csbb-ex991

Millersburg, Ohio – October 22, 2019 – CSB Bancorp, Inc. (OTC Pink: CSBB) today announced third quarter 2019 net income of $2,695,000, or $0.98 per basic and diluted share, as compared to $2,432,000, or $0.88 per basic and diluted share, for the same period in 2018. Income before federal income tax amounted to $3,344,000, an increase of 11% over the same quarter in the prior year. For the nine month period ended September 30, 2019 net income totaled $7,821,000 compared to $6,920,000 for the same period last year, an increase of 13%.

Annualized returns on average common equity (“ROE”) and average assets (“ROA”) for the quarter were 12.89% and 1.38%, respectively, compared with 13.07% and 1.34% for the third quarter of 2018.

Eddie Steiner, President and CEO stated, “The business sector has become somewhat more cautious in outlook as uncertainties related to trade policy, slowing global economies, and continued difficulties in agriculture and traditional retail sectors weigh on forward-looking perspectives. Demand for home loans has been steady. Mortgage rates are attractive and household balance sheets remain in decent shape overall with manageable debt levels, low unemployment and increasing wages.”

Net interest income and noninterest income, on a fully-taxable equivalent basis, totaled $8.7 million during the quarter, an 8% increase from the prior-year third quarter. Net interest income increased $387 thousand, or 6%, in the third quarter of 2019 compared to the same period in 2018.

Loan interest income including fees increased $532 thousand during third quarter 2019 as compared to the same quarter in 2018, an increase of 8%. Average total loan balances during the current quarter were $17 million higher than the year ago quarter, an increase of 3%. Loan yields for third quarter 2019 averaged 5.18%, an increase of 23 basis points from the 2018 third quarter average of 4.95%.

The net interest margin was 3.95% compared to 4.00% for third quarter 2018. The tax equivalency effect on the margin dropped to 0.02% from 0.03% a result of the reduction in tax exempt loans and securities in 2019.

Noninterest income increased 23%, compared to third quarter of 2018, driven by growth in gain on sale of loans, debit card fee income, increases in bank owned life insurance values, and service charges on deposit accounts.

Noninterest expense increased 8% from third quarter 2018. Salary and employee benefit costs increased $188 thousand, or 7%, compared to the prior year quarter, as a result of higher wage and 401k retirement expenses. Professional and director’s fees increased by $117 thousand, or 59%, reflecting higher technology investment to further improve network infrastructure in support of company growth. Marketing and public relations increased by $25 thousand, or 20%, reflecting timing of certain electronic and billboard promotional efforts and the opening of a new banking center. The Company’s third quarter efficiency ratio was stable at 57.5% in both periods.

Federal income tax expense totaled $649 thousand in third quarter 2019, as compared to $582 thousand tax expense for the same quarter in 2018. The effective tax rate was 19% in both periods.

Average total assets during the quarter amounted to $773 million, an increase of $53 million, or 7%, above the same quarter of the prior year. Average loan balances of $555 million increased $17 million, or 3%, from the prior year third quarter while average securities balances of $111 million decreased $7 million, or 6%, as compared to third quarter 2018.

Average commercial loan balances for the quarter, including commercial real estate, increased $3 million, or less than 1%, from prior year levels. Average residential mortgage balances including home equity lines of credit increased $12 million, or 8%, over the prior year’s quarter. Average consumer credit balances increased $2 million, or 9%, versus the same quarter of the prior year.

Nonperforming assets decreased $823 thousand from September 30, 2018 to $4.5 million, or 0.80%, of total loans plus other real estate at September 30, 2019. The decrease in nonperforming assets reflects various commercial loans exiting through liquidation. At September 30, 2019, approximately $1.2 million of the non-performing loan total is guaranteed by either USDA or the SBA. Delinquent loan balances as of September 30, 2019 declined to 0.96% of total loans as compared to 1.25% at September 30, 2018.

Net loan losses recognized during third quarter 2019 were $46 thousand, or 0.03% annualized, compared to third quarter 2018 net loan losses of $38 thousand. The allowance for loan losses amounted to 1.20% of total loans at September 30, 2019 as compared to 1.16% at September 30, 2018.

Average deposit balances grew on a quarter over prior year quarter comparison by $51 million, or 9%, partially on the strength of customer response to higher rates paid on insured deposits. For the third quarter 2019, the average cost of deposits amounted to 0.60%, as compared to 0.42% for the third quarter 2018. During the third quarter 2019, increases in average deposit balances over the prior year quarter included non-interest bearing demand accounts of $8 million, interest-bearing transaction accounts of $35 million, and time deposits of $8 million. The average balance of securities sold under repurchase agreement during the third quarter of 2019 decreased by $6 million, or 13%, compared to the average for the same period in the prior year.

Shareholders’ equity totaled $83.6 million on September 30, 2019 with 2.7 million common shares outstanding. The tangible equity to assets ratio amounted to 10.1% on September 30, 2019 and 9.8% on September 30, 2018. The Company declared a third quarter dividend of $0.28 per share, a $.04 per share increase over third quarter 2018, producing an annualized yield of 2.9% based on the September 30, 2019 closing price of $38.67.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $787 million as of September 30, 2019. 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 fifteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, Ohio.

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.

(Unaudited)	Quarters
(Dollars in thousands, except per share data)	2019			2019			2019			2018			2018			2019				2018
EARNINGS	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			9 months				9 months
Net interest income FTE (a)	$	7,228		$	7,111		$	7,049		$	6,934		$	6,847			21,388			$	19,980
Provision for loan losses		285			285			285			344			324			855				972
Other income		1,440			1,313			1,224			1,270			1,175			3,977				3,488
Other expenses		4,999			4,900			4,791			4,725			4,638			14,690				137,947
FTE adjustment (a)		40			40			38			24			46			118				138
Net income		2,695			2,586			2,540			2,492			2,432			7,821				6,920
Diluted earnings per share		0.98			0.94			0.93			0.91			0.88			2.85				2.52

PERFORMANCE RATIOS
Return on average assets (ROA)		1.38	%		1.39	%		1.41	%		1.36	%		1.34	%		1.39		%		1.30	%
Return on average common equity (ROE)		12.89	%		12.91	%		13.20	%		13.20	%		13.07	%		13.00		%		12.79	%
Net interest margin FTE (a)		3.95	%		4.08	%		4.16	%		4.01	%		4.00	%		4.06		%		3.98	%
Efficiency ratio		57.52	%		57.96	%		57.72	%		57.26	%		57.45	%		57.75		%		58.45	%
Number of full-time equivalent employees		175			174			174			170			174

MARKET DATA
Book value/common share	$	30.49		$	29.70		$	28.80		$	27.91		$	26.94
Period-end common share mkt value		38.67			40.45			38.75			38.50			40.57
Market as a % of book		126.83	%		136.20	%		134.55	%		137.94	%		150.59	%
Price-to-earnings ratio		10.28			11.05			10.85			11.22			12.80
Cash dividends/common share		0.28		$	0.26		$	0.26		$	0.26		$	0.24		$	0.80			$	0.72
Common stock dividend payout ratio		28.57	%		27.66	%		27.96	%		28.57	%		27.27	%		28.07		%		28.57	%
Average basic common shares		2,742,350			2,742,350			2,742,242			2,742,242			2,742,242			2,742,278				2,742,242
Average diluted common shares		2,742,350			2,742,350			2,742,242			2,742,242			2,742,242			2,742,278				2,742,242
Period end common shares outstanding		2,742,350			2,742,350			2,742,242			2,742,242			2,742,242
Common shares repurchased		—			—			—			—			—
Common stock market capitalization		106,047		$	110,928		$	106,262		$	105,576		$	111,253

ASSET QUALITY
Gross charge-offs	$	75		$	54		$	70		$	691		$	43			199			$	391
Net (recoveries) charge-offs		46			35			(95	)		641			38			(14	)			372
Allowance for loan losses		6,776			6,537			6,287			5,907			6,204
Nonperforming assets (NPAs)		4,518			4,555			3,302			3,428			5,341
Net charge-off (recovery) /average loans ratio		0.03	%		0.03	%		(0.07	)%		0.47	%		0.03	%		—		%		0.09	%
Allowance for loan losses/period-end loans		1.20			1.19			1.15			1.08			1.16
NPAs/loans and other real estate		0.80			0.83			0.60			0.62			1.00
Allowance for loan losses/nonperforming loans		153.35			146.70			197.23			177.45			116.16

CAPITAL & LIQUIDITY
Period-end tangible equity to assets		10.07	%		10.28	%		10.15	%		9.86	%		9.77	%
Average equity to assets		10.72			10.77			10.69			10.29			10.25
Average equity to loans		14.95			14.66			14.18			13.83			13.72
Average loans to deposits		86.18			88.73			91.16			89.88			90.80

AVERAGE BALANCES
Assets	$	773,482		$	745,658		$	730,181		$	727,962		$	720,372		$	749,959			$	712,288
Earning assets		725,616			699,229			687,515			686,807			679,281			704,260				671,654
Loans		554,957			547,981			550,483			541,482			538,182			551,157				533,492
Deposits		643,981			617,558			603,839			602,434			592,738			621,939				585,337
Shareholders' equity		82,948			80,338			78,038			74,900			73,844			80,459				72,362

ENDING BALANCES
Assets	$	786,792		$	750,252		$	734,845		$	731,722		$	710,815
Earning assets		734,860			704,738			688,792			682,345			668,468
Loans		566,213			550,612			548,220			548,974			535,424
Deposits		658,119			623,328			607,342			606,498			587,531
Shareholders' equity		83,614			81,458			78,967			76,536			73,877

(a) - Net Interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis differs from net interest income under U.S. generally accepted accounting principles.

(Unaudited)	September 30,			September 30,
(Dollars in thousands, except per share data)	2019			2018
ASSETS
Cash and cash equivalents
Cash and due from banks	$	20,696		$	15,865
Interest-earning deposits in other banks		58,873			17,384
Total cash and cash equivalents		79,569			33,249
Securities
Available-for-sale, at fair-value		89,572			89,507
Held-to-maturity		15,097			21,260
Equity securities		91			87
Restricted stock, at cost		4,614			4,614
Total securities		109,374			115,468
Loans held for sale		399			192
Loans		566,213			535,424
Less allowance for loan losses		6,776			6,204
Net loans		559,437			529,220
Premises and equipment, net		11,595			9,605
Goodwill and core deposit intangible		4,847			4,920
Bank owned life insurance		16,880			13,470
Accrued interest receivable and other assets		4,691			4,691
TOTAL ASSETS	$	786,792		$	710,815

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	192,620		$	177,203
Interest-bearing		465,499			410,328
Total deposits		658,119			587,531

Short-term borrowings		35,070			37,465
Other borrowings		6,453			8,676
Accrued interest payable and other liabilities		3,536			3,266
Total liabilities		703,178			636,938
Shareholders' equity
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares in 2019 and 2018		18,629			18,629
Additional paid-in capital		9,815			9,815
Retained earnings		59,915			52,510
Treasury stock at cost - 238,252 shares in 2019 and 238,360 in 2018		(4,780	)		(4,784	)
Accumulated other comprehensive loss		35			(2,293	)
Total shareholders' equity		83,614			73,877
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	786,792		$	710,815

	Quarter ended					Nine months ended
(Unaudited)	September 30,					September 30,
(Dollars in thousands, except per share data)	2019		2018			2019		2018
Interest and dividend income:
Loans, including fees	$	7,239	$	6,707		$	21,496	$	19,361
Taxable securities		534		586			1,705		1,784
Nontaxable securities		133		152			401		464
Other		356		127			749		256
Total interest and dividend income		8,262		7,572			24,351		21,865
Interest expense:
Deposits		966		633			2,711		1,647
Other		108		138			370		376
Total interest expense		1,074		771			3,081		2,023
Net interest income		7,188		6,801			21,270		19,842
Provision for loan losses		285		324			855		972
Net interest income after provision for loan losses		6,903		6,477			20,415		18,870
Noninterest income
Service charges on deposits accounts		333		301			938		885
Trust services		234		204			670		641
Debit card interchange fees		377		330			1,093		966
Gain on sale of loans		132		63			287		200
Market value change in equity securities		5		(6	)		8		(2	)
Other		359		283			981		798
Total noninterest income		1,440		1,175			3,977		3,488
Noninterest expenses
Salaries and employee benefits		2,993		2,805			8,750		8,160
Occupancy expense		209		194			618		628
Equipment expense		128		145			408		461
Professional and director fees		316		199			963		749
Software expense		225		221			674		655
Marketing and public relations		149		124			405		363
Debit card expense		142		144			401		386
Other expenses		837		806			2,471		2,392
Total noninterest expenses		4,999		4,638			14,690		13,794
Income before income tax		3,344		3,014			9,702		8,564
Federal income tax provision		649		582			1,881		1,644
Net income	$	2,695	$	2,432		$	7,821	$	6,920
Net income per share:
Basic	$	0.98	$	0.88		$	2.85	$	2.52
Diluted	$	0.98	$	0.88		$	2.85	$	2.52

	Quarter Ended September 30, 2019			Quarter Ended September 30, 2018
Diluted earnings per share	$	0.98		$	0.88
Net Income	$	2,695,000		$	2,432,000
Return on average common equity		12.89	%		13.07	%
Return on average assets		1.38	%		1.34	%