CSB Bancorp, Inc. Reports First Quarter Earnings

CSB Bancorp, Inc. Reports First Quarter Earnings CSB Bancorp, Inc. (OTC ID: CSBB): First Quarter Highlights Quarter Ended March 31, 2026 Quarter Ended March 31, 2025 Diluted earnings per share $ 1.69 $ 1.37 Net Income $ 4,444,000 $ 3,616,000 Return on average common equity 14.03 % 12.58 % Return on average assets 1.42 % 1.22 % CSB Bancorp, Inc. (OTC ID: CSBB) today announced first quarter 2026 net income of $4,444,000 or $1.69 per basic and diluted share, as compared to $3,616.000, or $1.37 per basic and diluted share, for the same period in 2025. Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 14.03% and 1.42%, respectively, compared with 12.58% and 1.22% for the first quarter of 2025. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $6.0 million during the quarter, an increase of $1.1 million, or 23%, from the prior year’s first quarter. Net interest income increased $1.8 million, or 18%, noninterest income increased $176 thousand, or 10%, and noninterest expense increased $824 thousand, or 13%, in the first quarter of 2026 compared to the same period in 2025. Eddie Steiner, President and CEO stated, “Loans increased 3% from year-end, while deposits declined by 2% on seasonal business slowdowns and tax payments. Mortgage application volume has improved with mortgage rates about 1/2%-3/4% below year ago levels. Commercial construction has been fairly robust in our markets. Businesses are generally cautious with inventory levels and equipment purchases. Higher energy prices are spurring inflation in a number of product and service categories and uncertain outcomes related to effects of the Iran war and related settlement agreements, along with fluctuations in U.S. global trade policy are feeding an unsettled tone. Consumers are spending at close to normal levels, with slightly increasing debt levels from sustained inflation. The Fed is likely on pause with rates for a sustained period of months unless significant flare-ups occur in employment or inflation. U.S. equity and debt markets have been volatile but regained all time high ranges in the past week.” Provision for credit loss expense for the quarter increased $93 thousand from first quarter 2025. The allowance for expected credit losses (“ACL”) amounted to $12.9 million, or 1.52% of total loans, on March 31, 2026, as compared to $8.0 million or 1.05% of total loans on March 31, 2025. The allowance for credit losses on off-balance sheet commitments on March 31, 2026 was $607 thousand, as compared to a March 31, 2025 balance of $519 thousand. The increase in the ACL is primarily related to the individually evaluated loan relationship. 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 $1.7 million, or 15%, during first quarter 2026 as compared to the same quarter in 2025. The increase was primarily the result of an $89 million average volume increase, augmented by a 17 basis point (“bp”) increase in yield over the prior year’s quarter. Securities interest income increased $156 thousand, or 8%, during the first 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 first quarter 2026 averaged 6.01%, an increase of 17 bps from the 2025 first quarter average of 5.84%. Securities yields for first quarter 2026 averaged 2.64% as compared to 2.34% in the first quarter of 2025, while overnight funds averaged 3.71% compared to 4.47% in the first quarter 2025. Interest expense declined $95 thousand, or 3%, during first quarter 2026 as compared to first quarter 2025. The cost to fund gross earning assets for the first quarter of 2026 declined to 1.18% as compared to 1.29% for the first quarter of 2025. The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.87% for first quarter 2026, compared to 3.48% in the first quarter of 2025. FTE net interest income increased $1.8 million, or 18%, with a $74 million increase in average earning assets as well as a 28 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 16 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 $176 thousand, or 10%, compared to first quarter of 2025. The increase was primarily the result of a $41 thousand increase in credit card fees, a $40 thousand increase in trust fees, a $39 thousand increase in earnings on bank owned life insurance, and a $28 thousand increase in debit card interchange fees. Noninterest expense increased $824 thousand, or 13%, from first quarter 2025. Salary and employee benefits increased $536 thousand, or 14%, compared to the prior year quarter, with increases in base salaries, benefits, and medical expenses, partially due to increased headcount as the company was able to reduce vacancies and add several new positions supporting growth. Software expense increased $118 thousand, or 29%, primarily due to new loan production software. Professional fees increased $45 thousand, or 11%, with increases to legal expense, audit and accounting, and director’s fees. Marketing and public relations increased $26 thousand, or 25%, with increasing benefit requests. The Company’s first quarter efficiency ratio decreased to 54.75% compared to 56.81% in the prior year. Federal income tax expense was $1.1 million in first quarter 2026 compared to $878 thousand in the first quarter of 2025. The effective tax rate for the 2026 and 2025 first quarters was 20%, respectively. Average earning assets for the first quarter of 2026 increased $74 million, or 7% from the year-ago quarter, primarily reflecting an $89 million, or 12%, increase in average loans, a $13 million, or 4%, decrease in average securities, and a $3 million, or 6%, 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 $67 million, or 13%, 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 $16 million, or 9%, 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 $8 million from the prior year’s quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $1 million, or 7%, versus the same quarter of the prior year on lower volume of loans for recreational vehicles. 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 $1.0 million, or 0.12%, of total loans on March 31, 2026, compared to $1.6 million, or 0.21% of total loans, a year ago. Delinquent loan balances as of March 31, 2026, decreased to 0.16% of total loans as compared to 0.43% on March 31, 2025. Net loan charge-offs recognized during first quarter 2026 were $7 thousand, compared to first quarter 2025 net loan charge-offs of $29 thousand. Average deposit balances increased on a quarter over prior year quarter comparison by $58 million, or 6%. For first quarter 2026, the average cost of deposits amounted to 1.26%, as compared to 1.36% for first quarter 2025. First quarter 2026 increases in average deposit balances over the prior year quarter included savings accounts of $4 million, money market accounts of $2 million, and time deposits of $16 million. Noninterest-bearing accounts increased $7 million from the prior year’s first quarter while interest-bearing demand accounts increased $30 million. The average balance of securities sold under repurchase agreement during the first quarter of 2026 increased by $1 million, or 4%, compared to the average for the same period in the prior year. Shareholders’ equity totaled $129 million on March 31, 2026, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 10.12% for the quarter ended March 31, 2026. The Company declared a first quarter dividend of $0.43 per share, producing an annualized yield of 2.8% based on March 31, 2026 closing price of $62.36. About CSB Bancorp, Inc. CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.3 billion as of March 31, 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 2025 2025 2025 2025 EARNINGS 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr Net interest income FTE(a) $ 11,493 $ 11,450 $ 10,968 $ 10,376 $ 9,712 Provision for credit loss expense 495 3,858 501 614 402 Noninterest income 1,872 1,956 1,866 1,777 1,696 Noninterest expenses 7,305 7,249 7,133 6,878 6,481 FTE adjustment(a) 28 30 30 31 31 Net income 4,444 1,869 4,151 3,727 3,616 Basic and Diluted earnings per share 1.69 0.71 1.57 1.41 1.37 PERFORMANCE RATIOS Return on average assets (ROA), annualized 1.42 % 0.58 % 1.31 % 1.23 % 1.22 % Return on average common equity (ROE), annualized 14.03 5.83 13.19 12.48 12.58 Net interest margin FTE(a) 3.87 3.73 3.67 3.61 3.48 Efficiency ratio 54.75 54.11 55.56 56.62 56.81 Number of full-time equivalent employees 182 178 181 175 173 MARKET DATA Book value per common share $ 49.18 $ 48.07 $ 47.56 $ 46.11 $ 44.80 Period-end common share market value 62.36 54.00 49.50 43.50 44.00 Market as a % of book 126.80 % 112.30 % 104.09 % 94.34 % 98.20 % Price-to-earnings ratio 11.59 10.65 9.48 9.01 10.92 Average basic common shares outstanding 2,627,015 2,629,229 2,636,028 2,639,244 2,644,543 Average diluted common shares outstanding 2,627,015 2,629,229 2,636,028 2,639,244 2,644,543 Period end common shares outstanding 2,627,015 2,627,015 2,632,498 2,638,921 2,641,547 Common stock market capitalization $ 163,821 $ 141,859 $ 130,309 $ 114,793 $ 116,228 ASSET QUALITY Gross charge-offs $ 13 $ 31 $ 39 $ 368 $ 35 Net charge-offs 7 26 11 362 29 Allowance for credit losses 12,947 12,470 8,720 8,251 7,974 Nonperforming assets (NPAs) 1,018 652 746 1,358 1,597 Net charge-off / average loans ratio 0.00 % 0.01 % 0.01 % 0.19 % 0.02 % Allowance for credit losses / period-end loans 1.52 1.50 1.08 1.05 1.05 NPAs/loans and other real estate 0.12 0.08 0.09 0.17 0.21 Allowance for credit losses / nonperforming loans 1,272 1,913 1,169 608 499 CAPITAL & LIQUIDITY Period-end tangible equity to assets(b) 9.87 % 9.43 % 9.69 % 9.48 % 9.36 Average equity to assets 10.12 9.90 9.96 9.82 9.73 Average equity to loans 15.20 15.56 15.55 15.36 15.42 Average loans to deposits 76.41 72.62 72.97 72.86 72.09 AVERAGE BALANCES Assets $ 1,269,557 $ 1,285,617 $ 1,253,262 $ 1,220,306 $ 1,197,828 Earning assets 1,205,187 1,216,492 1,184,077 1,153,677 1,131,483 Loans 845,298 818,312 802,858 779,664 755,860 Deposits 1,106,338 1,126,878 1,100,283 1,070,136 1,048,534 Shareholders' equity 128,465 127,296 124,818 119,779 116,554 ENDING BALANCES Assets $ 1,265,503 $ 1,292,736 $ 1,248,357 $ 1,237,969 $ 1,218,640 Earning assets 1,200,667 1,228,856 1,178,781 1,163,268 1,148,625 Loans 852,718 829,778 810,048 788,070 761,240 Deposits 1,101,821 1,127,915 1,096,596 1,089,344 1,070,777 Shareholders' equity 129,203 126,280 125,190 121,683 118,335 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) March 31, March 31, (Dollars in thousands, except per share data) 2026 2025 ASSETS Cash and cash equivalents Cash and due from banks $ 17,738 $ 22,315 Interest-bearing deposits with banks 37,470 66,171 Total cash and cash equivalents 55,208 88,486 Securities Available-for-sale, at fair-value 128,831 119,428 Held-to-maturity 179,155 200,000 Equity securities 302 266 Restricted stock, at cost 1,645 1,520 Total securities 309,933 321,214 Loans held for sale 546 - Loans 852,718 761,240 Less allowance for credit losses 12,947 7,974 Net loans 839,771 753,266 Premises and equipment, net 13,663 13,935 Goodwill 4,728 4,728 Bank owned life insurance 31,423 28,441 Accrued interest receivable and other assets 10,231 8,570 TOTAL ASSETS $ 1,265,503 $ 1,218,640 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing $ 272,934 $ 283,255 Interest-bearing 828,887 787,522 Total deposits 1,101,821 1,070,777 Short-term borrowings 27,648 24,981 Other borrowings 892 1,236 Accrued interest payable and other liabilities 5,939 3,311 TOTAL LIABILITIES 1,136,300 1,100,305 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 115,461 105,664 Treasury stock at cost - 353,587 shares in 2026 and 339,055 shares in 2025 (9,293 ) (8,622 ) Accumulated other comprehensive loss (5,409 ) (7,151 ) TOTAL SHAREHOLDERS' EQUITY 129,203 118,335 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,265,503 $ 1,218,640 CSB BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME Quarters ended (Unaudited) March 31, (Dollars in thousands, except per share data) 2026 2025 Interest and dividend income: Loans, including fees $ 12,526 $ 10,875 Taxable securities 1,962 1,795 Nontaxable securities 64 75 Other 418 536 Total interest and dividend income 14,970 13,281 Interest expense: Deposits 3,438 3,527 Other 67 73 Total interest expense 3,505 3,600 Net interest income 11,465 9,681 Provision for credit loss expense 495 402 Net interest income, after provision for credit loss expense 10,970 9,279 Noninterest income Service charges on deposit accounts 306 295 Trust services 318 278 Debit card interchange fees 543 515 Credit card fees 191 150 Earnings on bank owned life insurance 255 216 Gain on sale of loans 52 49 Unrealized gain on equity securities 24 - Other 183 193 Total noninterest income 1,872 1,696 Noninterest expenses Salaries and employee benefits 4,233 3,697 Occupancy expense 348 356 Equipment expense 208 206 Professional and director fees 458 413 Software expense 521 403 Marketing and public relations 131 105 Debit card expense 208 211 Financial institutions tax 253 230 FDIC insurance expense 147 150 Other expenses 798 710 Total noninterest expenses 7,305 6,481 Income before income taxes 5,537 4,494 Federal income tax provision 1,093 878 Net income $ 4,444 $ 3,616 Net income per share: Basic and diluted $ 1.69 $ 1.37 CSB BANCORP, INC. NON-GAAP DISCLOSURES NET INTEREST INCOME, FULLY-TAXABLE EQUIVALENT Quarters ended (Unaudited) March 31, (Dollars in thousands) 2026 2025 Net interest income $ 11,465 $ 9,681 Taxable equivalent adjustment1 28 31 Net interest income, FTE $ 11,493 $ 9,712 Net interest margin 3.86 % 3.47 % Taxable equivalent adjustment1 0.01 0.01 Net interest margin, FTE 3.87 % 3.48 % 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 (Unaudited) March 31, (Dollars in thousands) 2026 2025 Pre-Provision Net Revenue (PPNR) Net interest income $ 11,465 $ 9,681 Total noninterest income 1,872 1,696 Total revenue 13,337 11,377 Less: Noninterest expense 7,305 6,481 PPNR (Non-GAAP) $ 6,032 $ 4,896 TANGIBLE EQUITY (Unaudited) March 31, March 31, (Dollars in thousands) 2026 2025 Total Shareholders' Equity (GAAP) $ 129,203 $ 118,335 Less: Goodwill 4,728 4,728 Tangible Shareholders' Equity (Non-GAAP) $ 124,475 $ 113,607 Source: CSB Bancorp, Inc.