CSB Bancorp, Inc. Reports Third Quarter Earnings

MILLERSBURG, Ohio--(BUSINESS WIRE)-- CSB Bancorp, Inc. (OTC ID: CSBB): Third Quarter Highlights Quarter Ended September 30, 2026 Quarter Ended September 30, 2025 Diluted earnings per share $ 1.90 $ 1.57 Net Income $ 4,987,000 $ 4,151,000 Return on average common equity 14.67 % 13.19 % Return on average assets 1.50 % 1.31 % CSB Bancorp, Inc. (OTC ID: CSBB) today announced third quarter 2026 net income of $4,987,000 or $1.90 per basic and diluted share, an increase of 20% from $4,151,000, or $1.57 per basic and diluted share, for the same period in 2025. Strong net interest income growth, an improved net interest margin, and continued balance sheet expansion contributed to record year-to-date earnings of $14,166,000, up 23% from the first nine months of 2025. Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 14.67% and 1.50%, respectively, compared with 13.19% and 1.31% for the third quarter of 2025. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $7.0 million during the quarter, an increase of $1.3 million, or 23%, from the prior year’s third quarter. Net interest income increased $1.7 million, or 15%, noninterest income increased $237 thousand, or 13%, and noninterest expense increased $609 thousand, or 9%, in the third quarter of 2026 compared to the same period in 2025. For the nine-month period ended September 30, 2026 ROE and ROA were 14.40% and 1.47% as compared to 12.76% and 1.26% for the comparable period in 2025. Eddie Steiner, President and CEO stated, “Local and national economies continue to exhibit growth and relatively stable employment. The annualized pace of real U.S. GDP growth in Q3 is currently estimated between 2.6%-3.6%, accelerating from 2.1% and 2.2% in Q1 and Q2, respectively. Consumer spending has been steady. Wage increases have averaged perhaps slightly under 3%, while spending with debit and credit cards is up about 10% and the banking industry’s deposit balances grew 2.9% in the year-ended June 30. Home prices are easing, with September’s average selling price 1.2% above the year ago average and the number of would-be buyers and sellers is now more balanced in much of the country. At the same time, noticeably higher interest rates and the costs of gasoline, diesel, and growing electrical demand are stoutly propping up inflation. September’s Consumer Price Index was 3.7% above year ago levels. If higher interest rates persist and petroleum supply remains constrained by U.S. involvement in overseas conflicts, pockets of slowing economic activity will likely become more apparent and pronounced.” Provision for credit loss expense for the quarter increased $258 thousand from third quarter 2025. The allowance for expected credit losses (“ACL”) amounted to $14.1 million, or 1.58% of total loans, on September 30, 2026, as compared to $8.7 million or 1.08% of total loans on September 30, 2025. The increase in the ACL is primarily related to one individually evaluated loan relationship, partially supported by government guarantee, and for which a $4 million valuation allowance was established and reported in the fourth quarter of 2025. That loan relationship remains a performing credit. The allowance for credit losses on off-balance sheet commitments on September 30, 2026 was $642 thousand, as compared to a September 30, 2025 balance of $514 thousand. 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 $1.6 million, or 13%, during third quarter 2026 as compared to the same quarter in 2025. The increase was primarily the result of an $81 million average volume increase, augmented by an 18 basis point (“bp”) increase in yield over the prior year’s quarter. Securities interest income increased $124 thousand, or 7%, during third 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 third quarter 2026 averaged 6.17% as compared to the 2025 third quarter average of 5.99%. Securities yields for third quarter 2026 averaged 2.59% as compared to 2.31% in the third quarter of 2025, while overnight funds averaged 3.73% compared to 4.43% in the third quarter 2025. Interest expense declined $20 thousand, or 1%, during third quarter 2026 as compared to third quarter 2025. The cost to fund gross earning assets for the third quarter of 2026 declined to 1.19% as compared to 1.27% for the third quarter of 2025. The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.99% for third quarter 2026, compared to 3.67% in the third quarter of 2025. FTE net interest income increased $1.7 million, or 15%, with a $72 million increase in average earning assets as well as a 24 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 $237 thousand, or 13%, compared to third quarter of 2025. The increase was primarily the result of a $64 thousand gain on sale of loans, $55 thousand increase in debit card interchange fees, $41 thousand increase in service charges on deposit accounts, and a $39 thousand increase in earnings on bank owned life insurance. Noninterest expense increased $609 thousand, or 9%, from third quarter 2025 reflecting strategic investments in personnel, technology, and operational infrastructure to support continued growth. Salary and employee benefits increased $468 thousand, or 11%, compared to the prior year quarter, as the Company expanded staffing in growth-oriented areas. Software expense rose $81 thousand, or 16%, primarily due to investments in loan production software and customer service technologies. Debit card expense increased $34 thousand or 16%. The Company’s third quarter efficiency ratio decreased to 52.56% compared to 55.56% in the prior year. Federal income tax expense was $1.2 million in third quarter 2026 compared to $1.0 million in the third quarter of 2025. The effective tax rate for the 2026 and 2025 third quarters was 20%, respectively. Average earning assets for the third quarter of 2026 increased $72 million, or 6% from the year-ago quarter, primarily reflecting an $81 million, or 10%, increase in average loans, a $14 million, or 5%, decrease in average securities, and a $6 million, or 7%, increase 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 $54 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 $14 million, or 8%, 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 $13 million from the prior year’s quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $801 thousand, or 6%, 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 given the aforementioned rising interest rate environment and elevated fuel costs. Construction and development and commercial real estate borrowing have continued to exhibit fairly steady demand. Nonperforming loans were $7.1 million, or 0.80%, of total loans on September 30, 2026, compared to $746 thousand, or 0.09% of total loans, a year ago. The increase in nonperforming loans, which includes nonaccrual loans and loans past due 90 days and still accruing, is attributable to a single commercial relationship previously disclosed by the Company in second quarter 2026. Management continues to believe this credit remains well-secured based on current collateral valuations and ongoing analysis. Net loan charge-offs remained low at $83 thousand, compared to third quarter 2025 net loan charge-offs of $11 thousand. Average deposit balances increased compared to the prior-year quarter by $58 million, or 5%. For third quarter 2026, the average cost of deposits amounted to 1.27%, as compared to 1.34% for third quarter 2025. Third quarter 2026 increases in average deposit balances over the prior year quarter included noninterest bearing balances of $14 million, interest bearing checking accounts of $11 million, savings accounts of $7 million, and time deposits of $26 million. The average balance of securities sold under repurchase agreement during the third quarter of 2026 increased by $1.6 million, or 7%, compared to the average for the same period in the prior year. Shareholders’ equity totaled $135 million on September 30, 2026, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 10.19% for the quarter ended September 30, 2026. The Company declared a third quarter dividend of $0.45 per share, producing an annualized yield of 2.3% based on September 30, 2026 closing price of $77.04. About CSB Bancorp, Inc. CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.3 billion as of September 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 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 2026 2025 2025 2026 2025 EARNINGS 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 9 months 9 months Net interest income FTE (a) $ 12,647 $ 11,904 $ 11,493 $ 11,450 $ 10,968 $ 36,044 $ 31,056 Provision for credit loss expense 759 585 495 3,858 501 1,839 1,517 Noninterest income 2,103 1,952 1,872 1,956 1,866 5,927 5,339 Noninterest expenses 7,742 7,343 7,305 7,249 7,133 22,390 20,492 FTE adjustment (a) 29 28 28 30 30 85 92 Net income 4,987 4,735 4,444 1,869 4,151 14,166 11,494 Basic and Diluted earnings per share 1.90 1.80 1.69 0.71 1.57 5.39 4.35 PERFORMANCE RATIOS Return on average assets (ROA), annualized 1.50 % 1.48 % 1.42 % 0.58 % 1.31 % 1.47 % 1.26 % Return on average common equity (ROE), annualized 14.67 14.48 14.03 5.83 13.19 14.40 12.76 Net interest margin FTE (a) 3.99 3.92 3.87 3.73 3.67 3.93 3.59 Efficiency ratio 52.56 53.06 54.75 54.11 55.56 53.42 56.31 Number of full-time equivalent employees 189 185 182 178 181 MARKET DATA Book value per common share $ 51.22 $ 50.49 $ 49.18 $ 48.07 $ 47.56 Period-end common share market value 77.04 72.00 62.36 54.00 49.50 Market as a % of book 150.41 142.60 126.80 % 112.30 % 104.09 % Price-to-earnings ratio 12.63 12.48 11.59 10.65 9.48 Average basic common shares outstanding 2,627,015 2,627,015 2,627,015 2,629,229 2,636,028 2,627,015 2,639,907 Average diluted common shares outstanding 2,627,015 2,627,015 2,627,015 2,629,229 2,636,028 2,627,015 2,639,907 Period end common shares outstanding 2,627,015 2,627,015 2,627,015 2,627,015 2,632,498 Common stock market capitalization $ 202,385 $ 189,145 $ 163,821 $ 141,859 $ 130,309 ASSET QUALITY Gross charge-offs $ 94 $ 41 $ 13 $ 31 $ 39 $ 148 $ 442 Net charge-offs 83 28 7 26 11 118 402 Allowance for credit losses 14,146 13,528 12,947 12,470 8,720 Nonperforming assets (NPAs) 7,121 7,287 1,018 652 746 Net charge-off / average loans ratio 0.04 % 0.01 % 0.00 % 0.01 % 0.01 % 0.02 % 0.07 % Allowance for credit losses / period-end loans 1.58 1.56 1.52 1.50 1.08 NPAs/loans and other real estate 0.80 0.84 0.12 0.08 0.09 Allowance for credit losses / nonperforming loans 199 186 1,272 1,913 1,169 CAPITAL & LIQUIDITY Period-end tangible equity to assets (b) 9.94 % 9.92 % 9.87 % 9.43 % 9.69 % Average equity to assets 10.19 10.21 10.12 9.90 9.96 Average equity to loans 15.26 15.21 15.20 15.56 15.55 Average loans to deposits 76.30 76.83 76.41 72.62 72.97 AVERAGE BALANCES Assets $ 1,323,144 $ 1,284,910 $ 1,269,557 $ 1,285,617 $ 1,253,262 $ 1,292,717 $ 1,223,846 Earning assets 1,256,412 1,218,626 1,205,187 1,216,492 1,184,077 1,226,929 1,156,606 Loans 883,574 862,329 845,298 818,312 802,858 863,870 779,634 Deposits 1,157,951 1,122,413 1,106,338 1,126,878 1,100,283 1,129,089 1,073,175 Shareholders' equity 134,836 131,165 128,465 127,296 124,818 131,512 120,414 ENDING BALANCES Assets $ 1,310,516 $ 1,294,216 $ 1,265,503 $ 1,292,736 $ 1,248,357 Earning assets 1,245,757 1,224,138 1,200,667 1,228,856 1,178,781 Loans 893,744 869,348 852,718 829,778 810,048 Deposits 1,145,172 1,133,407 1,101,821 1,127,915 1,096,596 Shareholders' equity 134,556 132,630 129,203 126,280 125,190 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) September 30, September 30, (Dollars in thousands, except per share data) 2026 2025 ASSETS Cash and cash equivalents Cash and due from banks $ 17,514 $ 20,069 Interest-bearing deposits with banks 67,144 60,738 Total cash and cash equivalents 84,658 80,807 Securities Available-for-sale, at fair-value 115,895 115,795 Held-to-maturity 166,946 190,027 Equity securities 344 269 Restricted stock, at cost 1,684 1,520 Total securities 284,869 307,611 Loans held for sale — 384 Loans 893,744 810,048 Less allowance for credit losses 14,146 8,720 Net loans 879,598 801,328 Premises and equipment, net 13,973 13,716 Goodwill 4,728 4,728 Bank owned life insurance 31,957 30,899 Accrued interest receivable and other assets 10,733 8,884 TOTAL ASSETS $ 1,310,516 $ 1,248,357 LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Deposits: Noninterest-bearing $ 290,627 $ 277,838 Interest-bearing 854,545 818,758 Total deposits 1,145,172 1,096,596 Short-term borrowings 23,894 20,304 Other borrowings 675 941 Accrued interest payable and other liabilities 6,219 5,326 TOTAL LIABILITIES 1,175,960 1,123,167 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 122,871 111,380 Treasury stock at cost - 353,587 shares in 2026 and 348,104 shares in 2025 (9,293 ) (9,020 ) Accumulated other comprehensive loss (7,466 ) (5,614 ) TOTAL SHAREHOLDERS' EQUITY 134,556 125,190 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,310,516 $ 1,248,357 CSB BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME Quarters ended Nine months ended (Unaudited) September 30, September 30, (Dollars in thousands, except per share data) 2026 2025 2026 2025 Interest and dividend income: Loans, including fees $ 13,731 $ 12,117 $ 39,255 $ 34,489 Taxable securities 1,822 1,695 5,669 5,168 Nontaxable securities 70 73 199 223 Other 751 829 1,645 2,043 Total interest and dividend income 16,374 14,714 46,768 41,923 Interest expense: Deposits 3,697 3,715 10,621 10,757 Other 59 61 188 202 Total interest expense 3,756 3,776 10,809 10,959 Net interest income 12,618 10,938 35,959 30,964 Provision for credit loss expense 759 501 1,839 1,517 Net interest income, after provision for credit loss expense 11,859 10,437 34,120 29,447 Noninterest income Service charges on deposit accounts 351 310 982 902 Trust services 303 294 910 840 Debit card interchange fees 618 563 1,760 1,628 Credit card fees 193 182 577 483 Earnings on bank owned life insurance 268 229 789 674 Gain on sale of loans 129 65 256 195 Unrealized gain on equity securities 19 (4 ) 60 2 Other 222 227 593 615 Total noninterest income 2,103 1,866 5,927 5,339 Noninterest expenses Salaries and employee benefits 4,577 4,109 13,059 11,727 Occupancy expense 347 323 1,031 1,031 Equipment expense 230 200 648 629 Professional and director fees 404 502 1,273 1,307 Software expense 579 498 1,624 1,342 Marketing and public relations 139 155 423 414 Debit card expense 242 208 671 617 Financial institutions tax 252 226 757 689 FDIC insurance expense 147 135 437 420 Other expenses 825 777 2,467 2,316 Total noninterest expenses 7,742 7,133 22,390 20,492 Income before income taxes 6,220 5,170 17,657 14,294 Federal income tax provision 1,233 1,019 3,491 2,800 Net income $ 4,987 $ 4,151 $ 14,166 $ 11,494 Net income per share: Basic and diluted $ 1.90 $ 1.57 $ 5.39 $ 4.35 CSB BANCORP, INC. NON-GAAP DISCLOSURES NET INTEREST INCOME, FULLY-TAXABLE EQUIVALENT Quarters ended Nine months ended (Unaudited) September 30, September 30, (Dollars in thousands) 2026 2025 2026 2025 Net interest income $ 12,618 $ 10,938 $ 35,959 $ 30,964 Taxable equivalent adjustment 1 29 30 85 92 Net interest income, FTE $ 12,647 $ 10,968 $ 36,044 $ 31,056 Net interest margin 3.98 % 3.66 % 3.92 % 3.58 % Taxable equivalent adjustment 1 0.01 0.01 0.01 0.01 Net interest margin, FTE 3.99 % 3.67 % 3.93 % 3.59 % 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 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. PRE-PROVISION NET REVENUE Quarters ended Nine months ended (Unaudited) September 30, September 30, (Dollars in thousands) 2026 2025 2026 2025 Pre-Provision Net Revenue (PPNR) Net interest income $ 12,618 $ 10,938 $ 35,959 $ 30,964 Total noninterest income 2,103 1,866 5,927 5,339 Total revenue 14,721 12,804 41,886 36,303 Less: Noninterest expense 7,742 7,133 22,390 20,492 PPNR (Non-GAAP) $ 6,979 $ 5,671 $ 19,496 $ 15,811 TANGIBLE EQUITY (Unaudited) September 30, September 30, (Dollars in thousands) 2026 2025 Total Shareholders' Equity (GAAP) $ 134,556 $ 125,190 Less: Goodwill 4,728 4,728 Tangible Shareholders' Equity (Non-GAAP) $ 129,828 $ 120,462 Paula J. Meiler, SVP & CFO 330.763.2873 paula.meiler@csb1.com Source: CSB Bancorp, Inc.