Exhibit 99.1

 

LOGO

CSB BANCORP, INC. REPORTS THIRD QUARTER EARNINGS

Third Quarter Highlights

 

     Quarter Ended
September 30, 2018
    Quarter Ended
September 30, 2017
 

Diluted earnings per share

   $ 0.88     $ 0.68  

Net Income

   $ 2,432,000     $ 1,866,000  

Return on average common equity

     13.07     10.62

Return on average assets

     1.34     1.05

Millersburg, Ohio – October 24, 2018 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2018 net income of $2,432,000, or $.88 per basic and diluted share, as compared to $1,866,000, or $.68 per basic and diluted share, for the same period in 2017. Income before federal income tax amounted to $3.0 million, an increase of 12% over the same quarter in the prior year.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 13.07% and 1.34%, respectively, compared with 10.62% and 1.05% for the third quarter of 2017.

Eddie Steiner, President and CEO stated, “Average loan balances increased for the twelfth consecutive quarter, while net interest margin improved to 4.00%. Average deposit and loan balances have each increased approximately 6% from year ago levels.”

Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.0 million during the quarter, a 9% increase from the prior-year third quarter. Net interest income increased $597 thousand, or 10%, in the third quarter of 2018 compared to the same period in 2017.

Loan interest income including fees increased $800 thousand during third quarter 2018 as compared to the same quarter in 2017. Average total loan balances during the current quarter were $33 million higher than the year ago quarter.

The net interest margin was 4.00% compared to 3.77% for third quarter 2017. The tax equivalency effect on the margin dropped to 0.03% from 0.06% a result of the reduction in the corporate income tax rate in 2018.


Noninterest income increased by $121 thousand, or 11%, in the third quarter of 2018 compared to 2017. The increase reflects growth in trust and brokerage income, debit card fee income, and service charges on deposit accounts.

Noninterest expense amounted to $4.6 million during the quarter, an increase of $352 thousand, or 8%, from third quarter 2017. Increases are being reported in salary and employee benefits of $274 thousand, or 11%, compared to the prior year quarter with increases in headcount, salary, and the Company’s 401k plan. Marketing and public relations expense increased by $33 thousand, or 36%, on a quarter over quarter basis primarily on expanded channel advertising and increasing community donations. The Company’s third quarter efficiency ratio was 57.5% as compared to 57.9% for the same quarter in the prior year.

Federal income tax provision totaled $582 thousand in third quarter 2018, as compared to $826 thousand tax provision for the same quarter in 2017. The effective tax rate decreased from 31% to 19% a result of the Tax Cuts and Jobs Act enacted December 2017.

Average total assets during the quarter amounted to $720 million, an increase of $18 million, or 3%, above the same quarter of the prior year. Average loan balances of $538 million increased $33 million, or 7%, from the prior year third quarter while average securities balances of $117 million decreased $15 million, or 11%, as compared to third quarter 2017.

Average commercial loan balances for the quarter, including commercial real estate, increased $19 million, or 6%, from prior year levels. Average residential mortgage balances increased $10 million, or 9%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 13%, versus the same quarter of the prior year.

Nonperforming assets increased $411 thousand from September 30, 2017 to $5.3 million, or 1.00%, of total loans plus other real estate at September 30, 2018. The increase in nonperforming assets is the result of various commercial loans both entering through delinquency and exiting through liquidation during 2018. At September 30, 2018, approximately $1.7 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of September 30, 2018 declined to 1.25% of total loans as compared to 1.22% at September 30, 2017.

Net loan losses during third quarter 2018 were $38 thousand, or 0.03% annualized, compared to third quarter 2017 net loan losses of $1.1 million. The allowance for loan losses amounted to 1.16% of total loans at September 30, 2018 as compared to 1.07% at September 30, 2017.

Average deposit balances grew on a year over year comparison by $41 million, or 8%, partially on the strength of customer response to higher rates paid on insured deposits. During the third quarter 2018, increases in average deposit balances over the prior year quarter included interest-bearing demand accounts of $9 million; savings accounts of $10 million; time deposits of $5 million, and non-interest bearing checking accounts of $10 million. The average balance of securities sold under repurchase agreement during the third quarter of 2018 decreased by $7 million, or 13%, 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 September 30, 2018 the new product had balances of $22 million.


Shareholders’ equity totaled $73.9 million on September 30, 2018 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.8% on September 30, 2018 and 9.2% on September 30, 2017. The Company declared a third quarter dividend of $0.24 per share, a $.02 per share increase over third quarter 2017, producing an annualized yield of 2.4% based on the September 30, 2018 closing price of $40.57.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $711 million as of September 30, 2018. 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)

EARNINGS

   2018
3rd Qtr
    2018
2nd Qtr
    2018
1st Qtr
    2017
4th Qtr
    2017
3rd Qtr
    2018
9 months
    2017
9 months
 

Net interest income FTE (a)

   $ 6,847     $ 6,697     $ 6,436     $ 6,532     $ 6,300     $ 19,980     $ 18,301  

Provision for loan losses

     324       324       324       180       280       972       965  

Other income

     1,175       1,168       1,145       1,120       1,054       3,488       3,220  

Other expenses

     4,638       4,619       4,537       4,696       4,286       13,794       12,620  

FTE adjustment (a)

     46       45       47       96       96       138       285  

Net income

     2,432       2,324       2,164       1,779       1,866       6,920       5,322  

Diluted earnings per share

     0.88       0.85       0.79       0.65       0.68       2.52       1.94  

PERFORMANCE RATIOS

              

Return on average assets (ROA)

     1.34     1.30     1.25     0.99     1.05     1.30     1.04

Return on average common equity (ROE)

     13.07     12.94     12.33     10.02     10.62     12.79     10.44

Net interest margin FTE (a)

     4.00     3.98     3.95     3.84     3.77     3.98     3.79

Efficiency ratio

     57.45     58.41     59.52     60.99     57.89     58.45     58.24

Number of full-time equivalent employees

     174       174       171       174       169      

MARKET DATA

              

Book value/common share

   $ 26.94     $ 26.47     $ 25.90     $ 25.72     $ 25.47      

Period-end common share mkt value

     40.57       39.00       35.95       33.11       30.50      

Market as a % of book

     150.59     147.34     138.80     128.73     119.75    

Price-to-earnings ratio

     12.80       13.13       13.07       12.78       11.47      

Cash dividends/common share

   $ 0.24     $ 0.24     $ 0.24     $ 0.22     $ 0.22     $ 0.72     $ 0.62  

Common stock dividend payout ratio

     27.27     28.24     30.38     33.85     32.35     28.57     31.96

Average basic common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

Average diluted common shares

     2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242       2,742,242  

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

   $ 111,253     $ 106,947     $ 98,584     $ 90,796     $ 83,638      

ASSET QUALITY

              

Gross charge-offs

   $ 43     $ 45     $ 303     $ 19     $ 1,138     $ 391     $ 1,185  

Net (recoveries) charge-offs

     38       39       295       12       1,133       372       820  

Allowance for loan losses

     6,204       5,918       5,633       5,604       5,436      

Nonperforming assets (NPAs)

     5,341       4,399       4,622       6,522       4,930      

Net charge-off (recovery)/average loans ratio

     0.03     0.03     0.23     0.01     0.89     0.09     0.22

Allowance for loan losses/period-end loans

     1.16       1.11       1.06       1.08       1.07      

NPAs/loans and other real estate

     1.00       0.82       0.87       1.26       0.97      

Allowance for loan losses/nonperforming loans

     116.16       134.52       122.40       85.93       110.27      

CAPITAL & LIQUIDITY

              

Period-end tangible equity to assets

     9.77     9.41     9.50     9.33     9.18    

Average equity to assets

     10.25       10.06       10.16       9.84       9.93      

Average equity to loans

     13.72       13.47       13.50       13.76       13.81      

Average loans to deposits

     90.80       90.77       91.89       88.33       90.30      

AVERAGE BALANCES

              

Assets

   $ 720,372     $ 715,902     $ 700,394     $ 715,799     $ 702,040     $ 712,288     $ 685,210  

Earning assets

     679,281       674,699       660,772       674,234       662,432       671,654       645,732  

Loans

     538,182       534,852       527,315       511,805       504,943       533,492       492,075  

Deposits

     592,738       589,211       573,855       579,433       559,195       585,337       544,397  

Shareholders’ equity

     73,844       72,039       71,173       70,419       69,737       72,362       68,172  

ENDING BALANCES

              

Assets

   $ 710,815     $ 723,299     $ 699,967     $ 707,063     $ 710,824      

Earning assets

     668,468       681,200       662,779       664,365       669,483      

Loans

     535,424       535,427       530,395       516,830       509,458      

Deposits

     587,531       595,073       576,418       583,259       571,626      

Shareholders’ equity

     73,877       72,578       71,019       70,532       69,838      

 

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)

   September 30,
2018
    September 30,
2017
 
ASSETS     

Cash and cash equivalents

    

Cash and due from banks

   $ 15,865     $ 15,592  

Interest-earning deposits in other banks

     17,384       29,780  

Federal Funds Sold

     —         —    
  

 

 

   

 

 

 

Total cash and cash equivalents

     33,249       45,372  

Securities

    

Available-for-sale, at fair-value

     89,507       98,048  

Held-to-maturity

     21,260       26,475  

Equity securities

     87       —    

Restricted stock, at cost

     4,614       4,614  
  

 

 

   

 

 

 

Total securities

     115,468       129,137  

Loans held for sale

     192       1,108  

Loans

     535,424       509,458  

Less allowance for loan losses

     6,204       5,436  
  

 

 

   

 

 

 

Net loans

     529,220       504,022  

Premises and equipment, net

     9,605       8,906  

Goodwill and core deposit intangible

     4,920       5,024  

Bank owned life insurance

     13,470       13,131  

Accrued interest receivable and other assets

     4,691       4,124  
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 710,815     $ 710,824  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities

    

Deposits:

    

Noninterest-bearing

   $ 177,203     $ 167,563  

Interest-bearing

     410,328       404,063  
  

 

 

   

 

 

 

Total deposits

     587,531       571,626  

Short-term borrowings

     37,465       45,057  

Other borrowings

     8,676       21,596  

Accrued interest payable and other liabilities

     3,266       2,707  
  

 

 

   

 

 

 

Total liabilities

     636,938       640,986  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $6.25 par value. Authorized

    

9,000,000 shares; issued 2,980,602 shares in 2018 and 2017

     18,629       18,629  

Additional paid-in capital

     9,815       9,815  

Retained earnings

     52,510       46,250  

Treasury stock at cost — 238,360 shares in 2018 and 2017

     (4,784     (4,784

Accumulated other comprehensive (loss) income

     (2,293     (72
  

 

 

   

 

 

 

Total shareholders’ equity

     73,877       69,838  
  

 

 

   

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

   $ 710,815     $ 710,824  
  

 

 

   

 

 

 


CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

(Unaudited)    Quarter ended
September 30,
     Nine months ended
September 30,
 
(Dollars in thousands, except per share data)    2018     2017      2018     2017  

Interest and dividend income:

         

Loans, including fees

   $ 6,707     $ 5,907      $ 19,361     $ 16,940  

Taxable securities

     586       599        1,784       1,796  

Nontaxable securities

     152       171        464       509  

Other

     127       89        256       180  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest and dividend income

     7,572       6,766        21,865       19,425  
  

 

 

   

 

 

    

 

 

   

 

 

 

Interest expense:

         

Deposits

     633       368        1,647       942  

Other

     138       194        376       467  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total interest expense

     771       562        2,023       1,409  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income

     6,801       6,204        19,842       18,016  

Provision for loan losses

     324       280        972       965  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net interest income after provision for loan losses

     6,477       5,924        18,870       17,051  
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest income

         

Service charges on deposits accounts

     301       287        885       847  

Trust services

     204       122        641       481  

Debit card interchange fees

     330       298        966       882  

Gain on sale of loans

     63       94        200       197  

Gain on sale of securities

     (6     —          (2     —    

Other

     283       253        798       813  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest income

     1,175       1,054        3,488       3,220  
  

 

 

   

 

 

    

 

 

   

 

 

 

Noninterest expenses

         

Salaries and employee benefits

     2,805       2,531        8,160       7,462  

Occupancy expense

     194       236        628       660  

Equipment expense

     145       143        461       485  

Professional and director fees

     199       257        749       660  

Software expense

     221       219        655       633  

Marketing and public relations

     124       91        363       259  

Debit card expense

     144       139        386       410  

Other expenses

     806       670        2,392       2,051  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total noninterest expenses

     4,638       4,286        13,794       12,620  
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income tax

     3,014       2,692        8,564       7,651  

Federal income tax provision

     582       826        1,644       2,329  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 2,432     $ 1,866      $ 6,920     $ 5,322  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income per share:

         

Basic

   $ 0.88     $ 0.68      $ 2.52     $ 1.94  
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.88     $ 0.68      $ 2.52     $ 1.94  
  

 

 

   

 

 

    

 

 

   

 

 

 

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