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

Exhibit 99.1

CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS

Fourth Quarter Highlights

	Quarter Ended December 31, 2016			Quarter Ended December 31, 2015
Diluted earnings per share	$	0.72		$	0.59
Net Income	$	1,953,000		$	1,607,000
Return on average common equity		11.76	%		10.41	%
Return on average assets		1.17	%		0.98	%

Millersburg, Ohio – January 25, 2017 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced fourth quarter 2016 net income of $1,953,000, or $.72 per basic and diluted share, as compared to $1,607,000, or $.59 per basic and diluted share, for the same period in 2015. For the twelve month period ended December 31, 2016 net income totaled $6,738,000, compared to $6,022,000 for the same period last year, an increase of 12%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 11.76% and 1.17%, respectively, compared with 10.41% and 0.98% for the fourth quarter of 2015. ROE and ROA for the full year of 2016 were 10.44% and 1.03%, respectively, compared with 10.07% and 0.95% for the same period in 2015.

Eddie Steiner, President and CEO stated, “We are pleased to report strong fourth quarter earnings. Demand for business and consumer loans in our markets has improved for several quarters as compared to prior year levels, resulting in a higher level of earning assets.”

Revenue, on a fully-taxable equivalent basis, totaled $7.1 million during the quarter, a 13% increase from the prior-year fourth quarter. Net interest income increased $758 thousand, or 15%, in the fourth quarter of 2016 compared to the same period in 2015. Loan interest income including fees increased $910 thousand during fourth quarter 2016 as compared to the same quarter in 2015. This increase was driven partially by $418 thousand of one-time loan interest recovery, purchase discount, and premium recognition on loans being paid off as well as an increase in average loan volume of $55 million across all categories of loans. The net interest margin of 3.83% compared favorably to 3.39% for fourth quarter 2015. Excluding the one-time events of $418 thousand, fourth quarter 2016 net interest margin would have been 3.57%.

Noninterest revenue increased by $41 thousand, or 4%, in the fourth quarter of 2016 compared to 2015. The increase reflects growth in the gain on sale of mortgage loans, increases in debit card fee income, and service charges on deposit accounts. The increases were partially offset by a decrease in trust and brokerage fee income.

Noninterest expense amounted to $4 million during the quarter, an increase of $280 thousand, or 7%, from fourth quarter 2015. The Company’s fourth quarter efficiency ratio amounted to 58.6% as compared to 61.6% for the same quarter in the prior year. Salary and employee benefits rose $186 thousand, or 8%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes.

Federal income tax provision totaled $880 thousand in fourth quarter 2016, compared to $707 thousand for the same quarter in 2015 reflecting a slightly increased effective tax rate in 2016 for increased taxable income.

Average total assets during the quarter amounted to $664 million, an increase of $11 million, or 2%, above the same quarter of the prior year. Average loan balances of $464 million increased $55 million, or 14%, from the prior year fourth quarter while average securities balances of $134 million decreased $28 million, or 17%, as compared to fourth quarter 2015.

Average commercial loan balances for the quarter, including commercial real estate, increased $32 million, or 12%, from prior year levels. Average residential mortgage balances increased $15 million, or 19%, over the prior year’s quarter. Average home equity balances increased $4 million, or 10%, and average consumer credit balances increased $4 million, or 42%, versus the same quarter of the prior year.

Delinquent loan balances as of December 31, 2016 amounted to 0.68% of total loans as compared to 0.67% at December 31, 2015. Nonperforming assets totaled $1.7 million, or 0.35%, of total loans plus other real estate, an increase of $3 thousand over total loans plus other real estate at December 31, 2015. The allowance for loan losses amounted to 1.11% of total loans on December 31, 2016 as compared to 1.10% at December 31, 2015.

Net loan recoveries recognized during fourth quarter 2016 were $289 thousand, or (0.25)% annualized, compared to fourth quarter 2015 net loan recoveries of $30 thousand.

Average deposit balances for fourth quarter 2016 totaled $532 million, an increase of $8 million, or 2%, from the prior year’s fourth quarter. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $11 million, or 7%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $5 million, or 2%, from year ago levels, while average time deposit balances decreased $8 million, or 6%, from fourth quarter 2015. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth 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 $65.4 million on December 31, 2016 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.1% on December 31, 2016, as compared to 8.7% on December 31, 2015. The Company declared a fourth quarter dividend of $0.20 per share producing an annualized yield of 2.6% based on the December 31, 2016 closing price of $31.00.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $670 million as of December 31, 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 4th Qtr			2016 3rd Qtr			2016 2nd Qtr			2016 1st Qtr			2015 4th Qtr			2016 12 months			2015 12 months
EARNINGS
Net interest income FTE (a)	$	6,022		$	5,597		$	5,539		$	5,373		$	5,262		$	22,531		$	20,758
Provision for loan losses		—			164			165			164			—			493			389
Other income		1,112			1,095			1,097			992			1,071			4,296			4,424
Other expenses		4,210			3,994			4,062			3,989			3,930			16,255			15,796
FTE adjustment (a)		91			100			93			88			89			372			328
Net income		1,953			1,694			1,611			1,480			1,607			6,738			6,022
Diluted earnings per share		0.72			0.61			0.59			0.54			0.59			2.46			2.20
PERFORMANCE RATIOS
Return on average assets (ROA)		1.17	%		1.03	%		1.00	%		0.93	%		0.98	%		1.03	%		0.95	%
Return on average common equity (ROE)		11.76	%		10.29	%		10.14	%		9.48	%		10.41	%		10.44	%		10.07	%
Net interest margin FTE (a)		3.83	%		3.61	%		3.65	%		3.57	%		3.39	%		3.67	%		3.48	%
Efficiency ratio		58.59	%		59.23	%		60.76	%		62.20	%		61.55	%		60.14	%		62.37	%
Number of full-time equivalent employees		165			165			166			162			161
MARKET DATA
Book value/common share	$	23.85		$	23.98		$	23.49		$	22.90		$	22.35
Period-end common share mkt value		31.00			25.17			25.20			24.25			24.50
Market as a % of book		129.98	%		104.96	%		107.28	%		105.90	%		109.62	%
Price-to-earnings ratio		12.60			10.80			11.00			10.78			11.14
Cash dividends/common share	$	0.20		$	0.20		$	0.19		$	0.19		$	0.19		$	0.78		$	0.76
Common stock dividend payout ratio		27.78	%		32.79	%		32.20	%		35.19	%		32.20	%		31.71	%		34.55	%
Average basic common shares		2,742,242			2,742,242			2,742,242			2,741,379			2,739,664			2,742,028			2,739,470
Average diluted common shares		2,742,242			2,742,242			2,742,242			2,741,379			2,741,243			2,742,028			2,742,108
Period end common shares outstanding		2,742,242			2,742,242			2,742,242			2,742,242			2,740,996
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	85,010		$	69,022		$	69,104		$	66,499		$	67,154
ASSET QUALITY
Gross charge-offs	$	44		$	346		$	18		$	10		$	104		$	418		$	348
Net (recoveries) charge-offs		(289	)		318			14			(179	)		(30	)		(136	)		108
Allowance for loan losses		5,291			5,002			5,156			5,005			4,662
Nonperforming assets (NPAs)		1,684			2,849			2,806			1,915			1,681
Net charge-off (recovery) /average loans ratio		(0.25	)%		0.27	%		0.01	%		(0.17	)%		(0.03	)%		(0.03	)%		0.03	%
Allowance for loan losses/period-end loans		1.11			1.08			1.14			1.15			1.10
NPAs/loans and other real estate		0.35			0.62			0.62			0.44			0.40
Allowance for loan losses/nonperforming loans		314.19			177.61			188.59			261.35			277.35
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		9.07	%		9.34	%		9.19	%		9.11	%		8.69	%
Average equity to assets		9.95			10.02			9.88			9.77			9.38
Average equity to loans		14.25			14.33			14.29			14.63			14.99
Average loans to deposits		87.15			87.89			86.71			83.55			77.95
AVERAGE BALANCES
Assets	$	664,158		$	653,635		$	646,642		$	640,670		$	652,725		$	651,318		$	633,298
Earning assets		625,320			616,555			610,138			604,911			615,725			614,268			596,705
Loans		463,725			456,865			447,009			427,916			408,524			448,941			412,147
Deposits		532,102			519,828			515,511			512,192			524,078			519,941			505,913
Shareholders’ equity		66,094			65,471			63,877			62,625			61,230			64,524			59,799
ENDING BALANCES
Assets	$	669,978		$	654,391		$	649,890		$	637,202		$	650,314
Earning assets		631,069			617,264			610,221			602,306			610,251
Loans		475,449			463,211			450,789			433,453			422,871
Deposits		540,785			522,240			516,497			509,980			525,042
Shareholders’ equity		65,415			65,751			64,407			62,796			61,266

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)	December 31, 2016			December 31, 2015
(Dollars in thousands, except per share data)
ASSETS
Cash and cash equivalents
Cash and due from banks	$	13,590		$	17,341
Interest-earning deposits in other banks		23,248			20,931
Federal Funds Sold		—			—
Total cash and cash equivalents		36,838			38,272
Securities
Available-for-sale, at fair-value		103,875			127,969
Held-to-maturity		23,883			33,819
Restricted stock, at cost		4,614			4,614
Total securities		132,372			166,402
Loans held for sale		—			47
Loans		475,449			422,871
Less allowance for loan losses		5,291			4,662
Net loans		470,158			418,209
Goodwill and core deposit intangible		5,111			5,232
Bank owned life insurance		10,361			10,085
Premises and equipment, net		8,749			8,209
Accrued interest receivable and other assets		6,389			3,858
TOTAL ASSETS	$	669,978		$	650,314
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	167,824		$	151,549
Interest-bearing		372,961			373,493
Total deposits		540,785			525,042
Short-term borrowings		48,742			48,598
Other borrowings		12,385			13,465
Accrued interest payable and other liabilities		2,651			1,943
Total liabilities		604,563			589,048
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			9,846
Retained earnings		42,629			38,030
Treasury stock at cost – 238,360 shares in 2016 and 239,606 in 2015		(4,784	)		(4,822	)
Accumulated other comprehensive loss		(874	)		(417	)
Total shareholders’ equity		65,415			61,266
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	669,978		$	650,314

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)	Quarter ended December 31,				Twelve months ended December 31,
(Dollars in thousands, except per share data)	2016		2015		2016			2015
Interest and dividend income:
Loans, including fees	$	5,528	$	4,618	$	20,278		$	18,548
Taxable securities		566		749		2,598			2,790
Nontaxable securities		163		154		646			563
Other		38		38		110			96
Total interest and dividend income		6,295		5,559		23,632			21,997
Interest expense:
Deposits		248		266		1,006			1,081
Other		116		120		467			486
Total interest expense		364		386		1,473			1,567
Net interest income		5,931		5,173		22,159			20,430
Provision for loan losses		—		—		493			389
Net interest income after provision for loan losses		5,931		5,173		21,666			20,041
Noninterest income
Service charges on deposits accounts		299		287		1,166			1,203
Trust services		205		217		861			860
Debit card interchange fees		284		265		1,087			988
Gain on sale of loans		88		57		309	��		363
Gain on sale of securities		—		—		1			56
Other		236		245		872			954
Total noninterest income		1,112		1,071		4,296			4,424
Noninterest expenses
Salaries and employee benefits		2,409		2,223		9,354			8,819
Occupancy expense		266		251		973			1,027
Equipment expense		165		166		679			663
Professional and director fees		248		165		832			830
Software expense		212		202		799			801
Marketing and public relations		93		133		415			419
Debit card expense		107		103		445			413
Other expenses		710		687		2,758			2,824
Total noninterest expenses		4,210		3,930		16,255			15,796
Income before income tax		2,833		2,314		9,707			8,669
Federal income tax provision		880		707		2,969			2,647
Net income	$	1,953	$	1,607	$	6,738		$	6,022
Net income per share:
Basic	$	0.72	$	0.59	$	2.46		$	2.20
Diluted	$	0.72	$	0.59	$	2.46		$	2.20