Press Release  |  April 19, 2007


First Quarter Highlights

  Net Income of $815,000
  Diluted earnings per share of $0.33
  Return on average common equity of 9.37%
  Return on average assets of 1.02%

Millersburg, Ohio – April 19, 2007 – CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced first quarter net income of $815 thousand, or $.33 per basic and diluted share, as compared to $774 thousand, or $.30 per basic and diluted share for the same period in 2006.

Annualized returns on average common equity and average assets for the quarter were 9.37% and 1.02%, respectively, compared with 8.89% and .99% for the first quarter of 2006.

“We continue to focus on cost control and enhancing the customer experience,” commented Eddie Steiner, President and CEO. “Operating efficiencies are noticeably improved from year ago levels and generating increased profit. We opened a new banking center during the quarter to better serve customers in the Orrville area and also expanded availability of electronic remote deposit services for businesses and other organizations.”

Mr. Steiner continued, “Our capital position remains very strong, and core earnings have been increasing with no significant credit quality issues. As a result of this performance, we increased the first quarter cash dividend to $.18 per share, up $.02 from the first quarter dividend declared in 2006.”

Revenue, defined as net interest income on a fully tax-equivalent basis plus non-interest income net of securities transactions, totaled $3.9 million for the first quarter of 2007, an increase of $37,000, or .9% over the same quarter in the prior year.

The Company’s net interest margin held steady for the quarter at 4.40%, the ninth consecutive quarter above 4%. Mr. Steiner noted, “The interest rate environment, with its flat-to-inverted yield curve, continues to exert pressure on margins, and we expect modestly lower net interest margins in the coming quarter. Our goal is to offset the expected margin contraction with continued loan growth as well as ongoing emphasis on non-interest income and control of operating expenses.”

Non-interest income during first quarter 2007 totaled $646 thousand, an increase of $75 thousand, or 13.3% over the same quarter in the prior year. Trust services income increased $77 thousand, while service charges related to deposit products declined by $40 thousand.

Non-interest expense totaled $2.6 million during the quarter, a reduction of $88 thousand, or 3.2%, from the same quarter in 2006. Salary and benefit expense declined $84 thousand versus the prior year quarter.

The Company’s efficiency ratio was 66.5% during first quarter 2007, comparing favorably to the prior year’s same quarter ratio of 69.1%. Commenting on the Company’s operating initiatives, Mr. Steiner noted, “We recognize that costs associated with startup of the Orrville Area banking center will likely limit efficiency gains for several quarters, but we remain committed to continued efficiency improvements.”

Federal income tax expense was $389 thousand for the quarter ended March 31, compared to $351 thousand for the same quarter in 2006. The higher tax expense was partially due to increased income, and partially attributable to an increase in effective tax rate from 31.2% to 32.3% on a same quarter basis. The increase in effective tax rate was primarily the result of bond maturities within the Company’s tax-free investment portfolio.

Total assets averaged $323 million during the quarter, an increase of $2.9 million, or .9% over the immediate prior quarter and $6.5 million, or 2.1%, above average asset balances for the same quarter in the prior year. Average loan balances of $233 million for the current quarter reflect an increase of $3.4 million, or 1.5%, above the immediate prior quarter average, and an increase of $16.8 million, or 7.6%, above first quarter 2006. Average securities balances declined $1.0 million, or 1.4% during the quarter and were $9.6 million lower than the average securities balances of the first quarter of 2006, as the Company has funded a portion of its loan growth over the past year with proceeds from maturing securities.

Average commercial loan balances increased $3.4 million, or 2.6% during the quarter, with average residential and home equity balances growing $1.0 million or 1.1%, and average consumer installment loan and credit card balances declining by $900 thousand, or 8.1%.

Nonperforming assets totaled $1.58 million at March 31, 2007, or .67% of period-end loans plus other real estate, compared with $1.51 million, or .65%, at December 31, 2006. Net charge-offs for the quarter totaled $30 thousand, or an annualized rate of .05% of average total loans.

The Company’s allowance for loan losses at March 31, 2007 was 1.13% of period end loans and the Company funded $78 thousand in loan loss provision during the first quarter. The ratio of allowance for loan losses to nonperforming loans remained unchanged from the prior quarter at 173%.

Average deposit balances increased $1.5 million to $253 million, up .6% from the prior quarter. Interest-bearing checking, money market and savings account average balances increased a combined $1.0 million, or 1.2% for the quarter, with average time deposits and non-interest bearing demand balances up $160 thousand and $100 thousand, respectively.

Shareholders’ equity totaled $34.9 million at March 31, 2007, with 2.46 million common shares outstanding at quarter-end. Tangible equity to assets totaled 10.8% at March 31, 2007.

About CSB Bancorp, Inc.
CSB is a $320 million financial holding company headquartered in Millersburg, Ohio. CSB provides a complete range of banking, trust and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with ten banking centers in Holmes, Tuscarawas and Wayne counties, and can be found on the web at

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

Contact Information:
Paula J. Meiler, SVP & CFO

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