CSB Bancorp, Inc. Reports Fourth Quarter and Full Year Earnings

  CSB Bancorp, Inc. Reports Fourth Quarter and Full Year Earnings

Business Wire

MILLERSBURG, Ohio -- January 25, 2013

CSB Bancorp, Inc. (OTCBB:CSBB):

Fourth Quarter and Full Year Highlights


                                 Quarter Ended      Full Year Ended
                                  December 31, 2012   December 31, 2012

Diluted earnings per share        $     0.41          $     1.66

Net Income                        $     1,120,000     $     4,547,000

Return on average common equity         8.50%               8.85%

Return on average assets                0.77%               0.80%
                                                            

CSB Bancorp, Inc. (CSBB) today announced fourth quarter 2012 net income of
$1.1 million or $.41 per basic and diluted share, as compared to $820 thousand
or $.30 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 8.50% and 0.77%, respectively, compared with 6.58% and
0.61% for the fourth quarter of 2011.

For the full year of 2012, the Company reported net income of $4.5 million, or
$1.66 per basic and diluted share, as compared to $3.7 million, or $1.35 per
basic and diluted share in 2011. Full year ROE and ROA were 8.85% and 0.80%,
respectively, compared to 7.57% and 0.78% in 2011.

Eddie Steiner, President and CEO commented, “Net interest income increased for
the eighth consecutive quarter, and non-interest income increased for the
fourth consecutive quarter. While margins remain historically tight, our
ability to attract and grow customer relationships has been instrumental in
driving our revenue stream. We plan to continue this focus on building
customer relationships as we do not anticipate significant margin expansion as
long as interest rates remain at or near historic lows.”

Revenue totaled $5.7 million for the fourth quarter of 2012, a 9.5% increase
from the prior-year fourth quarter. Full year revenue of $22.1 million
reflects a $2 million, or 9.9%, increase as compared to full year 2011.

Non-interest expense amounted to $3.8 million during the quarter, an increase
of $70 thousand, or 2% from fourth quarter 2011. For the full year ended
December 31, 2012, non-interest expense increased $841 thousand, or 6% versus
2011, with the majority of the change attributable to the Company’s increased
operating size from the fourth quarter 2011 acquisition of banking centers in
Wooster, Ohio.

The Company’s fourth quarter efficiency ratio amounted to 63.6% as compared to
71.5% for the same quarter in the prior year. The full year 2012 efficiency
ratio of 64.8% compares to 68.1% for the full prior year.

Federal income tax provision was $475 thousand for fourth quarter 2012,
compared to $324 thousand for the same quarter in 2011. Full year income tax
of $2.0 million for 2012 was 24% higher than prior year and reflects an
effective tax rate of 30.4% for current year versus 30.3% in 2011.

Average total assets during the quarter amounted to $575 million, an increase
of $45 million, or 9% above the same quarter of the prior year. Average loan
balances of $357 million were $37 million, or 11% above prior year fourth
quarter, while average securities balances of $133 million increased $17
million, or 15% as compared to fourth quarter 2011.

Total assets amounted to $587 million on December 31, 2012, up $36 million, or
6% from December 31, 2011. Net loans increased to $360 million, up $40
million, or 12% from the prior year-end, while securities balances of $135
million were $6 million, or 5% higher than year ago balances.

Average commercial loan balances for the quarter, including commercial real
estate, increased $30 million, or 14% above year ago levels. Average
residential mortgage balances increased by $5 million, or 7% during the year.
The increase of in-house mortgage balances was the result of the bank
originating and retaining 15 year fixed rate mortgages. Average home equity
balances increased $2 million, or 5%, and average consumer credit balances
decreased $91 thousand, or 1% versus the same quarter of the prior year.

Net charge-offs for the quarter and the full year were $287 thousand and $325
thousand, respectively. Net charge-offs equated to 0.09% of average loans
during 2012 as compared to 0.28% during 2011.

Nonperforming assets totaled $3.4 million or 0.92% of total loans plus other
real estate at December 31, 2012, compared to $3.5 million or 1.08% at the
prior year-end. Delinquent loan balances as of year-end 2012 amounted to 1.25%
of total loans as compared to 2.04% at the end of 2011.

The Company funded $206 thousand in loan loss provision during the fourth
quarter and the allowance for loan losses amounted to 1.26% of total loans on
December 31, 2012. The ratio of the allowance for loan losses to nonperforming
loans stood at 137% at the end of 2012 as compared to 117% at year end 2011.

Commenting on the Company’s credit quality, Steiner noted, “Our level of
nonperforming assets have declined fairly consistently since peaking during
first quarter 2010, with continued improvement again noted this past quarter.
Delinquencies within the loan portfolio at the end of 2012 are at our lowest
quarter quarter-end levels reported since 2008.”

Average deposit balances grew by $8 million, or 2%, from the prior linked
quarter. Total average deposits of $464 million for the quarter were 10% above
the prior year’s fourth quarter average.

Deposit balances totaled $475 million at year-end, an increase of $32 million,
or 7% from the prior year-end. Within the deposit category, average non
interest-bearing account balances for the fourth quarter increased by $16
million, or 19% above the same period in the prior year. Average
interest-bearing checking, money market and traditional savings balances
increased $36 million, or 21% from year ago levels, while average time deposit
balances decreased $10 million, or 6% during the year. In addition to the
changes in average deposit balances, the average balance of securities sold
under repurchase agreement during the fourth quarter grew by $6 million, or
17% above the average for the same period in the prior year. Repurchase
agreements, while considered short-term borrowings, are primarily tied to
overnight customer sweep accounts.

Shareholders’ equity totaled $52.4 million on December 31, 2012 with 2.7
million common shares outstanding. The tangible equity to assets ratio
amounted to 8.1% on December 31, 2012, as compared to 8.0% on December 31,
2011. The Company declared a common dividend of $.18 per share during the
quarter. Based on the December 31, 2012 closing stock price of $17.00 per
share, the Company’s annual dividend yield approximates 4.2%.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with
approximate assets of $587 million as of December 31, 2012. 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.

                                                                                                            
CSB BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
                                                                           
(Unaudited)
(Dollars in
thousands except per
share data)
                           Quarters                                                              
                           2012          2012          2012          2012          2011          2012          2011
EARNINGS                4th Qtr      3rd Qtr      2nd Qtr      1st Qtr      4th Qtr        12 months  12 months
Net interest income        $ 4,543       $ 4,499       $ 4,474       $ 4,380       $ 4,280       $ 17,896      $ 16,596
FTE (a)
Provision for loan           206           206           205           206           240           823           950
losses
Other income                 1,149         1,073         1,034         948           920           4,204         3,508
Other expenses               3,818         3,528         3,560         3,544         3,748         14,450        13,609
FTE adjustment (a)           73            73            77            67            67            290           256
Net income                   1,120         1,231         1,141         1,055         820           4,547         3,687
Diluted earnings per         0.41          0.45          0.41          0.39          0.30          1.66          1.35
share
                                                                                                                           
PERFORMANCE RATIOS
Return on average            0.77        % 0.86        % 0.82        % 0.77        % 0.61        % 0.80        % 0.78      %
assets (ROA)
Return on average            8.50        % 9.41        % 8.98        % 8.46        % 6.58        % 8.85        % 7.57      %
common equity (ROE)
Net interest margin          3.33        % 3.34        % 3.40        % 3.38        % 3.38        % 3.36        % 3.71      %
FTE (a)
Efficiency ratio             63.61       % 62.66       % 64.03       % 65.90       % 71.47       % 64.75       % 68.11     %
Number of full-time          162           168           167           157           154
equivalent employees
                                                                                                                           
MARKET DATA
Book value/common          $ 19.17       $ 19.05       $ 18.71       $ 18.25       $ 18.07
share
Period-end common            17.00         18.25         18.17         17.75         16.75
share mkt value
Market as a % of             88.68       % 95.80       % 97.11       % 97.26       % 92.70       %
book
Price-to-earnings            10.24         11.77         12.36         12.59         12.41
ratio
Cash
dividends/common           $ 0.18        $ 0.18        $ 0.18        $ 0.18        $ 0.18          0.72          0.72
share
Common stock
dividend payout              43.90       % 40.00       % 43.90       % 46.15       % 60.00       %
ratio
Average basic common         2,735,157     2,734,799     2,734,799     2,734,799     2,734,799     2,734,889     2,734,799
shares
Average diluted              2,735,328     2,736,316     2,736,046     2,735,611     2,735,229     2,735,141     2,734,838
common shares
Period end common            2,736,060     2,734,799     2,734,799     2,734,799     2,734,799
shares outstanding
Common shares                0             0             0             0             0                           0
repurchased
Common stock market        $ 46,513      $ 49,910      $ 49,691      $ 48,543      $ 45,808
capitalization
                                                                                                                           
ASSET QUALITY
Gross charge-offs          $ 304         $ 39          $ 85          $ 79          $ 328         $ 507         $ 1,014
Net charge-offs              287           16            (19)          41            275           325           900
(recoveries)
Allowance for loan           4,580         4,661         4,471         4,246         4,082
losses
Nonperforming assets         3,362         3,713         4,010         3,266         3,499
(NPAs)
Net
charge-off/average           0.32        % 0.02        % -0.02       % 0.05        % 0.34        % 0.09        % 0.28      %
loans ratio
Allowance for loan
losses/period-end            1.26          1.32          1.30          1.28          1.26
loans
NPAs/loans and other         0.92          1.05          1.17          0.99          1.08
real estate
Allowance for loan
losses/nonperforming         137.23        127.28        111.65        130.20        116.96
loans
                                                                                                                           
CAPITAL & LIQUIDITY
Period-end tangible          8.06        % 8.24        % 8.11        % 7.96        % 8.01        %
equity to assets
Average equity to            9.11          9.15          9.09          9.08          9.33
assets
Average equity to            14.70         14.97         15.04         15.33         15.46
loans
Average loans to             76.87         76.33         75.24         73.87         75.78
deposits
                                                                                                                           
AVERAGE BALANCES
Assets                     $ 575,498     $ 569,142     $ 562,291     $ 552,407     $ 530,049     $ 564,875     $ 471,329
Earning assets               542,150       536,093       528,817       520,802       502,198       532,005       446,929
Loans                        356,555       347,682       339,829       327,203       319,852       342,868       318,781
Deposits                     463,862       455,491       451,646       442,973       422,094       453,526       367,865
Shareholders' equity         52,415        52,063        51,125        50,147        49,454        51,384        48,674
                                                                                                                           
ENDING BALANCES
Assets                     $ 586,900     $ 568,783     $ 566,687     $ 560,803     $ 551,233
Earning assets               544,727       535,402       530,094       526,942       522,410
Loans                        364,580       352,748       344,116       331,353       324,182
Deposits                     475,443       454,299       454,719       450,207       443,553
Shareholders' equity         52,453        52,101        51,176        49,918        49,429
                                                                                                                           

                                          
                                           
NOTES:
                                           
(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)
dollars in thousands, except per share
data
                                                 December 31,     December 31,
                                                 2012             2011
ASSETS
Cash and cash equivalents
Cash and due from banks                        $ 21,485         $ 12,519
Interest-earning deposits in other banks         45,393           69,739
Federal funds sold                              -               -
Total cash and cash equivalents                  66,878           82,258
Securities
Available-for-sale, at fair-value                129,291          123,026
Restricted stock, at cost                       5,463           5,463
Total securities                                 134,754          128,489
Loans held for sale                              -                -
Loans                                            364,580          324,182
Less allowance for loan losses                  4,580           4,082
Net loans                                        360,000          320,100
                                                                  
Goodwill and core deposit intangible             5,622            5,762
Bank owned life insurance                        8,298            3,068
Premises and equipment, net                      8,475            8,513
Accrued interest receivable and other           2,873           3,043
assets
                                                                  
TOTAL ASSETS                                   $ 586,900        $ 551,233
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing                            $ 104,147        $ 85,890
Interest-bearing                                371,296         357,663
Total deposits                                   475,443          443,553
                                                                  
Short-term borrowings                            43,992           37,073
Other borrowings                                 12,672           19,161
Accrued interest payable and other              2,340           2,017
liabilities
Total liabilities                               534,447         501,804
Shareholders' equity
Common stock, $6.25 par value.
Authorized
9,000,000 shares; issued 2,980,602
shares
in 2012 and 2011                                 18,629           18,629
Additional paid-in capital                       9,974            9,994
Retained earnings                                26,962           24,391
Treasury stock at cost - 244,542 shares
in 2012
and 245,803 in 2011                              (4,976)          (5,015)
Accumulated other comprehensive income          1,864           1,430
Total shareholders' equity                      52,453          49,429
                                                                  
TOTAL LIABILITIES AND SHAREHOLDERS'            $ 586,900        $ 551,233
EQUITY
                                                                  

                                                              
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
                                                                        
(Unaudited)
dollars in thousands, except             Quarter ended       Year ended
per share data
                                         December 31,        December 31,
                                         2012      2011      2012       2011
Interest and dividend income:
Loans, including fees                  $ 4,397   $ 4,232   $ 17,279   $ 16,977
Taxable securities                       599       729       2,672      2,538
Nontaxable securities                    122       111       486        421
Other                                   35       39       147       82
Total interest and dividend             5,153    5,111    20,584    20,018
income
Interest expense:
Deposits                                 533       710       2,323      2,864
Other                                   150      189      655       814
Total interest expense                  683      899      2,978     3,678
                                                                        
Net interest income                      4,470     4,212     17,606     16,340
Provision for loan losses               206      240      823       950
Net interest income after
provision
for loan losses                         4,264    3,972    16,783    15,390
Non-interest income
Service charges on deposits              334       324       1,305      1,134
accounts
Trust services                           168       173       671        677
Securities gains (losses), net           -         -         -          237
Gain on sale of loans                    229       65        591        219
Other                                   418      358      1,637     1,241
Total non-interest income               1,149    920      4,204     3,508
Non-interest expenses
Salaries and employee benefits           2,051     2,047     7,960      7,459
Occupancy expense                        257       259       1,025      890
Equipment expense                        170       154       618        524
Franchise tax expense                    126       145       542        550
Professional and director fees           193       176       814        713
Federal deposit insurance                90        99        328        352
Amortization of intangible               37        33        140        78
assets
Other expenses                          894      835      3,023     3,043
Total non-interest expenses             3,818    3,748    14,450    13,609
Income before income tax                 1,595     1,144     6,537      5,289
Federal income tax provision            475      324      1,990     1,602
                                                                        
Net income                             $ 1,120   $ 820     $ 4,547    $ 3,687
Net income per share:
Basic                                  $ 0.41    $ 0.30    $ 1.66     $ 1.35
                                                                        
Diluted                                $ 0.41    $ 0.30    $ 1.66     $ 1.35

Note: Certain prior year balances have been reclassified to conform to the
current year presentation.

Contact:

CSB Bancorp, Inc.
Paula J. Meiler, SVP & CFO, 330-763-2873
paula.meiler@csb1.com
 
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