MILLERSBURG, Ohio--(BUSINESS WIRE)--CSB Bancorp, Inc. (OTC Pink: CSBB):
First Quarter Highlights
|Quarter Ended||Quarter Ended|
March 31, 2019
March 31, 2018
|Diluted earnings per share||$||0.93||$||0.79|
|Return on average common equity||13.20||%||
Return on average assets
CSB Bancorp, Inc. (OTC Pink: CSBB) today announced first quarter 2019 net income of $2,540,000, or $.93 per basic and diluted share, as compared to $2,164,000, or $.79 per basic and diluted share, for the same period in 2018. Income before federal income tax amounted to $3.2 million, an increase of 18% over the same quarter in the prior year.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 13.20% and 1.41%, respectively, compared with 12.33% and 1.25% for the first quarter of 2018.
Eddie Steiner, President and CEO stated, “First quarter earnings were favorably impacted by increased margins, particularly with increased yields on adjustable rate loans outpacing higher rates of interest paid on deposits during the quarter. With the Federal Reserve’s announced “pause” in its rate hikes and our expectation for continued strong competition for deposits, we believe our margin expansion may have peaked for the current cycle after rising in each of the past seven consecutive quarters.”
Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.3 million during the quarter, a 9% increase from the prior-year first quarter. Net interest income increased $622 thousand, or 10%, in the first quarter of 2019 compared to the same period in 2018.
Loan interest income including fees increased $932 thousand during first quarter 2019 as compared to the same quarter in 2018, an increase of 15%. Average total loan balances during the current quarter were $23 million higher than the year ago quarter, an increase of 4%. Loan yields for first quarter 2019 averaged 5.21%, an increase of 48 basis points from the 2018 first quarter average of 4.73%.
The net interest margin was 4.16% compared to 3.95% for first quarter 2018. The tax equivalency effect on the margin dropped to 0.02% from 0.03% a result of the reduction in tax exempt loans and securities in 2019.
Noninterest income increased by $79 thousand, or 7%, in the first quarter of 2019 compared to 2018. The increase reflects growth in debit card fee income, service charges on deposit accounts, and trust and brokerage income.
Noninterest expense amounted to $4.8 million during the quarter, an increase of $254 thousand, or 6%, from first quarter 2018. Salary and employee benefit costs increased $205 thousand, or 8%, compared to the prior year quarter, as a result of higher wage and 401k retirement expenses. Professional and director’s fees increased by $28 thousand, or 9%, reflecting third party costs of the company’s commitment to improve its network infrastructure. Debit card expense increased by $11 thousand, or 9%, on a quarter over quarter basis primarily on expanded usage. The Company’s first quarter efficiency ratio was 57.7% as compared to 59.5% for the same quarter in the prior year.
Federal income tax provision was a $619 thousand expense in first quarter 2019, as compared to $509 thousand tax expense provision for the same quarter in 2018. The effective tax rate increased from 19% to 20% a result of decreased nontaxable income in 2019.
Average total assets during the quarter amounted to $730 million, an increase of $30 million, or 4%, above the same quarter of the prior year. Average loan balances of $550 million increased $23 million, or 4%, from the prior year first quarter while average securities balances of $110 million decreased $14 million, or 11%, as compared to first quarter 2018.
Average commercial loan balances for the quarter, including commercial real estate, increased $9 million, or 3%, from prior year levels. Average residential mortgage balances increased $9 million, or 8%, over the prior year’s quarter. Average consumer credit balances increased $3 million, or 18%, versus the same quarter of the prior year.
Nonperforming assets decreased $1.3 million from March 31, 2018 to $3.3 million, or 0.60%, of total loans plus other real estate at March 31, 2019. The decrease in nonperforming assets is the result of various commercial loans exiting through liquidation. At March 31, 2019, approximately $1.0 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of March 31, 2019 declined to 0.70% of total loans as compared to 1.05% at March 31, 2018.
Net loan recoveries recognized during first quarter 2019 were $95 thousand, or 0.07% annualized, compared to first quarter 2018 net loan losses of $295 thousand. The allowance for loan losses amounted to 1.15% of total loans at March 31, 2019 as compared to 1.06% at March 31, 2018.
Average deposit balances grew on a year over year comparison by $30 million, or 5%, partially on the strength of customer response to higher rates paid on insured deposits. For the first quarter 2019, the average cost of deposits amounted to 0.55%, as compared to 0.32% for the first quarter 2018. During the first quarter 2019, increases in average deposit balances over the prior year quarter included non-interest bearing demand accounts of $12 million and savings accounts of $9 million. The average balance of securities sold under repurchase agreement during the first quarter of 2019 decreased by $4 million, or 10%, compared to the average for the same period in the prior year.
Shareholders’ equity totaled $79.0 million on March 31, 2019 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 10.2% on March 31, 2019 and 9.5% on March 31, 2018. The Company declared a first quarter dividend of $0.26 per share, a $.02 per share increase over first quarter 2018, producing an annualized yield of 2.7% based on the March 31, 2019 closing price of $38.75.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $735 million as of March 31, 2019. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with fifteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, Ohio.
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
CSB BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
|(Dollars in thousands, except per share data)||2019||2018||2018||2018||2018|
|EARNINGS||1st Qtr||4th Qtr||3rd Qtr||2nd Qtr||1st Qtr|
|Net interest income FTE (a)||$||7,049||$||6,934||$||6,847||$||6,697||$||6,436|
|Provision for loan losses||285||344||324||324||324|
|FTE adjustment (a)||38||24||46||45||47|
|Diluted earnings per share||0.93||0.91||0.88||0.85||0.79|
|Return on average assets (ROA)||1.41||%||1.36||%||1.34||%||1.30||%||1.25||%|
|Return on average common equity (ROE)||13.20||%||13.20||%||13.07||%||12.94||%||12.33||%|
|Net interest margin FTE (a)||4.16||%||4.01||%||4.00||%||3.98||%||3.95||%|
|Number of full-time equivalent employees||174||170||174||174||171|
|Book value/common share||$||28.80||$||27.91||$||26.94||$||26.47||$||25.90|
|Period-end common share mkt value||38.75||38.50||40.57||39.00||35.95|
|Market as a % of book||134.55||%||137.94||%||150.59||%||147.34||%||138.80||%|
|Cash dividends/common share||$||0.26||$||0.26||$||0.24||$||0.24||$||0.24|
|Common stock dividend payout ratio||27.96||%||28.57||%||27.27||%||28.24||%||30.38||%|
|Average basic common shares||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|
|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||$||106,262||$||105,576||$||111,253||$||106,947||$||98,584|
|Net (recoveries) charge-offs||(95||)||641||38||39||295|
|Allowance for loan losses||6,287||5,907||6,204||5,918||5,633|
|Nonperforming assets (NPAs)||3,302||3,428||5,341||4,399||4,622|
|Net charge-off (recovery) /average loans ratio||(0.07||)%||0.47||%||0.03||%||0.03||%||0.23||%|
|Allowance for loan losses/period-end loans||1.15||1.08||1.16||1.11||1.06|
|NPAs/loans and other real estate||0.60||0.62||1.00||0.82||0.87|
|Allowance for loan losses/nonperforming loans||197.23||177.45||116.16||134.52||122.40|
|CAPITAL & LIQUIDITY|
|Period-end tangible equity to assets||10.15||%||9.86||%||9.77||%||9.41||%||9.50||%|
|Average equity to assets||10.69||10.29||10.25||10.06||10.16|
|Average equity to loans||14.18||13.83||13.72||13.47||13.50|
|Average loans to deposits||91.16||89.88||90.80||90.77||91.89|
|(a) - Net Interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. generally accepted accounting principles.|
CSB BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
|(Unaudited)||March 31,||March 31,|
|(Dollars in thousands, except per share data)||2019||2018|
|Cash and cash equivalents|
|Cash and due from banks||$||15,110||$||10,766|
|Interest-earning deposits in other banks||29,133||10,823|
|Total cash and cash equivalents||44,243||21,589|
|Available-for-sale, at fair-value||86,378||94,198|
|Restricted stock, at cost||4,614||4,614|
|Loans held for sale||140||167|
|Less allowance for loan losses||6,287||5,633|
|Premises and equipment, net||10,800||9,226|
|Goodwill and core deposit intangible||4,879||4,970|
|Bank owned life insurance||16,638||13,299|
|Accrued interest receivable and other assets||4,913||4,560|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Accrued interest payable and other liabilities||3,839||2,958|
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2019 and 2018
|Additional paid-in capital||9,815||9,815|
Treasury stock at cost - 238,360 shares in 2019 and 2018
|Accumulated other comprehensive loss||(808||)||(1,711||)|
|Total shareholders' equity||78,967||71,019|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$||734,845||$||699,967|
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
|(Dollars in thousands, except per share data)||2019||2018|
|Interest and dividend income:|
|Loans, including fees||$||7,072||$||6,140|
|Total interest and dividend income||7,968||6,949|
|Total interest expense||957||560|
|Net interest income||7,011||6,389|
|Provision for loan losses||285||324|
Net interest income after provision for loan losses
|Service charges on deposits accounts||292||284|
|Debit card interchange fees||347||313|
|Gain on sale of loans||79||77|
|Market value change in equity securities||6||4|
|Total noninterest income||1,224||1,145|
|Salaries and employee benefits||2,842||2,637|
|Professional and director fees||339||311|
|Marketing and public relations||117||120|
|Debit card expense||127||116|
|Total noninterest expenses||4,791||4,537|
|Income before income tax||3,159||2,673|
|Federal income tax provision||619||509|
|Net income per share:|