CSB Bancorp (CSBB) 8-K CSB Bancorp, Inc. Reports Second Quarter Earnings

Exhibit 99.1

CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS

Second Quarter Highlights

	Quarter Ended June 30, 2014			Quarter Ended June 30, 2013
Diluted earnings per share	$	0.55		$	0.45
Net Income	$	1,522,000		$	1,247,000
Return on average common equity		11.09	%		9.32	%
Return on average assets		1.02	%		0.88	%

Millersburg, Ohio – July 22, 2014 – CSB Bancorp, Inc. (CSBB) today announced second quarter 2014 net income of $1,522,000 or $.55 per basic and diluted share, as compared to $1,247,000 or $.45 per basic and diluted share for the same period in 2013.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 11.09% and 1.02%, respectively, compared with 9.32% and 0.88% for the second quarter of 2013.

Eddie Steiner, President and CEO commented, “Loan demand has improved as businesses are investing in plant and equipment and signs of improved housing markets are emerging. We continue to focus on expanding customer relationships within our primary markets.”

Revenue, on a fully-taxable equivalent basis, totaled $6.3 million during the quarter, a 9% increase from the prior-year second quarter. Net interest income improved by $453 thousand as compared to second quarter 2013 while other income increased $93 thousand, attributable to a $133 thousand gain on sale of investments during the quarter.

Non-interest expense amounted to $3.8 million during the quarter, an increase of $186 thousand or 5% from second quarter 2013. The Company’s second quarter efficiency ratio amounted to 62.1% as compared to 63.4% for the same quarter in the prior year.

Net interest margin amounted to 3.66% for the quarter compared to 3.49% for the prior year’s second quarter. The margin improvement resulted from the combination of a $47 million increase in average balances of higher earning loans and investments, a $23 million average balance decrease in overnight investments, a $17 million average balance increase in noninterest bearing deposits and a 15 basis point decrease in interest rates paid on interest bearing deposits and borrowings.

Federal income tax provision totaled $683 thousand in second quarter 2014, compared to $538 thousand for the same quarter in 2013 reflecting an effective tax rate of 31% for current quarter versus 30% for the second quarter in 2013.

Average total assets during the quarter amounted to $598 million, an increase of $27 million or 4.6% above the same quarter of the prior year. Average loan balances of $411 million were $36 million or 9.5% above prior year second quarter, while average securities balances of $146 million increased $12 million or 9% as compared to second quarter 2013.

Average commercial loan balances for the quarter, including commercial real estate, increased $30 million or 12% above year ago levels. Average residential mortgage balances increased by $4 million or 5% over the prior year’s quarter. The increase of in-house mortgage balances was the result of the bank originating and retaining some 15 year fixed rate mortgages. Average home equity balances increased $1 million or 3%, and average consumer credit balances increased $300 thousand or 4% versus the same quarter of the prior year.

Net charge-offs during second quarter 2014 were $152 thousand compared to second quarter 2013 net loan charge-offs of $69 thousand. Annualized net charge-offs equated to 0.15% of average loans in the current quarter.

Nonperforming assets totaled $5.0 million or 1.22% of total loans plus other real estate at June 30, 2014, compared to $2.4 million or 0.63% at June 30, 2013. Delinquent loan balances as of June 30, 2014 amounted to 1.50% of total loans as compared to 1.08% at June 30, 2013. During first quarter 2014 a $2.9 million commercial relationship was placed on nonaccrual with an assigned specific reserve.

The Company funded $150 thousand in loan loss provision during the second quarter and the allowance for loan losses amounted to 1.23% of total loans on June 30, 2014. The ratio of the allowance for loan losses to nonperforming loans stood at 100.6% at June 30, 2014.

Average deposit balances grew by $7 million, or 2%, from the prior year’s second quarter. Average deposit balances totaled $469 million at June 30, 2014, reflecting a seasonal decrease of $10 million or 2% from the December 31, 2013 quarter. Within the deposit category, average noninterest-bearing account balances for the second quarter increased by $17 million,

or 17% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $14 million or 7% from year ago levels, while average time deposit balances decreased $23 million or 15% during the year. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the second quarter grew by $5 million or 13% above the average for the same period in the prior year. The repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $55.2 million on June 30, 2014 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.3% on June 30, 2014, as compared to 8.1% on June 30, 2013. The Company declared a common dividend of $.18 per share during the quarter. Based on the June 30, 2014 closing stock price of $20.23 per share, the Company’s annual dividend yield approximates 3.6%.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $609 million as of June 30, 2014. 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 sixteen banking centers in Holmes, Wayne, Tuscarawas 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
	2014			2014			2013			2013			2013			2014			2013
EARNINGS	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			6 months			6 months
Net interest income FTE (a)	$	5,115		$	4,969		$	5,000		$	4,755		$	4,668		$	10,084		$	9,435
Provision for loan losses		150			185			210			210			210			335			420
Other income		1,159			953			1,024			1,190			1,066			2,112			2,104
Other expenses		3,849			3,677			3,992			3,634			3,663			7,526			7,222
FTE adjustment (a)		70			71			78			78			76			141			151
Net income		1,522			1,416			1,224			1,407			1,247			2,938			2,609
Diluted earnings per share		0.55			0.52			0.45			0.51			0.45			1.07			0.95
PERFORMANCE RATIOS
Return on average assets (ROA)		1.02	%		0.97	%		0.82	%		0.96	%		0.88	%		1.00	%		0.92	%
Return on average common equity (ROE)		11.09	%		10.70	%		9.19	%		10.79	%		9.32	%		10.90	%		9.87	%
Net interest margin FTE (a)		3.66	%		3.63	%		3.55	%		3.46	%		3.49	%		3.64	%		3.53	%
Efficiency ratio		62.14	%		61.55	%		65.70	%		62.11	%		63.40	%		61.85	%		62.05	%
Number of full-time equivalent employees		161			160			157			165			159
MARKET DATA
Book value/common share	$	20.18		$	19.69		$	19.15		$	19.06		$	18.78
Period-end common share mkt value		20.23			19.67			19.00			19.15			19.25
Market as a % of book		100.25	%		99.90	%		99.22	%		100.47	%		102.50	%
Price-to-earnings ratio		9.97			10.19			9.90			10.19			10.64
Cash dividends/common share	$	0.18		$	0.18		$	0.18		$	0.18		$	0.18			0.36		$	0.36
Common stock dividend payout ratio		32.72	%		34.62	%		37.50	%		34.62	%		40.00	%		33.64	%		37.89	%
Average basic common shares		2,737,085			2,736,634			2,736,634			2,736,634			2,736,555			2,736,861			2,736,309
Average diluted common shares		2,739,968			2,739,542			2,738,411			2,738,638			2,738,708			2,739,436			2,738,432
Period end common shares outstanding		2,737,085			2,736,634			2,736,634			2,736,634			2,736,634
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	55,371		$	53,830		$	51,996		$	52,407		$	52,680
ASSET QUALITY
Gross charge-offs	$	163		$	217		$	226		$	91		$	95		$	380		$	111
Net charge-offs		152			205			202			78			69			357			55
Allowance for loan losses		5,063			5,065			5,085			5,077			4,945
Nonperforming assets (NPAs)		5,031			5,291			3,270			2,368			2,394
Net charge-off/average loans ratio		0.15	%		0.21	%		0.21	%		0.08	%		0.07	%		0.18	%		0.03	%
Allowance for loan losses/period-end loans		1.23			1.24			1.34			1.35			1.31
NPAs/loans and other real estate		1.22			1.30			0.86			0.63			0.63
Allowance for loan losses/nonperforming loans		100.64			95.72			155.50			214.38			206.60
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		8.26	%		8.12	%		7.94	%		7.92	%		8.11	%
Average equity to assets		9.20			9.08			8.89			8.89			9.39
Average equity to loans		13.39			13.55			14.05			13.81			14.30
Average loans to deposits		87.67			84.17			78.50			79.81			81.36
AVERAGE BALANCES
Assets	$	598,093		$	590,977		$	594,736		$	582,200		$	571,569			594,555		$	573,712
Earning assets		561,063			555,492			558,155			545,907			537,165			558,293			539,740
Loans		411,016			396,028			376,164			374,579			375,447			403,563			374,263
Deposits		468,838			470,487			479,174			469,353			461,488			469,658			462,246
Shareholders’ equity		55,052			53,681			52,861			51,745			53,677			54,371			53,320
ENDING BALANCES
Assets	$	608,892		$	601,978		$	596,465		$	593,895		$	571,068
Earning assets		564,348			559,657			557,482			554,165			534,806
Loans		411,930			407,770			379,125			377,434			378,191
Deposits		483,672			466,573			480,933			480,861			462,845
Shareholders’ equity		55,239			53,879			52,411			52,149			51,391

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 differs from net interest income under U.S. generally accepted accounting principles.

CSB BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

dollars in thousands, except per share data

	June 30, 2014			June 30, 2013
ASSETS
Cash and cash equivalents
Cash and due from banks	$	21,446		$	13,532
Interest-earning deposits in other banks		14,908			23,534
Federal funds sold		—			—
Total cash and cash equivalents		36,354			37,066
Securities
Available-for-sale, at fair-value		93,389			127,515
Held-to-maturity		38,946			—
Restricted stock, at cost		4,613			5,463
Total securities		136,948			132,978
Loans held for sale		562			103
Loans		411,930			378,191
Less allowance for loan losses		5,063			4,945
Net loans		406,867			373,246
Goodwill and core deposit intangible		5,422			5,554
Bank owned life insurance		9,681			9,419
Premises and equipment, net		8,503			8,326
Accrued interest receivable and other assets		4,555			4,376
TOTAL ASSETS	$	608,892		$	571,068
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	124,768		$	101,644
Interest-bearing		358,904			361,201
Total deposits		483,672			462,845
Short-term borrowings		50,523			41,851
Other borrowings		17,280			12,558
Accrued interest payable and other liabilities		2,178			2,423
Total liabilities		553,653			519,677
Shareholders’ equity
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2014 and 2013		18,629			18,629
Additional paid-in capital		9,950			9,964
Retained earnings		32,184			28,586
Treasury stock at cost - 243,517 shares in 2014 and 243,968 in 2013		(4,944	)		(4,958	)
Accumulated other comprehensive loss		(580	)		(830	)
Total shareholders’ equity		55,239			51,391
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	608,892		$	571,068

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

dollars in thousands, except per share data

	Quarter ended June 30,				Year ended June 30,
	2014		2013		2014		2013
Interest and dividend income:
Loans, including fees	$	4,631	$	4,441	$	9,060	$	9,008
Taxable securities		736		585		1,522		1,167
Nontaxable securities		115		128		230		255
Other		2		19		8		43
Total interest and dividend income		5,484		5,173		10,820		10,473
Interest expense:
Deposits		289		448		593		923
Other		150		133		284		266
Total interest expense		439		581		877		1,189
Net interest income		5,045		4,592		9,943		9,284
Provision for loan losses		150		210		335		420
Net interest income after provision for loan losses		4,895		4,382		9,608		8,864
Noninterest income
Service charges on deposits accounts		316		333		613		648
Trust services		202		226		418		440
Debit card interchange fees		233		190		431		368
Gain on sale of loans		44		102		68		216
Other		364		215		582		432
Total noninterest income		1,159		1,066		2,112		2,104
Noninterest expenses
Salaries and employee benefits		2,110		2,042		4,129		4,092
Occupancy expense		240		255		506		513
Equipment expense		188		177		369		342
Franchise tax expense		106		147		213		294
Professional and director fees		214		174		396		291
Federal deposit insurance		91		84		177		172
Amortization of intangible assets		33		34		65		68
Other expenses		867		750		1,671		1,450
Total noninterest expenses		3,849		3,663		7,526		7,222
Income before income tax		2,205		1,785		4,194		3,746
Federal income tax provision		683		538		1,256		1,137
Net income	$	1,522	$	1,247	$	2,938	$	2,609
Net income per share:
Basic	$	0.55	$	0.45	$	1.07	$	0.95
Diluted	$	0.55	$	0.45	$	1.07	$	0.95

Note: Certain prior year balances have been reclassified to conform to the current year presentation.