CSB Bancorp, Inc. Reports Second Quarter Earnings

CSB Bancorp, Inc. Reports Second Quarter Earnings CSB Bancorp, Inc. (OTC ID: CSBB): Second Quarter Highlights Quarter Ended June 30, 2026 Quarter Ended June 30, 2025 Diluted earnings per share $ 1.80 $ 1.41 Net Income $ 4,735,000 $ 3,727,000 Return on average common equity 14.48 % 12.48 % Return on average assets 1.48 % 1.23 % CSB Bancorp, Inc. (OTC ID: CSBB) today announced second quarter 2026 net income of $4,735,000 or $1.80 per basic and diluted share, as compared to $3,727,000, or $1.41 per basic and diluted share, for the same period in 2025. For the six-month period ended June 30, 2026 net income totaled $9,179,000 compared to $7,343,000 for the same period last year, an increase of 25%. Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 14.48% and 1.48%, respectively, compared with 12.48% and 1.23% for the second quarter of 2025. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $6.5 million during the quarter, an increase of $1.2 million, or 24%, from the prior year’s second quarter. Net interest income increased $1.5 million, or 15%, noninterest income increased $175 thousand, or 10%, and noninterest expense increased $465 thousand, or 7%, in the second quarter of 2026 compared to the same period in 2025. For the six-month period ended June 30, 2026 ROE and ROA were 14.26% and 1.45% as compared to 12.53% and 1.22% for the comparable period in 2025. Eddie Steiner, President and CEO stated, “A relatively stable environment for interest rates and employment levels has fostered increased business expansion and additional home buying activity. Real GDP growth advanced at 2.1% annualized in the first quarter and appears to have sustained the pace through second quarter. Economic activity remains somewhat tempered by persistent inflation and global uncertainties that cloud the outlook for energy prices, tariffs, and other federal government actions. Consumer debt levels and delinquencies have been increasing as households contend with the higher cost of living expenses." Provision for credit loss expense for the quarter decreased $29 thousand from second quarter 2025. The allowance for expected credit losses (“ACL”) amounted to $13.5 million, or 1.56% of total loans, on June 30, 2026, as compared to $8.3 million or 1.05% of total loans on June 30, 2025. The allowance for credit losses on off-balance sheet commitments on June 30, 2026 was $583 thousand, as compared to a June 30, 2025 balance of $493 thousand. The increase in the ACL is primarily related to the individually evaluated loan relationship reported in prior periods. CSB has no allowance for credit losses related to available-for-sale or held-to-maturity debt securities, as there is no meaningful loss expectation on these securities. Loan interest income including fees increased $1.5 million, or 13%, during second quarter 2026 as compared to the same quarter in 2025. The increase was primarily the result of an $83 million average volume increase, augmented by a 13 basis point (“bp”) increase in yield over the prior year’s quarter. Securities interest income increased $197 thousand, or 11%, during second quarter 2026 compared to the same quarter 2025 with average yield in the portfolio improving as lower yielding securities continue to pay down and mature. Loan yields in second quarter 2026 averaged 6.05%, an increase of 13 bps from the 2025 second quarter average of 5.92%. Securities yields for second quarter 2026 averaged 2.59% as compared to 2.27% in the second quarter of 2025, while overnight funds averaged 3.71% compared to 4.47% in the second quarter 2025. Interest expense declined $35 thousand, or 1%, during second quarter 2026 as compared to second quarter 2025. The cost to fund gross earning assets for the second quarter of 2026 declined to 1.17% as compared to 1.25% for the second quarter of 2025. The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.92% for second quarter 2026, compared to 3.61% in the second quarter of 2025. FTE net interest income increased $1.5 million, or 15%, with a $65 million increase in average earning assets as well as a 23 bp increase in the yield on assets. The mix shift into loans primarily drove the increase in earnings from assets. The cost of interest-bearing liabilities declined 10 basis points as rates on time deposits have been slowly declining over the past year. Tax equivalency effect on net interest margin was 0.01% for both 2026 and 2025. Noninterest income increased $175 thousand, or 10%, compared to second quarter of 2025. The increase was primarily the result of a $49 thousand increase in debit card interchange fees, $42 thousand increase in credit card fees, a $37 thousand increase in earnings on bank owned life insurance, and a $28 thousand increase in service charges on deposit accounts. Noninterest expense increased $465 thousand, or 7%, from second quarter 2025. Salary and employee benefits increased $328 thousand, or 8%, compared to the prior year quarter, with increases in base salaries and benefits, partially due to increased headcount as the company was able to reduce vacancies and add several new positions supporting growth. Software expense increased $83 thousand, or 19%, primarily due to new loan production software. Debit card expense increased $23 thousand, or 12%. Professional fees increased $19 thousand, or 5%, with increases to legal expense, audit and accounting, and director’s fees. The Company’s second quarter efficiency ratio decreased to 53.06% compared to 56.62% in the prior year. Federal income tax expense was $1.2 million in second quarter 2026 compared to $903 thousand in the second quarter of 2025. The effective tax rate for the 2026 and 2025 second quarters was 20%, respectively. Average earning assets for the second quarter of 2026 increased $65 million, or 6% from the year-ago quarter, primarily reflecting an $83 million, or 11%, increase in average loans, an $8 million, or 3%, decrease in average securities, and a $9 million, or 15%, decrease in interest-earning deposits in other banks, held mainly at the Federal Reserve Bank. Average commercial loan balances for the quarter, including commercial real estate, increased $56 million, or 10%, from prior year levels, as construction loans were drawn, and borrowers used term loans to fund equipment and other purchases. Average residential mortgage balances increased $18 million, or 10%, above the prior year’s quarter with borrowers favoring adjustable-rate mortgages during this period of higher interest rates. The bank does not sell adjustable-rate mortgages to the secondary market. Home equity lines of credit increased $9 million from the prior year’s quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $504 thousand, or 3%, versus the same quarter of the prior year on lower recreational vehicle loan volume. Commercial loan demand for operating cash flow and equipment investments is somewhat constrained with households and businesses remaining cautious about discretionary borrowing until there is more confidence in price and employment stability following tensions in the Middle East and rising oil prices. Construction and development and commercial real estate borrowing have continued to exhibit fairly steady demand. Nonperforming loans were $7.3 million, or 0.84%, of total loans on June 30, 2026, compared to $1.4 million, or 0.17% of total loans, a year ago. The increase in nonperforming loans which includes nonaccrual loans and loans past due 90 days and still accruing, was attributable to a business relationship which has communicated that liquidation may provide greater economic value than continuing operations, due to cash flow pressure. The Bank believes it is well-secured on this relationship. Net loan charge-offs recognized during second quarter 2026 were $28 thousand, compared to second quarter 2025 net loan charge-offs of $362 thousand. The prior year net loan charge-offs were related to a previously reported voluntary liquidation of a commercial credit, for which no further book balances remain and any future recoveries are uncertain at this time. Average deposit balances increased on a quarter over prior year quarter comparison by $52 million, or 5%. For second quarter 2026, the average cost of deposits amounted to 1.25%, as compared to 1.32% for second quarter 2025. Second quarter 2026 increases in average deposit balances over the prior year quarter included interest bearing checking accounts of $15 million, savings accounts of $6 million, and time deposits of $23 million. Noninterest-bearing accounts increased $8 million from the prior year’s second quarter. The average balance of securities sold under repurchase agreement during the second quarter of 2026 increased by $621 thousand, or 3%, compared to the average for the same period in the prior year. Shareholders’ equity totaled $133 million on June 30, 2026, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 10.21% for the quarter ended June 30, 2026. The Company declared a second quarter dividend of $0.43 per share, producing an annualized yield of 2.4% based on June 30, 2026 closing price of $72.00. About CSB Bancorp, Inc. CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.3 billion as of June 30, 2026. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with sixteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, and a loan production office located in Medina, Ohio. Forward-Looking Statement This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets, and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. See the non-GAAP disclosures at the end of this release for a reconciliation of GAAP and non-GAAP measures. CSB BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) Quarters (Dollars in thousands, except per share data) 2026 2026 2025 2025 2025 2026 2025 EARNINGS 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 6 months 6 months Net interest income FTE(a) $ 11,904 $ 11,493 $ 11,450 $ 10,968 $ 10,376 $ 23,397 $ 20,088 Provision for credit loss expense 585 495 3,858 501 614 1,080 1,016 Noninterest income 1,952 1,872 1,956 1,866 1,777 3,824 3,473 Noninterest expenses 7,343 7,305 7,249 7,133 6,878 14,648 13,359 FTE adjustment(a) 28 28 30 30 31 56 62 Net income 4,735 4,444 1,869 4,151 3,727 9,179 7,343 Basic and Diluted earnings per share 1.80 1.69 0.71 1.57 1.41 3.49 2.78 PERFORMANCE RATIOS Return on average assets (ROA), annualized 1.48 % 1.42 % 0.58 % 1.31 % 1.23 % 1.45 % 1.22 % Return on average common equity (ROE), annualized 14.48 14.03 5.83 13.19 12.48 14.26 12.53 Net interest margin FTE(a) 3.92 3.87 3.73 3.67 3.61 3.89 3.55 Efficiency ratio 53.06 54.75 54.11 55.56 56.62 53.89 56.71 Number of full-time equivalent employees 185 182 178 181 175 MARKET DATA Book value per common share $ 50.49 $ 49.18 $ 48.07 $ 47.56 $ 46.11 Period-end common share market value 72.00 62.36 54.00 49.50 43.50 Market as a % of book 142.60 126.80 % 112.30 % 104.09 % 94.34 % Price-to-earnings ratio 12.48 11.59 10.65 9.48 9.01 Average basic common shares outstanding 2,627,015 2,627,015 2,629,229 2,636,028 2,639,244 2,627,015 2,641,879 Average diluted common shares outstanding 2,627,015 2,627,015 2,629,229 2,636,028 2,639,244 2,627,015 2,641,879 Period end common shares outstanding 2,627,015 2,627,015 2,627,015 2,632,498 2,638,921 Common stock market capitalization $ 189,145 $ 163,821 $ 141,859 $ 130,309 $ 114,793 ASSET QUALITY Gross charge-offs $ 41 $ 13 $ 31 $ 39 $ 368 $ 55 $ 403 Net charge-offs 28 7 26 11 362 35 391 Allowance for credit losses 13,528 12,947 12,470 8,720 8,251 Nonperforming assets (NPAs) 7,287 1,018 652 746 1,358 Net charge-off / average loans ratio 0.01 % 0.00 % 0.01 % 0.01 % 0.19 % 0.01 % 0.10 % Allowance for credit losses / period-end loans 1.56 1.52 1.50 1.08 1.05 NPAs/loans and other real estate 0.84 0.12 0.08 0.09 0.17 Allowance for credit losses / nonperforming loans 186 1,272 1,913 1,169 608 CAPITAL & LIQUIDITY Period-end tangible equity to assets(b) 9.92 % 9.87 % 9.43 % 9.69 % 9.48 % Average equity to assets 10.21 10.12 9.90 9.96 9.82 Average equity to loans 15.21 15.20 15.56 15.55 15.36 Average loans to deposits 76.83 76.41 72.62 72.97 72.86 AVERAGE BALANCES Assets $ 1,284,910 $ 1,269,557 $ 1,285,617 $ 1,253,262 $ 1,220,306 $ 1,277,294 $ 1,209,129 Earning assets 1,218,626 1,205,187 1,216,492 1,184,077 1,153,677 1,211,943 1,142,643 Loans 862,329 845,298 818,312 802,858 779,664 853,860 767,830 Deposits 1,122,413 1,106,338 1,126,878 1,100,283 1,070,136 1,114,418 1,059,395 Shareholders' equity 131,165 128,465 127,296 124,818 119,779 129,823 118,175 ENDING BALANCES Assets $ 1,294,216 $ 1,265,503 $ 1,292,736 $ 1,248,357 $ 1,237,969 Earning assets 1,224,138 1,200,667 1,228,856 1,178,781 1,163,268 Loans 869,348 852,718 829,778 810,048 788,070 Deposits 1,133,407 1,101,821 1,127,915 1,096,596 1,089,344 Shareholders' equity 132,630 129,203 126,280 125,190 121,683 Notes: (a) - Net interest income on a fully-taxable equivalent ("FTE") basis, restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the 21% statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. Generally Accepted Accounting Principles, and is considered a non-GAAP measure. (b) - Tangible equity is a non-GAAP measure, which is shareholders' equity net of goodwill. CSB BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, June 30, (Dollars in thousands, except per share data) 2026 2025 ASSETS Cash and cash equivalents Cash and due from banks $ 24,345 $ 27,000 Interest-bearing deposits with banks 57,182 68,290 Total cash and cash equivalents 81,527 95,290 Securities Available-for-sale, at fair-value 121,067 110,067 Held-to-maturity 174,421 195,048 Equity securities 325 273 Restricted stock, at cost 1,645 1,520 Total securities 297,458 306,908 Loans held for sale 150 - Loans 869,348 788,070 Less allowance for credit losses 13,528 8,251 Net loans 855,820 779,819 Premises and equipment, net 13,604 13,795 Goodwill 4,728 4,728 Bank owned life insurance 31,689 28,669 Accrued interest receivable and other assets 9,240 8,760 TOTAL ASSETS $ 1,294,216 $ 1,237,969 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing $ 287,118 $ 282,784 Interest-bearing 846,289 806,560 Total deposits 1,133,407 1,089,344 Short-term borrowings 22,014 22,364 Other borrowings 694 965 Accrued interest payable and other liabilities 5,471 3,613 TOTAL LIABILITIES 1,161,586 1,116,286 SHAREHOLDERS' EQUITY Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2026 and 2025 18,629 18,629 Additional paid-in capital 9,815 9,815 Retained earnings 119,066 108,309 Treasury stock at cost - 353,587 shares in 2026 and 341,681 shares in 2025 (9,293 ) (8,730 ) Accumulated other comprehensive loss (5,587 ) (6,340 ) TOTAL SHAREHOLDERS' EQUITY 132,630 121,683 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,294,216 $ 1,237,969 CSB BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME Quarters ended Six months ended (Unaudited) June 30, June 30, (Dollars in thousands, except per share data) 2026 2025 2026 2025 Interest and dividend income: Loans, including fees $ 12,998 $ 11,497 $ 25,524 $ 22,372 Taxable securities 1,885 1,678 3,847 3,473 Nontaxable securities 65 75 129 150 Other 476 678 894 1,214 Total interest and dividend income 15,424 13,928 30,394 27,209 Interest expense: Deposits 3,486 3,515 6,924 7,042 Other 62 68 129 141 Total interest expense 3,548 3,583 7,053 7,183 Net interest income 11,876 10,345 23,341 20,026 Provision for credit loss expense 585 614 1,080 1,016 Net interest income, after provision for credit loss expense 11,291 9,731 22,261 19,010 Noninterest income Service charges on deposit accounts 325 297 631 592 Trust services 289 268 607 546 Debit card interchange fees 599 550 1,142 1,065 Credit card fees 193 151 384 301 Earnings on bank owned life insurance 266 229 521 445 Gain on sale of loans 75 81 127 130 Unrealized gain on equity securities 17 6 41 6 Other 188 195 371 388 Total noninterest income 1,952 1,777 3,824 3,473 Noninterest expenses Salaries and employee benefits 4,249 3,921 8,482 7,618 Occupancy expense 336 352 684 708 Equipment expense 210 223 418 429 Professional and director fees 411 392 869 805 Software expense 524 441 1,045 844 Marketing and public relations 153 154 284 259 Debit card expense 221 198 429 409 Financial institutions tax 252 233 505 463 FDIC insurance expense 143 135 290 285 Other expenses 844 829 1,642 1,539 Total noninterest expenses 7,343 6,878 14,648 13,359 Income before income taxes 5,900 4,630 11,437 9,124 Federal income tax provision 1,165 903 2,258 1,781 Net income $ 4,735 $ 3,727 $ 9,179 $ 7,343 Net income per share: Basic and diluted $ 1.80 $ 1.41 $ 3.49 $ 2.78 CSB BANCORP, INC. NON-GAAP DISCLOSURES NET INTEREST INCOME, FULLY-TAXABLE EQUIVALENT Quarters ended Six months ended (Unaudited) June 30, June 30, (Dollars in thousands) 2026 2025 2026 2025 Net interest income $ 11,876 $ 10,345 $ 23,341 $ 20,026 Taxable equivalent adjustment1 28 31 56 62 Net interest income, FTE $ 11,904 $ 10,376 $ 23,397 $ 20,088 Net interest margin 3.91 % 3.60 % 3.88 % 3.54 % Taxable equivalent adjustment1 0.01 0.01 0.01 0.01 Net interest margin, FTE 3.92 % 3.61 % 3.89 % 3.55 % 1 Net interest income on a fully-taxable equivalent ("FTE") basis, restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. Generally Accepted Accounting Principles, and is considered a non-GAAP measure. PRE-PROVISION NET REVENUE Quarters ended Six months ended (Unaudited) June 30, June 30, (Dollars in thousands) 2026 2025 2026 2025 Pre-Provision Net Revenue (PPNR) Net interest income $ 11,876 $ 10,345 $ 23,341 $ 20,026 Total noninterest income 1,952 1,777 3,824 3,473 Total revenue 13,828 12,122 27,165 23,499 Less: Noninterest expense 7,343 6,878 14,648 13,359 PPNR (Non-GAAP) $ 6,485 $ 5,244 $ 12,517 $ 10,140 TANGIBLE EQUITY (Unaudited) June 30, June 30, (Dollars in thousands) 2026 2025 Total Shareholders' Equity (GAAP) $ 132,630 $ 121,683 Less: Goodwill 4,728 4,728 Tangible Shareholders' Equity (Non-GAAP) $ 127,902 $ 116,955 Source: CSB Bancorp, Inc.