CSB Bancorp, Inc.

What they do

CSB Bancorp, Inc. is an Ohio financial holding company incorporated in 1991 with two wholly owned subsidiaries: The Commercial and Savings Bank of Millersburg, Ohio, and CSB Investment Services, LLC. The Bank provides checking and savings accounts, time deposits, IRAs, safe deposit and night depository facilities, personal and commercial loans, real estate mortgage loans, and trust and brokerage services to corporate, institutional and individual customers in northeast Ohio. CSB Investment Services, LLC is licensed to engage in the business of insurance in Ohio. The Bank is a Federal Reserve System member with FDIC-insured deposits, regulated by the Federal Reserve Board and the Ohio Division of Financial Institutions.

Revenue drivers

• Net interest income (loans) — Interest and fees on the loan portfolio are the largest revenue source; 2025 total interest income was $57.0 million against $14.7 million of interest expense, producing $42.4 million of net interest income. Loan yields averaged 6.05% in Q2 2026 and net loans were $869.3 million at June 30, 2026.
• Net interest income (securities and overnight funds) — Securities contributed interest income at a 2.59% average yield in Q2 2026, up from 2.27% a year earlier as lower-yielding securities paid down and matured. Securities decreased $20 million during the six months ended June 30, 2026.
• Noninterest income — Noninterest income was $7.3 million in 2025, flat with 2024's $7.1 million and roughly 15% of total interest income plus noninterest income. It rose 10%, or $175 thousand, in Q2 2026 versus Q2 2025, and includes trust, brokerage and insurance-related services.
• Residential mortgage origination and sale — The Bank originates and sells primarily fixed-rate thirty-year mortgages into the secondary market; originations (including home equity lines) totaled $40 million in the first half of 2026 versus $32 million a year earlier, while loans sold into the secondary market held at $4 million in each period.

Recent performance

For Q2 2026, CSB reported net income of $4,735,000, or $1.80 per diluted share, compared with $3,727,000, or $1.41 per diluted share, in Q2 2025. Six-month 2026 net income was $9,179,000 versus $7,343,000 a year earlier, a 25% increase. Net interest income rose $1.5 million, or 15%, and noninterest expense rose $465 thousand, or 7%, in Q2 2026 versus the prior-year quarter. ROE and ROA for the quarter were 14.48% and 1.48%, compared with 12.48% and 1.23% in Q2 2025, and FTE net interest margin was 3.92% versus 3.61%. Nonperforming loans rose to $7.3 million, or 0.84% of total loans, at June 30, 2026 from $652 thousand, or 0.08%, at December 31, 2025, and the allowance for credit losses increased $1 million to $13.5 million, or 1.56% of total loans.

Strategy

Management attributes recent results to a relatively stable interest rate and employment environment that has supported business expansion and home buying activity in its northeast Ohio markets. The company continues to shift its earning-asset mix into loans: net loans grew $39 million, or 5%, in the first half of 2026, led by a $21 million increase in commercial and commercial real estate loans, a $5 million increase in residential real estate loans, and an $8 million (17%) increase in construction loans. Funding strategy emphasizes deposit gathering, with management noting all deposit types increased and customers continued moving funds into higher-yielding interest-bearing accounts; time deposit rates have been declining, cutting the cost of interest-bearing liabilities by 10 basis points year over year. The company also maintains an information security program led by an Information Security Officer under the COO, with oversight by an IT Steering Committee and the Board of Directors.

Risks

• Credit deterioration — Nonperforming loans jumped to $7.3 million (0.84% of total loans) at June 30, 2026 from $652 thousand (0.08%) at December 31, 2025, driven by $6.7 million of loans placed on nonaccrual, and the allowance for credit losses to nonperforming loans fell to 1.9x from 19.1x.
• Concentrated geographic and commercial lending exposure — Lending is concentrated in Holmes, Stark, Tuscarawas, Wayne and surrounding Ohio counties, with commercial and commercial real estate loans the largest growing category, tying asset quality to the local economy.
• Funding cost and deposit mix pressure — Customers continue shifting funds into higher-yielding interest-bearing accounts, and competition for workers with specialized skills has pushed up labor costs, pressuring both funding and operating expenses.
• Consumer credit and household stress — Management states consumer debt levels and delinquencies have been increasing as households contend with higher cost of living expenses, while consumer demand for goods and services declined moderately.

Outlook

Management describes a relatively stable environment for interest rates and employment levels fostering increased business expansion and home buying activity, with real GDP growth of 2.1% annualized in the first quarter apparently sustained through the second quarter. It cautions that activity remains tempered by persistent inflation and global uncertainties affecting energy prices, tariffs and other federal government actions. The company also reports that consumer demand for goods and services is expected to flatten out in the near future, even as commercial loan demand, including commercial real estate, increased steadily during 2025.