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

Exhibit 99.1

CSB BANCORP, INC. REPORTS THIRD QUARTER EARNINGS

Third Quarter Highlights

	Quarter Ended September 30, 2015			Quarter Ended September 30, 2014
Diluted earnings per share	$	0.57		$	0.55
Net Income	$	1,556,000		$	1,507,000
Return on average common equity		10.27	%		10.64	%
Return on average assets		0.98	%		0.98	%

Millersburg, Ohio – October 21, 2015 – CSB Bancorp, Inc. (CSBB) today announced third quarter 2015 net income of $1,556,000 or $.57 per basic and diluted share, as compared to $1,507,000 or $.55 per basic and diluted share for the same period in 2014. For the nine month period ended September 30, 2015 net income totaled $4,415,000, compared to $4,445,000 for the same period last year.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.27% and 0.98%, respectively, compared with 10.64% and 0.98% for the third quarter of 2014.

Eddie Steiner, President and CEO stated, “Revenue growth remains somewhat constrained by relatively slow economic expansion in our markets, aggressive competition among lenders, and very low interest rates. Average loan balances declined during the quarter but remained above year-ago levels, and credit quality as indicated by the percentage of nonperforming loans has improved to its best level in seven years.”

Revenue, on a fully-taxable equivalent basis, totaled $6.3 million during the quarter, a 2% increase from the prior-year third quarter. Net interest income improved by $71 thousand as compared to third quarter 2014, while other income increased $42 thousand attributable primarily to an increase in gain on sale of mortgage loans to the secondary market and an increase in debit card interchange fees.

Non-interest expense amounted to $3.9 million during the quarter, an increase of $174 thousand or 5% from third quarter 2014. The Company’s third quarter efficiency ratio amounted to 62.4% as compared to 60.8% for the same quarter in the prior year. Salary and employee benefits rose $99 thousand, or 5%, on a quarter over prior year quarter with increases in base salary, medical and employment taxes.

Net interest margin amounted to 3.43% for the quarter compared to 3.58% from the linked June quarter and 3.53% for the prior year’s third quarter. The margin decrease year over year resulted from a 14 basis point decrease in average yield on earning assets partially offset with a 4 basis point decrease in average interest costs on all liabilities. The sustained low interest rate environment with resultant periodic rate decreases on certain long-term loans with scheduled rate repricing, and deposit growth which has outpaced loan growth over the past year, have contributed to the lower margins year over year. On a linked quarter basis, decreases were recognized in asset yields and loan balances during third quarter 2015, while deposit balances increased and liability costs were unchanged as compared to the quarter ended June 2015.

Federal income tax provision totaled $687 thousand in third quarter 2015, compared to $674 thousand for the same quarter in 2014 reflecting a stable effective tax rate of 31% for the comparable quarters.

Average total assets during the quarter amounted to $633 million, an increase of $25 million or 4% above the same quarter of the prior year. Average loan balances of $408 million were $0.5 million or less than 1% above prior year third quarter, while average securities balances of $148 million increased $10 million or 7% as compared to third quarter 2014.

Average commercial loan balances for the quarter, including commercial real estate, decreased $3 million or 1% from prior year levels. Average residential mortgage balances increased by $3 million or 4% over the prior year’s quarter. The increase of mortgage balances was the result of the bank originating and retaining some 15 year fixed rate mortgages. Average home equity balances decreased $538 thousand or 1% and average consumer credit balances increased $1 million or 16% versus the same quarter of the prior year.

The Company did not fund a loan loss provision during the third quarter 2015 due to declines in delinquent loans and nonperforming assets. Delinquent loan balances as of September 30, 2015 amounted to 0.7% of total loans as compared to 1.5% at September 30, 2014. Nonperforming assets totaled $2.0 million or 0.49% of total loans plus other real estate, a decrease from $4.7 million or 1.14% of total loans plus other real estate at September 30, 2014. The allowance for loan losses amounted to 1.12% of total loans on September 30, 2015.

Net loan charge-offs during third quarter 2015 were $25 thousand compared to third quarter 2014 net loan recoveries of $2 thousand. Annualized net charge-offs equated to 0.02% of average loans in the current quarter.

Average deposit balances for third quarter 2015 totaled $503 million, an increase of $21 million, or 4%, from the prior year’s third quarter. Within the deposit category, average noninterest-bearing account balances for the third quarter increased by $18 million, or 14% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $9 million or 4% from year ago levels, while average time deposit balances decreased $5 million or 4% from third quarter 2014. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the third quarter of 2015 grew by $3 million or 6% 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 $60.5 million on September 30, 2015 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 8.8% on September 30, 2015, as compared to 8.4% on September 30, 2014. The Company declared a common dividend of $.19 per share during the quarter. Based on the September 30, 2015 closing stock price of $24.20 per share, the Company’s annual dividend yield approximates 3.1%.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $632 million as of September 30, 2015. 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)	Quarters
(Dollars in thousands, except per share data)	2015			2015			2015			2014			2014			2015			2014
EARNINGS	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			9 months			9 months
Net interest income FTE (a)	$	5,150		$	5,255		$	5,091		$	5,060		$	5,068		$	15,496		$	15,152
Provision for loan losses		—			195			194			185			123			389			458
Other income		1,119			1,180			1,054			1,061			1,077			3,353			3,189
Other expenses		3,944			3,974			3,948			3,787			3,770			11,866			11,295
FTE adjustment (a)		82			80			77			73			71			239			212
Net income		1,556			1,517			1,342			1,439			1,507			4,415			4,445
Diluted earnings per share		0.57			0.55			0.49			0.53			0.55			1.61			1.62
PERFORMANCE RATIOS
Return on average assets (ROA)		0.98	%		0.97	%		0.87	%		0.92	%		0.98	%		0.94	%		0.99	%
Return on average common equity (ROE)		10.27	%		10.23	%		9.33	%		9.99	%		10.64	%		9.95	%		10.81	%
Net interest margin FTE (a)		3.43	%		3.58	%		3.52	%		3.43	%		3.53	%		3.51	%		3.60	%
Efficiency ratio		62.42	%		61.47	%		64.09	%		61.34	%		60.81	%		62.64	%		61.50	%
Number of full-time equivalent employees		161			163			165			167			168
MARKET DATA
Book value/common share	$	22.09		$	21.53		$	21.46		$	20.97		$	20.55
Period-end common share mkt value		24.20			25.00			23.00			22.00			20.01
Market as a % of book		109.55	%		116.12	%		107.18	%		104.91	%		97.37	%
Price-to-earnings ratio		11.31			11.79			10.85			10.23			9.67
Cash dividends/common share	$	0.19		$	0.19		$	0.19		$	0.19		$	0.19		$	0.57		$	0.55
Common stock dividend payout ratio		33.33	%		34.54	%		38.78	%		35.85	%		34.55	%		35.40	%		33.95	%
Average basic common shares		2,739,405			2,739,405			2,739,405			2,738,869			2,737,927			2,739,405			2,737,220
Average diluted common shares		2,742,455			2,742,738			2,741,993			2,741,033			2,739,721			2,742,407			2,738,981
Period end common shares outstanding		2,739,405			2,739,405			2,739,405			2,739,405			2,738,355
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	66,294		$	68,485		$	63,006		$	60,267		$	54,794
ASSET QUALITY
Gross charge-offs	$	95		$	39		$	110		$	1,033		$	9		$	244		$	389
Net (recoveries) charge-offs		25			32			81			992			(2	)		138			355
Allowance for loan losses		4,632			4,656			4,494			4,381			5,188
Nonperforming assets (NPAs)		2,018			3,117			3,685			3,949			4,682
Net charge-off/average loans ratio		0.02	%		0.03	%		0.08	%		0.96	%		0.00	%		0.04	%		0.12	%
Allowance for loan losses/period-end loans		1.12			1.12			1.07			1.07			1.27
NPAs/loans and other real estate		0.49			0.75			0.88			0.96			1.14
Allowance for loan losses/nonperforming loans		229.54			149.38			121.96			110.93			110.80
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		8.81	%		8.69	%		8.63	%		8.46	%		8.40	%
Average equity to assets		9.50			9.52			9.37			9.19			9.25
Average equity to loans		14.73			14.25			14.07			13.97			13.79
Average loans to deposits		81.21			83.61			83.34			82.37			84.73
AVERAGE BALANCES
Assets	$	632,539		$	625,032		$	622,628		$	621,536		$	607,445		$	626,745		$	598,899
Earning assets		595,806			588,464			586,464			584,536			570,319			590,279			562,346
Loans		408,069			417,347			414,761			409,113			407,571			413,368			404,914
Deposits		502,514			499,157			497,646			496,670			481,017			499,791			473,486
Shareholders’ equity		60,112			59,473			58,351			57,134			56,203			59,316			54,988
ENDING BALANCES
Assets	$	632,381		$	622,956		$	625,088		$	620,981		$	610,982
Earning assets		597,476			584,510			588,174			582,629			573,701
Loans		412,974			415,198			420,861			410,903			409,908
Deposits		505,088			496,404			497,333			500,075			486,521
Shareholders’ equity		60,504			58,966			58,791			57,450			56,270

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)	September 30,			September 30,
(Dollars in thousands, except per share data)	2015			2014
ASSETS
Cash and cash equivalents
Cash and due from banks	$	11,940		$	14,578
Interest-earning deposits in other banks		27,896			22,232
Federal Funds Sold		—			—
Total cash and cash equivalents		39,836			36,810
Securities
Available-for-sale, at fair-value		115,231			98,836
Held-to-maturity		36,621			38,110
Restricted stock, at cost		4,614			4,614
Total securities		156,466			141,560
Loans held for sale		140			—
Loans		412,974			409,908
Less allowance for loan losses		4,632			5,188
Net loans		408,342			404,720
Goodwill and core deposit intangible		5,263			5,390
Bank owned life insurance		10,016			9,748
Premises and equipment, net		8,290			8,395
Accrued interest receivable and other assets		4,028			4,359
TOTAL ASSETS	$	632,381		$	610,982
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	146,001		$	131,498
Interest-bearing		359,087			355,023
Total deposits		505,088			486,521
Short-term borrowings		50,823			48,713
Other borrowings		13,602			17,118
Accrued interest payable and other liabilities		2,364			2,360
Total liabilities		571,877			554,712
Shareholders’ equity
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2015 and 2014		18,629			18,629
Additional paid-in capital		9,884			9,918
Retained earnings		36,944			33,171
Treasury stock at cost - 241,197 shares in 2015 and 242,247 in 2014		(4,871	)		(4,905	)
Accumulated other comprehensive loss		(82	)		(543	)
Total shareholders’ equity		60,504			56,270
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	632,381		$	610,982

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

	Quarter ended				Nine months ended
(Unaudited)	Sept 30,				Sept 30,
(Dollars in thousands, except per share data)	2015		2014		2015		2014
Interest and dividend income:
Loans, including fees	$	4,612	$	4,645	$	13,930	$	13,705
Taxable securities		683		661		2,041		2,182
Nontaxable securities		142		115		408		345
Other		25		14		58		23
Total interest and dividend income		5,462		5,435		16,437		16,255
Interest expense:
Deposits		271		291		815		884
Other		123		147		365		431
Total interest expense		394		438		1,180		1,315
Net interest income		5,068		4,997		15,257		14,940
Provision for loan losses		—		123		389		458
Net interest income after provision for loan losses		5,068		4,874		14,868		14,482
Noninterest income
Service charges on deposits accounts		315		324		916		937
Trust services		198		199		643		617
Debit card interchange fees		250		236		723		667
Gain on sale of loans		114		77		306		145
Gain on sale of securities		—		—		56		133
Other		242		241		709		690
Total noninterest income		1,119		1,077		3,353		3,189
Noninterest expenses
Salaries and employee benefits		2,222		2,123		6,596		6,253
Occupancy expense		252		255		777		761
Equipment expense		166		180		497		549
Franchise tax expense		106		107		305		320
Professional and director fees		173		132		665		528
Federal deposit insurance		90		90		272		267
Amortization of intangible assets		31		32		94		97
Other expenses		904		851		2,660		2,520
Total noninterest expenses		3,944		3,770		11,866		11,295
Income before income tax		2,243		2,181		6,355		6,376
Federal income tax provision		687		674		1,940		1,931
Net income	$	1,556	$	1,507	$	4,415	$	4,445
Net income per share:
Basic	$	0.57	$	0.55	$	1.61	$	1.62
Diluted	$	0.57	$	0.55	$	1.61	$	1.62