CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS (Form 8-K)

CSB BANCORP, INC. REPORTS FOURTH QUARTER EARNINGS

Fourth Quarter Highlights

Millersburg, Ohio - January 28, 2026 - CSB Bancorp, Inc. (OTC ID: CSBB) today announced fourth quarter 2025 net income of $1,869,000 or $0.71 per basic and diluted share, as compared to $2,319,000, or $0.87 per basic and diluted share, for the same period in 2024. For the twelve-month period ended December 31, 2025, net income totaled $13,363,000 compared to $10,012,000 for the same period last year, an increase of 33%.

Annualized returns on average common equity ("ROE") and average assets ("ROA") for the quarter were 5.83% and 0.58%, respectively, compared with 7.99% and 0.76% for the fourth quarter of 2024. Pre-Provision Net Revenue ("PPNR") (a non-GAAP measure) totaled $6.1 million during the quarter, an increase of $1.0 million, or 19%, from the prior year's fourth quarter. Net interest income increased $1.9 million, or 19%, noninterest income increased $176 thousand, or 10%, and noninterest expense increased $1.0 million, or 17%, in the fourth quarter of 2025 compared to the same period in 2024. For the twelve-month period ended December 31, 2025 ROE and ROA were 10.94% and 1.08% as compared to 8.96% and 0.85% for the comparable period in 2024.

Eddie Steiner, President and CEO stated, "Loans grew at a slower pace during fourth quarter, partially due to seasonal business slowdowns, as well as mortgage applications stalling during the holiday season. For the year, net loan balances increased $87 million, or 12%. That growth is net of a $5 million increase in the allowance for credit losses due to the recognition of a fourth quarter valuation allowance of $4 million for one large commercial credit that remains a performing asset. Pre-provision net revenue increased 13% in 2025 to $22 million. Full year net income increased 33% from the prior year. After tax earnings amounted to $5.07 per share, and shareholders' equity rose 10% to $126 million at year end."

Provision for credit loss expense for the quarter increased $1.6 million from fourth quarter 2024. The current year increase results from the $4 million valuation allowance mentioned above on an individually evaluated loan relationship which is collateral dependent through its continued operation. The fourth quarter of 2024 provision for credit loss of $2.3 million covered a net charge-off of $1.9 million for that prior year quarter.

The allowance for expected credit losses ("ACL") amounted to $12.5 million, or 1.50% of total loans, on December 31, 2025, as compared to $7.6 million or 1.03% of total loans on December 31, 2024. The allowance for credit losses on off-balance sheet commitments on December 31, 2025 was $596 thousand, as compared to a December 31, 2024 balance of $524 thousand. The increase in the ACL is primarily related to the individually evaluated loan relationship. CSB has no allowance for credit losses related to available-for-sale or held-to-maturity debt securities, as there is no meaningful loss expectation on these securities.

Loan interest income including fees increased $1.7 million, or 16%, during fourth quarter 2025 as compared to the same quarter in 2024. The increase was primarily the result of an $88 million average volume increase, augmented by a 20 basis point ("bp") increase in yield over the prior year's quarter. Securities interest income increased $13 thousand, or less than 1%, during the fourth quarter 2025 compared to the same quarter 2024 as the Company continues to deploy cash flow from investments into loan originations. Loan yields for fourth quarter 2025 averaged 5.97%, an increase of 20 bps from the 2024 fourth quarter average of 5.77%, while overnight funds and securities yields for fourth quarter 2025 averaged 3.98% and 2.48%, respectively, compared to 4.81% and 2.23% in the fourth quarter 2024.

Interest expense declined $92 thousand, or 2%, during fourth quarter 2025 as compared to fourth quarter 2024. The cost to fund gross earning assets for the fourth quarter of 2025 declined to 1.20% as compared to 1.32% for the fourth quarter of 2024.

The fully taxable equivalent ("FTE") net interest margin (a non-GAAP measure) was 3.73% compared to 3.33% for the fourth quarter 2024. Compared to the fourth quarter of 2024, FTE net interest income increased $1.9 million, or 19%, with a $71 million increase in average earning assets as well as a 29 bp increase in the yield on assets. The mix shift into loans primarily drove the increase in earnings from assets. The cost of interest-bearing liabilities declined 17 basis points as short-term interest rates dropped. Tax equivalency effect on net interest margin was 0.01% for both 2025 and 2024.

Noninterest income increased $176 thousand, or 10%, compared to fourth quarter of 2024. The increase was primarily the result of a $40 thousand increase in earnings on bank owned life insurance, a $38 thousand increase in trust fees, a $34 thousand increase in debit card interchange fees, and a $28 thousand increase in credit card fees. An offsetting decrease of $10 thousand was recognized in unrealized gain on equity securities.

Noninterest expense increased $1.0 million, or 17%, from fourth quarter 2024. Salary and employee benefits increased $690 thousand, or 20%, compared to the prior year quarter, with increases in base salaries, medical, and retirement benefits, partially due to increased headcount as the company was able to reduce vacancies and add several new positions supporting growth. Professional fees increased $81 thousand, or 20%, with increases to legal expense and workflow improvement. Marketing and public relations increased $54 thousand, or 42%, following a third quarter decrease. Software expense increased $25 thousand, or 6%, primarily due to new loan production software. Occupancy expense increased $35 thousand, or 12%, primarily due to facilities maintenance. The Company's fourth quarter efficiency ratio decreased to 54.1% compared to 54.7% in the prior year.

Federal income tax expense was $400 thousand in fourth quarter 2025 compared to $526 thousand in the fourth quarter of 2024. The effective tax rate for the 2025 and 2024 fourth quarters was 18%, respectively.

Average earning assets for the fourth quarter of 2025 increased $71 million, or 6% from the year-ago quarter, primarily reflecting an $88 million, or 12%, increase in average loans, a $34 million, or 10%, decrease in average securities, and a $17 million, or 24%, increase in interest-earning deposits in other banks, held mainly at the Federal Reserve Bank.

Average commercial loan balances for the quarter, including commercial real estate, increased $67 million, or 14%, from prior year levels, as construction loans were drawn, and borrowers used term loans to fund equipment and other purchases. Average residential mortgage balances increased $16 million, or 9%, above the prior year's quarter with borrowers favoring adjustable-rate mortgages during this period of higher interest rates. The bank does not sell adjustable-rate mortgages to the secondary market. Home equity lines of credit increased $7 million from the prior year's quarter as borrowers covered expenses and avoided refinancing their lower interest rate mortgages. Average consumer credit balances decreased $2 million, or 11%, versus the same quarter of the prior year on lower volume of loans for recreational vehicles. Commercial loan demand for operating cash flow and equipment investments is somewhat constrained with households and businesses remaining cautious about discretionary borrowing until there is more confidence in price and employment stability after implementation of tariff, tax rate, and other fiscal initiatives. Construction and development and commercial real estate borrowing have continued to exhibit fairly steady demand.

Nonperforming loans were $652 thousand, or 0.08%, of total loans on December 31, 2025, compared to $1.7 million, or 0.23% of total loans, a year ago. Delinquent loan balances as of December 31, 2025, decreased to 0.23% of total loans as compared to 0.40% on December 31, 2024. Net loan charge-offs recognized during fourth quarter 2025 were $26 thousand, compared to fourth quarter 2024 net loan charge-offs of $1.9 million.

Average deposit balances increased on a quarter over prior year quarter comparison by $61 million, or 6%. For fourth quarter 2025, the average cost of deposits amounted to 1.28%, as compared to 1.38% for fourth quarter 2024. Fourth quarter 2025 increases in average deposit balances over the prior year quarter included savings accounts of $6 million, money market accounts of $10 million, and time deposits of $23 million. Noninterest-bearing accounts increased $6 million from the prior year's fourth quarter while interest-bearing demand accounts increased $16 million. The average balance of securities sold under repurchase agreement during the fourth quarter of 2025 increased by $783 thousand, or 3%, compared to the average for the same period in the prior year.

Shareholders' equity totaled $126 million on December 31, 2025, with 2.6 million common shares outstanding. The average equity to assets ratio amounted to 9.90% for the quarter ended December 31, 2025. The Company declared a fourth quarter dividend of $0.42 per share, producing an annualized yield of 3.1% based on December 31, 2025 closing price of $54.00.

About CSB Bancorp, Inc.

CSB is a financial holding company headquartered in Millersburg, Ohio, with approximate assets of $1.2 billion as of September 30, 2025. 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 sixteen banking centers in Holmes, Wayne, Tuscarawas, and Stark counties and Trust offices located in Millersburg, North Canton, and Wooster, and a loan production office located in Medina, Ohio.