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CSB Bancorp, Inc. - Quarter Report: 2021 June (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 0-21714

 

CSB Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Ohio

34-1687530

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

91 North Clay Street, P.O. Box 232

Millersburg, OH

44654

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (330) 674-9015

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Shares, $6.25 par value

 

CSBB

 

OTCPink

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes      No  

As of August 1, 2021, the registrant had 2,734,244 shares of common stock, $6.25 par value per share, outstanding.

 

 

 


 

 

CSB BANCORP, INC.

FORM 10-Q

QUARTER ENDED June 30, 2021

Table of Contents

 

 

 

Part I - Financial Information

 

 

 

Page

ITEM 1

FINANCIAL STATEMENTS (Unaudited)

3

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Income

4

 

Consolidated Statements of Comprehensive Income

5

 

Consolidated Statements of Changes in Shareholders' Equity

6

 

Condensed Consolidated Statements of Cash Flows

7

 

Notes to Consolidated Financial Statements

8

ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

27

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

35

ITEM 4

CONTROLS AND PROCEDURES

36

 

 

 

 

Part II - Other Information

 

ITEM1

Legal Proceedings

37

ITEM1A

Risk Factors

37

ITEM2

Unregistered Sales of Equity Securities and Use of Proceeds

37

ITEM3

Defaults upon Senior Securities

37

ITEM4

Mine Safety Disclosures

37

ITEM5

Other Information

37

ITEM6

Exhibits

38

 

Signatures

39

 

2


 

 

CSB BANCORP, INC.

PART I – FINANCIAL INFORMATION

ITEM 1. – FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

June 30,

 

 

December 31,

 

(Dollars in thousands)

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

17,308

 

 

$

19,281

 

Interest-earning deposits in other banks

 

 

295,036

 

 

 

162,371

 

Total cash and cash equivalents

 

 

312,344

 

 

 

181,652

 

Securities

 

 

 

 

 

 

 

 

Available-for-sale, at fair value

 

 

194,164

 

 

 

190,438

 

Held-to-maturity (fair value 2021-$25,003; 2020-$9,225)

 

 

24,878

 

 

 

9,045

 

Equity securities

 

 

99

 

 

 

87

 

Restricted stock, at cost

 

 

4,614

 

 

 

4,614

 

Total securities

 

 

223,755

 

 

 

204,184

 

Loans held for sale

 

 

1,465

 

 

 

1,378

 

Loans

 

 

552,030

 

 

 

609,159

 

Less allowance for loan losses

 

 

7,875

 

 

 

8,274

 

Net loans

 

 

544,155

 

 

 

600,885

 

Premises and equipment, net

 

 

13,431

 

 

 

12,633

 

Core deposit intangible

 

 

22

 

 

 

44

 

Goodwill

 

 

4,728

 

 

 

4,728

 

Bank-owned life insurance

 

 

23,710

 

 

 

21,416

 

Accrued interest receivable and other assets

 

 

5,312

 

 

 

4,712

 

TOTAL ASSETS

 

$

1,128,922

 

 

$

1,031,632

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

302,688

 

 

$

272,051

 

Interest-bearing

 

 

683,980

 

 

 

619,511

 

Total deposits

 

 

986,668

 

 

 

891,562

 

Short-term borrowings

 

 

38,475

 

 

 

37,215

 

Other borrowings

 

 

3,570

 

 

 

4,664

 

Accrued interest payable and other liabilities

 

 

4,197

 

 

 

4,332

 

Total liabilities

 

 

1,032,910

 

 

 

937,773

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, $6.25 par value.  Authorized 9,000,000 shares; issued

   2,980,602 shares; outstanding 2,734,244 shares 2021 and 2,742,350 shares 2020

 

 

18,629

 

 

 

18,629

 

Additional paid-in capital

 

 

9,815

 

 

 

9,815

 

Retained earnings

 

 

73,196

 

 

 

69,209

 

Treasury stock at cost:  246,358 shares in 2021and  238,252 shares in 2020

 

 

(5,093

)

 

 

(4,780

)

Accumulated other comprehensive income (loss)

 

 

(535

)

 

 

986

 

Total shareholders' equity

 

 

96,012

 

 

 

93,859

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

1,128,922

 

 

$

1,031,632

 

 

See notes to unaudited consolidated financial statements.

3


 

 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(Dollars in thousands, except per share data)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

6,231

 

 

$

7,105

 

 

$

13,096

 

 

$

13,955

 

Taxable securities

 

 

604

 

 

 

470

 

 

 

1,163

 

 

 

1,090

 

Nontaxable securities

 

 

111

 

 

 

125

 

 

 

222

 

 

 

233

 

Other

 

 

68

 

 

 

31

 

 

 

114

 

 

 

270

 

Total interest and dividend income

 

 

7,014

 

 

 

7,731

 

 

 

14,595

 

 

 

15,548

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

508

 

 

 

673

 

 

 

1,046

 

 

 

1,504

 

Short-term borrowings

 

 

15

 

 

 

16

 

 

 

28

 

 

 

60

 

Other borrowings

 

 

20

 

 

 

30

 

 

 

42

 

 

 

56

 

Total interest expense

 

 

543

 

 

 

719

 

 

 

1,116

 

 

 

1,620

 

NET INTEREST INCOME

 

 

6,471

 

 

 

7,012

 

 

 

13,479

 

 

 

13,928

 

PROVISION FOR LOAN LOSSES

 

 

(475

)

 

 

717

 

 

 

(445

)

 

 

895

 

Net interest income, after provision for loan losses

 

 

6,946

 

 

 

6,295

 

 

 

13,924

 

 

 

13,033

 

NON INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

219

 

 

 

211

 

 

 

426

 

 

 

501

 

Trust services

 

 

264

 

 

 

196

 

 

 

546

 

 

 

427

 

Debit card interchange fees

 

 

526

 

 

 

400

 

 

 

997

 

 

 

776

 

Gain on sale of loans, net

 

 

417

 

 

 

508

 

 

 

904

 

 

 

622

 

Earnings on bank owned life insurance

 

 

144

 

 

 

131

 

 

 

294

 

 

 

259

 

Unrealized gain or (loss) on equity securities, net

 

 

(1

)

 

 

4

 

 

 

12

 

 

 

(9

)

Other income

 

 

274

 

 

 

191

 

 

 

542

 

 

 

408

 

Total noninterest income

 

 

1,843

 

 

 

1,641

 

 

 

3,721

 

 

 

2,984

 

NON INTEREST EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,044

 

 

 

2,676

 

 

 

6,073

 

 

 

5,644

 

Occupancy expense

 

 

247

 

 

 

244

 

 

 

501

 

 

 

464

 

Equipment expense

 

 

172

 

 

 

198

 

 

 

349

 

 

 

333

 

Professional and director fees

 

 

356

 

 

 

282

 

 

 

651

 

 

 

611

 

Financial institutions and franchise tax expense

 

 

187

 

 

 

171

 

 

 

375

 

 

 

342

 

Marketing and public relations

 

 

98

 

 

 

65

 

 

 

177

 

 

 

193

 

Software expense

 

 

336

 

 

 

259

 

 

 

636

 

 

 

485

 

Debit card expense

 

 

172

 

 

 

146

 

 

 

343

 

 

 

286

 

Amortization of intangible assets

 

 

11

 

 

 

15

 

 

 

22

 

 

 

30

 

FDIC insurance expense

 

 

120

 

 

 

12

 

 

 

228

 

 

 

12

 

Other expenses

 

 

647

 

 

 

641

 

 

 

1,316

 

 

 

1,316

 

Total noninterest expenses

 

 

5,390

 

 

 

4,709

 

 

 

10,671

 

 

 

9,716

 

Income before income taxes

 

 

3,399

 

 

 

3,227

 

 

 

6,974

 

 

 

6,301

 

FEDERAL INCOME TAX PROVISION

 

 

654

 

 

 

621

 

 

 

1,344

 

 

 

1,212

 

NET INCOME

 

$

2,745

 

 

$

2,606

 

 

$

5,630

 

 

$

5,089

 

Basic and diluted net earnings per share

 

$

1.00

 

 

$

0.95

 

 

$

2.05

 

 

$

1.86

 

See notes to unaudited consolidated financial statements

4


 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(Dollars in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income

 

$

2,745

 

 

$

2,606

 

 

$

5,630

 

 

$

5,089

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains arising during the period

 

 

1,649

 

 

 

617

 

 

 

(1,958

)

 

 

1,157

 

Amortization of discount on securities transferred to held-to-maturity

 

 

16

 

 

 

16

 

 

 

32

 

 

 

30

 

Income tax effect

 

 

(350

)

 

 

(133

)

 

 

405

 

 

 

(249

)

Other comprehensive income (loss)

 

 

1,315

 

 

 

500

 

 

 

(1,521

)

 

 

938

 

Total comprehensive income

 

$

4,060

 

 

$

3,106

 

 

$

4,109

 

 

$

6,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited consolidated financial statements.

5


 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

(Dollars in thousands)

 

Common

stock

 

 

Additional

paid-in

capital

 

 

Retained

earnings

 

 

Treasury

stock

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Total

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

71,271

 

 

$

(4,780

)

 

$

(1,850

)

 

$

93,085

 

Net income

 

 

 

 

 

 

 

 

2,745

 

 

 

 

 

 

 

 

 

2,745

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,315

 

 

 

1,315

 

Purchase of 8,106 treasury shares

 

 

 

 

 

 

 

 

 

 

 

(313

)

 

 

 

 

 

(313

)

Cash dividends declared, $0.30 per share

 

 

 

 

 

 

 

 

(820

)

 

 

 

 

 

 

 

 

(820

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

73,196

 

 

$

(5,093

)

 

$

(535

)

 

$

96,012

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

69,209

 

 

$

(4,780

)

 

$

986

 

 

$

93,859

 

Net income

 

 

 

 

 

 

 

 

5,630

 

 

 

 

 

 

 

 

 

5,630

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,521

)

 

 

(1,521

)

Purchase of 8,106 treasury shares

 

 

 

 

 

 

 

 

 

 

 

(313

)

 

 

 

 

 

(313

)

Cash dividends declared, $0.60 per share

 

 

 

 

 

 

 

 

(1,643

)

 

 

 

 

 

 

 

 

 

(1,643

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

73,196

 

 

$

(5,093

)

 

$

(535

)

 

$

96,012

 

Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

63,455

 

 

$

(4,780

)

 

$

510

 

 

$

87,629

 

Net income

 

 

 

 

 

 

 

 

2,606

 

 

 

 

 

 

 

 

 

2,606

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

500

 

 

 

500

 

Cash dividends declared, $0.28 per share

 

 

 

 

 

 

 

 

(768

)

 

 

 

 

 

 

 

 

(768

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

65,293

 

 

$

(4,780

)

 

$

1,010

 

 

$

89,967

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

61,740

 

 

$

(4,780

)

 

$

72

 

 

$

85,476

 

Net income

 

 

 

 

 

 

 

 

5,089

 

 

 

 

 

 

 

 

 

5,089

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

938

 

 

 

938

 

Cash dividends declared, $0.56 per share

 

 

 

 

 

 

 

 

(1,536

)

 

 

 

 

 

 

 

 

(1,536

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

65,293

 

 

$

(4,780

)

 

$

1,010

 

 

$

89,967

 

 

 

See notes to unaudited consolidated financial statements.

6


 

CSB BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Six Months Ended

June 30,

 

(Dollars in thousands)

 

2021

 

 

2020

 

NET CASH FROM OPERATING ACTIVITIES

 

$

5,684

 

 

$

7,635

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

Proceeds from repayments, available-for-sale

 

 

27,598

 

 

 

25,028

 

Proceeds from repayments, held-to-maturity

 

 

5,034

 

 

 

6,437

 

Purchases, available-for-sale

 

 

(33,917

)

 

 

(15,272

)

Purchases, held-to-maturity

 

 

(20,851

)

 

 

(3,425

)

Loan (originations) repayments, net

 

 

56,230

 

 

 

(87,808

)

Proceeds from sale of equipment

 

 

 

 

 

24

 

Property, equipment, and software acquisitions

 

 

(1,222

)

 

 

(969

)

Purchase of bank-owned life insurance

 

 

(2,000

)

 

 

 

Net cash provided by (used in) investing activities

 

 

30,872

 

 

 

(75,985

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Net change in deposits

 

 

95,106

 

 

 

132,415

 

Net change in short-term borrowings

 

 

1,260

 

 

 

4,976

 

Proceeds from other borrowings

 

 

 

 

 

5,000

 

Repayment of other borrowings

 

 

(1,094

)

 

 

(1,465

)

Cash dividends paid

 

 

(823

)

 

 

(768

)

Purchase of treasury shares

 

 

(313

)

 

 

 

Net cash provided by financing activities

 

 

94,136

 

 

 

140,158

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

130,692

 

 

 

71,808

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

181,652

 

 

 

102,017

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

312,344

 

 

$

173,825

 

SUPPLEMENTAL DISCLOSURES

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$

1,137

 

 

$

1,645

 

Income taxes

 

 

1,375

 

 

 

 

Noncash financing activities:

 

 

 

 

 

 

 

 

Dividends declared

 

 

820

 

 

 

768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited consolidated financial statements.

7


 

 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”).  All significant intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements have been prepared without audit.  In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at June 30, 2021, and the results of operations and changes in cash flows for the periods presented have been made.

Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted.  The Annual Report for CSB for the year ended December 31, 2020, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements.  The results of operations for the periods ended June 30, 2021 are not necessarily indicative of the operating results for the full year or any future interim period.

Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.

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 that affect 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 loan losses and the fair value of financial instruments.

 

  

8


 

 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ASU 2016-13 - Financial Instruments - Credit Losses. The Update and all subsequent ASU’s that modified Topic 326, requires that financial assets be presented at the net amount expected to be collected (i.e. net of expected credit losses), eliminating the probable recognition threshold for credit losses on financial assets measured at amortized cost. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We expect the Update will result in an increase in the allowance for credit losses for the estimated life of the financial asset, including an estimate for held-to-maturity debt securities. The amount of any increase will be impacted by the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. A cumulative-effect adjustment to retained earnings is required as of the beginning of the year of adoption. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In November 2019, the FASB deferred the effective date for ASC 326, Financial Instruments – Credit Losses, for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASU’s.  

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update, and all subsequent ASU’s, simplifies the goodwill impairment test.  Under the new guidance, Step 2 of the goodwill impairment process that requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities is eliminated. Instead, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. In November 2019, the FASB deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a material impact on the Company’s financial statements.

ASU 2020-4 – Reference Rate Reform (Topic 848).  This update provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. This Update is not expected to have a significant impact on the Company’s financial statements.

 

 

 

 

 

 

9


 

 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 2 – SECURITIES

Securities consist of the following on June 30, 2021 and December 31, 2020:

 

(Dollars in thousands)

 

Amortized

cost

 

 

Gross

unrealized

gains

 

 

Gross

unrealized

losses

 

 

Fair value

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

3,926

 

 

$

6

 

 

$

(71

)

 

$

3,861

 

U.S. Government agencies

 

 

13,999

 

 

 

 

 

 

(171

)

 

 

13,828

 

Mortgage-backed securities of government agencies

 

 

143,421

 

 

 

850

 

 

 

(1,695

)

 

 

142,576

 

Asset-backed securities of government agencies

 

 

805

 

 

 

 

 

 

(19

)

 

 

786

 

State and political subdivisions

 

 

24,291

 

 

 

459

 

 

 

(14

)

 

 

24,736

 

Corporate bonds

 

 

8,314

 

 

 

76

 

 

 

(13

)

 

 

8,377

 

Total available-for-sale

 

 

194,756

 

 

 

1,391

 

 

 

(1,983

)

 

 

194,164

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government agencies

 

 

24,395

 

 

 

145

 

 

 

(21

)

 

 

24,519

 

State and political subdivisions

 

 

483

 

 

 

1

 

 

 

 

 

 

484

 

Total held-to-maturity

 

 

24,878

 

 

 

146

 

 

 

(21

)

 

 

25,003

 

Equity securities

 

 

53

 

 

 

46

 

 

 

 

 

 

99

 

Restricted stock

 

 

4,614

 

 

 

 

 

 

 

 

 

4,614

 

Total securities

 

$

224,301

 

 

$

1,583

 

 

$

(2,004

)

 

$

223,880

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury security

 

$

999

 

 

$

12

 

 

$

 

 

$

1,011

 

U.S. Government agencies

 

 

13,998

 

 

 

8

 

 

 

 

 

 

14,006

 

Mortgage-backed securities of government agencies

 

 

138,964

 

 

 

1,184

 

 

 

(136

)

 

 

140,012

 

Asset-backed securities of government agencies

 

 

848

 

 

 

 

 

 

(11

)

 

 

837

 

State and political subdivisions

 

 

23,422

 

 

 

544

 

 

 

 

 

 

23,966

 

Corporate bonds

 

 

10,841

 

 

 

42

 

 

 

(277

)

 

 

10,606

 

Total available-for-sale

 

 

189,072

 

 

 

1,790

 

 

 

(424

)

 

 

190,438

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government agencies

 

 

5,620

 

 

 

192

 

 

 

(12

)

 

 

5,800

 

State and political subdivisions

 

 

3,425

 

 

 

 

 

 

 

 

 

3,425

 

Total held-to-maturity

 

 

9,045

 

 

 

192

 

 

 

(12

)

 

 

9,225

 

Equity securities

 

 

53

 

 

 

34

 

 

 

 

 

 

87

 

Restricted stock

 

 

4,614

 

 

 

 

 

 

 

 

 

4,614

 

Total securities

 

$

202,784

 

 

$

2,016

 

 

$

(436

)

 

$

204,364

 

 

10


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 2 – SECURITIES (continued)

 

The amortized cost and fair value of debt securities on June 30, 2021, 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 cost

 

 

Fair value

 

Available-for-sale

 

 

 

 

 

 

 

 

Due in one year or less

 

$

1,458

 

 

$

1,467

 

Due after one through five years

 

 

23,130

 

 

 

23,298

 

Due after five through ten years

 

 

32,624

 

 

 

32,790

 

Due after ten years

 

 

137,544

 

 

 

136,609

 

Total debt securities available-for-sale

 

$

194,756

 

 

$

194,164

 

Held-to-maturity

 

 

 

 

 

 

 

 

Due after five through ten years

 

 

110

 

 

 

111

 

Due after ten years

 

 

24,768

 

 

 

24,892

 

Total debt securities held-to-maturity

 

$

24,878

 

 

$

25,003

 

 

 

Securities with a fair value of approximately $107.8 million and $91.0 million were pledged on June 30, 2021 and December 31, 2020, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock.  The Bank’s investment in FHLB stock amounted to approximately $4.1 million on June 30, 2021 and December 31, 2020. Federal Reserve Bank stock was $471 thousand on June 30, 2021 and December 31, 2020.

There were no proceeds from sales of securities for the three and six-month periods ended June 30, 2021 and 2020. All gains and losses recognized on equity securities during the three and six-month periods were unrealized.

11


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 2 – SECURITIES (continued)

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, on June 30, 2021 and December 31, 2020:

 

 

 

Securities in a continuous unrealized loss position

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

(Dollars in thousands)

 

Gross

unrealized

losses

 

 

Fair

value

 

 

Gross

unrealized

losses

 

 

Fair

value

 

 

Gross

unrealized

losses

 

 

Fair

value

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Securities

 

$

(71

)

 

$

2,856

 

 

$

 

 

$

 

 

$

(71

)

 

$

2,856

 

U.S. Government agencies

 

 

(171

)

 

 

13,828

 

 

 

 

 

 

 

 

 

(171

)

 

 

13,828

 

Mortgage-backed securities of government

   agencies

 

 

(1,692

)

 

 

92,155

 

 

 

(3

)

 

 

328

 

 

 

(1,695

)

 

 

92,483

 

Asset-backed securities of government

   agencies

 

 

 

 

 

 

 

 

(19

)

 

 

786

 

 

 

(19

)

 

 

786

 

State and political subdivisions

 

 

(14

)

 

 

795

 

 

 

 

 

 

 

 

 

(14

)

 

 

795

 

Corporate bonds

 

 

 

 

 

 

 

 

(13

)

 

 

987

 

 

 

(13

)

 

 

987

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government

   agencies

 

 

 

 

 

 

 

 

(21

)

 

 

1,308

 

 

 

(21

)

 

 

1,308

 

Total temporarily impaired securities

 

$

(1,948

)

 

$

109,634

 

 

$

(56

)

 

$

3,409

 

 

$

(2,004

)

 

$

113,043

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government

   agencies

 

$

(70

)

 

$

10,808

 

 

$

(66

)

 

$

8,974

 

 

$

(136

)

 

$

19,782

 

Asset-backed securities of government

   agencies

 

 

 

 

 

 

 

 

(11

)

 

 

837

 

 

 

(11

)

 

 

837

 

Corporate bonds

 

 

(32

)

 

 

1,968

 

 

 

(245

)

 

 

3,733

 

 

 

(277

)

 

 

5,701

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government

   agencies

 

 

(12

)

 

 

1,734

 

 

 

 

 

 

 

 

 

(12

)

 

 

1,734

 

Total temporarily impaired securities

 

$

(114

)

 

$

14,510

 

 

$

(322

)

 

$

13,544

 

 

$

(436

)

 

$

28,054

 

 

 

There were thirty-nine securities in an unrealized loss position on June 30, 2021, eight of which were in a continuous loss position for twelve months or more.  At least quarterly, the Company conducts a comprehensive security-level impairment assessment.  The assessments are based on the nature of the securities, the extent and duration of the securities in an unrealized loss position, the extent and duration of the loss and management’s intent to sell or if it is more likely than not that management will be required to sell a security before recovery of its amortized cost basis, which may be maturity. Management believes the Company will fully recover the cost of these securities.  It does not intend to sell these securities and likely will not be required to sell them before the anticipated recovery of the remaining amortized cost basis, which may be maturity.  As a result, management concluded that these securities were not other-than-temporarily impaired on June 30, 2021.

 

12


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

 

NOTE 3 – LOANS

Loans consist of the following:

 

(Dollars in thousands)

 

June 30,

2021

 

 

December 31,

2020

 

Commercial 1

 

$

146,138

 

 

$

191,540

 

Commercial real estate

 

 

184,677

 

 

 

187,221

 

Residential real estate

 

 

171,496

 

 

 

177,155

 

Construction & land development

 

 

34,393

 

 

 

36,038

 

Consumer

 

 

16,550

 

 

 

17,916

 

Total loans before deferred costs

 

 

553,254

 

 

 

609,870

 

Deferred loan (fees) costs, net

 

 

(1,224

)

 

 

(711

)

Total Loans

 

$

552,030

 

 

$

609,159

 

1 Includes $39.0 million and $70.1 million of Paycheck Protection Program loans on June 30, 2021, and December 31, 2020, respectively.

 

Loan Origination/Risk Management

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and 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 loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its 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. The cash flows of borrowers; however, 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, inventory, and equipment, and may 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 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. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied.

 

 

 

 

13


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

With respect to loans to developers and builders that are 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, sensitivity analysis of absorption and lease rates, and financial analysis of the 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 ultimate 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 an interim loan commitment from the Company until permanent financing is obtained.  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.  To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel.  This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk.

The Company maintains an independent credit department that reviews and validates the credit risk program on a periodic basis.  Results of these reviews are presented to management.  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.  

Loans serviced for others approximated $133.4 million and $117.5 million on June 30, 2021 and December 31, 2020, respectively.

Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provided over $2 trillion in economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, the Company was automatically authorized to originate PPP loans. The PPP provides loans to small businesses who were affected by economic conditions as a result of COVID-19 to provide cash flow assistance to employers who maintain their payroll (including healthcare and certain related expenses), mortgage interest, rent, leases, utilities and interest on existing debt during the COVID-19 emergency. The Company had 499 PPP loans with outstanding principal balances of $39.0 million as of March 31, 2021, and 671 PPP loans with balances of $70.1 million outstanding as of December 31, 2020. The PPP loans are 100% guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan is made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. PPP loans are included in the Commercial loan category with no allowance for loan losses allocated.

In accordance with the SBA terms and conditions on these PPP loans, as of June 30, 2021, the Company has received approximately $5.4 million in fees associated with the processing of these loans since the inception of the program. Upon funding of the loans, the fees are deferred and amortized over the life of the loan with the unearned balance fully recognized at the time a loan is forgiven as an adjustment to yield in accordance with FASB ASC 310-20-25-2. For the six months ended June 30, 2021 and 2020, interest and fee income recognized on PPP loans was $1.7 million and $724 thousand, respectively. For the three months ended June 30, 2021 and

14


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

2020, interest and fee income recognized on PPP loans was $691 thousand and $724 thousand, respectively. As of June 30, 2021, there were $1.5 million in remaining unearned fees on PPP loans outstanding.

Concentrations of Credit

Nearly all the Company’s lending activity occurs within the state of Ohio, including the four counties of Holmes, Stark, Tuscarawas and Wayne, as well as other markets.  The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans.   Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the two largest industries compared to total loans at June 30, 2021, included $43 million, or 8%, of total loans to lessors of non-residential buildings or dwellings, and $34 million, or 6%, of total loans to assisted living facilities for the elderly. 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, interest payments, and the adequacy of the collateral received.

The Company has identified industries that could be at a higher risk due to the COVID-19 pandemic. As of June 30, 2021, the total balance of loans identified to COVID-19 affected businesses was $43 million, with $27 million of those loans to assisted living facilities and $13 million to businesses in the hotel industry.

 

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2021, and 2020.  Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

For the three months ended June 30, 2021, the decrease in the provision for loan losses for commercial loans was primarily related to a payoff. For the six months ended June 30, 2021 the decrease in the provision for commercial loans was primarily related to payoffs, partially offset by an increase in specific reserves. The decrease in provision for all other categories is related to the improvement in economic conditions along with fewer delinquent and nonperforming loans and improvement in classified loan balances.

For the three- and six-month periods ended June 30, 2020, the decrease in the provision for loan losses for commercial loans and the increase for commercial real estate loans was due to the reallocation of allowance related to loans affected by the COVID-19 pandemic. The increase in all other categories is primarily related to the slowing economy and the continuing elevated unemployment rates associated with the pandemic.

 

15


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

Summary of Allowance for Loan Losses

 

(Dollars in thousands)

 

Commercial

 

 

Commercial

Real Estate

 

 

Residential

Real Estate

 

 

Construction

& Land

Development

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,640

 

 

$

3,489

 

 

$

1,134

 

 

$

800

 

 

$

290

 

 

$

985

 

 

$

8,338

 

Provision for loan losses

 

 

(306

)

 

 

(86

)

 

 

(75

)

 

 

(33

)

 

 

(21

)

 

 

46

 

 

 

(475

)

Charge-offs

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

 

(20

)

Recoveries

 

 

4

 

 

 

1

 

 

 

1

 

 

 

 

 

 

26

 

 

 

 

 

 

 

32

 

Net recoveries

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

9

 

 

 

 

 

 

 

12

 

Ending balance

 

$

1,335

 

 

$

3,404

 

 

$

1,060

 

 

$

767

 

 

$

278

 

 

$

1,031

 

 

$

7,875

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

1,739

 

 

$

3,469

 

 

$

1,156

 

 

$

756

 

 

$

352

 

 

$

802

 

 

$

8,274

 

Provision for loan losses

 

 

(421

)

 

 

(66

)

 

 

(98

)

 

 

11

 

 

 

(100

)

 

 

229

 

 

 

(445

)

Charge-offs

 

 

(6

)

 

 

 

 

 

 

 

 

 

 

 

(19

)

 

 

 

 

 

 

(25

)

Recoveries

 

 

23

 

 

 

1

 

 

 

2

 

 

 

 

 

 

45

 

 

 

 

 

 

 

71

 

Net recoveries

 

 

17

 

 

 

1

 

 

 

2

 

 

 

 

 

 

26

 

 

 

 

 

 

 

46

 

Ending balance

 

$

1,335

 

 

$

3,404

 

 

$

1,060

 

 

$

767

 

 

$

278

 

 

$

1,031

 

 

$

7,875

 

Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

2,609

 

 

$

2,300

 

 

$

1,347

 

 

$

255

 

 

$

518

 

 

$

91

 

 

$

7,120

 

Provision for loan losses

 

 

(343

)

 

 

480

 

 

 

237

 

 

 

82

 

 

 

2

 

 

 

259

 

 

 

717

 

Charge-offs

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

 

 

 

 

(16

)

Recoveries

 

 

4

 

 

 

1

 

 

 

1

 

 

 

 

 

 

8

 

 

 

 

 

 

 

14

 

Net (charge-offs) recoveries

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

(2

)

Ending balance

 

$

2,266

 

 

$

2,781

 

 

$

1,585

 

 

$

337

 

 

$

516

 

 

$

350

 

 

$

7,835

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

2,408

 

 

$

2,153

 

 

$

1,152

 

 

$

203

 

 

$

481

 

 

$

620

 

 

$

7,017

 

Provision for loan losses

 

 

(131

)

 

 

627

 

 

 

446

 

 

 

134

 

 

 

89

 

 

 

(270

)

 

 

895

 

Charge-offs

 

 

(19

)

 

 

 

 

 

(15

)

 

 

 

 

 

(69

)

 

 

 

 

 

 

(103

)

Recoveries

 

 

8

 

 

 

1

 

 

 

2

 

 

 

 

 

 

15

 

 

 

 

 

 

 

26

 

Net (charge-offs) recoveries

 

 

(11

)

 

 

1

 

 

 

(13

)

 

 

 

 

 

(54

)

 

 

 

 

 

 

(77

)

Ending balance

 

$

2,266

 

 

$

2,781

 

 

$

1,585

 

 

$

337

 

 

$

516

 

 

$

350

 

 

$

7,835

 

 

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of June 30, 2021 and December 31, 2020:

 

(Dollars in thousands)

 

Commercial

 

 

Commercial

Real Estate

 

 

Residential

Real Estate

 

 

Construction

 

 

Consumer

 

 

Unallocated

 

 

Total

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

 

$

218

 

 

$

19

 

 

$

4

 

 

$

 

 

$

3

 

 

$

 

 

$

244

 

Collectively evaluated for impairment

 

 

1,117

 

 

 

3,385

 

 

 

1,056

 

 

 

767

 

 

 

275

 

 

 

1,031

 

 

 

7,631

 

Total ending allowance balance

 

$

1,335

 

 

$

3,404

 

 

$

1,060

 

 

$

767

 

 

$

278

 

 

$

1,031

 

 

$

7,875

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for

   impairment

 

$

1,515

 

 

$

2,390

 

 

$

818

 

 

$

 

 

$

133

 

 

 

 

 

 

$

4,856

 

Loans collectively evaluated for

   impairment

 

 

144,623

 

 

 

182,287

 

 

 

170,678

 

 

 

34,393

 

 

 

16,417

 

 

 

 

 

 

 

548,398

 

Total ending loans balance

 

$

146,138

 

 

$

184,677

 

 

$

171,496

 

 

$

34,393

 

 

$

16,550

 

 

 

 

 

 

$

553,254

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually evaluated for impairment

 

$

4

 

 

$

20

 

 

$

1

 

 

$

 

 

$

5

 

 

$

 

 

$

30

 

Collectively evaluated for impairment

 

 

1,735

 

 

 

3,449

 

 

 

1,155

 

 

 

756

 

 

 

347

 

 

 

802

 

 

 

8,244

 

Total ending allowance balance

 

$

1,739

 

 

$

3,469

 

 

$

1,156

 

 

$

756

 

 

$

352

 

 

$

802

 

 

$

8,274

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans individually evaluated for

   impairment

 

$

2,560

 

 

$

2,875

 

 

$

756

 

 

$

 

 

$

141

 

 

 

 

 

 

$

6,059

 

Loans collectively evaluated for

   impairment

 

 

188,980

 

 

 

184,346

 

 

 

176,399

 

 

 

36,038

 

 

 

17,775

 

 

 

 

 

 

 

603,538

 

Total ending loans balance

 

$

191,540

 

 

$

187,221

 

 

$

177,155

 

 

$

36,038

 

 

$

17,916

 

 

 

 

 

 

$

609,870

 

16


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

 

The following table presents loans individually evaluated for impairment by class of loans as of June 30, 2021 and December 31, 2020:

 

(Dollars in thousands)

 

Unpaid

Principal

Balance

 

 

Recorded

Investment

with no

Allowance

 

 

Recorded

Investment

with

Allowance

 

 

Total

recorded

investment1

 

 

Related

Allowance

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

1,715

 

 

$

1,263

 

 

$

251

 

 

$

1,514

 

 

$

218

 

Commercial real estate

 

 

2,915

 

 

 

2,271

 

 

 

118

 

 

 

2,389

 

 

 

19

 

Residential real estate

 

 

884

 

 

 

439

 

 

 

385

 

 

 

824

 

 

 

4

 

Consumer

 

 

136

 

 

 

12

 

 

 

126

 

 

 

138

 

 

 

3

 

Total impaired loans

 

$

5,650

 

 

$

3,985

 

 

$

880

 

 

$

4,865

 

 

$

244

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

2,604

 

 

$

1,965

 

 

$

597

 

 

$

2,562

 

 

$

4

 

Commercial real estate

 

 

3,755

 

 

 

2,673

 

 

 

211

 

 

 

2,884

 

 

 

20

 

Residential real estate

 

 

923

 

 

 

513

 

 

 

247

 

 

 

760

 

 

 

1

 

Consumer

 

 

143

 

 

 

 

 

 

146

 

 

 

146

 

 

 

5

 

Total impaired loans

 

$

7,425

 

 

$

5,151

 

 

$

1,201

 

 

$

6,352

 

 

$

30

 

 

1

includes principal, accrued interest, unearned fees, and origination costs

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

(Dollars in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Average recorded investment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

1,979

 

 

$

2,523

 

 

$

2,002

 

 

$

2,488

 

Commercial real estate

 

 

2,337

 

 

 

2,550

 

 

 

2,738

 

 

 

2,553

 

Residential real estate

 

 

834

 

 

 

820

 

 

 

822

 

 

 

833

 

Consumer

 

 

135

 

 

 

95

 

 

 

137

 

 

 

52

 

Average recorded investment in impaired loans

 

$

5,285

 

 

$

5,988

 

 

$

5,699

 

 

$

5,926

 

Interest income recognized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

9

 

 

$

19

 

 

$

19

 

 

$

37

 

Commercial real estate

 

 

21

 

 

 

4

 

 

 

51

 

 

 

6

 

Residential real estate

 

 

8

 

 

 

9

 

 

 

16

 

 

 

19

 

Consumer

 

 

2

 

 

 

1

 

 

 

4

 

 

 

1

 

Interest income recognized on a cash basis on impaired loans

 

$

40

 

 

$

33

 

 

$

90

 

 

$

63

 

 

17


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

The following table presents the aging of past due loans and nonaccrual loans as of June 30, 2021 and December 31, 2020 by class of loans:

 

 

 

 

 

 

 

Accruing Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Current

 

 

30-59

Days

Past

Due

 

 

60-89

Days

Past

Due

 

 

90 Days +

Past Due

 

 

Non-

Accrual

 

 

Total

Past

Due

and

Non-

Accrual

 

 

Total

Loans

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

144,796

 

 

$

 

 

$

 

 

$

 

 

$

1,342

 

 

$

1,342

 

 

$

146,138

 

Commercial real estate

 

 

184,152

 

 

 

 

 

 

 

 

 

 

 

 

525

 

 

 

525

 

 

 

184,677

 

Residential real estate

 

 

170,650

 

 

 

267

 

 

 

 

 

 

 

 

 

579

 

 

 

846

 

 

 

171,496

 

Construction & land development

 

 

34,064

 

 

 

 

 

 

 

 

 

 

 

 

329

 

 

 

329

 

 

 

34,393

 

Consumer

 

 

16,429

 

 

 

97

 

 

 

13

 

 

 

 

 

 

11

 

 

 

121

 

 

 

16,550

 

Total Loans

 

$

550,091

 

 

$

364

 

 

$

13

 

 

$

 

 

$

2,786

 

 

$

3,163

 

 

$

553,254

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

190,264

 

 

$

51

 

 

$

 

 

$

 

 

$

1,225

 

 

$

1,276

 

 

$

191,540

 

Commercial real estate

 

 

185,005

 

 

 

11

 

 

 

 

 

 

 

 

 

2,205

 

 

 

2,216

 

 

 

187,221

 

Residential real estate

 

 

175,812

 

 

 

606

 

 

 

 

 

 

49

 

 

 

688

 

 

 

1,343

 

 

 

177,155

 

Construction & land development

 

 

35,721

 

 

 

 

 

 

 

 

 

 

 

 

317

 

 

 

317

 

 

 

36,038

 

Consumer

 

 

17,713

 

 

 

168

 

 

 

22

 

 

 

 

 

 

13

 

 

 

203

 

 

 

17,916

 

Total Loans

 

$

604,515

 

 

$

836

 

 

$

22

 

 

$

49

 

 

$

4,448

 

 

$

5,355

 

 

$

609,870

 

 

 

Troubled Debt Restructurings

All troubled debt restructurings (“TDRs”) are individually evaluated for impairment and a related allowance is recorded, as needed.  Loans whose terms have been modified as TDRs totaled $4.1 million as of June 30, 2021, and $2.8 million as of December 31, 2020, with $27 thousand of specific reserves allocated to those loans at June 30, 2021 and $30 thousand at December 31, 2020, respectively.  On June 30, 2021, $2.5 million of the loans classified as TDRs were performing in accordance with their modified terms.  Of the remaining $1.6 million, all were in nonaccrual of interest status.  

Loan modifications considered TDRs completed during the three and six-months ended June 30 were as follows:  

18


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

(Dollars in thousands)

 

Number of

loans

restructured

 

Pre-

Modification

Recorded

Investment

 

 

Post-

Modification

Recorded

Investment

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

Commercial

 

3

 

$

894

 

 

$

894

 

Commercial real estate

 

1

 

 

386

 

 

 

386

 

Total Restructured Loans

 

4

 

$

1,280

 

 

$

1,280

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

Commercial

 

3

 

$

894

 

 

$

894

 

Commercial real estate

 

2

 

 

1,686

 

 

 

1,686

 

Residential real estate

 

1

 

 

88

 

 

 

88

 

Total Restructured Loans

 

6

 

$

2,668

 

 

$

2,668

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

Commercial

 

4

 

$

112

 

 

$

112

 

Commercial real estate

 

1

 

 

80

 

 

 

80

 

Residential real estate

 

1

 

 

66

 

 

 

66

 

Consumer

 

6

 

 

146

 

 

 

146

 

 

 

12

 

$

404

 

 

$

404

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

Commercial

 

5

 

$

181

 

 

$

181

 

Commercial real estate

 

1

 

 

80

 

 

 

80

 

Residential real estate

 

1

 

 

66

 

 

 

66

 

Consumer

 

6

 

 

146

 

 

 

146

 

 

 

13

 

$

473

 

 

$

473

 

 

The loans restructured were modified by changing the monthly payment to interest only and modifying the maturity dates.

None of the loans restructured in 2020 have defaulted in three or six months ended 2021.  None of the loans restructured in 2019 defaulted in 2020.

There was no other real estate owned on June 30, 2021 and December 31, 2020.  There were no mortgage loans in the process of foreclosure on June 30, 2021 and $21 thousand on December 31, 2020.  There were no other repossessed assets on June 30, 2021 and December 31, 2020.

 

Credit Quality Indicators

The Company categorizes 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 loans individually by classifying the loans as to credit risk.  This analysis includes all commercial loans before origination and an annual review of those with an outstanding commitment greater than $500 thousand.  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 collectible 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.

19


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

Special Mention.  Assets assigned a Special Mention grade are not considered classified assets but are considered criticized.  These assets exhibit potential weaknesses that, deserve management’s close attention. If left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date.  Loans in this rating warrant special attention but have not yet reached the point of concern for loss.  These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere.  Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk.

Substandard.  Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution 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 known facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans.  Loans listed as not rated annually are either less than $500 thousand or are included in groups of homogeneous loans.  Based on the most recent analysis performed, the risk category of loans by class is as follows as of June 30, 2021 and December 31, 2020:

(Dollars in thousands)

 

Pass

 

 

Special

Mention

 

 

Substandard

 

 

Doubtful

 

 

Not

Rated

 

 

Total

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

140,233

 

 

$

489

 

 

$

4,174

 

 

$

 

 

$

1,242

 

 

$

146,138

 

Commercial real estate

 

 

166,796

 

 

 

1,250

 

 

 

15,482

 

 

 

 

 

 

1,149

 

 

 

184,677

 

Residential real estate

 

 

168

 

 

 

 

 

 

121

 

 

 

 

 

 

171,207

 

 

 

171,496

 

Construction & land development

 

 

26,667

 

 

 

 

 

 

329

 

 

 

 

 

 

7,397

 

 

 

34,393

 

Consumer

 

 

 

 

 

 

 

 

13

 

 

 

 

 

 

16,537

 

 

 

16,550

 

Total

 

$

333,864

 

 

$

1,739

 

 

$

20,119

 

 

$

 

 

$

197,532

 

 

$

553,254

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

177,620

 

 

$

2,352

 

 

$

9,644

 

 

$

 

 

$

1,924

 

 

$

191,540

 

Commercial real estate

 

 

161,091

 

 

 

2,545

 

 

 

21,812

 

 

 

 

 

 

1,773

 

 

 

187,221

 

Residential real estate

 

 

174

 

 

 

 

 

 

114

 

 

 

 

 

 

176,867

 

 

 

177,155

 

Construction & land development

 

 

29,182

 

 

 

 

 

 

 

 

 

317

 

 

 

6,539

 

 

 

36,038

 

Consumer

 

 

 

 

 

 

 

 

105

 

 

 

 

 

 

17,811

 

 

 

17,916

 

Total

 

$

368,067

 

 

$

4,897

 

 

$

31,675

 

 

$

317

 

 

$

204,914

 

 

$

609,870

 

 

20


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 3 – LOANS (continued)

 

 

The following table presents loans that are not rated by class of loans as of June 30, 2021 and December 31, 2020.  Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

 

(Dollars in thousands)

 

Performing

 

 

Non-

Performing

 

 

Total

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

1,242

 

 

$

 

 

$

1,242

 

Commercial real estate

 

 

1,149

 

 

 

 

 

 

1,149

 

Residential real estate

 

 

170,632

 

 

 

575

 

 

 

171,207

 

Construction & land development

 

 

7,397

 

 

 

 

 

 

7,397

 

Consumer

 

 

16,526

 

 

 

11

 

 

 

16,537

 

Total

 

$

196,946

 

 

$

586

 

 

$

197,532

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

1,924

 

 

$

 

 

$

1,924

 

Commercial real estate

 

 

1,773

 

 

 

 

 

 

1,773

 

Residential real estate

 

 

176,278

 

 

 

589

 

 

 

176,867

 

Construction & land development

 

 

6,539

 

 

 

 

 

 

6,539

 

Consumer

 

 

17,798

 

 

 

13

 

 

 

17,811

 

Total

 

$

204,312

 

 

$

602

 

 

$

204,914

 

 

21


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 4 – SHORT-TERM BORROWINGS

The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.

 

 

 

Remaining Contractual Maturity

Overnight and Continuous

 

 

 

June 30,

 

 

December 31,

 

(Dollars in thousands)

 

2021

 

 

2020

 

Securities of U.S. Government Agencies and mortgage-backed securities of

   government agencies pledged, fair value

 

$

38,670

 

 

$

37,393

 

Repurchase agreements

 

 

38,475

 

 

 

37,215

 

 

 

NOTE 5 – FAIR VALUE MEASUREMENTS

The Company provides disclosures about assets and liabilities carried at fair value.  The framework provides a fair value hierarchy that prioritizes 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 that 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 that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by corroborated or other means.  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.

 

22


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 5 – FAIR VALUE MEASUREMENTS (CONTINUED)

 

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of June 30, 2021 and December 31, 2020 by level within the fair value hierarchy. No liabilities are carried at fair value.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  Equity securities with readily determinable values and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions and corporate bonds are valued at observable market data for similar assets.  Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes and are not included in the table below.

 

(Dollars in thousands)

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury security

 

$

3,861

 

 

$

 

 

$

 

 

$

3,861

 

U.S. Government agencies

 

 

 

 

 

13,828

 

 

 

 

 

 

13,828

 

Mortgage-backed securities of government agencies

 

 

 

 

 

142,576

 

 

 

 

 

 

142,576

 

Asset-backed securities of government agencies

 

 

 

 

 

786

 

 

 

 

 

 

786

 

State and political subdivisions

 

 

 

 

 

24,736

 

 

 

 

 

 

24,736

 

Corporate bonds

 

 

 

 

 

8,377

 

 

 

 

 

 

8,377

 

Total available-for-sale securities

 

$

3,861

 

 

$

190,303

 

 

$

 

 

$

194,164

 

Equity securities

 

$

54

 

 

$

 

 

$

 

 

$

54

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury security

 

$

1,011

 

 

$

 

 

$

 

 

$

1,011

 

U.S. Government agencies

 

 

 

 

 

14,006

 

 

 

 

 

 

14,006

 

Mortgage-backed securities of government agencies

 

 

 

 

 

140,012

 

 

 

 

 

 

140,012

 

Asset-backed securities of government agencies

 

 

 

 

 

837

 

 

 

 

 

 

837

 

State and political subdivisions

 

 

 

 

 

23,966

 

 

 

 

 

 

23,966

 

Corporate bonds

 

 

 

 

 

10,606

 

 

 

 

 

 

10,606

 

Total available-for-sale securities

 

$

1,011

 

 

$

189,427

 

 

$

 

 

$

190,438

 

Equity securities

 

$

41

 

 

$

 

 

$

 

 

$

41

 

 

 

 

 

 

 

 

 

 

 


23


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 5 – FAIR VALUE MEASUREMENTS (CONTINUED)

 

There were no assets measured on a nonrecurring basis at June 30, 2021.  The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of December 31, 2020, by level within the fair value hierarchy. An impaired loan is written down to fair value through the establishment of specific reserves or a charge down is taken to reduce the loan to fair value of the collateral (less estimated selling costs) and the loan is included in the following table as a Level III measurement.  Techniques used to value the collateral that secure the impaired loans include quoted market prices for identical assets classified as Level I inputs, and observable inputs, employed by certified appraisers, for similar assets classified as Level II inputs.  In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level III inputs.

 

(Dollars in thousands)

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets measured on a nonrecurring basis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impaired loans

 

$

 

 

$

 

 

$

10

 

 

$

10

 

 

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level III inputs to determine fair value.   

 

 

 

Quantitative Information about Level III Fair Value Measurements

 

(Dollars in thousands)

 

Fair Value

Estimate

 

 

Valuation

Techniques

 

Unobservable

Input

 

Range

(Weighted Average)

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Impaired loans

 

$

10

 

 

Appraisal of collateral 1

 

Appraisal adjustments 2

 

-20%

 

 

 

 

 

 

 

 

 

Liquidation expense 2

 

-10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various inputs which are not identifiable.

2

Appraisals may be adjusted by management for qualitative factors.  The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

 

 

24


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of recognized financial instruments as of June 30, 2021 and December 31, 2020 are as follows:

 

(Dollars in thousands)

 

Carrying

Value

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Fair Value

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

312,344

 

 

$

312,344

 

 

$

 

 

$

 

 

$

312,344

 

Securities held-to-maturity

 

 

24,878

 

 

 

 

 

 

25,003

 

 

 

 

 

 

25,003

 

Restricted stock

 

 

4,614

 

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

Loans held for sale

 

 

1,465

 

 

 

1,465

 

 

 

 

 

 

 

 

 

1,465

 

Net loans

 

 

544,155

 

 

 

 

 

 

 

 

 

548,622

 

 

 

548,622

 

Bank-owned life insurance

 

 

23,710

 

 

 

23,710

 

 

 

 

 

 

 

 

 

23,710

 

Accrued interest receivable

 

 

1,659

 

 

 

1,659

 

 

 

 

 

 

 

 

 

1,659

 

Mortgage servicing rights

 

 

561

 

 

 

 

 

 

 

 

 

561

 

 

 

561

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

986,668

 

 

$

861,672

 

 

$

 

 

$

125,568

 

 

$

987,240

 

Short-term borrowings

 

 

38,475

 

 

 

38,475

 

 

 

 

 

 

 

 

 

38,475

 

Other borrowings

 

 

3,570

 

 

 

 

 

 

 

 

 

3,640

 

 

 

3,640

 

Accrued interest payable

 

 

69

 

 

 

69

 

 

 

 

 

 

 

 

 

69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

181,652

 

 

$

181,652

 

 

$

 

 

$

 

 

$

181,652

 

Securities held-to-maturity

 

 

9,045

 

 

 

 

 

 

9,225

 

 

 

 

 

 

9,225

 

Restricted stock

 

 

4,614

 

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

Loans held for sale

 

 

1,378

 

 

 

1,378

 

 

 

 

 

 

 

 

 

1,378

 

Net loans

 

 

600,885

 

 

 

 

 

 

 

 

 

598,583

 

 

 

598,583

 

Bank-owned life insurance

 

 

21,416

 

 

 

21,416

 

 

 

 

 

 

 

 

 

21,416

 

Accrued interest receivable

 

 

2,159

 

 

 

2,159

 

 

 

 

 

 

 

 

 

2,159

 

Mortgage servicing rights

 

 

488

 

 

 

 

 

 

 

 

 

488

 

 

 

488

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

891,562

 

 

$

768,230

 

 

$

 

 

$

124,127

 

 

$

892,357

 

Short-term borrowings

 

 

37,215

 

 

 

37,215

 

 

 

 

 

 

 

 

 

37,215

 

Other borrowings

 

 

4,664

 

 

 

 

 

 

 

 

 

4,775

 

 

 

4,775

 

Accrued interest payable

 

 

90

 

 

 

90

 

 

 

 

 

 

 

 

 

90

 

 

The Company also has unrecognized financial instruments on June 30, 2021 and December 31, 2020.  These financial instruments relate to commitments to extend credit and letters of credit.  The aggregate contract amount of such financial instruments was approximately $237 million on June 30, 2021 and $228 million on December 31, 2020.  Such amounts are also considered to be the fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information.  Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.

25


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 7- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive income (loss) by component net of tax for the three and six months ended June 30, 2021 and 2020:

 

(Dollars in thousands)

 

Pretax

 

 

Tax Effect

 

 

After-tax

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2021

 

$

(2,342

)

 

$

492

 

 

$

(1,850

)

Unrealized holding gain on available-for-sale securities arising during

   the period

 

 

1,649

 

 

 

(346

)

 

 

1,303

 

Amortization of held-to-maturity discount resulting from transfer

 

 

16

 

 

 

(4

)

 

 

12

 

Total other comprehensive income

 

 

1,665

 

 

 

(350

)

 

 

1,315

 

Balance as of June 30, 2021

 

$

(677

)

 

$

142

 

 

$

(535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

1,249

 

 

$

(263

)

 

$

986

 

Unrealized holding loss on available-for-sale securities arising during

   the period

 

 

(1,958

)

 

 

411

 

 

 

(1,547

)

Amortization of held-to-maturity discount resulting from transfer

 

 

32

 

 

 

(6

)

 

 

26

 

Total other comprehensive loss

 

 

(1,926

)

 

 

405

 

 

 

(1,521

)

Balance as of June 30, 2021

 

$

(677

)

 

$

142

 

 

$

(535

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended June 30,2020

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31,2020

 

$

646

 

 

$

(136

)

 

$

510

 

Unrealized holding gain on available-for-sale securities arising during

   the period

 

 

617

 

 

 

(130

)

 

 

487

 

Amortization of held-to-maturity discount resulting from transfer

 

 

16

 

 

 

(3

)

 

 

13

 

Total other comprehensive income

 

 

633

 

 

 

(133

)

 

 

500

 

Balance as of June 30, 2020

 

$

1,279

 

 

$

(269

)

 

$

1,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

92

 

 

$

(20

)

 

$

72

 

Unrealized holding gain on available-for-sale securities arising during

   the period

 

 

1,157

 

 

 

(243

)

 

 

914

 

Amortization of held-to-maturity discount resulting from transfer

 

 

30

 

 

 

(6

)

 

 

24

 

Total other comprehensive income

 

 

1,187

 

 

 

(249

)

 

 

938

 

Balance as of June 30, 2020

 

$

1,279

 

 

$

(269

)

 

$

1,010

 

 

 

 

 

 

 

 

26


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis focuses on the consolidated financial condition of the Company at June 30, 2021 as compared to December 31, 2020, and the consolidated results of operations for the three and six months ended June 30, 2021 compared to the same periods in 2020. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim condensed Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report are not historical facts but rather are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates”, “plans”, “expects”, “believes”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company’s actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services. Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows, and financial position.  There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by applicable law.

FINANCIAL CONDITION

Total assets were $1.1 billion at June 30, 2021 as compared to $1.0 billion at December 31, 2020. During the six months ended June 30, 2021, net loans decreased $57 million. Cash and cash equivalents, and securities increased $150 million. Deposits and short-term borrowings increased $96 million.

Net loans decreased $57 million, or 9%, as commercial real estate and construction loans decreased $4 million, or 2%, and residential real estate loans decreased $6 million, or 3%, from December 31, 2020. Commercial loans decreased $47 million, or 24%. Loans originated under SBA Paycheck Protection Program totaled $37 million during the first six months of 2021 and $92 million during 2020. Consumers continued to refinance their mortgage loans for historically low long-term fixed rates while home purchase activity remained robust despite limited inventory through the first half of 2021. Residential mortgage loan originations for the six months ended June 30, 2021 totaled $58.7 million, an increase from $55.9 million in originations during the six months ended June 30, 2020. Originations sold into the secondary market were $27 million and $22 million, respectively during the six months ended June 30, 2021 and June 30, 2020. The Bank originates and sells primarily fixed rate thirty-year mortgages into the secondary market.

The allowance for loan losses increased $40 thousand from the year ago quarter to $7.9 million. The Company has not early adopted CECL which has been delayed for smaller reporting companies. Year over year outstanding loan balances decreased 13% to $552 million at June 30, 2021. Net recoveries were $46 thousand, or an annualized -0.02% of average loans, in the current six-month period compared to the $77 thousand net charge-off, or 0.03% of average loans in the year-ago six-month period. At June 30, 2021, the allowance for total loans minus the SBA guaranteed Payroll Protection loans was 1.53%. We believe the allowance level is appropriate given the low level of problem loans and current composition of the overall loan portfolio in the current economic environment.  


27


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Nonperforming loans decreased $1.6 million to $2.8 million, or 0.50%, of total loans from $4.4 million, or 0.69%, a year ago. For the six months ended June 30, 2021, $321 thousand loans were placed on nonaccrual status, $348 thousand in paydowns, and the bank returned $1.6 million back to accrual status due to ongoing payment performance.

 

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

(Dollars in thousands)

 

2021

 

 

2020

 

 

2020

 

Non-performing loans

 

$

2,786

 

 

$

4,497

 

 

$

4,382

 

Other real estate

 

 

 

 

 

 

 

 

98

 

Repossessed assets

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

7,875

 

 

 

8,274

 

 

 

7,835

 

Total loans

 

$

552,030

 

 

$

609,159

 

 

$

636,799

 

Allowance for loan losses as a percentage of total loans

 

 

1.43

%

 

 

1.36

%

 

 

1.23

%

Allowance for loan losses to total nonperforming loans

 

2.8x

 

 

1.8x

 

 

1.7x

 

 

The ratio of gross loans to deposits was 55.9% at June 30, 2021, compared to 68.3% at December 31, 2020.

The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. Management has considered industry analyst reports, sector credit reports, and the volatility within the bond market in concluding that the gross unrealized losses of $2.0 million within the available-for-sale and held-to-maturity portfolios as of June 30, 2021, was primarily the result of current market yields compared to the yields at the time the investments were purchased by the Company and not due to credit quality. As a result, all embedded security losses on June 30, 2021, are considered temporary and no impairment loss relating to these securities has been recognized.

Deposits increased $95 million, or 11%, from December 31, 2020 with noninterest-bearing deposits increasing approximately $31 million and interest-bearing deposit accounts increasing approximately $64 million. Total deposits as of June 30, 2021 are $987 million, or 21%, greater than June 30, 2020 deposit balances. On a year over year comparison, increases were recognized in noninterest-bearing demand deposits of $48 million, interest-bearing demand deposits of $68 million, money market accounts of $13 million, savings of $42 million, and time deposits remained stable. During 2020 and continuing into 2021, the Bank’s customers increased deposits through stimulus payments and cash conservation as a result of the COVID-19 pandemic.

Short-term borrowings consisting of overnight repurchase agreements with retail customers increased $1.3 million to $38 million at June 30, 2021 as compared to December 31, 2020 and other borrowings decreased $1 million as the Company repaid FHLB advances.  

Total shareholders’ equity amounted to $96 million, or 8.5%, of total assets at June 30, 2021 an increase from $93.9 million December 31, 2020. The increase in shareholders’ equity during the six months ended June 30, 2021 was due to net income of $5.6 million partially offset by cash dividends of $1.6 million, other comprehensive loss of $1.5 million and the repurchase of treasury shares for $313 thousand. The Company and the Bank met all regulatory capital requirements at June 30, 2021.

RESULTS OF OPERATIONS

Three months ended June 30, 2021 and 2020

For the quarters ended June 30, 2021 and 2020, the Company recorded net income of $2.7 million and $2.6 million and $1.00 and $0.95 per share, respectively. The $139 thousand increase in net income for the period was primarily the result of a reversal of provision for loan losses of $475 thousand and a $202 thousand increase in noninterest income. The increases were partially offset by an increase in noninterest expenses of $681 thousand, a $541 thousand decrease in net interest income and a $33 thousand increase in the federal income tax provision. Return on average assets and return on average equity were 0.97% and 11.62%, respectively, for the three-month period of 2021, compared to 1.15% and 11.72%, respectively for the same quarter in 2020.

28


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Average Balance Sheets and Net Interest Margin Analysis

 

 

 

For the Three Months Ended June 30,

 

 

 

2021

 

 

2020

 

(Dollars in thousands)

 

Average

balance1

 

 

Interest

 

 

Average

rate2

 

 

Average

balance1

 

 

Interest

 

 

Average

rate2

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits

 

$

291,587

 

 

$

68

 

 

 

0.09

%

 

$

117,916

 

 

$

31

 

 

 

0.11

%

Taxable securities

 

 

193,252

 

 

 

604

 

 

 

1.25

 

 

 

99,353

 

 

 

481

 

 

 

1.95

 

Tax-exempt securities 4

 

 

24,029

 

 

 

141

 

 

 

2.35

 

 

 

21,858

 

 

 

145

 

 

 

2.65

 

Loans 3,4

 

 

564,997

 

 

 

6,239

 

 

 

4.43

 

 

 

621,710

 

 

 

7,110

 

 

 

4.60

 

Total interest-earning assets

 

 

1,073,865

 

 

 

7,052

 

 

 

2.63

%

 

 

860,837

 

 

 

7,767

 

 

 

3.63

%

Noninterest-earning assets

 

 

57,386

 

 

 

 

 

 

 

 

 

 

 

52,038

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

1,131,251

 

 

 

 

 

 

 

 

 

 

$

912,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS'

   EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

281,376

 

 

$

94

 

 

 

0.13

%

 

$

186,993

 

 

 

79

 

 

 

0.17

%

Savings deposits

 

 

276,746

 

 

 

70

 

 

 

0.10

 

 

 

215,644

 

 

 

70

 

 

 

0.13

 

Time deposits

 

 

124,436

 

 

 

345

 

 

 

1.11

 

 

 

126,475

 

 

 

523

 

 

 

1.66

 

Borrowed funds

 

 

44,956

 

 

 

34

 

 

 

0.30

 

 

 

51,748

 

 

 

47

 

 

 

0.37

 

Total interest-bearing liabilities

 

 

727,514

 

 

 

543

 

 

 

0.30

%

 

 

580,860

 

 

 

719

 

 

 

0.50

%

Noninterest-bearing demand deposits

 

 

305,459

 

 

 

 

 

 

 

 

 

 

 

238,876

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

3,492

 

 

 

 

 

 

 

 

 

 

 

3,735

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

94,786

 

 

 

 

 

 

 

 

 

 

 

89,404

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS'

   EQUITY

 

$

1,131,251

 

 

 

 

 

 

 

 

 

 

$

912,875

 

 

 

 

 

 

 

 

 

Taxable equivalent net interest income, (Non-GAAP)

 

 

 

 

 

$

6,509

 

 

 

 

 

 

 

 

 

 

$

7,048

 

 

 

 

 

Tax equivalent adjustment 4

 

 

 

 

 

 

(38

)

 

 

 

 

 

 

 

 

 

 

(36

)

 

 

 

 

Net interest income, (GAAP)

 

 

 

 

 

$

6,471

 

 

 

 

 

 

 

 

 

 

$

7,012

 

 

 

 

 

Net interest margin, (GAAP)

 

 

 

 

 

 

 

 

 

 

2.42

%

 

 

 

 

 

 

 

 

 

 

3.27

%

Tax equivalent adjustment 4

 

 

 

 

 

 

 

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

0.02

 

Net interest margin-taxable equivalent, (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

2.43

%

 

 

 

 

 

 

 

 

 

 

3.29

%

Taxable equivalent net interest spread

 

 

 

 

 

 

 

 

 

 

2.33

%

 

 

 

 

 

 

 

 

 

 

3.13

%

 

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, which is a Non-GAAP measure and is reconciled to the GAAP measure at the bottom of the table.

 

Interest income for the quarter ended June 30, 2021, was $7 million representing a $717 thousand decrease, or a 9% decline, compared to the same period in 2020. This decrease was primarily due to average loan volume decreasing $57 million as well as average loan rates decreasing 17 basis points for the quarter ended June 30, 2021 as compared to the same period in 2020. Interest expense for the quarter ended June 30, 2021 was $543 thousand, a decrease of $176 thousand, or 24%, from the same quarter in 2020. The decrease in interest expense occurred primarily due to a decrease in rates on all liabilities for the quarter ended June 30, 2021, partially offset by increases in the average deposit balances.

 


29


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

For the quarter ended June 30, 2021, with stimulus programs, improving credit quality, and a decrease of outstanding loan balances, the bank recognized a negative (credit) provision of $475 thousand to the provision for loan losses, compared to a loss provision of $717 thousand for the same quarter in 2020. The Company’s provision for loan losses for the three months ended June 30, 2020, reflected the unknown COVID-19 pandemic and an elevated qualitative factor adjustment (“Q-factor”) under managements estimate of loss at that time. The recapture of provision for loan losses for the current quarter primarily reflects the decrease in loan balances, as well as the improvement in economic indicators including unemployment, residential real estate prices and consumer confidence over 2020. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the quarter ended June 30, 2021, was $1.8 million, an increase of $202 thousand, or 12%, compared to the same quarter in 2020. The gain on the sale of mortgage loans to the secondary market decreased by $90 thousand for the quarter ended June 30, 2021 as fewer loans were sold into the secondary market due to decreasing inventories of homes available for sale and decreasing demand for mortgage rewrites. Debit card interchange income increased $126 thousand, or 32%, with greater fees generated from usage in the second quarter 2021. Earnings on bank owned life insurance increased $13 thousand for the second quarter 2021 a result of adding policies in 2020. Fees from trust and brokerage services amounted to $264 thousand for the second quarter 2021, an increase of $68 thousand, or 35%, as compared to the same quarter in 2020. Service charges on deposit accounts increased $8 thousand, or 4%, compared to the same quarter in 2020 primarily from a slight volume increase in overdraft fees.

Noninterest expenses for the quarter ended June 30, 2021 increased $681 thousand, or 14%, compared to the second quarter 2020. Salaries and employee benefits increased $368 thousand, or 14%, a result of a decrease in capitalization of approximately $262 thousand in salary and benefits expense to deferred loan origination costs related to new commercial and mortgage loan originations.  Increases were recognized in base wage, social security benefits and incentive accruals. FDIC assessment amounted to $120 thousand as compared to $12 thousand in the second quarter 2020 due to small bank assessment credits being utilized in 2020. The Ohio financial institutions tax increased $16 thousand in the second quarter due to the Company’s increased capital base. Marketing and public relations expense increased $33 thousand, or 51%, primarily due to more events taking place after being cancelled due to COVID-19. Debit card expenses increased $26 thousand, or 18%, compared to the second quarter 2020 with increased volume. Software expense rose $77 thousand quarter over quarter with additional investment. Occupancy expense increased $3 thousand in 2021 over the second quarter 2020. Professional and director fees increased $74 thousand for the quarter ended June 30, 2021 as compared to the second quarter 2020. This increase resulted from an increase in collection legal fees, an increase in audit expense and an increase in director’s compensation.  

Federal income tax expense increased $33 thousand, or 5%, for the quarter ended June 30, 2021 as compared to the second quarter 2020. The provision for income taxes was $654 thousand (effective rate of 19%) for the quarter ended June 30, 2021, compared to $621 thousand (effective rate of 19%) for the same quarter ended 2020.

RESULTS OF OPERATIONS

Six months ended June 30, 2021 and 2020

For the six months ended June 30, 2021 and 2020, the Company recorded net income of $5.6 million and $5.1 million and $2.05 and $1.86 per share, respectively. The $541 thousand increase in net income for the six-month period was primarily the result of a negative loan loss provision of $445 thousand for the period as compared to a loss provision of $895 thousand for the same period in 2020. Other income increased $737 thousand. The increases were partially offset by an increase of $955 thousand in noninterest expense, a $449 thousand decrease in net interest income, and an $132 thousand increase in the federal income tax provision. Return on average assets and return on average equity were 1.04% and 11.97%, respectively, for the six months ended June 30, 2021, compared to 1.19% and 11.60%, respectively for the same period in 2020.

30


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

Average Balance Sheets and Net Interest Margin Analysis

 

 

For the Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

(Dollars in thousands)

 

Average

balance1

 

 

Interest

 

 

Average

rate2

 

 

Average

balance1

 

 

Interest

 

 

Average

rate2

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning deposits in other banks

 

 

247,638

 

 

 

114

 

 

 

0.09

%

 

 

96,867

 

 

 

270

 

 

 

0.56

%

Taxable securities

 

 

187,476

 

 

 

1,163

 

 

 

1.25

 

 

 

101,915

 

 

 

1,090

 

 

 

2.14

 

Tax-exempt securities4

 

 

23,700

 

 

 

281

 

 

 

2.39

 

 

 

21,521

 

 

 

296

 

 

 

2.76

 

Loans3,4

 

 

580,572

 

 

 

13,113

 

 

 

4.55

 

 

 

590,926

 

 

 

13,965

 

 

 

4.74

 

Total earning assets

 

 

1,039,386

 

 

 

14,671

 

 

 

2.85

%

 

 

811,229

 

 

 

15,621

 

 

 

3.86

%

Other assets

 

 

56,692

 

 

 

 

 

 

 

 

 

 

 

51,410

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

1,096,078

 

 

 

 

 

 

 

 

 

 

$

862,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

266,799

 

 

$

180

 

 

 

0.14

%

 

$

173,962

 

 

$

223

 

 

 

0.26

%

Savings deposits

 

 

269,826

 

 

 

140

 

 

 

0.10

 

 

 

208,546

 

 

 

198

 

 

 

0.19

 

Time deposits

 

 

123,584

 

 

 

726

 

 

 

1.18

 

 

 

126,837

 

 

 

1,083

 

 

 

1.72

 

Other borrowed funds

 

 

44,138

 

 

 

70

 

 

 

0.32

 

 

 

47,665

 

 

 

116

 

 

 

0.49

 

Total interest bearing liabilities

 

 

704,347

 

 

 

1,116

 

 

 

0.32

%

 

 

557,010

 

 

 

1,620

 

 

 

0.58

%

Non-interest bearing demand deposits

 

 

293,024

 

 

 

 

 

 

 

 

 

 

 

213,694

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

3,850

 

 

 

 

 

 

 

 

 

 

 

3,688

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

94,857

 

 

 

 

 

 

 

 

 

 

 

88,247

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

1,096,078

 

 

 

 

 

 

 

 

 

 

$

862,639

 

 

 

 

 

 

 

 

 

Taxable equivalent net interest income, (Non-GAAP)

 

 

 

 

 

$

13,555

 

 

 

 

 

 

 

 

 

 

$

14,001

 

 

 

 

 

Tax equivalent adjustment 4

 

 

 

 

 

 

(76

)

 

 

 

 

 

 

 

 

 

 

(73

)

 

 

 

 

Net interest income, (GAAP)

 

 

 

 

 

$

13,479

 

 

 

 

 

 

 

 

 

 

$

13,928

 

 

 

 

 

Net interest margin, (GAAP)

 

 

 

 

 

 

 

 

 

 

2.61

%

 

 

 

 

 

 

 

 

 

 

3.45

%

Tax equivalent adjustment 4

 

 

 

 

 

 

 

 

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

0.02

 

Net interest margin-taxable equivalent, (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

2.63

%

 

 

 

 

 

 

 

 

 

 

3.47

%

Taxable equivalent net interest spread

 

 

 

 

 

 

 

 

 

 

2.53

%

 

 

 

 

 

 

 

 

 

 

3.28

%

 

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, which is a Non-GAAP measure and is reconciled to the GAAP measure at the bottom of the table.

 

31


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

Interest income for the six months ended June 30, 2021, was $14.6 million representing a $953 thousand decrease, or a 6% decline, compared to the same period in 2020. This decrease was primarily due to yield decreases as follows: 19 basis points in average loan rates, 89 basis points in average taxable security yields, and 47 basis points in interest-earning deposits in other banks for the period ended June 30, 2021 as compared to the same period in 2020. Interest expense for the six months ended June 30, 2021 was $1.1 million, a decrease of $504 thousand, or 31%, from the same period in 2020. The decrease in interest expense occurred primarily due to a decrease in rates on all interest-bearing liabilities for the six months ended June 30, 2021, partially offset by increases in the average balances.

For the six months ended June 30, 2021, the provision for loan losses was a credit (reversal) of provision of $445 thousand, compared to a provision of $895 thousand for the same period in 2020. For more discussion see Results of Operations, three months. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the six months ended June 30, 2020, was $3.7 million, an increase of $737 thousand, or 25%, compared to the same period in 2020. The gain on the sale of mortgage loans to the secondary market increased $282 thousand to $904 thousand for the six months ended June 30, 2021.  Debit card interchange income increased $221 thousand, or 29%, with increased card usage in the first six months of 2021.  Earnings on bank owned life insurance policies increased $35 thousand for the period with the additional purchase of $2 million in policies in 2021. Service charges on deposit accounts decreased $75 thousand, or 15%, compared to the same period in 2020 primarily from decreases in overdraft fees. Fees from trust and brokerage services increased $119 thousand for the period.

Noninterest expenses for the six months ended June 30, 2021 increased $955 thousand, or 10%, compared to the same period in 2020.   Salaries and employee benefits increased $429 thousand, or 8%, a result increased salary, with additions to lending staff, and reduced capital gain of deferred loan costs with less volume originated in commercial loans. Marketing and public relations expense decreased $16 thousand, or 8%, with marketing, brand recognition initiatives, and community support in the company’s market slowly increasing in volume due to increasing opportunities presenting after previous cancellations due to COVID-19. Debit card expenses increased $57 thousand, or 20%, compared to the prior period in 2020.  Occupancy expense increased $37 thousand over the same period in 2020 with an increase in depreciation, maintenance, and supplies expense.  Professional and director fees increased $40 thousand for the six months ended June 30, 2021 as compared to the same period in 2020.

Federal income tax expense increased $132 thousand, or 11%, for the six months ended June 30, 2021 as compared to the same period in 2020. The provision for income taxes was $1.3 million (effective rate of 19%) for the six months ended June 30, 2021, compared to $1.2 million (effective rate of 19%) for the same period ended 2020.

CAPITAL RESOURCES

The Company maintained a strong capital position with tangible common equity to tangible assets of 8.1% at June 30, 2021 compared with 8.7% at December 31, 2020.

Consistent with the Board of Director’s commitment to public confidence and safe and sound banking operations, capital targets and minimum risk-based capital ratios for CSB were established to maintain excess capital to well-capitalized standards. To be considered well-capitalized, an institution must have a total risk-based capital ratio of at least 10%, a tier 1 capital ratio of at least 8%, a leverage capital ratio of at least 5%, a common equity tier 1 (“CET1”) ratio of at least 6.5% and must not be subject to any order or directive requiring the institution to improve its capital level. An adequately capitalized institution has a total risk-based capital ratio of at least 8%, a tier 1 capital ratio of at least 6%, a CET1 ratio of at least 4.5%, and a leverage ratio of at least 4%.

32


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. As of June 30, 2021, the Company and the Bank met all capital adequacy requirements to which they were subject.

During October 2019, the federal banking agencies adopted an optional community bank leverage ratio (“CBLR”).  Depository institutions and depository institution holding companies, that have less than $10 billion in total consolidated assets and have a tier 1 leverage ratio of greater than 9 percent, are considered qualifying community banking organizations and are eligible to opt into the community bank leverage ratio framework.  Additionally, such insured depository institutions are considered to have satisfied the risk-based and leverage capital requirements and will be considered well-capitalized under the rule, effective January 1, 2020.  The Company has not elected to opt-in to the CBLR framework as of June 30, 2021.

 

 

 

Capital Ratios

 

 

 

June 30,

2021

 

 

December 31,

2020

 

Common Equity Tier 1 Capital To Risk Weighted Assets

 

 

 

 

 

 

 

 

Consolidated

 

 

17.0

%

 

 

15.7

%

Bank

 

 

16.7

%

 

 

15.4

%

 

 

 

 

 

 

 

 

 

Tier 1 Capital To Risk Weighted Assets Ratio

 

 

 

 

 

 

 

 

Consolidated

 

 

17.0

%

 

 

15.7

%

Bank

 

 

16.7

%

 

 

15.4

%

 

 

 

 

 

 

 

 

 

Total Capital To Risk Weighted Assets Ratio

 

 

 

 

 

 

 

 

Consolidated

 

 

18.2

%

 

 

16.9

%

Bank

 

 

17.9

%

 

 

16.6

%

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

 

 

 

 

 

 

Consolidated

 

 

8.1

%

 

 

8.7

%

Bank

 

 

8.0

%

 

 

8.5

%

 

LIQUIDITY

 

(Dollars in thousands)

 

June 30,

2021

 

 

December 31,

2020

 

 

Change

 

Cash and cash equivalents

 

$

312,343

 

 

$

181,652

 

 

$

130,691

 

Available from FHLB

 

 

106,400

 

 

 

101,616

 

 

 

4,784

 

Unpledged AFS securities at fair market value

 

 

132,109

 

 

 

130,702

 

 

 

1,407

 

 

 

$

550,852

 

 

$

413,970

 

 

$

136,882

 

Net deposits and short-term liabilities

 

$

964,239

 

 

$

870,498

 

 

$

93,741

 

Liquidity ratio

 

 

57.1

 

%

 

47.6

 

%

 

 

 

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 the Company’s Asset Liability Committee. Other sources of liquidity include, but are not limited to, purchases of federal funds, advances from the FHLB, adjustments of interest rates to attract deposits, brokered deposits, and borrowing at the Federal Reserve discount window. Management believes that its sources of liquidity are adequate to meet cash flow obligations for the foreseeable future.  

 

The growth in core deposits was largely a result of PPP loan funds deposited into customer accounts and an increase in general customer liquidity due to reduced business investment and consumer spending during the COVID-19 pandemic.

33


CSB BANCORP, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements (as such term is defined in applicable Securities and Exchange Commission (the “Commission”) rules) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.

 

34


CSB BANCORP, INC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The COVID-19 pandemic added market risk disclosure which should be read with the disclosures presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. While 2020 began with increased loan demand and strong employment, the economic picture reversed sharply as coronavirus wreaked havoc and became the lead story by mid-March. A series of emergency health orders for public safety curtailed nonessential activity and had the effect of shutting down vast swaths of Ohio’s economy, resulting in a peak of approximately one million people on unemployment, or an unemployment rate of 17.6%, in Ohio during April of 2020.  By June 2021, Ohio’s unemployment rate approximated 6%.  The bank is based in Holmes County which is reporting the lowest unemployment rate in Ohio at 3.8% in June 2021.  Of the counties within the bank’s footprint, Stark County reported the highest unemployment rate at 6.3% in June. With vaccination rates and government stimulus funds slowing, the Federal Reserve is projecting bottlenecks, hiring difficulties, and other constraints  as well as the possibility that inflation could turn out to be higher and more persistent than expected.  The effects of the pandemic on the economy have continue to diminish, but risks to the economy remain.

Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. All balance sheet positions and interest rate projections are currently within the Company’s board-approved policy for the first twelve- month period. For the twenty-four month periods in the rising interest rate scenarios the increase in interest income is favorably above board policy limits.

The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -200 through +400 basis point changes, in 100 basis point increments, in market interest rates at June 30, 2021 and December 31, 2020. The net interest income reflected is for the first twelve-month period of the modeled twenty-four month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.    

 

June 30, 2021

(Dollars in thousands)

 

 

Change in

Interest Rates

(basis points)

 

Net Interest

Income

 

 

Dollar

Change

 

 

Percentage

Change

 

 

Board Policy

Limits

 

 

+400

 

$

28,153

 

 

$

3,040

 

 

 

12.1

 

%

+/- 25

 

%

+300

 

 

27,379

 

 

 

2,266

 

 

 

9.0

 

 

+/-15

 

 

+200

 

 

26,607

 

 

 

1,494

 

 

 

5.9

 

 

+/-10

 

 

+100

 

 

25,827

 

 

 

714

 

 

 

2.8

 

 

+/-5

 

 

0

 

 

25,113

 

 

 

 

 

 

 

 

 

 

 

-100

 

 

24,975

 

 

 

(138

)

 

 

(0.5

)

 

+/-5

 

 

-200

 

 

24,614

 

 

 

(499

)

 

 

(2.0

)

 

+/-10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

+400

 

$

28,036

 

 

$

2,121

 

 

 

8.2

 

%

+/- 25

 

%

+300

 

 

27,495

 

 

 

1,580

 

 

 

6.1

 

 

+/-15

 

 

+200

 

 

26,969

 

 

 

1,054

 

 

 

4.1

 

 

+/-10

 

 

+100

 

 

26,430

 

 

 

515

 

 

 

2.0

 

 

+/-5

 

 

0

 

 

25,915

 

 

 

 

 

 

 

 

 

 

 

-100

 

 

25,767

 

 

 

(148

)

 

 

(0.6

)

 

+/-5

 

 

-200

 

 

25,414

 

 

 

(501

)

 

 

(1.9

)

 

+/-10

 

 

 

 

35


CSB BANCORP, INC.

CONTROLS AND PROCEDURES

 

 

ITEM 4 - CONTROLS AND PROCEDURES

With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that:

 

(a)

information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;

 

(b)

information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms; and

 

(c)

the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Company and its consolidated subsidiary is made known to them, particularly during the period for which the Company’s periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during the period covered by this Quarterly Report on Form 10-Q in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

36


 

 

CSB BANCORP, INC.

FORM 10-Q

Quarter ended June 30, 2021

PART II – OTHER INFORMATION

In the opinion of management there are no outstanding legal proceedings that are reasonably likely to have a material adverse effect on the company’s financial condition or results of operations.

ITEM 1A - RISK FACTORS.

There have been no material changes to the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, other than the COVID-19 developments previously discussed under Item 3 - Quantitative and Qualitative Disclosures About Market Risk in Part I of this report.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

(a)

Not applicable

(b)

Not applicable

(c)

The following table provides information about repurchases of common stock by the Company during the quarter ended June 30, 2021:

 

Period

 

Total Number of Common Shares Purchased

 

 

Average Price Paid per Common Share

 

 

Total Number of Shares Purchases as Part of Publicly Announced Authorization

 

 

Maximum Number of Remaining Shares that May be Purchased as Part of Publicly Announced Authorization

 

April 1 ,2021 - April 30, 2021

 

 

 

 

 

 

 

 

 

 

 

137,117

 

May 1, 2021 - May 31, 2021

 

 

 

 

 

 

 

 

 

 

 

137,117

 

June 1, 2021 - June 30, 2021

 

 

8,106

 

 

 

38.50

 

 

 

8,106

 

 

 

129,011

 

Total for quarter

 

 

8,106

 

 

 

38.50

 

 

 

8,106

 

 

 

129,011

 

 

On March 2, 2021, CSB Bancorp, Inc. filed Form 8-K with the Commission announcing that its Board of Directors approved a Stock Repurchase Program authorizing the repurchase of up to 5% of the Company’s common shares or 137,117 of the Company’s outstanding shares. Repurchases may be made from time to time as market and business conditions warrant, in the open market, through block purchases, and in negotiated private transactions. The Company repurchased 8,106 shares under the repurchase authorization during the quarterly period ended June 30, 2021.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4 - MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5 - OTHER INFORMATION.

Not applicable.

 

 

37


CSB BANCORP, INC.

FORM 10-Q

Quarter ended June 30, 2021

PART II – OTHER INFORMATION

 

 

ITEM 6 - Exhibits.

 

Exhibit

Number

 

Description of Document

 

 

 

3.1

 

Amended Articles of Incorporation of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q filed August 6, 2004, Exhibit 3.1, film 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 the Registrant’s Form 10-SB).

 

 

 

3.2.1

 

Amended Article VIII of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a filed on March 25, 2009, Appendix A, film number 09703970).

 

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, file number 000-21714.

 

 

 

4.0

 

Description of Capital Stock (incorporated by reference to registrants Annual Report on Form 10-K filed on March 16, 2020, Exhibit 4.0, file number 000-21714).

 

 

 

11

 

Statement Regarding Computation of Per Share Earnings.

 

 

 

31.1

 

Rule 13a-14(a)/15d-14(a) Chief Executive Officer’s Certification.

 

 

 

31.2

 

Rule 13a-14(a)/15d-14(a) Chief Financial Officer’s Certification.

 

 

 

32.1

 

Section 1350 Chief Executive Officer’s Certification.

 

 

 

32.2

 

Section 1350 Chief Financial Officer’s Certification.

 

 

 

101

 

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Net Loss and Comprehensive Loss , (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

 

 

 

104

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

38


 

 

CSB BANCORP, INC.

SIGNATURES

Pursuant to the requirements 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.

 

 

 

 

CSB BANCORP, INC.

 

 

 

(Registrant)

 

 

 

 

 

 

 

 

Date:

 

August 9, 2021

/s/ Eddie L. Steiner

 

 

 

Eddie L. Steiner

 

 

 

President

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

Date:

 

August 9, 2021

/s/ Paula J. Meiler

 

 

 

Paula J. Meiler

 

 

 

Senior Vice President

 

 

 

Chief Financial Officer

 

 

39