CSB Bancorp, Inc. (OTC Pink: CSBB):
Third Quarter Highlights
Quarter Ended September 30, 2019 | Quarter Ended September 30, 2018 | |||||||
Diluted earnings per share | $ | 0.98 | $ | 0.88 | ||||
Net Income | $ | 2,695,000 | $ | 2,432,000 | ||||
Return on average common equity | 12.89 | % | 13.07 | % | ||||
Return on average assets | 1.38 | % | 1.34 | % | ||||
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2019 net income of $2,695,000, or $0.98 per basic and diluted share, as compared to $2,432,000, or $0.88 per basic and diluted share, for the same period in 2018. Income before federal income tax amounted to $3,344,000, an increase of 11% over the same quarter in the prior year. For the nine month period ended September 30, 2019 net income totaled $7,821,000 compared to $6,920,000 for the same period last year, an increase of 13%.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.89% and 1.38%, respectively, compared with 13.07% and 1.34% for the third quarter of 2018.
Eddie Steiner, President and CEO stated, “The business sector has become somewhat more cautious in outlook as uncertainties related to trade policy, slowing global economies, and continued difficulties in agriculture and traditional retail sectors weigh on forward-looking perspectives. Demand for home loans has been steady. Mortgage rates are attractive and household balance sheets remain in decent shape overall with manageable debt levels, low unemployment and increasing wages.”
Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.7 million during the quarter, an 8% increase from the prior-year third quarter. Net interest income increased $387 thousand, or 6%, in the third quarter of 2019 compared to the same period in 2018.
Loan interest income including fees increased $532 thousand during third quarter 2019 as compared to the same quarter in 2018, an increase of 8%. Average total loan balances during the current quarter were $17 million higher than the year ago quarter, an increase of 3%. Loan yields for third quarter 2019 averaged 5.18%, an increase of 23 basis points from the 2018 third quarter average of 4.95%.
The net interest margin was 3.95% compared to 4.00% for third 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 23%, compared to third quarter of 2018, driven by growth in gain on sale of loans, debit card fee income, increases in bank owned life insurance values, and service charges on deposit accounts.
Noninterest expense increased 8% from third quarter 2018. Salary and employee benefit costs increased $188 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 $117 thousand, or 59%, reflecting higher technology investment to further improve network infrastructure in support of company growth. Marketing and public relations increased by $25 thousand, or 20%, reflecting timing of certain electronic and billboard promotional efforts and the opening of a new banking center. The Company’s third quarter efficiency ratio was stable at 57.5% in both periods.
Federal income tax expense totaled $649 thousand in third quarter 2019, as compared to $582 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 $773 million, an increase of $53 million, or 7%, above the same quarter of the prior year. Average loan balances of $555 million increased $17 million, or 3%, from the prior year third quarter while average securities balances of $111 million decreased $7 million, or 6%, as compared to third quarter 2018.
Average commercial loan balances for the quarter, including commercial real estate, increased $3 million, or less than 1%, from prior year levels. Average residential mortgage balances including home equity lines of credit increased $12 million, or 8%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 9%, versus the same quarter of the prior year.
Nonperforming assets decreased $823 thousand from September 30, 2018 to $4.5 million, or 0.80%, of total loans plus other real estate at September 30, 2019. The decrease in nonperforming assets reflects various commercial loans exiting through liquidation. At September 30, 2019, approximately $1.2 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of September 30, 2019 declined to 0.96% of total loans as compared to 1.25% at September 30, 2018.
Net loan losses recognized during third quarter 2019 were $46 thousand, or 0.03% annualized, compared to third quarter 2018 net loan losses of $38 thousand. The allowance for loan losses amounted to 1.20% of total loans at September 30, 2019 as compared to 1.16% at September 30, 2018.
Average deposit balances grew on a quarter over prior year quarter comparison by $51 million, or 9%, partially on the strength of customer response to higher rates paid on insured deposits. For the third quarter 2019, the average cost of deposits amounted to 0.60%, as compared to 0.42% for the third quarter 2018. During the third quarter 2019, increases in average deposit balances over the prior year quarter included non-interest bearing demand accounts of $8 million, interest-bearing transaction accounts of $35 million, and time deposits of $8 million. The average balance of securities sold under repurchase agreement during the third quarter of 2019 decreased by $6 million, or 13%, compared to the average for the same period in the prior year.
Shareholders’ equity totaled $83.6 million on September 30, 2019 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 10.1% on September 30, 2019 and 9.8% on September 30, 2018. The Company declared a third quarter dividend of $0.28 per share, a $.04 per share increase over third quarter 2018, producing an annualized yield of 2.9% based on the September 30, 2019 closing price of $38.67.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $787 million as of September 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.
CSB BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited) | Quarters | |||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | 2019 | 2019 | 2019 | 2018 | 2018 | 2019 | 2018 | |||||||||||||||||||||
EARNINGS | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 9 months | 9 months | |||||||||||||||||||||
Net interest income FTE (a) | $ | 7,228 | $ | 7,111 | $ | 7,049 | $ | 6,934 | $ | 6,847 | 21,388 | $ | 19,980 | |||||||||||||||
Provision for loan losses | 285 | 285 | 285 | 344 | 324 | 855 | 972 | |||||||||||||||||||||
Other income | 1,440 | 1,313 | 1,224 | 1,270 | 1,175 | 3,977 | 3,488 | |||||||||||||||||||||
Other expenses | 4,999 | 4,900 | 4,791 | 4,725 | 4,638 | 14,690 | 137,947 | |||||||||||||||||||||
FTE adjustment (a) | 40 | 40 | 38 | 24 | 46 | 118 | 138 | |||||||||||||||||||||
Net income | 2,695 | 2,586 | 2,540 | 2,492 | 2,432 | 7,821 | 6,920 | |||||||||||||||||||||
Diluted earnings per share | 0.98 | 0.94 | 0.93 | 0.91 | 0.88 | 2.85 | 2.52 | |||||||||||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
Return on average assets (ROA) | 1.38 | % | 1.39 | % | 1.41 | % | 1.36 | % | 1.34 | % | 1.39 | % | 1.30 | % | ||||||||||||||
Return on average common equity (ROE) | 12.89 | % | 12.91 | % | 13.20 | % | 13.20 | % | 13.07 | % | 13.00 | % | 12.79 | % | ||||||||||||||
Net interest margin FTE (a) | 3.95 | % | 4.08 | % | 4.16 | % | 4.01 | % | 4.00 | % | 4.06 | % | 3.98 | % | ||||||||||||||
Efficiency ratio | 57.52 | % | 57.96 | % | 57.72 | % | 57.26 | % | 57.45 | % | 57.75 | % | 58.45 | % | ||||||||||||||
Number of full-time equivalent employees | 175 | 174 | 174 | 170 | 174 | |||||||||||||||||||||||
MARKET DATA | ||||||||||||||||||||||||||||
Book value/common share | $ | 30.49 | $ | 29.70 | $ | 28.80 | $ | 27.91 | $ | 26.94 | ||||||||||||||||||
Period-end common share mkt value | 38.67 | 40.45 | 38.75 | 38.50 | 40.57 | |||||||||||||||||||||||
Market as a % of book | 126.83 | % | 136.20 | % | 134.55 | % | 137.94 | % | 150.59 | % | ||||||||||||||||||
Price-to-earnings ratio | 10.28 | 11.05 | 10.85 | 11.22 | 12.80 | |||||||||||||||||||||||
Cash dividends/common share | 0.28 | $ | 0.26 | $ | 0.26 | $ | 0.26 | $ | 0.24 | $ | 0.80 | $ | 0.72 | |||||||||||||||
Common stock dividend payout ratio | 28.57 | % | 27.66 | % | 27.96 | % | 28.57 | % | 27.27 | % | 28.07 | % | 28.57 | % | ||||||||||||||
Average basic common shares | 2,742,350 | 2,742,350 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,278 | 2,742,242 | |||||||||||||||||||||
Average diluted common shares | 2,742,350 | 2,742,350 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,278 | 2,742,242 | |||||||||||||||||||||
Period end common shares outstanding | 2,742,350 | 2,742,350 | 2,742,242 | 2,742,242 | 2,742,242 | |||||||||||||||||||||||
Common shares repurchased | — | — | — | — | — | |||||||||||||||||||||||
Common stock market capitalization | 106,047 | $ | 110,928 | $ | 106,262 | $ | 105,576 | $ | 111,253 | |||||||||||||||||||
ASSET QUALITY | ||||||||||||||||||||||||||||
Gross charge-offs | $ | 75 | $ | 54 | $ | 70 | $ | 691 | $ | 43 | 199 | $ | 391 | |||||||||||||||
Net (recoveries) charge-offs | 46 | 35 | (95 | ) | 641 | 38 | (14 | ) | 372 | |||||||||||||||||||
Allowance for loan losses | 6,776 | 6,537 | 6,287 | 5,907 | 6,204 | |||||||||||||||||||||||
Nonperforming assets (NPAs) | 4,518 | 4,555 | 3,302 | 3,428 | 5,341 | |||||||||||||||||||||||
Net charge-off (recovery) /average loans ratio | 0.03 | % | 0.03 | % | (0.07 | )% | 0.47 | % | 0.03 | % | — | % | 0.09 | % | ||||||||||||||
Allowance for loan losses/period-end loans | 1.20 | 1.19 | 1.15 | 1.08 | 1.16 | |||||||||||||||||||||||
NPAs/loans and other real estate | 0.80 | 0.83 | 0.60 | 0.62 | 1.00 | |||||||||||||||||||||||
Allowance for loan losses/nonperforming loans | 153.35 | 146.70 | 197.23 | 177.45 | 116.16 | |||||||||||||||||||||||
CAPITAL & LIQUIDITY | ||||||||||||||||||||||||||||
Period-end tangible equity to assets | 10.07 | % | 10.28 | % | 10.15 | % | 9.86 | % | 9.77 | % | ||||||||||||||||||
Average equity to assets | 10.72 | 10.77 | 10.69 | 10.29 | 10.25 | |||||||||||||||||||||||
Average equity to loans | 14.95 | 14.66 | 14.18 | 13.83 | 13.72 | |||||||||||||||||||||||
Average loans to deposits | 86.18 | 88.73 | 91.16 | 89.88 | 90.80 | |||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||
Assets | $ | 773,482 | $ | 745,658 | $ | 730,181 | $ | 727,962 | $ | 720,372 | $ | 749,959 | $ | 712,288 | ||||||||||||||
Earning assets | 725,616 | 699,229 | 687,515 | 686,807 | 679,281 | 704,260 | 671,654 | |||||||||||||||||||||
Loans | 554,957 | 547,981 | 550,483 | 541,482 | 538,182 | 551,157 | 533,492 | |||||||||||||||||||||
Deposits | 643,981 | 617,558 | 603,839 | 602,434 | 592,738 | 621,939 | 585,337 | |||||||||||||||||||||
Shareholders' equity | 82,948 | 80,338 | 78,038 | 74,900 | 73,844 | 80,459 | 72,362 | |||||||||||||||||||||
ENDING BALANCES | ||||||||||||||||||||||||||||
Assets | $ | 786,792 | $ | 750,252 | $ | 734,845 | $ | 731,722 | $ | 710,815 | ||||||||||||||||||
Earning assets | 734,860 | 704,738 | 688,792 | 682,345 | 668,468 | |||||||||||||||||||||||
Loans | 566,213 | 550,612 | 548,220 | 548,974 | 535,424 | |||||||||||||||||||||||
Deposits | 658,119 | 623,328 | 607,342 | 606,498 | 587,531 | |||||||||||||||||||||||
Shareholders' equity | 83,614 | 81,458 | 78,967 | 76,536 | 73,877 | |||||||||||||||||||||||
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) | September 30, | September 30, | ||||||
(Dollars in thousands, except per share data) | 2019 | 2018 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | ||||||||
Cash and due from banks | $ | 20,696 | $ | 15,865 | ||||
Interest-earning deposits in other banks | 58,873 | 17,384 | ||||||
Total cash and cash equivalents | 79,569 | 33,249 | ||||||
Securities | ||||||||
Available-for-sale, at fair-value | 89,572 | 89,507 | ||||||
Held-to-maturity | 15,097 | 21,260 | ||||||
Equity securities | 91 | 87 | ||||||
Restricted stock, at cost | 4,614 | 4,614 | ||||||
Total securities | 109,374 | 115,468 | ||||||
Loans held for sale | 399 | 192 | ||||||
Loans | 566,213 | 535,424 | ||||||
Less allowance for loan losses | 6,776 | 6,204 | ||||||
Net loans | 559,437 | 529,220 | ||||||
Premises and equipment, net | 11,595 | 9,605 | ||||||
Goodwill and core deposit intangible | 4,847 | 4,920 | ||||||
Bank owned life insurance | 16,880 | 13,470 | ||||||
Accrued interest receivable and other assets | 4,691 | 4,691 | ||||||
TOTAL ASSETS | $ | 786,792 | $ | 710,815 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 192,620 | $ | 177,203 | ||||
Interest-bearing | 465,499 | 410,328 | ||||||
Total deposits | 658,119 | 587,531 | ||||||
Short-term borrowings | 35,070 | 37,465 | ||||||
Other borrowings | 6,453 | 8,676 | ||||||
Accrued interest payable and other liabilities | 3,536 | 3,266 | ||||||
Total liabilities | 703,178 | 636,938 | ||||||
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 | 59,915 | 52,510 | ||||||
Treasury stock at cost - 238,252 shares in 2019 and 238,360 in 2018 | (4,780 | ) | (4,784 | ) | ||||
Accumulated other comprehensive loss | 35 | (2,293 | ) | |||||
Total shareholders' equity | 83,614 | 73,877 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 786,792 | $ | 710,815 | ||||
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Quarter ended | Nine months ended | |||||||||||||||
(Unaudited) | September 30, | September 30, | ||||||||||||||
(Dollars in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Interest and dividend income: | ||||||||||||||||
Loans, including fees | $ | 7,239 | $ | 6,707 | $ | 21,496 | $ | 19,361 | ||||||||
Taxable securities | 534 | 586 | 1,705 | 1,784 | ||||||||||||
Nontaxable securities | 133 | 152 | 401 | 464 | ||||||||||||
Other | 356 | 127 | 749 | 256 | ||||||||||||
Total interest and dividend income | 8,262 | 7,572 | 24,351 | 21,865 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 966 | 633 | 2,711 | 1,647 | ||||||||||||
Other | 108 | 138 | 370 | 376 | ||||||||||||
Total interest expense | 1,074 | 771 | 3,081 | 2,023 | ||||||||||||
Net interest income | 7,188 | 6,801 | 21,270 | 19,842 | ||||||||||||
Provision for loan losses | 285 | 324 | 855 | 972 | ||||||||||||
Net interest income after provision for loan losses | 6,903 | 6,477 | 20,415 | 18,870 | ||||||||||||
Noninterest income | ||||||||||||||||
Service charges on deposits accounts | 333 | 301 | 938 | 885 | ||||||||||||
Trust services | 234 | 204 | 670 | 641 | ||||||||||||
Debit card interchange fees | 377 | 330 | 1,093 | 966 | ||||||||||||
Gain on sale of loans | 132 | 63 | 287 | 200 | ||||||||||||
Market value change in equity securities | 5 | (6 | ) | 8 | (2 | ) | ||||||||||
Other | 359 | 283 | 981 | 798 | ||||||||||||
Total noninterest income | 1,440 | 1,175 | 3,977 | 3,488 | ||||||||||||
Noninterest expenses | ||||||||||||||||
Salaries and employee benefits | 2,993 | 2,805 | 8,750 | 8,160 | ||||||||||||
Occupancy expense | 209 | 194 | 618 | 628 | ||||||||||||
Equipment expense | 128 | 145 | 408 | 461 | ||||||||||||
Professional and director fees | 316 | 199 | 963 | 749 | ||||||||||||
Software expense | 225 | 221 | 674 | 655 | ||||||||||||
Marketing and public relations | 149 | 124 | 405 | 363 | ||||||||||||
Debit card expense | 142 | 144 | 401 | 386 | ||||||||||||
Other expenses | 837 | 806 | 2,471 | 2,392 | ||||||||||||
Total noninterest expenses | 4,999 | 4,638 | 14,690 | 13,794 | ||||||||||||
Income before income tax | 3,344 | 3,014 | 9,702 | 8,564 | ||||||||||||
Federal income tax provision | 649 | 582 | 1,881 | 1,644 | ||||||||||||
Net income | $ | 2,695 | $ | 2,432 | $ | 7,821 | $ | 6,920 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.98 | $ | 0.88 | $ | 2.85 | $ | 2.52 | ||||||||
Diluted | $ | 0.98 | $ | 0.88 | $ | 2.85 | $ | 2.52 | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20191022006134/en/
Contacts:
330.763.2873
paula.meiler@csb1.com
