CSB Bancorp (CSBB) 2025 profit climbs on wider margin and loan growth
Rhea-AI Filing Summary
CSB Bancorp, Inc. reported solid 2025 growth, with net income rising to $13.4 million from $10.0 million, and basic and diluted earnings per share increasing to $5.07 from $3.76. Return on average assets improved to 1.08%, and return on average equity reached 10.94%.
Net interest income grew to $42.4 million, and the fully tax-equivalent net interest margin widened to 3.63% as higher loan balances and better yields more than offset funding costs. The loan portfolio expanded to $829.9 million of gross loans and $817.3 million net, led by commercial real estate and residential mortgage growth.
Total deposits averaged $1.09 billion and ended the year at $1.13 billion, while total assets reached $1.29 billion. Credit quality metrics improved, with net charge-offs equal to 0.05% of average loans versus 0.87% in 2024, and the allowance for credit losses on loans increased to 1.50% of year-end loans.
Noninterest income edged up to $7.3 million, helped by higher debit card fees and bank-owned life insurance earnings. Noninterest expense rose to $27.7 million, mainly from higher salaries and benefits. Book value per share increased to $48.07, and the company repurchased 23,074 shares while paying dividends of $1.64 per share.
Positive
- Net income growth: 2025 net income rose to $13.4 million from $10.0 million, a 33.5% increase, with EPS up to $5.07 from $3.76.
- Margin and profitability: Fully tax-equivalent net interest margin improved to 3.63%, lifting return on average assets to 1.08% and return on average equity to 10.94%.
- Loan and deposit expansion: Net loans grew to $817.3 million from $730.0 million and deposits to $1.13 billion from $1.04 billion, supporting balance sheet growth.
- Credit quality and reserves: Net charge-offs were only 0.05% of average loans versus 0.87% in 2024, while the allowance for credit losses on loans increased to 1.50% of year-end loans.
- Shareholder returns: Book value per share increased to $48.07, the annual dividend rose to $1.64 per share, and 23,074 shares were repurchased in 2025.
Negative
- None.
Insights
Strong 2025: higher earnings, wider margin, healthy credit.
CSB Bancorp delivered a 33.5% increase in net income to $13.4 million, driven mainly by higher net interest income and modest fee growth. The fully tax-equivalent net interest margin expanded to 3.63%, reflecting richer loan yields on a larger balance sheet.
Average loans rose to $789.4 million, with year-end loans net of allowance at $817.3 million, while deposits climbed to $1.13 billion. Credit quality remained favorable: net charge-offs were just 0.05% of average loans, and the allowance for credit losses on loans increased to 1.50% of loans, strengthening loss coverage.
Noninterest expense increased 13% to $27.7 million, largely from higher compensation, but profitability still improved, with return on average equity at 10.94%. Shareholder returns were supported by a higher dividend of $1.64 per share and repurchases of 23,074 shares during 2025, while book value per share rose to $48.07.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock as of June 30, 2025 of $43.50 per share on the OTC Stock Market, was $
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of CSB Bancorp Inc.’s Proxy Statement for the 2026 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.
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PART I
ITEM 1. BUSINESS.
General
CSB Bancorp, Inc. (“CSB”), is a registered financial holding company under the Bank Holding Company Act of 1956, as amended, and was incorporated under the laws of the State of Ohio in 1991. The Commercial and Savings Bank of Millersburg, Ohio (the “Bank”), an Ohio bank chartered in 1879, is a wholly owned subsidiary of CSB. The Bank is a member of the Federal Reserve System, and its deposits are insured up to the maximum amount provided by law by the Federal Deposit Insurance Corporation (“FDIC”). The primary regulators of the Bank are the Federal Reserve Board and the Ohio Division of Financial Institutions. CSB Investment Services, LLC, an Ohio limited liability company (“CSB Investment”), is a wholly owned subsidiary of CSB that is licensed to engage in the business of insurance in the State of Ohio. In this Annual Report on Form 10-K, CSB and its subsidiaries are sometimes collectively referred to as the “Company.”
Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this Annual Report on Form 10-K, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate”, “estimates”, “may”, “feels”, “expects”, “believes”, “plans”, “will”, “would”, “should”, “could” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying such statements. Examples of forward-looking statements include: (i) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure, and other financial items; (ii) statements of plans and objectives of the Company and of its management or Board of Directors, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially.
Other factors not currently anticipated may also materially and adversely affect the Company’s business, financial condition, results of operations, or cash flows. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this Annual Report on Form 10-K are reasonable, the reader should not place undue reliance on any forward-looking statement. In addition, these statements speak only as of the date made. The Company does not undertake, and expressly disclaims, any obligation to update or alter any statements whether as a result of new information, future events, or otherwise, except as may be required by applicable law.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statements. The Company desires to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
Business Overview and Lending Activities
CSB operates primarily through the Bank and CSB Investment Services, LLC, providing a wide range of banking, trust, financial, and brokerage services to corporate, institutional, and individual customers throughout northeast Ohio. The Bank provides retail and commercial banking services to its customers, including checking and savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, commercial loans, real estate mortgage loans, installment loans, night depository facilities, brokerage, and trust services.
The Bank provides residential real estate, commercial real estate, commercial, and consumer loans to customers located primarily in Holmes, Stark, Tuscarawas, Wayne, and portions of surrounding counties in Ohio. The Bank’s market area has historically exhibited relatively stable economic conditions. Economic activity in the Company’s market area increased slightly in the fourth quarter of 2025, but consumer demand for goods and services declined moderately and is expected to flatten out in the near future. Reported unemployment levels in December 2025 ranged from 2.8% to 4.4% in the four primary counties served by the Company. These levels decreased from the December 2024 unemployment range of 2.9% to 4.6%. Labor demand remained fairly flat, while competition for workers with specialized skills has put upward pressure on labor costs. The local housing market has increasing inventory levels compared to prior years. Commercial loan demand, including commercial real estate, increased steadily during 2025 along with increased demand for consumer mortgage, home equity lines of credit and consumer construction loans as stable interest rates contributed to the growth. Nonresidential construction loan balances declined as projects were completed and moved to permanent financing. Demand for consumer installment and indirect loans softened in 2025. All deposit types increased and customers continue to move funds into higher yielding interest-bearing accounts.
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Certain risks are involved in providing loans, including, but not limited to, the borrowers’ ability and willingness to repay the debt. Before the Bank extends a new loan or renews an existing loan to a customer, these risks are assessed through a review of the borrower’s past and current credit history, the collateral being used to secure the transaction, if any, and other factors. For all commercial loan relationships greater than $500,000, the Bank’s internal credit department performs an annual risk rating review. In addition to this review, an independent, outside loan review firm is engaged to review a sample of watch list and adversely classified credits over $500,000 and a sample of commercial loan relationships greater than $1,000,000. The outside loan review also assesses management’s current credit grades and provides commentary with regard to assigned ratings, as well as assesses management’s specific loan loss reserves for loans included in their sample that are considered to be impaired. In addition, any loan over $100,000 identified as a problem credit by management and/or the external loan review consultants is assigned to the Bank’s “loan watch list,” has a written action plan created specifically for the loan relationship and is subject to ongoing review at least quarterly by the Bank’s credit department and the assigned loan officer to ensure appropriate action is taken if deterioration continues. These "watch list action plans" are reviewed with the Executive Committee of the Board quarterly.
Commercial loan rates are variable and fixed and include operating lines of credit and term loans made to businesses, primarily based on their ability to repay the loan from the cash flow of the business. Business assets such as equipment, accounts receivable, and inventory typically secure such loans. When the borrower is not an individual, the Bank generally obtains the personal guarantee of the business owner. These loans typically involve larger loan balances, are generally dependent on the cash flow of the business, and thus may be subject to a greater extent to adverse conditions in the general economy or in a specific industry. Management reviews the borrower’s cash flows when deciding whether to grant the credit in order to evaluate whether estimated future cash flows will be adequate to service principal and interest of the new obligation in addition to existing obligations.
Commercial real estate loans are primarily secured by borrower-occupied business real estate and are dependent on the ability of the related business to generate adequate cash flow to service the debt. Commercial real estate loans are generally originated with a loan-to-value ratio of 80% of the lower of cost or appraised value. Commercial construction loans are secured by commercial real estate and in most cases the Bank also provides the permanent financing. The Bank monitors advances and the maximum loan to value ratio is typically limited to the lesser of 80% of cost or appraised value. Management performs much of the same analysis when deciding whether to grant a commercial real estate loan as when deciding whether to grant a commercial loan.
Residential real estate loans carry both fixed and variable rates and are secured by the borrower’s residence. Such loans are made based on the borrower’s ability to make repayment from employment and other income. Management assesses the borrower’s ability and willingness to repay the debt through review of credit history and ratings, verification of employment and other income, review of debt-to-income ratios, and other measures of repayment ability. The Bank generally makes these loans in amounts of 80% or less of the value of the collateral or up to 95% of collateral value with private mortgage insurance. An appraisal from a qualified real estate appraiser or an evaluation based on comparable market values is obtained for substantially all loans secured by real estate. Residential construction loans are secured by residential real estate that generally will be occupied by the borrower upon completion. The Bank usually makes the permanent loan at the end of the construction phase. Generally, construction loans are made in amounts of 80% or less of the value of the as-completed collateral.
Home equity lines of credit are made to individuals and are secured by second or first mortgages on the borrower’s residence. Loans are based on similar credit and appraisal criteria used for residential real estate loans; however, loans up to 90% of the value of the property may be approved for borrowers with excellent credit histories. These loans typically bear interest at variable rates and require minimum monthly payments of the accrued interest.
Installment loans to individuals include unsecured loans and loans secured by recreational vehicles (“RVs”), automobiles, and other consumer assets. Consumer loans for the purchase of new RV’s and new automobiles generally do not exceed 125% of Dealer Invoice on RV’s or 110% of the Manufacturer’s Suggested Retail Price (MSRP) of an automobile. Loans for used RV’s and automobiles do not exceed 120% of the “clean trade-in value” as reported in the current “J.D. Power” used vehicle guides. Overdraft protection loans are unsecured personal lines of credit to individuals who have demonstrated good credit character with reasonably assured sources of income and satisfactory credit histories. Consumer loans generally involve more risk than residential mortgage loans because of the type and nature of collateral and, in certain types of consumer loans, absence of collateral. Since these loans are generally repaid from ordinary income of the individual or family unit, repayment may be adversely affected by job loss, divorce, ill health, or by a general decline in economic conditions. The Bank assesses the borrower’s ability and willingness to repay through a review of credit history, credit ratings, debt-to-income ratios, and other measures of repayment ability.
While CSB’s chief decision-makers monitor the revenue streams of the various financial products and services, operations are managed, and financial performance is evaluated, on a Company-wide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment. For a discussion of the Company’s financial performance for the fiscal year ended December 31, 2025, see item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
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Employees
On December 31, 2025, the Company had 190 employees, 168 of which were employed on a full-time basis. CSB has no separate employees not also employed by the Bank. No employees are covered by collective bargaining agreements. Employees are provided benefit programs, some of which are contributory. Management considers its employee relations to be good.
Competition
The financial services industry is highly competitive. In its primary market area of Holmes, Stark, Tuscarawas, Wayne and surrounding Ohio counties, the Bank competes for new deposit dollars and loans with other commercial banks, including both large regional banks and smaller community banks, as well as savings and loan associations, credit unions, finance companies, insurance companies, brokerage firms, investment companies, private lenders, and technology-based providers of financial services (sometimes referred to as “fintech” companies).
Competition within the financial service industry continues to increase as a result of mergers between, and expansion of, financial service providers within and outside of the Company’s primary market areas. In addition, securities firms and insurance companies that have elected to become financial holding companies may acquire commercial banks and other financial institutions, which can create additional competitive pressure.
Management believes the primary factors in competing for loans and deposits are interest rates, availability of services, quality of customer service, convenience, and name recognition. Some of the Company’s competitors may have greater resources and as such, higher lending limits, or fewer regulatory constraints and lower cost structures, all of which may adversely affect the Company’s ability to compete.
Investor Relations
The Company’s website address is www.csb1.com. The Company makes available its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, free of charge on its website as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (the “SEC”). The Company also makes available through its website, other reports filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including its proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act, as well as the Company’s Code of Ethics. References to our website in this Annual Report on Form 10-K are provided as a convenience and do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website, and such information should not be considered part of this Annual Report on Form 10-K.
In addition, the Company’s filings are available on the SEC’s website at www.sec.gov free of charge as soon as reasonably practicable after the Company has filed the above referenced reports.
Supervision and Regulation of CSB and the Bank
CSB and the Bank are subject to extensive regulation by federal and state regulatory agencies. The regulation of financial holding companies and their subsidiaries by bank regulatory agencies is intended primarily for the protection of consumers, depositors, borrowers, the deposit insurance fund of the FDIC (the “DIF”), and the banking system as a whole and not for the protection of shareholders.
CSB is a bank holding company that has registered with the Federal Reserve Board (“FRB”) as a financial holding company under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). Pursuant to the Gramm-Leach-Bliley Act of 1999 (“GLBA”), a qualifying bank holding company may elect to become a financial holding company and thereby affiliate with securities firms and insurance companies and engage in other activities that are financial in nature and not otherwise permissible for a bank holding company, if: (i) the holding company is "well managed" and "well capitalized" and (ii) each of its subsidiary banks (a) is well capitalized under the Federal Deposit Insurance Corporation Act of 1991 prompt corrective action provisions, (b) is well managed, and (c) has at least a "satisfactory" rating under the Community Reinvestment Act (the “CRA”). CSB has been a financial holding company since 2005. No regulatory approval is required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the FRB. The financial holding company and its subsidiaries must continue to meet the above-described requirements in order to continue to engage in activities that are financial in nature without being subjected to regulatory action or restriction, which could include divestiture of the subsidiary or subsidiaries.
GLBA defines “financial in nature” to include securities underwriting, dealing, and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking; and activities that the FRB has determined to be closely related to banking. CSB is also subject to the disclosure and regulatory requirements of the Securities Act of 1933, as amended, the Exchange Act, and the regulations rules and regulations promulgated thereunder, as administered by the SEC.
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The Bank, as an Ohio state-chartered bank and member of the Federal Reserve System, is subject to regulation, supervision, and examination by the Ohio Division of Financial Institutions and the FRB. Because the FDIC insures its deposits, the Bank is also subject to certain FDIC regulations. The FDIC is an independent federal agency which insures the deposits, up to prescribed statutory limits, of federally insured banks and savings associations, and safeguards the safety and soundness of the financial institution industry. The Bank’s deposits are insured up to applicable limits by the DIF, and the Bank is subject to deposit insurance assessments to maintain the DIF. In addition, the Bank is subject to regulations promulgated by the Consumer Financial Protection Bureau (the “CFPB”), which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended (the “Dodd-Frank Act”).
The earnings, dividends, and other aspects of the operations and activities of CSB and the Bank are affected by state and federal laws and regulations, and by policies of various regulatory authorities. These policies include, for example, statutory maximum lending rates, requirements on maintenance of reserves against deposits, domestic monetary policies of the FRB, United States fiscal and economic policies, international currency regulations and monetary policies, certain restrictions on relationships with many phases of the securities business, and capital adequacy and liquidity restraints.
The following information describes selected federal and state statutory and regulatory provisions that have, or could have, a material impact on the Company’s business. This discussion is qualified in its entirety by reference to the full text of the particular statutory or regulatory provisions contained or referenced herein.
Regulation of Bank Holding Companies
As a financial holding company, CSB’s activities are subject to regulation by the FRB. CSB is subject to regular examinations by the FRB and is required to file reports and such additional information as the FRB may require. The FRB has extensive enforcement authority over bank holding companies, including the ability to assess civil money penalties, issue cease and desist orders, and require that a bank holding company divest subsidiaries (including subsidiary banks). The FRB may initiate enforcement actions for violations of laws and regulations, and for unsafe and unsound practices. Under FRB policies, a bank holding company is expected to act as a “source of strength” to its subsidiary banks and to commit resources to support those subsidiary banks. Under this policy, the FRB may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank.
The BHC Act requires the prior approval of the FRB in cases where a bank holding company proposes to acquire direct or indirect ownership or control of more than 5% of the voting shares of any bank that is not already majority-owned by it, acquire all or substantially all of the assets of another bank or another financial or bank holding company, or merge or consolidate with any other financial or bank holding company.
Economic Growth, Regulatory Relief and Consumer Protection Act
On May 25, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”) was signed into law. The Regulatory Relief Act repealed or modified certain provisions of the Dodd-Frank Act and eased regulations on all but the largest banks (those with consolidated assets in excess of $250 billion). Bank holding companies with consolidated assets of less than $100 billion, including CSB, are no longer subject to enhanced prudential standards. The Regulatory Relief Act also relieves bank holding companies and banks with consolidated assets of less than $100 billion, including CSB, from certain record-keeping, reporting and disclosure requirements.
Current Expected Credit Loss Model
In December 2019, the federal banking agencies issued a final rule to address regulatory treatment of credit loss allowances under the current expected credit loss ("CECL”) models. The rule revised the federal banking agencies’ regulatory capital rules to identify which credit loss allowances under the CECL model are eligible for inclusion in regulatory capital and to provide banking organizations the option to phase in over three years the day-one adverse effects on regulatory capital that may result from the adoption of the CECL model. Concurrent with the enactment of the Coronavirus Aid, Relief, and Economic Security Act of 2020, as amended, federal banking agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL. The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay. On August 26, 2020, the federal banking agencies issued a final rule that made certain technical changes to the interim final rule, including expanding the pool of eligible institutions. The Bank adopted the CECL model January 1, 2023, since it is a smaller reporting company.
Regulatory Capital
The FRB adopted risk-based capital guidelines for bank holding companies and state member banks, designed to absorb losses. The guidelines provide a systematic analytical framework, which makes regulatory capital requirements sensitive to differences in risk profiles among banking organizations, takes off-balance sheet exposures expressly into account in evaluating capital adequacy and incentivizes holding liquid, low-risk assets. Capital levels as measured by these standards are also used to categorize financial institutions for purposes of certain Prompt Corrective Action regulatory provisions.
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In July 2013, the United States banking regulators issued capital rules applicable to smaller banking organizations which also implement certain of the provisions of the Dodd-Frank Act (the “Basel III Capital Rules”). The Basel III Capital Rules include (i) a minimum common equity tier 1 capital ratio of 4.5%, (ii) a minimum tier 1 capital ratio of 6.0%, (iii) a minimum total capital ratio of 8.0%, and (iv) a minimum leverage ratio of 4.0%. Common equity for the common equity tier 1 capital ratio includes common stock (plus related surplus) and retained earnings, plus limited amounts of minority interests in the form of common stock, less the majority of certain regulatory deductions.
Tier 1 capital includes common equity as defined for the common equity tier 1 capital ratio, plus certain non-cumulative preferred stock and related surplus, cumulative preferred stock and related surplus, and trust preferred securities that have been grandfathered (but which are not permitted going forward), and limited amounts of minority interests in the form of additional tier 1 capital instruments, less certain deductions.
Tier 2 capital, which can be included in the total capital ratio, includes certain capital instruments (such as subordinated debt) and limited amounts of the allowance for loan and lease losses, subject to new eligibility criteria, less applicable deductions.
The deductions from common equity tier 1 capital include goodwill and other intangibles, certain deferred tax assets, mortgage-servicing assets above certain levels, gains on sale in connection with a securitization, investments in a banking organization’s own capital instruments, and investments in the capital of unconsolidated financial institutions (above certain levels).
Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The Basel III Capital Rules place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers in the event the Company does not hold a capital conservation buffer of greater than 2.5% composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5% at the beginning of the quarter. Pursuant to the FRB’s Small Bank Holding Company Policy statement (“SBHC Policy”), a bank holding company with assets of less than $3 billion and meeting certain other requirements is not required to comply with the consolidated capital requirements until such company exceeds $3 billion in assets or is otherwise determined by the FRB not to qualify as a small bank holding company. On December 31, 2023, CSB was deemed to be a small bank holding company under the SBHC Policy and was not required to comply with the FRB’s regulatory capital requirements. The Bank, however, must comply with the new capital requirements.
Prompt Corrective Action
The federal banking agencies have established a system of “prompt corrective action” to resolve certain of the problems of undercapitalized institutions. This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized”, and “critically undercapitalized.”
The federal banking agencies may (or in some cases must) take certain supervisory actions depending upon a bank’s capital level. For example, the banking agencies must appoint a receiver or conservator for a bank within 90 days after it becomes “critically undercapitalized” unless the bank’s primary regulator determines, with the concurrence of the FDIC, that other action would better achieve regulatory purposes. Banking operations otherwise may be significantly affected depending on a bank’s capital category. For example, a bank that is not “well capitalized” generally is prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, and the holding company of any undercapitalized depository institution must guarantee, in part, specific aspects of the bank’s capital plan for the plan to be acceptable.
In order to be “well-capitalized,” a bank must have a minimum common equity tier 1 capital ratio of 6.5%, a total risk-based capital ratio of at least 10.0%, a tier 1 risk-based capital ratio of at least 8.0%, and a leverage ratio of at least 5.0%, and the bank must not be subject to any written agreement, order, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.
As of December 31, 2025, the Bank met the ratio requirements in effect at that date to be deemed “well-capitalized.” See Note 12 – Regulatory Matters of the Notes to Consolidated Financial Statements, located in Item 8 Financial Statements and Supplementary Data of this 10-K.
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Deposit Insurance
Substantially all of the deposits of the Bank are insured up to applicable limits by the DIF, and the Bank is assessed quarterly deposit insurance premiums to maintain the DIF. Insurance premiums for each insured institution are determined based upon the institution’s capital level and supervisory rating provided to the FDIC by the institution’s primary federal regulator and other information deemed by the FDIC to be relevant to the risk posed to the DIF by the institution. The assessment rate is then applied to the amount of the institution’s assessment base to determine the institution’s insurance premium. The deposit insurance assessment base is calculated on average assets less average tangible equity.
The FDIC assesses a quarterly deposit insurance premium on each insured institution based on risk characteristics of the insured institution and may also impose special assessments in emergency situations. The premiums fund the DIF. Pursuant to the Dodd-Frank Act, the FDIC has established reserve ratios. On June 30, 2019, the reserve ratios were met and the FDIC applied credits for banks with assets of less than $10 billion ("small bank credits") beginning September 30, 2019 through the June 2020 premium payment. The FDIC rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk. As of June 30, 2020, the FDIC’s designated reserve ratio (“DRR”) fell below the statutory minimum DRR of 1.35%, to 1.30%. As a result, the FDIC adopted a restoration plan requiring the restoration of the DRR to 1.35% within eight years (September 30, 2028).
As insurer, the FDIC is authorized to conduct examinations of, and to require reporting by, federally insured institutions. It also may prohibit any federally insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious threat to the DIF. The FDIC also has the authority to take enforcement actions against insured institutions. Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged or is engaging in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC or written agreement entered into with the FDIC.
The management of the Bank does not know of any practice, condition, or violation that might lead to termination of deposit insurance.
Audits
The FDIC requires insured depository institutions with total assets in excess of $1 billion to have an annual independent audit made of the institution’s financial statements by an independent public accountant to verify that the financial statements of the institution are presented fairly and in accordance with generally accepted accounting principles and comply with such other disclosure requirements as prescribed by the FDIC. Effective January 1, 2026, the FDIC amended its rules and regulations to, in part, increase the threshold requirement for insured depository institutions to obtain an independent auditor’s report on the institution’s internal control over financial reporting from $1 billion in total assets to $5 billion in total assets.
Limits on Dividends and Other Payments
There are various legal limitations on the extent to which subsidiary banks may finance or otherwise supply funds to their parent holding company. Under applicable federal and state laws, a subsidiary bank may not, subject to certain limited exceptions, make loans or extensions of credit to, or investments in the securities of, its parent holding company. Subsidiary banks are also subject to collateral security requirements for any loan or extension of credit permitted by such exceptions.
Payments of dividends by the Bank are limited by applicable state and federal laws and regulations. The ability of CSB to obtain funds for the payment of dividends and for other cash requirements is largely dependent on the amount of dividends that may be declared by the Bank. However, the FRB expects CSB to serve as a source of strength for the Bank and may require CSB to retain capital for further investment in the Bank, rather than pay dividends to CSB shareholders. Payment of dividends by the Bank may be restricted at any time at the discretion of its applicable regulatory authorities if they deem such dividends to constitute an unsafe or unsound banking practice. These provisions could have the effect of limiting CSB’s ability to pay dividends on its common shares.
FRB policy requires CSB to provide notice to the FRB in advance of the payment of a dividend to CSB’s shareholders under certain circumstances and states that insured banks and bank holding companies should generally only pay dividends out of current operating earnings. Additionally, the Ohio Revised Code restricts the amount a Bank can dividend if the total amount of all dividends, including the proposed dividend, declared by the Bank in any calendar year exceeds the total of its retained net income of that year to date, combined with its retained net income of the two preceding years, unless the dividend is approved by the Ohio Division of Financial Institutions.
7
Consumer Protection Laws and Regulations
Banks are subject to regular examination to ensure compliance with federal statutes and regulations applicable to their business, including consumer protection statutes and implementing regulations. The Dodd-Frank Act established the CFPB, which has extensive regulatory and enforcement powers over consumer financial products and services. The CFPB has adopted numerous rules with respect to consumer protection laws, amending some existing regulations and adopting new ones, and has commenced enforcement actions against various parties. The following are just some of the consumer protection laws applicable to the Bank:
The banking regulators also use their authority under the Federal Trade Commission Act to take supervisory or enforcement action with respect to unfair or deceptive acts or practices by banks that may not necessarily fall within the scope of specific banking or consumer finance law.
Community Reinvestment Act
CRA requires depository institutions to assist in meeting the credit needs of their market areas, including low- and moderate-income areas, consistent with safe and sound banking practice. Under this Act, each institution is required to adopt a statement for each of its market areas describing the depository institution’s efforts to assist in its community’s credit needs. Depository institutions are periodically examined for compliance and assigned one of four ratings: outstanding, satisfactory, needs improvement, or substantial noncompliance. The rating assigned to a financial institution is considered in connection with various applications submitted by a financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or to open a new branch office. In addition, all subsidiary banks of a financial holding company must maintain a satisfactory or outstanding rating in order for the financial holding company to avoid limitations on its activities. The Bank received a rating of “outstanding" in its most recent CRA examination.
Customer Privacy
Under the GLBA, federal banking agencies have adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require distribution of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to nonaffiliated third parties.
USA Patriot Act
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended (the “Patriot Act”), and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity.
The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the Bank Secrecy Act of 1970 (the “BSA”), was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws. Among other things, it codifies a risk-based approach to anti-money laundering compliance for financial institutions; requires the development of standards for evaluating technology and internal processes for BSA compliance; expands enforcement-related and investigation-related authority, including increasing available sanctions for certain BSA violations and instituting BSA whistleblower initiatives and protections.
The Bank has established policies and procedures to be compliant with the requirements of the Patriot Act and the AMLA.
8
Office of Foreign Assets Control Regulation
The United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign countries and regimes, under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries. CSB is responsible for, among other things, blocking accounts of, and transactions with, such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence. Failure to comply with these sanctions could have serious financial, legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required. Regulatory authorities have imposed cease and desist orders and civil money penalties against institutions found to be violating these obligations.
Cybersecurity
In March 2015, federal regulators issued two related statements regarding cybersecurity. One statement indicates that financial institutions should design multiple layers of security controls to establish several lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing Internet-based services of the financial institution. The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption, and maintenance of the financial institution’s operations after a cyber-attack involving destructive malware. A financial institution is also expected to develop appropriate processes to enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the financial institution or its critical service providers fall victim to this type of cyber-attack. If CSB fails to observe the regulatory guidance, it could be subject to various regulatory sanctions, including financial penalties.
In February 2018, the SEC published interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents. These SEC guidelines, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.
In November 2021, federal banking agencies issued a final rule that became effective in May 2022 requiring banking organizations that experience a cybersecurity incident to notify certain entities. A cybersecurity incident occurs when actual or potential harm to the confidentiality, integrity, or availability of information or an information system occurs, or there is a violation or imminent threat of a violation to banking security policies and procedures. The affected bank must notify its respective federal regulator of the cybersecurity incident as soon as possible and no later than 36 hours after the bank determines a cybersecurity incident that rises to the level of a notification incident has occurred. These notifications are intended to promote early awareness of threats to banking organizations and will help banks react to those threats before they manifest into larger incidents. This rule also requires bank service providers to notify their bank organization customers of a cybersecurity incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours.
Furthermore, once final rules are adopted, the Cyber Incident Reporting for Critical Infrastructure Act, enacted in March 2022, will require certain covered entities to report a covered cyber incident to the U.S. Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (“CISA”) within 72 hours after it reasonably believes an incident has occurred. Separate reporting to CISA will also be required within 24 hours, if a ransom payment is made as a result of a ransomware attack.
On July 26, 2023, the SEC adopted final rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in an Annual Report on Form 10-K. Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination. See Item 1C “Cybersecurity” in Part I of this Form 10-K. These SEC rules, and any other regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking law and regulations.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and providing detailed requirements with respect to these programs, including data encryption requirements. Many states have also recently implemented or modified their data breach notification and data privacy requirements. CSB expects this trend of state-level activity in those areas to continue and is continually monitoring developments in the states in which our customers are located.
Effect of Environmental Regulation
Compliance with federal, state, and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material effect upon the capital expenditures, earnings, or competitive position of CSB or its subsidiaries. CSB believes the nature of the operations of its subsidiaries has little, if any, environmental impact. CSB, therefore, anticipates no material capital expenditures for environmental control facilities for its current fiscal year or for the foreseeable future.
9
CSB believes its primary exposure to environmental risk is through the lending activities of the Bank. In cases where management believes environmental risk potentially exists, the Bank mitigates environmental risk exposure by requiring environmental site assessments at the time of loan origination to confirm collateral quality as to commercial real estate parcels posing higher than normal potential for environmental impact, as determined by reference to present and past uses of the subject property and adjacent sites.
Executive and Incentive Compensation
Following the adoption of additional listing requirements in 2023 to comply with the Dodd-Frank Act and rules adopted by the SEC in October 2022, public companies listed on the NYSE or Nasdaq are now required to adopt and implement “clawback” procedures policies for incentive compensation payments and to disclose the details of the procedures, which allow recovery of incentive compensation that was paid on the basis of erroneous financial information necessitating an accounting restatement due to material noncompliance with financial reporting requirements. This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement a three-year look-back window of the restatement and would cover all executives (including former executives) who received incentive awards. CSB adopted a clawback policy effective December 1, 2023, though it is not required to do so.
Future Legislation
Various and significant legislation affecting financial institutions and the financial industry is from time to time adopted by the U.S. Congress and state legislatures, and regulatory agencies frequently adopt or amend regulations. Such legislation and regulation may continue to change banking laws and regulations and the operating environment of CSB and its subsidiaries in substantial and unpredictable ways and could significantly increase or decrease costs of doing business, limit or expand permissible activities, or affect the competitive balance among financial institutions. The nature and extent of future legislative and regulatory changes affecting financial institutions remains very unpredictable.
Statistical Disclosures
The following schedules present, for the periods indicated, certain financial and statistical information of the Company as required under the SEC’s “Subpart 1400 of Regulation S-K”, as amended on September 11, 2020, or a specific reference as to the location of required disclosures in Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) or Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Distribution of Assets, Liabilities, and Stockholders’ Equity; Interest Rates and Interest Differential
The information set forth under the heading, “Average Balance Sheets and Net Interest Margin Analysis” located in the MD&A is incorporated by reference herein.
The information set forth under the heading, “Rate/Volume Analysis of Changes in Income and Expense” located in the MD&A is incorporated by reference herein.
10
Investment Portfolio
The following is a schedule of maturities for each category of debt securities and the related weighted average yield of such securities as of December 31, 2025:
|
|
One Year or Less |
|
|
After One Year |
|
|
Maturing |
|
|
After Ten Years |
|
|
Total |
|
|
|||||||||||||||||||||||||
(Dollars in thousands) |
|
Amortized |
|
|
Yield |
|
|
Amortized |
|
|
Yield |
|
|
Amortized |
|
|
Yield |
|
|
Amortized |
|
|
Yield |
|
|
Amortized |
|
|
Yield |
|
|
||||||||||
Available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasuries |
|
$ |
3,003 |
|
|
|
3.98 |
|
% |
$ |
2,007 |
|
|
|
3.73 |
|
% |
$ |
— |
|
|
|
— |
|
% |
$ |
— |
|
|
|
— |
|
% |
$ |
5,010 |
|
|
|
3.88 |
|
% |
U.S. Government agencies |
|
|
— |
|
|
|
— |
|
|
|
3,000 |
|
|
|
0.74 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,000 |
|
|
|
0.74 |
|
|
Mortgage-backed securities of |
|
|
70 |
|
|
|
2.39 |
|
|
|
1,544 |
|
|
|
0.78 |
|
|
|
9,831 |
|
|
|
1.36 |
|
|
|
91,753 |
|
|
|
3.76 |
|
|
|
103,198 |
|
|
|
3.49 |
|
|
Asset-backed securities of |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
355 |
|
|
|
5.19 |
|
|
|
— |
|
|
|
— |
|
|
|
355 |
|
|
|
5.19 |
|
|
State and political subdivisions |
|
|
1,500 |
|
|
|
4.29 |
|
|
|
9,709 |
|
|
|
2.08 |
|
|
|
451 |
|
|
|
1.81 |
|
|
|
— |
|
|
|
— |
|
|
|
11,660 |
|
|
|
2.35 |
|
|
Corporate bonds |
|
|
1,501 |
|
|
|
4.85 |
|
|
|
8,953 |
|
|
|
2.69 |
|
|
|
3,700 |
|
|
|
3.65 |
|
|
|
— |
|
|
|
— |
|
|
|
14,154 |
|
|
|
3.17 |
|
|
Total |
|
$ |
6,074 |
|
|
|
4.25 |
|
% |
$ |
25,213 |
|
|
|
2.19 |
|
% |
$ |
14,337 |
|
|
|
2.06 |
|
% |
$ |
91,753 |
|
|
|
3.76 |
|
% |
$ |
137,377 |
|
|
|
3.32 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasuries |
|
$ |
2,494 |
|
|
|
1.19 |
|
% |
$ |
2,903 |
|
|
|
1.15 |
|
% |
$ |
— |
|
|
|
— |
|
% |
$ |
— |
|
|
|
— |
|
% |
$ |
5,397 |
|
|
|
1.17 |
|
% |
Mortgage-backed securities of |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
72 |
|
|
|
1.86 |
|
|
|
175,189 |
|
|
|
1.99 |
|
|
|
175,261 |
|
|
|
1.99 |
|
|
State and political subdivisions |
|
|
— |
|
|
|
— |
|
|
|
1,021 |
|
|
|
1.39 |
|
|
|
1,466 |
|
|
|
2.25 |
|
|
|
— |
|
|
|
— |
|
|
|
2,487 |
|
|
|
1.90 |
|
|
Total |
|
$ |
2,494 |
|
|
|
1.19 |
|
% |
$ |
3,924 |
|
|
|
1.21 |
|
% |
$ |
1,538 |
|
|
|
2.24 |
|
% |
$ |
175,189 |
|
|
|
1.99 |
|
% |
$ |
183,145 |
|
|
|
1.97 |
|
% |
The weighted average yields are calculated using amortized cost of investments and are based on coupon rates for securities purchased at par value, and on effective interest rates considering amortization or accretion if securities were purchased at a premium or discount. The weighted average yield on tax-exempt obligations is presented on a tax-equivalent basis using the Company’s marginal federal income tax rate of 21%.
Loan Portfolio
The following is a schedule of maturities of loans based on contract terms and assuming no amortization or prepayments, as of December 31, 2025:
|
|
Maturing |
|
|||||||||||||||||
(Dollars in thousands) |
|
One Year |
|
|
One |
|
|
Five Through Fifteen Years |
|
|
After Fifteen |
|
|
Total |
|
|||||
Commercial and industrial |
|
$ |
67,890 |
|
|
$ |
49,278 |
|
|
$ |
30,984 |
|
|
$ |
4,505 |
|
|
$ |
152,657 |
|
Commercial real estate |
|
|
8,105 |
|
|
|
12,382 |
|
|
|
50,544 |
|
|
|
184,880 |
|
|
|
255,911 |
|
Commercial lessors of buildings |
|
|
584 |
|
|
|
5,449 |
|
|
|
25,363 |
|
|
|
82,614 |
|
|
|
114,010 |
|
Construction |
|
|
2,313 |
|
|
|
5,732 |
|
|
|
10,216 |
|
|
|
29,721 |
|
|
|
47,982 |
|
Consumer mortgage |
|
|
30 |
|
|
|
3,225 |
|
|
|
27,483 |
|
|
|
162,560 |
|
|
|
193,298 |
|
Home equity line of credit |
|
|
2,559 |
|
|
|
10,416 |
|
|
|
39,641 |
|
|
|
— |
|
|
|
52,616 |
|
Consumer installment |
|
|
227 |
|
|
|
6,427 |
|
|
|
2,313 |
|
|
|
52 |
|
|
|
9,019 |
|
Consumer indirect |
|
|
1 |
|
|
|
357 |
|
|
|
4,008 |
|
|
|
— |
|
|
|
4,366 |
|
Total |
|
$ |
81,709 |
|
|
$ |
93,266 |
|
|
$ |
190,552 |
|
|
$ |
464,332 |
|
|
$ |
829,859 |
|
11
The following is a schedule of fixed rate and variable rate loans due after one year from December 31, 2025.
(Dollars in thousands) |
|
Fixed Rate |
|
|
Variable Rate |
|
||
Commercial and industrial |
|
$ |
43,965 |
|
|
$ |
40,802 |
|
Commercial real estate |
|
|
1,163 |
|
|
|
246,643 |
|
Commercial lessors of buildings |
|
|
722 |
|
|
|
112,704 |
|
Construction |
|
|
1,691 |
|
|
|
43,978 |
|
Consumer mortgage |
|
|
33,085 |
|
|
|
160,183 |
|
Home equity line of credit |
|
|
294 |
|
|
|
49,763 |
|
Consumer installment |
|
|
7,778 |
|
|
|
1,014 |
|
Consumer indirect |
|
|
4,365 |
|
|
|
— |
|
Total |
|
$ |
93,063 |
|
|
$ |
655,087 |
|
Summary of Credit Loss Experience
The following schedule presents an analysis of net charge-offs (recoveries) to average loans, and related ratios for the years ended:
|
December 31, 2025 |
|
December 31, 2024 |
||||||||||||||||||||||
(Dollars in thousands) |
Net (Charge-offs) Recoveries |
|
|
Average Loans |
|
|
Net (Charge-offs) Recoveries as a % of Average Loans |
|
|
|
Net (Charge-offs) Recoveries |
|
|
Average Loans |
|
|
Net (Charge-offs) Recoveries as a % of Average Loans |
|
|
||||||
Commercial and industrial |
$ |
(57 |
) |
|
$ |
150,234 |
|
|
|
-0.04 |
% |
|
|
$ |
(5,597 |
) |
|
$ |
144,306 |
|
|
|
-3.88 |
% |
|
Commercial real estate |
|
(302 |
) |
|
|
225,043 |
|
|
|
-0.13 |
% |
|
|
|
(597 |
) |
|
|
192,555 |
|
|
|
-0.31 |
% |
|
Commercial lessors of buildings |
|
— |
|
|
|
108,004 |
|
|
|
0.00 |
% |
|
|
|
— |
|
|
|
94,553 |
|
|
|
0.00 |
% |
|
Construction |
|
— |
|
|
|
57,246 |
|
|
|
0.00 |
% |
|
|
|
— |
|
|
|
55,766 |
|
|
|
0.00 |
% |
|
Consumer mortgage |
|
2 |
|
|
|
185,934 |
|
|
|
0.00 |
% |
|
|
|
10 |
|
|
|
171,475 |
|
|
|
0.01 |
% |
|
Home equity line of credit |
|
— |
|
|
|
48,547 |
|
|
|
0.00 |
% |
|
|
|
— |
|
|
|
44,373 |
|
|
|
0.00 |
% |
|
Consumer installment |
|
(59 |
) |
|
|
9,518 |
|
|
|
-0.62 |
% |
|
|
|
(48 |
) |
|
|
10,378 |
|
|
|
-0.46 |
% |
|
Consumer indirect |
|
(12 |
) |
|
|
4,856 |
|
|
|
-0.25 |
% |
|
|
|
(24 |
) |
|
|
5,622 |
|
|
|
-0.43 |
% |
|
Total |
$ |
(428 |
) |
|
$ |
789,383 |
|
|
|
-0.05 |
% |
|
|
$ |
(6,256 |
) |
|
$ |
719,028 |
|
|
|
-0.87 |
% |
|
The following schedule is a breakdown of the allowance for credit losses allocated by type of loan and related ratios. While management’s periodic analysis of the adequacy of the allowance for credit losses may allocate portions of the allowance for specific problem-loan situations, the entire allowance is available for any loan charge-offs that occur.
|
Allocation of the Allowance for Credit Losses |
||||||||||||||||
|
(Dollars in thousands) |
||||||||||||||||
|
|
Allowance |
|
|
Percentage |
|
|
Allowance |
|
|
Percentage |
|
|
||||
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
|
||||||||||
Commercial and industrial |
|
$ |
6,886 |
|
|
|
18 |
|
% |
$ |
2,919 |
|
|
|
19 |
|
% |
Commercial real estate |
|
|
2,394 |
|
|
|
31 |
|
|
|
1,681 |
|
|
|
26 |
|
|
Commercial lessors of buildings |
|
|
1,314 |
|
|
|
14 |
|
|
|
1,141 |
|
|
|
14 |
|
|
Construction |
|
|
524 |
|
|
|
6 |
|
|
|
502 |
|
|
|
9 |
|
|
Consumer mortgage |
|
|
838 |
|
|
|
23 |
|
|
|
812 |
|
|
|
24 |
|
|
Home equity line of credit |
|
|
227 |
|
|
|
6 |
|
|
|
205 |
|
|
|
6 |
|
|
Consumer installment |
|
|
84 |
|
|
|
1 |
|
|
|
92 |
|
|
|
1 |
|
|
Consumer indirect |
|
|
203 |
|
|
|
1 |
|
|
|
243 |
|
|
|
1 |
|
|
Total |
|
$ |
12,470 |
|
|
|
100 |
|
% |
$ |
7,595 |
|
|
|
100 |
|
% |
12
Deposits
The following is a schedule of average deposit amounts and average rates paid on each category for the periods indicated:
|
|
Average Amounts Outstanding |
|
|
Average Rate Paid |
||||||||||||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
||||
Noninterest-bearing demand |
|
$ |
281,716 |
|
|
$ |
281,675 |
|
|
N/A |
|
|
N/A |
|
|
||
Interest-bearing demand |
|
|
233,401 |
|
|
|
227,842 |
|
|
|
0.73 |
|
% |
|
0.90 |
|
% |
Savings deposits |
|
|
313,766 |
|
|
|
302,621 |
|
|
|
0.94 |
|
|
|
1.07 |
|
|
Time deposits |
|
|
257,827 |
|
|
|
223,421 |
|
|
|
3.78 |
|
|
|
4.08 |
|
|
Total deposits |
|
$ |
1,086,710 |
|
|
$ |
1,035,559 |
|
|
|
|
|
|
|
|
||
The Bank does not have any material deposits by foreign depositors. The total uninsured portion of all deposit accounts greater than $250 thousand was $281 million as of December 31, 2025, and $244 million as of December 31, 2024. The following is a schedule of maturities of time certificates of deposit in amounts greater than $250 thousand as of December 31, 2025:
(Dollars in thousands) |
|
Time Deposits Greater than $250 Thousand |
|
|
Three months or less |
|
$ |
41,252 |
|
Over three through six months |
|
|
14,209 |
|
Over six through twelve months |
|
|
22,759 |
|
Over twelve months |
|
|
3,081 |
|
Total |
|
$ |
81,301 |
|
ITEM 1A. RISK FACTORS.
Not Applicable.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 1C. CYBERSECURITY
In the ordinary course of business, CSB relies on electronic communications and information systems to conduct its operations and to store sensitive data. CSB employs an in-depth, layered, defensive approach that leverages people, processes and technology to manage and maintain cybersecurity controls. CSB employs a variety of preventative and detective tools to monitor, block, and provide alerts regarding suspicious activity, as well as to report on any suspected advanced persistent threats. CSB places a high priority and focus on securing the confidential information it receives and stores about its customers and associates and providing highly available systems.
Governance
Our Information Security (“IS”) Program consists of policies, procedures and guidelines to ensure the security, availability, and confidentiality of systems and customer information.
13
The IS team is staffed primarily with internal associates, and we utilize third party service providers for extended coverage.
While all vendors are subject to our vendor management process, those with access to our data and data centers are subject to more rigorous initial and ongoing due diligence.
Risk Management and Strategy
Our systems are monitored 24/7 for cybersecurity threats, and we utilize a variety of tools to reduce the risk of data breaches and cybersecurity events. We maintain an Incident Response Plan that outlines the steps to be taken in the event of an incident, which could include a potential or actual data breach. The plan identifies a designated team, including associates and third-party experts, responsible for incident response and summarizes the steps, including escalation protocol, for determining whether an event has occurred and the nature and scope of the event (if applicable). The plan also summarizes protocol for notifying impacted persons, which may include customers as well as other applicable agencies or persons, including law enforcement and regulatory authorities.
The processes and controls related to data security are regularly tested by the IS team and Internal Audit. Additional internal security assessments may be performed at the request of the ISO, CIO, the Internal Auditor, Management or our Board. Audit and assessment results are presented to the Audit Committee of the Board, and to the IT Steering Committee.
At least annually, the IS Program, including its effectiveness, is reviewed by the Board. Annually, all associates participate in mandatory training related to the IS Program, including information security and its importance with respect to customer and associate privacy. All associates are required to participate in monthly bank-wide phishing tests. Results from these tests are delivered to our Audit Committee of the Board of Directors.
14
ITEM 2. PROPERTIES.
The Bank operates sixteen banking centers, and a loan production office in Medina, Ohio, as noted below:
|
|
|
|
|
|
|
|
|
|
|
|||
Location |
|
Address |
|
Owned |
|
Leased |
Walnut Creek |
|
4980 Old Pump Street, Walnut Creek, Ohio 44687 |
|
X |
|
|
Winesburg |
|
2225 U.S. 62, Winesburg, Ohio 44690 |
|
X |
|
|
Sugarcreek |
|
127 South Broadway, Sugarcreek, Ohio 44681 |
|
X |
|
|
Charm |
|
4440 C.R. 70, Charm, Ohio 44617 |
|
X |
|
|
Clinton Commons |
|
2102 Glen Drive, Millersburg, Ohio 44654 |
|
|
|
X |
Berlin |
|
4587 S.R. 39 Suite B, Berlin, Ohio 44610 |
|
|
|
X |
South Clay |
|
91 South Clay Street, Millersburg, Ohio 44654 |
|
X |
|
|
Shreve |
|
333 West South Street, Shreve, Ohio 44676 |
|
X |
|
|
Orrville |
|
119 West High Street, Orrville, Ohio 44667 |
|
X |
|
|
Gnadenhutten |
|
100 South Walnut Street, Gnadenhutten, Ohio 44629 |
|
X |
|
|
New Philadelphia |
|
635 West High Avenue, New Philadelphia, Ohio 44663 |
|
X |
|
|
North Canton |
|
600 South Main Street, North Canton, Ohio 44720 |
|
X |
|
|
Bolivar |
|
11113 Fairoaks Road NE, Bolivar, Ohio 44612 |
|
|
|
X |
Wooster |
|
350 East Liberty Street, Wooster, Ohio 44691 |
|
X |
|
|
Wooster |
|
3562 Commerce Parkway, Wooster, Ohio 44691 |
|
X |
|
|
Medina |
|
23 Public Square, Suite 200, Medina, Ohio 44256 |
|
|
|
X |
Operations Center |
|
91 North Clay Street, Millersburg, Ohio 44654 |
|
X |
|
|
The Bank considers its physical properties to be in good operating condition and suitable for the purposes for which they are being used. All properties owned by the Bank are unencumbered by any mortgage or security interest and in management’s opinion, are adequately insured.
ITEM 3. LEGAL PROCEEDINGS.
In the normal course of business, CSB is subject to pending and threatened legal actions, including claims for which material relief or damages are sought. Although CSB is not able to predict the outcome of such actions, after reviewing pending and threatened actions, management believes that the outcome of any or all such actions will not have a material adverse effect on the results of operations, the financial position, or shareholders’ equity of CSB. Further, there are no material legal proceedings in which any director, executive officer, principal shareholder, or affiliate of CSB is a party or has a material interest that is adverse to CSB or the Bank.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
15
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information contained in the section captioned “Common Stock and Shareholder Information” included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.
PERFORMANCE GRAPH
The following graph compares the yearly stock change, and the cumulative total shareholder return on CSB’s common shares during the five-year period ended December 31, 2025, with the cumulative total return on the Standard and Poor’s 500 Stock Index and the NASDAQ Community Bank Stock Index. The comparison assumes $100 was invested on December 31, 2020, in CSB’s common shares and in each of the indicated indices and assumes reinvestment of dividends.
|
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
||||||
CSBB |
|
$ |
100 |
|
|
$ |
111 |
|
|
$ |
117 |
|
|
$ |
119 |
|
|
$ |
126 |
|
|
$ |
185 |
|
S & P 500 Total Return |
|
|
100 |
|
|
|
129 |
|
|
|
105 |
|
|
|
133 |
|
|
|
166 |
|
|
|
196 |
|
NASDAQ Community Bank Total Return |
|
|
100 |
|
|
|
135 |
|
|
|
126 |
|
|
|
123 |
|
|
|
142 |
|
|
|
150 |
|
16
ISSUER PURCHASES OF EQUITY SECURITIES
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid Per Share |
|
|
Total number of Shares Purchased as Part of Publicly Announced Plans |
|
|
Maximum Number of Shares that May Yet be Purchased Under the Plan |
|
||||
October 1, 2025 to October 31, 2025 |
|
|
3,272 |
|
|
$ |
50.18 |
|
|
|
3,272 |
|
|
|
23,994 |
|
November 1, 2025 to November 30, 2025 |
|
|
1,466 |
|
|
|
49.28 |
|
|
|
1,466 |
|
|
|
22,528 |
|
December 1, 2025 to December 31, 2025 |
|
|
745 |
|
|
|
49.31 |
|
|
|
745 |
|
|
|
21,783 |
|
On March 2, 2021, CSB filed a Current Report on Form 8-K with the SEC announcing that its Board of Directors approved a Stock Repurchase Program authorizing the repurchase of up to 5% of CSB’s common shares. Repurchases may be made periodically as market and business conditions warrant, in the open market, through block purchases and in negotiated private transactions. The Stock Repurchase Program has no scheduled expiration date. CSB repurchased 23,074 common shares during 2025 and 19,849 common shares during 2024.
ITEM 6. [RESERVED]
17
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
2025 FINANCIAL REVIEW
INTRODUCTION
CSB Bancorp, Inc. (the “Company” or “CSB”) was incorporated under the laws of the State of Ohio in 1991 and is a registered financial holding company. The Company’s wholly owned subsidiaries are The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC. The Bank is chartered under the laws of the State of Ohio and was organized in 1879. The Bank is a member of the Federal Reserve System, with deposits insured by the Federal Deposit Insurance Corporation, and its primary regulators are the Ohio Division of Financial Institutions and the Federal Reserve Board.
The Company, through the Bank, provides retail and commercial banking services to its customers including checking and savings accounts, time deposits, cash management, safe deposit facilities, commercial loans, real estate mortgage loans, consumer loans, IRAs, night depository facilities, and trust and brokerage services. Its customers are located primarily in Holmes, Stark, Tuscarawas, Wayne, and portions of surrounding counties in Ohio.
Economic activity in the Company’s market area increased slightly in the fourth quarter of 2025. Consumer demand for goods and services declined moderately and is expected to flatten out in the near future. Reported unemployment levels in December 2025 ranged from 2.8% to 4.4% in the four primary counties served by the Company. These levels decreased from the December 2024 range of 2.9% to 4.6%. Labor demand remained fairly flat while competition for workers with specialized skills has put upward pressure on labor costs. The local housing market has increasing inventory levels. Residential construction activity has increased with stable interest rates increasing demand. Nonresidential construction activity has also increased modestly since the prior year. All deposit types increased and customers continue to move funds into higher yielding interest-bearing accounts.
FORWARD-LOOKING STATEMENTS
Certain statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations are not related to historical results but are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties. Any forward-looking statements made by the Company herein and in future reports and statements are not guarantees of future performance. Actual results may differ materially from those in forward-looking statements because of various risk factors as discussed in this annual report. The Company does not undertake, and specifically disclaims, any obligation to publicly release the result of any revisions to any forward-looking statements to reflect the occurrence of unanticipated events or circumstances after the date of such statements.
NON-U.S. GAAP FINANCIAL MEASURES
Management’s Discussion and Analysis of Financial Condition and Results of Operations contains non-U.S. generally accepted accounting principles ("GAAP") financial measures where management believes it to be helpful in understanding CSB’s results of operations or financial position. Where non-U.S. GAAP financial measures are used, the comparable U.S. GAAP financial measure, as well as the reconciliation to the comparable U.S. GAAP financial measure, can be found herein.
18
FINANCIAL DATA
The following table sets forth certain selected consolidated financial information:
(Dollars in thousands, except per share data) |
|
|
2025 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|||||
Statements of income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total interest income |
|
$ |
|
57,037 |
|
|
$ |
|
51,601 |
|
|
$ |
|
46,016 |
|
|
$ |
|
34,819 |
|
|
$ |
|
29,529 |
|
|
Total interest expense |
|
|
|
14,653 |
|
|
|
|
14,748 |
|
|
|
|
9,875 |
|
|
|
|
2,496 |
|
|
|
|
2,012 |
|
|
Net interest income |
|
|
|
42,384 |
|
|
|
|
36,853 |
|
|
|
|
36,141 |
|
|
|
|
32,323 |
|
|
|
|
27,517 |
|
|
Provision (recovery) for credit loss expense |
|
|
|
5,375 |
|
|
|
|
7,031 |
|
|
|
|
442 |
|
|
|
|
(895 |
) |
|
|
|
(655 |
) |
|
Net interest income after provision (recovery) for credit loss expense |
|
|
|
37,009 |
|
|
|
|
29,822 |
|
|
|
|
35,699 |
|
|
|
|
33,218 |
|
|
|
|
28,172 |
|
|
Noninterest income |
|
|
|
7,295 |
|
|
|
|
7,102 |
|
|
|
|
6,744 |
|
|
|
|
6,711 |
|
|
|
|
7,325 |
|
|
Noninterest expense |
|
|
|
27,741 |
|
|
|
|
24,589 |
|
|
|
|
24,060 |
|
|
|
|
23,393 |
|
|
|
|
22,093 |
|
|
Income before income taxes |
|
|
|
16,563 |
|
|
|
|
12,335 |
|
|
|
|
18,383 |
|
|
|
|
16,536 |
|
|
|
|
13,404 |
|
|
Income tax provision |
|
|
|
3,200 |
|
|
|
|
2,323 |
|
|
|
|
3,627 |
|
|
|
|
3,223 |
|
|
|
|
2,567 |
|
|
Net income |
|
$ |
|
13,363 |
|
|
$ |
|
10,012 |
|
|
$ |
|
14,756 |
|
|
$ |
|
13,313 |
|
|
$ |
|
10,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Per share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic earnings per share |
|
$ |
|
5.07 |
|
|
$ |
|
3.76 |
|
|
$ |
|
5.51 |
|
|
$ |
|
4.91 |
|
|
$ |
|
3.97 |
|
|
Diluted earnings per share |
|
|
|
5.07 |
|
|
|
|
3.76 |
|
|
|
|
5.51 |
|
|
|
|
4.91 |
|
|
|
|
3.97 |
|
|
Dividends |
|
|
|
1.64 |
|
|
|
|
1.58 |
|
|
|
|
1.50 |
|
|
|
|
1.30 |
|
|
|
|
1.22 |
|
|
Book value |
|
|
|
48.07 |
|
|
|
|
43.33 |
|
|
|
|
40.43 |
|
|
|
|
35.43 |
|
|
|
|
35.80 |
|
|
Average basic common shares outstanding |
|
|
|
2,637,216 |
|
|
|
|
2,661,308 |
|
|
|
|
2,679,902 |
|
|
|
|
2,714,045 |
|
|
|
|
2,733,126 |
|
|
Average diluted common shares outstanding |
|
|
|
2,637,216 |
|
|
|
|
2,661,308 |
|
|
|
|
2,679,902 |
|
|
|
|
2,714,045 |
|
|
|
|
2,733,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year-end balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans, net |
|
$ |
|
817,308 |
|
|
$ |
|
730,046 |
|
|
$ |
|
694,797 |
|
|
$ |
|
620,333 |
|
|
$ |
|
541,536 |
|
|
Securities |
|
|
|
317,286 |
|
|
|
|
331,529 |
|
|
|
|
368,153 |
|
|
|
|
401,144 |
|
|
|
|
311,245 |
|
|
Total assets |
|
|
|
1,292,736 |
|
|
|
|
1,191,500 |
|
|
|
|
1,178,689 |
|
|
|
|
1,159,108 |
|
|
|
|
1,144,239 |
|
|
Deposits |
|
|
|
1,127,915 |
|
|
|
|
1,044,887 |
|
|
|
|
1,027,427 |
|
|
|
|
1,023,417 |
|
|
|
|
1,002,747 |
|
|
Borrowings |
|
|
|
32,434 |
|
|
|
|
26,949 |
|
|
|
|
37,597 |
|
|
|
|
35,011 |
|
|
|
|
39,937 |
|
|
Shareholders’ equity |
|
|
|
126,280 |
|
|
|
|
114,835 |
|
|
|
|
107,939 |
|
|
|
|
95,920 |
|
|
|
|
97,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average balances: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans, net |
|
$ |
|
780,998 |
|
|
$ |
|
710,963 |
|
|
$ |
|
660,266 |
|
|
$ |
|
580,454 |
|
|
$ |
|
554,547 |
|
|
Securities |
|
|
|
313,998 |
|
|
|
|
351,731 |
|
|
|
|
385,666 |
|
|
|
|
388,827 |
|
|
|
|
231,285 |
|
|
Total assets |
|
|
|
1,239,521 |
|
|
|
|
1,181,417 |
|
|
|
|
1,158,286 |
|
|
|
|
1,151,925 |
|
|
|
|
1,111,808 |
|
|
Deposits |
|
|
|
1,086,710 |
|
|
|
|
1,035,559 |
|
|
|
|
1,017,983 |
|
|
|
|
1,012,629 |
|
|
|
|
969,009 |
|
|
Borrowings |
|
|
|
25,393 |
|
|
|
|
28,709 |
|
|
|
|
34,525 |
|
|
|
|
40,218 |
|
|
|
|
42,600 |
|
|
Shareholders’ equity |
|
|
|
122,149 |
|
|
|
|
111,722 |
|
|
|
|
100,452 |
|
|
|
|
94,850 |
|
|
|
|
96,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Select ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net interest margin, FTE basis1 |
|
|
|
3.63 |
|
% |
|
|
3.31 |
|
% |
|
|
3.32 |
|
% |
|
|
2.98 |
|
% |
|
|
2.63 |
|
% |
Return on average total assets |
|
|
|
1.08 |
|
|
|
|
0.85 |
|
|
|
|
1.27 |
|
|
|
|
1.16 |
|
|
|
|
0.97 |
|
|
Return on average shareholders’ equity |
|
|
|
10.94 |
|
|
|
|
8.96 |
|
|
|
|
14.69 |
|
|
|
|
14.04 |
|
|
|
|
11.27 |
|
|
Average shareholders’ equity as a percent of average total assets |
|
|
|
9.85 |
|
|
|
|
9.46 |
|
|
|
|
8.67 |
|
|
|
|
8.23 |
|
|
|
|
8.65 |
|
|
Net loan charge-offs (recoveries) as a percent of average loans |
|
|
|
0.05 |
|
|
|
|
0.87 |
|
|
|
|
(0.02 |
) |
|
|
|
(0.02 |
) |
|
|
|
0.00 |
|
|
Allowance for credit losses on loans as a percent of loans at year-end |
|
|
|
1.50 |
|
|
|
|
1.03 |
|
|
|
|
0.94 |
|
|
|
|
1.09 |
|
|
|
|
1.39 |
|
|
Shareholders’ equity as a percent of total year-end assets |
|
|
|
9.77 |
|
|
|
|
9.64 |
|
|
|
|
9.16 |
|
|
|
|
8.28 |
|
|
|
|
8.50 |
|
|
Dividend payout ratio2 |
|
|
|
32.35 |
|
|
|
|
42.02 |
|
|
|
|
27.20 |
|
|
|
|
26.48 |
|
|
|
|
30.73 |
|
|
1 Net interest margin is shown on a fully taxable equivalent, ("FTE") basis, (non-GAAP).
2 Dividend payout ratio is calculated as dividends per share as a percentage of earnings per share.
19
RESULTS OF OPERATIONS
Net Income
CSB’s 2025 net income was $13.4 million compared to $10.0 million for 2024, an increase of 33.5%. Total revenue, net interest income plus noninterest income, increased $5.7 million, or 13%, over the prior year to a total of $50 million. The provision for credit loss expense decreased to $5.4 million as compared to $7.0 million for the prior year. Noninterest expense increased $3.2 million, or 13% and the provision for income tax increased $877 thousand over the prior year due to an increase in taxable income. Basic and diluted earnings per share were $5.07, up 35% from the prior year. The return on average assets was 1.08% in 2025 compared to 0.85% in 2024 and return on average equity was 10.94% in 2025 compared to 8.96% in 2024.
Net Interest Income
(Dollars in thousands) |
|
|
2025 |
|
|
|
2024 |
|
|
||
Net interest income |
|
$ |
|
42,384 |
|
|
$ |
|
36,853 |
|
|
Taxable equivalent |
|
|
|
122 |
|
|
|
|
143 |
|
|
Net interest income, FTE1 |
|
$ |
|
42,506 |
|
|
$ |
|
36,996 |
|
|
Net interest margin |
|
|
|
3.62 |
|
% |
|
|
3.30 |
|
% |
Taxable equivalent adjustment |
|
|
|
0.01 |
|
|
|
|
0.01 |
|
|
Net interest margin, FTE1 |
|
|
|
3.63 |
|
% |
|
|
3.31 |
|
% |
1 Taxable equivalent adjustments have been computed assuming a 21% tax rate in 2025, and 2024 (non-GAAP).
Net interest income is the largest source of the Company’s revenue and consists of the difference between interest income generated on earning assets and interest expense incurred on liabilities (deposits, short-term and long-term borrowings). Changes in volume, interest rates, composition of interest-earning assets, and interest-bearing liabilities affect net interest income. Net interest income increased $5.5 million, or 15%, in 2025 compared to 2024. The increase was a result of a $5.4 million increase in interest income and a decrease of $95 thousand in interest expense. The FTE net interest margin increased to 3.63% from 3.31% in 2024.
Interest income increased $5.4 million, or 11%, in 2025 compared to 2024 primarily due to an increase of $5.3 million, or 13%, in interest and fees on loans primarily due to an increase in average balances of $70 million and an increase in yield of 15 basis points ("bps"). Interest income on taxable securities decreased $300 thousand due to a decrease in average balances of $35 million. Interest income on interest-earning deposits mainly held at the Federal Reserve increased $530 thousand in 2025 compared to 2024 primarily due to an increase in average balances of $22 million.
Interest expense decreased $95 thousand, or less than 1%, in 2025 as compared to 2024, primarily due to lower cost of deposits as short-term interest rates dropped. Average noninterest-bearing demand and interest-bearing demand deposit balances increased $6 million during the year and average time deposit balances increased $34 million, and the average interest rate paid on time deposits decreased by 30 bps.
20
The following table provides detailed analysis of changes in average balances, yield, and net interest income:
AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS
|
2025 |
|
|
|
2024 |
|
|
||||||||||||||||||||||
(Dollars in thousands) |
|
Average |
|
|
|
Interest |
|
|
Average |
|
|
|
|
Average |
|
|
|
Interest |
|
|
Average |
|
|
||||||
Interest-earning |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-earning |
$ |
|
68,320 |
|
|
$ |
|
2,935 |
|
|
|
4.30 |
|
% |
|
$ |
|
46,309 |
|
|
$ |
|
2,405 |
|
|
|
5.19 |
|
% |
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Taxable |
|
|
297,580 |
|
|
|
|
7,015 |
|
|
|
2.36 |
|
|
|
|
|
332,849 |
|
|
|
|
7,315 |
|
|
|
2.20 |
|
|
Tax exempt 4 |
|
|
16,418 |
|
|
|
|
373 |
|
|
|
2.27 |
|
|
|
|
|
18,882 |
|
|
|
|
435 |
|
|
|
2.30 |
|
|
Loans 3, 4 |
|
|
789,383 |
|
|
|
|
46,836 |
|
|
|
5.93 |
|
|
|
|
|
719,028 |
|
|
|
|
41,589 |
|
|
|
5.78 |
|
|
Total interest- |
|
|
1,171,701 |
|
|
|
|
57,159 |
|
|
|
4.88 |
|
% |
|
|
|
1,117,068 |
|
|
|
|
51,744 |
|
|
|
4.63 |
|
% |
Noninterest- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and due |
|
|
18,890 |
|
|
|
|
|
|
|
|
|
|
|
|
18,302 |
|
|
|
|
|
|
|
|
|
||||
Bank premises |
|
|
13,824 |
|
|
|
|
|
|
|
|
|
|
|
|
13,565 |
|
|
|
|
|
|
|
|
|
||||
Other assets |
|
|
43,491 |
|
|
|
|
|
|
|
|
|
|
|
|
40,547 |
|
|
|
|
|
|
|
|
|
||||
Allowance for credit losses on loans |
|
|
(8,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
(8,065 |
) |
|
|
|
|
|
|
|
|
||||
Total assets |
$ |
|
1,239,521 |
|
|
|
|
|
|
|
|
|
|
$ |
|
1,181,417 |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Demand deposits |
$ |
|
233,401 |
|
|
|
|
1,699 |
|
|
|
0.73 |
|
% |
|
$ |
|
227,842 |
|
|
|
|
2,053 |
|
|
|
0.90 |
|
% |
Savings deposits |
|
|
313,766 |
|
|
|
|
2,934 |
|
|
|
0.94 |
|
|
|
|
|
302,621 |
|
|
|
|
3,242 |
|
|
|
1.07 |
|
|
Time deposits |
|
|
257,827 |
|
|
|
|
9,750 |
|
|
|
3.78 |
|
|
|
|
|
223,421 |
|
|
|
|
9,109 |
|
|
|
4.08 |
|
|
Borrowed funds |
|
|
25,393 |
|
|
|
|
270 |
|
|
|
1.06 |
|
|
|
|
|
28,709 |
|
|
|
|
344 |
|
|
|
1.20 |
|
|
Total interest- |
|
|
830,387 |
|
|
|
|
14,653 |
|
|
|
1.76 |
|
% |
|
|
|
782,593 |
|
|
|
|
14,748 |
|
|
|
1.88 |
|
% |
Noninterest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Demand deposits |
|
|
281,716 |
|
|
|
|
|
|
|
|
|
|
|
|
281,675 |
|
|
|
|
|
|
|
|
|
||||
Other liabilities |
|
|
5,269 |
|
|
|
|
|
|
|
|
|
|
|
|
5,427 |
|
|
|
|
|
|
|
|
|
||||
Shareholders’ equity |
|
|
122,149 |
|
|
|
|
|
|
|
|
|
|
|
|
111,722 |
|
|
|
|
|
|
|
|
|
||||
Total liabilities |
$ |
|
1,239,521 |
|
|
|
|
|
|
|
|
|
|
$ |
|
1,181,417 |
|
|
|
|
|
|
|
|
|
||||
Net interest |
|
|
|
|
|
|
42,506 |
|
|
|
|
|
|
|
|
|
|
|
|
36,996 |
|
|
|
|
|
||||
FTE adjustment |
|
|
|
|
|
|
(122 |
) |
|
|
|
|
|
|
|
|
|
|
|
(143 |
) |
|
|
|
|
||||
GAAP net interest |
|
|
|
|
$ |
|
42,384 |
|
|
|
|
|
|
|
|
|
|
$ |
|
36,853 |
|
|
|
|
|
||||
Net interest margin |
|
|
|
|
|
|
|
|
|
3.63 |
|
% |
|
|
|
|
|
|
|
|
|
|
3.31 |
|
% |
||||
Net interest spread |
|
|
|
|
|
|
|
|
|
3.12 |
|
% |
|
|
|
|
|
|
|
|
|
|
2.75 |
|
% |
||||
1 Average balances have been computed on an average daily basis.
2 Average rates have been computed based on the amortized cost of the corresponding asset or liability.
3 Average loan balances include nonaccrual loans.
4 Interest income is shown on a fully tax-equivalent basis (non-GAAP), reconciled to the GAAP amount at the bottom of the table.
21
The following table compares the impact of changes in average rates and average volumes on net interest income:
RATE/VOLUME ANALYSIS OF CHANGES IN INCOME AND EXPENSE1
|
|
|
2025 v. 2024 |
|
|||||||||||
|
|
|
Net Increase |
|
|
|
|
|
|
|
|
|
|||
(Dollars in thousands) |
|
|
(Decrease) |
|
|
|
Volume |
|
|
|
Rate |
|
|||
Increase (decrease) in interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Federal Funds |
|
$ |
|
(4 |
) |
|
$ |
|
0 |
|
|
$ |
|
(4 |
) |
Interest-earning deposits in other banks |
|
|
534 |
|
|
|
947 |
|
|
|
|
(413 |
) |
||
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Taxable |
|
|
|
(300 |
) |
|
|
|
(841 |
) |
|
|
|
541 |
|
Tax exempt 2 |
|
|
|
(62 |
) |
|
|
|
(56 |
) |
|
|
|
(6 |
) |
Loans 2 |
|
|
|
5,247 |
|
|
|
|
4,117 |
|
|
|
|
1,130 |
|
Total interest income change 2 |
|
|
|
5,415 |
|
|
|
|
4,167 |
|
|
|
|
1,248 |
|
Increase (decrease) in interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Demand deposits |
|
|
|
(354 |
) |
|
|
|
40 |
|
|
|
|
(394 |
) |
Savings deposits |
|
|
|
(308 |
) |
|
|
|
104 |
|
|
|
|
(412 |
) |
Time deposits |
|
|
|
641 |
|
|
|
|
1,301 |
|
|
|
|
(660 |
) |
Borrowed funds |
|
|
|
(74 |
) |
|
|
|
(35 |
) |
|
|
|
(39 |
) |
Total interest expense change |
|
|
|
(95 |
) |
|
|
|
1,410 |
|
|
|
|
(1,505 |
) |
Net interest income change 2 |
|
$ |
|
5,510 |
|
|
$ |
|
2,757 |
|
|
$ |
|
2,753 |
|
1 Changes attributable to both volume and rate, which cannot be segregated, have been allocated based on the absolute value of the change due to volume and the change due to rate.
2 Interest income is shown on a fully tax-equivalent basis (non-GAAP).
Provision (Recovery) for Credit Losses on Loans and Off-Balance Sheet Commitments
The provision for credit losses on loans is determined by management as the amount required to bring the allowance for credit losses to a level considered appropriate to absorb an estimation of credit loss during the expected weighted average life of the loan. During 2025, a provision for credit loss expense on loans of $5.3 million was recognized compared to a provision of $7.2 million in 2024. A provision for credit loss expense on off-balance sheet commitments of $72 thousand was recognized in 2025 as compared to a recovery for credit loss expense for off-balance sheet commitments of $213 thousand in 2024. Nonperforming loans decreased $1.1 million from 2024 to 2025. See Financial Condition – Allowance for Credit Losses for additional discussion and information relative to the provision for credit losses.
Noninterest Income
YEARS ENDED DECEMBER 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
Change from 2024 |
|
|
|
|||||||||
(Dollars in thousands) |
|
2025 |
|
|
|
Amount |
|
|
% |
|
|
|
2024 |
|
||||
Service charges on deposit accounts |
$ |
|
1,212 |
|
|
$ |
|
56 |
|
|
|
5 |
|
% |
$ |
|
1,156 |
|
Trust services |
|
|
1,146 |
|
|
|
|
(73 |
) |
|
|
(6 |
) |
|
|
|
1,219 |
|
Debit card interchange fees |
|
|
2,207 |
|
|
|
|
92 |
|
|
|
— |
|
|
|
|
2,115 |
|
Credit card fees |
|
|
670 |
|
|
|
|
27 |
|
|
|
4 |
|
|
|
|
643 |
|
Gain on sale of loans, including MSRs |
|
|
285 |
|
|
|
|
4 |
|
|
|
1 |
|
|
|
|
281 |
|
Earnings on bank-owned life insurance |
|
|
943 |
|
|
|
|
129 |
|
|
|
16 |
|
|
|
|
814 |
|
Unrealized gain on equity securities |
|
|
12 |
|
|
|
|
4 |
|
|
|
50 |
|
|
|
|
8 |
|
Other |
|
|
820 |
|
|
|
|
(46 |
) |
|
|
(5 |
) |
|
|
|
866 |
|
Total noninterest income |
$ |
|
7,295 |
|
|
$ |
|
193 |
|
|
|
3 |
|
% |
$ |
|
7,102 |
|
Noninterest income increased $193 thousand, or 3%, in 2025 compared to the same period in 2024. Earnings on bank owned life insurance increased $129 thousand, with the purchase of an additional $2 million of insurance. Debit card interchange income increased $92 thousand due to an overall increase in volume. Service charges on deposit accounts increased $56 thousand, as increases in monthly deposit account service charges and increases in non-sufficient funds ("NSF") charges. Trust services revenue decreased $73 thousand due to a one time fee collected in 2024 which did not recur in 2025.
22
Noninterest Expenses
YEARS ENDED DECEMBER 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
Change from 2024 |
|
|
|
||||||||||
(Dollars in thousands) |
|
2025 |
|
|
|
Amount |
|
|
|
% |
|
|
|
2024 |
|
||||
Salaries and employee benefits |
$ |
|
15,859 |
|
|
$ |
|
2,236 |
|
|
|
|
16 |
|
% |
$ |
|
13,623 |
|
Occupancy expense |
|
|
1,366 |
|
|
|
|
194 |
|
|
|
|
17 |
|
|
|
|
1,172 |
|
Equipment expense |
|
|
847 |
|
|
|
|
(16 |
) |
|
|
|
(2 |
) |
|
|
|
863 |
|
Professional and director fees |
|
|
1,793 |
|
|
|
|
228 |
|
|
|
|
15 |
|
|
|
|
1,565 |
|
Ohio financial institutions tax |
|
|
918 |
|
|
|
|
54 |
|
|
|
|
6 |
|
|
|
|
864 |
|
Marketing and public relations |
|
|
597 |
|
|
|
|
36 |
|
|
|
|
6 |
|
|
|
|
561 |
|
Software expense |
|
|
1,813 |
|
|
|
|
104 |
|
|
|
|
6 |
|
|
|
|
1,709 |
|
Debit card expense |
|
|
829 |
|
|
|
|
74 |
|
|
|
|
10 |
|
|
|
|
755 |
|
FDIC insurance |
|
|
559 |
|
|
|
|
21 |
|
|
|
|
4 |
|
|
|
|
538 |
|
Other |
|
|
3,160 |
|
|
|
|
221 |
|
|
|
|
8 |
|
|
|
|
2,939 |
|
Total noninterest expenses |
$ |
|
27,741 |
|
|
$ |
|
3,152 |
|
|
|
|
13 |
|
% |
$ |
|
24,589 |
|
Noninterest expense increased $3 million, or 13%, in 2025 compared to 2024. Salaries and employee benefits increased $2 million with increases in base salaries due to filled positions and increases in medical, incentive compensation and retirement benefits. Professional and director fees increased $228 thousand, primarily from increases in legal and audit and accounting expenses. Occupancy expense increased $194 thousand, due to snow removal and HVAC repairs. Other expenses increased $221 thousand, or 8% as increases in education expenses of $53 thousand over the prior year contributed to this difference.
Income Taxes
The provision for income taxes amounted to $3.2 million in 2025 as compared to $2.3 million in 2024. The increase in 2025 resulted from higher taxable income. The corporate statutory tax rate was 21% for 2025 and 2024. The effective tax rate in 2025 and 2024 was 19.3% and 18.8%, respectively.
FINANCIAL CONDITION
Total assets of the Company were $1.3 billion and $1.2 billion on December 31, 2025 and 2024, representing an increase of $101 million, or 8%. Net loans increased $87 million, or 12%, while investment securities decreased $14 million, or 4%, and total cash and cash equivalents increased $26 million, or 35%. Deposits increased $83 million and short-term borrowings decreased $6 million, while other borrowings from the Federal Home Loan Bank (“FHLB”) decreased by $349 thousand.
Securities
Total investment securities decreased $14 million, or 4%, to $317 million at year-end 2025, primarily related to principal repayments on mortgage-backed securities. CSB’s portfolio is primarily comprised of agency mortgage-backed securities, obligations of state and political subdivisions, U.S. Treasury notes, other government agencies’ debt, and corporate bonds. Restricted securities consist primarily of FHLB stock.
The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. The Company’s municipal bond portfolio consists of tax-exempt general obligation and revenue bonds. As of December 31, 2025, 99% of such bonds held an S&P or Moody’s investment grade rating, and 1% were non-rated local issues. The municipal portfolio includes a broad spectrum of counties, cities, universities, and school districts with 75% of the portfolio originating in Ohio, and 25% in Pennsylvania. Gross unrealized security losses within the portfolio were 9% of total securities on December 31, 2025, reflecting interest rate increases, not credit downgrades.
One of the primary functions of the securities portfolio is to provide a source of liquidity and it is structured such that maturities and cash flows provide a portion of the Company’s liquidity needs and asset/liability management requirements.
23
Loans
Total loans increased $92 million, or 12%, during 2025. Volume increases were recognized as follows: commercial real estate $65 million, or 34%, commercial real estate buildings held for investment and leased to others increased $13 million, or 13%, residential real estate loans increased $16 million, or 9%, and home equity lines of credit increased $8 million, or 17%. Commercial and industrial loans increased $8 million, or 6% during 2025, construction loans decreased $16 million, or 25%, and consumer installment loans, including consumer indirect loans, also decreased $2 million, or 10%. At year-end 2025, commercial real estate is comprised mostly of owner occupied buildings of $256 million, and $114 million of buildings held for investment and leased to others. Owner occupied buildings are mostly light industrial, warehouse buildings and auto repair. Investment properties include healthcare buildings, retail strip centers, and residential investment properties.
The Company originated $78 million and $58 million of residential mortgage loans held in the portfolio, including residential construction, conventional 1-4 family, and equity line loans, which were predominately variable rate, in 2025 and 2024, respectively. Demand for homes increased as rates declined then stabilized and borrowers chose variable-rate products hopeful for lower rates in the future, thus limiting the Company's mortgage sales to $8 million in 2025 and $9 million in 2024. Home equity loan balances increased $8 million during 2025 with demand improving as interest rates dropped.
Management anticipates modest economic growth in the Company’s local service areas will continue. Commercial and commercial real estate loans, in aggregate, comprise approximately 63% and 59% of the total loan portfolio at year-end 2025 and 2024, respectively. Residential real estate loans approximated 30% of the portfolio in 2025 and 2024. Construction and land development loans decreased from 9% to 6% of the portfolio. The Company is well within the respective regulatory guidelines for investment in construction, development, and investment property loans that are not owner occupied. The Company has very little exposure to commercial office space leased properties. See Note 3 - Loans for further discussion on Concentrations of Credit. Most of the Company’s lending activity is with customers primarily located within Holmes, Medina, Stark, Tuscarawas and Wayne counties in Ohio.
Nonperforming Assets, Individually Evaluated Loans, and Loans Past Due 90 Days or More
Nonperforming assets consist of nonaccrual loans, loans past due 90 days and still accruing, and other real estate acquired through or in lieu of foreclosure. Loans are placed on nonaccrual status when they become past due 90 days or more, or when mortgage loans are past due as to principal and interest 120 days or more, unless they are both well secured and in the process of collection. During 2025, $614 thousand in nonaccrual loans were collected, $404 thousand were charged-off, and $451 thousand new loans entered nonaccrual status.
NONPERFORMING ASSETS |
|
|
December 31 |
|
|
||||||
(Dollars in thousands) |
|
|
2025 |
|
|
|
2024 |
|
|
||
Nonaccrual loans |
|
|
|
|
|
|
|
|
|
||
Commercial and industrial |
|
$ |
|
9 |
|
|
$ |
|
449 |
|
|
Commercial real estate |
|
|
|
161 |
|
|
|
|
501 |
|
|
Commercial lessors of buildings |
|
|
|
— |
|
|
|
|
3 |
|
|
Construction |
|
|
|
— |
|
|
|
|
— |
|
|
Consumer mortgage |
|
|
|
336 |
|
|
|
|
80 |
|
|
Home equity line of credit |
|
|
|
64 |
|
|
|
|
71 |
|
|
Consumer installment |
|
|
|
32 |
|
|
|
|
48 |
|
|
Consumer indirect |
|
|
|
50 |
|
|
|
|
67 |
|
|
|
|
|
|
|
|
|
|
|
|
||
Loans past due 90 days or more and still accruing |
|
|
|
— |
|
|
|
|
486 |
|
|
Total nonperforming loans |
|
|
|
652 |
|
|
|
|
1,705 |
|
|
|
|
|
|
|
|
|
|
|
|
||
Other real estate owned |
|
|
|
— |
|
|
|
|
— |
|
|
Other repossessed assets |
|
|
|
— |
|
|
|
|
14 |
|
|
Total nonperforming assets |
|
$ |
|
652 |
|
|
$ |
|
1,719 |
|
|
|
|
|
|
|
|
|
|
|
|
||
Nonaccrual loans to total loans |
|
|
|
0.08 |
|
% |
|
|
0.17 |
|
% |
24
Allowance for Credit Losses
The allowance for credit losses ("ACL") is maintained at a level considered by management to be adequate to cover credit losses currently expected over the weighted average life of the loan pools. The ACL increased by $5 million, or 64%, to $12.5 million on December 31, 2025, from $7.6 million on December 31, 2024. The additional ACL was primarily the result of the recognition of a fourth quarter valuation allowance of $4 million for one large commercial credit that remains a performing asset. The Bank continues to maintain qualitative factors tied to changes in the lending policy, economic conditions, lending credit management, delinquent and classified loans, and the value of collateral.
ALLOWANCE FOR CREDIT LOSSES |
FOR THE YEAR ENDED |
|
|
||||||||
(Dollars in thousands) |
|
|
2025 |
|
|
|
2024 |
|
|
||
Net charge-offs (recoveries) as a percentage of average total loans |
|
|
|
0.05 |
|
% |
|
|
0.87 |
|
% |
Allowance for credit losses as a percentage of total loans |
|
|
|
1.50 |
|
|
|
|
1.03 |
|
|
Allowance for credit losses to total nonaccrual loans |
|
|
|
19.13 |
|
x |
|
|
6.23 |
|
x |
|
|
|
|
|
|
|
|
|
|
||
Components of the allowance for credit losses: |
|
|
|
|
|
|
|
|
|
||
General reserves |
|
$ |
|
8,470 |
|
|
$ |
|
7,595 |
|
|
Specific reserve allocations |
|
|
|
4,000 |
|
|
|
|
— |
|
|
Total allowance for credit losses |
|
$ |
|
12,470 |
|
|
$ |
|
7,595 |
|
|
The ACL on loans totaled $12.5 million, or 1.5% of total loans at year-end 2025 as compared to $7.6 million, or 1.03%, of total loans at year-end 2024. The Bank had net credit losses of $428 thousand in 2025, compared to $6.3 million in 2024. During fourth quarter 2025, a performing loan was determined to be collateral dependent through continued operation. As a result, a $4 million valuation allowance was recognized. As previously disclosed during 2024, the credit facility being liquidated through court receivership has no remaining loan balances at December 31, 2025.
The Company maintains an internal watch list for loans where management’s analysis of the borrower’s operating results and financial condition indicates the borrower’s cash flows are inadequate to meet its debt service requirements and for loans where there exists an increased risk that a shortfall may occur. See the Credit Quality Indicators section of Note 3 to the Consolidated Financial Statements for additional information. Nonperforming loans, which consist of loans past due 90 days or more and nonaccrual loans, aggregated $652 thousand, or 0.08%, of loans at year-end 2025 compared to $1.7 million, or 0.23%, of loans at year-end 2024.
Other Assets
Net premises and equipment decreased $492 thousand to $13.6 million at year-end 2025 with $426 thousand in capitalized purchases and $886 thousand in depreciation expense. Total bank-owned life insurance increased from $28 million at year-end 2024 to $31 million at year-end 2025, including a $2 million purchase of insurance and increasing cash surrender values. There was no other real estate owned on December 31, 2025 or 2024. The Company recognized a net deferred tax asset of $2.3 million on December 31, 2025, and 2024, respectively.
Deposits
The Company’s deposits are obtained primarily from individuals and businesses located in its market area. For deposits, the Company must compete with products offered by other financial institutions, as well as alternative investment options. Market rates on deposits and cash management products decreased during the year.
|
|
|
December 31 |
|
|
|
Change from 2024 |
|
|
||||||||||||
(Dollars in thousands) |
|
|
2025 |
|
|
|
2024 |
|
|
|
Amount |
|
|
|
% |
|
|
||||
Noninterest-bearing demand |
|
$ |
|
288,947 |
|
|
$ |
|
281,358 |
|
|
$ |
|
7,589 |
|
|
|
|
3 |
|
% |
Interest-bearing demand |
|
|
|
259,866 |
|
|
|
|
218,866 |
|
|
|
|
41,000 |
|
|
|
|
19 |
|
|
Traditional savings |
|
|
|
166,951 |
|
|
|
|
161,354 |
|
|
|
|
5,597 |
|
|
|
|
3 |
|
|
Money market savings |
|
|
|
149,245 |
|
|
|
|
140,056 |
|
|
|
|
9,189 |
|
|
|
|
7 |
|
|
Time deposits in excess of $250,000 |
|
|
|
81,301 |
|
|
|
|
79,634 |
|
|
|
|
1,667 |
|
|
|
|
2 |
|
|
Other time deposits |
|
|
|
180,355 |
|
|
|
|
162,869 |
|
|
|
|
17,486 |
|
|
|
|
11 |
|
|
Total deposits |
|
$ |
|
1,126,665 |
|
|
$ |
|
1,044,137 |
|
|
$ |
|
82,528 |
|
|
|
|
8 |
|
% |
Other Funding Sources
The Company obtains additional funds through securities sold under repurchase agreements, overnight borrowings from the FHLB or other financial institutions, and advances from the FHLB. Short-term borrowings, consisting of securities sold under repurchase agreements, increased $5.8 million. Other borrowings, consisting of FHLB advances, decreased $349 thousand as the result of principal repayments. The majority of FHLB borrowings on December 31, 2025, have long term maturities with monthly amortizing payments.
25
CAPITAL RESOURCES
Total shareholders’ equity was $126.3 million at December 31, 2025, compared to $114.8 million on December 31, 2024. This increase was primarily due to net income of $13.4 million and a $3.4 million decrease in the accumulated other comprehensive loss recognized on the available-for-sale securities portfolio, resulting from investment payment and maturities as well as decreasing interest rates. During 2025, the Company paid $4.3 million in dividends, and repurchased $999 thousand of its common shares. The Board of Directors approved a Stock Repurchase Program on February 26, 2021, allowing the repurchase of up to 5% of the Company’s then-outstanding common shares. Repurchased shares are to be held as treasury stock and are available for general corporate purposes. On December 31, 2025, approximately 22 thousand common shares could still be repurchased under the current authorized program. Shares repurchased during 2025 totaled 23,074 shares for $999 thousand and shares purchased in 2024 totaled 19,849 shares for $762 thousand.
Effective January 1, 2015, the Federal Reserve adopted final rules implementing Basel III and regulatory capital changes required by the Dodd-Frank Act. The rules apply to both the Company and the Bank. The rules established minimum risk-based and leverage capital requirements for all banking organizations. The rules include: (a) a common equity tier 1 capital ratio of at least 4.5%, (b) a tier 1 capital ratio of at least 6.0%, (c) a minimum total capital ratio of at least 8.0%, and (d) a minimum leverage ratio of 4%. Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of several risk weights is applied to different balance sheet and off-balance sheet assets primarily based on the relative credit risk of the counterparty. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the Company does not hold a capital conservation buffer of greater than 2.5% composed of common equity tier 1 capital above its minimum risk-based capital requirements. The Company and Bank’s actual and required capital amounts are disclosed in Note 12 to the Consolidated Financial Statements.
Dividends paid by the Bank to CSB are the primary source of funds available to the Company for payment of dividends to shareholders and for other working capital needs. The payment of dividends by the Bank to the Company is subject to restrictions by regulatory authorities, which generally limit dividends to current year net income and the prior two (2) year's net retained earnings, as defined by regulation. In addition, dividend payments generally cannot reduce regulatory capital levels below the minimum regulatory guidelines discussed above.
LIQUIDITY
|
|
|
December 31 |
|
|
|
|
|
|
|||||||
(Dollars in thousands) |
|
|
2025 |
|
|
|
2024 |
|
|
|
Change |
|
|
|||
Cash and cash equivalents |
|
$ |
|
99,310 |
|
|
$ |
|
73,509 |
|
|
$ |
|
25,801 |
|
|
Unused lines of credit |
|
|
|
144,813 |
|
|
|
|
126,334 |
|
|
|
|
18,479 |
|
|
Unpledged AFS securities at fair market value |
|
|
|
126,666 |
|
|
|
|
123,155 |
|
|
|
|
3,511 |
|
|
|
|
$ |
|
370,789 |
|
|
$ |
|
322,998 |
|
|
$ |
|
47,791 |
|
|
Net deposits and short-term liabilities |
|
$ |
|
1,153,980 |
|
|
$ |
|
1,068,413 |
|
|
$ |
|
85,567 |
|
|
Liquidity ratio |
|
|
|
32.1 |
|
% |
|
|
30.2 |
|
% |
|
|
|
|
|
Minimum board approved liquidity ratio |
|
|
|
20.0 |
|
% |
|
|
20.0 |
|
% |
|
|
|
|
|
Liquidity refers to the Company’s ability to generate sufficient cash to fund current loan demand, meet deposit withdrawals, pay operating expenses, and meet other obligations. Liquidity is monitored by CSB’s Asset Liability Committee. The Company was within all Board-approved limits on December 31, 2025, and 2024. Additional sources of liquidity include net income, loan repayments, the availability of borrowings, and adjustments of interest rates to attract deposit accounts.
As summarized in the Consolidated Statements of Cash Flows, the most significant investing activities for the Company in 2025 included net loan originations of $92 million and securities purchases of $52 million, offset by maturities and repayment of securities totaling $71 million. The Company’s financing activities included a $83 million increase in deposits, $6 million increase in short-term borrowings, and $4 million decrease in cash dividends paid.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The most significant market risk the Company is exposed to is interest rate risk. The business of the Company and the composition of its balance sheet consist of investments in interest-earning assets (primarily loans and securities), which are funded by interest-bearing liabilities (deposits and borrowings). These financial instruments have varying levels of sensitivity to changes in the market rates of interest, resulting in market risk. None of the Company’s financial instruments are held for trading purposes.
26
The Board of Directors establishes policies and operating limits with respect to interest rate risk. The Company manages interest rate risk regularly through its Asset Liability Committee. The Committee meets periodically to review various asset and liability management information including, but not limited to, the Company’s liquidity position, projected sources and uses of funds, interest rate risk position, and economic conditions.
Interest rate risk is monitored primarily through the use of an earnings simulation model. The model is highly dependent on various assumptions, which change regularly as the balance sheet and market interest rates change. The earnings simulation model projects change in net interest income resulting from the effect of changes in interest rates. The analysis is performed quarterly over a twenty-four-month horizon. The analysis includes two (2) balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. This analysis is performed by estimating the expected cash flows of the Company’s financial instruments using interest rates in effect at year-end 2025 and 2024. Interest rate risk policy limits are tested by measuring the anticipated change in net interest income over a two-year period. The tests assume quarterly ramped increases and decreases in market interest rates over twenty-four month horizons, as compared to a stable rate environment or base model. The following table reflects the change to net interest income using a dynamic balance sheet for the first twelve-month periods of the twenty-four month horizon.
Net Interest Income at Risk
|
December 31, 2025 |
|
|||||||||||||||||||||
|
|
Change In |
|
|
Net |
|
|
|
Dollar |
|
|
Percentage |
|
|
Board |
|
|||||||
(Dollars in thousands) |
|
|
+ 400 |
|
|
|
$ |
|
49,820 |
|
|
$ |
|
1,601 |
|
|
|
3.3 |
|
% |
± 25 |
% |
|
|
|
|
+ 300 |
|
|
|
|
|
49,417 |
|
|
|
|
1,198 |
|
|
|
2.5 |
|
|
± 15 |
|
|
|
|
|
+ 200 |
|
|
|
|
|
49,012 |
|
|
|
|
793 |
|
|
|
1.6 |
|
|
± 10 |
|
|
|
|
|
+ 100 |
|
|
|
|
|
48,602 |
|
|
|
|
383 |
|
|
|
0.8 |
|
|
± 5 |
|
|
|
|
|
|
0 |
|
|
|
|
|
48,219 |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
– 100 |
|
|
|
|
|
47,598 |
|
|
|
|
(621 |
) |
|
|
(1.3 |
) |
|
± 5 |
|
|
|
|
|
– 200 |
|
|
|
|
|
46,983 |
|
|
|
|
(1,236 |
) |
|
|
(2.6 |
) |
|
± 10 |
|
|
|
|
|
– 300 |
|
|
|
|
|
46,252 |
|
|
|
|
(1,967 |
) |
|
|
(4.1 |
) |
|
± 15 |
|
|
|
|
|
– 400 |
|
|
|
|
|
45,678 |
|
|
|
|
(2,541 |
) |
|
|
(5.3 |
) |
|
± 25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
December 31, 2024 |
|
|||||||||||||||||||||
|
|
|
+ 400 |
|
|
|
$ |
|
42,231 |
|
|
$ |
|
1,333 |
|
|
|
3.3 |
|
% |
± 25 |
% |
|
|
|
|
+ 300 |
|
|
|
|
|
41,902 |
|
|
|
|
1,004 |
|
|
|
2.5 |
|
|
± 15 |
|
|
|
|
|
+ 200 |
|
|
|
|
|
41,571 |
|
|
|
|
673 |
|
|
|
1.6 |
|
|
± 10 |
|
|
|
|
|
+ 100 |
|
|
|
|
|
41,237 |
|
|
|
|
339 |
|
|
|
0.8 |
|
|
± 5 |
|
|
|
|
|
|
0 |
|
|
|
|
|
40,898 |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
– 100 |
|
|
|
|
|
40,432 |
|
|
|
|
(466 |
) |
|
|
(1.1 |
) |
|
± 5 |
|
|
|
|
|
– 200 |
|
|
|
|
|
40,089 |
|
|
|
|
(809 |
) |
|
|
(2.0 |
) |
|
± 10 |
|
|
|
|
|
– 300 |
|
|
|
|
|
39,553 |
|
|
|
|
(1,345 |
) |
|
|
(3.3 |
) |
|
± 15 |
|
|
|
|
|
– 400 |
|
|
|
|
|
38,988 |
|
|
|
|
(1,910 |
) |
|
|
(4.7 |
) |
|
± 25 |
|
|
Management reviews Net Interest Income at Risk with the Board on a periodic basis. Additional earnings simulations are run to test an immediate interest rate shock over a twenty-four month period. The Company was within all Board-approved limits at December 31, 2025 and 2024 for the first twelve-month periods of the twenty-four month horizon.
27
Economic Value of Equity at Risk
|
December 31, 2025 |
|||||||
Change In |
Percentage |
|
|
Board |
|
|||
|
+ 400 |
|
|
(6.1 |
) |
% |
± 35 |
% |
|
+ 300 |
|
|
(3.8 |
) |
|
± 30 |
|
|
+ 200 |
|
|
(1.9 |
) |
|
± 20 |
|
|
+ 100 |
|
|
(0.8 |
) |
|
± 15 |
|
|
– 100 |
|
|
(1.0 |
) |
|
± 15 |
|
|
– 200 |
|
|
(4.0 |
) |
|
± 20 |
|
|
– 300 |
|
|
(9.2 |
) |
|
± 30 |
|
|
– 400 |
|
|
(19.0 |
) |
|
± 35 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|||||||
|
+ 400 |
|
|
(5.4 |
) |
% |
± 35 |
% |
|
+ 300 |
|
|
(3.6 |
) |
|
± 30 |
|
|
+ 200 |
|
|
(2.0 |
) |
|
± 20 |
|
|
+ 100 |
|
|
(0.7 |
) |
|
± 15 |
|
|
– 100 |
|
|
(0.8 |
) |
|
± 15 |
|
|
– 200 |
|
|
(2.8 |
) |
|
± 20 |
|
|
– 300 |
|
|
(7.6 |
) |
|
± 30 |
|
|
– 400 |
|
|
(15.9 |
) |
|
± 35 |
|
The economic value of equity is calculated by subjecting the period-end balance sheet to changes in interest rates and measuring the impact of the changes on the values of the assets and liabilities. Hypothetical changes in interest rates are then applied to the financial instruments. The cash flows and fair values are again estimated using these hypothetical rates. For the net interest income estimates, the hypothetical rates are applied to the financial instruments based on the assumed cash flows.
Management periodically measures and reviews the economic value of equity at risk with the Board. As of December 31, 2025, the Company was within all policy limits set by the Board.
Significant Assumptions Related to Market Risk
The market risk analysis is based on numerous assumptions, including relative levels of market interest rates, loan prepayments, and reactions of depositors to changes in interest rates and this should not be relied upon as being indicative of actual results. Further, the analysis does not contemplate all actions the Company may undertake in response to changes in interest rates.
U.S. Treasury securities, obligations of U.S. Government corporations and agencies, obligations of states and political subdivisions will generally repay at their stated maturity or if callable, prior to their final maturity date. Mortgage-backed security payments increase when interest rates are low and decrease when interest rates rise. Most of the Company’s loans permit the borrower to prepay the principal balance prior to maturity without penalty. The likelihood of prepayment depends on a number of factors: current interest rate and interest rate index (if any) on the loan, the financial ability of the borrower to refinance, the economic benefit to be obtained from refinancing, availability of refinancing at attractive terms, as well as economic conditions in specific geographic areas, which affect the sales and price levels of residential and commercial property. In a changing interest rate environment, prepayments may increase or decrease on fixed and adjustable-rate loans depending on the current relative levels and expectations of future short-term and long-term interest rates. Prepayments on adjustable-rate loans generally increase when long-term interest rates fall or are at historically low levels relative to short-term interest rates, thus making fixed rate loans more desirable. While savings and checking deposits generally may be withdrawn upon the customer’s request without prior notice, a continuing relationship with customers resulting in future deposits and withdrawals is generally predictable, leading to a dependable and uninterrupted source of funds. Time deposits generally have early withdrawal penalties, which discourage customer withdrawal prior to maturity. Short-term borrowings have fixed maturities. Certain advances from the FHLB carry prepayment penalties and are expected to be repaid in accordance with their contractual terms.
FAIR VALUE MEASUREMENTS
The Company discloses the estimated fair value of its financial instruments on December 31, 2025, and 2024 in Note 15 to the Consolidated Financial Statements.
28
OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS, AND CONTINGENT LIABILITIES AND COMMITMENTS
The following table summarizes the Company’s loan commitments, including letters of credit, as of December 31, 2025:
|
Amount of Commitment to Expire Per Period |
|
|||||||||||||||||||||||
(Dollars in thousands) |
|
|
Total |
|
|
|
Less than |
|
|
|
1 to 3 |
|
|
|
3 to 5 |
|
|
|
Over 5 |
|
|||||
Commercial lines of credit |
|
$ |
|
130,321 |
|
|
$ |
|
118,630 |
|
|
$ |
|
7,649 |
|
|
$ |
|
4,042 |
|
|
$ |
|
— |
|
Commercial real estate |
|
|
|
23,621 |
|
|
|
|
8,808 |
|
|
|
|
7,409 |
|
|
|
|
7,404 |
|
|
|
|
— |
|
Home equity line of credit |
|
|
|
88,513 |
|
|
|
|
6,751 |
|
|
|
|
12,371 |
|
|
|
|
12,183 |
|
|
|
|
57,208 |
|
Construction |
|
|
|
32,819 |
|
|
|
|
32,819 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
Consumer lines of credit |
|
|
|
643 |
|
|
|
|
643 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Credit card lines |
|
|
|
8,277 |
|
|
|
|
8,277 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Overdraft privilege |
|
|
|
7,133 |
|
|
|
|
7,133 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Letters of credit |
|
|
|
2,257 |
|
|
|
|
2,231 |
|
|
|
|
11 |
|
|
|
|
15 |
|
|
|
|
— |
|
Total commitments |
|
$ |
|
293,584 |
|
|
$ |
|
185,292 |
|
|
$ |
|
27,440 |
|
|
$ |
|
23,644 |
|
|
$ |
|
57,208 |
|
All lines of credit represent either fee-paid or legally binding loan commitments for the loan categories noted. Letters of credit are also included in the amounts noted in the table since the Company requires each letter of credit be supported by a loan agreement. The commercial and consumer lines represent both unsecured and secured obligations. The home equity lines are secured by mortgages on residential property. It is anticipated that a significant portion of these lines will expire without being drawn upon.
The following table summarizes the Company’s other contractual obligations, exclusive of interest, as of December 31, 2025:
|
Payment Due by Period |
|
|||||||||||||||||||||||
(Dollars in thousands) |
|
|
Total |
|
|
|
Less |
|
|
|
1 to 3 |
|
|
|
3 to 5 |
|
|
|
Over 5 |
|
|||||
Total time deposits |
|
$ |
|
262,906 |
|
|
$ |
|
236,830 |
|
|
$ |
|
25,276 |
|
|
$ |
|
800 |
|
|
$ |
|
— |
|
Short-term borrowings |
|
|
|
31,517 |
|
|
|
|
31,517 |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Other borrowings |
|
|
|
917 |
|
|
|
|
262 |
|
|
|
|
339 |
|
|
|
|
183 |
|
|
|
|
133 |
|
Operating leases |
|
|
|
265 |
|
|
|
|
115 |
|
|
|
|
117 |
|
|
|
|
33 |
|
|
|
|
— |
|
Total obligations |
|
$ |
|
295,605 |
|
|
$ |
|
268,724 |
|
|
$ |
|
25,732 |
|
|
$ |
|
1,016 |
|
|
$ |
|
133 |
|
The other borrowings noted in the preceding table represent borrowings from the FHLB. The notes require payment of interest on a monthly basis with principal due in monthly installments. The obligations bear stated fixed interest rates and stipulate a prepayment penalty if the note’s interest rate exceeds the current market rate for similar borrowings at the time of repayment. As the notes mature, the Company evaluates the liquidity and interest rate circumstances at that time to determine whether to pay off or renew the note. The evaluation process typically includes: the strength of current and projected customer loan demand, the Company’s federal funds sold or purchased position, projected cash flows from maturing investment securities, the current and projected market interest rate environment, local and national economic conditions, and customer demand for the Company’s deposit product offerings.
CRITICAL ACCOUNTING POLICIES
The Company’s Consolidated Financial Statements are prepared in accordance with U.S. Generally Accepted Accounting Principles and follow general practices within the commercial banking industry. Application of these principles requires management to make estimates, assumptions, and judgments affecting the amounts reported in the financial statements. These estimates, assumptions, and judgments are based upon the information available as of the date of the financial statements.
The most significant accounting policies followed by the Company are presented in Note 1 to the Consolidated Financial Statements. These policies, along with the other disclosures presented in the Notes to Consolidated Financial Statements and the 2025 Financial Review, provide information about how significant assets and liabilities are valued in the financial statements and how those values are determined. Management has identified the allowance for credit losses and goodwill as the accounting areas requiring the most subjective and complex estimates, assumptions, and judgments, and as such, could be the most subject to revision as new information becomes available.
29
As previously noted in the section entitled Allowance for Credit Losses, management performs an analysis to assess the adequacy of its allowance for credit losses using the current expected credit loss (CECL) model. This analysis encompasses a variety of factors including: the potential loss exposure for individually reviewed loans, the historical loss experience, changes in delinquent and classified loans, any significant changes in lending or loan review staff, an evaluation of current and future economic conditions, any significant changes in the volume or mix of loans within each category, a review of the significant concentrations of credit, and any legal, competitive, or regulatory concerns. Potential future earnings volatility is driven by CECL's life of credit loss and economic forecasts of unemployment, recession and future credit loss within the portfolio. Under stress testing performed by the Bank in 2025, the unemployment forecast models as the largest driver of credit loss provision volatility. When sustained unemployment is significantly increased to 8% over a two-year period, an additional provision of approximately $1 million would be required under current model assumptions. While the weighted average life of the loan portfolio remains five years, at December 31, 2025, stressing the commercial real estate, lessors of buildings and residential mortgage portfolios' weighted average lives by 10%, or an increase of 4 months, resulted in a minimal increase of $61 thousand to the allowance for credit losses.
The Company accounts for business combinations using the acquisition method of accounting. Goodwill and intangible assets with indefinite useful lives are not amortized. Intangible assets with finite useful lives are amortized using accelerated methods over their estimated weighted-average useful lives, approximating ten years.
IMPACT OF INFLATION AND CHANGING PRICES
The Consolidated Financial Statements and related data presented herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles, requiring measurement of financial position, and results of operations primarily in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. Most assets and liabilities of the Company are monetary in nature. Therefore, interest rates have a more significant impact on the Company’s performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or magnitude as prices of goods and services. The liquidity, maturity structure, and quality of the Company’s assets and liabilities are critical to maintenance of acceptable performance levels.
COMMON STOCK AND SHAREHOLDER INFORMATION
Common shares of the Company are not traded on an established market. Shares are traded on the OTC market through broker/ dealers under the symbol “CSBB” and through private transactions. The table below represents the range of high and low prices paid for transactions known to the Company. Management does not have knowledge of prices paid on all transactions. Because of the lack of an established market, these prices may not reflect the prices at which stock would trade in an active market. These quotations reflect interdealer prices, without mark-up, mark-down, or commission and may not represent actual transactions. The table specifies cash dividends declared by the Company to its shareholders during 2025 and 2024. No assurances can be given that future dividends will be declared, or if declared, what the amount of any such dividends will be. Additional information concerning restrictions over the payment of dividends is included in Note 12 of the Consolidated Financial Statements.
Quarterly Common Stock Price and Dividend Data
Quarter Ended |
|
|
High |
|
|
|
Low |
|
|
|
Dividends |
|
|
|
Dividends |
|
||||
March 31, 2025 |
|
$ |
|
44.49 |
|
|
$ |
|
36.00 |
|
|
$ |
|
0.40 |
|
|
$ |
|
1,056,739 |
|
June 30, 2025 |
|
|
|
45.00 |
|
|
|
|
40.02 |
|
|
|
|
0.41 |
|
|
|
|
1,081,958 |
|
September 30, 2025 |
|
|
|
49.50 |
|
|
|
|
43.50 |
|
|
|
|
0.41 |
|
|
|
|
1,080,153 |
|
December 31, 2025 |
|
|
|
57.00 |
|
|
|
|
46.81 |
|
|
|
|
0.42 |
|
|
|
|
1,103,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
March 31, 2024 |
|
$ |
|
40.90 |
|
|
$ |
|
35.46 |
|
|
$ |
|
0.39 |
|
|
$ |
|
1,039,337 |
|
June 30, 2024 |
|
|
|
41.00 |
|
|
|
|
37.17 |
|
|
|
|
0.39 |
|
|
|
|
1,039,227 |
|
September 30, 2024 |
|
|
|
40.00 |
|
|
|
|
37.00 |
|
|
|
|
0.40 |
|
|
|
|
1,063,810 |
|
December 31, 2024 |
|
|
|
39.50 |
|
|
|
|
36.02 |
|
|
|
|
0.40 |
|
|
|
|
1,061,406 |
|
As of December 31, 2025, the Company had 1,013 shareholders of record and 2,627,015 outstanding shares of common stock.
30
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information contained in the section captioned, “Quantitative and Qualitative Disclosures about Market Risk” located in the MD&A is incorporated by reference herein.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT ON MANAGEMENT’S ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of CSB Bancorp, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance that our published financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted the required assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. Management’s assessment did not identify any material weaknesses in the Company’s internal control over financial reporting. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control-Integrated Framework. Based upon this assessment, management believes that the Company’s internal control over financial reporting is effective as of December 31, 2025.
|
|
|
|
|
|
|
|
|
|
Eddie L. Steiner |
|
|
|
Paula J. Meiler |
President, |
|
|
|
Senior Vice President, |
Chief Executive Officer |
|
|
|
Chief Financial Officer |
31
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of CSB Bancorp, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of CSB Bancorp, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024; the related consolidated statements of income, comprehensive income, changes in shareholders' equity, and cash flows for the years then ended; and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
32
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involve our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter, in any way, our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Allowance for Credit Losses (ACL) – Qualitative Adjustments
Description of the Matter
The Company's loan portfolio totaled $830 million as of December 31, 2025, and the associated ACL was $12.5 million. As discussed in Notes 1 and 3 to the consolidated financial statements, determining the amount of the ACL requires significant judgment about the expected future losses, which is based on a baseline lifetime loss rate, calculated using a weighted-average remaining maturities method, which is then adjusted for current qualitative conditions and reasonable and supportable forecasts. Management applies these qualitative adjustments to the baseline lifetime loss rate to reflect changes in the current and forecasted environment, both internal and external, that are different from the conditions that existed during the historical loss calculation period.
We identified these qualitative adjustments within the ACL as critical audit matters because they involve a high degree of subjectivity. While the determination of these qualitative adjustments includes analysis of observable data over the historical loss period, the judgment required to assess the directionality and magnitude of adjustments is highly subjective. Auditing these complex judgments and assumptions involved especially challenging auditor judgment due to the nature of audit evidence and the nature and extent of effort required to address these matters.
How we addressed the matter in our audit
The primary procedures we performed to address these critical audit matters included:
We have served as the Company’s auditor since 2005.
Cranberry Township, Pennsylvania
March 16, 2026
33
CONSOLIDATED BALANCE SHEETS
December 31, 2025 and 2024
(Dollars in thousands, except per share data) |
|
2025 |
|
|
2024 |
|
||
ASSETS |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Cash and due from banks |
|
$ |
|
|
$ |
|
||
Interest-earning deposits in other banks |
|
|
|
|
|
|
||
Federal funds sold |
|
|
|
|
|
|
||
Total cash and cash equivalents |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Securities |
|
|
|
|
|
|
||
Available-for-sale, at fair value |
|
|
|
|
|
|
||
Held-to-maturity; fair value of $ |
|
|
|
|
|
|
||
Equity securities |
|
|
|
|
|
|
||
Restricted stock, at cost |
|
|
|
|
|
|
||
Total securities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Loans held for sale |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Loans |
|
|
|
|
|
|
||
Less allowance for credit losses |
|
|
|
|
|
|
||
Net loans |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Premises and equipment, net |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Bank owned life insurance |
|
|
|
|
|
|
||
Accrued interest receivable and other assets |
|
|
|
|
|
|
||
TOTAL ASSETS |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
LIABILITIES |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Noninterest-bearing |
|
$ |
|
|
$ |
|
||
Interest-bearing |
|
|
|
|
|
|
||
Total deposits |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Short-term borrowings |
|
|
|
|
|
|
||
Other borrowings |
|
|
|
|
|
|
||
Allowance for credit losses on off-balance sheet commitments |
|
|
|
|
|
|
||
Accrued interest payable and other liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Retained earnings |
|
|
|
|
|
|
||
Treasury stock at cost: |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total shareholders’ equity |
|
|
|
|
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
|
|
$ |
|
||
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
34
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 2025 and 2024
(Dollars in thousands, except per share data) |
|
2025 |
|
|
2024 |
|
||
INTEREST AND DIVIDEND INCOME |
|
|
|
|
|
|
||
Loans, including fees |
|
$ |
|
|
$ |
|
||
Taxable securities |
|
|
|
|
|
|
||
Nontaxable securities |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total interest and dividend income |
|
|
|
|
|
|
||
INTEREST EXPENSE |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Short-term borrowings |
|
|
|
|
|
|
||
Other borrowings |
|
|
|
|
|
|
||
Total interest expense |
|
|
|
|
|
|
||
NET INTEREST INCOME |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
CREDIT LOSS EXPENSE |
|
|
|
|
|
|
||
Provision for credit loss expense - loans |
|
|
|
|
|
|
||
Provision (recovery) for credit loss expense - off-balance sheet commitments |
|
|
|
|
|
( |
) |
|
Total provision for credit loss expense |
|
|
|
|
|
|
||
NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE |
|
|
|
|
|
|
||
NONINTEREST INCOME |
|
|
|
|
|
|
||
Service charges on deposit accounts |
|
|
|
|
|
|
||
Trust services |
|
|
|
|
|
|
||
Debit card interchange fees |
|
|
|
|
|
|
||
Credit card fees |
|
|
|
|
|
|
||
Gain on sale of loans, net |
|
|
|
|
|
|
||
Earnings on bank owned life insurance |
|
|
|
|
|
|
||
Unrealized gain on equity securities |
|
|
|
|
|
|
||
Other income |
|
|
|
|
|
|
||
Total noninterest income |
|
|
|
|
|
|
||
NONINTEREST EXPENSES |
|
|
|
|
|
|
||
Salaries and employee benefits |
|
|
|
|
|
|
||
Occupancy expense |
|
|
|
|
|
|
||
Equipment expense |
|
|
|
|
|
|
||
Professional and director fees |
|
|
|
|
|
|
||
Financial institutions tax |
|
|
|
|
|
|
||
Marketing and public relations |
|
|
|
|
|
|
||
Software expense |
|
|
|
|
|
|
||
Debit card expense |
|
|
|
|
|
|
||
FDIC insurance expense |
|
|
|
|
|
|
||
Other expenses |
|
|
|
|
|
|
||
Total noninterest expenses |
|
|
|
|
|
|
||
INCOME BEFORE INCOME TAXES |
|
|
|
|
|
|
||
Federal income tax provision |
|
|
|
|
|
|
||
NET INCOME |
|
$ |
|
|
$ |
|
||
Weighted average shares outstanding - basic and diluted |
|
|
|
|
|
|
||
Earnings per share - basic and diluted |
|
$ |
|
|
$ |
|
||
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
35
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31, 2025 and 2024
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Net income |
|
$ |
|
|
$ |
|
||
Other comprehensive income |
|
|
|
|
|
|
||
Unrealized gain on available-for-sale securities arising during the period |
|
|
|
|
|
|
||
Amortization of held-to-maturity discount resulting from transfer |
|
|
|
|
|
|
||
Income tax effect at |
|
|
( |
) |
|
|
( |
) |
Other comprehensive income |
|
|
|
|
|
|
||
Total comprehensive income |
|
$ |
|
|
$ |
|
||
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
36
CONSOLIDATED STATEMENTS OF CHANGES IN
Years Ended December 31, 2025 and 2024
(Dollars in thousands, except per share data) |
|
Common |
|
|
Additional |
|
|
Retained |
|
|
Treasury |
|
|
Accumulated |
|
|
Total |
|
||||||
BALANCE AT DECEMBER 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Purchase of |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Cash dividends declared, $ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
BALANCE AT DECEMBER 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Purchase of |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Cash dividends declared, $ |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
BALANCE AT DECEMBER 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
37
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2025 and 2024
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by |
|
|
|
|
|
|
||
Depreciation and amortization of premises, equipment |
|
|
|
|
|
|
||
Deferred income tax expense |
|
|
|
|
|
|
||
Provision for credit loss expense - loans |
|
|
|
|
|
|
||
Gain on sale of loans, net |
|
|
( |
) |
|
|
( |
) |
Security amortization, net of accretion |
|
|
|
|
|
|
||
Secondary market loan sale proceeds |
|
|
|
|
|
|
||
Originations of secondary market loans held-for-sale |
|
|
( |
) |
|
|
( |
) |
Earnings on bank-owned life insurance |
|
|
( |
) |
|
|
( |
) |
Effects of changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Net deferred loan fees |
|
|
( |
) |
|
|
( |
) |
Accrued interest receivable |
|
|
( |
) |
|
|
( |
) |
Accrued interest payable |
|
|
( |
) |
|
|
|
|
Other assets and liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
$ |
|
|
$ |
|
||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Securities: |
|
|
|
|
|
|
||
Proceeds from repayments, available-for-sale |
|
$ |
|
|
$ |
|
||
Proceeds from repayments, held-to-maturity |
|
|
|
|
|
|
||
Purchases, available-for-sale |
|
|
( |
) |
|
|
( |
) |
Purchase of restricted stock |
|
|
( |
) |
|
|
— |
|
Redemption of restricted stock |
|
|
|
|
|
|
||
Loan (originations) and payments, net |
|
|
( |
) |
|
|
( |
) |
Purchases of premises and equipment |
|
|
( |
) |
|
|
( |
) |
Purchases of software |
|
|
( |
) |
|
|
( |
) |
Purchase of bank owned life insurance |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
$ |
( |
) |
|
$ |
( |
) |
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
38
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Years Ended December 31, 2025 and 2024
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Net change in deposits |
|
$ |
|
|
$ |
|
||
Net change in short-term borrowings |
|
|
|
|
|
( |
) |
|
Repayment of other borrowings |
|
|
( |
) |
|
|
( |
) |
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Purchase of treasury stock |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
$ |
|
|
$ |
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT END OF YEAR |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES |
|
|
|
|
|
|
||
Cash paid during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
Income taxes |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
These consolidated financial statements should be read in connection with the accompanying notes to the consolidated financial statements.
39
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CSB Bancorp, Inc. (the “Company” or “CSB”) was incorporated in 1991 in the State of Ohio and is a registered bank holding company. The Company’s wholly owned subsidiaries are The Commercial and Savings Bank of Millersburg, Ohio (the “Bank”) and CSB Investment Services, LLC. The Company, through its subsidiaries, operates in the commercial banking industry.
The Bank, an Ohio-chartered bank organized in 1879, provides financial services through its
Significant accounting policies followed by the Company are presented below.
BUSINESS SEGMENTS
The Company's operations have been evaluated for segment reporting and management has determined operations are managed along
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 affecting the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.
PRINCIPLES OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.
The Bank has a trust department and the assets held by the Bank in fiduciary or agency capacities for its customers are not included in the Consolidated Balance Sheets as such items are not assets of the Bank.
CASH AND CASH EQUIVALENTS
For purposes of the Consolidated Statements of Cash Flows, cash and cash equivalents include cash on hand and amounts due from banks which mature or within
DEBT SECURITIES
At the time of purchase all debt securities are evaluated and designated as available-for-sale (AFS) or held-to-maturity (HTM). Securities designated as AFS are carried at fair value with unrealized gains and losses on such securities, net of applicable income taxes, recognized as other comprehensive income or loss. HTM securities are recorded at amortized cost. Securities transferred from AFS to HTM are carried at their fair value on the date of transfer. On December 31, 2025,
EQUITY SECURITIES
Equity securities are held at fair value. Holding gains and losses are recorded in noninterest income. Dividends on equity securities are recognized as income when earned.
40
RESTRICTED STOCK
Investments in FHLB and Federal Reserve Bank stock are classified as restricted stock, carried at cost, and evaluated for impairment. The Bank is required to maintain an investment in common stock of the FHLB and Federal Reserve Bank because the Bank is a member of the FHLB and the Federal Reserve System.
LOANS
Loans that management has the intent and ability to hold for the foreseeable future, until maturity, or pay-off, generally are stated at their outstanding principal amount, adjusted for charge-offs, the allowance for credit losses, and any deferred loan fees or costs on originated loans. Interest is accrued based upon the daily outstanding principal balance. Loan origination fees and certain direct origination costs are capitalized and recognized as an adjustment of the yield over the life of the related loan.
Interest income is not reported when full repayment is in doubt, typically when the loan is individually evaluated, or payments are past due over 90 days. All interest accrued but not collected for loans placed on nonaccrual or charged-off is reversed and charged against interest income. The interest on these loans is accounted for on a cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
At origination, a determination is made whether a loan will be held in the Bank’s portfolio or is intended for sale in the secondary market. Mortgage loans held for sale are recorded at the lower of the aggregate cost or fair value. Generally, these loans are held for sale for less than three (3) days. The Bank recognizes gains and losses on sales of the loans held for sale when the sale is completed.
ALLOWANCE FOR CREDIT LOSSES (ACL)
The ACL is a valuation reserve established and maintained by charges against operating income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The ACL is an estimate of expected credit losses, measured over the contractual life of a loan (adjusted for expected prepayment), that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.
The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of individual loans that do not share risk characteristics with other loans. The ACL for homogeneous loans is calculated using a life-time loss rate methodology with both a quantitative and a qualitative analysis that is applied on a quarterly basis. The ACL model is comprised of eight distinct portfolio segments: 1) Commercial and Industrial or C&I, 2) Commercial Real Estate, or CRE, 3) Commercial Lessors of Buildings, 4) Construction, 5) Consumer Mortgage, 6) Home Equity Line of Credit or HELOC, 7) Consumer Installment, and 8) Consumer Indirect loans. Each segment has a distinct set of risk characteristics monitored by management.
Historical credit loss experience is the basis for the estimation of expected credit losses. We apply historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already reflected in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on the unemployment forecast and management judgment. For periods beyond our two-year reasonable and supportable forecast, we revert to the historical loss rate. The qualitative adjustments for current conditions are based upon changes in lending policies and practices, change in economic conditions, change in nature of the portfolio, experience and ability of lending staff, problem loan trends, quality of the bank’s loan review system, value of underlying collateral for collateral dependent loans, the existence of and changes in concentrations, and other external factors. These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. A similar process is employed to calculate a reserve assigned to the portion of off-balance sheet commitments that we expect to fund, specifically unfunded loan commitments, and any needed reserve is recorded in other liabilities.
The ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other pooled loans and therefore, should be individually assessed. We evaluate all commercial loans greater than $
Although we believe our process for determining the ACL appropriately considers all the factors that would likely result in credit losses, the process includes subjective elements and may be susceptible to significant change. To the extent actual losses are higher than management estimates, additional provision for credit losses could be required and could adversely affect our earnings or financial position in future periods.
41
The ACL for off-balance sheet commitments is estimated on the likelihood and amount of funding under the same criteria used for loans under the ACL. The ACL for off-balance sheet commitments is recorded in other liabilities in the Consolidated Balance Sheets.
HTM Securities - Any expected credit loss is recorded through the ACL on HTM securities and is deducted from the amortized cost basis on the balance sheet. The majority of HTM securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. Therefore, there is no credit loss expectation on these securities.
AFS Securities - The AFS securities portfolio is evaluated on a quarterly basis for indicators of credit loss. Management reviews the amount of unrealized loss, the credit rating history, market trends of similar security classes, time remaining to maturity, and the source of principal and interest payments to identify securities which could potentially have a credit loss. For those securities that management intends to sell before the recovery of their amortized cost basis, the difference between fair value and amortized cost is considered to have a credit loss and is recognized in provision for credit loss expense and the amortized cost is written down to the realizable value through a charge-off. For those AFS securities that management does not intend to sell prior to expected recovery of the amortized cost basis, the credit portion is recognized through the ACL on AFS securities, while the noncredit portion is recognized through the accumulated other comprehensive income or loss included in shareholders' equity. Non-credit related impairment is a result of other factors, including changes in interest rates.
OTHER REAL ESTATE OWNED
Other real estate acquired through or in lieu of foreclosure is initially recorded at fair value, less estimated costs to sell, and any loan balance in excess of fair value is charged to the allowance for credit losses. Subsequent valuations are periodically performed, and write-downs are included in noninterest expenses, as well as expenses related to maintenance of the properties. Gains or losses upon sale are recorded through noninterest income. There was
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation and amortization. Land is carried at cost. Depreciation and amortization are determined based on the estimated useful lives of the individual assets (typically
GOODWILL
Goodwill is not amortized but is tested for impairment at least annually in the fourth quarter or more frequently if indicators of impairment are present. The evaluation for impairment involves comparing the current fair value of the reporting unit to the carrying value, including goodwill. If the current fair value of a reporting unit exceeds the carrying value, no additional testing is required, and an impairment loss is not recorded. The Company uses market capitalization and multiples of tangible book value methods, based on observable bank acquisitions in the state of Ohio, to determine the estimated current fair value of its reporting unit. Based on this analysis
MORTGAGE SERVICING RIGHTS
Mortgage servicing rights (“MSRs”) represent the right to service loans for third party investors. MSRs are recognized at fair value as a separate asset upon the sale of mortgage loans to a third-party investor with the servicing rights retained by the Company. Originated MSRs are recorded at allocated fair value at the time of the sale of the loans to the third-party investor. MSRs are amortized in proportion to and over the estimated period of net servicing income. MSRs are carried at amortized cost, less a valuation allowance for impairment, if any. MSRs are evaluated on a discounted earnings basis to determine the present value of future earnings of the underlying serviced mortgages. All assumptions are reviewed annually, or more frequently if necessary, and adjusted to reflect current and anticipated market conditions.
BANK-OWNED LIFE INSURANCE
The cash surrender value of bank-owned life insurance policies is included as an asset on the Consolidated Balance Sheets and any increases in the cash surrender value are recorded as noninterest income on the Consolidated Statements of Income. In the event of the death of an individual insured under these policies, the Company would receive a death benefit, which would be recorded as noninterest income.
REPURCHASE AGREEMENTS
Substantially all securities sold under repurchase agreements represent amounts advanced by various customers. Securities owned by the Bank are pledged to secure those obligations. Repurchase agreements are not deposits and are not covered by federal deposit insurance.
42
ADVERTISING COSTS
All advertising costs are expensed as incurred. Advertising expenses amounted to $
FEDERAL INCOME TAXES
The Company and its subsidiaries file a consolidated federal tax return. Deferred income taxes are recorded on temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their respective tax bases. Deferred tax assets are recognized for temporary differences deductible in future years’ tax returns and for operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance if it is deemed more likely than not that some or all of the deferred tax assets will not be realized. Deferred tax liabilities are recognized for temporary differences taxable in future years’ tax returns.
The Bank, domiciled in Ohio, is not currently subject to state and local income taxes.
COMPREHENSIVE INCOME
The Company includes recognized revenue, expenses, gains, and losses in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the Consolidated Balance Sheets, net of tax, these items along with net income are components of comprehensive income. The unrealized loss on securities transferred from AFS to HTM at the date of transfer, is amortized over the remaining life of the securities as part of comprehensive income.
TRANSFERS OF FINANCIAL ASSETS
Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions constraining it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
PER SHARE DATA
Earnings per share is computed based on the weighted average number of shares of common stock outstanding during each year. The company currently maintains a simple capital structure, thus, there are
The weighted average number of common shares outstanding for earnings per share computations was as follows:
(Dollars in thousands, except per share data) |
|
2025 |
|
|
2024 |
|
||
Weighted average common shares issued |
|
|
|
|
|
|
||
Average treasury shares |
|
|
( |
) |
|
|
( |
) |
Total weighted average common shares outstanding basic and diluted |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Earnings per share, basic and diluted |
|
|
|
|
|
|
||
The Company has evaluated subsequent events through the date these financial statements were issued.
43
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. This ASU requires disclosure in the notes to financial statements of specified information about certain costs and expenses. Specific disclosures are required for (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas producing activities. The amendments in this Update do not change or remove current expense disclosure requirements. However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. The amendments in ASU 2024-03 apply only to public business entities and are effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. This Update is not expected to have a significant impact on the Company’s financial statements.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326), which amends the guidance in Topic 326 to expand the population of acquired financial assets subject to the gross-up approach to include loans (excluding credit cards) that are acquired without credit deterioration and deemed “seasoned.” All non-purchased credit deteriorated loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-purchased credit deteriorated loans (excluding credit cards) are considered to be seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. ASU 2025-08 should be applied prospectively and is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods. Early adoption is permitted. This Update is not expected to have an impact on the Company’s financial statements.
ACCOUNTING PRONOUNCEMENTS ADOPTED IN 2025
During the year ended December 31, 2025, the Company
RECLASSIFICATION OF COMPARATIVE AMOUNTS
Certain comparative amounts from the prior years have been reclassified to conform to current year classifications. Such classifications had
44
NOTE 2 – SECURITIES
Securities consisted of the following on December 31:
(Dollars in thousands) |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Allowance for Credit Losses |
|
|
Fair |
|
|||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||
U.S. Government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Asset-backed securities of government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Total available-for-sale |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
State and political subdivisions |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Total held-to-maturity |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Equity securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Restricted stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|||
U.S. Government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Asset-backed securities of government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Total available-for-sale |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Held-to-maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury securities |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Total held-to-maturity |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Equity securities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Restricted stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Total securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|||
45
The amortized cost and fair value of debt securities on December 31, 2025, 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 |
|
|
Fair |
|
||
Available-for-sale |
|
|
|
|
|
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due after one through five years |
|
|
|
|
|
|
||
Due after five through ten years |
|
|
|
|
|
|
||
Due after ten years |
|
|
|
|
|
|
||
Total debt securities available-for-sale |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Held-to-maturity |
|
|
|
|
|
|
||
Due in one year or less |
|
$ |
|
|
$ |
|
||
Due after one through five years |
|
|
|
|
|
|
||
Due after five through ten years |
|
|
|
|
|
|
||
Due after ten years |
|
|
|
|
|
|
||
Total debt securities held-to-maturity |
|
$ |
|
|
$ |
|
||
Securities with a carrying value of approximately $
Restricted stock primarily consists of investments in FHLB and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to $
There were
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 December 31, 2025 and 2024
(Dollars in thousands) |
|
U.S. Treasury securities |
|
|
Mortgage- backed securities of government agencies |
|
|
State and political subdivisions |
|
|||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Credit rating: |
|
|
|
|
|
|
|
|
|
|||
AAA / AA / A |
|
$ |
|
|
$ |
|
|
$ |
|
|||
BBB / BB / B |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lower than B |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-rated |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Credit rating: |
|
|
|
|
|
|
|
|
|
|||
AAA / AA / A |
|
$ |
|
|
$ |
|
|
$ |
|
|||
BBB / BB / B |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Lower than B |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Non-rated |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
46
The following table presents gross unrealized losses, fair value of securities, aggregated by investment category, and length of time individual available-for-sale securities have been in a continuous unrealized loss position, on December 31 2025 and 2024:
|
|
Less Than 12 Months |
|
|
12 Months or More |
|
|
Total |
|
|||||||||||||||
(Dollars in thousands) |
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Government agencies |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Mortgage-backed securities of government |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||
Asset-backed securities of government |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
State and political subdivisions |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate bonds |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total temporarily impaired available-for-sale securities |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury securities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
U.S. Government agencies |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Mortgage-backed securities of government |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||
Asset-backed securities of government |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
State and political subdivisions |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||
Corporate bonds |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total temporarily impaired available-for-sale securities |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
There were
47
NOTE 3 – LOANS
Loans consisted of the following on December 31:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Commercial and industrial |
|
$ |
|
|
$ |
|
||
Commercial real estate |
|
|
|
|
|
|
||
Commercial lessors of buildings |
|
|
|
|
|
|
||
Construction |
|
|
|
|
|
|
||
Consumer mortgage |
|
|
|
|
|
|
||
Home equity line of credit |
|
|
|
|
|
|
||
Consumer installment |
|
|
|
|
|
|
||
Consumer indirect |
|
|
|
|
|
|
||
Total loans |
|
|
|
|
|
|
||
Allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Deferred loan fees, net |
|
|
( |
) |
|
|
( |
) |
Net Loans |
|
$ |
|
|
$ |
|
||
Loan Origination/Risk Management
The Company has certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. Management reviews and the Board of Directors 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 and industrial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand their 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. However, the cash flows of borrowers may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and generally incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.
Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial 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.
With respect to loans to developers and builders secured by non-owner occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisal reviews, lease rates, and financial analysis of developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction and land development loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or permanent financing from the Company. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.
The Company originates consumer loans utilizing a judgmental underwriting process. Policies and procedures are developed and modified, as needed, by management to monitor and manage consumer loan risk. This activity, coupled with relatively small loan amounts spread across many individual borrowers, minimizes risk.
The Company engages an independent loan review vendor that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management and the Audit Committee. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.
48
Concentrations of Credit
Nearly all the Company’s lending activity occurs within the State of Ohio, including the five counties of Holmes, Medina, Stark, Tuscarawas, and Wayne, as well as surrounding counties. The majority of the Company’s loan portfolio consists of commercial and industrial and commercial real estate loans. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal and interest payments, and the adequacy of the collateral received.
The top ten collateral exposures in commercial real estate and commercial lessors of buildings at December 31, 2025 are as follows: Industrial, manufacturing and production $
Allowance for Credit Losses
The following table details activity in the allowance for credit losses ("ACL") by portfolio segment for the years ended December 31, 2025, and 2024. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
During 2025, the increase in the provision for credit loss expense for commercial and industrial loans was primarily related to one loan relationship which had a $
During 2024, the increase in the provision for credit loss expense for commercial and industrial and commercial real estate loans was primarily related to one loan relationship which is in process of court liquidation. This relationship has been charged down by $
49
Summary of Allowance for Credit Losses on Loans
The following table details activity in the allowance for credit losses on loans during the year ended December 31:
(Dollars in thousands) |
|
Beginning ACL Balance |
|
|
Charge-offs |
|
|
Recoveries |
|
|
Provision for Credit Losses (Recovery) |
|
|
Ending ACL Balance |
|
|||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and industrial |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Commercial lessors of buildings |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Construction |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Consumer mortgage |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Home equity line of credit |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Consumer installment |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Consumer indirect |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and industrial |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Commercial lessors of buildings |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Construction |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Consumer mortgage |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Home equity line of credit |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Consumer installment |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Consumer indirect |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
50
Age Analysis of Past-Due Loans Receivable and Nonperforming Loans
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.
(Dollars in thousands) |
|
Current |
|
|
30-59 |
|
|
60-89 |
|
|
90 Days + |
|
|
Total Past Due |
|
|
Total |
|
||||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||||
Commercial real estate |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Commercial lessors of buildings |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Construction |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Consumer mortgage |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Home equity line of credit |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Consumer installment |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Consumer indirect |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial and industrial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|||||
Commercial real estate |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Commercial lessors of buildings |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Construction |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Consumer mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Home equity line of credit |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Consumer installment |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Consumer indirect |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing interest as of December 31:
(Dollars in thousands) |
|
Nonaccrual with no ACL |
|
|
Nonaccrual with ACL |
|
|
Total Nonaccrual |
|
|
Loans Past Due Over 90 Days Still Accruing |
|
|
Total Nonperforming |
|
|||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and industrial |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Commercial real estate |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Commercial lessors of buildings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Construction |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer mortgage |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Home equity line of credit |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Consumer installment |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Consumer indirect |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Total Loans |
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial and industrial |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Commercial lessors of buildings |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Construction |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Consumer mortgage |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Home equity line of credit |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Consumer installment |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Consumer indirect |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Total Loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
51
Interest income recognized on nonaccrual loans as of December 31, 2025 was $
Collateral-Dependent Financial Assets
When loan repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, expected credit losses are based on the fair value of the collateral. The class of loan represents the primary collateral type associated with the loan.
|
|
Type of Collateral |
|
|||||
(Dollars in thousands) |
|
Real Estate |
|
|
Blanket Liens |
|
||
December 31, 2025 |
|
|
|
|
|
|
||
Commercial and industrial |
|
$ |
|
1 |
$ |
|
||
Commercial real estate |
|
|
|
2 |
|
— |
|
|
Total collateral dependent loans |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
December 31, 2024 |
|
|
|
|
|
|
||
Commercial and industrial |
|
$ |
— |
|
|
$ |
|
|
Commercial real estate |
|
|
|
|
|
— |
|
|
Total collateral dependent loans |
|
$ |
|
|
$ |
|
||
1
2
Credit Quality Indicators
The Company categorizes commercial and commercial real estate loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial and commercial real estate loans individually by classifying the loans as to credit risk. This analysis includes commercial loans with an outstanding exposure balance greater than $
The Company uses the following definitions for risk ratings:
Pass. Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity, and adequate cash flow. Loans are considered fully collectable and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.
Special Mention. Loans classified as special mention have a material weakness deserving of management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan or of the Bank’s credit position at some future date.
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses jeopardizing the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, values, highly questionable, and improbable.
52
Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Based on the most recent analysis performed, the following tables present the recorded investment in non-homogeneous loans by internal risk rating system:
|
|
Term Loans Amortized Costs Basis by Origination Year |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
Prior |
|
Revolving Loans Amortized Cost Basis |
|
Revolving Loans Converted to Term |
|
|
Total |
|
|||||||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special mention |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|||||
Substandard |
|
|
|
|
|
— |
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
— |
|
|
$ |
|
|||
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
||||
Substandard |
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
||
Commercial lessors of buildings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
||
Substandard |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Commercial construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Substandard |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Substandard |
|
|
|
|
|
|
|
|
|
1, 2 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
— |
|
|
$ |
|
|||
1
2
53
|
|
Term Loans Amortized Costs Basis by Origination Year |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
Revolving Loans Amortized Cost Basis |
|
Revolving Loans Converted to Term |
|
|
Total |
|
|||||||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special mention |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
||||||
Substandard |
|
|
— |
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
— |
|
|
$ |
|
||||
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||||
Substandard |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
||
Commercial lessors of buildings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
||
Substandard |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Commercial construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Substandard |
|
|
— |
|
|
|
|
2 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pass |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Special Mention |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Substandard |
|
|
|
|
|
|
1, 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||||
Doubtful |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
— |
|
|
$ |
|
||||
1
2
54
The Company monitors the credit risk profile by payment activity for the loan classes listed below. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. The following table presents the amortized cost in residential consumer loans based on payment activity:
|
|
Term Loans Amortized Costs Basis by Origination Year |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
Prior |
|
Revolving Loans Amortized Cost Basis |
|
Revolving Loans Converted to Term |
|
|
Total |
|
|||||||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Consumer construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Home equity line of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
|
|
$ |
|
|||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
||
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
|
|
$ |
|
|||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Consumer installment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Consumer indirect: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
|||||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
|||||||||
Total YTD gross charge-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
55
|
|
Term Loans Amortized Costs Basis by Origination Year |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(Dollars in thousands) |
|
2024 |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
Prior |
|
Revolving Loans Amortized Cost Basis |
|
Revolving Loans Converted to Term |
|
|
Total |
|
|||||||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumer mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Consumer construction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Home equity line of credit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
|
|
$ |
|
|||
Nonperforming |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
||
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
|
$ |
|
|
$ |
|
|||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
Consumer installment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
Nonperforming |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
— |
|
|
$ |
|
||||||||
YTD gross charge-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Consumer indirect: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Nonperforming |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
YTD gross charge-offs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performing |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
|||||||||
Nonperforming |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
|
$ |
|
|
$ |
|
|||||||||
Total YTD gross charge-offs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
$ |
— |
|
$ |
— |
|
|
$ |
|
|||||||
Consumer mortgages are substantially secured by one to four family owner occupied properties and consumer indirect loans are substantially secured by recreational vehicles. All nonperforming consumer loans are evaluated when placed on nonaccrual status and may be charged down based on the fair value of the collateral less cost to sell, if that value is lower than the outstanding balance.
Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Bank may provide multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.
There were two modifications of loans to borrowers experiencing financial difficulty completed during the year ended December 31, 2025 and no modifications of loans to borrowers experiencing financial difficulty completed during 2024.
|
|
Term Extension |
|||||||
(Dollars in thousands) |
|
Amortized Cost Basis at December 31, 2025 |
|
|
% of Total Class of Financing Receivable |
||||
Home equity line of credit |
|
$ |
|
|
|
|
% |
||
Total |
|
$ |
|
|
|
|
|
||
|
Term Extension |
Loan Type |
Financial Effect |
Home equity line of credit |
Added a |
56
Real Estate Loans in Foreclosure
There was
Mortgage Servicing Rights
For the years ended December 31, 2025 and 2024, the Company had outstanding MSRs of $
Total loans serviced for others including commercial loans, approximated $
The following summarizes mortgage servicing rights capitalized and amortized during each year:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Beginning of year |
|
$ |
|
|
$ |
|
||
Capitalized additions |
|
|
|
|
|
|
||
Amortization |
|
|
( |
) |
|
|
( |
) |
Valuation allowance |
|
|
— |
|
|
|
— |
|
End of year |
|
$ |
|
|
$ |
|
||
NOTE 4 – PREMISES AND EQUIPMENT
Premises and equipment consisted of the following on December 31:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Land and improvements |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Furniture and equipment |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Premises and equipment, cost |
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Premises and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense amounted to $
NOTE 5 – LEASES
Operating leases in which the Company is the lessee are recorded as operating lease Right of Use (“ROU”) assets and operating lease liabilities, included in other assets and other liabilities, respectively, on the consolidated balance sheets. The Company does not currently have any finance leases. Operating lease ROU assets represent the right to use an underlying asset during the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease.
Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in occupancy and equipment expense in the Consolidated Statements of Income. The leases relate to bank branches with remaining lease terms of generally
57
As of December 31, 2025 and 2024, assets were $
The following table summarizes other information related to operating leases:
|
|
December 31, 2025 |
|
|
|
December 31, 2024 |
|
|
||
Weighted-average remaining lease term - operating leases in years |
|
|
|
|
|
|
|
|
||
Weighted-average discount rate - operating leases |
|
|
|
% |
|
|
|
% |
||
The following table presents aggregate lease maturities and obligations:
(Dollars in thousands) |
|
|
|
|
December 31, 2025 |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
— |
|
2031 and thereafter |
|
|
— |
|
Total lease payments |
|
|
|
|
Less: interest |
|
|
|
|
Present value of lease liabilities |
|
$ |
|
|
NOTE 6 – INTEREST-BEARING DEPOSITS
Interest-bearing deposits on December 31 were as follows:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Demand |
|
$ |
|
|
$ |
|
||
Savings |
|
|
|
|
|
|
||
Time deposits: |
|
|
|
|
|
|
||
$250,000 and greater |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total interest-bearing deposits |
|
$ |
|
|
$ |
|
||
On December 31, 2025, stated maturities of time deposits were as follows:
(Dollars in thousands) |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Total |
|
$ |
|
|
58
NOTE 7 – BORROWINGS
Short-term borrowings
Short-term borrowings include overnight repurchase agreements, federal funds purchased, and short-term advances through the FHLB.
(Dollars in thousands) |
|
2025 |
|
|
|
2024 |
|
|
||
Balance at year-end |
|
$ |
|
|
|
$ |
|
|
||
Average balance outstanding |
|
|
|
|
|
|
|
|
||
Maximum month-end balance |
|
|
|
|
|
|
|
|
||
Weighted-average rate at year-end |
|
|
|
% |
|
|
|
% |
||
Weighted-average rate during the year |
|
|
|
|
|
|
|
|
||
Average balances outstanding during the year represent daily average balances; average interest rates represent interest expense divided by the related average balances.
The following table provides additional detail regarding the collateral pledged to secure repurchase agreements accounted for as secured borrowings:
|
|
Remaining Contractual Maturity |
|
|||||
(Dollars in thousands) |
|
December 31, |
|
|
December 31, |
|
||
Securities of U.S. Government agencies and mortgage-backed securities of |
|
$ |
|
|
$ |
|
||
Repurchase agreements |
|
|
|
|
|
|
||
Other borrowings
The following table sets forth information concerning other borrowings:
|
|
Maturity Range |
|
Weighted |
|
|
Stated Interest |
|
|
At December 31, |
|
|||||||||||||
(Dollars in thousands) |
|
From |
|
To |
|
Rate |
|
|
From |
|
|
To |
|
|
2025 |
|
|
2024 |
|
|||||
Fixed-rate amortizing |
|
|
|
|
% |
|
|
% |
|
|
% |
|
$ |
|
|
$ |
|
|||||||
Maturities of other borrowings on December 31, 2025, are summarized as follows for the years ended December 31:
(Dollars in thousands) |
|
Amount |
|
|
Weighted |
|
|
||
2026 |
|
$ |
|
|
|
|
% |
||
2027 |
|
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
|
||
2030 |
|
|
|
|
|
|
|
||
2031 and beyond |
|
|
|
|
|
|
|
||
Total other borrowings |
|
$ |
|
|
|
|
% |
||
Monthly principal and interest payments, as well as
NOTE 8 – INCOME TAXES
Income tax expense was as follows:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Current |
|
$ |
|
|
$ |
|
||
Deferred |
|
|
|
|
|
|
||
Total income tax provision |
|
$ |
|
|
$ |
|
||
59
Effective tax rates were
(Dollars in thousands) |
|
2025 |
|
2024 |
||||||||||||||
Expected provision using statutory income tax rate |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||
Effect of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nontaxable securities and loans income |
|
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
|
( |
) |
|
Nontaxable bank owned life insurance income |
|
|
( |
) |
|
|
( |
) |
|
|
|
( |
) |
|
|
( |
) |
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total income tax provision |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||
The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities on December 31 were as follows:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Allowance for credit losses |
|
$ |
|
|
$ |
|
||
Unrealized loss on securities |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Deferred tax assets |
|
|
|
|
|
|
||
Premises and equipment |
|
|
( |
) |
|
|
( |
) |
Federal Home Loan Bank stock dividends |
|
|
( |
) |
|
|
( |
) |
Deferred loan fees |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
( |
) |
|
|
( |
) |
Deferred tax liabilities |
|
|
( |
) |
|
|
( |
) |
Net deferred tax asset |
|
$ |
|
|
$ |
|
||
There is currently
NOTE 9 – EMPLOYEE BENEFITS
The Company sponsors a contributory 401(k) profit-sharing plan (the “Plan”) covering substantially all employees who meet certain age and service requirements. The Plan permits investment in the Company’s common stock subject to various limitations and provides for discretionary profit sharing and matching contributions. The discretionary profit-sharing contribution is determined annually by the Board of Directors and amounted to
The Company sponsors a deferred compensation plan covering eligible officers. Expense under the plan amounted to $
NOTE 10 – FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are primarily loan commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the Consolidated Balance Sheets. The contract amount of these instruments reflects the extent of involvement the Bank has in these financial instruments. The Bank’s exposure to credit loss in the event of the nonperformance by the other party to the financial instruments for loan commitments to extend credit and letters of credit is represented by the contractual amounts of these instruments. The Bank uses the same credit policies in making loan commitments as it does for on-balance sheet loans.
60
The following financial instruments whose contract amount represents credit risk were outstanding on December 31:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Commitments to extend credit |
|
$ |
|
|
$ |
|
||
Letters of credit |
|
|
|
|
|
|
||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Consumer commitments generally have fixed expiration dates and commercial commitments are generally due on demand and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral, obtained if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include residential real estate, accounts receivable, recognized inventory, property, plant and equipment, and income-producing commercial properties.
Letters of credit are written conditional commitments issued by the Company to guarantee the performance of a customer to a third party and are reviewed for renewal at expiration. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company requires collateral supporting these commitments when deemed appropriate.
The Company had $
NOTE 11 – RELATED-PARTY TRANSACTIONS
In the ordinary course of business, loans are made by the Bank to executive officers, directors, their immediate family members, and their related business interests consistent with Federal Reserve Regulation O, SEC Regulation S-X, and GAAP definition of related parties.
The following is an analysis of activity of related-party loans for the years ended December 31:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
Balance at beginning of year |
|
$ |
|
|
$ |
|
||
New loans and advances |
|
|
|
|
|
|
||
Repayments, including loans sold |
|
|
|
|
|
|
||
Balance at end of year |
|
$ |
|
|
$ |
|
||
Deposits from executive officers, directors, their immediate family members, and their related business interests on December 31, 2025, and 2024 were approximately $
NOTE 12 – REGULATORY MATTERS
The Company (on a consolidated basis) and Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial performance. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines involving quantitative measures of the assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of Total capital, Tier 1 capital and Common equity tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Management believes as of December 31, 2025 and 2024, the Company and Bank met or exceeded all capital adequacy requirements to which they are subject.
As of December 31, 2025, the most recent notification from federal and state banking agencies categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized” an institution must maintain minimum Total risk-based, Tier 1 risk-based, Common equity Tier 1, and Tier 1 leverage ratios as set forth in the following tables. There are no known conditions or events since that notification that Management believes have changed the Bank’s category.
61
The actual capital amounts and ratios of the Company and Bank as of December 31 are presented in the following tables:
|
|
Actual |
|
|
|
Minimum |
|
|
|
Minimum Required |
|
|
|||||||||||||||
(Dollars in thousands) |
|
Amount |
|
|
Ratio |
|
|
|
Amount |
|
|
Ratio |
|
|
|
Amount |
|
|
Ratio |
|
|
||||||
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total capital to risk-weighted assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 capital to risk-weighted assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common equity tier 1 capital to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 leverage ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total capital to risk-weighted assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
|
$ |
|
|
|
|
% |
||||||
Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tier 1 capital to risk-weighted assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Consolidated |
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Bank |
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Common equity tier 1 capital to |
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Consolidated |
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Bank |
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Tier 1 leverage ratio |
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Consolidated |
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Bank |
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The Company’s primary source of funds with which to pay dividends, are dividends received from the Bank. The payment of dividends by the Bank to the Company is subject to restrictions by its regulatory agencies. These restrictions generally limit dividends to current year net income and prior
62
NOTE 13 – CONDENSED PARENT COMPANY FINANCIAL INFORMATION
A summary of condensed financial information of the parent company as of December 31, 2025, and 2024, and for each of the two years in the period ended December 31, 2025, follows:
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
CONDENSED BALANCE SHEETS |
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|
||
ASSETS |
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|
||
Cash deposited with subsidiary bank |
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$ |
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$ |
|
||
Investment in subsidiary bank |
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|
||
Equity securities |
|
|
|
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||
Other assets |
|
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|
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|
|
||
TOTAL ASSETS |
|
$ |
|
|
$ |
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
|
||
Total shareholders’ equity |
|
|
|
|
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
|
|
$ |
|
||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME |
|
|
|
|
|
|
||
Dividends on securities |
|
$ |
|
|
$ |
|
||
Dividends from subsidiary |
|
|
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|
|
|
||
Unrealized gain on equity securities |
|
|
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|
||
Other income |
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— |
|
|
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|
|
Total income |
|
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|
||
Operating expenses |
|
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|
||
Income before taxes and undistributed equity |
|
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|
||
Income tax benefit |
|
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|
||
Equity earnings in subsidiary, net of dividends |
|
|
|
|
|
|
||
NET INCOME |
|
$ |
|
|
$ |
|
||
COMPREHENSIVE INCOME |
|
$ |
|
|
$ |
|
||
(Dollars in thousands) |
|
2025 |
|
|
2024 |
|
||
CONDENSED STATEMENTS OF CASH FLOWS |
|
|
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|
||
Cash flows from operating activities |
|
|
|
|
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|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Equity earnings in subsidiary, net of dividends |
|
|
( |
) |
|
|
( |
) |
Unrealized gain on equity securities |
|
|
( |
) |
|
|
( |
) |
Change in other assets and liabilities |
|
|
( |
) |
|
|
|
|
Net cash provided by operating activities |
|
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|
||
Cash flows from financing activities |
|
|
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|
||
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Purchase of treasury stock |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Net increase in cash |
|
|
|
|
|
|
||
Cash at beginning of year |
|
|
|
|
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|
||
Cash at end of year |
|
$ |
|
|
$ |
|
||
63
NOTE 14 – FAIR VALUE MEASUREMENTS
The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:
Level I: |
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets the Company has the ability to access. |
Level II: |
|
Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices observable for the asset or liability; inputs derived principally from or corroborated by observable market data by or other means including certified appraisals. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability. |
Level III: |
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The following table presents the assets reported on the consolidated statements of financial condition at their fair value on a recurring basis as of December 31, 2025, and December 31, 2024, by level within the fair value hierarchy.
(Dollars in thousands) |
|
Level I |
|
|
Level II |
|
|
Level III |
|
|
Total |
|
||||
Assets: |
|
|
|
|
December 31, |
|
|
|
|
|||||||
Securities available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury securities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
U.S. Government agencies |
|
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— |
|
|
|
|
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government |
|
|
|
|
|
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|
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— |
|
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|
|
|||
Asset-backed securities of government agencies |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
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— |
|
|
|
|
|
|
— |
|
|
|
|
||
Corporate bonds |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total available-for-sale securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Equity securities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Assets: |
|
|
|
|
December 31, |
|
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|
|||||||
Securities available-for-sale |
|
|
|
|
|
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|
|
|
|
|
|
||||
U.S. Treasury securities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
U.S. Government agencies |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Asset-backed securities of government agencies |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Corporate bonds |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Total available-for-sale securities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||
Equity securities |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
64
NOTE 15 – FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of recognized financial instruments carried at amortized cost as of December 31 were as follows:
|
|
2025 |
|
||||||||||||||||||
|
|
|
Carrying |
|
|
|
|
|
|
|
|
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|
|
Total Fair |
|
|||||
(Dollars in thousands) |
|
|
Value |
|
|
Level I |
|
|
Level II |
|
|
Level III |
|
|
Value |
|
|||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Securities held-to-maturity |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Loans held for sale |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loans |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Mortgage servicing rights |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits |
|
$ |
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
Other borrowings |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2024 |
|
||||||||||||||||||
|
|
|
Carrying |
|
|
|
|
|
|
|
|
|
|
|
Total Fair |
|
|||||
(Dollars in thousands) |
|
|
Value |
|
|
Level I |
|
|
Level II |
|
|
Level III |
|
|
Value |
|
|||||
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Securities held-to-maturity |
|
$ |
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Loans held for sale |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Net loans |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Mortgage servicing rights |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deposits |
|
$ |
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||
Other borrowings |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Other financial instruments carried at amortized cost include cash and cash equivalents, restricted stock, bank-owned life insurance, accrued interest receivable, short-term borrowings, and accrued interest payable, all of which have a level 1 fair value that approximates their carrying value.
NOTE 16 – ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the changes in accumulated other comprehensive loss by component net of tax for the years ended December 31, 2025, and 2024:
(Dollars in thousands) |
|
Pretax |
|
|
Tax Effect |
|
|
After-Tax |
|
|||
BALANCE AS OF DECEMBER 31, 2023 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding gain on available-for-sale |
|
|
|
|
|
( |
) |
|
|
|
||
Amortization of held-to-maturity discount resulting |
|
|
|
|
|
( |
) |
|
|
|
||
Total other comprehensive income |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||
BALANCE AS OF DECEMBER 31, 2024 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized holding gain on available-for-sale |
|
|
|
|
|
( |
) |
|
|
|
||
Amortization of held-to-maturity discount resulting |
|
|
|
|
|
( |
) |
|
|
|
||
Total other comprehensive income |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||
BALANCE AS OF DECEMBER 31, 2025 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
65
NOTE 17 – CONTINGENT LIABILITIES
In the normal course of business, the Company is subject to pending and threatened legal actions. Although, the Company is not able to predict the outcome of such actions, after reviewing pending and threatened actions, management believes that the outcome of any or all such actions will not have a material adverse effect on the results of operations or shareholders’ equity of the Company.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
With the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) was performed, as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective.
Internal Control over Financial Reporting
Information contained in the Report on Management’s Assessment of Internal Control Over Financial Reporting in Item 8 of this Annual Report on Form 10-K is incorporated herein by reference
Changes in Internal Control over Financial Reporting
There have been no changes during the quarter ended December 31, 2025, in the Company’s internal controls over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, CSB’s 2025 internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
(a) None.
(b)
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
66
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
The information required by Item 401 of Regulation S-K concerning the directors of the Company and the nominees for election as directors of the Company at the Annual Meeting of Shareholders to be held on April 22, 2026 (the “2026 Annual Meeting”), is incorporated herein by reference from the information to be included under the captions “Proposal One – Election of Directors,” “Nominees for Election of Directors,” and “Directors Continuing in Office” in the Company’s definitive proxy statement relating to the 2026 Annual Meeting to be filed with the SEC (the “2026 Proxy Statement”) no later than 120 days after December 31, 2025. The information required by Item 401 of Regulation S-K concerning the executive officers of the Company is incorporated herein by reference from the information to be included under the caption “Executive Officers” in the 2026 Proxy Statement.
Code of Ethics
The Company has adopted a Code of Ethics that applies to its principal officers, including the Chief Executive Officer and Chief Financial Officer. The Company has posted its Code of Ethics on its website at www.csb1.com; select Investors/Governance/Governance Documents. The Company plans to satisfy SEC disclosure requirements regarding any amendments to, or waiver of, the Code of Ethics relating to its Chief Executive Officer or Chief Financial Officer, and persons performing similar functions, by posting such information on the Company’s website or by making any necessary filings with the SEC. Any person may receive a copy of our Code of Ethics free of charge upon request by calling the Company during business hours or by sending a written request.
Procedures for Recommending Director Nominees
Information concerning the procedures by which shareholders may recommend nominees to the Company’s Board of Directors can be found under the caption, “Shareholder Recommendations” in the 2026 Proxy Statement.
Audit Committee
The information required by Items 407(d)(4) and (d)(5) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the sections, “Membership and Meetings of the Board and its Committees” and the subsection, “Committees of the Board of Directors – Audit Committee” in the 2026 Proxy Statement.
The information required by Item 408(b) of Regulation S-K incorporated herein by reference from the disclosure to be included under the section, "Insider Trading Arrangements and Policies" in the 2026 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 402 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the sections, “Discussion of Executive Compensation Programs” and, “Executive Compensation and Other Information” and the subsection, “Directors’ Compensation” under the section captioned, “Membership and Meetings of the Board and its Committees” in the 2026 Proxy Statement; provided, however, that the pay versus performance disclosure included in the 2026 Proxy Statement in response to Item 402(v) of Regulation S-K shall not be incorporated herein by reference.
The information required by Item 407(e)(4) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the section, “Compensation Committee Interlocks and Insider Participation” in the 2026 Proxy Statement.
The information required by Item 407(e)(5) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the section, “The Compensation Committee Report” in the 2026 Proxy Statement.
The information required by Item 402(x)(1) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the [section, “Discussion of Executive Compensation Programs” and the subsection, “Compensation Committee Decision-Making Process”] in the 2026 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Equity Compensation Plan Information
None.
Security Ownership of Certain Beneficial Owners and Management
The information required by Item 403 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the section, “Beneficial Ownership of Management and Certain Beneficial Owners” in the 2026 Proxy Statement.
67
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by Item 404 of Regulation S-K is incorporated herein by reference from the disclosure to be included under the section, “Certain Relationships and Related Transactions” in the 2026 Proxy Statement.
The information required by Item 407(a) of Regulation S-K is incorporated herein by reference from the disclosure to be included under the section, “Membership and Meetings of the Board and its Committees” in the 2026 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information required by this Item 14 is incorporated herein by reference from the disclosure to be included under the section, “Independent Registered Public Accounting Firm Fees” and subsection, “Audit Committee Procedures for Pre-Approval of Services by the Independent Public Accounting Firm” in the 2026 Proxy Statement.
68
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(1) |
Financial Statements |
31 |
|
Report of Independent Registered Public Accounting Firm (S.R. Snodgrass) |
32 |
|
Consolidated Balance Sheets on December 31, 2025 and 2024 |
34 |
|
Consolidated Statements of Income for the years ended December 31, 2025 and 2024 |
35 |
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025 and 2024 |
36 |
|
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025 and 2024 |
37 |
|
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 |
38 |
|
Notes to Consolidated Financial Statements |
40 |
All schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and have been omitted.
The documents listed in the Index to Exhibits that immediately precedes the "Signatures" pages of this Annual Report on Form 10-K are filed or furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference.
Certain schedules have been omitted because the required information is included in the consolidated financial statements and notes thereto or because they are not applicable or not required.
ITEM 16. FORM 10-K SUMMARY.
None.
69
(a)(3) Exhibits
The documents listed below are filed with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference as noted:
Exhibit Number |
|
Description of Document |
|
|
|
3.1 |
|
Amended Articles of Incorporation of CSB Bancorp, Inc., (incorporated by reference to registrant’s Quarterly Report on Form 10-Q filed August 6, 2004, Exhibit 3.1, file number 000-21714). |
|
|
|
3.1.1 |
|
Amended form of Article Fourth of Amended Articles of Incorporation, as effective April 9, 1998 (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 30, 1999, Exhibit 3.1.1, file number 000-21714). |
|
|
|
3.2 |
|
Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form 10-SB). |
|
|
|
3.2.1 |
|
Amendment to Article VIII to the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to registrant’s Form DEF 14A filed on March 25, 2009, Appendix A, file number 000-21714). |
|
|
|
3.2.2 |
|
Amended Article II of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant's Form DEF 14A file on March 16, 2021, Appendix A, film number 000-21714). |
|
|
|
3.2.3 |
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Amendment to Article III, Section 3, to the Code of Regulations of CSB Bancorp, Inc., (incorporated by reference to the registrant's Form DEF 14A filed on March 16, 2023, Exhibit A, file number 000-21714). |
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4 |
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Description of Capital Stock (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 16, 2020, Exhibit 4, file number 000-21714). |
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10.2+ |
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Employment Agreement between Paula Meiler and the Commercial and Savings Bank of Millersburg, Ohio (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 25, 2013, Exhibit 10.2, file number 000-21714). |
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10.3+ |
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Amendment to Employment Agreement between Paula Meiler and The Commercial & Savings Bank of Millersburg, Ohio (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 25, 2013, Exhibit 10.3, file number 000-21714). |
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10.4+ |
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CSB Bancorp, Inc. Annual Incentive Plan (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 23, 2017, Exhibit 10.4, file number 000-21714). |
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10.5+ |
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The Commercial & Savings Bank Deferred Compensation Plan (incorporated by reference to Registrant’s Report on Form 8-K filed on December 26, 2019, Exhibit 10.1 file number 000-21714). |
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19 |
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Insider Trading Policy (incorporated by reference to Registrant's Annual Report on Form 10-K filed on March 14, 2025, Exhibit 19, file number 000-21714). |
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21* |
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Subsidiaries of CSB Bancorp, Inc. |
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23.1* |
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Consent of S.R. Snodgrass, P.C. |
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31.1* |
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Section 302 Certification of Chief Executive Officer |
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31.2* |
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Section 302 Certification of Chief Financial Officer |
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32.1** |
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Section 906 Certification of Chief Executive Officer |
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32.2** |
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Section 906 Certification of Chief Financial Officer |
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97** |
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Incentive Compensation Clawback Policy (filed herewith) |
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101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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104 |
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The cover page for the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, has been formatted in Inline XBRL and contained in Exhibit 101 |
* Filed herewith.
** Furnished herewith.
+ Indicates management contract or compensatory plan.
70
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CSB BANCORP, INC. |
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/s/ Eddie L. Steiner |
Date: March 16, 2026 |
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Eddie L. Steiner, President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 16, 2026.
Signatures |
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Title |
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/s/ Eddie L. Steiner |
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President and Chief Executive Officer |
Eddie L. Steiner |
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/s/ Paula J. Meiler |
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Senior Vice President and Chief Financial Officer |
Paula J. Meiler |
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/s/ Pamela S. Basinger |
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Vice President and Principal Accounting Officer |
Pamela S. Basinger |
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/s/ Robert K. Baker |
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Director |
Robert K. Baker |
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/s/ Vikki G. Briggs |
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Director |
Vikki G. Briggs |
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/s/ Julian L. Coblentz |
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Director |
Julian L. Coblentz |
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/s/ Cheryl M. Kirkbride |
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Director |
Cheryl M. Kirkbride |
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/s/ Stephen E. Schillig |
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Director |
Stephen E. Schillig |
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71