CSB Bancorp, Inc. (OTCBB: CSBB):

Fourth Quarter and Full Year Highlights

        Quarter Ended         Full Year Ended

December 31, 2010

December 31, 2010

 
Diluted earnings per share

$.35

$1.28

 
Net Income

$956,000

$3,496,000

 
Return on average common equity 7.95% 7.43%
 
Return on average assets 0.83% 0.78%
 

CSB Bancorp, Inc. (OTCBB: CSBB) today announced fourth quarter 2010 net income of $956 thousand or $.35 per basic and diluted share, as compared to $931 thousand or $.34 per basic and diluted share for the same period in 2009.

Annualized returns on average common equity (?ROE?) and average assets (?ROA?) for the quarter were 7.95% and 0.83%, respectively, compared with 8.04% and 0.84% for the fourth quarter of 2009.

For the full year of 2010, the Company reported net income of $3.50 million or $1.28 per basic and diluted share, as compared to $3.39 million or $1.24 per basic and diluted share in 2009. Full year ROE and ROA were 7.43% and 0.78%, respectively, compared to 7.51% and 0.79% in 2009.

Eddie Steiner, President and CEO commented, ?We are pleased that fourth quarter and full year net income were both higher than the prior year results, in spite of the difficult economic and interest rate environments. Full year earnings were 3% above last year's results.?

Revenue totaled $4.9 million for the fourth quarter of 2010, a decrease of 2.7% from the prior-year fourth quarter. Revenue decreased 0.5% for the full year of 2010 to $19.1 million as compared to $19.2 million in 2009.

Non-interest expense amounted to $3.2 million during the quarter, a decrease of $21 thousand or 0.7% from fourth quarter 2009. For the full year ended December 31, 2010, non-interest expense decreased $142 thousand or 1.1% versus the prior year.

The Company's fourth quarter efficiency ratio was 64.8% as compared to 63.5% for the same quarter in the prior year. The full year 2010 efficiency ratio of 66.0% improved slightly from the 66.2% registered in the prior year.

Federal income tax provision was $440 thousand for fourth quarter 2010, compared to $413 thousand for the same quarter in 2009. Full year income tax of $1.6 million for 2010 and $1.5 million for 2009 reflects effective tax rates of 31.0% and 31.1%, respectively.

Average total assets during the quarter amounted to $455 million, an increase of $15 million or 3.4% above the same quarter of the prior year. Average loan balances of $315 million were unchanged from the prior year fourth quarter, while average securities balances of $76 million decreased $2.2 million or 2.9% as compared to fourth quarter 2009.

Total assets amounted to $457 million on December 31, 2010, up $6 million or 1.4% from December 31, 2009. Net loans increased to $312 million, up $2 million or 0.7% from the prior year-end, while securities balances of $81 million were unchanged from the prior year-end.

Average commercial loan balances for the quarter, including commercial real estate, increased $7 million or 3.9% above year ago levels. Average residential mortgage balances declined by $9 million or 10.6% during the year. The decline of in-house mortgage balances was primarily due to customers selecting secondary market products because of prevailing lower interest rates in those products. Average home equity balances increased $3 million or 8.7%, and average consumer credit balances declined $0.8 million or 10.2% versus the same quarter of the prior year.

Net charge-offs for the quarter and the full year were $615 thousand and $1.3 million, respectively. Net charge-offs equated to 0.40% of average loans during 2010 as compared to 0.21% during 2009.

Nonperforming assets totaled $4.6 million or 1.47% of total loans plus other real estate at December 31, 2010, compared to $4.3 million or 1.37% at the prior year-end. Delinquent loan balances as of year-end 2010 amounted to 2.55% of total loans as compared to 1.92% at the end of 2009.

The Company funded $239 thousand in loan loss provision during the fourth quarter and the allowance for loan losses amounted to 1.28% of total loans on December 31, 2010. The ratio of the allowance for loan losses to nonperforming loans stood at 88% at the end of 2010.

Commenting on the Company's credit quality, Steiner noted, ?Our ratio of nonperforming assets declined from September 30, 2010, while early stage delinquencies as a percent of total loans increased. We expect total delinquencies and nonperforming assets to remain somewhat elevated for the foreseeable future.?

Average deposit balances grew by $9.9 million during the fourth quarter, or 2.9%. Total average deposits of $346 million for the quarter were 10.5% above the prior year's fourth quarter average.

Deposit balances totaled $353 million at year-end, an increase of $24 million or 7.3% from the prior year-end total. Within the deposit category, average non interest-bearing account balances for the fourth quarter increased by $16 million, or 30.9% above the same period in the prior year. Average interest-bearing checking, money market and traditional savings balances increased $16 million or 14.6% from year ago levels, while average time deposit balances grew by $0.7 million or 0.5% 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 $3 million or 8.7% 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 $47.2 million on December 31, 2010 with 2.7 million common shares outstanding at year-end. The Company's capital position remains strong, with tangible equity to assets approximating 9.9% on December 31, 2010, compared to 9.7% on December 31, 2009. The Company declared a common dividend of $.18 per share during the quarter. Based on the December 31, 2010 closing stock price of $15.57 per share, the Company's annual dividend yield approximates 4.6%.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $457 million as of December 31, 2010. 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 fourteen banking centers in Holmes, Tuscarawas, Wayne 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 YTD
2010 2010 2010 2010 2009
EARNINGS       4th Qtr   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr 2010   2009  
Net interest income FTE (a) $ 3,959 $ 4,016 $ 3,886 $ 3,935 $ 4,231 $ 15,796 $ 15,975
Provision for loan losses 239 238 239 519 409 1,235 1,337
Other income 904 780 889 731 769 3,305 3,215
Other expenses 3,169 3,215 3,150 3,041 3,190 12,576 12,718
FTE adjustment (a) 60 59 53 54 56 226 210
Net income 956 882 921 737 931 3,496 3,391
Diluted earnings per share 0.35 0.32 0.34 0.27 0.34 1.28 1.24
 
PERFORMANCE RATIOS
Return on average assets (ROA) 0.83 % 0.78 % 0.85 % 0.67 % 0.84 % 0.78 % 0.79 %
Return on average common equity (ROE) 7.95 % 7.41 % 7.90 % 6.44 % 8.04 % 7.43 % 7.51 %
Net interest margin FTE (a) 3.64 % 3.76 % 3.76 % 3.78 % 4.01 % 3.73 % 3.93 %
Efficiency ratio 64.84 % 66.72 % 67.74 % 64.83 % 63.51 % 66.02 % 66.22 %
Number of full-time equivalent employees 140 144 144 140 144
 
MARKET DATA
Book value/common share $ 17.24 $ 17.26 $ 17.10 $ 16.88 $ 16.76
Period-end common share mkt value 15.57 15.95 15.75 14.60 15.25
Market as a % of book 90.31 % 92.41 % 92.11 % 86.49 % 90.99 %
Price-to-earnings ratio 12.16 12.56 12.50 12.37 12.30
Cash dividends/common share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.72 $ 0.72
Common stock dividend payout ratio 51.43 % 56.25 % 52.94 % 66.67 % 52.94 %
Average basic common shares 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799
Average diluted common shares 2,734,836 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799
Period end common shares outstanding 2,734,799 2,734,799 2,734,799 2,734,799 2,734,799
Common shares repurchased 0 0 0 0 0 0 0
Common stock market capitalization $ 42,581 $ 43,620 $ 43,073 $ 39,928 $ 41,706
 
ASSET QUALITY
Gross charge-offs $ 621 $ 459 $ 20 $ 289 $ 82 $ 1,389 $ 885
Net charge-offs (recoveries) 615 440 (14) 223 46 1,264 671
Allowance for loan losses 4,031 4,407 4,608 4,356 4,060
Nonperforming assets (NPAs) 4,626 5,410 6,335 6,492 4,303
Net charge-off/average loans ratio 0.77 % 0.55 % (0.02) % 0.29 % 0.06 % 0.40 % 0.21 %
Allowance for loan losses/period-end loans 1.28 1.39 1.48 1.40 1.29
NPAs/loans and other real estate 1.47 1.71 2.03 2.09 1.37
Allowance for loan losses/nonperforming loans 87.84 83.99 75.69 70.02 98.04
 
CAPITAL & LIQUIDITY
Period-end tangible equity to assets 9.90 % 10.03 % 10.16 % 10.15 % 9.73 %
Average equity to assets 10.49 10.58 10.70 10.44 10.45
Average equity to loans 15.13 14.97 14.99 14.89 14.58
Average loans to deposits 91.15 93.83 95.24 95.35 100.69
 
AVERAGE BALANCES
Assets $ 454,657 $ 446,099 $ 436,782 $ 444,916 $ 439,688 $ 445,649 $ 427,613
Earning assets 431,661 423,591 414,137 422,487 418,737 422,996 406,566
Loans 315,348 315,355 311,647 311,789 315,168 313,549 317,254
Deposits 345,962 336,089 327,215 326,986 313,016 334,073 304,902
Shareholders' equity 47,703 47,213 46,724 46,440 45,964 47,081 45,184
 
ENDING BALANCES
Assets $ 457,056 $ 451,586 $ 441,242 $ 435,622 $ 450,666
Earning assets 434,876 428,895 419,855 413,771 428,301
Loans 315,647 316,909 311,857 310,900 313,483
Deposits 353,491 341,296 329,817 326,204 329,486
Shareholders' equity 47,154 47,211 46,776 46,171 45,822
                                   
 
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,
2010 2009
ASSETS
Cash and cash equivalents
Cash and due from banks $ 9,798 $ 8,803
Interest-earning deposits in other banks 38,497 33,858
Federal funds sold   65   -
Total cash and cash equivalents 48,360 42,661
Securities
Available-for-sale, at fair-value 75,204 75,158
Restricted stock, at cost   5,463   5,463
Total securities 80,667 80,621
Loans held for sale - 340
Loans 315,647 313,483
Less allowance for loan losses   4,031   4,060
Net loans 311,616 309,423
 
Goodwill and core deposit intangible 2,131 2,194
Bank owned life insurance 2,961 2,854
Premises and equipment, net 7,878 8,354
Accrued interest receivable and other assets   3,443   4,219
 
TOTAL ASSETS $ 457,056 $ 450,666
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing $ 69,151 $ 53,974
Interest-bearing   284,340   275,512
Total deposits 353,491 329,486
 
Short-term borrowings 32,018 28,764
Other borrowings 22,909 45,010
Accrued interest payable and other liabilities   1,484   1,584
Total liabilities   409,902   404,844
Shareholders' equity

Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2010 and 2009

18,629 18,629
Additional paid-in capital 9,994 9,994
Retained earnings 22,673 21,146

Treasury stock at cost - 245,803 shares in 2010 and 2009

(5,015) (5,015)
Accumulated other comprehensive income   873   1,068
Total shareholders' equity   47,154   45,822
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 457,056 $ 450,666
 
                       
 
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
 
(Unaudited)
dollars in thousands, except per share data

Quarter ended

Year ended

December 31,

December 31,

2010 2009 2010 2009
Interest and dividend income:
Loans, including fees $ 4,340 $ 4,770 $ 17,311 $ 18,539
Taxable securities 585 755 2,648 3,216
Nontaxable securities 97 86 354 319
Other   25   14   77   31
Total interest and dividend income   5,047   5,625   20,390   22,105
Interest expense:
Deposits 868 953 3,509 4,306
Other   279   498   1,311   2,034
Total interest expense   1,147   1,451   4,820 6,340
 
Net interest income 3,900 4,174 15,570 15,765
Provision for loan losses   239   409   1,235   1,337

Net interest income after provision for loan losses

3,661 3,765 14,335 14,428
Non-interest income
Service charges on deposits accounts 276 304 1,126 1,234
Trust services 253 149 655 547
Securities gains (losses), net - - 148 152
Gain on sale of loans 89 106 242 463
Other   286   210   1,134   819
Total non-interest income   904   769   3,305   3,215
Non-interest expenses
Salaries and employee benefits 1,780 1,748 6,880 6,900
Occupancy expense 199 274 808 1,014
Equipment expense 121 136 497 539
Franchise tax expense 131 135 536 507
Professional and director fees 174 155 631 641
Federal deposit insurance 69 46 486 542
Amortization of intangible assets 16 16 63 65
Other expenses   679   680   2,675   2,510
Total non-interest expenses   3,169   3,190   12,576   12,718
Income before income tax 1,396 1,344 5,064 4,925
Federal income tax provision   440   413   1,568   1,534
 
Net income $ 956 $ 931 $ 3,496 $ 3,391
Net income per share:
Basic $ 0.35 $ 0.34 $ 1.28 $ 1.24
 
Diluted $ 0.35 $ 0.34 $ 1.28 $ 1.24
 
 
Note: Certain prior year balances have been reclassified to conform to the current year presentation.
 

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