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, 2017			Quarter Ended December 31, 2016
Diluted earnings per share	$	0.65		$	0.72
Net Income	$	1,779,000		$	1,953,000
Return on average common equity		10.02	%		11.76	%
Return on average assets		0.99	%		1.17	%

Millersburg, Ohio – January 25, 2018 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced fourth quarter 2017 net income of $1,779,000, or $.65 per basic and diluted share, as compared to $1,953,000, or $.72 per basic and diluted share, for the same period in 2016. The Company recognized a $101,000 impact as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”) in the fourth quarter of 2017, resulting in a $0.04 per share decrease in earnings. Excluding the impact of the TCJA, net income would have been $1,880,000. For the twelve month period ended December 31, 2017 net income totaled $7,101,000, compared to $6,738,000 for the same period last year an increase of 5%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.02% and 0.99%, respectively, compared with 11.76% and 1.17% for the fourth quarter of 2016.

Eddie Steiner, President and CEO stated, “Loan and deposit balances continued to grow at a fairly steady pace through the fourth quarter. Net interest margin, compared to the same quarter in the prior year, improved for the eighth consecutive quarter.”

Revenue, on a fully-taxable equivalent basis, totaled $7.7 million during the quarter, a 7% increase from the prior-year fourth quarter. Net interest income increased $505 thousand, or 9%, in the fourth quarter of 2017 compared to the same period in 2016.

Loan interest income including fees increased $629 thousand during fourth quarter 2017 as compared to the same quarter in 2016. The current quarter’s loan interest income was favorably impacted by $196 thousand in interest and late charges attributable to payoffs of several loan relationships that had been on nonaccrual. Fourth quarter 2016 loan interest income had by comparison included several payoff recoveries and net purchase discount recognition totaling $413 thousand. Additionally, average total loan balances during the current quarter were $48 million higher than the year ago quarter.

The net interest margin was 3.84% compared to 3.83% for fourth quarter 2016. Excluding the nonaccrual and purchase discounts the net interest margin for fourth quarter 2017 and 2016 would have been 3.73% and 3.57%, respectively.

Noninterest income increased by $8 thousand, or 1%, in the fourth quarter of 2017 compared to 2016. The increase reflects growth in debit card fee income and gain on sale of loans. The increase in other income was partially offset by a decline in service charges on deposit accounts and an impairment loss on leasehold assets. Trust and brokerage fees stabilized in the fourth quarter following a year-long decline resulting from broker and administrative changes within the unit.

Noninterest expense amounted to $4.7 million during the quarter, an increase of $486 thousand, or 12%, from fourth quarter 2016. Salary and employee benefits rose $138 thousand, or 6%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes. Professional fees increased by $55 thousand, or 22%, resulting from increased internal audit fees, retained search fees, director fees, and legal fees for loan collection. Marketing and public relations expense increased by $49 thousand, or 53%, on a quarter over quarter basis with expanded channel advertising and increasing community donations. The Company’s fourth quarter efficiency ratio was 61.0% as compared to 58.6% for the same quarter in the prior year.

Federal income tax provision totaled $901 thousand in fourth quarter 2017, including the TCJA income tax increase adjustment of $101 thousand, as compared to $880 thousand tax provision for the same quarter in 2016.

Average total assets during the quarter amounted to $716 million, an increase of $52 million, or 8%, above the same quarter of the prior year. Average loan balances of $512 million increased $48 million, or 10%, from the prior year fourth quarter while average securities balances of $128 million decreased $7 million, or 5%, as compared to fourth quarter 2016.

Average commercial loan balances for the quarter, including commercial real estate, increased $30 million, or 10%, from prior year levels. Average residential mortgage balances increased $14 million, or 14%, over the prior year’s quarter. Average consumer credit balances increased $3 million, or 26%, versus the same quarter of the prior year.

Delinquent loan balances as of December 31, 2017 amounted to 1.53% of total loans as compared to 0.68% at December 31, 2016. Nonperforming assets totaled $6.5 million, or 1.26%, of total loans plus other real estate, an increase of $5 million over December 31, 2016. Approximately $2.9 million of thenon-performing loan total is guaranteed by either USDA or the SBA. The increase in nonperforming loans year over year is primarily due to three lending relationships comprised of several loans. All nonperforming loans have been reviewed for impairment, or additional charge-down if collateral dependent, at December 31, 2017. Current impairment on these loans approximates $220 thousand. The allowance for loan losses amounted to 1.08% of total loans on December 31, 2017 as compared to 1.11% at December 31, 2016.

Net loan losses recognized during fourth quarter 2017 were $12 thousand, or 0.01% annualized, compared to fourth quarter 2016 net loan recoveries of $289 thousand.

Average deposit balances for fourth quarter 2017 totaled $579 million, an increase of $47 million, or 9%, from the prior year’s fourth quarter. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $1 million, or 1%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $48 million, or 20%, from year ago levels, while average time deposit balances decreased $2 million, or 2%, from fourth quarter 2016. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth quarter of 2017 decreased by $8 million, or 15%, compared to the average for the same period in the prior year. During 2017, a new corporate overnight cash management product was established within interest-bearing checking and at December 31, 2017 the new product had balances of $21.8 million.

Shareholders’ equity totaled $70.5 million on December 31, 2017 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.3% on December 31, 2017 and 9.1% on December 31, 2016. The Company declared a fourth quarter dividend of $0.22 per share producing an annualized yield of 2.7% based on the December 31, 2017 closing price of $33.11.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $707 million as of December 31, 2017. 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 fifteen 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)	2017 4th Qtr			2017 3rd Qtr			2017 2nd Qtr			2017 1st Qtr			2016 4th Qtr			2017 12 months			2016 12 months
EARNINGS
Net interest income FTE (a)	$	6,532		$	6,300		$	6,046		$	5,955		$	6,022		$	24,833		$	22,531
Provision for loan losses		180			280			845			(160	)		—			1,145			493
Other income		1,120			1,054			1,060			1,106			1,112			4,340			4,296
Other expenses		4,696			4,286			3,688			4,646			4,210			17,316			16,255
FTE adjustment (a)		96			96			96			93			91			381			372
Net income		1,779			1,866			1,726			1,730			1,953			7,101			6,738
Diluted earnings per share		0.65			0.68			0.63			0.63			0.72			2.59			2.46
PERFORMANCE RATIOS
Return on average assets (ROA)		0.99	%		1.05	%		1.01	%		1.05	%		1.17	%		1.02	%		1.03	%
Return on average common equity (ROE)		10.02	%		10.62	%		10.15	%		10.54	%		11.76	%		10.33	%		10.44	%
Net interest margin FTE (a)		3.84	%		3.77	%		3.75	%		3.85	%		3.83	%		3.80	%		3.67	%
Efficiency ratio		60.99	%		57.89	%		51.49	%		65.39	%		58.59	%		58.96	%		60.14	%
Number of full-time equivalent employees		174			169			169			164			165
MARKET DATA
Book value/common share	$	25.72		$	25.47		$	25.06		$	24.41		$	23.85
Period-end common share mkt value		33.11			30.50			30.60			31.00			31.00
Market as a         % of book		128.73	%		119.75	%		122.11	%		127.00	%		129.98	%
Price-to-earnings ratio		12.78			11.47			11.81			12.16			12.60
Cash dividends/common share	$	0.22		$	0.22		$	0.20		$	0.20		$	0.20		$	0.84		$	0.78
Common stock dividend payout ratio		33.85	%		32.35	%		31.75	%		31.75	%		27.78	%		32.43	%		31.71	%
Average basic common shares		2,742,242			2,742,242			2,742,242			2,742,242			2,742,242			2,742,242			2,742,028
Average diluted common shares		2,742,242			2,742,242			2,742,242			2,742,242			2,742,242			2,742,242			2,742,028
Period end common shares outstanding		2,742,242			2,742,242			2,742,242			2,742,242			2,742,242
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	90,796		$	83,638		$	83,913		$	85,010		$	85,010
ASSET QUALITY
Gross charge-offs	$	19		$	1,138		$	34		$	13		$	44		$	1,204		$	418
Net charge-offs (recoveries)		12			1,133			10			(323	)		(289	)		832			(136	)
Allowance for loan losses		5,604			5,436			6,289			5,454			5,291
Nonperforming assets (NPAs)		6,522			4,930			6,036			4,909			1,684
Net charge-off (recovery) /average loans ratio		0.01	%		0.89	%		0.01	%		(0.27	)%		(0.25	)%		0.17	%		(0.03	)%
Allowance for loan losses/period-end loans		1.08			1.07			1.26			1.13			1.11
NPAs/loans and other real estate		1.26			0.97			1.21			1.02			0.35
Allowance for loan losses/nonperforming loans		85.93			110.27			104.19			111.10			314.19
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		9.33	%		9.18	%		9.20	%		9.17	%		9.07	%
Average equity to assets		9.84			9.93			9.93			9.98			9.95
Average equity to loans		13.76			13.81			13.90			13.85			14.25
Average loans to deposits		88.33			90.30			90.42			90.45			87.15
AVERAGE BALANCES
Assets	$	715,799		$	702,040		$	686,403		$	666,650		$	664,158		$	692,859		$	651,318
Earning assets		674,234			662,432			646,859			627,520			625,320			652,916			614,268
Loans		511,805			504,943			490,359			480,656			463,725			497,048			448,941
Deposits		579,433			559,195			542,308			531,380			532,102			553,228			519,941
Shareholders' equity		70,419			69,737			68,184			66,560			66,094			68,738			64,524
ENDING BALANCES
Assets	$	707,063		$	710,824		$	696,891		$	679,437		$	669,978
Earning assets		664,365			669,483			657,249			640,113			631,069
Loans		516,830			509,458			498,625			480,709			475,449
Deposits		583,259			571,626			547,104			542,180			540,785
Shareholders' equity		70,532			69,838			68,726			66,927			65,415

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)	December 31, 2017			December 31, 2016
ASSETS
Cash and cash equivalents
Cash and due from banks	$	17,255		$	13,590
Interest-earning deposits in other banks		19,165			23,248
Federal Funds Sold		—			—
Total cash and cash equivalents		36,420			36,838
Securities
Available-for-sale, at fair-value		97,752			103,875
Held-to-maturity		25,758			23,883
Restricted stock, at cost		4,614			4,614
Total securities		128,124			132,372
Loans held for sale		246			—
Loans		516,830			475,449
Less allowance for loan losses		5,604			5,291
Net loans		511,226			470,158
Goodwill and core deposit intangible		4,996			5,111
Bank owned life insurance		13,218			10,361
Premises and equipment, net		9,244			8,749
Accrued interest receivable and other assets		3,589			6,389
TOTAL ASSETS	$	707,063		$	669,978
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	173,671		$	167,824
Interest-bearing		409,588			372,961
Total deposits		583,259			540,785
Short-term borrowings		39,480			48,742
Other borrowings		11,409			12,385
Accrued interest payable and other liabilities		2,383			2,651
Total liabilities		636,531			604,563
Shareholders' equity
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2017 and 2016		18,629			18,629
Additional paid-in capital		9,815			9,815
Retained earnings		47,535			42,629
Treasury stock at cost—238,360 shares in 2017 and 2016		(4,784	)		(4,784	)
Accumulated other comprehensive (loss)		(663	)		(874	)
Total shareholders' equity		70,532			65,415
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	707,063		$	669,978

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (Dollars in thousands, except per share data)	Quarter ended December 31,				Twelve months ended December 31,
	2017		2016		2017		2016
Interest and dividend income:
Loans, including fees	$	6,157	$	5,528	$	23,097	$	20,278
Taxable securities		578		566		2,374		2,598
Nontaxable securities		171		163		680		646
Other		108		38		289		110
Total interest and dividend income		7,014		6,295		26,440		23,632
Interest expense:
Deposits		402		248		1,344		1,006
Other		176		116		644		467
Total interest expense		578		364		1,988		1,473
Net interest income		6,436		5,931		24,452		22,159
Provision for loan losses		180		—		1,145		493
Net interest income after provision for loan losses		6,256		5,931		23,307		21,666
Noninterest income
Service charges on deposits accounts		287		299		1,133		1,166
Trust services		207		205		687		861
Debit card interchange fees		311		284		1,193		1,087
Gain on sale of loans		99		88		296		309
Gain on sale of securities		—		—		—		1
Other		216		236		1,031		872
Total noninterest income		1,120		1,112		4,340		4,296
Noninterest expenses
Salaries and employee benefits		2,547		2,409		10,009		9,354
Occupancy expense		209		266		869		973
Equipment expense		180		165		665		679
Professional and director fees		303		248		963		832
Software expense		246		212		879		799
Marketing and public relations		142		93		401		415
Debit card expense		126		107		536		445
Other expenses		943		710		2,994		2,758
Total noninterest expenses		4,696		4,210		17,316		16,255
Income before income tax		2,680		2,833		10,331		9,707
Federal income tax provision		901		880		3,230		2,969
Net income	$	1,779	$	1,953	$	7,101	$	6,738
Net income per share:
Basic	$	0.65	$	0.72	$	2.59	$	2.46
Diluted	$	0.65	$	0.72	$	2.59	$	2.46