EXHIBIT 99.1
Quarterly Report to Shareholders of CSB Bancorp, Inc., dated September 30, 2003
QUARTERLY
REPORT
SEPTEMBER 30, 2003
CSB
--------------------
CSB BANCORP, INC.
TO OUR SHAREHOLDERS
================================================================================
The Company's unaudited net income for the first nine months of 2003 was
$1,508,131 or $0.57 per share. These results compare to the first nine months of
2002 with $1,516,904 or $0.58 per share. As a result of these sustained
earnings, the Board of Directors has declared a quarterly dividend of $0.12 per
share to shareholders of record September 30, 2003 payable October 20, 2003.
The nine-month results were negatively impacted by a one-time severance payment
to the Company's prior Chief Executive Officer, which was in keeping with his
employment contract. The after tax effect of this expense, incurred in July
2003, was to lower earnings by approximately $222,000.
The Company's transition to its new management team is complete. At its July
2003 meeting the Board elected John J. Limbert as President and Chief Executive
Officer. Also in July, Rick Ginther joined the bank as Senior Vice President
and Chief Lending Officer and Paul Greig was retained as Senior Vice President
and Chief Operations Officer and Chief Information Officer. These veteran
bankers join A. Lee Miller, Chief Financial Officer and complete the executive
management group for your company.
The management transition has gone very well. Several operating changes are
already underway which will positively impact our financial performance and
provide greater customer convenience. More are being planned and should be
implemented prior to the calendar year end.
Management is focused on reducing its operating costs to provide greater
shareholder value. We have set ambitious yet attainable goals, which should
begin impacting results in the fourth quarter of 2003.
We are grateful for your continuing support of CSB and invite your comments.
Robert K. Baker John J. Limbert
Chairman President & Chief Executive Officer
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)
(000 OMITTED EXCEPT SHARE DATA) SEPTEMBER 30
2003 2002
-------- --------
ASSETS:
CASH AND DUE FROM BANKS .................................... $10,025 $ 12,801
FEDERAL FUNDS SOLD ......................................... 3,859 8,296
SECURITIES ................................................. 74,090 73,910
NET LOANS .................................................. 206,959 186,439
PREMISES & EQUIPMENT, NET .................................. 8,668 8,417
OTHER ASSETS ............................................... 2,301 4,061
-------- --------
TOTAL ASSETS ............................................... $305,902 $293,924
======== ========
LIABILITIES:
DEPOSITS ................................................... $237,144 $229,977
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE ............. 13,227 13,533
OTHER BORROWINGS ........................................... 19,654 15,536
OTHER LIABILITIES .......................................... 1,461 1,222
-------- --------
TOTAL LIABILITIES .......................................... $271,486 $260,268
======== ========
SHAREHOLDERS' EQUITY:
COMMON STOCK ............................................... $16,674 $ 16,674
ADDITIONAL PAID-IN CAPITAL ................................. 6,414 6,414
RETAINED EARNINGS .......................................... 12,030 11,523
TREASURY STOCK.............................................. (763) (1,105)
ACCUMULATED OTHER COMPREHENSIVE INCOME ..................... 61 150
-------- --------
TOTAL SHAREHOLDERS' EQUITY ................................. $34,416 $ 33,656
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................... $305,902 $293,924
======== ========
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(000 OMITTED EXCEPT SHARE DATA) NINE MONTHS ENDED SEPTEMBER 30
2003 2002
-------- -------
INTEREST INCOME:
INTEREST & FEES ON LOANS ................................... $ 9,462 $ 9,422
INTEREST ON SECURITIES ..................................... 2,229 3,019
OTHER INTEREST INCOME ...................................... 20 172
-------- --------
TOTAL INTEREST INCOME ...................................... $ 11,711 $ 12,613
-------- --------
INTEREST EXPENSE:
INTEREST ON DEPOSITS ....................................... $ 2,933 $ 4,611
OTHER INTEREST EXPENSE ..................................... 623 496
-------- --------
TOTAL INTEREST EXPENSE ....................................... $ 3,556 $ 5,107
-------- --------
NET INTEREST INCOME .......................................... $ 8,155 $ 7,506
CREDIT FOR LOAN LOSSES ..................................... 51 562
-------- --------
NET INTEREST INCOME AFTER CREDIT FOR LOAN LOSSES ............. $ 8,206 $ 8,068
TOTAL OTHER INCOME ........................................... 1,634 1,571
TOTAL OTHER EXPENSE .......................................... 8,254 8,144
FEDERAL INCOME TAX PROVISION (CREDIT) ........................ 78 (22)
-------- --------
NET INCOME ................................................... $ 1,508 $ 1,517
======== ========
EARNINGS PER SHARE ........................................... $ 0.57 $ 0.58
======== ========
FINANCIAL HIGHLIGHTS
================================================================================
(000 OMITTED) EXCEPT SHARE DATA
SEPTEMBER 30
2003 2002
-------- --------
Assets .................................. $305,902 $293,924
Net loans ............................... 206,959 186,439
Securities .............................. 74,090 73,910
Deposits ................................ 237,144 229,977
Shareholders' equity .................... 34,416 33,656
Net income............................... 1,508 1,517
Earnings per share ...................... .57 .58
Book value per
outstanding share ..................... 13.03 12.79
*Quarterly price per share:
High .................................. 17.50 19.15
Low ................................... 15.50 17.00
*Includes transactions reported by market makers and private transactions, known
to the Company.
KEY RATIOS
================================================================================
SEPTEMBER 30
2003 2002
------ ------
Return on average assets ...... .67% .69%
Return on average equity ...... 5.86% 6.11%
Loan to deposit ..................... 88.29% 82.40%
Equity to assets ..................... 11.25% 11.45%
================================================================================
Copies of
CSB BANCORP, INC.
S.E.C. Filings may be obtained by writing:
A. Lee Miller, CFO
CSB BANCORP, INC.
6 West Jackson Street
Millersburg, Ohio 44654
(800) 654-9015 or (330) 674-9015
================================================================================
Stock Symbol: CSBB.OB