News Details

MILLERSBURG, Ohio--(BUSINESS WIRE)-- CSB Bancorp, Inc. (OTC Pink: CSBB)

First Quarter Highlights

CSB Bancorp, Inc. (OTC Pink: CSBB) today announced first quarter 2025 net income of $3,616,000 or $1.37 per basic and diluted share, as compared to $2,933,000, or $1.10 per basic and diluted share, for the same period in 2024.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.58% and 1.22%, respectively, compared with 10.84% and 1.02% for the first quarter of 2024. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $4.9 million during the quarter, an increase of $118 thousand, or 2%, from the prior year’s first quarter. Net interest income increased $533 thousand, or 6%, noninterest income decreased $76 thousand, or 4%, and noninterest expense increased $339 thousand, or 6%, in the first quarter of 2025 compared to the same period in 2024.

Eddie Steiner, President and CEO stated, “Trade and immigration policy announcements, along with unsettled federal tax and budget matters, have fueled increasing concern about a slowing economy and rising prices. Some businesses and households have deferred discretionary borrowing, although construction and acquisition financing activity has remained fairly steady. Net loan balances increased 3% during the quarter. Book value per common share increased to $44.80, up 9% from a year ago, with market price at 10.9 times earnings of the most recent twelve-month period.”

Credit loss provision expense for the quarter decreased $750 thousand from first quarter 2024 as nonperforming loans continue to decrease since the second quarter of 2024. The court liquidation of one commercial credit of approximately $1 million continues with the bank holding a priority lien on auction proceeds held by the court receiver which will be applied to the loan balances when released. The court receiver continues to move through the court system and has scheduled the auction of the remaining real estate.

The allowance for expected credit losses (“ACL”) amounted to $8.0 million, or 1.05% of total loans, on March 31, 2025, as compared to $7.1 million or 1.00% of total loans on March 31, 2024. The allowance for credit losses on off-balance sheet commitments on March 31, 2025 was $519 thousand, as compared to a March 31, 2024 balance of $1.3 million. The decrease in the ACL on off-balance sheet commitments is related to an $885 thousand allowance for letters of credit on March 31, 2024, that were drawn and converted to loans during second quarter 2024. CSB recorded no allowance for credit losses related to available-for-sale or held-to-maturity debt securities, with no meaningful loss expectation on these securities.

Loan interest income including fees increased $666 thousand, or 7%, during first quarter 2025 as compared to the same quarter in 2024. The increase was primarily the result of a $51 million volume increase, augmented by a 1 basis point (“bp”) increase in quarter over prior year’s quarter yield. Securities interest income decreased $108 thousand, or 5%, during the first quarter 2025 compared to the same quarter 2024 as the Company continues to deploy cash flow from investments into loan originations. Loan yields for first quarter 2025 averaged 5.84%, an increase of 1 bp from the 2024 first quarter average of 5.83%, while overnight funds and securities yields for first quarter 2025 averaged 4.47% and 2.34%, respectively, compared to 5.36% and 2.21% in the first quarter 2024.

Interest expense rose $192 thousand, or 6%, during first quarter 2025 as compared to first quarter 2024. The increase follows a period of rapid interest rate increases spurred by the Federal Reserve during March 2022 through May 2023, followed by competitive pressures from banks and others to secure adequate funding. The cost to fund gross earning assets for the first quarter 2025 was 1.29% as compared to 1.25% for the first quarter of 2024.

The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.48% compared to 3.37% for the first quarter 2024. Compared to the 2024 first quarter, FTE net interest income increased $522 thousand, or 6%, reflecting increasing interest income with a $34 million increase in average earning assets as well as a 16 bp increase in the yield on assets. The higher interest rate environment coupled with the continued mix shift into loans from securities primarily drove the increase in earnings from assets, which was partially offset by higher average interest-bearing liabilities and a 3 bp higher cost of funds. Tax equivalency effect on net interest margin was 0.01% in first quarter 2025 and 0.02% in first quarter 2024.

Noninterest income decreased $76 thousand, or 4%, compared to first quarter of 2024. The decrease was primarily the result of a $116 thousand decrease in trust service fees representing a one-time fee in 2024 that did not recur in 2025. Offsetting increases were recognized as follows: $28 thousand increase in earnings on bank owned life insurance, $15 thousand increase in service fees on deposits, $8 thousand increase in debit card interchange fees, and a $13 thousand increase in gain on sale of mortgage loans to the secondary market.

Noninterest expense increased $339 thousand, or 6%, from first quarter 2024. Salary and employee benefits increased $228 thousand, or 7%, compared to the prior year quarter, with increases in base salaries, medical, and retirement benefits. Professional fees increased $81 thousand, or 24%, with increases for IT support. Occupancy expense increased $73 thousand, or 26%, primarily due to snow removal and heating system repairs due to the cold winter. Debit card expense increased $22 thousand, or 12% with increased charge-backs and the Financial Institutions Tax increased $14 thousand, or 6%, with higher capital levels. Marketing and public relations costs decreased $23 thousand, or 18%, and software expense decreased $25 thousand, or 6%. The Company’s first quarter efficiency ratio increased slightly to 56.8% compared to 56.0% in the prior year.

Federal income tax expense was $878 thousand in the 2025 first quarter compared to $693 thousand in the 2024 first quarter. The effective tax rate for the 2025 and 2024 first quarters was 20% and 19%, respectively.

Average earning assets for the 2025 first quarter increased $34 million, or 3%, from the year-ago quarter, primarily reflecting a $51 million, or 7%, increase in average loans, a $38 million, or 10%, decrease in average securities, and a $21 million, or 75%, increase in interest-earning deposits in other banks, held mainly at the Federal Reserve Bank.

Average commercial loan balances for the quarter, including commercial real estate, increased $37 million, or 8%, from prior year levels, as construction loans were drawn, and borrowers used term loans to fund equipment and other purchases. Average residential mortgage balances increased $13 million, or 8%, above the prior year’s quarter as borrowers have been favoring adjustable-rate mortgages during this period of higher interest rates. The bank does not sell adjustable-rate mortgages to the secondary market. Home equity lines of credit increased $2 million from the prior year’s quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $1.6 million, or 10%, versus the same quarter of the prior year. Commercial loan demand has leveled out, with households and businesses alike preferring to limit borrowing until fiscal policies effects of tariffs and tax rates signal more certainty about the strength of the economy.

Nonperforming loans were $1.6 million, or 0.21%, of total loans on March 31, 2025, compared to $361 thousand, or 0.05% of total loans, a year ago. Delinquent loan balances as of March 31, 2025, increased to 0.43% of total loans as compared to 0.30% on March 31, 2024. Net loan charge-offs recognized during first quarter 2025 were $29 thousand, compared to first quarter 2024 net loan charge-offs of $74 thousand.

Average deposit balances increased on a quarter over prior year quarter comparison by $38 million, or 4%. For first quarter 2025, the average cost of deposits amounted to 1.36%, as compared to 1.31% for first quarter 2024. First quarter 2025 increases in average deposit balances over the prior year quarter included savings accounts of $1 million, money market accounts of $14 million, and time deposits of $48 million. Noninterest-bearing accounts decreased $4 million from the prior year’s first quarter while interest-bearing demand accounts declined $21 million. The average balance of securities sold under repurchase agreement during the first quarter of 2025 decreased by $7 million, or 21%, compared to the average for the same period in the prior year.

Shareholders’ equity totaled $118 million on March 31, 2025, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 9.73% for the quarter ended March 31, 2025. The Company declared a first quarter dividend of $0.40 per share, producing an annualized yield of 3.6% based on March 31, 2025 closing price of $44.00.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.2 billion as of March 31, 2025. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with sixteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, and a loan production office located in Medina, Ohio.

Forward-Looking Statement

This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Company, as well as its operations, markets, and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Company’s business, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Company’s periodic reports and registration statements filed with the Securities and Exchange Commission. The Company undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release. See the non-GAAP disclosures at the end of this release for a reconciliation of GAAP and non-GAAP measures.