CSB Bancorp, Inc. 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
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þ |
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ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2006
OR
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o |
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 0-21714
CSB BANCORP, INC.
(Exact name of registrant as specified in its charter)
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Ohio
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34-1687530 |
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) |
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91 North Clay Street, Millersburg, Ohio
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44654 |
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(Address of principal executive offices)
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(Zip code) |
Registrants telephone number, including area code (330) 674-9015
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act:
Common Shares, $6.25 par value
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act.
o Yes þ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act.
o Yes þ No
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.
þ Yes o No
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained herein and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of accelerated filer in Rule 12b-2 of the
Exchange Act. (Check One):
Large accelerated filer o Accelerated filer o Non-accelerated filer þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
o Yes þ No
At June 30, 2006, the aggregate market value of the voting stock held by non-affiliates of the
registrant, based on a share price of $20.40 per share (such price being the last trade price on
such date) was $48.0 million.
At
March 22, 2007, there were outstanding 2,462,891 of the registrants Common Shares, $6.25 par
value.
TABLE OF CONTENTS
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrants 2006 Annual Report to Shareholders.
Portions of Registrants Proxy Statement dated March 23, 2007.
PART I
Available Information
Our
website address is www.csb1.com. We make our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports available free of
charge on our website as soon as reasonably practicable after such material is electronically filed
with the Securities and Exchange Commission (the SEC). We also make available through our
website, other reports filed with the SEC under the Exchange Act, including our proxy statements
and reports filed by officers and directors under Section 16(a) of that Act, as well as our Code of
Ethics. We do not intend for information contained in our website to be part of this Annual Report
on Form 10-K.
In addition, the public may read and copy any materials we filed with the SEC at the SECs Public
Reference Room at 450 Fifth Street, NW, Washington DC 20549. Information on the operation of the
Public Reference Room is available by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains
an Internet site that contains reports, proxy and information statements and other information at
www.sec.gov.
ITEM 1. BUSINESS.
General
CSB Bancorp, Inc. (the Company), is a registered financial holding company under the Bank Holding
Company Act of 1956, as amended, and was incorporated under the laws of the State of Ohio in 1991.
The Commercial and Savings Bank (the Bank), an Ohio banking corporation chartered in 1879, is a
wholly owned subsidiary of the Company. The Bank is a member of the Federal Reserve system, and
its deposits are insured up to the maximum provided by law by the Federal Deposit Insurance
Corporation. The primary regulators of the Bank are the Federal Reserve Board and the Ohio
Division of Financial Institutions.
The Bank provides retail and commercial banking services to its customers, including checking and
savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, commercial loans,
real estate mortgage loans, installment loans, night depository facilities, brokerage and trust
services.
The Bank grants residential real estate, commercial real estate, consumer and commercial loans to
customers located primarily in Holmes County and portions of surrounding counties in Ohio. The
general economic conditions in the Companys market area have been sound. Unemployment statistics
have generally been among the lowest in the state of Ohio and real estate values have been stable
to rising.
Certain risks are involved in granting loans, primarily related to the borrowers ability and
willingness to repay the debt. Before the Bank extends or renews a new loan to a customer, these
risks are assessed through a review of the borrowers past and current credit history, collateral
being used to secure the transaction, borrowers character, and other factors. For all commercial
loan relationships greater than $275,000, the Banks internal credit department performs an annual
risk rating review. In addition to this review, an independent outside loan review firm is engaged
to review all watch list and adversely classified credits, commercial loan relationships greater
than $500,000, a sample of commercial loan relationships less than $500,000, loans within an
industry concentration and a sample of consumer/mortgage loans. In addition, any loan identified
as a problem credit by management and/or the external loan review consultants is assigned to the
Banks loan watch list, and is subject to ongoing review by the Banks credit department and the
assigned loan officer to ensure appropriate action is taken when deterioration has occurred.
2
Commercial loan rates are variable as well as fixed, and include operating lines of credit and term
loans made to small businesses primarily based on their ability to repay the loan from the cash
flow of the business. Business assets such as equipment, accounts receivable, and inventory
typically secure such loans. When the borrower is not an individual, the Bank generally obtains
the personal guarantee of the business owner. As compared to consumer lending, which includes
single-family residences, personal installment loans and automobile loans, commercial lending
entails significant additional risks. These loans typically involve larger loan balances, are
generally dependent on the cash flow of the business, and thus may be subject to a greater extent
to adverse conditions in the general economy or in a specific industry. Management reviews the
borrowers cash flows when deciding whether to grant the credit, to evaluate whether estimated
future cash flows will be adequate to service principal and interest of the new obligation in
addition to existing obligations.
Commercial real estate loans are primarily secured by borrower-occupied business real estate and
are dependent on the ability of the related business to generate adequate cash flow to service the
debt. Commercial real estate loans are generally originated with a loan-to-value ratio of 80% or
less. Commercial construction loans are secured by commercial real estate and in most cases the
bank also provides the permanent financing. Advances are monitored by the Bank and the maximum
loan to value is typically limited to the lesser of 90% of cost or 80% of appraisal. Management
performs much the same analysis when deciding whether to grant a commercial real estate loan as
when deciding whether to grant a commercial loan.
Residential real estate loans carry both fixed and variable rates and are secured by the borrowers
residence. Such loans are made based on the borrowers ability to make repayment from employment
and other income. Management assesses the borrowers ability and willingness to repay the debt
through review of credit history and ratings, verification of employment and other income, review
of debt-to-income ratios and other measures of repayment ability. The Bank generally makes these
loans in amounts of 85% or less of the value of collateral or up to 100% with PMI. An appraisal
from a qualified real estate appraiser or an evaluation based on tax value is obtained for
substantially all loans secured by real estate. Residential construction loans are secured by
residential real estate that generally will be occupied by the borrower on completion. The Bank
usually makes the permanent loan at the end of the construction phase. Construction loans also are
made in amounts of 85% or less of the value of the collateral.
Home equity lines of credit are made to individuals and are secured by second or first mortgages on
the borrowers residence. Loans are based on similar credit and appraisal criteria used for
residential real estate loans; however, loans up to 100% of the value of the property may be
approved for borrowers with excellent credit histories. These loans typically bear interest at
variable rates and require certain minimum monthly payments.
Installment loans to individuals include loans secured by automobiles and other consumer assets,
including second mortgages on personal residences. Consumer loans for the purchase of new
automobiles generally do not exceed 90% of the purchase price of the automobile. Loans for used
automobiles generally do not exceed average wholesale or trade-in values as stipulated in a recent
auto-industry used-car price guide. Credit card and overdraft protection loans are unsecured
personal lines of credit to individuals of demonstrated good credit character with reasonably
assured sources of income and satisfactory credit histories. Consumer loans generally involve more
risk than residential mortgage loans because of the type and nature of collateral and, in certain
types of consumer loans, absence of collateral. Since these loans are generally repaid from
ordinary income of the individual or family unit, repayment may be adversely affected by job loss,
divorce, ill health or by general decline in economic conditions. The Bank assesses the borrowers
ability and willingness to make repayment through a review of credit history, credit ratings,
debt-to-income ratios and other measures of repayment ability.
While the Companys chief decision-makers monitor the revenue streams of the various Company
products and services, operations are managed and financial performance is evaluated on a
Company-wide basis. Accordingly, all of the Companys banking operations are considered by
management to be aggregated in one reportable operating segment.
Employees
At December 31, 2006, the Company had 135 employees, 112 of which were employed on a full-time
basis. The Company has no separate employees not also employed by the Bank. No employees are
covered by collective bargaining agreements. Management considers its employee relations to be
good.
3
Competition
The Bank operates in a highly competitive industry due, in part, to Ohio law permitting statewide
branching by banks, savings and loan associations and credit unions. Ohio law also permits
nationwide interstate banking on a reciprocal basis. In its primary market area of Holmes and
surrounding counties, the Bank competes for new deposit dollars and loans with several other
commercial banks, both large regional banks and smaller community banks, as well as savings and
loan associations, credit unions, finance companies, insurance companies, brokerage firms and
investment companies. The ability to generate earnings is impacted, in part, by competitive
pricing on loans and deposits and by changes in the rates on various U.S. Treasury and State and
political subdivision issues which comprise a significant portion of the Banks investment
portfolio, and which rates are used as indices on several loan products. The Bank believes its
presence in the Holmes County area provides the Bank with a competitive advantage due to its large
asset base and ability to make loans and provide services to the local community.
On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley Act of 1999
(Gramm-Leach) that permits bank holding companies to become financial holding companies and
thereby affiliate with securities firms and insurance companies and engage in other activities that
are financial in nature. Gramm-Leach may significantly change the competitive environment in which
the Company conducts business. See Financial Modernization for further discussion.
Supervision and Regulation
The Bank is subject to supervision, regulation and periodic examination by the Federal Reserve
Board and the State of Ohio Division of Financial Institutions. Because the Federal Deposit
Insurance Corporation insures its deposits, the Bank is also subject to certain regulations of that
federal agency. As a financial holding company, the Company is subject to supervision, regulation
and periodic examination by the Federal Reserve Board. The earnings of the Company and the Bank
are affected by state and federal laws and regulations, and by policies of various regulatory
authorities. These policies include, for example, statutory maximum lending rates, requirements on
maintenance of reserves against deposits, domestic monetary policies of the Board of Governors of
the Federal Reserve System, United States fiscal policy, international currency regulations and
monetary policies, certain restrictions on banks relationships with many phases of the securities
business and capital adequacy and liquidity restraints.
Financial Modernization
Pursuant to Gramm-Leach, a bank holding company may become a financial holding company if each of
its subsidiary banks is well capitalized under regulatory prompt corrective action provisions, is
well managed, and has at least a satisfactory rating under the Community Reinvestment Act (CRA)
by filing a declaration that the bank holding company wishes to become a financial holding company.
No prior regulatory approval will be required for a financial holding company to acquire a
company, other than a bank or savings association, engaged in activities that are financial in
nature or incidental to activities that are financial in nature, as determined by the Federal
Reserve Board.
Gramm-Leach defines financial in nature to include securities underwriting, dealing and market
making; sponsoring mutual funds and investment companies; insurance underwriting and agency;
merchant banking activities; and activities that the Board has determined to be closely related to
banking. Subsidiary banks of a financial holding company must continue to be well capitalized and
well managed in order to continue to engage in activities that are financial in nature without
regulatory actions or restrictions, which could include divestiture of the financial in nature
subsidiary or subsidiaries. In addition, a financial holding company or a bank may not acquire a
company that is engaged in activities that are financial in nature unless each of the subsidiary
banks of the financial holding company or the bank has CRA rating of satisfactory or better.
4
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which contains
important requirements for public companies in the area of financial disclosure and corporate
governance. In accordance with section 302(a) of the Sarbanes-Oxley Act, written certifications by
the Companys Chief Executive Officer and Chief Financial Officer are required. These
certifications attest that the Companys quarterly and annual reports filed with the SEC do not
contain any untrue statement of a material fact or omit to state a material fact. The Company has
also implemented a program designed to comply with Section 404 of the Sarbanes-Oxley Act, which
includes the identification of significant processes and accounts, documentation of the design of
control effectiveness over process and entity level controls, and testing of the operating
effectiveness of key controls. The Securities and Exchange Commission extended the deadline for
Section 404 compliance for non-accelerated filers, including the Company, until the fiscal year
ended December 31, 2007, with attestation by the external accountants being extended to the year
ending December 31, 2008. There has been ongoing discussions about future delays or changes in the
implementation of the legislation. The Company has begun the documentation phase of required
Section 404 certification; however, has paused efforts pending the outcome of the aforementioned
discussions. If there are no further changes, the Company is poised to implement the legislation
within the revised time frames stated above.
Item 1A. Risk Factors.
Investments in CSB Bancorp Inc. stock involve risk.
The market price of the Companys common stock may fluctuate significantly in response to a number
of factors, including:
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Changes in interest rates |
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New developments in the banking industry |
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Regulatory actions |
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Credit risk |
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Economy |
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Thinly traded stock |
Changes in interest rates
CSBs earnings and financial condition are dependent to a large degree upon net interest
income, which is the difference between interest earned from loans and investments and interest
paid on deposits and borrowings. Market interest rates are largely beyond the Companys control,
and they fluctuate in response to general economic conditions and the policies of various
governmental and regulatory agencies, in particular, the Federal Reserve Board. Changes in
interest rates, will influence the origination of loans, the purchase of investments and the level
of prepayments on our loans and the receipt of payments on our mortgage-backed securities resulting
in reduced income and cash flow.
New developments in the banking industry
CSB will need to adjust to competition in both originating loans and attracting deposits.
Competition in the financial services industry is intense as we compete with securities dealers,
finance and insurance companies, mortgage brokers and investment advisors. As a result of their
size and ability to achieve economies of scale, certain of our competitors offer a broader range of
products and services than we offer. Our ability to obtain our financial objectives will depend on
our ability to deliver or expand product delivery systems and changes in technology required by our
customers.
Regulatory actions
The Company and its wholly owned subsidiary The Commercial and Savings Bank are subject to
extensive state and federal regulation, supervision and legislation that govern nearly every aspect
of its operations. Changes to these laws could affect the Companys ability to deliver or expand
its services and diminish the value of its business.
Credit Risk
Credit Risk is the risk of losing principal and interest income because borrowers fail to
repay loans. Our earnings may be negatively impacted if we fail to manage credit risk, as the
origination of loans is an integral part of our business. Factors which may affect the ability of
borrowers to repay loans would include a downturn in the local economy that we operate in, a
downturn in one or more business sectors in which our customers operate or a rapid increase in
interest rates.
5
Economy
Downturns in the local economy in which we operate in may adversely affect our business. Our
loan portfolio is concentrated primarily in Holmes, Wayne and Tuscarawas counties in Ohio. Our
profits depend on providing products and services to customers in these areas. A decline in real
estate values, a prolonged flatness of the interest rate curve or increases in unemployment could
depress our earnings. Weakness in our market area could result from a decline in tourism resulting
in the value of collateral securing our loans declining while borrowers may not be able to repay
their loans.
Thinly traded stock
CSB common stock is very thinly traded, and it is therefore susceptible to price swings.
However, CSB common stock is traded on the Over the Counter Bulletin Board under the symbol
CSBB.ob. We list three brokers within the back cover of our annual report to shareholders who
facilitate trades. The stock is not actively followed by the investment community and the price
may be negatively impacted any time there are more sellers than buyers.
Item 1B. Unresolved Staff Comments.
None.
Statistical Disclosures
The following schedules present, for the periods indicated, certain financial and statistical
information of the Company as required under the Securities and Exchange Commissions Industry
Guide 3, or a specific reference as to the location of required disclosures in the Companys 2006
Annual Report to Shareholders (the Annual Report).
I. Distribution of Assets, Liabilities and Stockholders Equity; Interest Rates and Interest
Differential
A&B. Average Balance Sheet and Related Analysis of Net Interest Earnings: The information set
forth under the heading Average Balances, Rates and Yields which is incorporated by reference
pursuant to Part II, Item 7 of this document, is incorporated herein by reference.
C. Dollar Amount of Change in Interest Income and Interest Expense: The information set forth
under the heading Rate/Volume Analysis of Changes in Income and Expense which is incorporated by
reference pursuant to Part II, Item 7 of this document, is incorporated herein by reference.
II. Investment Portfolio
A. The following is a schedule of the carrying value of securities at December 31, 2006, 2005
and 2004.
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(In thousands of dollars) |
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2006 |
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2005 |
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2004 |
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Securities available-for-sale, at fair value |
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U.S. Treasury securities |
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$ |
100 |
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$ |
99 |
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$ |
134 |
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U.S. Government corporations and agencies |
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32,917 |
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42,230 |
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39,214 |
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Mortgage-backed securities |
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28,048 |
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27,006 |
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16,228 |
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Obligations of states and political subdivisions |
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5,769 |
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8,633 |
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17,862 |
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Equity securities |
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301 |
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305 |
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Total |
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$ |
67,135 |
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$ |
78,273 |
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$ |
73,438 |
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6
B. The following is a schedule of maturities for each category of debt securities and the related
weighted average yield of such securities as of December 31, 2006:
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(In thousands of dollars) |
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Maturing |
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After One Year |
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Through Five |
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After Five Years |
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One Year or Less |
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Years |
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Through Ten Years |
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After Ten Years |
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Total |
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Amortized Cost |
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Yield |
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Amortized Cost |
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Yield |
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Amortized Cost |
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Yield |
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Amortized Cost |
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Yield |
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Amortized Cost |
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Yield |
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Available for sale: |
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U.S. Treasury |
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$ |
100 |
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3.18 |
% |
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$ |
100 |
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3.18 |
% |
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U.S.
Government corporations and agencies |
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2,000 |
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3.42 |
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$ |
31,493 |
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4.36 |
% |
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33,493 |
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4.30 |
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Mortgage-backed
securities |
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37 |
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4.79 |
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1,017 |
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4.79 |
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$ |
3,846 |
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4.41 |
% |
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$ |
23,553 |
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5.07 |
% |
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28,453 |
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4.97 |
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Obligations of
states and
political
subdivisions |
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871 |
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7.20 |
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4,796 |
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7.36 |
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5,667 |
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7.34 |
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Total |
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$ |
3,008 |
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4.52 |
% |
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$ |
37,306 |
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4.76 |
% |
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$ |
3,846 |
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4.41 |
% |
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$ |
23,553 |
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5.07 |
% |
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$ |
67,713 |
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4.84 |
% |
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The weighted average yields are calculated using amortized cost of investments and are based
on coupon rates for securities purchased at par value, and on effective interest rates considering
amortization or accretion if securities were purchased at a premium or discount. The weighted
average yield on tax-exempt obligations is presented on a tax-equivalent basis based on the
Companys marginal federal income tax rate of 34%.
C. Excluding holdings of U.S. Treasury securities and other agencies and corporations of the U.S.
Government, there were no investments in securities of any one issuer that exceeded 10% of the
Companys consolidated shareholders equity at December 31, 2006.
III. Loan Portfolio
A. Types of Loans Total loans on the balance sheet are comprised of the following
classifications at December 31:
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(In thousands of dollars) |
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2006 |
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2005 |
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2004 |
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2003 |
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2002 |
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Commercial |
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$ |
55,513 |
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$ |
69,922 |
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$ |
77,231 |
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$ |
73,559 |
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$ |
74,907 |
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Commercial real estate |
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72,707 |
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52,661 |
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43,744 |
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49,160 |
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41,665 |
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Residential real estate |
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85,933 |
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78,722 |
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78,862 |
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72,944 |
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65,653 |
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Construction |
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7,735 |
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2,120 |
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8,034 |
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5,503 |
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5,453 |
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Installment and credit card |
|
|
10,510 |
|
|
|
11,539 |
|
|
|
10,273 |
|
|
|
12,251 |
|
|
|
12,382 |
|
|
|
|
Total loans |
|
$ |
232,398 |
|
|
$ |
214,964 |
|
|
$ |
218,144 |
|
|
$ |
213,417 |
|
|
$ |
200,060 |
|
|
|
|
7
B. Maturities and Sensitivities of Loans to Changes in Interest Rates The following is a
schedule of maturities of loans based on contract terms and assuming no amortization or
prepayments, excluding real estate mortgage and installment loans, as of December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturing |
|
|
|
One Year |
|
|
One Through |
|
|
After Five |
|
|
|
|
(In thousands of dollars) |
|
or Less |
|
|
Five Years |
|
|
Years |
|
|
Total |
|
|
|
|
Commercial |
|
$ |
28,116 |
|
|
$ |
17,611 |
|
|
$ |
9,786 |
|
|
$ |
55,513 |
|
Commercial real estate |
|
|
6,967 |
|
|
|
8,932 |
|
|
|
56,808 |
|
|
|
72,707 |
|
Construction |
|
|
1,446 |
|
|
|
1,058 |
|
|
|
5,231 |
|
|
|
7,735 |
|
|
|
|
Total |
|
$ |
36,529 |
|
|
$ |
27,601 |
|
|
$ |
71,825 |
|
|
$ |
135,955 |
|
|
|
|
The following is a schedule of fixed rate and variable rate commercial, commercial real estate and
real estate construction loans due after one year from December 31, 2006.
|
|
|
|
|
|
|
|
|
(In thousands of dollars) |
|
Fixed Rate |
|
|
Variable Rate |
|
|
|
|
Total commercial, commercial real estate and construction
loans due after one year |
|
$ |
10,572 |
|
|
$ |
88,854 |
|
C. Risk Elements
1. Nonaccrual, Past Due and Restructured Loans The following schedule summarizes nonaccrual,
past due and restructured loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of dollars) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
2003 |
|
|
2002 |
|
|
|
|
(a) Loans accounted for
on a nonaccrual basis |
|
$ |
1,509 |
|
|
$ |
633 |
|
|
$ |
1,552 |
|
|
$ |
1,170 |
|
|
$ |
1,721 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Accruing loans that
are contractually past
due 90 days or more as
to interest or principal
payments |
|
|
|
|
|
|
168 |
|
|
|
119 |
|
|
|
175 |
|
|
|
|
|
|
|
|
Totals |
|
$ |
1,509 |
|
|
$ |
801 |
|
|
$ |
1,671 |
|
|
$ |
1,345 |
|
|
$ |
1,721 |
|
|
|
|
The policy for placing loans on nonaccrual status is to cease accruing interest on loans when
management believes that collection of interest is doubtful, when commercial loans are past due as
to principal and interest 90 days or more or when mortgage loans are past due as to principal and
interest 120 days or more, except that in certain circumstances interest accruals are continued on
loans deemed by management to be well-secured and in process of collection. In such cases, loans
are individually evaluated in order to determine whether to continue income recognition after 90
days beyond the due date. When loans are placed on nonaccrual, any accrued interest is charged
against interest income. Consumer loans are not placed on non-accrual but are charged off after 90
days past due.
8
Impaired Loans Information regarding impaired loans at December 31 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of dollars) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
Balance of impaired loans at December 31 |
|
$ |
988 |
|
|
$ |
565 |
|
|
$ |
1,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less portion for which no allowance for loan loss is allocated |
|
|
|
|
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portion of impaired loan balance for which an allowance for
loan losses is allocated |
|
|
988 |
|
|
|
503 |
|
|
|
1,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portion of allowance for loan losses allocated to the
impaired loan balance at December 31 |
|
|
327 |
|
|
|
174 |
|
|
|
388 |
|
For the year ended December 31, 2006 interest income recognized on impaired loans amounted to
$25,717 while $58,905 would have been recognized had the loans been performing under their
contractual terms. For the year ended December 31, 2005 interest income recognized on impaired
loans amounted to $2,764 while $39,168 would have been recognized had the loans been performing
under their contractual terms. For the year ended December 31, 2004 interest income recognized on
impaired loans amounted to $24,000 while $45,000 would have been recognized had the loans been
performing under their contractual terms.
Impaired loans are comprised of commercial and commercial real estate loans, and are carried at the
present value of expected cash flows discounted at the loans effective interest rate or at fair
value of the collateral if the loan is collateral dependent. A portion of the allowance for loan
losses is allocated to impaired loans.
Smaller-balance homogeneous loans are evaluated for impairment in total. Such loans include
residential first-mortgage loans secured by one- to four-family residences, residential
construction loans, and automobile, home equity and second-mortgage loans less than $100,000. Such
loans are included in nonaccrual and past due disclosures in (a) and (b) above, but not in the
impaired loan totals. Commercial loans and mortgage loans secured by other properties are
evaluated individually for impairment. When analysis of borrower operating results and financial
condition indicates that underlying cash flows of the borrowers business are not adequate to meet
its debt service requirements, the loan is evaluated for impairment. Impaired loans, or portions
thereof, are charged off when deemed uncollectible.
2. Potential Problem Loans At December 31, 2006, no loans were identified that management has
serious doubts about the borrowers ability to comply with present loan repayment terms that are
not included in item III.C.1. On a monthly basis, the Company internally classifies certain loans
based on various factors. At December 31, 2006, these amounts, including impaired and
nonperforming loans, amounted to $9.5 million of substandard loans and $0 doubtful loans.
3. Foreign Outstandings There were no foreign outstandings during any period presented.
4. Loan Concentrations As of December 31, 2006, there are no concentrations of loans greater
than 10% of total loans that are not otherwise disclosed as a category of loans in Item III.A
above.
D. Other Interest-Bearing Assets As of December 31, 2006, there are no other interest-bearing
assets required to be disclosed under Item III.C.1 or 2 if such assets were loans.
9
IV. Summary Of Loan Loss Experience
A. The following schedule presents an analysis of the allowance for loan losses, average loan
data and related ratios for the years ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of dollars) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
2003 |
|
|
2002 |
|
|
|
|
LOANS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average loans outstanding
during period |
|
$ |
225,445 |
|
|
$ |
220,655 |
|
|
$ |
216,864 |
|
|
$ |
209,231 |
|
|
$ |
181,147 |
|
|
|
|
ALLOWANCE FOR LOAN LOSSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
|
$ |
2,445 |
|
|
$ |
2,575 |
|
|
$ |
2,459 |
|
|
$ |
2,701 |
|
|
$ |
4,019 |
|
Loans charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
(9 |
) |
|
|
(16 |
) |
|
|
(95 |
) |
|
|
(56 |
) |
|
|
(429 |
) |
Commercial real estate |
|
|
(123 |
) |
|
|
(442 |
) |
|
|
0 |
|
|
|
(97 |
) |
|
|
(342 |
) |
Residential real estate |
|
|
(74 |
) |
|
|
(16 |
) |
|
|
(275 |
) |
|
|
(70 |
) |
|
|
(154 |
) |
Installment and credit card |
|
|
(104 |
) |
|
|
(102 |
) |
|
|
(64 |
) |
|
|
(115 |
) |
|
|
(240 |
) |
|
|
|
Total loans charged off |
|
|
(310 |
) |
|
|
(576 |
) |
|
|
(434 |
) |
|
|
(338 |
) |
|
|
(1,165 |
) |
|
|
|
Recoveries of loans
previously charged off: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
20 |
|
|
|
63 |
|
|
|
61 |
|
|
|
7 |
|
|
|
244 |
|
Commercial real estate |
|
|
80 |
|
|
|
2 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Residential real estate |
|
|
3 |
|
|
|
33 |
|
|
|
23 |
|
|
|
70 |
|
|
|
36 |
|
Installment |
|
|
67 |
|
|
|
67 |
|
|
|
43 |
|
|
|
70 |
|
|
|
153 |
|
|
|
|
Total loan recoveries |
|
|
170 |
|
|
|
163 |
|
|
|
127 |
|
|
|
147 |
|
|
|
433 |
|
|
|
|
Net loans charged off |
|
|
(140 |
) |
|
|
(413 |
) |
|
|
(307 |
) |
|
|
(191 |
) |
|
|
(732 |
) |
Provision charged to
operating expense |
|
|
302 |
|
|
|
283 |
|
|
|
423 |
|
|
|
(51 |
) |
|
|
(586 |
) |
|
|
|
Balance at end of period |
|
$ |
2,607 |
|
|
$ |
2,445 |
|
|
$ |
2,575 |
|
|
$ |
2,459 |
|
|
$ |
2,701 |
|
|
|
|
Ratio of net charge-offs to
average loans outstanding for
period |
|
|
.06 |
% |
|
|
.19 |
% |
|
|
.14 |
% |
|
|
.09 |
% |
|
|
.40 |
% |
The allowance for loan losses balance and provision charged to expense are determined by management
based on periodic reviews of the loan portfolio, past loan loss experience, economic conditions and
various other circumstances subject to change over time. In making this judgment, management
reviews selected large loans, as well as impaired loans, other delinquent, nonaccrual and problem
loans and loans to industries experiencing economic difficulties. The collectibility of these
loans is evaluated after considering current operating results and financial position of the
borrower, estimated market value of collateral, guarantees and the Companys collateral position
versus other creditors. Judgments, which are necessarily subjective, as to the probability of loss
and amount of such loss are formed on these loans, as well as other loans taken together.
B. The following schedule is a breakdown of the allowance for loan losses allocated by type of
loan and related ratios. While managements periodic analysis of the adequacy of the allowance for
loan losses may allocate portions of the allowance for specific problem-loan situations, the entire
allowance is available for any loan charge-offs that occur.
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of the
Allowance for Loan Losses |
|
|
(In thousands of dollars) |
|
|
|
|
|
|
Percentage of |
|
|
|
|
|
Percentage of |
|
|
|
|
|
Percentage of |
|
|
|
|
|
Percentage of |
|
|
|
|
|
Percentage of |
|
|
|
|
|
|
Loans in |
|
|
|
|
|
Loans in |
|
|
|
|
|
Loans in |
|
|
|
|
|
Loans in |
|
|
|
|
|
Loans in |
|
|
|
|
|
|
Each |
|
|
|
|
|
Each |
|
|
|
|
|
Each |
|
|
|
|
|
Each |
|
|
|
|
|
Each |
|
|
Allowance |
|
Category to |
|
Allowance |
|
Category to |
|
|
|
|
|
Category to |
|
Allowance |
|
Category to |
|
Allowance |
|
Category to |
|
|
Amount |
|
Total Loans |
|
Amount |
|
Total Loans |
|
Allowance Amount |
|
Total Loans |
|
Amount |
|
Total Loans |
|
Amount |
|
Total Loans |
|
|
December 31, 2006 |
|
December 31, 2005 |
|
December 31, 2004 |
|
December 31, 2003 |
|
December 31, 2002 |
|
|
|
Commercial |
|
$ |
967 |
|
|
|
23.89 |
% |
|
$ |
936 |
|
|
|
32.52 |
% |
|
$ |
1,256 |
|
|
|
35.41 |
% |
|
$ |
741 |
|
|
|
34.47 |
% |
|
$ |
809 |
|
|
|
37.44 |
% |
Commercial real
estate |
|
|
1,041 |
|
|
|
31.28 |
|
|
|
763 |
|
|
|
24.50 |
|
|
|
765 |
|
|
|
20.05 |
|
|
|
759 |
|
|
|
23.03 |
|
|
|
908 |
|
|
|
20.82 |
|
Residential real
estate |
|
|
379 |
|
|
|
36.98 |
|
|
|
278 |
|
|
|
36.62 |
|
|
|
261 |
|
|
|
36.15 |
|
|
|
768 |
|
|
|
34.18 |
|
|
|
491 |
|
|
|
32.82 |
|
Construction |
|
|
22 |
|
|
|
3.33 |
|
|
|
4 |
|
|
|
.99 |
|
|
|
18 |
|
|
|
3.68 |
|
|
|
30 |
|
|
|
2.58 |
|
|
|
35 |
|
|
|
2.73 |
|
Installment and
credit card |
|
|
32 |
|
|
|
4.52 |
|
|
|
36 |
|
|
|
5.37 |
|
|
|
22 |
|
|
|
4.71 |
|
|
|
70 |
|
|
|
5.74 |
|
|
|
231 |
|
|
|
6.19 |
|
Unallocated |
|
|
166 |
|
|
|
|
|
|
|
428 |
|
|
|
|
|
|
|
253 |
|
|
|
|
|
|
|
91 |
|
|
|
|
|
|
|
227 |
|
|
|
|
|
|
|
|
Total |
|
$ |
2,607 |
|
|
|
100.00 |
% |
|
$ |
2,445 |
|
|
|
100.00 |
% |
|
$ |
2,575 |
|
|
|
100.00 |
% |
|
$ |
2,459 |
|
|
|
100.00 |
% |
|
$ |
2,701 |
|
|
|
100.00 |
% |
|
|
|
11
V. Deposits
A. & B. The following is a schedule of average deposit amounts and average rates paid on each
category for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Average |
|
|
|
Amounts Outstanding |
|
|
Rate Paid |
|
|
|
Year ended December 31 |
|
|
Year ended December 31 |
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
(In thousands of dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand |
|
$ |
38,938 |
|
|
$ |
37,855 |
|
|
$ |
34,310 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Interest-bearing demand
deposits |
|
|
46,096 |
|
|
|
49,021 |
|
|
|
48,042 |
|
|
|
.50 |
% |
|
|
.39 |
% |
|
|
.22 |
% |
Savings deposits |
|
|
41,528 |
|
|
|
44,759 |
|
|
|
42,904 |
|
|
|
.99 |
|
|
|
.80 |
|
|
|
.44 |
|
Time deposits |
|
|
120,981 |
|
|
|
117,372 |
|
|
|
116,418 |
|
|
|
3.95 |
|
|
|
3.05 |
|
|
|
2.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
|
$ |
247,543 |
|
|
$ |
249,007 |
|
|
$ |
241,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. There were no foreign deposits in any period presented.
D. |
|
The following is a schedule of maturities of time certificates of deposit in amounts of
$100,000 or more as of December 31, 2006: |
|
|
|
|
|
(In thousands of dollars) |
|
|
|
|
Three months or less |
|
$ |
11,196 |
|
Over three through six months |
|
|
8,331 |
|
Over six through twelve months |
|
|
9,016 |
|
Over twelve months |
|
|
3,762 |
|
|
|
|
|
Total |
|
$ |
32,305 |
|
|
|
|
|
E. There were no foreign deposits in any period presented.
VI. Return On Equity and Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
Return on average assets |
|
|
0.97 |
% |
|
|
0.91 |
% |
|
|
0.81 |
% |
Return on average shareholders equity |
|
|
8.95 |
|
|
|
7.92 |
|
|
|
7.15 |
|
Dividend payout ratio |
|
|
51.89 |
|
|
|
51.47 |
|
|
|
54.44 |
|
Average shareholders equity to average assets |
|
|
10.87 |
|
|
|
11.46 |
|
|
|
11.31 |
|
12
VII. Short-Term Borrowings
Short-term borrowings consist of securities sold under agreements to repurchase, a $5,000,000
short-term advance through Federal Home Loan Bank and federal funds purchased. Securities sold
under agreements to repurchase generally mature one (1) day from the transaction date. Federal
funds purchased generally have overnight terms. Information concerning short-term borrowings is
summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of dollars) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
Securities sold under agreements to repurchase,
federal funds purchased and short-term advances at
period-end |
|
$ |
28,022 |
|
|
$ |
21,418 |
|
|
$ |
18,316 |
|
Weighted average interest rate at period-end |
|
|
3.71 |
% |
|
|
1.54 |
% |
|
|
.88 |
% |
Maximum outstanding at any month-end during the year |
|
|
41,468 |
|
|
|
29,467 |
|
|
|
31,704 |
|
Average amount outstanding |
|
|
32,974 |
|
|
|
20,243 |
|
|
|
21,360 |
|
Weighted average rates during the year |
|
|
3.84 |
% |
|
|
1.64 |
% |
|
|
.85 |
% |
13
ITEM 2. PROPERTIES.
The Company operates ten banking centers and two other properties as noted below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking |
|
Other |
|
|
|
|
|
|
Location |
|
Center |
|
Property |
|
Address |
|
Owned |
|
Leased |
|
Millersburg
|
|
X
|
|
|
|
6 West Jackson Street, Millersburg, Ohio 44654
|
|
X |
|
|
Walnut Creek
|
|
X
|
|
|
|
4980 Old Pump Street, Walnut Creek, Ohio 44687
|
|
X |
|
|
Winesburg
|
|
X
|
|
|
|
2225 U.S. 62, Winesburg, Ohio 44690
|
|
X |
|
|
Sugarcreek
|
|
X
|
|
|
|
127 South Broadway, Sugarcreek, Ohio 44681
|
|
X |
|
|
Charm
|
|
X
|
|
|
|
4440 C.R.70, Charm, Ohio 44617
|
|
|
|
X |
Clinton Commons
|
|
X
|
|
|
|
2102 Glen Drive, Millersburg, Ohio 44654
|
|
|
|
X |
Berlin
|
|
X
|
|
|
|
4587 S.R.39 Suite B, Berlin, Ohio 44610
|
|
|
|
X |
South Clay
|
|
X
|
|
|
|
91 South Clay Street, Millersburg, Ohio 44654
|
|
X |
|
|
Shreve
|
|
X
|
|
|
|
333 West South Street, Shreve, Ohio 44676
|
|
X |
|
|
Orrville*
|
|
X
|
|
|
|
461 Wadsworth Road, Orrville, Ohio 44667
|
|
|
|
X |
Operations Center
|
|
|
|
X
|
|
91North Clay Street, Millersburg, Ohio 44654
|
|
X |
|
|
Wooster Trust
|
|
|
|
X
|
|
146 East Liberty Street, Wooster, Ohio 44691
|
|
|
|
X |
* Lease effective March 1, 2007.
The Bank considers its physical properties to be in good operating condition and suitable for the
purposes for which they are being used. All properties owned by the Bank are unencumbered by any
mortgage or security interest and in managements opinion, are adequately insured.
ITEM 3. LEGAL PROCEEDINGS.
There is no pending litigation, other than routine litigation incidental to the business of
the Company and Bank, or of a material nature involving or naming the Company or Bank as a
defendant. Further, there are no material legal proceedings in which any director, executive
officer, principal shareholder or affiliate of the Company is a party or has a material interest
that is adverse to the Company or Bank. None of the routine litigation in which the Company or
Bank is involved is expected to have a material adverse impact on the financial position or results
of operations of the Company or Bank.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth quarter of 2006.
14
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information contained in the section captioned Common Stock and Shareholder Information on
page 25 of the Annual Report is incorporated herein by reference.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares |
|
|
Number of shares of |
|
|
|
|
|
remaining available for |
|
|
common stock to be issued |
|
Weighted-average exercise |
|
future issuance under |
|
|
upon exercise of |
|
price of outstanding |
|
equity compensation plans |
|
|
outstanding options, |
|
options, warrants, and |
|
(excluding securities |
|
|
warrants and rights |
|
rights |
|
reflected in column (a)) |
|
|
(a) |
|
(b) |
|
(c) |
|
|
|
Equity compensation
plans
approved by
stockholders |
|
|
41,245 |
|
|
$ |
17.60 |
|
|
|
158,755 |
|
Equity compensation
plans not approved
by stockholders |
|
|
10,000 |
|
|
|
17.75 |
|
|
|
0 |
|
|
|
|
Total |
|
|
51,245 |
|
|
$ |
17.63 |
|
|
|
158,755 |
|
|
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
Total Number of Shares |
|
Shares that |
|
|
|
|
|
|
|
|
|
|
Purchased as Part of |
|
May Yet be |
|
|
Total Number of |
|
Average Price |
|
Publicly Announced |
|
Purchased |
Period |
|
Shares Purchased |
|
Paid Per Share |
|
Plans |
|
Under the Plan |
|
October 1, 2006 to
October 31, 2006
|
|
|
70.5126 |
|
|
$ |
19.05 |
|
|
|
70.5126 |
|
|
|
118,933 |
|
November 1, 2006 to
November 30, 2006
|
|
|
105.4649 |
|
|
$ |
19.00 |
|
|
|
105.4649 |
|
|
|
118,828 |
|
December 1, 2006 to
December 31, 2006
|
|
|
118.7541 |
|
|
$ |
18.35 |
|
|
|
118.7541 |
|
|
|
118,709 |
|
On July 7, 2005 CSB Bancorp, Inc. filed Form 8-k with the Securities and Exchange
Commission announcing that its Board of Directors approved a Stock Repurchase Program
authorizing the repurchase of up to 10% of the Companys common shares then outstanding.
Repurchases will be made from time to time as market and business conditions warrant, in
the open market, through block purchases and in negotiated private transactions.
15
PERFORMANCE GRAPH
The following graph compares the yearly stock change and the cumulative total shareholder return on
CSBs Common Shares during the five-year period ended December 31, 2006, with the cumulative total
return on the NASDAQ Bank Stock Index and the Standard and Poors 500 Stock Index. The comparison
assumes $100 was invested on December 31, 2001 in CSBs Common Shares and in each of the indicated
indices and assumes reinvestment of dividends.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001 |
|
|
2002 |
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
CSBB |
|
$ |
100.00 |
|
|
$ |
108.84 |
|
|
$ |
118.54 |
|
|
$ |
145.85 |
|
|
$ |
154.56 |
|
|
$ |
144.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S & P 500 |
|
|
100.00 |
|
|
|
76.63 |
|
|
|
96.85 |
|
|
|
105.56 |
|
|
|
108.73 |
|
|
|
123.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NASDAQ Bank |
|
|
100.00 |
|
|
|
104.52 |
|
|
|
135.80 |
|
|
|
150.73 |
|
|
|
144.20 |
|
|
|
160.07 |
|
Performance
Graph
ITEM 6. SELECTED FINANCIAL DATA.
Information contained in the section captioned Selected Financial Data on page 11 of the Annual
Report is incorporated herein by reference.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Information contained in the section captioned 2006 Financial Review on pages 10 through 25 of
the Annual Report is incorporated herein by reference.
16
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information contained in the section captioned Quantitative and Qualitative Disclosures About
Market Risk on page 20 of the Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information contained in the consolidated financial statements and related notes and the Report of
Independent Registered Public Accounting Firm thereon, on pages 26 through 49 of the Annual Report
is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
Information contained in the Form 8-k Item 4.01 Changes in Registrants Certifying Accountant
filed August 25, 2005 is incorporated herein by reference.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation Of Disclosure Controls And Procedures
With the participation of the Companys management, including the Companys Chief Executive Officer
(CEO) and Chief Financial Officer (CFO), an evaluation of the effectiveness of the Companys
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934) was performed, as of the end of the period covered by this Annual Report. Based on this evaluation, the CEO and CFO
have concluded that the Companys disclosure controls and procedures are effective to ensure that
material information is recorded, processed, summarized and reported by management of the Company
on a timely basis in order to comply with the Companys disclosure obligations under the Securities
Exchange Act of 1934 and the SEC rules thereunder.
Changes In Internal Control Over Financial Reporting
There have been no significant changes during the quarter ended December 31, 2006, in the Companys
internal controls over financial reporting (as defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934) or in other factors that could have significantly affected those
controls subsequent to the date of our most recent evaluation of internal controls over financial
reporting, including any corrective actions with regard to significant deficiencies and material
weaknesses.
ITEM 9B. OTHER INFORMATION.
None
17
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information contained in the section captioned ELECTION OF DIRECTORS on pages 6 and 7; DIRECTORS
AND EXECUTIVE OFFICERS page 8; MEMBERSHIP AND MEETINGS OF THE BOARD AND ITS COMMITTEES page 9;
COMMITTEES OF THE BOARD OF DIRECTORS on pages 10 and 11; of the Companys proxy statement for the
Companys Annual Meeting of Shareholders filed with the Securities and Exchange Commission on March
23, 2007 (the Proxy Statement) and information contained in the section captioned SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE on page 5 of the Proxy Statement is incorporated herein
by reference.
Code of Ethics
We have adopted a Code of Ethics that applies to our senior financial officers including our Chief
Executive Officer and Chief Financial Officer. We have posted our Code of Ethics on our website at
www.csb1.com. We plan to satisfy SEC disclosure requirements regarding any amendments to, or
waiver of, the Code of Ethics relating to our Chief Executive Officer or Chief Financial Officer,
and persons performing similar functions, by posting such information on our website or by making
any necessary filings with the SEC. Any person may receive a copy of our Code of Ethics free of
charge upon request.
ITEM 11. EXECUTIVE COMPENSATION.
Information contained in the section captioned Compensation Discussion and Analysis on
pages 12 through 14 of the Proxy Statement, the section captioned Executive Compensation
and Other Information on pages 16 and 17 of the Proxy Statement, the section captioned
EMPLOYMENT CONTRACTS and Other Arrangements on page 19 of the Proxy Statement, and the
section captioned Potential Payments Upon Termination or Change in Control on page 18 of
the Proxy Statement, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
Information contained in the section captioned SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT on pages 4 and 5 of the Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Information contained in the section captioned CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS on
page 22 of the Proxy Statement is incorporated herein by reference. There were no relationships
where transactions exceeded $120,000 for the year ended December 31, 2006.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Information contained in the section captioned INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES
on page 21 of the Proxy Statement is incorporated herein by reference.
18
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
|
|
|
Exhibit |
|
|
Number |
|
Description of Document |
|
3.1
|
|
Amended Articles of Incorporation of CSB Bancorp, Inc.
(incorporated by reference to Registrants 1994 Form
10-KSB) |
|
|
|
3.1.1
|
|
Amended form of Article Fourth of Amended Articles of
Incorporation, as effective April 9, 1998 (incorporated by
reference to Registrants 1998 Form 10-K) |
|
|
|
3.2
|
|
Code of Regulations of CSB Bancorp, Inc. (incorporated by
reference to Registrants Form 10-SB) |
|
|
|
4
|
|
Form of Certificate of Common Shares of CSB Bancorp, Inc.
(incorporated by reference to Registrants Form 10-SB) |
|
|
|
10.1
|
|
Leases for the Clinton Commons, Berlin and Charm Branch
Offices of The Commercial and Savings Bank (incorporated by
reference to Registrants Form 10-SB) |
|
|
|
10.2
|
|
Third Amendment to Employment Agreement between CSB
Bancorp, Inc. and C. James Bess (incorporated by reference
to Registrants Form 10-Q filed May 13, 2003) |
|
|
|
10.3
|
|
Employment Agreement between CSB Bancorp, Inc. and John J.
Limbert (incorporated by reference to Registrants Form 8-K
filed May 22, 2003) |
|
|
|
13
|
|
CSB Bancorp, Inc. 2006 Annual Report to Shareholders |
|
|
|
21
|
|
Subsidiaries of CSB Bancorp, Inc. |
|
|
|
23.1
|
|
Consent of S.R. Snodgrass A.C. |
|
|
|
23.2
|
|
Consent of Clifton Gunderson LLP |
|
|
|
31.1
|
|
Section 302 Certification of Chief Executive Officer |
|
|
|
31.2
|
|
Section 302 Certification of Chief Financial Officer |
|
|
|
32.1
|
|
Section 906 Certification of Chief Executive Officer |
|
|
|
32.2
|
|
Section 906 Certification of Chief Financial Officer |
19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
|
|
|
|
|
CSB BANCORP, INC.
|
|
|
/s/ Eddie L. Steiner
|
|
Date: March 23, 2007 |
Eddie L. Steiner, President and Chief Executive Officer |
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities indicated on March
23, 2007.
|
|
|
Signatures |
|
Title |
/s/ Eddie L. Steiner
Eddie L. Steiner
|
|
President and Chief Executive Officer |
|
|
|
/s/ Paula J. Meiler
Paula J. Meiler
|
|
Senior Vice President and Chief Financial Officer |
|
|
|
/s/ Pamela S. Basinger
Pamela S. Basinger
|
|
Vice President and Principal Accounting Officer |
|
|
|
/s/ Robert K. Baker
Robert K. Baker
|
|
Director |
|
|
|
/s/ Ronald E. Holtman
Ronald E. Holtman
|
|
Director |
|
|
|
/s/ J. Thomas Lang
J. Thomas Lang
|
|
Director |
|
|
|
/s/ Daniel J. Miller
Daniel J. Miller
|
|
Director |
|
|
|
/s/ Jeffery A. Robb, Sr.
Jeffery A. Robb, Sr.
|
|
Director |
|
|
|
/s/ Samuel M. Steimel
Samuel M. Steimel
|
|
Director |
|
|
|
/s/ John R. Waltman
John R. Waltman
|
|
Director |
20
INDEX TO EXHIBITS
|
|
|
|
|
Exhibit |
|
|
|
Sequential |
Number |
|
Description of Document |
|
Page |
3.1
|
|
Amended Articles of Incorporation of CSB Bancorp,
Inc. (incorporated by reference to Registrants
1994 Form 10-KSB)
|
|
N/A |
|
|
|
|
|
3.1.1
|
|
Amended form of Article Fourth of Amended Articles
of Incorporation, as effective April 9, 1998
(incorporated by reference to Registrants 1998
Form 10-K).
|
|
N/A |
|
|
|
|
|
3.2
|
|
Code of Regulations of CSB Bancorp, Inc.
(incorporated by reference to Registrants Form
10-SB).
|
|
N/A |
|
|
|
|
|
4
|
|
Form of Certificate of Common Shares of CSB
Bancorp, Inc. (incorporated by reference to
Registrants Form 10-SB).
|
|
N/A |
|
|
|
|
|
10.1
|
|
Leases for the Clinton Commons, Berlin and Charm
Branch Offices of The Commercial and Savings Bank
(incorporated by reference to Registrants Form
10-SB).
|
|
N/A |
|
|
|
|
|
10.2
|
|
Third Amendment to Employment Agreement between CSB
Bancorp, Inc. and C. James Bess (incorporated by
reference to Registrants Form 10-Q filed May 13,
2003)
|
|
N/A |
|
|
|
|
|
10.3
|
|
Employment Agreement between CSB Bancorp, Inc. and
John J. Limbert (incorporated by reference to
Registrants Form 8-K filed May 22, 2003)
|
|
N/A |
|
|
|
|
|
13
|
|
CSB Bancorp, Inc. 2006 Annual Report to Shareholders
|
|
N/A |
|
|
|
|
|
21
|
|
Subsidiaries of CSB Bancorp, Inc.
|
|
N/A |
|
|
|
|
|
23.1
|
|
Consent of S.R. Snodgrass A.C.
|
|
N/A |
|
|
|
|
|
23.2
|
|
Consent of Clifton Gunderson LLP
|
|
N/A |
|
|
|
|
|
31.1
|
|
Section 302 Certification of Chief Executive Officer
|
|
N/A |
|
|
|
|
|
31.2
|
|
Section 302 Certification of Chief Financial Officer
|
|
N/A |
|
|
|
|
|
32.1
|
|
Section 906 Certification of Chief Executive Officer
|
|
N/A |
|
|
|
|
|
32.2
|
|
Section 906 Certification of Chief Financial Officer
|
|
N/A |
21