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Section 1: 10-Q (10-Q)

csbb-10q_20200331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:     0-21714

CSB Bancorp, Inc.

(Exact name of registrant as specified in its charter)

 

Ohio

 

34-1687530

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

Registrant’s address:  91 North Clay, P.O. Box 232, Millersburg, Ohio 44654

Registrant’s telephone number, including area code:  (330) 674-9015

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes (X)         No (   )

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes (X)        No (   )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer (   ) Accelerated filer (X) Non-accelerated filer (   ) Smaller reporting company ( X ) Emerging growth company (   )

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  (   )

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes (   )         No (X)

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock

 

CSBB

 

OTCPink

 

Indicate the number of shares outstanding of the registrant's common stock, as of the latest practicable date.

 

Common stock, $6.25 par value

Outstanding at May 1, 2020, 2,742,350 common shares

 

 

 

 


 

CSB BANCORP, INC.

FORM 10-Q

QUARTER ENDED MARCH 31, 2020

Table of Contents

 

Part I - Financial Information

 

 

 

 

 

 

 

Page

ITEM 1 –

 

FINANCIAL STATEMENTS (Unaudited)

 

3

Consolidated Balance Sheets

 

3

Consolidated Statements of Income

 

4

Consolidated Statements of Comprehensive Income

 

5

Consolidated Statements of Changes in Shareholders' Equity

 

6

Condensed Consolidated Statements of Cash Flows

 

7

Notes to Consolidated Financial Statements

 

8

 

 

 

ITEM 2 –

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

24

ITEM 3 –

 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

29

ITEM 4 –

 

CONTROLS AND PROCEDURES

 

30

 

 

 

Part II - Other Information

 

 

 

 

 

ITEM1 –

 

Legal Proceedings

 

31

ITEM1A –

 

Risk Factors

 

31

ITEM2 –

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

31

ITEM3 –

 

Defaults upon Senior Securities

 

31

ITEM4 –

 

Mine Safety Disclosures

 

31

ITEM5

 

Other Information

 

31

ITEM6 –

 

Exhibits

 

32

Signatures

 

33

 

2


 

CSB BANCORP, INC.

PART I – FINANCIAL INFORMATION

ITEM 1. – FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

(Dollars in thousands)

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

18,277

 

 

$

17,648

 

Interest-earning deposits in other banks

 

 

77,995

 

 

 

84,369

 

Total cash and cash equivalents

 

 

96,272

 

 

 

102,017

 

Securities

 

 

 

 

 

 

 

 

Available-for-sale, at fair value

 

 

108,263

 

 

 

112,146

 

Held-to-maturity (fair value 2020-$11,542; 2019-13,950)

 

 

11,242

 

 

 

13,869

 

Equity securities

 

 

79

 

 

 

92

 

Restricted stock, at cost

 

 

4,614

 

 

 

4,614

 

Total securities

 

 

124,198

 

 

 

130,721

 

Loans held for sale

 

 

256

 

 

 

622

 

Loans

 

 

555,320

 

 

 

551,633

 

Less allowance for loan losses

 

 

7,120

 

 

 

7,017

 

Net loans

 

 

548,200

 

 

 

544,616

 

Premises and equipment, net

 

 

12,387

 

 

 

12,040

 

Core deposit intangible

 

 

89

 

 

 

104

 

Goodwill

 

 

4,728

 

 

 

4,728

 

Bank-owned life insurance

 

 

19,023

 

 

 

18,894

 

Accrued interest receivable and other assets

 

 

4,888

 

 

 

4,941

 

TOTAL ASSETS

 

$

810,041

 

 

$

818,683

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

188,137

 

 

$

197,780

 

Interest-bearing

 

 

483,025

 

 

 

485,766

 

Total deposits

 

 

671,162

 

 

 

683,546

 

Short-term borrowings

 

 

40,605

 

 

 

38,889

 

Other borrowings

 

 

6,206

 

 

 

6,330

 

Accrued interest payable and other liabilities

 

 

4,439

 

 

 

4,442

 

Total liabilities

 

 

722,412

 

 

 

733,207

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, $6.25 par value.  Authorized 9,000,000 shares; issued

   2,980,602 shares; outstanding 2,742,350 shares 2020 and 2019

 

 

18,629

 

 

 

18,629

 

Additional paid-in capital

 

 

9,815

 

 

 

9,815

 

Retained earnings

 

 

63,455

 

 

 

61,740

 

Treasury stock at cost:  238,252 shares 2020 and 2019

 

 

(4,780

)

 

 

(4,780

)

Accumulated other comprehensive income

 

 

510

 

 

 

72

 

Total shareholders' equity

 

 

87,629

 

 

 

85,476

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

810,041

 

 

$

818,683

 

 

See notes to unaudited consolidated financial statements.

 

3


 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

(Dollars in thousands, except per share data)

 

2020

 

 

2019

 

INTEREST AND DIVIDEND INCOME

 

 

 

 

 

 

 

 

Loans, including fees

 

$

6,850

 

 

$

7,072

 

Taxable securities

 

 

609

 

 

 

587

 

Nontaxable securities

 

 

119

 

 

 

134

 

Other

 

 

239

 

 

 

175

 

Total interest and dividend income

 

 

7,817

 

 

 

7,968

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

Deposits

 

 

831

 

 

 

825

 

Short-term borrowings

 

 

41

 

 

 

93

 

Other borrowings

 

 

29

 

 

 

39

 

Total interest expense

 

 

901

 

 

 

957

 

NET INTEREST INCOME

 

 

6,916

 

 

 

7,011

 

PROVISION FOR LOAN LOSSES

 

 

178

 

 

 

285

 

Net interest income, after provision for loan losses

 

 

6,738

 

 

 

6,726

 

NON INTEREST INCOME

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

291

 

 

 

292

 

Trust services

 

 

230

 

 

 

224

 

Debit card interchange fees

 

 

375

 

 

 

347

 

Gain on sale of loans, net

 

 

114

 

 

 

79

 

Earnings on bank owned life insurance

 

 

129

 

 

 

83

 

Unrealized gain or (loss) on equity securities, net

 

 

(13

)

 

 

6

 

Other income

 

 

217

 

 

 

193

 

Total noninterest income

 

 

1,343

 

 

 

1,224

 

NON INTEREST EXPENSES

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,968

 

 

 

2,842

 

Occupancy expense

 

 

220

 

 

 

204

 

Equipment expense

 

 

135

 

 

 

137

 

Professional and director fees

 

 

330

 

 

 

339

 

Financial institutions and franchise tax expense

 

 

171

 

 

 

153

 

Marketing and public relations

 

 

127

 

 

 

117

 

Software expense

 

 

227

 

 

 

218

 

Debit card expense

 

 

140

 

 

 

127

 

Amortization of intangible assets

 

 

15

 

 

 

16

 

Other expenses

 

 

674

 

 

 

638

 

Total noninterest expenses

 

 

5,007

 

 

 

4,791

 

Income before income taxes

 

 

3,074

 

 

 

3,159

 

FEDERAL INCOME TAX PROVISION

 

 

591

 

 

 

619

 

NET INCOME

 

$

2,483

 

 

$

2,540

 

Basic and diluted net earnings per share

 

$

0.91

 

 

$

0.93

 

 

See notes to unaudited consolidated financial statements

4


 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

(Dollars in thousands)

 

2020

 

 

2019

 

Net income

 

$

2,483

 

 

$

2,540

 

Other comprehensive income

 

 

 

 

 

 

 

 

Unrealized gains arising during the period

 

 

540

 

 

 

749

 

Amortization of discount on securities transferred to held-to-maturity

 

 

14

 

 

 

15

 

Income tax effect

 

 

(116

)

 

 

(160

)

Other comprehensive income

 

 

438

 

 

 

604

 

Total comprehensive income

 

$

2,921

 

 

$

3,144

 

 

See notes to unaudited consolidated financial statements.

5


 

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

(Dollars in thousands)

 

Common

stock

 

 

Additional

paid-in

capital

 

 

Retained

earnings

 

 

Treasury

stock

 

 

Accumulated

other

comprehensive

income (loss)

 

 

Total

 

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

54,288

 

 

$

(4,784

)

 

$

(1,412

)

 

$

76,536

 

Net income

 

 

 

 

 

 

 

 

2,540

 

 

 

 

 

 

 

 

 

2,540

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

604

 

 

 

604

 

Cash dividends declared, $0.26 per share

 

 

 

 

 

 

 

 

(713

)

 

 

 

 

 

 

 

 

(713

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

56,115

 

 

$

(4,784

)

 

$

(808

)

 

$

78,967

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

18,629

 

 

$

9,815

 

 

$

61,740

 

 

$

(4,780

)

 

$

72

 

 

$

85,476

 

Net income

 

 

 

 

 

 

 

 

2,483

 

 

 

 

 

 

 

 

 

2,483

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

438

 

 

 

438

 

Cash dividends declared, $0.28 per share

 

 

 

 

 

 

 

 

(768

)

 

 

 

 

 

 

 

 

(768

)

Balance, end of period

 

$

18,629

 

 

$

9,815

 

 

$

63,455

 

 

$

(4,780

)

 

$

510

 

 

$

87,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited consolidated financial statements.

6


 

CSB BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

(Dollars in thousands)

 

2020

 

 

2019

 

NET CASH FROM OPERATING ACTIVITIES

 

$

2,488

 

 

$

1,894

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

Proceeds from repayments, available-for-sale

 

 

10,338

 

 

 

1,836

 

Proceeds from repayments, held-to-maturity

 

 

2,635

 

 

 

477

 

Purchases, available-for-sale

 

 

(6,055

)

 

 

(2,023

)

Loan originations, net of repayments

 

 

(3,808

)

 

 

870

 

Property, equipment, and software acquisitions

 

 

(551

)

 

 

(976

)

Purchase of bank-owned life insurance

 

 

 

 

 

(3,000

)

Net cash provided by (used in) investing activities

 

 

2,559

 

 

 

(2,816

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Net change in deposits

 

 

(12,384

)

 

 

844

 

Net change in short-term borrowings

 

 

1,716

 

 

 

(1,091

)

Repayment of other borrowings

 

 

(124

)

 

 

(152

)

Net cash used in financing activities

 

 

(10,792

)

 

 

(399

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

 

(5,745

)

 

 

(1,321

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

102,017

 

 

 

45,564

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

96,272

 

 

$

44,243

 

SUPPLEMENTAL DISCLOSURES

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$

909

 

 

$

921

 

Income taxes

 

 

 

 

 

 

Noncash financing activities:

 

 

 

 

 

 

 

 

Dividends declared

 

 

768

 

 

 

713

 

Lease adoption:

 

 

 

 

 

 

 

 

Right of use lease asset

 

 

 

 

 

477

 

Lease liability

 

 

 

 

 

469

 

 

 

 

 

 

See notes to unaudited consolidated financial statements.

 

 

7


 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”).  All significant intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated financial statements have been prepared without audit.  In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at March 31, 2020, and the results of operations and changes in cash flows for the periods presented have been made.

Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been omitted.  The Annual Report for CSB for the year ended December 31, 2019, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying Consolidated Financial Statements.  The results of operations for the period ended March 31, 2020 are not necessarily indicative of the operating results for the full year or any future interim period.

Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation.

REVENUE RECOGNITION

Management has determined the primary sources of revenue emanating from interest and dividend income on loans and securities along with noninterest revenue resulting from investment security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit cards fees, and income on bank-owned life insurance are not within the scope of ASC 606. These sources of revenue comprise 88% of the total revenue of the Company. Services within the scope of ASC 606 include income from fiduciary activities, brokerage fees, service charges on deposit accounts, other fee income, ATM fees, interchange fees, and gain on sale of OREO, net. For these accounts, fees are related to specific customer transactions, or attributable to specific performance obligations of the Bank where revenue is recognized at a defined point in time upon completion of the requested service/transaction.  

8


 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ASU 2016-13 - Financial Instruments - Credit Losses. The Update and all subsequent ASU’s that modified Topic 326, requires that financial assets be presented at the net amount expected to be collected (i.e. net of expected credit losses), eliminating the probable recognition threshold for credit losses on financial assets measured at amortized cost. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We expect the Update will result in an increase in the allowance for credit losses for the estimated life of the financial asset, including an estimate for debt securities. The amount of any increase will be impacted by the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. A cumulative-effect adjustment to retained earnings is required as of the beginning of the year of adoption. The Company expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In November 2019, the FASB deferred the effective date for ASC 326, Financial Instruments – Credit Losses, for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASU’s.  

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update, and all subsequent ASU’s, simplifies the goodwill impairment test.  Under the new guidance, Step 2 of the goodwill impairment process that requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities is eliminated. Instead, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. In November 2019, the FASB deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a material impact on the Company’s financial statements.

9


 

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

ASU 2018-15 - Intangibles – Goodwill and Other – Internal-Use Software. This Update addresses customers’ accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This Update is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The amendments in this Update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. In November 2019, the FASB deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements. 

 

ASU 2019-12 - Income Taxes. This update simplifies the accounting for income taxes, changes the accounting for certain tax transactions, and makes minor improvements to the codification. This Update provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and provides guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized as a separate transaction. The Update also changes current guidance for making an intra-period allocation, if there is a loss in continuing operations and gains outside of continuing operations; determining when a deferred tax liability is recognized after an investor in a foreign entity transitions to or from the equity method of accounting; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income. For public business entities, the amendments in this Update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. This update is not expected to have a significant impact on the Company’s financial statements.

ASU 2020-4 – Reference Rate Reform (Topic 848).  This update provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. This Update is not expected to have a significant impact on the Company’s financial statements.

 

 

10


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 2 SECURITIES

Securities consist of the following at March 31, 2020 and December 31, 2019:

 

(Dollars in thousands)

 

Amortized

cost

 

 

Gross

unrealized

gains

 

 

Gross

unrealized

(losses)

 

 

Fair value

 

March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury security

 

$

999

 

 

$

21

 

 

$

 

 

$

1,020

 

U.S. Government agencies

 

 

2,000

 

 

 

3

 

 

 

 

 

 

2,003

 

Mortgage-backed securities of government agencies

 

 

74,328

 

 

 

1,104

 

 

 

(225

)

 

 

75,207

 

Asset-backed securities of government agencies

 

 

910

 

 

 

 

 

 

(105

)

 

 

805

 

State and political subdivisions

 

 

20,648

 

 

 

309

 

 

 

 

 

 

20,957

 

Corporate bonds

 

 

8,566

 

 

 

2

 

 

 

(297

)

 

 

8,271

 

Total available-for-sale

 

 

107,451

 

 

 

1,439

 

 

 

(627

)

 

 

108,263

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

 

3,000

 

 

 

8

 

 

 

 

 

 

3,008

 

Mortgage-backed securities of government agencies

 

 

8,242

 

 

 

292

 

 

 

 

 

 

8,534

 

Total held-to-maturity

 

 

11,242

 

 

 

300

 

 

 

 

 

 

11,542

 

Equity securities

 

 

53

 

 

 

26

 

 

 

 

 

 

79

 

Restricted stock

 

 

4,614

 

 

 

 

 

 

 

 

 

4,614

 

Total securities

 

$

123,360

 

 

$

1,765

 

 

$

(627

)

 

 

124,498

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury security

 

$

998

 

 

$

1

 

 

$

 

 

$

999

 

U.S. Government agencies

 

 

5,500

 

 

 

 

 

 

(4

)

 

 

5,496

 

Mortgage-backed securities of government agencies

 

 

75,676

 

 

 

326

 

 

 

(145

)

 

 

75,857

 

Asset-backed securities of government agencies

 

 

934

 

 

 

 

 

 

(17

)

 

 

917

 

State and political subdivisions

 

 

21,161

 

 

 

351

 

 

 

(1

)

 

 

21,511

 

Corporate bonds

 

 

7,605

 

 

 

23

 

 

 

(262

)

 

 

7,366

 

Total available-for-sale

 

 

111,874

 

 

 

701

 

 

 

(429

)

 

 

112,146

 

Held-to-maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

 

4,999

 

 

 

 

 

 

(6

)

 

 

4,993

 

Mortgage-backed securities of government agencies

 

 

8,870

 

 

 

143

 

 

 

(56

)

 

 

8,957

 

Total held-to-maturity

 

 

13,869

 

 

 

143

 

 

 

(62

)

 

 

13,950

 

Equity securities

 

 

53

 

 

 

39

 

 

 

 

 

 

92

 

Restricted stock

 

 

4,614

 

 

 

 

 

 

 

 

 

4,614

 

Total securities

 

$

130,410

 

 

$

883

 

 

$

(491

)

 

$

130,802

 

 

The amortized cost and fair value of debt securities at March 31, 2020, by contractual maturity, are shown below.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

(Dollars in thousands)

 

Amortized cost

 

 

Fair value

 

Available-for-sale

 

 

 

 

 

 

 

 

Due in one year or less

 

$

5,285

 

 

$

5,283

 

Due after one through five years

 

 

11,542

 

 

 

11,649

 

Due after five through ten years

 

 

18,308

 

 

 

18,465

 

Due after ten years

 

 

72,316

 

 

 

72,866

 

Total debt securities available-for-sale

 

$

107,451

 

 

$

108,263

 

Held-to-maturity

 

 

 

 

 

 

 

 

Due after one through five years

 

$

3,000

 

 

$

3,008

 

Due after ten years

 

 

8,242

 

 

 

8,534

 

Total debt securities held-to-maturity

 

$

11,242

 

 

$

11,542

 

11


CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – SECURITIES (CONTINUED)

 

 

Securities with a fair value of approximately $87.6 million and $80.3 million were pledged at March 31, 2020 and December 31, 2019, respectively, to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock.  The Bank’s investment in FHLB stock amounted to approximately $4.1 million at March 31, 2020 and December 31, 2019. Federal Reserve Bank stock was $471 thousand at March 31, 2020 and December 31, 2019.

There were no proceeds from sales of securities for the three month periods ending March 31, 2020 and 2019. All gains and losses recognized on equity securities during the three month periods were unrealized.

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2020 and December 31, 2019:

 

 

 

Securities in a continuous unrealized loss position

 

 

 

Less than 12 months

 

 

12 months or more

 

 

Total

 

(Dollars in thousands)

 

Gross

unrealized

losses

 

 

Fair

value

 

 

Gross

unrealized

losses

 

 

Fair

value

 

 

Gross

unrealized

losses

 

 

Fair

value

 

March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities of government

   agencies

 

$

(208

)

 

$

27,404

 

 

$

(17

)

 

$

2,496

 

 

$

(225

)

 

$

29,900

 

Asset-backed securities of government

   agencies

 

 

 

 

 

 

 

 

(105

)

 

 

805

 

 

 

(105

)

 

 

805

 

Corporate bonds

 

 

(7

)

 

 

3,009

 

 

 

(290

)

 

 

3,686

 

 

 

(297

)

 

 

6,695

 

Total temporarily impaired securities

 

$

(215

)

 

$

30,413

 

 

$

(412

)

 

$

6,987

 

 

$

(627

)

 

$

37,400

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

 

 

 

 

 

 

$

(4