CSB Bancorp, Inc. Reports Fourth Quarter and Full Year Earnings

MILLERSBURG, Ohio--()--CSB Bancorp, Inc. (OTCBB: CSBB):

Fourth Quarter and Full Year Highlights

 
        Quarter Ended     Full Year Ended
December 31, 2013 December 31, 2013
 
Diluted earnings per share $ 0.45 $ 1.91
 
Net Income $ 1,224,000 $ 5,240,000
 
Return on average common equity 9.19 % 9.93 %
 
Return on average assets 0.82 % 0.90 %
 

CSB Bancorp, Inc. (CSBB) today announced fourth quarter 2013 net income of $1.2 million or $.45 per basic and diluted share, as compared to $1.1 million or $.41 per basic and diluted share for the same period in 2012.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 9.19% and 0.82%, respectively, compared with 8.50% and 0.77% for the fourth quarter of 2012.

For the full year of 2013, the Company reported net income of $5.2 million or $1.91 per basic and diluted share, as compared to $4.5 million or $1.66 per basic and diluted share in 2012. Full year ROE and ROA were 9.93% and 0.90%, respectively, compared to 8.85% and 0.80% in 2012.

Eddie Steiner, President and CEO commented, “Net interest income increased for the eleventh time out of the past twelve quarters. Our ability to attract and grow customer relationships has been instrumental in driving the revenue stream. This focus on expanding customer relationships will continue to be our core strategy in the coming year.”

Revenue, on a fully-taxable equivalent basis, totaled $6.0 million for the fourth quarter of 2013, a 5.8% increase from the prior-year fourth quarter. Full year revenue of $23.5 million reflects a $1.4 million, or 6.4%, increase as compared to full year 2012.

Non-interest expense amounted to $4 million during the quarter, an increase of $174 thousand or 4.6% from fourth quarter 2012. For the full year ended December 31, 2013, non-interest expense increased $398 thousand or 2.8% versus 2012, with the majority of the change attributable to increases in personnel costs.

The Company’s fourth quarter efficiency ratio amounted to 65.7% as compared to 63.6% for the same quarter in the prior year. The full year 2013 efficiency ratio of 63.0% compares to 64.7% for the full prior year. Net interest margin amounted to 3.55% for the quarter and 3.51% for the full year, compared to 3.33% and 3.36% for the prior year’s fourth quarter and full year, respectively.

Federal income tax provision was $520 thousand for fourth quarter 2013, compared to $475 thousand for the same quarter in 2012. Full year income tax of $2.3 million for 2013 was 14% higher than prior year and reflects an effective tax rate of 30.3% for current year versus 30.4% in 2012.

Average total assets during the quarter amounted to $595 million, an increase of $19 million or 3.3% above the same quarter of the prior year. Average loan balances of $376 million were $20 million or 5.5% above prior year fourth quarter, while average securities balances of $147 million increased $14 million or 10% as compared to fourth quarter 2012.

Total assets amounted to $596 million on December 31, 2013, up $10 million or 1.6% from December 31, 2012. Loans increased to $379 million, up $15 million or 4% from the prior year-end, while securities balances of $152 million were $17 million or 12% higher than year ago balances.

Average commercial loan balances for the quarter, including commercial real estate, increased $12 million or 5% above year ago levels. Average residential mortgage balances increased by $4 million or 5% during the year. The increase of in-house mortgage balances was the result of the bank originating and retaining 15 year fixed rate mortgages. Average home equity balances increased $1 million or 2%, and average consumer credit balances increased $333 thousand or 5% versus the same quarter of the prior year.

Net charge-offs for the quarter and the full year were $202 thousand and $335 thousand, respectively. Net charge-offs equated to 0.09% of average loans during 2013 and 2012.

Nonperforming assets totaled $5.1 million or 0.86% of total loans plus other real estate at December 31, 2013, compared to $4.6 million or 0.92% at the prior year-end. Delinquent loan balances as of year-end 2013 amounted to 1.26% of total loans as compared to 1.25% at the end of 2012.

The Company funded $210 thousand in loan loss provision during the fourth quarter and the allowance for loan losses amounted to 1.34% of total loans on December 31, 2013. The ratio of the allowance for loan losses to nonperforming loans stood at 156% at the end of 2013.

Commenting on the Company’s credit quality, Steiner noted, “Our level of nonperforming assets have declined fairly consistently since peaking during first quarter 2010, with an increase this past quarter related solely to a single credit. Delinquencies as a percentage of the loan portfolio remain low and relatively stable, amounting to 1.26% at year-end 2013.”

Average deposit balances grew by $10 million, or 2%, from the prior linked quarter. Total average deposits of $479 million for the quarter were 3% above the prior year’s fourth quarter average.

Deposit balances totaled $481 million at year-end, an increase of $5 million or 1% from the prior year-end. Within the deposit category, average noninterest-bearing account balances for the fourth quarter increased by $24 million, or 24% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $10 million or 5% from year ago levels, while average time deposit balances decreased $18 million or 12% during the year. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the fourth quarter grew by $6 million or 15% above the average for the same period in the prior year. Repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $52.4 million on December 31, 2013 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 7.9% on December 31, 2013, as compared to 8.1% on December 31, 2012. The Company declared a common dividend of $.18 per share during the quarter. Based on the December 31, 2013 closing stock price of $19.00 per share, the Company’s annual dividend yield approximates 3.8%.

About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $596 million as of December 31, 2013. 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 sixteen banking centers in Holmes, Wayne, Tuscarawas and Stark counties and Trust offices located in Millersburg 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)
(Dollars in thousands except per share data)
Quarters
2013 2013 2013 2013 2012 2013 2012
EARNINGS           4th Qtr       3rd Qtr       2nd Qtr       1st Qtr       4th Qtr     12 months     12 months  
Net interest income FTE (a) $ 5,000

 

$

4,755

 

$

4,668

 

$

4,767

 

$

4,543

 

$

19,190

 

$

17,896
Provision for loan losses 210 210 210 210 206 840 823
Other income 1,024 1,190 1,066 1,038 1,149 4,318 4,204
Other expenses 3,992 3,634 3,663 3,559 3,818 14,848 14,450
FTE adjustment (a) 78 78 76 75 73 307 290
Net income 1,224 1,407 1,247 1,362 1,120 5,240 4,547
Diluted earnings per share 0.45 0.51 0.45 0.50 0.41 1.91 1.66
 
PERFORMANCE RATIOS
Return on average assets (ROA) 0.82 % 0.96 % 0.88 % 0.96 % 0.77 % 0.90 % 0.80 %
Return on average common equity (ROE) 9.19 % 10.79 % 9.32 % 10.43 % 8.50 % 9.93 % 8.85 %
Net interest margin FTE (a) 3.55 % 3.46 % 3.49 % 3.56 % 3.33 % 3.51 % 3.36 %
Efficiency ratio 65.70 % 62.11 % 63.40 % 60.72 % 63.61 % 63.01 % 64.75 %
Number of full-time equivalent employees 157 165 159 164 162
 
MARKET DATA
Book value/common share $ 19.15

 

$

19.06

 

$

18.78

 

$

19.31

 

$

19.17
Period-end common share mkt value 19.00 19.15 19.25 19.20 17.00
Market as a % of book 99.22 % 100.47 % 102.50 % 99.43 % 88.68 %
Price-to-earnings ratio 9.90 10.19 10.64 10.85 10.24
Cash dividends/common share $ 0.18

 

$

0.18

 

$

0.18

 

$

0.18

 

$

0.18

 

$

0.72

 

$

0.72
Common stock dividend payout ratio 37.50 % 34.62 % 40.00 % 36.00 % 43.90 %
Average basic common shares 2,736,634 2,736,634 2,736,555 2,736,060 2,735,157 2,736,473 2,734,889
Average diluted common shares 2,738,411 2,738,638 2,738,708 2,738,300 2,735,328 2,738,477 2,735,141
Period end common shares outstanding 2,736,634 2,736,634 2,736,634 2,736,060 2,736,060
Common shares repurchased 0 0 0 0 0 0 0
Common stock market capitalization $ 51,996

 

$

52,407

 

$

52,680

 

$

52,532

 

$

46,513
 
ASSET QUALITY
Gross charge-offs $ 226

 

$

91

 

$

95

 

$

16

 

$

304

 

$

428

 

$

507
Net charge-offs (recoveries) 202 78 69 (14) 287 335 325
Allowance for loan losses 5,085 5,077 4,945 4,804 4,580
Nonperforming assets (NPAs) 3,270 2,368 2,394 2,187 3,362
Net charge-off/average loans ratio 0.21 % 0.08 % 0.07 % (0.02) % 0.32 % 0.09 % 0.09 %
Allowance for loan losses/period-end loans 1.34 1.35 1.31 1.29 1.26
NPAs/loans and other real estate 0.86 0.63 0.63 0.59 0.92
Allowance for loan losses/nonperforming loans 155.50 214.38 206.60 219.66 137.23
 
CAPITAL & LIQUIDITY
Period-end tangible equity to assets 7.94 % 7.92 % 8.11 % 8.39 % 8.06 %
Average equity to assets 8.89 8.89 9.39 9.20 9.11
Average equity to loans 14.05 13.81 14.30 14.20 14.70
Average loans to deposits 78.50 79.81 81.36 80.57 76.87
 
AVERAGE BALANCES
Assets $ 594,736

 

$

582,200

 

$

571,569

 

$

575,925

 

$

575,498

 

$

581,150

 

$

564,875
Earning assets 558,155 545,907 537,165 543,068 542,150 546,112 532,005
Loans 376,164 374,579 375,447 373,064 356,555 374,821 342,868
Deposits 479,174 469,353 461,488 463,030 463,862 468,395 453,526
Shareholders' equity 52,861 51,745 53,677 52,960 52,415 52,787 51,384
 
ENDING BALANCES
Assets $ 596,465

 

$

593,895

 

$

571,068

 

$

568,852

 

$

586,900
Earning assets 557,482 554,165 534,806 538,674 544,727
Loans 379,125 377,434 378,191 373,367 364,580
Deposits 480,933 480,861 462,845 457,530 475,443
Shareholders' equity 52,411 52,149 51,391 52,830 52,453
                                               

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, December 31,
2013 2012
ASSETS
Cash and cash equivalents
Cash and due from banks $ 15,777 $ 21,485
Interest-earning deposits in other banks 26,822 45,393
Federal funds sold   -     -  
Total cash and cash equivalents 42,599 66,878
Securities
Available-for-sale, at fair-value 101,722 129,291
Held-to-maturity 44,350 -
Restricted stock, at cost   5,463     5,463  
Total securities 151,535 134,754
Loans held for sale - -
Loans 379,125 364,580
Less allowance for loan losses   5,085     4,580  
Net loans 374,040 360,000
 
Goodwill and core deposit intangible 5,487 5,622
Bank owned life insurance 9,551 8,298
Premises and equipment, net 8,690 8,475
Accrued interest receivable and other assets   4,563     2,873  
 
TOTAL ASSETS $ 596,465   $ 586,900  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing $ 120,325 $ 104,147
Interest-bearing   360,608     371,296  
Total deposits 480,933 475,443
 
Short-term borrowings 48,671 43,992
Other borrowings 12,459 12,672
Accrued interest payable and other liabilities   1,991     2,340  
Total liabilities   544,054     534,447  
Shareholders' equity
Common stock, $6.25 par value. Authorized
9,000,000 shares; issued 2,980,602 shares
in 2013 and 2012 18,629 18,629
Additional paid-in capital 9,964 9,974
Retained earnings 30,232 26,962
Treasury stock at cost - 243,968 shares in 2013
and 244,542 in 2012 (4,958 ) (4,976 )
Accumulated other comprehensive (loss) income   (1,456 )   1,864  
Total shareholders' equity   52,411     52,453  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 596,465   $ 586,900  
 
                   
 
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
 
(Unaudited)

dollars in thousands, except per share data

 

Quarter ended

Year ended

December 31,

December 31,

2013 2012 2013 2012
Interest and dividend income:
Loans, including fees $ 4,542 $ 4,397 $ 17,963 $ 17,279
Taxable securities 736 599 2,572 2,672
Nontaxable securities 128 122 513 486
Other   24   35   90   147
Total interest and dividend income   5,430   5,153   21,138   20,584
Interest expense:
Deposits 374 533 1,720 2,323
Other   134   150   535   655
Total interest expense   508   683   2,255   2,978
Net interest income 4,922 4,470 18,883 17,606
Provision for loan losses   210   206   840   823

Net interest income after provision for loan losses

  4,712   4,264   18,043   16,783
Non-interest income
Service charges on deposits accounts 348 334 1,349 1,305
Trust services 186 168 826 671
Gain on sale of loans 64 229 347 591
Gain on sale of securities - - 159 -
Other   426   419   1,637   1,637
Total non-interest income   1,024   1,150   4,318   4,204
 
Non-interest expenses
Salaries and employee benefits 2,142 2,051 8,261 7,960
Occupancy expense 267 257 1,026 1,025
Equipment expense 195 170 719 618
Franchise tax expense 141 126 581 542
Professional and director fees 163 193 628 814
Federal deposit insurance 97 90 359 328
Amortization of intangible assets 34 37 135 140
Other expenses   953   894   3,139   3,023
Total non-interest expenses   3,992   3,818   14,848   14,450
Income before income tax 1,744 1,596 7,513 6,537
Federal income tax provision   520   475   2,273   1,990
 
Net income $ 1,224 $ 1,121 $ 5,240 $ 4,547
Net income per share:
Basic $ 0.45 $ 0.41 $ 1.91 $ 1.66
 
Diluted $ 0.45 $ 0.41 $ 1.91 $ 1.66
 

Note: Certain prior year balances have been reclassified to conform to the current year presentation.

Contacts

CSB Bancorp, Inc.
Paula J. Meiler, SVP & CFO, 330-763-2873
paula.meiler@csb1.com

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Contacts

CSB Bancorp, Inc.
Paula J. Meiler, SVP & CFO, 330-763-2873
paula.meiler@csb1.com