CSB Bancorp Reports Strong Second-Quarter 2026 Earnings as Loan Growth and Higher Net Interest Income Drive Results
CSB Bancorp, Inc. reported a significant increase in profitability for the second quarter of 2026, supported by strong loan growth, improved net interest income, higher noninterest income and continued operating efficiency. The company generated net income of $4.735 million, or $1.80 per basic and diluted share, for the quarter ended June 30, 2026. That compares with net income of $3.727 million, or $1.41 per basic and diluted share, during the second quarter of 2025.
For the first six months of 2026, CSB Bancorp reported net income of $9.179 million, compared with $7.343 million for the same period a year earlier. The increase represents year-over-year earnings growth of approximately 25%, highlighting the company’s continued momentum during the first half of the year.
The company also reported improvements in key profitability metrics. Annualized return on average common equity was 14.48% for the second quarter of 2026, compared with 12.48% in the year-earlier quarter. Return on average assets increased to 1.48%, compared with 1.23% in the second quarter of 2025.
For the six-month period ended June 30, 2026, return on average common equity was 14.26%, compared with 12.53% in the same period of 2025. Return on average assets improved to 1.45%, up from 1.22% a year earlier.
Pre-Provision Net Revenue, or PPNR, a non-GAAP financial measure, totaled $6.5 million during the second quarter, an increase of $1.2 million, or 24%, from the second quarter of 2025.
Eddie Steiner, President and Chief Executive Officer of CSB Bancorp, said the company’s performance benefited from a relatively stable interest-rate and employment environment, which supported business expansion and increased home-buying activity.
“A relatively stable environment for interest rates and employment levels has fostered increased business expansion and additional home buying activity,” Steiner said. He noted that real gross domestic product growth advanced at a 2.1% annualized rate during the first quarter and appeared to maintain a similar pace during the second quarter.
At the same time, Steiner pointed to continuing economic challenges, including persistent inflation and global uncertainty surrounding energy prices, tariffs and federal government policy. He also noted that rising household costs have contributed to higher consumer debt levels and increasing delinquencies.
Net Interest Income Provides Key Earnings Support
Net interest income remained the primary driver of CSB Bancorp’s improved second-quarter performance.
Net interest income increased by $1.5 million, or 15%, compared with the second quarter of 2025. The increase was supported by growth in average earning assets, particularly loans, as well as stronger asset yields and a lower cost of funding.
On a fully taxable equivalent basis, the company’s net interest margin increased to 3.92% in the second quarter of 2026, compared with 3.61% in the second quarter of 2025. The 31-basis-point improvement reflected a combination of loan growth, improved asset yields and lower funding costs.
Fully taxable equivalent net interest income increased $1.5 million, or 15%, as average earning assets increased by $65 million and the yield on assets improved by 23 basis points. The shift in the company’s asset mix toward loans was a major contributor to the improvement.
The cost of interest-bearing liabilities declined by 10 basis points during the period, primarily as rates paid on time deposits gradually declined over the past year. The CSB tax equivalency adjustment to net interest margin was 0.01% in both the second quarter of 2026 and the second quarter of 2025.
Loan interest income, including fees, increased $1.5 million, or 13%, from the prior-year quarter. The increase was primarily attributable to an $83 million increase in average loan balances, combined with a 13-basis-point improvement in loan yields.
The average yield on loans rose to 6.05% in the second quarter of 2026, compared with 5.92% in the second quarter of 2025.
Securities interest income also increased by $197,000, or 11%, during the quarter. The improvement reflected higher average yields within the securities portfolio as lower-yielding investments continued to pay down or mature.
The average yield on securities increased to 2.59%, compared with 2.27% in the prior-year quarter. Meanwhile, average overnight funds yielded 3.71%, down from 4.47% a year earlier.
Interest expense declined by $35,000, or 1%, year over year. The cost of funding gross earning assets declined to 1.17% in the second quarter of 2026, compared with 1.25% in the second quarter of 2025.
Loan Growth Remains Broad-Based
CSB Bancorp’s average earning assets increased by $65 million, or 6%, from the second quarter of 2025. The growth was primarily driven by an $83 million, or 11%, increase in average loans.
Average securities declined by $8 million, or 3%, while interest-earning deposits held at other banks, primarily at the Federal Reserve Bank, decreased by $9 million, or 15%.
Commercial lending was a significant contributor to loan growth. Average commercial loan balances, including commercial real estate, increased by $56 million, or 10%, compared with the prior-year quarter.
The increase was supported by construction loan draws and borrowers using term loans to finance equipment and other business investments.
Average residential mortgage balances rose by $18 million, or 10%, compared with the second quarter of 2025. During the period, borrowers showed a preference for adjustable-rate mortgages amid a higher interest-rate environment. CSB Bancorp retains these adjustable-rate mortgage loans rather than selling them into the secondary market.
Home equity lines of credit increased by $9 million from the prior-year quarter as borrowers used available credit to fund expenses while avoiding the refinancing of existing mortgages that carried lower interest rates.
Average consumer credit balances declined by approximately $504,000, or 3%, year over year. The decline was primarily related to lower recreational vehicle loan volume.
Management indicated that commercial loan demand for operating cash flow and equipment investment remains somewhat constrained as businesses and households continue to exercise caution regarding discretionary borrowing. Uncertainty surrounding price stability, employment conditions, geopolitical tensions and energy costs has contributed to a more cautious borrowing environment.
Despite those challenges, construction and development lending and commercial real estate borrowing continued to show relatively steady demand.
Credit Provision Declines, While Allowance Reflects Individual Relationship
Provision for credit loss expense declined by $29,000 compared with the second quarter of 2025.
The allowance for expected credit losses stood at $13.5 million at June 30, 2026, equivalent to 1.56% of total loans. This compared with $8.3 million, or 1.05% of total loans, at June 30, 2025.
The increase in the allowance was primarily related to an individually evaluated loan relationship that had been reported in previous periods.
The allowance for credit losses related to off-balance-sheet commitments totaled $583,000 at June 30, 2026, compared with $493,000 a year earlier.
CSB Bancorp reported no allowance for credit losses related to its available-for-sale or held-to-maturity debt securities because management does not expect meaningful credit losses from those portfolios.
Net loan charge-offs were only $28,000 during the second quarter of 2026, CSB compared with $362,000 in the second quarter of 2025. The prior-year charge-offs were associated with a previously disclosed voluntary liquidation of a commercial credit relationship.
Nonperforming Loans Increase
While net charge-offs remained low, nonperforming loans increased during the quarter.
Nonperforming loans totaled $7.3 million, or 0.84% of total loans, at June 30, 2026, compared with $1.4 million, or 0.17%, a year earlier.
The increase was primarily related to a business relationship in which management believes liquidation may provide greater economic value than continuing operations due to cash-flow pressures.
CSB Bancorp stated that it believes it is well-secured on the relationship.
The bank continues to monitor credit quality closely as borrowers face higher operating expenses and broader economic uncertainty. Management’s credit approach remains focused on underwriting discipline, collateral protection and active monitoring of borrower performance.
Noninterest Income Records Solid Growth
Noninterest income increased by $175,000, or 10%, compared with the second quarter of 2025.
The increase was supported by several sources of fee-based revenue. Debit card interchange fees increased by $49,000, while credit card fees increased by $42,000.
Earnings from bank-owned life insurance increased by $37,000, and service charges on deposit accounts rose by $28,000.
The broad-based improvement in noninterest income helped strengthen the company’s overall revenue performance and contributed to the 24% increase in PPNR.
Expense Growth Remains Controlled
Noninterest expense increased by $465,000, or 7%, year over year.
Salary and employee benefits expenses increased by $328,000, or 8%,CSB primarily due to higher base salaries and benefits, as well as increased staffing levels.
The company said it was able to reduce vacancies and add several new positions to support future growth.
Software expenses increased by $83,000, or 19%, primarily because of investments in new loan production software. Debit card expenses rose by $23,000, or 12%, while professional fees increased by $19,000, or 5%, due to higher legal, audit, accounting and director-related expenses.
Despite the increase in operating costs, CSB Bancorp’s efficiency ratio improved to 53.06% in the second quarter of 2026, compared with 56.62% in the second quarter of 2025.
The improvement reflects the company’s ability to grow revenue faster than operating expenses.
Deposit Growth Supports Funding Base
Average deposit balances increased by $52 million, or 5%, compared with the second quarter of 2025.
The average cost of deposits declined to 1.25% during the second quarter of 2026, compared with 1.32% in the year-earlier period.
Average interest-bearing checking account balances increased by $15 million, while savings account balances rose by $6 million. Time deposit balances increased by $23 million, and noninterest-bearing deposits grew by $8 million.
The average balance of securities sold under repurchase agreements increased by $621,000, or 3%, compared with the same period a year earlier.
The combination of deposit growth and lower funding costs contributed to the company’s improved net interest margin.
Capital Position Remains Strong
CSB Bancorp reported shareholders’ equity of $133 million at June 30, 2026, with approximately 2.6 million common shares outstanding.
The average equity-to-assets ratio was 10.21% for the second quarter.
The company also declared a second-quarter dividend of $0.43 per common share. Based on the June 30, 2026 closing share price of $72.00, the dividend represented an annualized yield of approximately 2.4%.
Overall, CSB Bancorp’s second-quarter 2026 results reflected continued improvement in profitability and operating performance. Strong loan growth, higher loan CSB yields, an expanding net interest margin and increased fee income helped drive a 25% increase in first-half net income.
While the company continues to monitor rising consumer delinquencies, inflationary pressures and broader economic uncertainty,CSB credit losses remained low and the bank maintained a strong capital position.
With continued demand in commercial lending, construction and development, commercial real estate and residential mortgage products, CSB Bancorp remains focused on expanding its banking relationships while maintaining disciplined risk management and controlling operating costs.
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