MILLERSBURG, Ohio--(BUSINESS WIRE)--CSB Bancorp, Inc. (OTC Pink: CSBB):
Second Quarter Highlights
| Quarter Ended | Quarter Ended | |||||||||||
|
June 30, 2017 |
June 30, 2016 |
|||||||||||
| Diluted earnings per share | $ | 0.63 | $ | 0.59 | ||||||||
| Net Income | $ | 1,726,000 | $ | 1,611,000 | ||||||||
| Return on average common equity | 10.15 | % | 10.14 | % | ||||||||
| Return on average assets | 1.01 | % | 1.00 | % | ||||||||
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2017 net income of $1,726,000, or $.63 per basic and diluted share, as compared to $1,611,000, or $.59 per basic and diluted share, for the same period in 2016. For the six month period ended June 30, 2017 net income totaled $3,456,000, compared to $3,091,000 for the same period last year an increase of 12%.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.15% and 1.01%, respectively, compared with 10.14% and 1.00% for the second quarter of 2016.
Eddie Steiner, President and CEO stated, “Six month revenue is 9% ahead of last year’s midpoint on the strength of 11% growth in average loan balances and an increase in net interest margin. Business, homeowner and consumer lending platforms are all contributing to this loan growth.”
Revenue, on a fully-taxable equivalent basis, totaled $7.1 million during the quarter, a 7% increase from the prior-year second quarter. Net interest income increased $504 thousand, or 9%, in the second quarter of 2017 compared to the same period in 2016. Loan interest income including fees increased $618 thousand during second quarter 2017 as compared to the same quarter in 2016. This increase was driven partially by an increase in average loan volume of $43 million across all categories of loans as well as in increase of 9 basis points in loan yield. The net interest margin of 3.75% compared favorably to 3.65% for second quarter 2016.
Noninterest income declined by $37 thousand, or 3%, in the second quarter of 2017 compared to 2016. The decrease reflects a $66 thousand drop in trust and brokerage fees a result of broker and administrative changes within the unit which have been completed late in second quarter 2017. The decrease in other income was partially offset by growth in cash surrender value of life insurance and increases in debit card fee income. During 2016 a write-down of fixed assets of $25 thousand occurred during second quarter which did not recur in 2017.
Noninterest expense amounted to $3.7 million during the quarter, a decrease of $374 thousand, or 9%, from second quarter 2016. This decrease primarily results from CSB reversing a $540 thousand provision for unfunded loan commitments as a previously impaired commercial line of credit is currently drawn. Salary and employee benefits rose $173 thousand, or 8%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes. The Company’s second quarter efficiency ratio amounted to 51.5% as compared to 60.8% for the same quarter in the prior year and improved to 58.4% for the current six month period as compared to 61.5% in the first six months of 2016.
Federal income tax provision totaled $751 thousand in second quarter 2017, compared to $705 thousand for the same quarter in 2016 reflecting a slightly decreased effective tax rate in 2017 from an increase in nontaxable income.
Average total assets during the quarter amounted to $686 million, an increase of $40 million, or 6%, above the same quarter of the prior year. Average loan balances of $490 million increased $43 million, or 10%, from the prior year second quarter while average securities balances of $133 million decreased $17 million, or 12%, as compared to second quarter 2016.
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 $18 million, or 21%, over the prior year’s quarter. Average home equity balances increased $2 million, or 4%, and average consumer credit balances increased $4 million, or 36%, versus the same quarter of the prior year.
Delinquent loan balances as of June 30, 2017 amounted to 1.31% of total loans as compared to 0.82% at June 30, 2016. Nonperforming assets totaled $6.0 million, or 1.21%, of total loans plus other real estate, an increase of $3 million over June 30, 2016. The allowance for loan losses amounted to 1.26% of total loans on June 30, 2017 as compared to 1.14% at June 30, 2016.
Net loan losses recognized during second quarter 2017 were $10 thousand, or 0.01% annualized, compared to second quarter 2016 net loan losses of $14 thousand.
Average deposit balances for second quarter 2017 totaled $542 million, an increase of $27 million, or 5%, from the prior year’s second quarter. Within the deposit category, average noninterest-bearing account balances for the second quarter increased by $18 million, or 12%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $15 million, or 6%, from year ago levels, while average time deposit balances decreased $6 million, or 5%, from second quarter 2016. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the second quarter of 2017 increased by $4 million, or 8%, compared to 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 $68.7 million on June 30, 2017 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.2% on June 30, 2017 and June 30, 2016. The Company declared a second quarter dividend of $0.20 per share producing an annualized yield of 2.6% based on the June 30, 2017 closing price of $30.60.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $697 million as of June 30, 2017. 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, 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) | 2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||||||||
| EARNINGS | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 6 months | 6 months | |||||||||||||||||||||
| Net interest income FTE (a) | $ | 6,046 | $ | 5,955 | $ | 6,022 | $ | 5,597 | $ | 5,539 | $ | 12,001 | $ | 10,912 | ||||||||||||||
| Provision for loan losses | 845 | (160) | - | 164 | 165 | 685 | 329 | |||||||||||||||||||||
| Other income | 1,060 | 1,106 | 1,112 | 1,095 | 1,097 | 2,166 | 2,089 | |||||||||||||||||||||
| Other expenses | 3,688 | 4,646 | 4,210 | 3,994 | 4,062 | 8,334 | 8,051 | |||||||||||||||||||||
| FTE adjustment (a) | 96 | 93 | 91 | 100 | 93 | 189 | 181 | |||||||||||||||||||||
| Net income | 1,726 | 1,730 | 1,953 | 1,694 | 1,611 | 3,456 | 3,091 | |||||||||||||||||||||
| Diluted earnings per share | 0.63 | 0.63 | 0.72 | 0.61 | 0.59 | 1.26 | 1.13 | |||||||||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
| Return on average assets (ROA) | 1.01 |
% |
|
1.05 |
% |
|
1.17 |
% |
|
1.03 |
% |
|
1.00 |
% |
|
1.03 |
% |
|
0.97 | % | ||||||||
| Return on average common equity (ROE) | 10.15 |
% |
|
10.54 |
% |
|
11.76 |
% |
|
10.29 |
% |
|
10.14 |
% |
|
10.34 |
% |
|
9.83 | % | ||||||||
| Net interest margin FTE (a) | 3.75 |
% |
|
3.85 |
% |
|
3.83 |
% |
|
3.61 |
% |
|
3.65 |
% |
|
3.80 |
% |
|
3.61 | % | ||||||||
| Efficiency ratio | 51.49 |
% |
|
65.39 |
% |
|
58.59 |
% |
|
59.23 |
% |
|
60.76 |
% |
|
58.42 |
% |
|
61.46 | % | ||||||||
| Number of full-time equivalent employees |
169 |
164 | 165 | 165 | 166 | |||||||||||||||||||||||
| MARKET DATA | ||||||||||||||||||||||||||||
| Book value/common share | $ | 25.06 | $ | 24.41 | $ | 23.85 | $ | 23.98 | $ | 23.49 | ||||||||||||||||||
| Period-end common share mkt value | 30.60 | 31.00 | 31.00 | 25.17 | 25.20 | |||||||||||||||||||||||
| Market as a % of book | 122.11 |
% |
|
127.00 |
% |
|
129.98 |
% |
|
104.96 |
% |
|
107.28 |
% |
|
|||||||||||||
| Price-to-earnings ratio | 11.81 | 12.16 | 12.60 | 10.80 | 11.00 | |||||||||||||||||||||||
| Cash dividends/common share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.19 | $ | 0.40 | $ | 0.38 | ||||||||||||||
| Common stock dividend payout ratio | 31.75 |
% |
|
31.75 |
% |
|
27.78 |
% |
|
32.79 |
% |
|
32.20 |
% |
|
31.75 |
% |
|
33.63 | % | ||||||||
| Average basic common shares | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,741,811 | |||||||||||||||||||||
| Average diluted common shares | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,742,242 | 2,741,811 | |||||||||||||||||||||
| 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 | $ | 83,913 | $ | 85,010 | $ | 85,010 | $ | 69,022 | $ | 69,104 | ||||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||||||||||
| Gross charge-offs | $ | 34 | $ | 13 | $ | 44 | $ | 346 | $ | 18 | $ | 47 | $ | 28 | ||||||||||||||
| Net charge-offs (recoveries) | 10 | (323) | (289) | 318 | 14 | (313) | (165) | |||||||||||||||||||||
| Allowance for loan losses | 6,289 | 5,454 | 5,291 | 5,002 | 5,156 | |||||||||||||||||||||||
| Nonperforming assets (NPAs) | 6,036 | 4,909 | 1,684 | 2,849 | 2,806 | |||||||||||||||||||||||
|
Net charge-off (recovery)/average loans ratio |
0.01 |
% |
|
(0.27) |
% |
|
(0.25) |
% |
|
0.27 |
% |
|
0.01 |
% |
|
(0.13) |
% |
|
(0.08) | % | ||||||||
| Allowance for loan losses/period-end loans | 1.26 | 1.13 | 1.11 | 1.08 | 1.14 | |||||||||||||||||||||||
| NPAs/loans and other real estate | 1.21 | 1.02 | 0.35 | 0.62 | 0.62 | |||||||||||||||||||||||
| Allowance for loan losses/nonperforming loans | 104.19 | 111.10 | 314.19 | 177.61 | 188.59 | |||||||||||||||||||||||
| CAPITAL & LIQUIDITY | ||||||||||||||||||||||||||||
| Period-end tangible equity to assets | 9.20 |
% |
|
9.17 |
% |
|
9.07 |
% |
|
9.34 |
% |
|
9.19 |
% |
|
|||||||||||||
| Average equity to assets | 9.93 | 9.98 | 9.95 | 10.02 | 9.88 | |||||||||||||||||||||||
| Average equity to loans | 13.90 | 13.85 | 14.25 | 14.33 | 14.29 | |||||||||||||||||||||||
| Average loans to deposits | 90.42 | 90.45 | 87.15 | 87.89 | 86.71 | |||||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Assets | $ | 686,403 | $ | 666,650 | $ | 664,158 | $ | 653,635 | $ | 646,642 | $ | 676,655 | $ | 643,656 | ||||||||||||||
| Earning assets | 646,859 | 627,520 | 625,320 | 616,555 | 610,138 | 637,242 | 607,524 | |||||||||||||||||||||
| Loans | 490,359 | 480,656 | 463,725 | 456,865 | 447,009 | 485,534 | 437,462 | |||||||||||||||||||||
| Deposits | 542,308 | 531,380 | 532,102 | 519,828 | 515,511 | 531,380 | 513,851 | |||||||||||||||||||||
| Shareholders' equity | 68,184 | 66,560 | 66,094 | 65,471 | 63,877 | 67,377 | 63,251 | |||||||||||||||||||||
| ENDING BALANCES | ||||||||||||||||||||||||||||
| Assets | $ | 696,891 | $ | 679,437 | $ | 669,978 | $ | 654,391 | $ | 649,890 | ||||||||||||||||||
| Earning assets | 657,249 | 640,113 | 631,069 | 617,264 | 610,221 | |||||||||||||||||||||||
| Loans | 498,625 | 480,709 | 475,449 | 463,211 | 450,789 | |||||||||||||||||||||||
| Deposits | 547,104 | 542,180 | 540,785 | 522,240 | 516,497 | |||||||||||||||||||||||
| Shareholders' equity | 68,726 | 66,927 | 65,415 | 65,751 | 64,407 | |||||||||||||||||||||||
| 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) | 2017 | 2016 | ||||||
| ASSETS | ||||||||
| Cash and cash equivalents | ||||||||
| Cash and due from banks | $ | 15,445 | $ | 16,859 | ||||
| Interest-earning deposits in other banks | 23,351 | 11,268 | ||||||
| Federal Funds Sold | - | - | ||||||
| Total cash and cash equivalents | 38,796 | 28,127 | ||||||
| Securities | ||||||||
| Available-for-sale, at fair-value | 103,058 | 119,355 | ||||||
| Held-to-maturity | 27,169 | 23,845 | ||||||
| Restricted stock, at cost | 4,614 | 4,614 | ||||||
| Total securities | 134,841 | 147,814 | ||||||
| Loans held for sale | 432 | 350 | ||||||
| Loans | 498,625 | 450,789 | ||||||
| Less allowance for loan losses | 6,289 | 5,156 | ||||||
| Net loans | 492,336 | 445,633 | ||||||
| Goodwill and core deposit intangible | 5,053 | 5,172 | ||||||
| Bank owned life insurance | 13,045 | 10,222 | ||||||
| Premises and equipment, net | 8,633 | 8,660 | ||||||
| Accrued interest receivable and other assets | 3,755 | 3,912 | ||||||
| TOTAL ASSETS | $ | 696,891 | $ | 649,890 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 169,241 | $ | 156,365 | ||||
| Interest-bearing | 377,863 | 360,132 | ||||||
| Total deposits | 547,104 | 516,497 | ||||||
| Short-term borrowings | 56,932 | 54,125 | ||||||
| Other borrowings | 21,781 | 12,574 | ||||||
| Accrued interest payable and other liabilities | 2,348 | 2,287 | ||||||
| Total liabilities | 628,165 | 585,483 | ||||||
| Shareholders' equity | ||||||||
|
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2017 and 2016 |
18,629 | 18,629 | ||||||
| Additional paid-in capital | 9,815 | 9,815 | ||||||
| Retained earnings | 44,987 | 40,079 | ||||||
|
Treasury stock at cost - 238,360 shares in 2017 and 2016 |
(4,784 | ) | (4,784 | ) | ||||
| Accumulated other comprehensive income | 79 | 668 | ||||||
| Total shareholders' equity | 68,726 | 64,407 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 696,891 | $ | 649,890 | ||||
| CSB BANCORP, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
|
Quarter ended |
Year ended |
||||||||||||
| (Unaudited) |
June 30, |
June 30, |
|||||||||||
| (Dollars in thousands, except per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||
| Interest and dividend income: | |||||||||||||
| Loans, including fees | $ | 5,584 | $ | 4,966 | $ | 11,033 | $ | 9,708 | |||||
| Taxable securities | 598 | 662 | 1,196 | 1,398 | |||||||||
| Nontaxable securities | 174 | 165 | 339 | 319 | |||||||||
| Other | 57 | 20 | 91 | 49 | |||||||||
| Total interest and dividend income | 6,413 | 5,813 | 12,659 | 11,474 | |||||||||
| Interest expense: | |||||||||||||
| Deposits | 307 | 250 | 574 | 509 | |||||||||
| Other | 156 | 117 | 273 | 234 | |||||||||
| Total interest expense | 463 | 367 | 847 | 743 | |||||||||
| Net interest income | 5,950 | 5,446 | 11,812 | 10,731 | |||||||||
| Provision for loan losses | 845 | 165 | 685 | 329 | |||||||||
|
Net interest income after provision for loan losses |
5,105 | 5,281 | 11,127 | 10,402 | |||||||||
| Noninterest income | |||||||||||||
| Service charges on deposits accounts | 268 | 288 | 559 | 566 | |||||||||
| Trust services | 152 | 218 | 359 | 444 | |||||||||
| Debit card interchange fees | 296 | 271 | 584 | 533 | |||||||||
| Gain on sale of loans | 61 | 118 | 103 | 150 | |||||||||
| Gain on sale of securities | - | - | - | - | |||||||||
| Other | 283 | 202 | 561 | 396 | |||||||||
| Total noninterest income | 1,060 | 1,097 | 2,166 | 2,089 | |||||||||
| Noninterest expenses | |||||||||||||
| Salaries and employee benefits | 2,472 | 2,299 | 4,931 | 4,626 | |||||||||
| Occupancy expense | 214 | 233 | 424 | 477 | |||||||||
| Equipment expense | 171 | 169 | 341 | 343 | |||||||||
| Professional and director fees | 234 | 189 | 403 | 363 | |||||||||
| Software expense | 203 | 198 | 413 | 384 | |||||||||
| Marketing and public relations | 89 | 143 | 167 | 228 | |||||||||
| Debit card expense | 141 | 114 | 271 | 218 | |||||||||
| Provision for unfunded loan commitments | (540 | ) | - | - | - | ||||||||
| Other expenses | 704 | 717 | 1,384 | 1,412 | |||||||||
| Total noninterest expenses | 3,688 | 4,062 | 8,334 | 8,051 | |||||||||
| Income before income tax | 2,477 | 2,316 | 4,959 | 4,440 | |||||||||
| Federal income tax provision | 751 | 705 | 1,503 | 1,349 | |||||||||
| Net income | $ | 1,726 | $ | 1,611 | $ | 3,456 | $ | 3,091 | |||||
| Net income per share: | |||||||||||||
| Basic | $ | 0.63 | $ | 0.59 | $ | 1.26 | $ | 1.13 | |||||
| Diluted | $ | 0.63 | $ | 0.59 | $ | 1.26 | $ | 1.13 | |||||
