Press Release  | April 22, 2014


First Quarter Highlights        


                                                                   Quarter Ended                      Quarter Ended
                                                                March 31, 2014                    March 31, 2013

Diluted earnings per share                                         $0.52                                     $0.50

Net Income                                                       $1,416,000                           $1,362,000

Return on average common equity                          10.70%                                  10.43%        

Return on average assets                                         0.97%                                    0.96%      

Millersburg, Ohio – April 22, 2014 – CSB Bancorp, Inc. (CSBB) today announced first quarter 2014 net income of $1,416,000 or $.52 per basic and diluted share, as compared to $1,362,000 or $.50 per basic and diluted share for the same period in 2013. 

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 10.70% and 0.97%, respectively, compared with 10.43% and 0.96% for the first quarter of 2013.

Eddie Steiner, President and CEO commented, “Loan demand has improved as businesses are investing in plant and equipment and signs of improved housing markets are emerging.  We continue to focus on expanding customer relationships within our primary markets.” 

Revenue, on a fully-taxable equivalent basis, totaled $5.9 million during the quarter, a 2% increase from the prior-year first quarter.  Net interest income improved by $206 thousand as compared to first quarter 2013 while other income declined $85 thousand partially attributable to reduced sales of mortgage originations as the Company chose to retain some fifteen year fixed rate mortgage originations within its loan portfolio. 

Non-interest expense amounted to $3.7 million during the quarter, an increase of $118 thousand or 3.3% from first quarter 2013. During first quarter 2013, the Company recovered $43 thousand in prior year legal expenses on two lending relationships, which did not recur during first quarter 2014.    

The Company’s first quarter efficiency ratio amounted to 63.5% as compared to 60.7% for the same quarter in the prior year.  The current quarter’s efficiency ratio was impacted by the decreased gain on sale of mortgage loans.   

Net interest margin amounted to 3.63% for the quarter compared to 3.56% for the prior year’s first quarter. The margin improvement resulted from the combination of a $40 million increase in average balances of higher earning loans and investments, a $27 million average balance decrease in overnight investments, a $19 million average balance increase in noninterest bearing deposits and a 16 basis point decrease in interest rates paid on interest bearing deposits and borrowings.

Federal income tax provision totaled $573 thousand in first quarter 2014, compared to $599 thousand for the same quarter in 2013 reflecting an effective tax rate of 28.8% for current year versus 30.5% in 2013. The effective rate reduction occurred as a valuation allowance booked in prior years against a capital loss was reversed during first quarter 2014.

Average total assets during the quarter amounted to $591 million, an increase of $15 million or 2.6% above the same quarter of the prior year.  Average loan balances of $396 million were $23 million or 6.1% above prior year first quarter, while average securities balances of $152 million increased $17 million or 12% as compared to first quarter 2013.

Average commercial loan balances for the quarter, including commercial real estate, increased $22 million or 9% above year ago levels.  Average residential mortgage balances increased by $100 thousand or 1% over the prior year’s quarter.  The increase of in-house mortgage balances was the result of the bank originating and retaining the aforementioned 15 year fixed rate mortgages.  Average home equity balances increased $700 thousand or 2%, and average consumer credit balances increased $250 thousand or 4% versus the same quarter of the prior year. 

Net charge-offs during first quarter 2014 were $205 thousand compared to a first quarter 2013 net loan recovery of $14 thousand.  Annualized net charge-offs equated to 0.21% of average loans in the current quarter.

Nonperforming assets totaled $5.3 million or 1.30% of total loans plus other real estate at March 31, 2014, compared to $2.2 million or 0.59% at March 31, 2013.  Delinquent loan balances as of March 31, 2014 amounted to 1.57% of total loans as compared to 1.00% at March 31, 2013. During first quarter 2014 a $2.9 million commercial relationship was placed on nonaccrual with an assigned specific reserve.   

The Company funded $185 thousand in loan loss provision during the first quarter and the allowance for loan losses amounted to 1.24% of total loans on March 31, 2014.  The ratio of the allowance for loan losses to nonperforming loans stood at 96% at March 31, 2014.  

Average deposit balances grew by $7 million, or 2%, from the prior year’s first quarter.  Average deposit balances totaled $470 million at March 31, 2014, reflecting a seasonal decrease of $9 million or 2% from the December 31, 2013 linked quarter.  Within the deposit category, average noninterest-bearing account balances for the first quarter increased by $19 million, or 20% above the same period in the prior year.  Average interest-bearing checking, money market and traditional savings balances increased $14 million or 7% from year ago levels, while average time deposit balances decreased $25 million or 16% during the year.  In addition to the changes in average deposit balances, the average balance of securities sold under repurchase agreement during the first quarter grew by $3 million or 8% above the average for the same period in the prior year.  The repurchase agreements, while considered short-term borrowings, are primarily tied to overnight customer sweep accounts.

Shareholders’ equity totaled $53.9 million on March 31, 2014 with 2.7 million common shares outstanding.  The tangible equity to assets ratio amounted to 8.1% on March 31, 2014, as compared to 8.4% on March 31, 2013.  The Company declared a common dividend of $.18 per share during the quarter.  Based on the March 31, 2014 closing stock price of $19.67 per share, the Company’s annual dividend yield approximates 3.7%.

About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $602 million as of March 31, 2014.  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 sixteen banking centers in Holmes, Wayne, Tuscarawas and Stark counties and Trust offices located in Millersburg and Wooster, Ohio. 

Forward-Looking Statement
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.


Contact Information:
Paula J. Meiler, SVP & CFO






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