MILLERSBURG, Ohio--(BUSINESS WIRE)--CSB Bancorp, Inc. (OTC Pink: CSBB):
|Quarter Ended||Quarter Ended|
September 30, 2017
September 30, 2016
|Diluted earnings per share||$0.68||$0.61|
|Return on average common equity||10.62%||10.29%|
|Return on average assets||1.05%||1.03%|
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2017 net income of $1,866,000, or $.68 per basic and diluted share, as compared to $1,694,000, or $.61 per basic and diluted share, for the same period in 2016. For the nine month period ended June 30, 2017 net income totaled $5,322,000, compared to $4,785,000 for the same period last year an increase of 11%.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.62% and 1.05%, respectively, compared with 10.29% and 1.03% for the third quarter of 2016.
Eddie Steiner, President and CEO stated, “Loan and deposit balances continued to grow at a fairly steady pace through the third quarter. Net interest margin, compared to the same quarter in the prior year, improved for the seventh consecutive quarter.”
Revenue, on a fully-taxable equivalent basis, totaled $7.4 million during the quarter, a 10% increase from the prior-year third quarter. Net interest income increased $707 thousand, or 13%, in the third quarter of 2017 compared to the same period in 2016. Loan interest income including fees increased $865 thousand during third quarter 2017 as compared to the same quarter in 2016. This increase was driven partially by an increase in average loan volume of $48 million across all categories of loans as well as in increase of 25 basis points in loan yield. The net interest margin of 3.77% compared favorably to 3.61% for third quarter 2016.
Noninterest income declined by $41 thousand, or 4%, in the third quarter of 2017 compared to 2016. The decrease reflects a $91 thousand drop in trust and brokerage fees a result of broker and administrative changes within the unit. The decrease in other income was partially offset by growth in cash surrender value of life insurance, debit card fee income, and gain on sale of loans.
Noninterest expense amounted to $4.3 million during the quarter, an increase of $292 thousand, or 7%, from third quarter 2016. Salary and employee benefits rose $212 thousand, or 9%, on a quarter over prior year quarter with increases in salary, healthcare, and employment taxes. The Company’s third quarter efficiency ratio was 57.9% as compared to 59.2% for the same quarter in the prior year.
Federal income tax provision totaled $826 thousand in third quarter 2017, compared to $740 thousand for the same quarter in 2016 reflecting an increased effective tax rate in 2017 from an increase in taxable income.
Average total assets during the quarter amounted to $702 million, an increase of $48 million, or 7%, above the same quarter of the prior year. Average loan balances of $505 million increased $48 million, or 11%, from the prior year third quarter while average securities balances of $132 million decreased $13 million, or 9%, as compared to third quarter 2016.
Average commercial loan balances for the quarter, including commercial real estate, increased $28 million, or 9%, from prior year levels. Average residential mortgage balances increased $15 million, or 16%, over the prior year’s quarter. Average home equity balances increased $1 million, or 3%, and average consumer credit balances increased $4 million, or 28%, versus the same quarter of the prior year.
Delinquent loan balances as of September 30, 2017 amounted to 1.22% of total loans as compared to 0.82% at September 30, 2016. Nonperforming assets totaled $4.9 million, or 0.97%, of total loans plus other real estate, an increase of $2 million over September 30, 2016. The increase in nonperforming loans year over year is primarily due to two lending relationships comprised of several loans. The allowance for loan losses amounted to 1.07% of total loans on September 30, 2017 as compared to 1.08% at September 30, 2016.
Net loan losses recognized during third quarter 2017 were $1.1 million, or 0.89% annualized, compared to third quarter 2016 net loan losses of $318 thousand.
Average deposit balances for third quarter 2017 totaled $559 million, an increase of $39 million, or 8%, from the prior year’s third quarter. Within the deposit category, average noninterest-bearing account balances for the third quarter increased by $39 million, or 8%, above the same period in the prior year. Average interest-bearing checking, money market, and traditional savings balances increased $11 million, or 7%, from year ago levels, while average time deposit balances decreased $4 million, or 4%, from third quarter 2016. In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the third quarter of 2017 decreased 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 $69.8 million on September 30, 2017 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.2% on September 30, 2017 and 9.3% on September 30, 2016. The Company declared a third quarter dividend of $0.22 per share producing an annualized yield of 2.9% based on the September 30, 2017 closing price of $30.50.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $711 million as of September 30, 2017. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with sixteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, Ohio.
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
|CSB BANCORP, INC.|
|CONSOLIDATED FINANCIAL HIGHLIGHTS|
|(Dollars in thousands, except per share data)||2017||2017||2017||2016||2016||2017||2016|
|EARNINGS||3rd Qtr||2nd Qtr||1st Qtr||4th Qtr||3rd Qtr||9 months||9 months|
|Net interest income FTE (a)||$||6,300||$||6,046||$||5,955||$||6,022||$||5,597||$||18,301||$||16,509|
|Provision for loan losses||280||845||(160)||-||164||965||493|
|FTE adjustment (a)||96||96||93||91||100||285||281|
|Diluted earnings per share||0.68||0.63||0.63||0.72||0.61||1.94||1.74|
|Return on average assets (ROA)||1.05||%||1.01||%||1.05||%||1.17||%||1.03||%||1.04||%||0.99||%|
|Return on average common equity (ROE)||10.62||%||10.15||%||10.54||%||11.76||%||10.29||%||10.44||%||9.99||%|
|Net interest margin FTE (a)||3.77||%||3.75||%||3.85||%||3.83||%||3.61||%||3.79||%||3.61||%|
|Number of full-time equivalent employees||169||169||164||165||165|
|Book value/common share||$||25.47||$||25.06||$||24.41||$||23.85||$||23.98|
|Period-end common share mkt value||30.50||30.60||31.00||31.00||25.17|
|Market as a % of book||119.75||%||122.11||%||127.00||%||129.98||%||104.96||%|
|Cash dividends/common share||$||0.22||$||0.20||$||0.20||$||0.20||$||0.20||$||0.62||$||0.58|
|Common stock dividend payout ratio||32.35||%||31.75||%||31.75||%||27.78||%||32.79||%||31.96||%||33.33||%|
|Average basic common shares||2,742,242||2,742,242||2,742,242||2,742,242||2,742,242||2,742,242||2,741,956|
|Average diluted common shares||2,742,242||2,742,242||2,742,242||2,742,242||2,742,242||2,742,242||2,741,956|
|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||$||83,638||$||83,913||$||85,010||$||85,010||$||69,022|
|Net charge-offs (recoveries)||1,133||10||(323)||(289)||318||820||153|
|Allowance for loan losses||5,436||6,289||5,454||5,291||5,002|
|Nonperforming assets (NPAs)||4,930||6,036||4,909||1,684||2,849|
|Net charge-off (recovery) /average loans ratio||0.89||%||0.01||%||(0.27)||%||(0.25)||%||0.27||%||0.22||%||0.05||%|
|Allowance for loan losses/period-end loans||1.07||1.26||1.13||1.11||1.08|
|NPAs/loans and other real estate||0.97||1.21||1.02||0.35||0.62|
|Allowance for loan losses/nonperforming loans||110.27||104.19||111.10||314.19||177.61|
|CAPITAL & LIQUIDITY|
|Period-end tangible equity to assets||9.18||%||9.20||%||9.17||%||9.07||%||9.34||%|
|Average equity to assets||9.93||9.93||9.98||9.95||10.02|
|Average equity to loans||13.81||13.90||13.85||14.25||14.33|
|Average loans to deposits||90.30||90.42||90.45||87.15||87.89|
|(a) - Net Interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. generally accepted accounting principles.|
|CSB BANCORP, INC.|
|CONSOLIDATED BALANCE SHEETS|
|(Unaudited)||September 30,||September 30,|
|(Dollars in thousands, except per share data)||2017||2016|
|Cash and cash equivalents|
|Cash and due from banks||$||15,592||$||14,396|
|Interest-earning deposits in other banks||29,780||13,308|
|Federal Funds Sold||-||-|
|Total cash and cash equivalents||45,372||27,704|
|Available-for-sale, at fair-value||98,048||112,924|
|Restricted stock, at cost||4,614||4,614|
|Loans held for sale||1,108||243|
|Less allowance for loan losses||5,436||5,002|
|Goodwill and core deposit intangible||5,024||5,141|
|Bank owned life insurance||13,131||10,292|
|Premises and equipment, net||8,906||8,561|
|Accrued interest receivable and other assets||4,124||3,739|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued interest payable and other liabilities||2,707||2,957|
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2017 and 2016
|Additional paid-in capital||9,815||9,815|
Treasury stock at cost - 238,360 shares in 2017 and 2016
|Accumulated other comprehensive (loss) income||(72)||867|
|Total shareholders' equity||69,838||65,751|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||710,824||$||654,391|
|CSB BANCORP, INC.|
|CONSOLIDATED STATEMENTS OF INCOME|
Nine months ended
|(Dollars in thousands, except per share data)||2017||2016||2017||2016|
|Interest and dividend income:|
|Loans, including fees||$||5,907||$||5,042||$||16,940||$||14,750|
|Total interest and dividend income||6,766||5,863||19,425||17,337|
|Total interest expense||562||366||1,409||1,109|
|Net interest income||6,204||5,497||18,016||16,228|
|Provision for loan losses||280||165||965||493|
Net interest income after provision for loan losses
|Service charges on deposits accounts||287||301||847||867|
|Debit card interchange fees||298||270||882||803|
|Gain on sale of loans||94||71||197||221|
|Gain on sale of securities||-||1||-||1|
|Total noninterest income||1,054||1,095||3,220||3,184|
|Salaries and employee benefits||2,531||2,319||7,462||6,945|
|Professional and director fees||257||221||660||584|
|Marketing and public relations||91||94||259||322|
|Debit card expense||139||120||410||338|
|Total noninterest expenses||4,286||3,994||12,620||12,045|
|Income before income tax||2,692||2,434||7,651||6,874|
|Federal income tax provision||826||740||2,329||2,089|
|Net income per share:|