MILLERSBURG, Ohio--(BUSINESS WIRE)--CSB Bancorp, Inc. (OTC Pink: CSBB):
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Second Quarter Highlights |
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| Quarter Ended | Quarter Ended | |||||||
| June 30, 2018 | June 30, 2017 | |||||||
| Diluted earnings per share | $ | 0.85 | $ | 0.63 | ||||
| Net Income | $ | 2,324,000 | $ | 1,726,000 | ||||
| Return on average common equity | 12.94 | % | 10.15 | % | ||||
| Return on average assets | 1.30 | % | 1.01 | % | ||||
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced second quarter 2018 net income of $2,324,000, or $.85 per basic and diluted share, as compared to $1,726,000, or $.63 per basic and diluted share, for the same period in 2017. Income before federal income tax amounted to $2.9 million, an increase of 16.1% over the same quarter in the prior year.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.94% and 1.30%, respectively, compared with 10.15% and 1.01% for the second quarter of 2017.
Eddie Steiner, President and CEO stated, “Average loan balances increased for the eleventh consecutive quarter, while net interest margin improved to 3.98%. Average deposit and loan balances have each increased approximately 9% from year ago levels.”
Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $7.9 million during the quarter, an 11% increase from the prior-year second quarter. Net interest income increased $702 thousand, or 12%, in the second quarter of 2018 compared to the same period in 2017.
Loan interest income including fees increased $931 thousand during second quarter 2018 as compared to the same quarter in 2017. Average total loan balances during the current quarter were $44 million higher than the year ago quarter.
The net interest margin was 3.98% compared to 3.75% for second 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 $108 thousand, or 10%, in the second 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 $931 thousand, or 25%, from second quarter 2017. More than half of the comparative increase stems from second quarter 2017 reversal of a $540 thousand provision for unfunded loan commitments due to the impairment of a commercial line of credit. In other categories, salary and employee benefits rose $246 thousand, or 10%, compared to the prior year quarter with increases in headcount, salary, and employment taxes. Marketing and public relations expense increased by $30 thousand, or 34%, on a quarter over quarter basis primarily on expanded channel advertising and increasing community donations. The Company’s second quarter efficiency ratio was 58.4% as compared to 51.5% for the same quarter in the prior year.
Federal income tax provision totaled $553 thousand in second quarter 2018, as compared to $751 thousand tax provision for the same quarter in 2017. The effective tax rate decreased from 30% to 19% a result of the Tax Cuts and Jobs Act enacted on December 22, 2017.
Average total assets during the quarter amounted to $716 million, an increase of $29 million, or 4%, above the same quarter of the prior year. Average loan balances of $535 million increased $44 million, or 9%, from the prior year second quarter while average securities balances of $119 million decreased $14 million, or 10%, as compared to second quarter 2017.
Average commercial loan balances for the quarter, including commercial real estate, increased $32 million, or 9%, from prior year levels. Average residential mortgage balances increased $11 million, or 7%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 11%, versus the same quarter of the prior year.
Nonperforming assets decreased $2 million from December 31, 2017 to $4.4 million, or 0.82%, of total loans plus other real estate at June 30, 2018. The decrease in nonperforming loans is the result of the liquidation of a $1.7 million credit facility during first quarter 2018. At June 30, 2018, approximately $1.8 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of June 30, 2018 declined to 1.06% of total loans as compared to 1.53% at December 31, 2017 and 1.31% at June 30, 2017.
Net loan losses during second quarter 2018 were $39 thousand, or 0.03% annualized, compared to second quarter 2017 net loan losses of $10 thousand. The allowance for loan losses amounted to 1.11% of total loans at June 30, 2018 as compared to 1.08% of total loans on December 31, 2017 and 1.26% at June 30, 2017.
Average deposit balances grew on a year over year comparison by $47 million, or 9%, partially on the strength of customer response to higher rates paid on insured deposits. During the second quarter 2018, increases in average deposit balances over the prior year quarter included interest-bearing demand accounts of $28 million; savings accounts of $11 million; time deposits of $5 million, and non-interest bearing checking accounts of $3 million. The average balance of securities sold under repurchase agreement during the second quarter of 2018 decreased by $14 million, or 25%, 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 June 30, 2018 the new product had balances of $17 million.
Shareholders’ equity totaled $72.6 million on June 30, 2018 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.4% on June 30, 2018 and 9.2% on June 30, 2017. The Company declared a second quarter dividend of $0.24 per share, a $.04 per share increase over second quarter 2017, producing an annualized yield of 2.5% based on the June 30, 2018 closing price of $39.00.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $723 million as of June 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.
| CSB BANCORP, INC. | ||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||
| (Unaudited) | Quarters | |||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | 2018 | 2018 | 2017 | 2017 | 2017 | 2018 | 2017 | |||||||||||||||||||||
| EARNINGS | 2nd Qtr | 1st Qtr | 4th Qtr |
3rd Qtr |
2nd Qtr | 6 months | 6 months | |||||||||||||||||||||
| Net interest income FTE (a) | $ | 6,697 | $ | 6,436 | $ | 6,532 |
|
$ |
6,300 | $ | 6,046 | $ | 13,133 | $ | 12,001 | |||||||||||||
| Provision for loan losses | 324 | 324 | 180 | 280 | 845 | 648 | 685 | |||||||||||||||||||||
| Other income | 1,168 | 1,145 | 1,120 | 1,054 | 1,060 | 2,313 | 2,166 | |||||||||||||||||||||
| Other expenses | 4,619 | 4,537 | 4,696 | 4,286 | 3,688 | 9,156 | 8,334 | |||||||||||||||||||||
| FTE adjustment (a) | 45 | 47 | 96 | 96 | 96 | 92 | 189 | |||||||||||||||||||||
| Net income | 2,324 | 2,164 | 1,779 | 1,866 | 1,726 | 4,488 | 3,456 | |||||||||||||||||||||
| Diluted earnings per share | 0.85 | 0.79 | 0.65 | 0.68 | 0.63 | 1.64 | 1.26 | |||||||||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
| Return on average assets (ROA) | 1.30 | % | 1.25 | % | 0.99 | % | 1.05 | % | 1.01 | % | 1.28 | % | 1.03 | % | ||||||||||||||
| Return on average common equity (ROE) | 12.94 | % | 12.33 | % | 10.02 | % | 10.62 | % | 10.15 | % | 12.64 | % | 10.34 | % | ||||||||||||||
| Net interest margin FTE (a) | 3.98 | % | 3.95 | % | 3.84 | % | 3.77 | % | 3.75 | % | 3.97 | % | 3.80 | % | ||||||||||||||
| Efficiency ratio | 58.41 | % | 59.52 | % | 60.99 | % | 57.89 | % | 51.49 | % | 58.97 | % | 58.42 | % | ||||||||||||||
| Number of full-time equivalent employees | 174 | 171 | 174 | 169 | 169 | |||||||||||||||||||||||
| MARKET DATA | ||||||||||||||||||||||||||||
| Book value/common share | $ | 26.47 | $ | 25.90 | $ | 25.72 |
|
$ |
25.47 | $ | 25.06 | |||||||||||||||||
| Period-end common share mkt value | 39.00 | 35.95 | 33.11 | 30.50 | 30.60 | |||||||||||||||||||||||
| Market as a % of book | 147.34 | % | 138.80 | % | 128.73 | % | 119.75 | % | 122.11 | % | ||||||||||||||||||
| Price-to-earnings ratio | 13.13 | 13.07 | 12.78 | 11.47 | 11.81 | |||||||||||||||||||||||
| Cash dividends/common share | $ | 0.24 | $ | 0.24 | $ | 0.22 |
|
$ |
0.22 | $ | 0.20 | $ | 0.48 | $ | 0.40 | |||||||||||||
| Common stock dividend payout ratio | 28.24 | % | 30.38 | % | 33.85 | % | 32.35 | % | 31.75 | % | 29.27 | % | 31.75 | % | ||||||||||||||
| 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 | $ | 106,947 | $ | 98,584 | $ | 90,796 |
|
$ |
83,638 | $ | 83,913 |
|
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| ASSET QUALITY | ||||||||||||||||||||||||||||
| Gross charge-offs | $ | 45 | $ | 303 | $ | 19 |
|
$ |
1,138 | $ | 34 | $ | 348 | $ | 47 | |||||||||||||
| Net (recoveries) charge-offs | 39 | 295 | 12 | 1,133 | 10 | 334 |
(313 |
) |
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| Allowance for loan losses | 5,918 | 5,633 | 5,604 | 5,436 | 6,289 | |||||||||||||||||||||||
| Nonperforming assets (NPAs) | 4,399 | 4,622 | 6,522 | 4,930 | 6,036 | |||||||||||||||||||||||
| Net charge-off (recovery) /average loans ratio | 0.03 | % | 0.23 | % | 0.01 | % | 0.89 | % | 0.01 | % | 0.13 | % |
(0.13 |
)% |
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| Allowance for loan losses/period-end loans | 1.11 | 1.06 | 1.08 | 1.07 | 1.26 | |||||||||||||||||||||||
| NPAs/loans and other real estate | 0.82 | 0.87 | 1.26 | 0.97 | 1.21 | |||||||||||||||||||||||
| Allowance for loan losses/nonperforming loans | 134.52 | 122.40 | 85.93 | 110.27 | 104.19 | |||||||||||||||||||||||
| CAPITAL & LIQUIDITY | ||||||||||||||||||||||||||||
| Period-end tangible equity to assets | 9.41 | % | 9.50 | % | 9.33 | % | 9.18 | % | 9.20 | % | ||||||||||||||||||
| Average equity to assets | 10.06 | 10.16 | 9.84 | 9.93 | 9.93 | |||||||||||||||||||||||
| Average equity to loans | 13.47 | 13.50 | 13.76 | 13.81 | 13.90 | |||||||||||||||||||||||
| Average loans to deposits | 90.77 | 91.89 | 88.33 | 90.30 | 90.42 | |||||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Assets | $ | 715,902 | $ | 700,394 | $ | 715,799 |
|
$ |
702,040 | $ | 686,403 | $ | 708,198 | $ | 676,655 | |||||||||||||
| Earning assets | 674,699 | 660,772 | 674,234 | 662,432 | 646,859 | 667,777 | 637,242 | |||||||||||||||||||||
| Loans | 534,852 | 527,315 | 511,805 | 504,943 | 490,359 | 531,107 | 485,534 | |||||||||||||||||||||
| Deposits | 589,211 | 573,855 | 579,433 | 559,195 | 542,308 | 581,576 | 531,380 | |||||||||||||||||||||
| Shareholders' equity | 72,039 | 71,173 | 70,419 | 69,737 | 68,184 | 71,608 | 67,377 | |||||||||||||||||||||
| ENDING BALANCES | ||||||||||||||||||||||||||||
| Assets | $ | 723,299 | $ | 699,967 | $ | 707,063 |
|
$ |
710,824 | $ | 696,891 | |||||||||||||||||
| Earning assets | 681,200 | 662,779 | 664,365 | 669,483 | 657,249 | |||||||||||||||||||||||
| Loans | 535,427 | 530,395 | 516,830 | 509,458 | 498,625 | |||||||||||||||||||||||
| Deposits | 595,073 | 576,418 | 583,259 | 571,626 | 547,104 | |||||||||||||||||||||||
| Shareholders' equity | 72,578 | 71,019 | 70,532 | 69,838 | 68,726 | |||||||||||||||||||||||
| 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. |
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| CSB BANCORP, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited) | June 30, | June 30, | ||||||
| (Dollars in thousands, except per share data) | 2018 | 2017 | ||||||
| ASSETS | ||||||||
| Cash and cash equivalents | ||||||||
| Cash and due from banks | $ | 14,956 | $ | 15,445 | ||||
| Interest-earning deposits in other banks | 28,275 | 23,351 | ||||||
| Federal Funds Sold | - | - | ||||||
| Total cash and cash equivalents | 43,231 | 38,796 | ||||||
| Securities | ||||||||
| Available-for-sale, at fair-value | 90,808 | 102,974 | ||||||
| Held-to-maturity | 21,882 | 27,169 | ||||||
| Equity securities | 94 | 84 | ||||||
| Restricted stock, at cost | 4,614 | 4,614 | ||||||
| Total securities | 117,398 | 134,841 | ||||||
| Loans held for sale | 100 | 432 | ||||||
| Loans | 535,427 | 498,625 | ||||||
| Less allowance for loan losses | 5,918 | 6,289 | ||||||
| Net loans | 529,509 | 492,336 | ||||||
| Premises and equipment, net | 9,563 | 8,633 | ||||||
| Goodwill and core deposit intangible | 4,945 | 5,053 | ||||||
| Bank owned life insurance | 13,384 | 13,045 | ||||||
| Accrued interest receivable and other assets | 5,169 | 3,755 | ||||||
| TOTAL ASSETS | $ | 723,299 | $ | 696,891 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 178,343 | $ | 169,241 | ||||
| Interest-bearing | 416,730 | 377,863 | ||||||
| Total deposits | 595,073 | 547,104 | ||||||
| Short-term borrowings | 44,155 | 56,932 | ||||||
| Other borrowings | 8,827 | 21,781 | ||||||
| Accrued interest payable and other liabilities | 2,666 | 2,348 | ||||||
| Total liabilities | 650,721 | 628,165 | ||||||
| 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 | 50,736 | 44,987 | ||||||
|
Treasury stock at cost - 238,360 shares in 2018 and 2017 |
(4,784 | ) | (4,784 | ) | ||||
| Accumulated other comprehensive (loss) income | (1,818 | ) | 79 | |||||
| Total shareholders' equity | 72,578 | 68,726 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 723,299 | $ | 696,891 | ||||
| CSB BANCORP, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
|
Quarter ended |
Six months ended |
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| (Unaudited) | June 30, | Sept 30, | June 30, | Sept 30, | |||||||||
| (Dollars in thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||
| Interest and dividend income: | |||||||||||||
| Loans, including fees | $ | 6,515 | $ | 5,584 | $ | 12,654 | $ | 11,033 | |||||
| Taxable securities | 594 | 598 | 1,197 | 1,196 | |||||||||
| Nontaxable securities | 152 | 174 | 313 | 339 | |||||||||
| Other | 83 | 57 | 129 | 91 | |||||||||
| Total interest and dividend income | 7,344 | 6,413 | 14,293 | 12,659 | |||||||||
| Interest expense: | |||||||||||||
| Deposits | 560 | 307 | 1,014 | 574 | |||||||||
| Other | 132 | 156 | 238 | 273 | |||||||||
| Total interest expense | 692 | 463 | 1,252 | 847 | |||||||||
| Net interest income | 6,652 | 5,950 | 13,041 | 11,812 | |||||||||
| Provision for loan losses | 324 | 845 | 648 | 685 | |||||||||
|
Net interest income after provision for loan losses |
6,328 | 5,105 | 12,393 | 11,127 | |||||||||
| Noninterest income | |||||||||||||
| Service charges on deposit accounts | 300 | 268 | 584 | 559 | |||||||||
| Trust services | 217 | 152 | 436 | 359 | |||||||||
| Debit card interchange fees | 323 | 296 | 636 | 584 | |||||||||
| Gain on sale of loans | 60 | 61 | 137 | 103 | |||||||||
| Gain on sale of securities | - | - | 4 | - | |||||||||
| Other | 268 | 283 | 516 | 561 | |||||||||
| Total noninterest income | 1,168 | 1,060 | 2,313 | 2,166 | |||||||||
| Noninterest expenses | |||||||||||||
| Salaries and employee benefits | 2,718 | 2,472 | 5,355 | 4,931 | |||||||||
| Occupancy expense | 214 | 214 | 434 | 424 | |||||||||
| Equipment expense | 160 | 171 | 316 | 341 | |||||||||
| Professional and director fees | 239 | 234 | 551 | 403 | |||||||||
| Marketing and public relations | 119 | 89 | 239 | 167 | |||||||||
| Software expense | 221 | 203 | 434 | 413 | |||||||||
| Debit card expense | 126 | 141 | 242 | 271 | |||||||||
| Provision for unfunded loan commitments | - | (540 | ) | - | - | ||||||||
| Other expenses | 822 | 704 | 1,585 | 1,384 | |||||||||
| Total noninterest expenses | 4,619 | 3,688 | 9,156 | 8,334 | |||||||||
| Income before income tax | 2,877 | 2,477 | 5,550 | 4,959 | |||||||||
| Federal income tax provision | 553 | 751 | 1,062 | 1,503 | |||||||||
| Net income | $ | 2,324 | $ | 1,726 | $ | 4,488 | $ | 3,456 | |||||
| Net income per share: | |||||||||||||
| Basic | $ | 0.85 | $ | 0.63 | $ | 1.64 | $ | 1.26 | |||||
| Diluted | $ | 0.85 | $ | 0.63 | $ | 1.64 | $ | 1.26 | |||||
