MILLERSBURG, Ohio--(BUSINESS WIRE)--CSB Bancorp, Inc. (OTC Pink: CSBB):
Third Quarter Highlights
|Quarter Ended||Quarter Ended|
September 30, 2018
September 30, 2017
|Diluted earnings per share||$||0.88||$||0.68|
Return on average common equity
Return on average assets
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2018 net income of $2,432,000, or $.88 per basic and diluted share, as compared to $1,866,000, or $.68 per basic and diluted share, for the same period in 2017. Income before federal income tax amounted to $3.0 million, an increase of 12% over the same quarter in the prior year.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 13.07% and 1.34%, respectively, compared with 10.62% and 1.05% for the third quarter of 2017.
Eddie Steiner, President and CEO stated, “Average loan balances increased for the twelfth consecutive quarter, while net interest margin improved to 4.00%. Average deposit and loan balances have each increased approximately 6% from year ago levels.”
Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.0 million during the quarter, a 9% increase from the prior-year third quarter. Net interest income increased $597 thousand, or 10%, in the third quarter of 2018 compared to the same period in 2017.
Loan interest income including fees increased $800 thousand during third quarter 2018 as compared to the same quarter in 2017. Average total loan balances during the current quarter were $33 million higher than the year ago quarter.
The net interest margin was 4.00% compared to 3.77% for third 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 $121 thousand, or 11%, in the third 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 $352 thousand, or 8%, from third quarter 2017. Increases are being reported in salary and employee benefits of $274 thousand, or 11%, compared to the prior year quarter with increases in headcount, salary, and the Company’s 401k plan. Marketing and public relations expense increased by $33 thousand, or 36%, on a quarter over quarter basis primarily on expanded channel advertising and increasing community donations. The Company’s third quarter efficiency ratio was 57.5% as compared to 57.9% for the same quarter in the prior year.
Federal income tax provision totaled $582 thousand in third quarter 2018, as compared to $826 thousand tax provision for the same quarter in 2017. The effective tax rate decreased from 31% to 19% a result of the Tax Cuts and Jobs Act enacted December 2017.
Average total assets during the quarter amounted to $720 million, an increase of $18 million, or 3%, above the same quarter of the prior year. Average loan balances of $538 million increased $33 million, or 7%, from the prior year third quarter while average securities balances of $117 million decreased $15 million, or 11%, as compared to third quarter 2017.
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 $10 million, or 9%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 13%, versus the same quarter of the prior year.
Nonperforming assets increased $411 thousand from September 30, 2017 to $5.3 million, or 1.00%, of total loans plus other real estate at September 30, 2018. The increase in nonperforming assets is the result of various commercial loans both entering through delinquency and exiting through liquidation during 2018. At September 30, 2018, approximately $1.7 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of September 30, 2018 declined to 1.25% of total loans as compared to 1.22% at September 30, 2017.
Net loan losses during third quarter 2018 were $38 thousand, or 0.03% annualized, compared to third quarter 2017 net loan losses of $1.1 million. The allowance for loan losses amounted to 1.16% of total loans at September 30, 2018 as compared to 1.07% at September 30, 2017.
Average deposit balances grew on a year over year comparison by $41 million, or 8%, partially on the strength of customer response to higher rates paid on insured deposits. During the third quarter 2018, increases in average deposit balances over the prior year quarter included interest-bearing demand accounts of $9 million; savings accounts of $10 million; time deposits of $5 million, and non-interest bearing checking accounts of $10 million. The average balance of securities sold under repurchase agreement during the third quarter of 2018 decreased by $7 million, or 13%, 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 September 30, 2018 the new product had balances of $22 million.
Shareholders’ equity totaled $73.9 million on September 30, 2018 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 9.8% on September 30, 2018 and 9.2% on September 30, 2017. The Company declared a third quarter dividend of $0.24 per share, a $.02 per share increase over third quarter 2017, producing an annualized yield of 2.4% based on the September 30, 2018 closing price of $40.57.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $711 million as of September 30, 2018. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with fifteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, Ohio.
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
CSB BANCORP, INC.
|CONSOLIDATED FINANCIAL HIGHLIGHTS|
|(Dollars in thousands, except per share data)||2018||2018||2018||2017||2017||2018||2017|
|EARNINGS||3rd Qtr||2nd Qtr||1st Qtr||4th Qtr||3rd Qtr||9 months||9 months|
|Net interest income FTE (a)||$||6,847||$||6,697||$||6,436||$||6,532||$||6,300||$||19,980||$||18,301|
|Provision for loan losses||324||324||324||180||280||972||965|
|FTE adjustment (a)||46||45||47||96||96||138||285|
|Diluted earnings per share||0.88||0.85||0.79||0.65||0.68||2.52||1.94|
|Return on average assets (ROA)||1.34||%||1.30||%||1.25||%||0.99||%||1.05||%||1.30||%||1.04||%|
|Return on average common equity (ROE)||13.07||%||12.94||%||12.33||%||10.02||%||10.62||%||12.79||%||10.44||%|
|Net interest margin FTE (a)||4.00||%||3.98||%||3.95||%||3.84||%||3.77||%||3.98||%||3.79||%|
|Number of full-time equivalent employees||174||174||171||174||169|
|Book value/common share||$||26.94||$||26.47||$||25.90||$||25.72||$||25.47|
|Period-end common share mkt value||40.57||39.00||35.95||33.11||30.50|
|Market as a % of book||150.59||%||147.34||%||138.80||%||128.73||%||119.75||%|
|Cash dividends/common share||$||0.24||$||0.24||$||0.24||$||0.22||$||0.22||$||0.72||$||0.62|
|Common stock dividend payout ratio||27.27||%||28.24||%||30.38||%||33.85||%||32.35||%||28.57||%||31.96||%|
|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||$||111,253||$||106,947||$||98,584||$||90,796||$||83,638|
|Net (recoveries) charge-offs||38||39||295||12||1,133||372||820|
|Allowance for loan losses||6,204||5,918||5,633||5,604||5,436|
|Nonperforming assets (NPAs)||5,341||4,399||4,622||6,522||4,930|
|Net charge-off (recovery) /average loans ratio||0.03||%||0.03||%||0.23||%||0.01||%||0.89||%||0.09||%||0.22||%|
|Allowance for loan losses/period-end loans||1.16||1.11||1.06||1.08||1.07|
|NPAs/loans and other real estate||1.00||0.82||0.87||1.26||0.97|
|Allowance for loan losses/nonperforming loans||116.16||134.52||122.40||85.93||110.27|
|CAPITAL & LIQUIDITY|
|Period-end tangible equity to assets||9.77||%||9.41||%||9.50||%||9.33||%||9.18||%|
|Average equity to assets||10.25||10.06||10.16||9.84||9.93|
|Average equity to loans||13.72||13.47||13.50||13.76||13.81|
|Average loans to deposits||90.80||90.77||91.89||88.33||90.30|
|(a) - Net Interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. generally accepted accounting principles.|
|CSB BANCORP, INC.|
|CONSOLIDATED BALANCE SHEETS|
|(Unaudited)||September 30,||September 30,|
(Dollars in thousands, except per share data)
|Cash and cash equivalents|
|Cash and due from banks||$||15,865||$||15,592|
|Interest-earning deposits in other banks||17,384||29,780|
|Federal Funds Sold||-||-|
|Total cash and cash equivalents||33,249||45,372|
|Available-for-sale, at fair-value||89,507||98,048|
|Restricted stock, at cost||4,614||4,614|
|Loans held for sale||192||1,108|
|Less allowance for loan losses||6,204||5,436|
|Premises and equipment, net||9,605||8,906|
|Goodwill and core deposit intangible||4,920||5,024|
|Bank owned life insurance||13,470||13,131|
|Accrued interest receivable and other assets||4,691||4,124|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued interest payable and other liabilities||3,266||2,707|
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2018 and 2017
|Additional paid-in capital||9,815||9,815|
Treasury stock at cost - 238,360 shares in 2018 and 2017
|Accumulated other comprehensive (loss) income||(2,293||)||(72||)|
|Total shareholders' equity||73,877||69,838|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||710,815||$||710,824|
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Nine months ended
|(Dollars in thousands, except per share data)||2018||2017||2018||2017|
|Interest and dividend income:|
|Loans, including fees||$||6,707||$||5,907||$||19,361||$||16,940|
|Total interest and dividend income||7,572||6,766||21,865||19,425|
|Total interest expense||771||562||2,023||1,409|
|Net interest income||6,801||6,204||19,842||18,016|
|Provision for loan losses||324||280||972||965|
Net interest income after provision for loan losses
|Service charges on deposits accounts||301||287||885||847|
|Debit card interchange fees||330||298||966||882|
|Gain on sale of loans||63||94||200||197|
|Gain on sale of securities||(6||)||-||(2||)||-|
|Total noninterest income||1,175||1,054||3,488||3,220|
|Salaries and employee benefits||2,805||2,531||8,160||7,462|
|Professional and director fees||199||257||749||660|
|Marketing and public relations||124||91||363||259|
|Debit card expense||144||139||386||410|
|Total noninterest expenses||4,638||4,286||13,794||12,620|
|Income before income tax||3,014||2,692||8,564||7,651|
|Federal income tax provision||582||826||1,644||2,329|
|Net income per share:|