Press Release  |  October 26, 2010


Third Quarter and Year to Date Highlights

Quarter Ended Nine Months Ended
September 30, 2010 September 30, 2010
Diluted earnings per share $0.32 $0.93

Net Income $882,000 $2,540,000

Return on average common equity 7.41% 7.25%

Return on average assets 0.78% 0.77%

Millersburg, Ohio – October 25, 2010 – CSB Bancorp, Inc. (OTCBB: CSBB.ob) today announced third quarter 2010 net income of $882 thousand, or $.32 per basic and diluted share, as compared to $858 thousand, or $.31 per basic and diluted share for the same period in 2009.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 7.41% and 0.78%, respectively, compared with 7.49% and 0.80% for the third quarter of 2009.

“Loan demand and economic activity remain soft in our market,” commented Eddie Steiner, CSB President and CEO. “The recessionary climate and high unemployment levels continue to exert pressure on credit quality and we are reserving for future loan losses that may exceed our historical norm. Our balance sheet remains strong, and while net income is 3% ahead of last year at this time, revenue is basically flat on a year to date basis.”

Total revenue amounted to $4.8 million during the quarter, unchanged from total revenue in the third quarter of 2009. Net interest income of $4.0 million increased $96 thousand or 2.4% over the same quarter of the prior year, and $130 thousand or 3.3% on a linked quarter basis.

Other income of $780 thousand reflects a decrease of $90 thousand or 10.3% from the same quarter in the prior year. The decline was primarily reflective of reduced gains from sales of loans and lower trust income.

Non-interest expense totaled $3.2 million during the quarter, an increase of $27 thousand or 0.9% from third quarter 2009.

Federal income tax expense was $402 thousand for third quarter 2010, reflecting an effective tax rate of 31.3%, compared to 31.6% for the same quarter in 2009. The decrease in the effective tax rate was primarily the result of a higher proportion of tax-exempt securities in the Company’s investment portfolio.

Average asset balances totaled $446 million for third quarter 2010, an increase of $9 million or 2.1% on a linked quarter basis and up $21 million or 4.9% over third quarter 2009. Total loan balances averaged $315 million during the quarter, up $4 million for the quarter, while $0.8 million or 0.3% below year ago levels. Average commercial loan balances, including commercial real estate, increased $4 million or 2.2% for the quarter, while average balances for residential mortgage and home equity loans declined $0.6 million or 0.5% during the quarter, and installment and other consumer average loan balances decreased $28 thousand, or 0.4%. The Company continues to experience a fair amount of consumer refinancing from existing in-house mortgages to the secondary mortgage market given prevailing low secondary market rates.

As of September 30, 2010, nonperforming assets totaled $5.4 million or 1.71% of period-end loans plus other real estate, compared with $3.7 million or 1.44% at September 30, 2009. Net charge-offs during the quarter amounted to $440 thousand. Year to date net charge-offs total $649 thousand, which equates to an annualized rate of 0.28% of average total loans, as compared to an annualized rate of 0.26% after nine months in the previous year.

The Company’s allowance for loan losses at September 30, 2010 was 1.39% of period end loans and the Company funded $238 thousand in loan loss provision during the quarter. The ratio of allowance for loan losses to nonperforming loans stood at 84% at quarter-end. Steiner remarked, “While charge-off activity year to date is running at about the same pace as last year, nonperforming loan balances remain somewhat elevated above prior year levels.”

Average deposit balances increased $9 million, or 2.7% during the quarter to $336 million. Within the deposit category, average balances for non interest-bearing accounts increased $6 million or 10.6%, while interest bearing checking, money market and savings average balances increased $543 thousand or 0.4% during the quarter and average time deposit balances increased $2.6 million, or 1.7%.

Short-term and other borrowings amounted to $61 million on September 30, a decrease of $1.9 million or 2.9% from June 30.

Shareholders’ equity totaled $47.2 million on September 30, 2010 with 2.7 million common shares outstanding and a tangible equity to assets ratio of 10.03% at quarter-end. The Company declared a common dividend of $.18 per share during the quarter.

About CSB Bancorp, Inc.
CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $452 million as of September 30, 2010. CSB provides a complete range of banking and other financial services to consumers and businesses through its wholly owned subsidiary, The Commercial and Savings Bank, with fourteen banking centers in Holmes, Tuscarawas, Wayne and Stark counties and Trust offices located in Millersburg and Wooster, Ohio.

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

Contact Information:
Paula J. Meiler, SVP & CFO

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