Letter to Shareholders

October 25, 2016

Dear Fellow Shareholder:

We are pleased to enclose a third quarter dividend remittance of $0.20 per share. This amount represents an increase of $0.01 per share over second quarter 2016 with an annualized dividend yield of 3.0% based on CSB’s $26.75 stock price at the time of this writing (October 18).

Net income for the third quarter amounted to $1.7 million, a 9% increase over third quarter 2015. At September 30, 2016, net income of $4.8 million is 8% ahead of the same point in the prior year. The book value of equity has grown to $66 million, with a total balance sheet of $654 million. Average loan balances during the third quarter were 12% higher than year ago levels, while average deposit balances were 3% above the same period in the prior year.

Loan demand has improved. Businesses are exhibiting increased confidence in the outlook for their products and services, and consumers continue to take advantage of the very low interest rate environment for a variety of borrowing needs. Overall economic conditions within the bank’s markets are stable and remain on relatively good footing at the present time.

Credit quality within the bank’s loan portfolio continues to be good, with 0.6% of total loan balances nonperforming as of September 30, 2016 and net charge-offs totaling $153 thousand during the nine month period ended September 30, 2016.

Most forecasters are calling for a stable U.S. economic environment through the end of 2017. An improved labor market in the U.S. is contributing to the growth in personal consumption expenditures. However, the national business sector has been generally conservative about investing in production expansion due to uncertainty that the improved level of consumer spending is sustainable. Financial markets are currently anticipating that the Federal Reserve will raise managed interest rates by year-end.

CSB Bancorp, Inc. and The Commercial and Savings Bank remain well-positioned to continue growing and providing excellent financial services for the customers and communities we serve. We thank you for your support as a shareholder.

 

Sincerely,

                                      
Eddie Steiner                                                      Robert K. Baker
President and Chief Executive Officer                 Chairman of the Board

 

This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.  We have based these forward-looking statements on the Company’s current expectations and projections about future events.  These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us and the Company’s affiliate companies, that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.  Factors that might cause or contribute to such a discrepancy include, but are not limited to those identified in the Company’s Securities and Exchange Commission filings, including the Company’s 2013 Annual Report on Form 10-K, filed on March 25, 2014.  The discussion should be read in conjunction with the Company’s Financial Statements and related Notes thereto included in the Company’s Form 10-K and Form 10-Q filings.


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