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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:
March 31,
2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number:
000-21714
CSB Bancorp, Inc.
(Exact Name of Registrant as Specified in its Charter)
Ohio
34-1687530
( State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
91 North Clay Street
,
P.O. Box 232
Millersburg
,
OH
44654
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (
330
)
674-9015
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Shares, $6.25 par value
CSBB
OTCPink
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes
☒
No
☐
As of May 1, 2025, the registrant had
2,638,956
shares of common stock, $6.25 par value per share, outstanding.
Held-to-maturity; fair value of $
172,478
in 2025 and $
172,603
in 2024 ($
0
credit loss allowance for 2025 and 2024)
200,000
204,309
Equity securities
266
266
Restricted stock, at cost
1,520
1,520
Total securities
321,214
331,529
Loans held for sale
—
283
Loans
761,240
737,641
Less allowance for credit losses
7,974
7,595
Net loans
753,266
730,046
Premises and equipment, net
13,935
14,069
Bank-owned life insurance
28,441
28,225
Goodwill
4,728
4,728
Accrued interest receivable and other assets
8,570
9,111
TOTAL ASSETS
$
1,218,640
$
1,191,500
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest-bearing
$
283,255
$
281,358
Interest-bearing
787,522
763,529
Total deposits
1,070,777
1,044,887
Short-term borrowings
24,981
25,683
Other borrowings
1,236
1,266
Allowance for credit losses on off-balance sheet commitments
519
524
Accrued interest payable and other liabilities
2,792
4,305
TOTAL LIABILITIES
1,100,305
1,076,665
SHAREHOLDERS' EQUITY
Common stock, $
6.25
par value. Authorized
9,000,000
shares; issued
2,980,602
shares; outstanding
2,641,547
shares in 2025 and
2,650,089
in 2024
18,629
18,629
Additional paid-in capital
9,815
9,815
Retained earnings
105,664
103,105
Treasury stock at cost:
339,055
shares in 2025 and
330,513
shares in 2024
(
8,622
)
(
8,294
)
Accumulated other comprehensive loss
(
7,151
)
(
8,420
)
TOTAL SHAREHOLDERS' EQUITY
118,335
114,835
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,218,640
$
1,191,500
See notes to unaudited consolidated financial statements.
3
CSB BANCORP, INC.
CONSOLIDATED STAT
EMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
(Dollars in thousands, except per share data)
2025
2024
INTEREST AND DIVIDEND INCOME
Loans, including fees
$
10,875
$
10,209
Taxable securities
1,795
1,890
Nontaxable securities
75
88
Other
536
369
Total interest and dividend income
13,281
12,556
INTEREST EXPENSE
Deposits
3,527
3,300
Short-term borrowings
67
100
Other borrowings
6
8
Total interest expense
3,600
3,408
NET INTEREST INCOME
9,681
9,148
CREDIT LOSS EXPENSE
Provision for credit loss expense - loans
408
603
(Recovery) provision for credit loss expense - off-balance sheet commitments
(
6
)
549
Total provision for credit loss expense
402
1,152
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE
9,279
7,996
NONINTEREST INCOME
Service charges on deposit accounts
295
280
Trust services
278
394
Debit card interchange fees
515
507
Credit card fees
150
157
Gain on sale of loans, net
49
36
Earnings on bank owned life insurance
216
188
Unrealized loss on equity securities
—
(
6
)
Other income
193
216
Total noninterest income
1,696
1,772
NONINTEREST EXPENSES
Salaries and employee benefits
3,697
3,469
Occupancy expense
356
283
Equipment expense
206
224
Professional and director fees
413
332
Financial institutions tax
230
216
Marketing and public relations
105
128
Software expense
403
428
Debit card expense
211
189
FDIC insurance expense
150
135
Other expenses
710
738
Total noninterest expenses
6,481
6,142
Income before income taxes
4,494
3,626
FEDERAL INCOME TAX PROVISION
878
693
NET INCOME
$
3,616
$
2,933
Basic and diluted net earnings per share
$
1.37
$
1.10
See notes to unaudited consolidated financial statements
4
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)
2025
2024
Net income
$
3,616
$
2,933
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities arising during the period
1,565
(
144
)
Amortization of held-to-maturity discount resulting from transfer
40
41
Income tax effect at
21
%
(
336
)
22
Other comprehensive income (loss)
1,269
(
81
)
Total comprehensive income
$
4,885
$
2,852
See notes to unaudited consolidated financial statements.
5
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHA
NGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(Dollars in thousands, except per share data)
Common
stock
Additional
paid-in
capital
Retained
earnings
Treasury
stock
Accumulated
other
comprehensive
loss
Total
Three Months Ended March 31, 2025
Balance at beginning of period
$
18,629
$
9,815
$
103,105
$
(
8,294
)
$
(
8,420
)
$
114,835
Net income
—
—
3,616
—
—
3,616
Other comprehensive income
—
—
—
—
1,269
1,269
Purchase of
8,542
treasury shares
—
—
—
(
328
)
—
(
328
)
Cash dividends declared, $
0.40
per share
—
—
(
1,057
)
—
—
(
1,057
)
Balance at March 31, 2025
$
18,629
$
9,815
$
105,664
$
(
8,622
)
$
(
7,151
)
$
118,335
Three Months Ended
March 31, 2024
Balance at beginning of period
$
18,629
$
9,815
$
97,297
$
(
7,532
)
$
(
10,270
)
$
107,939
Net income
—
—
2,933
—
—
2,933
Other comprehensive loss
—
—
—
—
(
81
)
(
81
)
Purchase of
5,255
treasury shares
—
—
—
(
197
)
—
(
197
)
Cash dividends declared, $
0.39
per share
—
—
(
1,039
)
—
—
(
1,039
)
Balance at March 31, 2024
$
18,629
$
9,815
$
99,191
$
(
7,729
)
$
(
10,351
)
$
109,555
See notes to unaudited consolidated financial statements.
6
CSB BANCORP, INC.
CONDENSED CONSOLIDATED S
TATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)
2025
2024
NET CASH PROVIDED BY OPERATING ACTIVITIES
$
3,053
$
600
INVESTING ACTIVITIES
Securities:
Proceeds from repayments, available-for-sale
9,587
4,896
Proceeds from repayments, held-to-maturity
4,280
4,153
Purchases, available-for-sale
(
2,084
)
—
Redemption of FHLB stock
—
5
Loan (originations) and payments, net
(
23,538
)
(
9,177
)
Property, equipment, and software acquisitions
(
94
)
(
174
)
Net cash used in investing activities
(
11,849
)
(
297
)
FINANCING ACTIVITIES
Net increase (decrease) in deposits
25,890
(
17,312
)
Net change in short-term borrowings
(
702
)
(
6,359
)
Repayment of other borrowings
(
30
)
(
54
)
Cash dividends paid
(
1,057
)
(
1,039
)
Purchase of treasury shares
(
328
)
(
197
)
Net cash provided by (used in) financing activities
23,773
(
24,961
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
14,977
(
24,658
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
73,509
64,077
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
88,486
$
39,419
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest
$
3,599
$
3,366
Income taxes
—
—
See notes to unaudited consolidated financial statements.
7
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
N
OTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”). All significant intercompany transactions and balances have been eliminated in consolidation.
The condensed consolidated financial statements have been prepared without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at March 31, 2025, and the results of operations and changes in cash flows for the periods presented have been made.
Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2024, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements. The results of operations for the period ended March 31, 2025 are not necessarily indicative of the operating results for the full year or any future interim period.
Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.
USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.
RECENTLY ISSUED ACCOUNTING PRONOUNCMENTS
In December 2023, the FASB issued
ASU 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures
, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after December 15, 2024, and for annual periods beginning after December 15, 2025, for all other entities. The Company
adopted
the new disclosures for the annual periods beginning on
January 1, 2025
. The Company will include the applicable and relevant required disclosures in the Income Taxes footnote in the Form 10-K.
In November 2024, the FASB issued
ASU 2024-03,
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
. This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Specific disclosures are required for (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities. The amendments in this Update do not change or remove current expense disclosure requirements. However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. The amendments in ASU 2024-03 apply only to public business entities and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its financial statements.
8
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 – SECURITIES
Securities consisted of the following on
March 31, 2025 and December 31, 2024:
(Dollars in thousands)
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Allowance for Credit Losses
Fair
Value
March 31, 2025
Available-for-sale
U.S. Treasury securities
$
11,999
$
2
$
(
33
)
$
—
$
11,968
U.S. Government agencies
6,000
—
(
232
)
—
5,768
Mortgage-backed securities of government agencies
69,215
142
(
6,057
)
—
63,300
Asset-backed securities of government agencies
393
—
(
5
)
—
388
State and political subdivisions
15,031
—
(
709
)
—
14,322
Corporate bonds
24,527
8
(
853
)
—
23,682
Total available-for-sale
127,165
152
(
7,889
)
—
119,428
Held-to-maturity
U.S. Treasury securities
$
7,865
$
—
$
(
506
)
—
$
7,359
Mortgage-backed securities of government agencies
189,624
—
(
26,802
)
—
162,822
State and political subdivisions
2,511
—
(
214
)
—
2,297
Total held-to-maturity
200,000
—
(
27,522
)
—
172,478
Equity securities
185
81
—
—
266
Restricted stock
1,520
—
—
—
1,520
Total securities
$
328,870
$
233
$
(
35,411
)
$
—
$
293,692
December 31, 2024
Available-for-sale
U.S. Treasury securities
$
13,487
$
8
$
(
81
)
$
—
$
13,414
U.S. Government agencies
6,000
—
(
302
)
—
5,698
Mortgage-backed securities of government agencies
69,746
30
(
7,078
)
—
62,698
Asset-backed securities of government agencies
404
—
(
6
)
—
398
State and political subdivisions
15,051
—
(
805
)
—
14,246
Corporate bonds
30,048
5
(
1,073
)
—
28,980
Total available-for-sale
134,736
43
(
9,345
)
—
125,434
Held-to-maturity
U.S. Treasury securities
7,854
—
(
621
)
—
7,233
Mortgage-backed securities of government agencies
193,937
—
(
30,862
)
—
163,075
State and political subdivisions
2,518
—
(
223
)
—
2,295
Total held-to-maturity
204,309
—
(
31,706
)
—
172,603
Equity securities
185
81
—
—
266
Restricted stock
1,520
—
—
—
1,520
Total securities
$
340,750
$
124
$
(
41,051
)
$
—
$
299,823
9
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 – SECURITIES
(continued)
The amortized cost and fair value of debt securities on
March 31, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(Dollars in thousands)
Amortized cost
Fair value
Available-for-sale
Due in one year or less
$
23,163
$
22,983
Due after one through five years
21,113
20,474
Due after five through ten years
16,601
15,423
Due after ten years
66,288
60,548
Total debt securities available-for-sale
$
127,165
$
119,428
Held-to-maturity
Due in one year or less
$
2,489
$
2,444
Due after one through five years
3,305
3,120
Due after five through ten years
4,693
4,202
Due after ten years
189,513
162,712
Total debt securities held-to-maturity
$
200,000
$
172,478
Securities with a fair value of approximately $
136
million and $
134
million were pledged on
March 31, 2025 and December 31, 2024, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.
Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $
1.0
million on
March 31, 2025 and December 31, 2024
. Federal Reserve Bank stock was $
471
thousand on
March 31, 2025 and December 31, 2024.
There were
no
proceeds from sales of securities for the
three-month period ended March 31, 2025 and 2024. All gains and losses recognized on equity securities during the three-month periods were unrealized.
10
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 – SECURITIES
(continued)
The following table presents gross unrealized losses and fair value of securities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on
March 31, 2025 and December 31, 2024:
Securities in a continuous unrealized loss position
Less than 12 months
12 months or more
Total
(Dollars in thousands)
Gross
unrealized
losses
Fair
value
Gross
unrealized
losses
Fair
value
Gross
unrealized
losses
Fair
value
March 31, 2025
Available-for-sale
U.S. Treasury securities
$
—
$
—
$
(
33
)
$
8,978
$
(
33
)
$
8,978
U.S. Government agencies
—
—
(
232
)
5,768
(
232
)
5,768
Mortgage-backed securities of government agencies
—
—
(
6,057
)
44,349
(
6,057
)
44,349
Asset-backed securities of government agencies
—
—
(
5
)
388
(
5
)
388
State and political subdivisions
(
13
)
1,452
(
696
)
12,560
(
709
)
14,012
Corporate bonds
—
—
(
853
)
22,172
(
853
)
22,172
Total temporarily impaired
$
(
13
)
$
1,452
$
(
7,876
)
$
94,215
$
(
7,889
)
$
95,667
December 31, 2024
Available-for-sale
U.S. Treasury securities
$
—
$
—
$
(
81
)
$
8,949
$
(
81
)
$
8,949
U.S. Government agencies
—
—
(
302
)
5,698
(
302
)
5,698
Mortgage-backed securities of government agencies
(
88
)
12,944
(
6,990
)
45,063
(
7,078
)
58,007
Asset-backed securities of government agencies
—
—
(
6
)
398
(
6
)
398
State and political subdivisions
(
19
)
1,446
(
786
)
12,800
(
805
)
14,246
Corporate bonds
—
—
(
1,073
)
27,473
(
1,073
)
27,473
Total temporarily impaired
$
(
107
)
$
14,390
$
(
9,238
)
$
100,381
$
(
9,345
)
$
114,771
There were
104
securities in an unrealized loss position on
March 31, 2025
,
100
of which were in a continuous loss position for twelve (12) months or more. Each quarter the Company conducts a comprehensive security-level impairment assessment on the securities portfolio. Management believes the Company will fully recover the cost of these securities. Unrealized losses on the Company’s fixed-rate debt securities are a result of interest rate increases. U.S. Treasury securities and investments in securities of U.S. government sponsored agency bonds comprise $
81
million of total AFS securities. The remaining $
38
million of non-agency debt securities is made up of Corporate Bonds and debt securities to State and Political Subdivisions. For non-agency debt securities, the Company verified the current credit ratings remain above investment grade. Non-rated debt securities total $
10
million. Annually, management reviews the credit profile of each non-rated issue and assesses whether any impairment to the contractually obligated cash flow is likely to occur. Based on these reviews, management has concluded the underlying creditworthiness for each security remains sufficient to maintain required payment obligations and, therefore, no allowance for credit losses has been recorded. Management believes the value will recover as the securities approach maturity or market interest rates change.
11
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 – SECURITIES
(continued)
The Bank monitors the credit quality of held-to-maturity debt securities primarily through utilizing their credit rating. The Bank monitors the credit rating on a quarterly basis. There are no nonperforming held-to-maturity securities. As of March 31, 2025
,
no
ACL was required for any held-to-maturity security. The majority of the securities are explicitly or implicitly guaranteed by the United States government, and any estimate of expected credit losses would be insignificant to the Bank.
The following table summarizes the amortized cost of held-to maturity debt securities at
March 31, 2025 and December 31, 2024, aggregated by credit quality indicator:
(Dollars in thousands)
U.S. Treasury securities
Mortgage- backed securities of government agencies
State and political subdivisions
March 31, 2025
Credit rating:
AAA / AA / A
$
7,865
$
189,624
$
2,511
BBB / BB / B
—
—
—
Lower than B
—
—
—
Non-rated
—
—
—
Total
$
7,865
$
189,624
$
2,511
December 31, 2024
Credit rating:
AAA / AA / A
$
7,854
$
193,937
$
2,518
BBB / BB / B
—
—
—
Lower than B
—
—
—
Non-rated
—
—
—
Total
$
7,854
$
193,937
$
2,518
12
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
Loans consisted of the following on
March 31, 2025 and December 31, 2024:
(Dollars in thousands)
March 31,
2025
December 31, 2024
Commercial and industrial
$
149,391
$
144,376
Commercial real estate
194,863
190,514
Commercial lessors of buildings
106,703
101,168
Construction
70,198
64,262
Consumer mortgage
179,702
177,578
Home equity line of credit
45,945
44,971
Consumer installment
9,420
9,645
Consumer indirect
5,078
5,276
Total loans
761,300
737,790
Allowance for credit losses
(
7,974
)
(
7,595
)
Deferred loan fees, net
(
60
)
(
149
)
Net Loans
$
753,266
$
730,046
Loan Origination/Risk Management
The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.
Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory, and equipment, and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied.
The top ten collateral exposures in commercial real estate and commercial lessors of buildings at March 31, 2025
are as follows: Industrial, manufacturing and production $
60
million; warehouse $
40
million: healthcare facilities $
34
million; residential investment property $
29
million; hotels $
18
million; retail strip center $
17
million; auto repair $
15
million; retail stores $
13
million; senior housing $
12
million; office buildings $
9
million.
13
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
With respect to loans to developers and builders that are secured by non-owner-occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, sensitivity analysis of absorption and lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate.
Construction and land development loans often involve the disbursement of substantial funds with repayment dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.
The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk.
The Company maintains an independent credit department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.
Loans serviced for others approximated $
135
million and $
136
million
on March 31, 2025 and December 31, 2024, respectively.
Concentrations of Credit
Nearly all the Company’s lending activity occurs within the state of Ohio, including the five counties of Holmes, Medina, Stark, Tuscarawas, and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans. Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the
three
largest industries compared to total loans on
March 31, 2025
, included $
84
million, or
11
%, of total loans to lessors of non-residential buildings, $
37
million, or
5
%, of total loans to manufacturers of animal food, and $
29
million, or
4
%, of total loans to hotels. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal, interest payments, and the adequacy of the collateral received.
Allowance for Credit Losses
The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the three months ended
March 31, 2025 and 2024
.
Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
For the three-months ended March 31, 2025, the increase in the provision for credit losses on commercial and industrial loans primarily relates to the increase in nonperforming commercial credit cards. The increase in provision amounts for the remaining commercial and construction loan categories primarily relates to loan growth.
14
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
For the three-months ended March 31, 2024, the increase in the provision for commercial and industrial loans primarily related to one individually evaluated commercial loan relationship which had a collateral advance shortfall. The remaining provision amounts for the quarter were primarily a result of changes in loan volume and weighted average remaining maturities of the loans in each category.
(Dollars in thousands)
Beginning ACL Balance
Charge-offs
Recoveries
Provision (Recovery) for Credit Losses
Ending ACL Balance
Three Months Ended March 31, 2025
Commercial and industrial
$
2,919
$
(
27
)
$
—
$
262
$
3,154
Commercial real estate
1,681
—
—
26
1,707
Commercial lessors of buildings
1,141
—
—
99
1,240
Construction
502
—
—
74
576
Consumer mortgage
812
—
1
(
55
)
758
Home equity line of credit
205
—
—
(
12
)
193
Consumer installment
92
(
8
)
4
1
89
Consumer indirect
243
—
1
13
257
$
7,595
$
(
35
)
$
6
$
408
$
7,974
Three Months Ended March 31, 2024
Commercial and industrial
$
1,737
$
(
11
)
$
7
$
491
$
2,224
Commercial real estate
1,637
—
—
(
25
)
1,612
Commercial lessors of buildings
1,200
—
—
144
1,344
Construction
333
—
—
(
10
)
323
Consumer mortgage
1,107
—
1
(
40
)
1,068
Home equity line of credit
288
—
—
(
4
)
284
Consumer installment
76
(
18
)
3
13
74
Consumer indirect
229
(
59
)
3
34
207
$
6,607
$
(
88
)
$
14
$
603
$
7,136
15
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
Age Analysis of Past-Due Loans Receivable and Nonperforming Loans
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.
The following table presents the classes of the loan portfolio summarized by the past-due status.
(Dollars in thousands)
Current
30-59
Days
Past
Due
60-89
Days
Past
Due
90 Days +
Past Due
Total Past Due
Total
Loans
March 31, 2025
Commercial and industrial
$
149,362
$
4
$
25
$
—
$
29
$
149,391
Commercial real estate
194,700
—
163
—
163
194,863
Commercial lessors of buildings
106,703
—
—
—
—
106,703
Construction
70,175
23
—
—
23
70,198
Consumer mortgage
178,805
262
432
203
897
179,702
Home equity line of credit
45,250
695
—
—
695
45,945
Consumer installment
9,411
8
1
—
9
9,420
Consumer indirect
5,006
64
8
—
72
5,078
Total Loans
$
759,412
$
1,056
$
629
$
203
$
1,888
$
761,300
December 31, 2024
Commercial and industrial
$
144,274
$
46
$
56
$
—
$
102
$
144,376
Commercial real estate
190,514
—
—
—
—
190,514
Commercial lessors of buildings
101,168
—
—
—
—
101,168
Construction
64,262
—
—
—
—
64,262
Consumer mortgage
176,403
633
56
486
1,175
177,578
Home equity line of credit
44,595
376
—
—
376
44,971
Consumer installment
9,637
5
3
—
8
9,645
Consumer indirect
5,238
27
11
—
38
5,276
Total Loans
$
736,091
$
1,087
$
126
$
486
$
1,699
$
737,790
16
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of
March 31, 2025 and December 31, 2024:
(Dollars in thousands)
Nonaccrual with no ACL
Nonaccrual with ACL
Total Nonaccrual
Loans Past Due 90 Days or More Still Accruing
Total Nonperforming
March 31, 2025
Commercial and industrial
$
413
$
49
$
462
$
—
$
462
Commercial real estate
501
—
501
—
501
Commercial lessors of buildings
—
2
2
—
2
Construction
—
—
—
—
—
Consumer mortgage
—
242
242
203
445
Home equity line of credit
—
69
69
—
69
Consumer installment
—
44
44
—
44
Consumer indirect
—
73
73
—
73
Total Loans
$
914
$
479
$
1,393
$
203
$
1,596
December 31, 2024
Commercial and industrial
$
413
$
36
$
449
$
—
$
449
Commercial real estate
497
4
501
—
501
Commercial lessors of buildings
—
3
3
—
3
Construction
—
—
—
—
—
Consumer mortgage
—
80
80
486
566
Home equity line of credit
—
71
71
—
71
Consumer installment
—
48
48
—
48
Consumer indirect
—
67
67
—
67
Total Loans
$
910
$
309
$
1,219
$
486
$
1,705
Interest income recognized on nonaccrual loans for the three months ended March 31, 2025
and 2024 was $
12
thousand and $
3
thousand, respectively.
Collateral-Dependent Financial Assets
When loan repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, expected credit losses are based on the fair value of the collateral. The class of loan represents the primary collateral type associated with the loan.
The following table presents the amortized cost basis of collateral dependent loans by class of loan:
Type of Collateral
(Dollars in thousands)
Real Estate
Blanket Liens
March 31, 2025
Commercial and industrial
$
—
$
413
Commercial real estate
501
—
Total collateral dependent loans
$
501
$
413
December 31, 2024
Commercial and industrial
$
—
$
413
Commercial real estate
501
—
Total collateral dependent loans
$
501
$
413
17
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes all commercial loans before origination and an annual review of those with an outstanding commitment greater than $
500
thousand. The Company uses the following definitions for risk ratings:
Pass
. Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor, or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.
Special Mention
. Assets assigned a Special Mention grade are not considered classified assets but are considered criticized. These assets exhibit potential weaknesses that, deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Loans in this rating warrant special attention but have not yet reached the point of concern for loss. These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere. Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk.
Substandard
. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful
. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.
18
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system as of
March 31, 2025 and December 31, 2024:
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)
2025
2024
2023
2022
2021
Prior
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term
Total
March 31, 2025
Commercial and industrial:
Pass
$
9,083
$
20,089
$
18,905
$
12,819
$
6,274
$
8,303
$
46,982
$
—
$
122,455
Special mention
—
—
827
2,136
708
146
1,012
—
4,829
Substandard
—
474
9,653
1
3,885
574
791
6,730
—
22,107
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
9,083
$
20,563
$
29,385
$
18,840
$
7,556
$
9,240
$
54,724
$
—
$
149,391
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
27
$
—
$
27
Commercial real estate:
Pass
$
8,520
$
15,127
$
24,744
$
38,777
$
40,740
$
36,765
$
177
$
—
$
164,850
Special Mention
—
—
—
1,128
5,148
11,640
—
—
17,916
Substandard
—
343
1,057
301
2,353
8,043
—
—
12,097
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
8,520
$
15,470
$
25,801
$
40,206
$
48,241
$
56,448
$
177
$
—
$
194,863
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Commercial lessors of buildings:
Pass
$
7,135
$
22,230
$
22,935
$
21,247
$
14,990
$
16,490
$
466
$
—
$
105,493
Special Mention
—
—
—
—
178
—
—
—
178
Substandard
—
—
—
—
—
994
38
—
1,032
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
7,135
$
22,230
$
22,935
$
21,247
$
15,168
$
17,484
$
504
$
—
$
106,703
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Commercial Construction:
Pass
$
2,972
$
16,182
$
10,188
$
7,985
$
732
$
1,261
$
2,240
$
—
$
41,560
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
—
20,500
2
—
—
73
—
—
20,573
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
2,972
$
16,182
$
30,688
$
7,985
$
732
$
1,334
$
2,240
$
—
$
62,133
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Total
Pass
$
27,710
$
73,628
$
76,772
$
80,828
$
62,736
$
62,819
$
49,865
$
—
$
434,358
Special Mention
—
—
827
3,264
6,034
11,786
1,012
—
22,923
Substandard
—
817
31,210
1, 2
4,186
2,927
9,901
6,768
—
55,809
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
27,710
$
74,445
$
108,809
$
88,278
$
71,697
$
84,506
$
57,645
$
—
$
513,090
YTD commercial gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
27
$
—
$
27
1
Balances include $
3.3
million USDA guarantee.
2
Balances include $
16.4
million USDA guarantee.
19
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term
Total
December 31, 2024
Commercial and industrial:
Pass
$
20,361
$
20,376
$
14,446
$
7,291
$
2,920
$
6,576
$
44,566
$
—
$
116,536
Special mention
—
869
2,227
812
161
—
1,987
—
6,056
Substandard
—
8,479
1
4,170
650
109
1,107
7,269
—
21,784
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
20,361
$
29,724
$
20,843
$
8,753
$
3,190
$
7,683
$
53,822
$
—
$
144,376
YTD gross charge-offs
$
—
$
1,393
$
—
$
10
$
—
$
—
$
4,268
$
—
$
5,671
Commercial real estate:
Pass
$
15,216
$
25,238
$
39,541
$
41,742
$
13,049
$
25,258
$
154
$
—
$
160,198
Special Mention
—
—
1,245
5,216
2,013
9,701
—
—
18,175
Substandard
345
1,252
196
2,211
6
8,131
—
—
12,141
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
15,561
$
26,490
$
40,982
$
49,169
$
15,068
$
43,090
$
154
$
—
$
190,514
YTD gross charge-offs
$
—
$
598
$
—
$
—
$
—
$
—
$
—
$
—
$
598
Commercial lessors of buildings:
Pass
$
22,287
$
23,003
$
21,576
$
15,206
$
3,043
$
13,792
$
384
$
—
$
99,291
Special Mention
—
—
—
180
—
—
—
—
180
Substandard
—
—
557
94
949
59
38
—
1,697
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
22,287
$
23,003
$
22,133
$
15,480
$
3,992
$
13,851
$
422
$
—
$
101,168
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Commercial construction:
Pass
$
12,420
$
9,588
$
8,084
$
818
$
845
$
431
$
2,239
$
—
$
34,425
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
20,500
2
—
—
—
74
—
—
20,574
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
12,420
$
30,088
$
8,084
$
818
$
845
$
505
$
2,239
$
—
$
54,999
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Total
Pass
$
70,284
$
78,205
$
83,647
$
65,057
$
19,857
$
46,057
$
47,343
$
—
$
410,450
Special Mention
—
869
3,472
6,208
2,174
9,701
1,987
—
24,411
Substandard
345
30,231
1, 2
4,923
2,955
1,064
9,371
7,307
—
56,196
Doubtful
—
—
—
—
—
—
—
—
—
Total
$
70,629
$
109,305
$
92,042
$
74,220
$
23,095
$
65,129
$
56,637
$
—
$
491,057
YTD commercial gross charge-offs
$
—
$
1,991
$
—
$
10
$
—
$
—
$
4,268
$
—
$
6,269
1
Balances include $
1.9
million USDA guarantee.
2
Balances include $
16.4
million USDA guarantee.
20
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in consumer loans based on payment activity as of
March 31, 2025 and December 31, 2024:
Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)
2025
2024
2023
2022
2021
Prior
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term
Total
March 31, 2025
Consumer mortgage:
Performing
$
3,146
$
24,887
$
27,789
$
31,907
$
31,394
$
60,134
$
—
$
—
$
179,257
Nonperforming
—
—
203
—
76
166
—
—
445
Total
$
3,146
$
24,887
$
27,992
$
31,907
$
31,470
$
60,300
$
—
$
—
$
179,702
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Consumer Construction:
Performing
$
570
$
6,443
$
230
$
600
$
153
$
69
$
—
$
—
$
8,065
Nonperforming
—
—
—
—
—
—
—
—
—
Total
$
570
$
6,443
$
230
$
600
$
153
$
69
$
—
$
—
$
8,065
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Home equity line of credit:
Performing
$
—
$
—
$
—
$
—
$
—
$
—
$
45,808
$
68
$
45,876
Nonperforming
—
—
—
—
—
—
69
—
69
Total
$
—
$
—
$
—
$
—
$
—
$
—
$
45,877
$
68
$
45,945
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Consumer installment:
Performing
$
1,146
$
3,256
$
2,860
$
1,362
$
383
$
315
$
54
$
—
$
9,376
Nonperforming
—
—
5
3
2
34
—
—
44
Total
$
1,146
$
3,256
$
2,865
$
1,365
$
385
$
349
$
54
$
—
$
9,420
YTD gross charge-offs
$
—
$
3
$
3
$
1
$
—
$
1
$
—
$
—
$
8
Consumer indirect:
Performing
$
166
$
661
$
586
$
839
$
486
$
2,267
$
—
$
—
$
5,005
Nonperforming
—
—
17
—
—
56
—
—
73
Total
$
166
$
661
$
603
$
839
$
486
$
2,323
$
—
$
—
$
5,078
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Total
Performing
$
5,028
$
35,247
$
31,465
$
34,708
$
32,416
$
62,785
$
45,862
$
68
$
247,579
Nonperforming
—
—
225
3
78
256
69
—
631
Total
$
5,028
$
35,247
$
31,690
$
34,711
$
32,494
$
63,041
$
45,931
$
68
$
248,210
YTD consumer gross charge-offs
$
—
$
3
$
3
$
1
$
—
$
1
$
—
$
—
$
8
21
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 – LOANS
(CONTINUED)
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving Loans Amortized Cost Basis
Revolving Loans Converted to Term
Total
December 31, 2024
Consumer mortgage:
Performing
$
21,807
$
28,296
$
31,939
$
32,540
$
28,571
$
33,859
$
—
$
—
$
177,012
Nonperforming
—
—
359
76
51
80
—
—
566
Total
$
21,807
$
28,296
$
32,298
$
32,616
$
28,622
$
33,939
$
—
$
—
$
177,578
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Consumer construction:
Performing
$
7,511
$
657
$
810
$
159
$
86
$
40
$
—
$
—
$
9,263
Nonperforming
—
—
—
—
—
—
—
—
—
Total
$
7,511
$
657
$
810
$
159
$
86
$
40
$
—
$
—
$
9,263
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Home equity line of credit:
Performing
$
—
$
—
$
—
$
—
$
—
$
—
$
44,865
$
35
$
44,900
Nonperforming
—
—
—
—
—
—
71
—
71
Total
$
—
$
—
$
—
$
—
$
—
$
—
$
44,936
$
35
$
44,971
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Consumer installment:
Performing
$
3,660
$
3,427
$
1,630
$
443
$
209
$
165
$
63
$
—
$
9,597
Nonperforming
—
6
3
3
—
36
—
—
48
Total
$
3,660
$
3,433
$
1,633
$
446
$
209
$
201
$
63
$
—
$
9,645
YTD gross charge-offs
$
3
$
23
$
20
$
5
$
4
$
10
$
—
$
—
$
65
Consumer indirect:
Performing
$
766
$
611
$
923
$
499
$
484
$
1,926
$
—
$
—
$
5,209
Nonperforming
—
18
—
—
—
49
—
—
67
Total
$
766
$
629
$
923
$
499
$
484
$
1,975
$
—
$
—
$
5,276
YTD gross charge-offs
$
—
$
—
$
—
$
—
$
—
$
60
$
—
$
—
$
60
Total
Performing
$
33,744
$
32,991
$
35,302
$
33,641
$
29,350
$
35,990
$
44,928
$
35
$
245,981
Nonperforming
—
24
362
79
51
165
71
—
752
Total
$
33,744
$
33,015
$
35,664
$
33,720
$
29,401
$
36,155
$
44,999
$
35
$
246,733
YTD consumer gross charge-offs
$
3
$
23
$
20
$
5
$
4
$
70
$
—
$
—
$
125
Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the collateral fair value less cost to sell if that value is lower than the outstanding balance. As of March 31, 2025
there were two loans secured by consumer real estate totaling $
168
thousand in process of foreclosure.
Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Bank modifies loans to borrowers in financial distress by providing – principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Bank may provide multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
There were no modifications of loans to borrowers in financial distress completed during the three months ended March 31, 2025 and 2024.
22
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SHORT-TERM BORROWINGS
The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.
Remaining Contractual Maturity
Overnight and Continuous
March 31,
December 31,
(Dollars in thousands)
2025
2024
Securities of U.S. Government Agencies and mortgage-backed securities of
government agencies pledged, fair value
$
25,026
$
25,745
Repurchase agreements
24,981
25,683
NOTE 5 – FAIR VALUE MEASUREMENTS
The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:
Level I:
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.
Level II:
Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by corroborated or other means. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability.
Level III:
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
23
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 – FAIR VALUE MEASUREMENTS
(CONTINUED)
The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of
March 31, 2025 and December 31, 2024
by level within the fair value hierarchy.
No
liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities with readily determinable values and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities or identical securities are traded. Obligations of U.S. government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions and corporate bonds are valued at observable market data for similar assets. Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes and are not included in the table below.
(Dollars in thousands)
Level I
Level II
Level III
Total
March 31, 2025
Assets:
Securities available-for-sale
U.S. Treasury securities
$
—
$
11,968
$
—
$
11,968
U.S. Government agencies
—
5,768
—
5,768
Mortgage-backed securities of government agencies
—
63,300
—
63,300
Asset-backed securities of government agencies
—
388
—
388
State and political subdivisions
—
14,322
—
14,322
Corporate bonds
—
23,682
—
23,682
Total available-for-sale securities
$
—
$
119,428
$
—
$
119,428
Equity securities
$
220
$
—
$
—
$
220
December 31, 2024
Assets:
Securities available-for-sale
U.S. Treasury securities
$
—
$
13,414
$
—
$
13,414
U.S. Government agencies
—
5,698
—
5,698
Mortgage-backed securities of government agencies
—
62,698
—
62,698
Asset-backed securities of government agencies
—
398
—
398
State and political subdivisions
—
14,246
—
14,246
Corporate bonds
—
28,980
—
28,980
Total available-for-sale securities
$
—
$
125,434
$
—
$
125,434
Equity securities
$
221
$
—
$
—
$
221
The following methods and assumptions were used by the Company in determining the fair value of assets measured at fair value on a nonrecurring basis as described below:
Individually evaluated collateral dependent loans:
Loans that are collateral dependent are written down to fair value through the establishment of specific reserves. Techniques used to value the collateral securing these loans include: quoted market prices for identical assets classified as Level I inputs; observable inputs, employed by certified appraisers, for similar assets classified as Level II inputs. In cases where valuation techniques included unobservable inputs and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level III inputs.
24
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 – FAIR VALUE MEASUREMENTS
(CONTINUED)
The following table presents the assets measured on a nonrecurring basis on the consolidated balance sheet at their fair value as of
March 31, 2025 and December 31, 2024, by level within the fair value hierarchy.
(Dollars in thousands)
Level I
Level II
Level III
Total
March 31, 2025
Individually evaluated collateral dependent loans recorded at fair value:
Commercial and industrial
$
—
$
—
$
413
$
413
Commercial real estate
—
—
501
501
Total individually evaluated collateral dependent loans recorded at fair value:
$
—
$
—
$
914
$
914
December 31, 2024
Individually evaluated collateral dependent loans recorded at fair value:
Commercial and industrial
$
—
$
—
$
413
$
413
Commercial real estate
—
—
501
501
Total individually evaluated collateral dependent loans recorded at fair value:
$
—
$
—
$
914
$
914
NOTE 6 –
FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of recognized financial instruments carried at amortized cost as of
March 31, 2025 and December 31, 2024 are as follows:
(Dollars in thousands)
Carrying
Value
Level I
Level II
Level III
Fair Value
March 31, 2025
Financial assets
Securities held-to-maturity
$
200,000
$
—
$
172,478
$
—
$
172,478
Net loans
753,266
—
—
720,101
720,101
Mortgage servicing rights
621
—
—
621
621
Financial liabilities
Deposits
$
1,070,777
$
808,652
$
—
$
264,084
$
1,072,736
Other borrowings
1,236
—
—
1,104
1,104
December 31, 2024
Financial assets
Securities held-to-maturity
$
204,309
$
—
$
172,603
$
—
$
172,603
Loans held for sale
$
283
$
290
$
—
$
—
$
290
Net loans
730,046
—
—
691,816
691,816
Mortgage servicing rights
621
—
—
621
621
Financial liabilities
Deposits
$
1,044,887
$
801,634
$
—
$
242,413
$
1,044,047
Other borrowings
1,266
—
—
1,111
1,111
Other financial instruments carried at amortized cost include cash and cash equivalents, restricted stock, bank-owned life insurance, accrued interest receivable, short-term borrowings, and accrued interest payable, all of which have a Level I fair value that approximates their carrying value. The Company also has unrecognized financial instruments on March 31, 2025 and December 31, 2024
, related to commitments to extend credit and letters of credit. The aggregate contract amount of such financial instruments was approximately $
297
million on
March 31, 2025
and $
289
million on
December 31, 2024.
25
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6 –
FAIR VALUES OF FINANCIAL INSTRUMENTS
(CONTINUED)
The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.
Note 7-
ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the changes in accumulated other comprehensive loss by component net of tax for the
three months ended March 31, 2025 and 2024:
(Dollars in thousands)
Pretax
Tax Effect
After-tax
Three Months Ended March 31, 2025
Balance, beginning of period
$
(
10,657
)
$
2,237
$
(
8,420
)
Unrealized holding gain on available-for-sale securities arising during
the period
1,565
(
328
)
1,237
Amortization of held-to-maturity discount resulting from transfer
40
(
8
)
32
Total other comprehensive income
1,605
(
336
)
1,269
Balance, end of period
$
(
9,052
)
$
1,901
$
(
7,151
)
Three Months Ended March 31, 2024
Balance, beginning of period
$
(
12,999
)
$
2,729
$
(
10,270
)
Unrealized holding loss on available-for-sale securities arising during
the period
(
144
)
30
(
114
)
Amortization of held-to-maturity discount resulting from transfer
41
(
8
)
33
Total other comprehensive loss
(
103
)
22
(
81
)
Balance, end of period
$
(
13,102
)
$
2,751
$
(
10,351
)
26
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis focuses on the consolidated financial condition of the Company on March 31, 2025 as compared to December 31, 2024, and the consolidated results of operations for the three months ended March 31, 2025 compared to the same period in 2024. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim condensed Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report are not historical facts but rather are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates”, “plans”, “expects”, “believes”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company’s actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services. Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows, and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement.
The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by applicable law.
FINANCIAL CONDITION
Total assets increased $27 million to $1.22 billion at March 31, 2025 compared to $1.19 billion at December 31, 2024. During the three months ended March 31, 2025, securities decreased $10 million, net loans increased $23 million, and cash and cash equivalents increased $15 million. Deposits and short-term borrowings increased $25 million.
Net loans increased $23 million, or 3%, as commercial and commercial real estate loans increased $15 million, or 3%, compared to December 31, 2024 and residential real estate loans increased $2 million, or 1%, from December 31, 2024. Construction loans increased $6 million, or 9%, from December 31, 2024.
Consumer refinance activity remains slow on mortgage loans, while home purchase activity remains stable despite limited inventory, and home equity line balances increased by $1 million.
Residential mortgage loan originations, including home equity lines, for the three months ended March 31, 2025 totaled $11 million, an increase from $9 million in mortgage originations during the three months ended March 31, 2024. Mortgage loan originations sold into the secondary market increased slightly to $1.5 million from $1.2 million, respectively during the three months ended March 31, 2025 and March 31, 2024. The Bank originates and sells primarily fixed rate thirty-year mortgages into the secondary market.
The allowance for credit losses for loans increased $379 thousand from December 31, 2024 to $8 million.
The increase in the allowance was primarily due to the volume increase in loans originated. Net charge-offs were $29 thousand, or an annualized 0.02% of average loans, in the current three-month period compared to net charge-offs of $74 thousand, or 0.04% of average loans in the year-ago three-month period. At March 31, 2025, the allowance for credit losses to total loans was 1.05%. We believe the allowance level is appropriate given the level of problem loans and composition of the overall loan portfolio in the current economic environment.
27
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nonperforming loans decreased $109 thousand to $1.6 million, or 0.21%, of total loans from $1.7 million, or 0.23% of total loans, on December 31, 2024. For the three months ended March 31, 2025, $224 thousand in loans were placed on nonaccrual status, $22 thousand in paydowns were received, and $27 thousand in loans were charged-off due to non-payment.
March 31,
December 31,
March 31,
(Dollars in thousands)
2025
2024
2024
Non-performing loans
$
1,596
$
1,705
$
361
Other real estate
—
—
—
Repossessed assets
—
14
—
Allowance for credit losses
7,974
7,595
7,136
Total loans
761,240
737,641
710,822
Allowance for credit losses as a percentage of total loans
1.05
%
1.03
%
1.00
%
Allowance for credit losses to total nonperforming loans
500
%
445
%
1,977
%
The ratio of gross loans to deposits was 71% at March 31, 2025 and December 31, 2024.
The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. Management has considered industry analyst reports, sector credit reports, and the volatility within the bond market in concluding that the gross unrealized losses of $35 million within the available-for-sale and held-to-maturity portfolios as of March 31, 2025, was primarily the result of current market yields compared to the yields at the time the investments were purchased by the Company and not due to credit quality. As a result, all embedded security losses on March 31, 2025, are considered temporary and no allowance for credit loss is necessary.
The weighted average life of total debt securities was 5.44 years at March 31, 2025 as compared to 5.14 years at December 31, 2024. If interest rates declined 100 basis points, the weighted average life was estimated to fall to 5.16 years at March 31, 2025. If interest rates rose 100 basis points the weighted average life would be expected to increase to 5.70 years at March 31, 2025.
Deposits increased $26 million, or 2%, from December 31, 2024 with noninterest-bearing deposits increasing approximately $2 million, or less than 1%, and interest-bearing deposit accounts increasing approximately $24 million, or 3%. Total deposits as of March 31, 2025 are $1.07 billion, or 6%, above March 31, 2024 deposit balances. On a year over year comparison, increases were recognized in noninterest-bearing demand deposits of $5 million, savings accounts of $2 million, money market accounts of $9 million, and time deposits of $50 million. Decreases were recognized in interest bearing demand accounts of $6 million. Deposits have increased as customers move excess liquid funds into money market accounts and time certificates of deposit to take advantage of the increased interest rates. The estimated amount of uninsured deposits was $262 million, $244 million, and $249 million as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively.
Short-term borrowings consisting of overnight repurchase agreements with retail customers decreased $702 thousand, or 3%, to $25 million at March 31, 2025 as compared to December 31, 2024 as customers moved money into higher interest rate money market and time deposit accounts. Other borrowings decreased $30 thousand as the Company repaid FHLB advances.
Total shareholders’ equity amounted to $118 million, or 9.7%, of total assets at March 31, 2025, an increase of $3.5 million, or 3%, from $115 million at December 31, 2024. The increase in shareholders’ equity during the three months ended March 31, 2025 was due to net income of $3.6 million, other comprehensive income of $1.3 million, less cash dividends of $1.1 million, and treasury stock repurchases of $328 thousand. Total accumulated other comprehensive loss ("AOCL") decreased during the three months ended March 31, 2025 due to decreases in interest rates and improvements in pricing in government agency and corporate bonds as AFS securities are marked to fair value. This remaining unrealized loss in securities is temporary and is adjusted monthly for additional interest rate fluctuations, principal paydowns, calls, and maturities. The Company and the Bank met all regulatory capital requirements at March 31, 2025 as shown in the Capital Resources section of this report.
28
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended March 31, 2025 and 2024
For the quarters ended March 31, 2025 and 2024, the Company recorded net income of $3.6 million and $2.9 million and $1.37 and $1.10 per share, respectively. The $683 thousand increase in net income for the period was primarily the result of the provision for credit losses and off-balance sheet commitments of $402 thousand compared to the provision for credit losses in the prior year period of $1.2 million. The increase of $533 thousand in net interest income partially offset by a $76 thousand decrease in noninterest income and a $339 thousand increase in noninterest expenses. The federal income tax provision increased $185 thousand. Pre-provision net revenue ("PPNR"), (a non-GAAP measure), totaled $4.9 million for the quarter ended March 31, 2025, an increase of $118 thousand, or 2.5%, from the prior year's first quarter.
Return on average assets and return on average equity were 1.22% and 12.58%, respectively, for the three-month period of 2025, compared to 1.02% and 10.84%, respectively for the same quarter in 2024.
Average Balance Sheets and Net Interest Margin Analysis
For the Three Months Ended March 31,
2025
2024
(Dollars in thousands)
Average
balance
1
Interest
Average
rate
2
Average
balance
1
Interest
Average
rate
2
ASSETS
Federal Funds Sold
$
386
$
4
4.20
%
$
321
$
4
5.01
%
Interest-earning deposits in other banks
48,237
532
4.47
27,393
365
5.36
Taxable securities
310,210
1,795
2.35
345,613
1,890
2.20
Tax-exempt securities
4
16,787
95
2.30
19,083
112
2.36
Loans
3,4
755,863
10,886
5.84
705,294
10,227
5.83
Total interest-earning assets
1,131,483
13,312
4.77
%
1,097,704
12,598
4.62
%
Noninterest-earning assets
66,320
62,957
TOTAL ASSETS
$
1,197,803
$
1,160,661
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits
$
210,759
$
358
0.69
%
$
231,707
$
563
0.98
%
Savings deposits
312,084
729
0.95
297,125
781
1.06
Time deposits
250,360
2,440
3.95
202,700
1,956
3.88
Borrowed funds
27,653
73
1.07
35,051
108
1.24
Total interest-bearing liabilities
800,856
3,600
1.82
%
766,583
3,408
1.79
%
Noninterest-bearing demand deposits
275,331
279,212
Other liabilities
5,062
6,029
Shareholders' Equity
116,554
108,837
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,197,803
$
1,160,661
Taxable equivalent net interest
income, (Non-GAAP)
$
9,712
$
9,190
Tax equivalent adjustment
4
(31
)
(42
)
Net interest income, (GAAP)
$
9,681
$
9,148
Net interest margin, (GAAP)
3.47
%
3.35
%
Tax equivalent adjustment
4
0.01
0.02
Net interest margin-taxable equivalent, (Non-GAAP)
3.48
%
3.37
%
Taxable equivalent net interest spread
2.95
%
2.83
%
1
Average balances have been computed on an average daily basis.
2
Average rates have been computed based on the amortized cost of the corresponding asset or liability.
3
Average loan balances include nonaccrual loans.
4
Taxable equivalent adjustments have been computed assuming a 21% tax rate in 2025 and 2024 (non-GAAP).
29
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interest income for the quarter ended March 31, 2025, was $13.3 million representing a $725 thousand, or 6% increase, compared to the same period in 2024. This increase was primarily due to higher average balances of loans and interest-earning deposits in other banks. These increases were partially offset by the volume decreases in taxable securities to the comparable period. Rates on average interest-earning deposits in other banks decreased 89 basis points, while loan rates rose 1 basis point, and taxable securities' interest rates increased 15 basis points for the quarter ended March 31, 2025 as compared to the same period in 2024. Interest expense for the quarter ended March 31, 2025 was $3.6 million, an increase of $192 thousand, or 6%, from the same quarter in 2024. The increase in interest expense occurred primarily due to volume increases in money market and time deposit accounts as well as the increase in rates on time deposit accounts for the quarter ended March 31, 2025.
For the quarter ended March 31, 2025, the bank recognized net charge-offs of $29 thousand, compared to $74 thousand net charge-offs for the same quarter in 2024. The provision for credit losses on loans in the current quarter of $408 thousand, compared to a provision of $603 thousand in the same quarter ended 2024. The company recorded a $6 thousand recovery for credit loss expense on off-balance commitments in the first quarter 2025 compared to a $549 thousand provision in the first quarter of 2024. The quarter increase results primarily from the increase in loan volume during first quarter 2025.
Economic indicators reflect a leveling off in residential real estate prices and increases in unemployment rates. The provision for credit losses is determined based on management’s calculation of the adequacy of the allowance for credit losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.
Noninterest income decreased $76 thousand, or 4%, compared to first quarter of 2024. The decrease was primarily the result of a $116 thousand decrease in trust services, partially offset by a $28 thousand increase in the earnings on bank owned life insurance.
Noninterest expense increased $339 thousand, or 6%, from first quarter 2024. Salary and employee benefit costs increased $228 thousand, or 7%, compared to the prior year quarter with increases in base salary, insurance, and social security taxes. Occupancy expense costs increased $73 thousand, or 26%, with increases in snow removal costs. Professional and directors’ fees increased $81 thousand, or 24%, state financial institutions tax increased $14 thousand, or 6%, due to the increase in capital. Debit card expenses increased $22 thousand, or 12%, primarily with increases in processing. Software expense decreased $25 thousand, or 6%, and equipment expense decreased $18 thousand, or 8%. The Company’s first quarter efficiency ratio increased to 56.8% compared to 56.0% in the prior year.
Federal income tax expense increased $185 thousand, or 27%, for the quarter ended March 31, 2025 as compared to the first quarter 2024. The provision for income taxes was $878 thousand (effective rate of 19.5%) for the quarter ended March 31, 2025, compared to $693 thousand (effective rate of 19.1%) for the same quarter ended 2024.
CAPITAL RESOURCES
The Company maintained a strong capital position with tangible common equity to tangible assets of 9.4% at March 31, 2025 compared with 9.3% at December 31, 2024.
Consistent with the Board of Director’s commitment to public confidence and safe and sound banking operations, capital targets and minimum risk-based capital ratios for CSB were established to maintain excess capital to well-capitalized standards. To be considered well-capitalized, an institution must have a total risk-based capital ratio of at least 10%, a tier 1 capital ratio of at least 8%, a leverage capital ratio of at least 5%, a common equity tier 1 (“CET1”) ratio of at least 6.5% and must not be subject to any order or directive requiring the institution to improve its capital level. An adequately capitalized institution has a total risk-based capital ratio of at least 8%, a tier 1 capital ratio of at least 6%, a CET1 ratio of at least 4.5%, and a leverage ratio of at least 4%.
30
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as
presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. As of March 31, 2025, the Company and the Bank met all capital adequacy requirements to which they were subject.
Capital Ratios
March 31,
2025
December 31,
2024
Total Capital To Risk Weighted Assets Ratio
Consolidated
16.5
%
16.4
%
Bank
16.4
16.3
Tier 1 Capital To Risk Weighted Assets Ratio
Consolidated
15.4
15.3
Bank
15.3
15.2
Common Equity Tier 1 Capital To Risk Weighted Assets
Consolidated
15.4
15.3
Bank
15.3
15.2
Tier 1 Leverage Ratio
Consolidated
10.1
9.7
Bank
10.0
9.7
LIQUIDITY
(Dollars in thousands)
March 31,
2025
December 31,
2024
Change
Cash and cash equivalents
$
88,486
$
73,509
$
14,977
Available from FHLB
127,542
126,334
1,208
Unpledged AFS securities at fair market value
117,215
123,155
(5,940
)
$
333,243
$
322,998
$
10,245
Net deposits and short-term liabilities
$
1,093,668
$
1,068,413
$
25,255
Liquidity ratio
30.4
%
30.2
%
0.2
%
Minimum board approved liquidity ratio
20.0
%
20.0
%
Liquidity refers to the Company’s ability to generate sufficient cash to fund current loan demand, meet deposit withdrawals, pay operating expenses, and meet other obligations. Liquidity is monitored by the Company’s Asset Liability Committee. Other sources of liquidity include, but are not limited to, purchases of federal funds, advances from the FHLB, adjustments of interest rates to attract deposits, brokered deposits, and borrowing at the Federal Reserve discount window. Additionally, the Company could sell all of its AFS securities and the loss would not cause a change in the capital adequacy classification. Management believes its sources of liquidity are adequate to meet cash flow obligations for the foreseeable future.
31
CSB BANCORP, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements (as such term is defined in applicable Securities and Exchange Commission (the “Commission”) rules) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.
PER SHARE DATA
Earnings per share is computed based on the weighted average number of shares of common stock outstanding during each year. The company currently maintains a simple capital structure, thus, there are no dilutive effects on earnings per share.
The weighted average number of common shares outstanding for earnings per share computations was as follows:
Three Months Ended
March 31,
(Dollars in thousands, except per share data)
2025
2024
Net income
$
3,616
$
2,933
Weighted average common shares outstanding
2,644,543
2,665,277
Earnings per share, basic and diluted
$
1.37
$
1.10
32
CSB BANCORP, INC.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 3 - QUANTITATIVE AND QUALITAT
IVE DISCLOSURES ABOUT MARKET RISK
Ohio's unemployment rate continues to rise to 5.1% in March 2025 which was up from 4.4% in December 2024. Holmes County, where the bank is headquartered, is reporting an unemployment rate of 3.9% in March 2025. Of the counties within the bank's footprint, Stark County reported the highest unemployment rate at 5.6%, while Tuscarawas, Wayne, and Medina Counties posted unemployment rates of 5.4%, 4.7% and 3.6% respectively in March 2025. The rate of inflation, as measured by the Consumer Price Index, decreased to 2.4% on a year over year basis at March 2025, following average inflation rates of 2.9% in 2024, 4.1% in 2023 and 8.0% in 2022. The rate continues to be above the Federal Reserve target rate of 2%. The Federal Reserve reduced the federal funds target rate in 2024 by 1% to a range of 4.25% to 4.50%.
Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four-month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. All balance sheet positions, and interest rate projections are currently within the Company’s board-approved policy for both the twelve- month and twenty-four-month periods.
The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -400 through +400 basis point changes, in 100 basis point increments, in market interest rates at March 31, 2025 and December 31, 2024. The net interest income reflected is for the first twelve-month period of the modeled twenty-four-month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.
March 31, 2025
(Dollars in thousands)
Change in
Interest Rates
(basis points)
Net Interest
Income
Dollar
Change
Percentage
Change
Board Policy
Limits
+ 400
$
44,062
$
945
2.2
%
± 25
%
+ 300
43,824
707
1.6
± 15
+ 200
43,597
480
1.1
± 10
+ 100
43,367
250
0.6
± 5
0
43,117
—
—
– 100
42,740
(377
)
(0.9
)
± 5
– 200
42,319
(798
)
(1.9
)
± 10
– 300
41,724
(1,393
)
(3.2
)
± 15
– 400
41,145
(1,972
)
(4.6
)
± 25
December 31, 2024
+ 400
$
42,231
$
1,333
3.3
%
± 25
%
+ 300
41,902
1,004
2.5
± 15
+ 200
41,571
673
1.7
± 10
+ 100
41,237
339
0.9
± 5
0
40,898
—
—
– 100
40,432
(466
)
(1.1
)
± 5
– 200
40,089
(809
)
(2.0
)
± 10
– 300
39,553
(1,345
)
(3.3
)
± 15
– 400
38,988
(1,910
)
(4.7
)
± 25
33
CSB BANCORP, INC.
CONTROLS AND PROCEDURES
ITEM 4 - CONTROL
S AND PROCEDURES
With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that:
(a)
information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;
(b)
information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms; and
(c)
the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Company and its consolidated subsidiary is made known to them, particularly during the period for which the Company’s periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes during the period covered by this Quarterly Report on Form 10-Q in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
34
CSB BANCORP, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2025
PART II – OTHER INFORMATION
ITEM 1 - LEGA
L PROCEEDINGS.
In the opinion of management there are no outstanding legal proceedings that are reasonably likely to have a material adverse effect on the company’s financial condition or results of operations.
ITEM 1A - RI
SK FACTORS.
Not required for Smaller Reporting Companies.
ITEM 2 - UNREGISTERED SALES OF EQUI
TY SECURITIES AND USE OF PROCEEDS.
(a)
Not applicable
(b)
Not applicable
(c)
The following table provides information about repurchases of common stock by the Company during the quarter ended March 31, 2025:
Period
Total Number of Common Shares Purchased
Average Price Paid per Common Share
Total Number of Shares Purchased as Part of Publicly Announced Authorization
Maximum Number of Remaining Shares that May be Purchased as Part of Publicly Announced Authorization
January 1, 2025 - January 31, 2025
4,978
36.98
4,978
39,879
February 1, 2025 - February 28, 2025
1,039
38.14
1,039
38,840
March 1, 2025 - March 31, 2025
2,525
41.34
2,525
36,315
Total for quarter
8,542
8,542
36,315
On March 2, 2021, CSB Bancorp, Inc. filed Form 8-K with the Commission announcing that its Board of Directors approved a Stock Repurchase Program authorizing the repurchase of up to 5% of the Company’s common shares, or 137,117 of the Company’s outstanding shares. Repurchases may be made from time to time as market and business conditions warrant, in the open market, through block purchases, and in negotiated private transactions.
The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statements of Changes in Shareholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
36
CSB BANCORP, INC.
SIGNA
TURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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