"Heartbleed" in the News - You may have read or heard about the recently announced "Heartbleed" vulnerability for the Internet community. CSB’s website, internet banking and mobile applications are secure and have not been affected. However, if you use the same password for multiple internet applications, including your CSB internet banking, we strongly advise you to change your CSB password to a unique password used only for CSB internet banking. It would be best to use a combination of upper and lower case letters and numbers. You may also want to refer to heartbleed.com for more information about the “Heartbleed” internet vulnerability. As companies patch their systems to protect from this vulnerability, they may request that you change your password and/or update your security questions. We highly recommend you follow their instructions, keeping in mind that no legitimate business would ask you to provide your password to them. Your password should be known only by you.
Press Release | April 22, 2009
CSB BANCORP, INC. REPORTS EARNINGS FOR FIRST QUARTER 2009
First Quarter Highlights
• Net Income totals $896,000
• Diluted earnings per share of $0.33
• Return on average common equity of 8.20%
• Return on average assets of 0.86%
Millersburg, Ohio – April 22, 2009 – CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter 2009 net income of $896 thousand, or $.33 per basic and diluted share, as compared to $1.0 million, or $.41 per basic and diluted share for the same period in 2008.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 8.20% and 0.86%, respectively, compared with 10.89% and 1.17% for the first quarter of 2008.
Eddie Steiner, President and CEO stated, “The first quarter results reflect a solid start to what we anticipate will be a difficult year for bank earnings. Both revenue and net income increased over the prior quarter. Additionally, the results reflect an increase over the prior year’s first quarter core revenue and income after excluding last year’s nonrecurring gain from sale of the Company’s credit card portfolio. All of this was accomplished during the first full quarter of operations after acquiring Indian Village Bancorp, Inc. That transaction increased our balance sheet by 20% and added three new banking centers in Tuscarawas and Stark counties. Customer and shareholder response in these new markets has been favorable, and the acquired group of banking centers posted a positive contribution to Company earnings during the quarter.”
Net interest income of $3.9 million increased $514 thousand or 15.2% over the same quarter in the prior year, and by $121 thousand or 3.2% over the immediate prior quarter. Total revenue amounted to $4.7 million during the quarter, compared with $4.4 million in the prior-year first quarter, an increase of 8.6%.
Non-interest expense totaled $3.1 million during the quarter, an increase of $401 thousand, or 14.7%, from first quarter 2008. The Company’s first quarter efficiency ratio (defined as operating expenses divided by revenue) was 67.7%, as compared to same quarter results in the prior year of 62.6%.
Federal income tax expense was $424 thousand for first quarter 2009, reflecting an effective tax rate of 32.1%, compared to $498 thousand for the same quarter in 2008, or 33.2%. The decrease in the effective tax rate was primarily the result of a higher proportion of tax-exempt securities in the Company’s investment portfolio.
At March 31, 2009, assets totaled $422 million, down $2 million, or 0.5%, from December 31, 2008. Gross loan balances of $319 million reflected an increase of $3 million, or 1.0%, for the quarter. Commercial loan balances, including commercial real estate, increased $5.1 million or 2.8% during the quarter ended March 31, residential mortgage and home equity balances declined $1.9 million, or 1.5% during the quarter, while consumer installment, and other loan balances decreased $85 thousand, or 0.9%.
As of March 31, 2009, nonperforming assets totaled $4.2 million, or 1.31% of period-end loans plus other real estate, compared with $2.7 million, or 0.86%, at the prior quarter-end. Net charge-offs for the quarter totaled $233 thousand, or an annualized rate of 0.30% of average total loans. Steiner remarked, “Nonperforming assets have increased sharply in the past few months, with the majority of these balances originating from the former Indian Village portfolio. We anticipate that continuing difficult economic conditions will somewhat limit the pace of resolution for some of the involved credits. Therefore, we expect that levels of nonperforming assets and net charge-offs will remain somewhat elevated through much of 2009 when compared to the relatively low levels we have experienced in recent years.”
The Company’s allowance for loan losses at March 31, 2009 was 1.07% of period end loans and the Company funded $241 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 81% at quarter-end.
Deposit balances totaled $305 million at quarter-end, a decrease of $862 thousand, or 0.3% from the prior quarter-end. Within the deposit category, non interest-bearing account balances decreased $6 million, or 13.0%. Interest bearing checking, money market and savings accounts increased a total of $1 million, or 1.0%, during the quarter while time deposit balances increased $4 million, or 2.9%.
Short-term and other borrowings amounted to $71 million as of March 31, a decrease of $3 million or 3.9% from December 31 as the company repaid certain federal home loan bank advances that matured during the quarter.
Shareholders’ equity totaled $44 million on March 31, 2009 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.1% at quarter-end. Steiner noted in conclusion, “A number of earnings headwinds are buffeting the banking industry and appear likely to remain in effect for some time as the contracting economy, rising unemployment and increased FDIC premiums exert pressure against income. CSB’s strong capital and liquidity positions afford continued stability and security, and provide the foundation needed to effectively meet the financial service needs within the communities we serve.”
The Company declared a common dividend of $.18 per share during the quarter.
About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $422 million as of March 31, 2009. 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 thirteen banking centers in Holmes, Tuscarawas, Wayne and Stark counties and Trust offices located in Millersburg 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.
Paula J. Meiler, SVP & CFO