CSB Bancorp, Inc. Reports Third Quarter Earnings

Higher lending income and a wider interest margin accompanied an increase in nonperforming loans tied to one commercial relationship.

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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 adjustment1			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 adjustment1			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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261020197030/en/

Paula J. Meiler, SVP & CFO
330.763.2873
paula.meiler@csb1.com

Source: CSB Bancorp, Inc.