CSB Bancorp Q2 2024 10-Q Filed

TL;DR

**CSB Bancorp Q2 2024 10-Q: Loan portfolio details and financial position.**

AI Summary

CSB Bancorp, Inc. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and positions, including various loan categories and their past-due statuses. Key figures relate to retained earnings and accumulated other comprehensive income for periods including Q2 2024 and the first half of 2023.

Why It Matters

This filing provides insight into the financial health and loan portfolio performance of CSB Bancorp, Inc., which can impact investor confidence and lending practices.

Risk Assessment

Risk Level: medium — The filing contains detailed financial data, including loan performance metrics, which are crucial for assessing the company's risk exposure.

Key Numbers

• 2024-06-30 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial data is reported.)
• 2024-08-12 — Filing Date (The date the 10-Q was officially submitted to the SEC.)
• 2023-12-31 — Previous Year End Date (Provides a comparison point for financial performance and position.)

Key Players & Entities

• CSB Bancorp, Inc. (company) — Filer of the 10-Q
• 20240630 (date) — End of reporting period
• 20240812 (date) — Filing date
• OH (location) — State of incorporation
• MILLERSBURG (location) — City of business address

FAQ

Key Financial Figures

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

Filing Documents

• csbb-20240630.htm (10-Q) — 4507KB
• 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
• 0000950170-24-095315.txt ( ) — 19703KB
• csbb-20240630.xsd (EX-101.SCH) — 1191KB
• csbb-20240630_htm.xml (XML) — 6355KB

- 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 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 28 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) June 30, December 31, (Dollars in thousands, except per share data) 2024 2023 ASSETS Cash and cash equivalents Cash and due from banks $ 19,873 $ 24,463 Interest-earning deposits with banks 35,941 39,614 Federal funds sold 391 — Total cash and cash equivalents 56,205 64,077 Securities Available-for-sale, at fair value 127,279 140,080 Held-to-maturity fair value of $ 183,484 in 2024 and $ 194,730 in 2023 ($ 0 credit loss allowance) 216,899 226,279 Equity securities 230 259 Restricted stock, at cost 1,520 1,535 Total securities 345,928 368,153 Loans held for sale 228 — Loans 721,916 701,404 Less allowance for credit losses 10,587 6,607 Net loans 711,329 694,797 Premises and equipment, net 13,538 13,002 Bank-owned life insurance 25,793 25,410 Goodwill 4,728 4,728 Accrued interest receivable and other assets 9,566 8,522 TOTAL ASSETS $ 1,167,315 $ 1,178,689 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing $ 277,749 $ 301,697 Interest-bearing 746,086 725,730 Total deposits 1,023,835 1,027,427 Short-term borrowings 27,842 35,843 Other borrowings 1,326 1,754 Allowance for credit losses on off-balance sheet commitments 477 736 Accrued interest payable and other liabilities 3,467 4,990 TOTAL LIABILITIES 1,056,947 1,070,750 SHAREHOLDERS' EQUITY Common stock, $ 6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,663,924 shares in 2024 and 2,669,938 in 2023 18,629 18,629 Additional paid-in capital 9,815 9,815 Retained earnings 99,766 97,297 Treasury stock at cost: 316,678 shares in 2024 and 310,664 shares in 2023 ( 7,757 ) ( 7,532 ) Accumulated other comprehensive loss ( 10,085 ) ( 10,270 ) TOTAL SHAREHOLDERS' EQUIT

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 June 30, 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 June 30, 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 rev

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES Securities consist of the following on June 30, 2024 and December 31, 2023: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value June 30, 2024 Available-for-sale U.S. Treasury securities $ 11,065 $ — $ ( 253 ) $ — $ 10,812 U.S. Government agencies 13,999 — ( 655 ) — 13,344 Mortgage-backed securities of government agencies 66,544 14 ( 7,731 ) — 58,827 Asset-backed securities of government agencies 473 — ( 4 ) — 469 17,429 — ( 1,017 ) — 16,412 Corporate bonds 29,090 4 ( 1,679 ) — 27,415 Total available-for-sale 138,600 18 ( 11,339 ) — 127,279 Held-to-maturity U.S. Treasury securities $ 10,329 $ — $ ( 784 ) — $ 9,545 Mortgage-backed securities of government agencies 204,036 — ( 32,372 ) — 171,664 2,534 — ( 259 ) — 2,275 Total held-to-maturity 216,899 — ( 33,415 ) — 183,484 Equity securities 185 45 — — 230 Restricted stock 1,520 — — — 1,520 Total securities $ 357,204 $ 63 $ ( 44,754 ) $ — $ 312,513 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 — ( 798

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 June 30, 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 $ 25,351 $ 24,823 Due after one through five years 32,105 30,382 Due after five through ten years 18,386 16,737 Due after ten years 62,758 55,337 Total debt securities available-for-sale $ 138,600 $ 127,279 Held-to-maturity Due in one year or less $ 2,499 $ 2,466 Due after one through five years 5,176 4,842 Due after five through ten years 4,879 4,251 Due after ten years 204,345 171,925 Total debt securities held-to-maturity $ 216,899 $ 183,484 Securities with a fair value of approximately $ 147 million and $ 126 million were pledged on June 30, 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 June 30, 2024 and December 31, 2023 . The FHLB redeemed approximately $ 15 thousand in stock at $ 100 par value per share during the six-month period ended June 30, 2024 . Federal Reserve Bank stock was $ 471 thousand on June 30, 2024 and December 31, 2023. There were no proceeds from sales of securities for the three and six-month period ended June 30, 2024 and 2023. All gains and losses recognized on equity securities during the three and six-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 June 30, 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 June 30, 2024 Available-for-sale U.S. Treasury securities $ — $ — $ ( 253 ) $ 10,812 $ ( 253 ) $ 10,812 U.S. Government agencies — — ( 655 ) 13,344 ( 655 ) 13,344 Mortgage-backed securities of government agencies ( 70 ) 5,475 ( 7,661 ) 49,762 ( 7,731 ) 55,237 Asset-backed securities of government agencies — — ( 4 ) 469 ( 4 ) 469 ( 2 ) 423 ( 1,015 ) 15,874 ( 1,017 ) 16,297 Corporate bonds — — ( 1,679 ) 26,915 ( 1,679 ) 26,915 Total temporarily impaired available-for-sale securities $ ( 72 ) $ 5,898 $ ( 11,267 ) $ 117,176 $ ( 11,339 ) $ 123,074 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 sec

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES (continued) There were 121 securities in an unrealized loss position on June 30, 2024 , 117 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 $ 83 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 June 30, 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 June 30, 2024 and December 31, 2023: (Dollars in thousands) June 30, 2024 December 31, 2023 Commercial and industrial $ 143,950 $ 152,125 Commercial real estate 194,637 190,702 Commercial lessors of buildings 96,235 82,687 Construction 55,275 49,214 Consumer mortgage 171,198 166,891 Home equity line of credit 44,331 43,269 Consumer installment 10,646 10,636 Consumer indirect 5,734 5,957 Total loans 722,006 701,481 Allowance for credit losses ( 10,587 ) ( 6,607 ) Deferred loan fees, net ( 90 ) ( 77 ) Net Loans $ 711,329 $ 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 t

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 June 30, 2024 are as follows: Industrial, manufacturing and production $ 57 million; warehouses $ 38 million; healthcare $ 27 million; residential investment property $ 24 million; retail strip centers $ 17 million; senior ho

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