863 | 244,293,063 | ||||||
Goodwill and core deposit intangible | 1,965,710 | 0 | ||||||
Bank owned life insurance | 2,774,893 | 0 | ||||||
Premises and equipment, net | 8,368,805 | 7,235,361 | ||||||
Accrued interest receivable and other assets | 3,192,356 | 2,107,609 | ||||||
TOTAL ASSETS | $ | 422,390,043 | $ | 344,808,317 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 42,685,916 | $ | 38,665,336 | ||||
Interest-bearing | 261,904,865 | 208,364,076 | ||||||
Total deposits | 304,590,781 | 247,029,412 | ||||||
Short-term borrowings | 20,416,999 | 24,604,161 | ||||||
Other borrowings | 50,590,025 | 33,875,513 | ||||||
Accrued interest payable and other liabilities | 2,400,564 | 2,151,610 | ||||||
Total liabilities | 377,998,369 | 307,660,696 | ||||||
Shareholders’ equity | ||||||||
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2009 and 2,667,786 in 2008 | 18,628,767 | 16,673,667 | ||||||
Additional paid-in capital | 9,987,999 | 6,455,819 | ||||||
Retained earnings | 20,127,651 | 18,552,852 | ||||||
Treasury stock at cost - 245,803 shares in 2009 and 226,936 shares in 2008 | (5,014,541 | ) | (4,712,735 | ) | ||||
Accumulated other comprehensive income | 661,798 | 178,018 | ||||||
Total shareholders’ equity | 44,391,674 | 37,147,621 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 422,390,043 | $ | 344,808,317 | ||||
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Quarter ended | ||||||||
March 31, | ||||||||
2009 | 2008 | |||||||
Interest and dividend income: | ||||||||
Loans, including fees | $ | 4,620,756 | $ | 4,412,704 | ||||
Taxable securities | 887,867 | 804,622 | ||||||
Nontaxable securities | 67,997 | 43,878 | ||||||
Other | 2,724 | 22,207 | ||||||
Total interest and dividend income | 5,579,344 | 5,283,411 | ||||||
Interest expense: | ||||||||
Deposits | 1,162,395 | 1,427,758 | ||||||
Other | 523,389 | 475,888 | ||||||
Total interest expense | 1,685,784 | 1,903,646 | ||||||
Net interest income | 3,893,560 | 3,379,765 | ||||||
Provision for loan losses | 241,072 | 107,032 | ||||||
Net interest income after provision for loan losses | 3,652,488 | 3,272,733 | ||||||
Non-interest income | ||||||||
Service charges on deposits accounts | 293,300 | 287,152 | ||||||
Trust services | 114,759 | 188,664 | ||||||
Securities gains (losses) | 116,080 | — | ||||||
Gain on sale of loans | 67,570 | 261,072 | ||||||
Other | 204,446 | 218,598 | ||||||
Total non-interest income | 796,155 | 955,486 | ||||||
Non-interest expenses | ||||||||
Salaries and employee benefits | 1,708,364 | 1,536,903 | ||||||
Occupancy expense | 243,345 | 197,881 | ||||||
Equipment expense | 133,745 | 125,450 | ||||||
Franchise tax expense | 109,790 | 107,430 | ||||||
Professional and director fees | 143,762 | 139,556 | ||||||
Other expenses | 789,894 | 621,239 | ||||||
Total non-interest expenses | 3,128,900 | 2,728,459 | ||||||
Income before income tax | 1,319,743 | 1,499,760 | ||||||
Federal income tax provision | 423,800 | 498,000 | ||||||
Net income | $ | 895,943 | $ | 1,001,760 | ||||
Net income per share | ||||||||
Basic | $ | 0.33 | $ | 0.41 | ||||
Diluted | $ | 0.33 | $ | 0.41 |
Note: Certain prior year balances have been reclassified to conform to the current year presentation.