News Details

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

First Quarter Highlights

CSB Bancorp, Inc. (OTC ID: CSBB) today announced first quarter 2026 net income of $4,444,000 or $1.69 per basic and diluted share, as compared to $3,616.000, or $1.37 per basic and diluted share, for the same period in 2025.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 14.03% and 1.42%, respectively, compared with 12.58% and 1.22% for the first quarter of 2025. Pre-Provision Net Revenue (“PPNR”) (a non-GAAP measure) totaled $6.0 million during the quarter, an increase of $1.1 million, or 23%, from the prior year’s first quarter. Net interest income increased $1.8 million, or 18%, noninterest income increased $176 thousand, or 10%, and noninterest expense increased $824 thousand, or 13%, in the first quarter of 2026 compared to the same period in 2025.

Eddie Steiner, President and CEO stated, “Loans increased 3% from year-end, while deposits declined by 2% on seasonal business slowdowns and tax payments. Mortgage application volume has improved with mortgage rates about 1/2%-3/4% below year ago levels. Commercial construction has been fairly robust in our markets. Businesses are generally cautious with inventory levels and equipment purchases. Higher energy prices are spurring inflation in a number of product and service categories and uncertain outcomes related to effects of the Iran war and related settlement agreements, along with fluctuations in U.S. global trade policy are feeding an unsettled tone. Consumers are spending at close to normal levels, with slightly increasing debt levels from sustained inflation. The Fed is likely on pause with rates for a sustained period of months unless significant flare-ups occur in employment or inflation. U.S. equity and debt markets have been volatile but regained all time high ranges in the past week.”

Provision for credit loss expense for the quarter increased $93 thousand from first quarter 2025. The allowance for expected credit losses (“ACL”) amounted to $12.9 million, or 1.52% of total loans, on March 31, 2026, as compared to $8.0 million or 1.05% of total loans on March 31, 2025. The allowance for credit losses on off-balance sheet commitments on March 31, 2026 was $607 thousand, as compared to a March 31, 2025 balance of $519 thousand. The increase in the ACL is primarily related to the individually evaluated loan relationship. 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 $1.7 million, or 15%, during first quarter 2026 as compared to the same quarter in 2025. The increase was primarily the result of an $89 million average volume increase, augmented by a 17 basis point (“bp”) increase in yield over the prior year’s quarter. Securities interest income increased $156 thousand, or 8%, during the first quarter 2026 compared to the same quarter 2025 with average yield in the portfolio improving as lower yielding securities continue to pay down and mature. Loan yields in first quarter 2026 averaged 6.01%, an increase of 17 bps from the 2025 first quarter average of 5.84%. Securities yields for first quarter 2026 averaged 2.64% as compared to 2.34% in the first quarter of 2025, while overnight funds averaged 3.71% compared to 4.47% in the first quarter 2025.

Interest expense declined $95 thousand, or 3%, during first quarter 2026 as compared to first quarter 2025. The cost to fund gross earning assets for the first quarter of 2026 declined to 1.18% as compared to 1.29% for the first quarter of 2025.

The fully taxable equivalent (“FTE”) net interest margin (a non-GAAP measure) was 3.87% for first quarter 2026, compared to 3.48% in the first quarter of 2025. FTE net interest income increased $1.8 million, or 18%, with a $74 million increase in average earning assets as well as a 28 bp increase in the yield on assets. The mix shift into loans primarily drove the increase in earnings from assets. The cost of interest-bearing liabilities declined 16 basis points as rates on time deposits have been slowly declining over the past year. Tax equivalency effect on net interest margin was 0.01% for both 2026 and 2025.

Noninterest income increased $176 thousand, or 10%, compared to first quarter of 2025. The increase was primarily the result of a $41 thousand increase in credit card fees, a $40 thousand increase in trust fees, a $39 thousand increase in earnings on bank owned life insurance, and a $28 thousand increase in debit card interchange fees.

Noninterest expense increased $824 thousand, or 13%, from first quarter 2025. Salary and employee benefits increased $536 thousand, or 14%, compared to the prior year quarter, with increases in base salaries, benefits, and medical expenses, partially due to increased headcount as the company was able to reduce vacancies and add several new positions supporting growth. Software expense increased $118 thousand, or 29%, primarily due to new loan production software. Professional fees increased $45 thousand, or 11%, with increases to legal expense, audit and accounting, and director’s fees. Marketing and public relations increased $26 thousand, or 25%, with increasing benefit requests. The Company’s first quarter efficiency ratio decreased to 54.75% compared to 56.81% in the prior year.

Federal income tax expense was $1.1 million in first quarter 2026 compared to $878 thousand in the first quarter of 2025. The effective tax rate for the 2026 and 2025 first quarters was 20%, respectively.

Average earning assets for the first quarter of 2026 increased $74 million, or 7% from the year-ago quarter, primarily reflecting an $89 million, or 12%, increase in average loans, a $13 million, or 4%, decrease in average securities, and a $3 million, or 6%, decrease 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 $67 million, or 13%, 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 $16 million, or 9%, above the prior year’s quarter with borrowers favoring adjustable-rate mortgages during this period of higher interest rates. The bank does not sell adjustable-rate mortgages to the secondary market. Home equity lines of credit increased $8 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 million, or 7%, 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 following tensions in the middle east and rising oil prices. Construction and development and commercial real estate borrowing have continued to exhibit fairly steady demand.

Nonperforming loans were $1.0 million, or 0.12%, of total loans on March 31, 2026, compared to $1.6 million, or 0.21% of total loans, a year ago. Delinquent loan balances as of March 31, 2026, decreased to 0.16% of total loans as compared to 0.43% on March 31, 2025. Net loan charge-offs recognized during first quarter 2026 were $7 thousand, compared to first quarter 2025 net loan charge-offs of $29 thousand.

Average deposit balances increased on a quarter over prior year quarter comparison by $58 million, or 6%. For first quarter 2026, the average cost of deposits amounted to 1.26%, as compared to 1.36% for first quarter 2025. First quarter 2026 increases in average deposit balances over the prior year quarter included savings accounts of $4 million, money market accounts of $2 million, and time deposits of $16 million. Noninterest-bearing accounts increased $7 million from the prior year’s first quarter while interest-bearing demand accounts increased $30 million. The average balance of securities sold under repurchase agreement during the first quarter of 2026 increased by $1 million, or 4%, compared to the average for the same period in the prior year.

Shareholders’ equity totaled $129 million on March 31, 2026, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 10.12% for the quarter ended March 31, 2026. The Company declared a first quarter dividend of $0.43 per share, producing an annualized yield of 2.8% based on March 31, 2026 closing price of $62.36.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.3 billion as of March 31, 2026. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with sixteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, 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.