Exhibit 99.1
CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS
Second Quarter Highlights
Quarter Ended June 30, 2016 | Quarter Ended June 30, 2015 | |||||||
Diluted earnings per share | $ | 0.59 | $ | 0.55 | ||||
Net Income | $ | 1,611,000 | $ | 1,517,000 | ||||
Return on average common equity | 10.14 | % | 10.23 | % | ||||
Return on average assets | 1.00 | % | 0.97 | % |
Millersburg, Ohio – July 26, 2016 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2016 net income of $1,611,000 or $.59 per basic and diluted share, as compared to $1,517,000 or $.55 per basic and diluted share for the same period in 2015. For the six month period ended June 30, 2016 net income totaled $3,091,000, compared to $2,859,000 for the same period last year an increase of 8%.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.14% and 1.00%, respectively, compared with 10.23% and 0.97% for the second quarter of 2015.
Eddie Steiner, President and CEO stated, “We are pleased to report record second quarter earnings on the strength of increased revenue. Demand for consumer and business loans is steady and credit quality remains acceptable.”
Revenue, on a fully-taxable equivalent basis, totaled $6.6 million during the quarter, a 3% increase from the prior-year second quarter. Net interest income increased $271 thousand in the second quarter of 2016 compared to the same period in 2015, driven primarily by growth in average loans outstanding of $30 million and a lower cost of funds. As a result, the net interest margin improved by .07% to 3.65% during the second quarter of 2016 from 3.58% a year earlier.
Noninterest revenue declined by $83 thousand, or 7%, in the second quarter of 2016 compared to 2015. The decline reflects a decrease in service charges on deposit accounts, a $25 thousand loss on fixed asset retirement and reductions in gains on the sale of securities and mortgage loans. These reductions were partially offset by increases in interchange fees.
Noninterest expense amounted to $4 million during the quarter, an increase of $88 thousand or 2% from second quarter 2015. The Company’s second quarter efficiency ratio amounted to 60.8% as compared to 61.5% for the same quarter in the prior year. Salary and employee benefits rose $75 thousand, or 3%, on a quarter over prior year quarter with increases in base salary, healthcare coverage and employment taxes.
Federal income tax provision totaled $705 thousand in second quarter 2016, compared to $669 thousand for the same quarter in 2015 reflecting a slightly improved effective tax rate of 30% for the comparable quarters.
Average total assets during the quarter amounted to $647 million, an increase of $22 million or 3% above the same quarter of the prior year. Average loan balances of $447 million increased $30 million, or 7%, from the prior year second quarter while average securities balances of $151 million increased $3 million or 2% as compared to second quarter 2015.
Average commercial loan balances for the quarter, including commercial real estate, increased $20 million, or 7%, from prior year levels. Average residential mortgage balances increased $4 million, or 4%, over the prior year’s quarter. Average home equity balances increased $3 million, or 8%, and average consumer credit balances increased $3 million, or 36%, versus the same quarter of the prior year.
Delinquent loan balances as of June 30, 2016 amounted to 0.82% of total loans as compared to 1.06% at June 30, 2015. Nonperforming assets totaled $2.8 million, or 0.62%, of total loans plus other real estate, a decrease from $3.1 million, or 0.75%, of total loans plus other real estate at June 30, 2015. The allowance for loan losses amounted to 1.14% of total loans on June 30, 2016.
Net loan charge-offs during second quarter 2016 were $14 thousand, or 0.01% annualized, compared to second quarter 2015 net loan charge-offs of $32 thousand.
Average deposit balances for second quarter 2016 totaled $516 million, an increase of $16 million, or 3%, from the prior year’s second quarter. Within the deposit category, average noninterest-bearing account balances for the second quarter increased by $14 million, or 11%, above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $11 million, or 5%, from year ago levels, while average time deposit balances decreased $9 million, or 7%, from second quarter 2015. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the second quarter of 2016 increased by $1 million, or 2%, above the average for the same period in the prior year. Repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.
Shareholders’ equity totaled $64.4 million on June 30, 2016 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.2% on June 30, 2016, as compared to 8.7% on June 30, 2015. The Company declared a second quarter dividend of $0.19 per share producing a yield of 3.0% based on the June 30, 2016 closing price of $25.20.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $650 million as of June 30, 2016. 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, North Canton 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
Quarters | ||||||||||||||||||||||||||||
(Unaudited) (Dollars in thousands, except per share data) | 2016 2nd Qtr | 2016 1st Qtr | 2015 4th Qtr | 2015 3rd Qtr | 2015 2nd Qtr | 2016 6 months | 2015 6 months | |||||||||||||||||||||
EARNINGS | ||||||||||||||||||||||||||||
Net interest income FTE (a) | $ | 5,539 | $ | 5,373 | $ | 5,262 | $ | 5,150 | $ | 5,255 | $ | 10,912 | $ | 10,346 | ||||||||||||||
Provision for loan losses | 165 | 164 | — | — | 195 | 329 | 389 | |||||||||||||||||||||
Other income | 1,097 | 992 | 1,071 | 1,119 | 1,180 | 2,089 | 2,234 | |||||||||||||||||||||
Other expenses | 4,062 | 3,989 | 3,930 | 3,944 | 3,974 | 8,051 | 7,922 | |||||||||||||||||||||
FTE adjustment (a) | 93 | 88 | 89 | 82 | 80 | 181 | 157 | |||||||||||||||||||||
Net income | 1,611 | 1,480 | 1,607 | 1,556 | 1,517 | 3,091 | 2,859 | |||||||||||||||||||||
Diluted earnings per share | 0.59 | 0.54 | 0.59 | 0.57 | 0.55 | 1.13 | 1.04 | |||||||||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
Return on average assets (ROA) | 1.00 | % | 0.93 | % | 0.98 | % | 0.98 | % | 0.97 | % | 0.97 | % | 0.92 | % | ||||||||||||||
Return on average common equity (ROE) | 10.14 | % | 9.48 | % | 10.41 | % | 10.27 | % | 10.23 | % | 9.83 | % | 9.79 | % | ||||||||||||||
Net interest margin FTE (a) | 3.65 | % | 3.57 | % | 3.39 | % | 3.43 | % | 3.58 | % | 3.61 | % | 3.55 | % | ||||||||||||||
Efficiency ratio | 60.76 | % | 62.20 | % | 61.55 | % | 62.42 | % | 61.47 | % | 61.46 | % | 62.76 | % | ||||||||||||||
Number of full-time equivalent employees | 166 | 162 | 161 | 161 | 163 | |||||||||||||||||||||||
MARKET DATA | ||||||||||||||||||||||||||||
Book value/common share | $ | 23.49 | $ | 22.90 | $ | 22.35 | $ | 22.09 | $ | 21.53 | ||||||||||||||||||
Period-end common share mkt value | 25.20 | 24.25 | 24.50 | 24.20 | 25.00 | |||||||||||||||||||||||
Market as a % of book | 107.28 | % | 105.90 | % | 109.62 | % | 109.55 | % | 116.12 | % | ||||||||||||||||||
Price-to-earnings ratio | 11.00 | 10.78 | 11.14 | 11.31 | 11.79 | |||||||||||||||||||||||
Cash dividends/common share | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.19 | $ | 0.38 | $ | 0.38 | ||||||||||||||
Common stock dividend payout ratio | 32.20 | % | 35.19 | % | 32.20 | % | 33.33 | % | 34.54 | % | 33.63 | % | 36.54 | % | ||||||||||||||
Average basic common shares | 2,742,242 | 2,741,379 | 2,739,664 | 2,739,405 | 2,739,405 | 2,741,811 | 2,739,405 | |||||||||||||||||||||
Average diluted common shares | 2,742,242 | 2,741,379 | 2,741,243 | 2,742,455 | 2,742,738 | 2,741,811 | 2,742,381 | |||||||||||||||||||||
Period end common shares outstanding | 2,742,242 | 2,742,242 | 2,740,996 | 2,739,405 | 2,739,405 | |||||||||||||||||||||||
Common shares repurchased | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Common stock market capitalization | $ | 69,104 | $ | 66,499 | $ | 67,154 | $ | 66,294 | $ | 68,485 | ||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||
Gross charge-offs | $ | 18 | $ | 10 | $ | 104 | $ | 95 | $ | 39 | $ | 28 | $ | 149 | ||||||||||||||
Net (recoveries) charge-offs | 14 | (179 | ) | (30 | ) | 25 | 32 | (165 | ) | 113 | ||||||||||||||||||
Allowance for loan losses | 5,156 | 5,005 | 4,662 | 4,632 | 4,656 | |||||||||||||||||||||||
Nonperforming assets (NPAs) | 2,806 | 1,915 | 1,681 | 2,018 | 3,117 | |||||||||||||||||||||||
Net charge-off (recovery) /average loans ratio | 0.01 | % | (0.17 | )% | (0.03 | )% | 0.02 | % | 0.03 | % | (0.08 | )% | 0.05 | % | ||||||||||||||
Allowance for loan losses/period-end loans | 1.14 | 1.15 | 1.10 | 1.12 | 1.12 | |||||||||||||||||||||||
NPAs/loans and other real estate | 0.62 | 0.44 | 0.40 | 0.49 | 0.75 | |||||||||||||||||||||||
Allowance for loan losses/nonperforming loans | 188.59 | 261.35 | 277.35 | 229.54 | 149.38 | |||||||||||||||||||||||
CAPITAL & LIQUIDITY | ||||||||||||||||||||||||||||
Period-end tangible equity to assets | 9.19 | % | 9.11 | % | 8.69 | % | 8.81 | % | 8.69 | % | ||||||||||||||||||
Average equity to assets | 9.88 | 9.77 | 9.38 | 9.50 | 9.52 | |||||||||||||||||||||||
Average equity to loans | 14.29 | 14.63 | 14.99 | 14.73 | 14.25 | |||||||||||||||||||||||
Average loans to deposits | 86.71 | 83.55 | 77.95 | 81.21 | 83.61 | |||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||
Assets | $ | 646,642 | $ | 640,670 | $ | 652,725 | $ | 632,539 | $ | 625,032 | $ | 643,656 | $ | 623,800 | ||||||||||||||
Earning assets | 610,138 | 604,911 | 615,725 | 595,806 | 588,464 | 607,524 | 587,475 | |||||||||||||||||||||
Loans | 447,009 | 427,916 | 408,524 | 408,069 | 417,347 | 437,462 | 416,062 | |||||||||||||||||||||
Deposits | 515,511 | 512,192 | 524,078 | 502,514 | 499,157 | 513,851 | 498,407 | |||||||||||||||||||||
Shareholders’ equity | 63,877 | 62,625 | 61,230 | 60,112 | 59,473 | 63,251 | 58,912 | |||||||||||||||||||||
ENDING BALANCES | ||||||||||||||||||||||||||||
Assets | $ | 649,890 | $ | 637,202 | $ | 650,314 | $ | 632,381 | $ | 622,956 | ||||||||||||||||||
Earning assets | 610,221 | 602,306 | 610,251 | 597,476 | 584,510 | |||||||||||||||||||||||
Loans | 450,789 | 433,453 | 422,871 | 412,974 | 415,198 | |||||||||||||||||||||||
Deposits | 516,497 | 509,980 | 525,042 | 505,088 | 496,404 | |||||||||||||||||||||||
Shareholders’ equity | 64,407 | 62,796 | 61,266 | 60,504 | 58,966 |
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) | June 30, | June 30, | ||||||
(Dollars in thousands, except per share data) | 2016 | 2015 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | ||||||||
Cash and due from banks | $ | 16,859 | $ | 15,244 | ||||
Interest-earning deposits in other banks | 11,268 | 23,672 | ||||||
Federal Funds Sold | — | — | ||||||
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Total cash and cash equivalents | 28,127 | 38,916 | ||||||
Securities | ||||||||
Available-for-sale, at fair-value | 119,355 | 107,409 | ||||||
Held-to-maturity | 23,845 | 33,554 | ||||||
Restricted stock, at cost | 4,614 | 4,614 | ||||||
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Total securities | 147,814 | 145,577 | ||||||
Loans held for sale | 350 | 63 | ||||||
Loans | 450,789 | 415,198 | ||||||
Less allowance for loan losses | 5,156 | 4,656 | ||||||
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Net loans | 445,633 | 410,542 | ||||||
Goodwill and core deposit intangible | 5,172 | 5,295 | ||||||
Bank owned life insurance | 10,222 | 9,948 | ||||||
Premises and equipment, net | 8,660 | 8,374 | ||||||
Accrued interest receivable and other assets | 3,912 | 4,241 | ||||||
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TOTAL ASSETS | $ | 649,890 | $ | 622,956 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 156,365 | $ | 139,603 | ||||
Interest-bearing | 360,132 | 356,801 | ||||||
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Total deposits | 516,497 | 496,404 | ||||||
Short-term borrowings | 54,125 | 51,702 | ||||||
Other borrowings | 12,574 | 13,738 | ||||||
Accrued interest payable and other liabilities | 2,287 | 2,146 | ||||||
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Total liabilities | 585,483 | 563,990 | ||||||
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Shareholders’ equity | ||||||||
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2016 and 2015 | 18,629 | 18,629 | ||||||
Additional paid-in capital | 9,815 | 9,884 | ||||||
Retained earnings | 40,079 | 35,908 | ||||||
Treasury stock at cost - 238,360 shares in 2016 and 241,197 in 2015 | (4,784 | ) | (4,871 | ) | ||||
Accumulated other comprehensive gain (loss) | 668 | (584 | ) | |||||
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Total shareholders’ equity | 64,407 | 58,966 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 649,890 | $ | 622,956 | ||||
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CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) | Quarter ended June 30, | Six months ended June 30, | ||||||||||||||
(Dollars in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Interest and dividend income: | ||||||||||||||||
Loans, including fees | $ | 4,966 | $ | 4,744 | $ | 9,708 | $ | 9,318 | ||||||||
Taxable securities | 662 | 670 | 1,398 | 1,357 | ||||||||||||
Nontaxable securities | 165 | 137 | 319 | 267 | ||||||||||||
Other | 20 | 17 | 49 | 33 | ||||||||||||
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Total interest and dividend income | 5,813 | 5,568 | 11,474 | 10,975 | ||||||||||||
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Interest expense: | ||||||||||||||||
Deposits | 250 | 272 | 509 | 544 | ||||||||||||
Other | 117 | 121 | 234 | 242 | ||||||||||||
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Total interest expense | 367 | 393 | 743 | 786 | ||||||||||||
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Net interest income | 5,446 | 5,175 | 10,731 | 10,189 | ||||||||||||
Provision for loan losses | 165 | 195 | 329 | 389 | ||||||||||||
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Net interest income after provision for loan losses | 5,281 | 4,980 | 10,402 | 9,800 | ||||||||||||
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Noninterest income | ||||||||||||||||
Service charges on deposits accounts | 288 | 315 | 566 | 601 | ||||||||||||
Trust services | 218 | 243 | 444 | 445 | ||||||||||||
Debit card interchange fees | 271 | 246 | 533 | 473 | ||||||||||||
Gain on sale of loans | 118 | 122 | 150 | 192 | ||||||||||||
Gain on sale of securities | — | 21 | — | 56 | ||||||||||||
Other | 202 | 233 | 396 | 467 | ||||||||||||
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Total noninterest income | 1,097 | 1,180 | 2,089 | 2,234 | ||||||||||||
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Noninterest expenses | ||||||||||||||||
Salaries and employee benefits | 2,299 | 2,224 | 4,626 | 4,374 | ||||||||||||
Occupancy expense | 233 | 258 | 477 | 525 | ||||||||||||
Equipment expense | 169 | 165 | 343 | 331 | ||||||||||||
Professional and director fees | 189 | 202 | 363 | 492 | ||||||||||||
Software expense | 198 | 213 | 384 | 402 | ||||||||||||
Marketing and public relations | 143 | 99 | 228 | 175 | ||||||||||||
Debit card expense | 114 | 108 | 218 | 208 | ||||||||||||
Other expenses | 717 | 705 | 1,412 | 1,415 | ||||||||||||
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Total noninterest expenses | 4,062 | 3,974 | 8,051 | 7,922 | ||||||||||||
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Income before income tax | 2,316 | 2,186 | 4,440 | 4,112 | ||||||||||||
Federal income tax provision | 705 | 669 | 1,349 | 1,253 | ||||||||||||
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Net income | $ | 1,611 | $ | 1,517 | $ | 3,091 | $ | 2,859 | ||||||||
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Net income per share: | ||||||||||||||||
Basic | $ | 0.59 | $ | 0.55 | $ | 1.13 | $ | 1.04 | ||||||||
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Diluted | $ | 0.59 | $ | 0.55 | $ | 1.13 | $ | 1.04 | ||||||||
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