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Press Release | July 24, 2012
CSB BANCORP, INC. REPORTS SECOND QUARTER EARNINGS
Second Quarter Highlights
Quarter Ended Quarter EndedJune 30, 2012 June 30, 2011
Diluted earnings per share $.41 $.35
Net Income $1,141,000 $972,000
Return on average common equity 8.98% 8.06%
Return on average assets 0.82% 0.87%
Millersburg, Ohio – July 24, 2012 – CSB Bancorp, Inc. (OTCBB: CSBB) today announced second quarter 2012 net income of $1.1 million or $.41 per basic and diluted share, as compared to $972 thousand or $.35 per basic and diluted share for the same period in 2011.
Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 8.98% and 0.82%, respectively, compared with 8.06% and 0.87% for the second quarter of 2011.
Eddie Steiner, President and CEO commented, “We are pleased that second quarter net income was 17% above the year ago level. Commercial loan demand remains above prior year levels and home mortgage refinance activity has been steady in response to lower mortgage rates.”
Revenue totaled $5.5 million for the second quarter of 2012, an increase of 11% from the prior-year second quarter. Increases were reflected in both net interest income and other income. Second quarter net interest income on a fully tax equivalent basis was $4.5 million, a $316 thousand or 8% increase over the second quarter of 2011. Other income totaled $1 million in second quarter 2012, an increase of $250 thousand or 32% compared to second quarter 2011.
Non-interest expense amounted to $3.6 million during the quarter, an increase of $277 thousand or 8% from second quarter 2011.
The Company’s second quarter efficiency ratio was 64.0% as compared to 66.1% for the same quarter in the prior year.
Federal income tax provision totaled $525 thousand for second quarter 2012, compared to $435 thousand for the same quarter in 2011. The quarterly provisions reflect effective tax rates of 31%.
Total assets amounted to $567 million on June 30, 2012, up $15 million or 3% from December 31, 2011. Net loans increased to $340 million, up $20 million or 6% year to date, while securities balances of $132 million increased $4 million or 3% from the prior year-end.
Average total assets during the quarter amounted to $562 million, an increase of $114 million or 25% above the same quarter of the prior year. Average loan balances of $340 million increased $20 million from the prior year second quarter, and average securities balances of $132 million increased $46 million or 53% as compared to second quarter 2011.
Average commercial loan balances, including commercial real estate, increased $8.5 million or 4% during the quarter. Average residential mortgage balances, including home equity line balances, increased by $4.1 million or 4% during the quarter. Average consumer credit balances increased $60 thousand or 1% versus the linked quarter.
Net recoveries on loans for the quarter totaled $19 thousand, or 0.02% of average loans on an annualized basis, as compared to net charge-offs of $164 thousand, or 0.21% for second quarter 2011.
Nonperforming assets totaled $4.0 million or 1.17% of total loans plus other real estate at June 30, 2012 as compared to $3.5 million or 1.08% on December 31, 2011 and $4.0 million or 1.25% at June 30, 2011. Delinquent loan balances as of June 30, 2012 amounted to 1.67% of total loans as compared to 2.04% on December 31, 2011 and 1.70% at June 30, 2011.
The Company funded $205 thousand in loan loss provision during the quarter as compared to $190 thousand during the prior year’s quarter. The allowance for loan losses amounted to 1.30% of total loans on June 30, 2012 as compared to 1.28% at June 30, 2011. The ratio of the allowance for loan losses to nonperforming loans stood at 112% on June 30, 2012 as compared to 117% and 115% at December 31, and June 30, 2011, respectively.
Deposit balances totaled $455 million at quarter-end, an increase of $11 million or 2.5% from December 31, 2011 and an increase of $107 million or 31% from prior year’s quarter-end. The majority of the year-over-year increase is attributable to deposits acquired with the Wooster branch acquisition during fourth quarter 2011. Organic deposit growth without the acquired deposits amounted to $33 million between June 30, 2012 and June 30, 2011 with noninterest bearing, NOW, money market and savings account balances growing and time deposit balances declining due to the low interest rate environment.
The average balance of securities sold under repurchase agreement during the second quarter grew by $10.5 million or 35% above the average for the same period in the prior year. The growth results from a campaign expanding relationships with our business customers. These repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts. Average advances from the Federal Home Loan Bank (“FHLB”) decreased $3 million or 14% from the prior year’s quarter as maturing borrowings have been paid down, funded by reducing average balances of Fed funds sold and interest bearing deposits with other banks.
Shareholders’ equity totaled $51.2 million on June 30, 2012 with 2.7 million common shares outstanding at year-end. The Company’s capital position remains strong, with tangible equity to assets approximating 8.1% and 8.0% on June 30, 2012 and December 31, 2011, respectively. The Company declared a common dividend of $.18 per share during the quarter. Based on the June 30, 2012 closing stock price of $18.17 per share, the Company’s annual dividend yield approximates 4.0%.
Paula J. Meiler, SVP & CFO