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

Exhibit 99.1

CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS

Second Quarter Highlights

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018
Diluted earnings per share	$	0.94		$	0.85
Net Income	$	2,586,000		$	2,324,000
Return on average common equity		12.91	%		12.94	%
Return on average assets		1.39	%		1.30	%

Millersburg, Ohio – July 23, 2019 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2019 net income of $2,586,000, or $.94 per basic and diluted share, as compared to $2,324,000, or $.85 per basic and diluted share, for the same period in 2018. Income before federal income tax amounted to $3,199,000, an increase of 11% over the same quarter in the prior year. For the six month period ended June 30, 2019 net income totaled $5,126,000 compared to $4,488,000 for the same period last year, an increase of 14%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.91% and 1.39%, respectively, compared with 12.94% and 1.30% for the second quarter of 2018.

Eddie Steiner, President and CEO stated, “We are pleased to report solidmid-year earnings with increases over the prior year. Business loan growth has been at a slower pace for most of 2019, particularly with lower usage needs for operating lines of credit, while home and consumer lending demand has increased as fixed rates on mortgage loans drifted lower and home construction season moved into full swing.”

Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.4 million during the quarter, a 7% increase from the prior-year second quarter. Net interest income increased $419 thousand, or 6%, in the second quarter of 2019 compared to the same period in 2018.

Loan interest income including fees increased $670 thousand during second quarter 2019 as compared to the same quarter in 2018, an increase of 10%. Average total loan balances during the current quarter were $13 million higher than the year ago quarter, an increase of 2%. Loan yields for second quarter 2019 averaged 5.26%, an increase of 37 basis points from the 2018 second quarter average of 4.89%.

The net interest margin was 4.08% compared to 3.98% for second quarter 2018. The tax equivalency effect on the margin dropped to 0.02% from 0.03% a result of the reduction in tax exempt loans and securities in 2019.

Noninterest income increased 12%, compared to second quarter of 2018, driven by growth in debit card fee income, increases in bank owned life insurance values, gain on sale of loans, and service charges on deposit accounts.

Noninterest expense increased 6% from second quarter 2018. Salary and employee benefit costs increased $197 thousand, or 7%, compared to the prior year quarter, as a result of higher wage and 401k retirement expenses. Professional and director’s fees increased by $69 thousand, or 29%, reflecting higher technology investment to further improve network infrastructure in support of company growth. Marketing and public relations increased by $20 thousand, or 17%, reflecting timing of certain electronic and billboard promotional efforts and the opening of a new banking center. The Company’s second quarter efficiency ratio was 58.0% as compared to 58.4% for the same quarter in the prior year.

Federal income tax expense totaled $613 thousand in second quarter 2019, as compared to $553 thousand tax expense for the same quarter in 2018. The effective tax rate was 19% in both periods.

Average total assets during the quarter amounted to $746 million, an increase of $30 million, or 4%, above the same quarter of the prior year. Average loan balances of $548 million increased $13 million, or 2%, from the prior year second quarter while average securities balances of $111 million decreased $8 million, or 7%, as compared to second quarter 2018.

Average commercial loan balances for the quarter, including commercial real estate, decreased $1 million, or less than 1%, from prior year levels. Average residential mortgage balances including home equity lines of credit increased $12 million, or 7%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 12%, versus the same quarter of the prior year.

Nonperforming assets increased $156 thousand from June 30, 2018 to $4.6 million, or 0.83%, of total loans plus other real estate at June 30, 2019. The increase in nonperforming assets reflects the second quarter 2019 impairment of a commercial facility in liquidation, partially offset by various commercial loans exiting through liquidation. At June 30, 2019, approximately $1.0 million of thenon-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of June 30, 2019 declined to 1.03% of total loans as compared to 1.06% at June 30, 2018.

Net loan losses recognized during second quarter 2019 were $35 thousand, or 0.03% annualized, compared to second quarter 2018 net loan losses of $39 thousand. The allowance for loan losses amounted to 1.19% of total loans at June 30, 2019 as compared to 1.11% at June 30, 2018.

Average deposit balances grew on a year over year comparison by $28 million, or 5%, partially on the strength of customer response to higher rates paid on insured deposits. For the second quarter 2019, the average cost of deposits amounted to 0.60%, as compared to 0.38% for the second quarter 2018. During the second quarter 2019, increases in average deposit balances over

the prior year quarter includednon-interest bearing demand accounts of $7 million and interest-bearing transaction accounts of $14 million, and time deposits of $7 million. The average balance of securities sold under repurchase agreement during the second quarter of 2019 decreased by $5 million, or 12%, compared to the average for the same period in the prior year.

Shareholders’ equity totaled $81.0 million on June 30, 2019 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 10.3% on June 30, 2019 and 9.4% on June 30, 2018. The Company declared a second quarter dividend of $0.26 per share, a $.02 per share increase over second quarter 2018, producing an annualized yield of 2.6% based on the June 30, 2019 closing price of $40.45.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $750 million as of June 30, 2019. 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

(Unaudited)	Quarters
(Dollars in thousands, except per share data)	2019			2019			2018			2018			2018			2019			2018
EARNINGS	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr			6 months			6 months
Net interest income FTE (a)	$	7,111		$	7,049		$	6,934		$	6,847		$	6,697			14,160		$	13,133
Provision for loan losses		285			285			344			324			324			570			648
Other income		1,313			1,224			1,270			1,175			1,168			2,537			2,313
Other expenses		4,900			4,791			4,725			4,638			4,619			9,691			9,156
FTE adjustment (a)		40			38			24			46			45			78			92
Net income		2,586			2,540			2,492			2,432			2,324			5,126			4,488
Diluted earnings per share		0.94			0.93			0.91			0.88			0.85			1.87			1.64
PERFORMANCE RATIOS
Return on average assets (ROA)		1.39	%		1.41	%		1.36	%		1.34	%		1.30	%		1.40	%		1.28	%
Return on average common equity (ROE)		12.91	%		13.20	%		13.20	%		13.07	%		12.94	%		13.05	%		12.64	%
Net interest margin FTE (a)		4.08	%		4.16	%		4.01	%		4.00	%		3.98	%		4.12	%		3.97	%
Efficiency ratio		57.96	%		57.72	%		57.26	%		57.45	%		58.41	%		57.86	%		58.97	%
Number of full-time equivalent employees		174			174			170			174			174
MARKET DATA
Book value/common share	$	29.70		$	28.80		$	27.91		$	26.94		$	26.47
Period-end common share mkt value		40.45			38.75			38.50			40.57			39.00
Market as a % of book		136.20	%		134.55	%		137.94	%		150.59	%		147.34	%
Price-to-earnings ratio		11.05			10.85			11.22			12.80			13.13
Cash dividends/common share	$	0.26		$	0.26		$	0.26		$	0.24		$	0.24			0.52		$	0.48
Common stock dividend payout ratio		27.66	%		27.96	%		28.57	%		27.27	%		28.24	%		27.81	%		29.27	%
Average basic common shares		2,742,350			2,742,242			2,742,242			2,742,242			2,742,242			2,742,296			2,742,242
Average diluted common shares		2,742,350			2,742,242			2,742,242			2,742,242			2,742,242			2,742,296			2,742,242
Period end common shares outstanding		2,742,350			2,742,242			2,742,242			2,742,242			2,742,242
Common shares repurchased		0			0			0			0			0
Common stock market capitalization	$	110,928		$	106,262		$	105,576		$	111,253		$	106,947
ASSET QUALITY
Gross charge-offs	$	54		$	70		$	691		$	43		$	45			124		$	348
Net (recoveries) charge-offs		35			(95	)		641			38			39			(60	)		334
Allowance for loan losses		6,537			6,287			5,907			6,204			5,918
Nonperforming assets (NPAs)		4,555			3,302			3,428			5,341			4,399
Net charge-off (recovery) /average loans ratio		0.03	%		(0.07	)%		0.47	%		0.03	%		0.03	%		(0.02	)%		0.13	%
Allowance for loan losses/period-end loans		1.19			1.15			1.08			1.16			1.11
NPAs/loans and other real estate		0.83			0.60			0.62			1.00			0.82
Allowance for loan losses/nonperforming loans		146.70			197.23			177.45			116.16			134.52
CAPITAL & LIQUIDITY
Period-end tangible equity to assets		10.28	%		10.15	%		9.86	%		9.77	%		9.41	%
Average equity to assets		10.77			10.69			10.29			10.25			10.06
Average equity to loans		14.66			14.18			13.83			13.72			13.47
Average loans to deposits		88.73			91.16			89.88			90.80			90.77
AVERAGE BALANCES
Assets	$	745,658		$	730,181		$	727,962		$	720,372		$	715,902		$	738,002		$	708,198
Earning assets		699,229			687,515			686,807			679,281			674,699			693,404			667,777
Loans		547,981			550,483			541,482			538,182			534,852			549,225			531,107
Deposits		617,558			603,839			602,434			592,738			589,211			610,736			581,576
Shareholders’ equity		80,338			78,038			74,900			73,844			72,039			79,194			71,608
ENDING BALANCES
Assets	$	750,252		$	734,845		$	731,722		$	710,815		$	723,299
Earning assets		704,738			688,792			682,345			668,468			681,200
Loans		550,612			548,220			548,974			535,424			535,427
Deposits		623,328			607,342			606,498			587,531			595,073
Shareholders’ equity		81,458			78,967			76,536			73,877			72,578

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)	2019			2018
ASSETS
Cash and cash equivalents
Cash and due from banks	$	15,214		$	14,956
Interest-earning deposits in other banks		42,063			28,275
Total cash and cash equivalents		57,277			43,231
Securities
Available-for-sale, at fair-value		86,297			90,808
Held-to-maturity		19,657			21,882
Equity securities		87			94
Restricted stock, at cost		4,614			4,614
Total securities		110,655			117,398
Loans held for sale		409			100
Loans		550,612			535,427
Less allowance for loan losses		6,537			5,918
Net loans		544,075			529,509
Premises and equipment, net		11,638			9,563
Goodwill and core deposit intangible		4,863			4,945
Bank owned life insurance		16,760			13,384
Accrued interest receivable and other assets		4,575			5,169
TOTAL ASSETS	$	750,252		$	723,299
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	180,766		$	178,343
Interest-bearing		442,562			416,730
Total deposits		623,328			595,073
Short-term borrowings		35,474			44,155
Other borrowings		6,576			8,827
Accrued interest payable and other liabilities		3,416			2,666
Total liabilities		668,794			650,721
Shareholders’ equity
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2019 and 2018		18,629			18,629
Additional paid-in capital		9,815			9,815
Retained earnings		57,988			50,736
Treasury stock at cost—238,252 shares in 2019 and 238,360 in 2018		(4,780	)		(4,784	)
Accumulated other comprehensive loss		(194	)		(1,818	)
Total shareholders’ equity		81,458			72,578
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	750,252		$	723,299

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)	Quarter ended June 30,					Six months ended June 30,
(Dollars in thousands, except per share data)	2019			2018		2019		2018
Interest and dividend income:
Loans, including fees	$	7,185		$	6,515	$	14,257	$	12,654
Taxable securities		584			594		1,171		1,197
Nontaxable securities		134			152		268		313
Other		218			83		393		129
Total interest and dividend income		8,121			7,344		16,089		14,293
Interest expense:
Deposits		921			560		1,746		1,014
Other		129			132		261		238
Total interest expense		1,050			692		2,007		1,252
Net interest income		7,071			6,652		14,082		13,041
Provision for loan losses		285			324		570		648
Net interest income after provision for loan losses		6,786			6,328		13,512		12,393
Noninterest income
Service charges on deposits accounts		313			300		605		584
Trust services		212			217		436		436
Debit card interchange fees		369			323		716		636
Gain on sale of loans		76			60		155		137
Market value change in equity securities		(2	)		—		4		4
Other		345			268		621		516
Total noninterest income		1,313			1,168		2,537		2,313
Noninterest expenses
Salaries and employee benefits		2,915			2,718		5,757		5,355
Occupancy expense		205			214		409		434
Equipment expense		143			160		280		316
Professional and director fees		308			239		647		551
Software expense		232			221		450		434
Marketing and public relations		139			119		256		239
Debit card expense		132			126		259		242
Other expenses		826			822		1,633		1,585
Total noninterest expenses		4,900			4,619		9,691		9,156
Income before income tax		3,199			2,877		6,358		5,550
Federal income tax provision		613			553		1,232		1,062
Net income	$	2,586		$	2,324	$	5,126	$	4,488
Net income per share:
Basic	$	0.94		$	0.85	$	1.87	$	1.64
Diluted	$	0.94		$	0.85	$	1.87	$	1.64