News Details

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

Second Quarter Highlights

CSB Bancorp, Inc. (OTCID: CSBB) today announced second quarter 2025 net income of $3,727,000 or $1.41 per basic and diluted share, as compared to $1,615,000, or $0.61 per basic and diluted share, for the same period in 2024. For the six-month period ended June 30, 2025 net income totaled $7,343,000 compared to $4,548,000 for the same period last year, an increase of 62%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.48% and 1.23%, respectively, compared with 5.89% and 0.56% for the second quarter of 2024. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $5.2 million during the quarter, an increase of $392 thousand, or 8%, from the prior year’s second quarter. Net interest income increased $1.4 million, or 16%, noninterest income increased $36 thousand, or 2%, and noninterest expense increased $1.1 million, or 18%, in the second quarter of 2025 compared to the same period in 2024. For the six-month period ended June 30, 2025 ROE and ROA were 12.53% and 1.22% as compared to 8.35% and 0.79% for the comparable period in 2024.

Eddie Steiner, President and CEO stated, “While eventual economic outcomes from changing trade, immigration, and tax policies remain unclear, the U.S. economy has shown few signs of significant deterioration. Unemployment remains just above 4% nationally, and a little under 5% in Ohio. Inflation pressures remain above target, but the Consumer Price Index has held to a 2.7% increase over the past twelve months. Construction and acquisition financing activity remains steady, while businesses and households continue to be cautious about discretionary spending. The Bank’s net loan balances have increased 10% from year ago levels. Book value per common share at $46.11 is up 11% from a year ago, with the market price at 9 times earnings of the most recent twelve-month period.”

Provision for credit loss expense for the quarter decreased $2.3 million from second quarter 2024 as nonperforming loans continue to decrease since the second quarter of 2024. The court liquidation of one commercial credit of approximately $200 thousand 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 remaining real estate has been sold by the court appointed receiver and the auction proceeds will be received during third quarter 2025.

The allowance for expected credit losses (“ACL”) amounted to $8.3 million, or 1.05% of total loans, on June 30, 2025, as compared to $10.6 million or 1.47% of total loans on June 30, 2024. The allowance for credit losses on off-balance sheet commitments on June 30, 2025 was $493 thousand, as compared to a June 30, 2024 balance of $477 thousand. The decrease in the ACL is related primarily to the charge-off of one commercial credit facility in 2024. CSB has no allowance for credit losses related to available-for-sale or held-to-maturity debt securities, as there is no meaningful loss expectation on these securities.

Loan interest income including fees increased $1.3 million, or 13%, during second quarter 2025 as compared to the same quarter in 2024. The increase was primarily the result of a $63 million volume increase, augmented by an 18 basis point (“bp”) increase in yield over the prior year’s quarter. Securities interest income decreased $152 thousand, or 8%, during the second quarter 2025 compared to the same quarter 2024 as the Company continues to deploy cash flow from investments into loan originations. Loan yields for second quarter 2025 averaged 5.92%, an increase of 18 bps from the 2024 second quarter average of 5.74%, while overnight funds and securities yields for second quarter 2025 averaged 4.46% and 2.27%, respectively, compared to 5.57% and 2.20% in the second quarter 2024.

Interest expense rose $5 thousand, or less than 1%, during second quarter 2025 as compared to second quarter 2024. The cost to fund gross earning assets for the second quarter 2025 declined to 1.25% as compared to 1.31% for the second quarter of 2024.

The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.61% for the second quarter 2025, compared to 3.28% for the second quarter 2024. Compared to the 2024 second quarter, FTE net interest income increased $1.4 million, or 16%, with a $56 million increase in average earning assets as well as a 26 bp increase in the yield on assets. The mix shift into loans from securities primarily drove the increase in earnings from assets. The cost of interest earning liabilities declined with the decrease in short-term interest rates resulting in a 12 bp lower cost of deposits and repurchase agreements. Tax equivalency effect on net interest margin was 0.01% for both 2025 and 2024.

Noninterest income increased $36 thousand, or 2%, compared to second quarter of 2024. The increase was primarily the result of a $35 thousand increase in earnings on bank owned life insurance, a $29 thousand increase in unrealized gains on securities, and a $22 thousand increase on debit card interchange fees. Offsetting decreases were recognized as follows: $15 thousand decrease in trust service fees representing a one-time fee in 2024 that did not recur in 2025 and a $14 thousand decrease in credit card fees.

Noninterest expense increased $1.1 million, or 18%, from second quarter 2024. Salary and employee benefits increased $865 thousand, or 28%, compared to the prior year quarter, with increases in base salaries, medical, and retirement benefits. During second quarter 2024, a one-time reduction of incentive compensation and profit-sharing benefits was recorded to recognize the effect of the commercial credit loss on net income. Occupancy expense increased $58 thousand, or 20%, primarily due to heating system and elevator repairs. Software expense increased $27 thousand, or 7%. Equipment expense increased $22 thousand, or 11%. Professional fees decreased $45 thousand, or 10%, with decreases in legal fees for loan collections. The Company’s second quarter efficiency ratio increased slightly to 56.6% compared to 54.2% in the prior year.

Federal income tax expense was $903 thousand in second quarter 2025 compared to $348 thousand in the 2024 second quarter. The effective tax rate for the 2025 and 2024 second quarters was 20% and 18%, respectively.

Average earning assets for the 2025 second quarter increased $56 million, or 5%, from the year-ago quarter, primarily reflecting a $63 million, or 9%, increase in average loans, a $40 million, or 11%, decrease in average securities, and a $34 million, or 123%, 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 $48 million, or 10%, from prior year levels, as construction loans were drawn, and borrowers used term loans to fund equipment and other purchases. Average residential mortgage balances increased $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 $3 million from the prior year’s quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $1.4 million, or 9%, versus the same quarter of the prior year on lower volume of loans for recreational vehicles. Commercial loan demand for operating cash flow and equipment investments is somewhat constrained with households and businesses remaining cautious about discretionary borrowing until there is more confidence in price and employment stability after implementation of tariff and tax rate proposals. Construction and development and commercial real estate borrowing have continued to exhibit fairly steady demand.

Nonperforming loans were $1.4 million, or 0.17%, of total loans on June 30, 2025, compared to $6.7 million, or 0.93% of total loans, a year ago. Delinquent loan balances as of June 30, 2025, decreased to 0.30% of total loans as compared to 1.16% on June 30, 2024. Net loan charge-offs recognized during second quarter 2025 were $363 thousand, compared to second quarter 2024 net loan charge-offs of $246 thousand.

Average deposit balances increased on a quarter over prior year quarter comparison by $54 million, or 5%. For second quarter 2025, the average cost of deposits amounted to 1.32%, as compared to 1.38% for second quarter 2024. Second quarter 2025 increases in average deposit balances over the prior year quarter included savings accounts of $3 million, money market accounts of $4 million, and time deposits of $39 million. Noninterest-bearing accounts decreased $2 million from the prior year’s second quarter while interest-bearing demand accounts increased $10 million. The average balance of securities sold under repurchase agreement during the second quarter of 2025 decreased by $3 million, or 12%, compared to the average for the same period in the prior year.

Shareholders’ equity totaled $122 million on June 30, 2025, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 9.82% for the quarter ended June 30, 2025. The Company declared a second quarter dividend of $0.41 per share, producing an annualized yield of 3.8% based on June 30, 2025 closing price of $43.50.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.2 billion as of June 30, 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.