CSB Bancorp Q3 2024 Update: Financials Revealed

TL;DR

CSB Bancorp's Q3 2024 10-Q is out - check retained earnings and investment gains.

AI Summary

CSB Bancorp, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and position, including various loan categories and investment securities. Key figures relate to retained earnings, accumulated net unrealized investment gains/losses, and treasury stock as of different reporting dates throughout 2023 and 2024.

Why It Matters

This filing provides investors and analysts with a detailed look at CSB Bancorp's financial health and operational performance during the third quarter of 2024.

Risk Assessment

Risk Level: medium — As a financial institution, CSB Bancorp is subject to market, credit, and regulatory risks inherent in the banking sector.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter covered by the report.)
• 2023-12-31 — Prior Year-End Date (Provides a comparison point to the previous fiscal year-end.)
• 2023-06-30 — Prior Interim Date (Offers a comparison to an earlier point in the previous fiscal year.)
• 2022-12-31 — Earlier Year-End Date (Shows financial data from two years prior.)

Key Players & Entities

• CSB Bancorp, Inc. (company) — Filer of the 10-Q
• 2024-09-30 (date) — End of reporting period
• 2023-12-31 (date) — Prior year-end reporting date
• 2023-06-30 (date) — Prior interim reporting date
• 2022-12-31 (date) — Earlier year-end reporting date

FAQ

Key Financial Figures

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

Filing Documents

• csbb-20240930.htm (10-Q) — 4501KB
• 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
• 0000950170-24-126930.txt ( ) — 19828KB
• csbb-20240930.xsd (EX-101.SCH) — 1205KB
• csbb-20240930_htm.xml (XML) — 6303KB

- Financial Information

Part I - Financial Information Page ITEM 1 –

FINANCIAL STATEMENTS (Unaudited)

FINANCIAL STATEMENTS (Unaudited) 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 36 ITEM 4 –

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 37

- Other Information

Part II - Other Information ITEM 1 –

Legal Proceedings

Legal Proceedings 38 ITEM 1A –

Risk Factors

Risk Factors 38 ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds 38 ITEM 3 – Defaults upon Senior Securities 38 ITEM 4 – Mine Safety Disclosures 38 ITEM 5 – Other Information 38 ITEM 6 – Exhibits 39

Signatures

Signatures 40 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) September 30, December 31, (Dollars in thousands, except per share data) 2024 2023 ASSETS Cash and cash equivalents Cash and due from banks $ 26,108 $ 24,463 Interest-earning deposits in other banks 69,108 39,614 Federal funds sold 427 — Total cash and cash equivalents 95,643 64,077 Securities Available-for-sale, at fair value 131,718 140,080 Held-to-maturity; fair value of $ 185,647 in 2024 and $ 194,730 in 2023 ($ 0 credit loss allowance) 211,655 226,279 Equity securities 247 259 Restricted stock, at cost 1,520 1,535 Total securities 345,140 368,153 Loans held for sale 509 — Loans 719,602 701,404 Less allowance for credit losses 7,224 6,607 Net loans 712,378 694,797 Premises and equipment, net 13,994 13,002 Bank-owned life insurance 27,996 25,410 Goodwill 4,728 4,728 Accrued interest receivable and other assets 8,793 8,522 TOTAL ASSETS $ 1,209,181 $ 1,178,689 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits Noninterest-bearing $ 286,525 $ 301,697 Interest-bearing 784,006 725,730 Total deposits 1,070,531 1,027,427 Short-term borrowings 19,224 35,843 Other borrowings 1,296 1,754 Allowance for credit losses on off-balance sheet commitments 532 736 Accrued interest payable and other liabilities 2,590 4,990 TOTAL LIABILITIES 1,094,173 1,070,750 SHAREHOLDERS' EQUITY Common stock, $ 6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,659,324 shares in 2024 and 2,669,938 in 2023 18,629 18,629 Additional paid-in capital 9,815 9,815 Retained earnings 101,847 97,297 Treasury stock at cost: 321,278 shares in 2024 and 310,664 shares in 2023 ( 7,929 ) ( 7,532 ) Accumulated other comprehensive loss ( 7,354 ) ( 10,270 ) TOTAL SHAREHOLDE

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 September 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 September 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 amou

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES Securities consisted of the following on September 30, 2024 and December 31, 2023: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value September 30, 2024 Available-for-sale U.S. Treasury securities $ 13,461 $ 16 $ ( 124 ) $ — $ 13,353 U.S. Government agencies 14,000 — ( 382 ) — 13,618 Mortgage-backed securities of government agencies 63,785 94 ( 5,715 ) — 58,164 Asset-backed securities of government agencies 410 — ( 3 ) — 407 17,406 — ( 689 ) — 16,717 Corporate bonds 30,568 25 ( 1,134 ) — 29,459 Total available-for-sale 139,630 135 ( 8,047 ) — 131,718 Held-to-maturity U.S. Treasury securities $ 10,342 $ — $ ( 524 ) — $ 9,818 Mortgage-backed securities of government agencies 198,787 — ( 25,328 ) — 173,459 2,526 — ( 156 ) — 2,370 Total held-to-maturity 211,655 — ( 26,008 ) — 185,647 Equity securities 185 62 — — 247 Restricted stock 1,520 — — — 1,520 Total securities $ 352,990 $ 197 $ ( 34,055 ) $ — $ 319,132 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 September 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 $ 30,197 $ 29,959 Due after one through five years 31,043 30,115 Due after five through ten years 18,078 16,755 Due after ten years 60,312 54,889 Total debt securities available-for-sale $ 139,630 $ 131,718 Held-to-maturity Due in one year or less $ 2,500 $ 2,496 Due after one through five years 5,182 4,971 Due after five through ten years 4,866 4,431 Due after ten years 199,107 173,749 Total debt securities held-to-maturity $ 211,655 $ 185,647 Securities with a fair value of approximately $ 130 million and $ 126 million were pledged on September 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 September 30, 2024 and December 31, 2023 . The FHLB redeemed approximately $ 15 thousand in stock at $ 100 par value per share during the nine-month period ended September 30, 2024 . Federal Reserve Bank stock was $ 471 thousand on September 30, 2024 and December 31, 2023. There were no proceeds from sales of securities for the three and nine-month period ended September 30, 2024 and 2023. All gains and losses recognized on equity securities during the three and nine-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 September 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 September 30, 2024 Available-for-sale U.S. Treasury securities $ — $ — $ ( 124 ) $ 8,923 $ ( 124 ) $ 8,923 U.S. Government agencies — — ( 382 ) 13,618 ( 382 ) 13,618 Mortgage-backed securities of government agencies — — ( 5,715 ) 48,167 ( 5,715 ) 48,167 Asset-backed securities of government agencies — — ( 3 ) 407 ( 3 ) 407 ( 1 ) 424 ( 688 ) 14,712 ( 689 ) 15,136 Corporate bonds — — ( 1,134 ) 27,437 ( 1,134 ) 27,437 Total temporarily impaired $ ( 1 ) $ 424 $ ( 8,046 ) $ 113,264 $ ( 8,047 ) $ 113,688 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 $ ( 31 ) $ 3,692 $ ( 11,541 ) $ 124,357 $

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 2 – SECURITIES (continued) There were 111 securities in an unrealized loss position on September 30, 2024 , 110 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 $ 86 million of total AFS securities. The remaining $ 46 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 $ 11 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 September 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 th

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3 – LOANS Loans consisted of the following on September 30, 2024 and December 31, 2023: (Dollars in thousands) September 30, 2024 December 31, 2023 Commercial and industrial $ 134,125 $ 152,125 Commercial real estate 194,329 190,702 Commercial lessors of buildings 98,049 82,687 Construction 57,283 49,214 Consumer mortgage 175,093 166,891 Home equity line of credit 44,978 43,269 Consumer installment 10,377 10,636 Consumer indirect 5,493 5,957 Total loans 719,727 701,481 Allowance for credit losses ( 7,224 ) ( 6,607 ) Deferred loan fees, net ( 125 ) ( 77 ) Net Loans $ 712,378 $ 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 estat

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