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, 2016			Quarter Ended September 30, 2015
Diluted earnings per share	$	0.61		$	0.57
Net Income	$	1,694,000		$	1,556,000
Return on average common equity		10.29	%		10.27	%
Return on average assets		1.03	%		0.98	%

Millersburg, Ohio – October 25, 2016 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2016 net income of $1,694,000 or $.61 per basic and diluted share, as compared to $1,556,000 or $.57 per basic and diluted share for the same period in 2015. For the nine month period ended September 30, 2016 net income totaled $4,785,000, compared to $4,415,000 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 10.29% and 1.03%, respectively, compared with 10.27% and 0.98% for the third quarter of 2015.

Eddie Steiner, President and CEO stated, “We are pleased to report strong third quarter earnings. As part of our commitment to generate returns for our shareholders, we have increased the quarterly dividend by 5% to $.20 per share. We expect to pay approximately $2.1 million in dividends this year, bringing total dividends paid to shareholders over the past 10 years to more than $19 million.”

Revenue, on a fully-taxable equivalent basis, totaled $6.7 million during the quarter, a 7% increase from the prior-year third quarter. Net interest income increased $429 thousand in the third quarter of 2016 compared to the same period in 2015, driven primarily by growth in average loans outstanding of $49 million and a lower cost of funds. Net interest margin of 3.61% compared favorably to 3.43% for third quarter 2015, an increase of  0.18% from the year earlier period.

Noninterest revenue declined by $24 thousand, or 2%, in the third quarter of 2016 compared to 2015. The decline reflects decreases in gain on sale of mortgage loans and service charges on deposit accounts, partially offset by increases in interchange fees and trust income.

Noninterest expense amounted to $4 million during the quarter, an increase of $50 thousand or 1% from third quarter 2015. The Company’s third quarter efficiency ratio amounted to 59.2% as compared to 62.4% for the same quarter in the prior year. Salary and employee benefits rose $97 thousand, or 4%, on a quarter over prior year quarter with increases in salary, healthcare coverage and employment taxes.

Federal income tax provision totaled $740 thousand in third quarter 2016, compared to $687 thousand for the same quarter in 2015 reflecting a slightly improved effective tax rate approximating 30% for the comparable quarters.

Average total assets during the quarter amounted to $654 million, an increase of $21 million, or 3%, above the same quarter of the prior year. Average loan balances of $457 million increased $49 million, or 12%, from the prior year third quarter while average securities balances of $145 million decreased $3 million or 2% as compared to third quarter 2015.

Average commercial loan balances for the quarter, including commercial real estate, increased $31 million, or 11%, from prior year levels. Average residential mortgage balances increased $9 million, or 11%, over the prior year’s quarter. Average home equity balances increased $4 million, or 11%, and average consumer credit balances increased $4 million, or 48%, versus the same quarter of the prior year.

Delinquent loan balances as of September 30, 2016 amounted to 0.82% of total loans as compared to 0.73% at September 30, 2015. Nonperforming assets totaled $2.8 million, or 0.62%, of total loans plus other real estate, an increase from $2.0 million, or 0.49%, of total loans plus other real estate at September 30, 2015. The allowance for loan losses amounted to 1.08% of total loans on September 30, 2016 as compared to 1.12% at September 30, 2015.

Net loan charge-offs during third quarter 2016 were $153 thousand, or 0.05% annualized, compared to third quarter 2015 net loan charge-offs of $138 thousand.

Average deposit balances for third quarter 2016 totaled $520 million, an increase of $17 million, or 3%, from the prior year’s third quarter. Within the deposit category, average noninterest-bearing account balances for the third quarter increased by $13 million, or 9%, above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $13 million, or 6%, from year ago levels, while average time deposit balances decreased $9 million, or 7%, from third quarter 2015. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the third quarter of 2016 decreased by $1 million, or 2%, compared to 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 $65.8 million on September 30, 2016 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.3% on September 30, 2016, as compared to 8.8% on September 30, 2015. The Company declared a third quarter dividend of $0.20 per share producing a yield of 3.2% based on the September 30, 2016 closing price of $25.17.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $654 million as of September 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

(Unaudited)	Quarters
(Dollars in thousands, except per share data)	2016 3rd Qtr			2016 2nd Qtr			2016 1st Qtr			2015 4th Qtr			2015 3rd Qtr			2016 9 months			2015 9 months
EARNINGS
Net interest income FTE (a)	$	5,597		$	5,539		$	5,373		$	5,262		$	5,150		$	16,509		$	15,496
Provision for loan losses		164			165			164			—			—			493			389
Other income		1,095			1,097			992			1,071			1,119			3,184			3,353
Other expenses		3,994			4,062			3,989			3,930			3,944			12,045			11,866
FTE adjustment (a)		100			93			88			89			82			281			239
Net income		1,694			1,611			1,480			1,607			1,556			4,785			4,415
Diluted earnings per share		0.61			0.59			0.54			0.59			0.57			1.74			1.61
PERFORMANCE RATIOS
Return on average assets (ROA)		1.03	%		1.00	%		0.93	%		0.98	%		0.98	%		0.99	%		0.94	%
Return on average common equity (ROE)		10.29	%		10.14	%		9.48	%		10.41	%		10.27	%		9.99	%		9.95	%
Net interest margin FTE (a)		3.61	%		3.65	%		3.57	%		3.39	%		3.43	%		3.61	%		3.51	%
Efficiency ratio		59.23	%		60.76	%		62.20	%		61.55	%		62.42	%		60.70	%		62.64	%
Number of full-time equivalent employees		165			166			162			161			161
MARKET DATA
Book value/common share	$	23.98		$	23.49		$	22.90		$	22.35		$	22.09
Period-end common share mkt value		25.17			25.20			24.25			24.50			24.20
Market as a % of book		104.96	%		107.28	%		105.90	%		109.62	%		109.55	%
Price-to-earnings ratio		10.80			11.00			10.78			11.14			11.31
Cash dividends/common share	$	0.20		$	0.19		$	0.19		$	0.19		$	0.19		$	0.58		$	0.57
Common stock dividend payout ratio		32.79	%		32.20	%		35.19	%		32.20	%		33.33	%		33.33	%		35.40	%
Average basic common shares		2,742,242			2,742,242			2,741,379			2,739,664			2,739,405			2,741,956			2,739,405
Average diluted common shares		2,742,242			2,742,242			2,741,379			2,741,243			2,742,455			2,741,956			2,742,407
Period end common shares outstanding		2,742,242			2,742,242			2,742,242			2,740,996			2,739,405
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	69,022		$	69,104		$	66,499		$	67,154		$	66,294
ASSET QUALITY
Gross charge-offs	$	346		$	18		$	10		$	104		$	95		$	374		$	244
Net (recoveries) charge-offs		318			14			(179	)		(30	)		25			153			138
Allowance for loan losses		5,002			5,156			5,005			4,662			4,632
Nonperforming assets (NPAs)		2,849			2,806			1,915			1,681			2,018
Net charge-off (recovery) /average loans ratio		0.27	%		0.01	%		(0.17	)%		(0.03	)%		0.02	%		0.05	%		0.04	%
Allowance for loan losses/period-end loans		1.08			1.14			1.15			1.10			1.12
NPAs/loans and other real estate		0.62			0.62			0.44			0.40			0.49
Allowance for loan losses/nonperforming loans		177.61			188.59			261.35			277.35			229.54
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		9.34	%		9.19	%		9.11	%		8.69	%		8.81	%
Average equity to assets		10.02			9.88			9.77			9.38			9.50
Average equity to loans		14.33			14.29			14.63			14.99			14.73
Average loans to deposits		87.89			86.71			83.55			77.95			81.21
AVERAGE BALANCES
Assets	$	653,635		$	646,642		$	640,670		$	652,725		$	632,539		$	647,007		$	626,745
Earning assets		616,555			610,138			604,911			615,725			595,806			610,556			590,279
Loans		456,865			447,009			427,916			408,524			408,069			443,977			413,368
Deposits		519,828			515,511			512,192			524,078			502,514			515,858			499,791
Shareholders’ equity		65,471			63,877			62,625			61,230			60,112			63,996			59,316
ENDING BALANCES
Assets	$	654,391		$	649,890		$	637,202		$	650,314		$	632,381
Earning assets		617,264			610,221			602,306			610,251			597,476
Loans		463,211			450,789			433,453			422,871			412,974
Deposits		522,240			516,497			509,980			525,042			505,088
Shareholders’ equity		65,751			64,407			62,796			61,266			60,504

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, 2016			September 30, 2015
(Dollars in thousands, except per share data)
ASSETS
Cash and cash equivalents
Cash and due from banks	$	14,396		$	11,940
Interest-earning deposits in other banks		13,308			27,896
Federal Funds Sold		—			—
Total cash and cash equivalents		27,704			39,836
Securities
Available-for-sale, at fair-value		112,924			115,231
Held-to-maturity		22,964			36,621
Restricted stock, at cost		4,614			4,614
Total securities		140,502			156,466
Loans held for sale		243			140
Loans		463,211			412,974
Less allowance for loan losses		5,002			4,632
Net loans		458,209			408,342
Goodwill and core deposit intangible		5,141			5,263
Bank owned life insurance		10,292			10,016
Premises and equipment, net		8,561			8,290
Accrued interest receivable and other assets		3,739			4,028
TOTAL ASSETS	$	654,391		$	632,381
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	160,947		$	146,001
Interest-bearing		361,293			359,087
Total deposits		522,240			505,088
Short-term borrowings		50,967			50,823
Other borrowings		12,476			13,602
Accrued interest payable and other liabilities		2,957			2,364
Total liabilities		588,640			571,877
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		41,224			36,944
Treasury stock at cost – 238,360 shares in 2016 and 241,197 in 2015		(4,784	)		(4,871	)
Accumulated other comprehensive gain (loss)		867			(82	)
Total shareholders’ equity		65,751			60,504
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	654,391		$	632,381

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)	Quarter ended Sept 30,				Nine months ended Sept 30,
(Dollars in thousands, except per share data)	2016		2015		2016		2015
Interest and dividend income:
Loans, including fees	$	5,042	$	4,612	$	14,750	$	13,930
Taxable securities		634		683		2,032		2,041
Nontaxable securities		163		142		482		408
Other		24		25		73		58
Total interest and dividend income		5,863		5,462		17,337		16,437
Interest expense:
Deposits		249		271		758		815
Other		117		123		351		365
Total interest expense		366		394		1,109		1,180
Net interest income		5,497		5,068		16,228		15,257
Provision for loan losses		164		—		493		389
Net interest income after provision for loan losses		5,333		5,068		15,735		14,868
Noninterest income
Service charges on deposits accounts		301		315		867		916
Trust services		213		198		657		643
Debit card interchange fees		270		250		803		723
Gain on sale of loans		71		114		221		306
Gain on sale of securities		1		—		1		56
Other		239		242		635		709
Total noninterest income		1,095		1,119		3,184		3,353
Noninterest expenses
Salaries and employee benefits		2,319		2,222		6,945		6,596
Occupancy expense		229		252		707		777
Equipment expense		170		166		513		497
Professional and director fees		221		173		584		665
Software expense		203		198		587		600
Marketing and public relations		94		111		322		286
Debit card expense		120		102		338		310
Other expenses		638		720		2,049		2,135
Total noninterest expenses		3,994		3,944		12,045		11,866
Income before income tax		2,434		2,243		6,874		6,355
Federal income tax provision		740		687		2,089		1,940
Net income	$	1,694	$	1,556	$	4,785	$	4,415
Net income per share:
Basic	$	0.61	$	0.57	$	1.74	$	1.61
Diluted	$	0.61	$	0.57	$	1.74	$	1.61