CSB Bancorp, Inc. Files 10-Q for Q1 2024

TL;DR

<b>CSB Bancorp, Inc. filed its Q1 2024 10-Q, detailing financial assets, loan portfolios, and fair value measurements.</b>

AI Summary

CSB Bancorp, Inc. (CSBB) filed a Quarterly Report (10-Q) with the SEC on May 10, 2024. CSB Bancorp, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing details financial information including fair value measurements and loan portfolio segments. Specific loan categories mentioned include Consumer Mortgages, Commercial Construction, and Commercial Real Estate. The report references accounting standards updates, including ASU 2016-13 and ASU 2019-11. Fair value measurements are broken down by input levels (Level 1, Level 2, Level 3) and recurring/nonrecurring categories.

Why It Matters

For investors and stakeholders tracking CSB Bancorp, Inc., this filing contains several important signals. The 10-Q provides a detailed look at CSB Bancorp's financial health and loan portfolio composition as of March 31, 2024, which is crucial for investors assessing credit risk and asset valuation. Disclosure of fair value measurements across different levels and categories offers transparency into how the company values its assets, impacting reported financial performance and stability.

Risk Assessment

Risk Level: — CSB Bancorp, Inc. shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) with no immediate red flags, indicating routine financial disclosure.

Analyst Insight

Review the detailed breakdown of loan portfolio segments and fair value measurements to understand CSB Bancorp's asset quality and valuation methodologies.

Key Numbers

• 2024-03-31 — Period End Date (10-Q Filing)
• 2024-01-01 — Quarter Start Date (Retained Earnings and Treasury Stock reporting period)
• 2024-03-31 — Fair Value Measurement Date (Recurring Fair Value Measurements)
• 2023-12-31 — Previous Year End Date (Fair Value Measurements and Loan Portfolio Segments)

Key Players & Entities

• CSB Bancorp, Inc. (company) — Filer
• CSBB (company) — Ticker Symbol
• OH (location) — State of Incorporation
• 1934 Act (regulation) — SEC Act
• 2024-03-31 (date) — Period of Report
• 2024-05-10 (date) — Filed As Of Date
• Millersburg (location) — Business Address City
• 3306749015 (phone) — Business Phone

FAQ

Industry Context

CSB Bancorp, Inc. operates within the commercial banking sector, providing financial services to individuals and businesses.

Regulatory Implications

As a publicly traded company, CSB Bancorp is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the filing of quarterly 10-Q reports.

What Investors Should Do

1. Analyze the specific loan categories (e.g., Commercial Construction, Consumer Mortgage) for potential credit risks.
2. Examine the breakdown of fair value measurements (Level 1, 2, 3) to assess the reliability of asset valuations.
3. Compare current quarter data with previous periods to identify trends in asset quality and financial performance.

Key Dates

• 2024-03-31: Quarter End — Reporting period for the 10-Q
• 2024-05-10: Filing Date — Date the 10-Q was filed with the SEC

Glossary

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC). (Provides a comprehensive update on the company's financial performance and condition during the quarter.)

Fair Value Measurements

The process of determining the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. (Crucial for understanding how the company values its assets and liabilities, impacting reported equity and profitability.)

Year-Over-Year Comparison

This filing represents the first quarterly report for CSB Bancorp in fiscal year 2024, providing updated financial data compared to the previous fiscal year's filings.

Key Financial Figures

• $6.25 — ge on which registered Common Shares, $6.25 par value CSBB OTCPink Indicate b

Filing Documents

• csbb-20240331.htm (10-Q) — 3811KB
• csbb-ex31_1.htm (EX-31.1) — 13KB
• csbb-ex31_2.htm (EX-31.2) — 13KB
• csbb-ex32_1.htm (EX-32.1) — 6KB
• csbb-ex32_2.htm (EX-32.2) — 6KB
• 0000950170-24-057866.txt (&nbsp;) — 18044KB
• csbb-20240331.xsd (EX-101.SCH) — 1250KB
• csbb-20240331_htm.xml (XML) — 5780KB

- Financial Information

Part I - Financial Information Page ITEM 1 –

FINANCIAL STATEMENTS (Unaudited)

FINANCIAL STATEMENTS (Unaudited) 3 Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Comprehensive Income (Loss) 5 Consolidated Statements of Changes in Shareholders' Equity 6 Condensed Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 ITEM 2 –

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27 ITEM 3 –

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 38 ITEM 4 –

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 39

- Other Information

Part II - Other Information ITEM 1 –

Legal Proceedings

Legal Proceedings 40 ITEM 1A –

Risk Factors

Risk Factors 40 ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds 40 ITEM 3 – Defaults upon Senior Securities 40 ITEM 4 – Mine Safety Disclosures 40 ITEM 5 – Other Information 40 ITEM 6 – Exhibits 41

Signatures

Signatures 42 2 CSB BANCORP, INC.

– FINANCI AL INFORMATION

PART I – FINANCI AL INFORMATION

– FINAN CIAL STATEMENTS

ITEM 1. – FINAN CIAL STATEMENTS CONSOLIDATED B ALANCE SHEETS (Unaudited) March 31, December 31, (Dollars in thousands, except per share data) 2024 2023 ASSETS Cash and cash equivalents Cash and due from banks $ 11,447 $ 24,463 Interest-earning deposits with banks 27,972 39,614 Total cash and cash equivalents 39,419 64,077 Securities Available-for-sale, at fair value 134,926 140,080 Held-to-maturity fair value of $ 188,942 in 2024 and $ 194,730 in 2023 ($ 0 credit loss allowance) 222,095 226,279 Equity securities 253 259 Restricted stock, at cost 1,530 1,535 Total securities 358,804 368,153 Loans held for sale 105 — Loans 710,822 701,404 Less allowance for credit losses 7,136 6,607 Net loans 703,686 694,797 Premises and equipment, net 12,936 13,002 Bank-owned life insurance 25,599 25,410 Goodwill 4,728 4,728 Accrued interest receivable and other assets 10,968 8,522 TOTAL ASSETS $ 1,156,245 $ 1,178,689 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing $ 277,898 $ 301,697 Interest-bearing 732,217 725,730 Total deposits 1,010,115 1,027,427 Short-term borrowings 29,484 35,843 Other borrowings 1,700 1,754 Allowance for credit losses on off-balance sheet commitments 1,285 736 Accrued interest payable and other liabilities 4,106 4,990 TOTAL LIABILITIES 1,046,690 1,070,750 SHAREHOLDERS' EQUITY Common stock, $ 6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,664,683 shares in 2024 and 2,669,938 in 2023 18,629 18,629 Additional paid-in capital 9,815 9,815 Retained earnings 99,191 97,297 Treasury stock at cost: 315,919 shares in 2024 and 310,664 shares in 2023 ( 7,729 ) ( 7,532 ) Accumulated other comprehensive loss ( 10,351 ) ( 10,270 ) TOTAL SHAREHOLDERS' EQUITY 109,555 107,939 TOTA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2024, 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, 2023, 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, 2024 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 r

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES Securities consist of the following on March 31, 2024 and December 31, 2023: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value March 31, 2024 Available-for-sale U.S. Treasury securities $ 16,087 $ — $ ( 341 ) $ — $ 15,746 U.S. Government agencies 14,000 — ( 788 ) — 13,212 Mortgage-backed securities of government agencies 69,367 30 ( 7,712 ) — 61,685 Asset-backed securities of government agencies 519 — ( 11 ) — 508 17,453 — ( 891 ) — 16,562 Corporate bonds 29,112 6 ( 1,905 ) — 27,213 Total available-for-sale 146,538 36 ( 11,648 ) — 134,926 Held-to-maturity U.S. Treasury securities $ 10,317 $ — $ ( 830 ) $ — $ 9,487 Mortgage-backed securities of government agencies 209,236 — ( 32,116 ) — 177,120 2,542 — ( 207 ) — 2,335 Total held-to-maturity 222,095 — ( 33,153 ) — 188,942 Equity securities 185 68 — — 253 Restricted stock 1,530 — — — 1,530 Total securities $ 370,348 $ 104 $ ( 44,801 ) $ — $ 325,651 December 31, 2023 Available-for-sale U.S. Treasury securities $ 18,110 $ — $ ( 421 ) $ — $ 17,689 U.S. Government agencies 14,000 — ( 848 ) — 13,152 Mortgage-backed securities of government agencies 72,279 98 ( 7,332 ) — 65,045 Asset-backed securities of government agencies 548 — ( 25 ) — 523 17,476 — ( 890 ) — 16,586 Corporate bonds 29,135 6 ( 2,056 ) — 27,085 Total available-for-sale 151,548 104 ( 11,572 ) — 140,080 Held-to-maturity U.S. Treasury securities 10,305 — (

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES (continued) The amortized cost and fair value of debt securities on March 31, 2024, 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 $ 16,275 $ 15,939 Due after one through five years 46,315 44,048 Due after five through ten years 18,663 17,015 Due after ten years 65,285 57,924 Total debt securities available-for-sale $ 146,538 $ 134,926 Held-to-maturity Due in one year or less $ 2,498 $ 2,439 Due after one through five years 5,170 4,812 Due after five through ten years 5,352 4,727 Due after ten years 209,075 176,964 Total debt securities held-to-maturity $ 222,095 $ 188,942 Securities with a fair value of approximately $ 139 million and $ 126 million were pledged on March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023 . The FHLB redeemed approximately $ 5 thousand in stock at $ 100 par value per share during the three month period ended March 31, 2024. Federal Reserve Bank stock was $ 471 thousand on March 31, 2024 and December 31, 2023. There were no proceeds from sales of securities for the three-month periods ended March 31, 2024 and 2023. All gains and losses recognized on equity securities during the three-month periods were unrealized. 10 CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2024 and December 31, 2023: 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, 2024 Available-for-sale U.S. Treasury securities $ — $ — $ ( 341 ) $ 15,746 $ ( 341 ) $ 15,746 U.S. Government agencies ( 788 ) 13,212 ( 788 ) 13,212 Mortgage-backed securities of government agencies ( 56 ) 6,055 ( 7,656 ) 51,753 ( 7,712 ) 57,808 Asset-backed securities of government agencies — — ( 11 ) 508 ( 11 ) 508 ( 3 ) 422 ( 888 ) 16,025 ( 891 ) 16,447 Corporate bonds — — ( 1,905 ) 26,713 ( 1,905 ) 26,713 Total temporarily impaired available-for-sale securities $ ( 59 ) $ 6,477 $ ( 11,589 ) $ 123,957 $ ( 11,648 ) $ 130,434 December 31, 2023 Available-for-sale U.S. Treasury securities $ — $ — $ ( 421 ) $ 17,689 $ ( 421 ) $ 17,689 U.S. Government agencies — — ( 848 ) 13,152 ( 848 ) 13,152 Mortgage-backed securities of government agencies ( 3 ) 1,909 ( 7,329 ) 52,144 ( 7,332 ) 54,053 Asset-backed securities of government agencies — — ( 25 ) 523 ( 25 ) 523 ( 28 ) 1,783 ( 862 ) 14,263 ( 890 ) 16,046 Corporate bonds — — ( 2,056 ) 26,586 ( 2,056 ) 26,586 Total temporarily impaired available-for-sale securities

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES (continued) There were 114 securities in an unrealized loss position on March 31, 2024 , 111 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 $ 91 million of total AFS securities. The remaining $ 44 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 $ 10.5 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. 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, 2024 , 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3 – LOANS The composition of net loans receivable as of March 31, 2024 and December 31, 2023: (Dollars in thousands) March 31, 2024 December 31, 2023 Commercial and industrial $ 146,300 $ 152,125 Commercial real estate 191,717 190,702 Commercial lessors of buildings 94,195 82,687 Construction 52,543 49,214 Consumer mortgage 165,836 166,891 Home equity line of credit 44,113 43,269 Consumer installment 10,538 10,636 Consumer indirect 5,625 5,957 Total loans 710,867 701,481 Allowance for credit losses ( 7,136 ) ( 6,607 ) Deferred loan fees, net ( 45 ) ( 77 ) Net Loans $ 703,686 $ 694,797 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3 – LOANS (CONTINUED) 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, 2024 are as follows: Industrial, manufacturing and production $ 60 million; warehouses $ 40 million; retail $ 36 million; healthcare $ 26 million; senior housing $ 17 million; auto supply $ 16 million; lodging $ 11 million; office building $ 9 million; vacant land $ 9 million, and restaurants $ 8 million. 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

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