##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2007
 OR
 o
    
    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
    
    (I.R.S. Employer Identification Number)incorporation or organization)
 91 North Clay, P.O. Box 232, Millersburg, Ohio 44654
   (Registrants telephone number)
 þ o
  o o þ
 o þ
  Common stock, $6.25 par value
    
    Outstanding at November 12, 2007:2,452,948 common shares




---



##### 



PagePart I  Financial InformationITEM 1  FINANCIAL STATEMENTS (Unaudited)Consolidated Balance Sheets
    
    
    3Consolidated Statements of Income
    
    
    4Consolidated Statements of Changes in Shareholders Equity
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to the Consolidated Financial Statements
    
    
    7ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    9ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    15ITEM 4  CONTROLS AND PROCEDURES
    
    
    16Part II  Other InformationITEM 1   Legal Proceedings
    
    
    171A   Risk Factors
    
    
    172   Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    173   Defaults upon Senior Securities
    
    
    174   Submission of Matters to a Vote of Security Holders
    
    
    175   Other Information
    
    
    176   Exhibits
    
    
    18Signatures
    
    
    19EX-11EX-31.1EX-31.2EX-32.1EX-32.2




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September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCash and due from banks
    
    $
    11,197,845
    
    
    $
    12,643,440Interest-earning deposits in other banks
    
    
    75,179
    
    
    
    9,748Federal funds sold
    
    
    
    
    
    
    5,000,000Total cash and cash equivalents
    
    
    11,273,024
    
    
    
    17,653,188Securities available-for-sale, at fair value
    
    
    63,052,850
    
    
    
    67,135,126Restricted stock, at cost
    
    
    3,105,900
    
    
    
    3,105,900Total securities
    
    
    66,158,750
    
    
    
    70,241,026Loans
    
    
    245,626,368
    
    
    
    232,431,938Less allowance for loan losses
    
    
    2,554,489
    
    
    
    2,607,118Net loans
    
    
    243,071,879
    
    
    
    229,824,820Premises and equipment, net
    
    
    7,397,612
    
    
    
    7,390,182Accrued interest receivable and other assets
    
    
    2,219,472
    
    
    
    2,130,631Total Assets
    
    $
    330,120,737
    
    
    $
    327,239,847LIABILITIESDepositsNoninterest-bearing
    
    $
    42,329,684
    
    
    $
    44,455,131Interest-bearing
    
    
    211,264,649
    
    
    
    215,722,541Total deposits
    
    
    253,594,333
    
    
    
    260,177,672Short-term borrowings
    
    
    31,783,926
    
    
    
    28,022,077Other borrowings
    
    
    7,107,511
    
    
    
    2,499,399Accrued interest payable and other liabilities
    
    
    1,686,784
    
    
    
    1,470,379Total liabilities
    
    
    294,172,554
    
    
    
    292,169,527SHAREHOLDERS EQUITYCommon stock, $6.25 par value: Authorized 9,000,000
shares; issued 2,667,786 shares
    
    
    16,673,667
    
    
    
    16,673,667Additional paid-in capital
    
    
    6,446,180
    
    
    
    6,427,765Retained earnings
    
    
    17,552,129
    
    
    
    16,248,608Treasury stock at cost: 204,906 shares in 2007 and
168,605 shares in 2006
    
    
    (4,348,987
    )
    
    
    (3,696,102
    )Accumulated other comprehensive loss
    
    
    (374,806
    )
    
    
    (583,618
    )Total shareholders equity
    
    
    35,948,183
    
    
    
    35,070,320Total Liabilities and Shareholders Equity
    
    $
    330,120,737
    
    
    $
    327,239,847
 
  3.




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest incomeLoans, including fees
    
    $
    4,633,268
    
    
    $
    4,325,203
    
    
    $
    13,433,102
    
    
    $
    12,294,678Taxable securities
    
    
    720,952
    
    
    
    735,071
    
    
    
    2,205,401
    
    
    
    2,272,037Nontaxable securities
    
    
    62,931
    
    
    
    95,495
    
    
    
    198,060
    
    
    
    297,011Other
    
    
    944
    
    
    
    297
    
    
    
    16,324
    
    
    
    7,136Total interest income
    
    
    5,418,095
    
    
    
    5,156,066
    
    
    
    15,852,887
    
    
    
    14,870,862Interest expenseDeposits
    
    
    1,608,916
    
    
    
    1,440,410
    
    
    
    4,763,015
    
    
    
    3,880,245Other
    
    
    419,497
    
    
    
    421,566
    
    
    
    1,169,545
    
    
    
    1,129,321Total interest expense
    
    
    2,028,413
    
    
    
    1,861,976
    
    
    
    5,932,560
    
    
    
    5,009,566Net interest income
    
    
    3,389,682
    
    
    
    3,294,090
    
    
    
    9,920,327
    
    
    
    9,861,296Provision for loan losses
    
    
    151,264
    
    
    
    75,000
    
    
    
    353,540
    
    
    
    221,667Net interest income after provision
for loan losses
    
    
    3,238,418
    
    
    
    3,219,090
    
    
    
    9,566,787
    
    
    
    9,639,629Non-interest incomeService charges on deposit
accounts
    
    
    335,536
    
    
    
    325,029
    
    
    
    927,894
    
    
    
    977,755Trust and financial services
    
    
    188,598
    
    
    
    135,904
    
    
    
    544,873
    
    
    
    392,495Insurance recovery
    
    
    
    
    
    
    
    
    
    
    186,526
    
    
    
    Credit card fee income
    
    
    63,818
    
    
    
    73,349
    
    
    
    192,623
    
    
    
    219,915Debit card interchange
    
    
    85,551
    
    
    
    55,322
    
    
    
    201,354
    
    
    
    154,426Securities gains
    
    
    
    
    
    
    
    
    
    
    5,430
    
    
    
    Other income
    
    
    88,778
    
    
    
    86,738
    
    
    
    251,573
    
    
    
    234,401Total non-interest income
    
    
    762,281
    
    
    
    676,342
    
    
    
    2,310,273
    
    
    
    1,978,992Non-interest expensesSalaries and employee benefits
    
    
    1,485,842
    
    
    
    1,538,491
    
    
    
    4,327,845
    
    
    
    4,459,994Occupancy expense
    
    
    188,166
    
    
    
    176,360
    
    
    
    554,439
    
    
    
    515,104Equipment expense
    
    
    131,192
    
    
    
    118,813
    
    
    
    372,324
    
    
    
    376,326State franchise tax
    
    
    105,892
    
    
    
    113,425
    
    
    
    311,971
    
    
    
    334,817Professional and director fees
    
    
    147,009
    
    
    
    171,042
    
    
    
    453,151
    
    
    
    519,494Cash loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    236,526Other expenses
    
    
    664,008
    
    
    
    585,737
    
    
    
    1,968,762
    
    
    
    1,877,537Total non-interest expenses
    
    
    2,722,109
    
    
    
    2,703,868
    
    
    
    7,988,492
    
    
    
    8,319,798Income before income taxes
    
    
    1,278,590
    
    
    
    1,191,564
    
    
    
    3,888,568
    
    
    
    3,298,823Federal income tax provision
    
    
    415,500
    
    
    
    378,000
    
    
    
    1,254,500
    
    
    
    1,034,700Net income
    
    $
    863,090
    
    
    $
    813,564
    
    
    $
    2,634,068
    
    
    $
    2,264,123Basic and diluted earnings per share
    
    $
    0.35
    
    
    $
    0.32
    
    
    $
    1.07
    
    
    $
    0.89
 
  4.




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Balance at beginning of period
    
    $
    35,119,135
    
    
    $
    33,798,998
    
    
    $
    35,070,320
    
    
    $
    35,170,259Comprehensive income (loss):Net income
    
    
    863,090
    
    
    
    813,564
    
    
    
    2,634,068
    
    
    
    2,264,123Change in net unrealized
loss, net of reclassification
adjustments and related
income taxes $207,217,
$387,845, $107,570, and
$(36,518), respectively
    
    
    402,244
    
    
    
    752,875
    
    
    
    208,812
    
    
    
    (70,889
    )Total comprehensive income
    
    
    1,265,334
    
    
    
    1,566,439
    
    
    
    2,842,880
    
    
    
    2,193,234Issuance of 40 shares from treasury
    
    
    
    
    
    
    
    
    
    
    641
    
    
    
    Stock-based compensation expense
    
    
    7,165
    
    
    
    2,525
    
    
    
    18,415
    
    
    
    7,575Purchase of treasury shares
    
    
    (131
    )
    
    
    (414,726
    )
    
    
    (654,114
    )
    
    
    (1,603,890
    )Cash dividends declared
($0.18 and $0.54 per share in
2007 and $0.16 and $0.48
per share in 2006)
    
    
    (443,320
    )
    
    
    (399,916
    )
    
    
    (1,329,959
    )
    
    
    (1,213,858
    )Balance at end of period
    
    $
    35,948,183
    
    
    $
    34,553,320
    
    
    $
    35,948,183
    
    
    $
    34,553,320
 
  5.




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##### Table of Contents



Nine Months EndedSeptember 30,2007
    
    
    2006Net cash from operating activities
    
    $
    3,067,230
    
    
    $
    3,787,731Cash flows from investing activitiesSecurities available-for-sale:Proceeds from maturities, calls and repayments
    
    
    6,529,688
    
    
    
    8,715,847Purchases
    
    
    (2,156,064
    )
    
    
    (1,589
    )Purchase of FHLB stock
    
    
    
    
    
    
    (116,700
    )Proceeds from sale of other real estate
    
    
    59,096
    
    
    
    412,500Net change in loans
    
    
    (13,664,910
    )
    
    
    (15,028,161
    )Premises and equipment expenditures, net
    
    
    (461,715
    )
    
    
    (187,576
    )Net cash used for investing activities
    
    
    (9,693,905
    )
    
    
    (6,205,679
    )Cash flows from financing activitiesNet change in deposits
    
    
    (6,583,339
    )
    
    
    (5,797,653
    )Net change in short-term borrowings
    
    
    3,761,849
    
    
    
    10,004,365Proceeds from other borrowings
    
    
    5,000,000
    
    
    
    Repayment of other borrowings
    
    
    (391,888
    )
    
    
    (5,473,773
    )Purchase of treasury shares
    
    
    (654,113
    )
    
    
    (1,603,890
    )Issuance of treasury shares
    
    
    641
    
    
    
    Cash dividends paid
    
    
    (886,639
    )
    
    
    (813,942
    )Net cash provided by (used for) financing activities
    
    
    246,511
    
    
    
    (3,684,893
    )Net change in cash and cash equivalents
    
    
    (6,380,164
    )
    
    
    (6,102,841
    )Cash and cash equivalents at beginning of period
    
    
    17,653,188
    
    
    
    16,649,976Cash and cash equivalents at end of period
    
    $
    11,273,024
    
    
    $
    10,547,135Supplemental disclosuresInterest paid
    
    $
    5,816,914
    
    
    $
    4,954,291Income taxes paid
    
    
    1,560,000
    
    
    
    655,000Non-cash investing activity-transfer of loans to OREO
    
    
    
    
    
    
    39,560
 
  6.




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NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    
 7.




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NOTE 2  SECURITIES
  Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    FairSeptember 30, 2007
    
    Cost
    
    
    gains
    
    
    losses
    
    
    ValueAvailable-for-sale:U.S. Treasury security
    
    $
    99,930
    
    
    $
    1,109
    
    
    $
    
    
    
    $
    101,039Obligations of U.S.
government
corporations and agencies
    
    
    31,494,529
    
    
    
    6,922
    
    
    
    220,991
    
    
    
    31,280,460Mortgage-backed securities
    
    
    26,485,843
    
    
    
    2,745
    
    
    
    380,906
    
    
    
    26,107,682Obligations of states and
political subdivisions
    
    
    5,167,316
    
    
    
    67,302
    
    
    
    1,329
    
    
    
    5,233,289Total debt securities
    
    
    63,247,618
    
    
    
    78,078
    
    
    
    603,226
    
    
    
    62,722,470Equity Securities
    
    
    373,120
    
    
    
    684
    
    
    
    43,424
    
    
    
    330,380Total available-for-sale
    
    
    63,620,738
    
    
    
    78,762
    
    
    
    646,650
    
    
    
    63,052,850Restricted stock
    
    
    3,105,900
    
    
    
    
    
    
    
    
    
    
    
    3,105,900Total securities
    
    $
    66,726,638
    
    
    $
    78,762
    
    
    $
    646,650
    
    
    $
    66,158,750
 Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    FairDecember 31, 2006
    
    Cost
    
    
    gains
    
    
    losses
    
    
    ValueAvailable-for-sale:U.S. Treasury security
    
    $
    99,992
    
    
    $
    
    
    
    $
    172
    
    
    $
    99,820Obligations of U.S.
government
corporations and agencies
    
    
    33,493,189
    
    
    
    
    
    
    
    576,494
    
    
    
    32,916,695Mortgage-backed securities
    
    
    28,453,336
    
    
    
    591
    
    
    
    405,963
    
    
    
    28,047,964Obligations of states and
political subdivisions
    
    
    5,666,915
    
    
    
    103,482
    
    
    
    1,103
    
    
    
    5,769,294Total debt securities
    
    
    67,713,432
    
    
    
    104,073
    
    
    
    983,732
    
    
    
    66,833,773Equity Securities
    
    
    305,965
    
    
    
    8,194
    
    
    
    12,806
    
    
    
    301,353Total available-for-sale
    
    
    68,019,397
    
    
    
    112,267
    
    
    
    996,538
    
    
    
    67,135,126Restricted stock
    
    
    3,105,900
    
    
    
    
    
    
    
    
    
    
    
    3,105,900Total securities
    
    $
    71,125,297
    
    
    $
    112,267
    
    
    $
    996,538
    
    
    $
    70,241,026
 
 8.




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ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
   FINANCIAL CONDITION
   
 9.




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RESULTS OF OPERATIONS
 Three months ended September 30, 2007 and 2006
  
 10.




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Nine months ended September 30, 2007 and 2006
   
 11.




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12.




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##### Table of Contents



CAPITAL RESOURCES
  LIQUIDITY
  OFF-BALANCE SHEET ARRANGEMENTS
  CONTRACTUAL OBLIGATIONS
  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 
 13.




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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS-(continued
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115 Fair Value
Measurements
 Accounting for Uncertainty in
Income Taxes Accounting for Income Taxes
 
 14.




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ITEM 3  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
   September 30, 2007
 Changes inInterest Rates
    
    Net Interest
    
    Dollar
    
    Percentage(basis points)
    
    Income
    
    Change
    
    Change(Dollars in Thousands)+200
    
    $
    13,998
    
    
    $
    433
    
    
    
    3.2
    %+100
    
    
    13,736
    
    
    
    171
    
    
    
    1.30
    
    
    13,565
    
    
    
    0
    
    
    
    0.0-100
    
    
    13,419
    
    
    
    (146
    )
    
    
    (1.1
    )-200
    
    
    13,140
    
    
    
    (425
    )
    
    
    (3.1
    )
 December 31, 2006
 Changes inInterest Rates
    
    Net Interest
    
    Dollar
    
    Percentage(basis points)
    
    Income
    
    Change
    
    Change(Dollars in Thousands)+200
    
    $
    14,165
    
    
    $
    682
    
    
    
    5.1
    %+100
    
    
    13,767
    
    
    
    284
    
    
    
    2.10
    
    
    13,483
    
    
    
    0
    
    
    
    0.0-100
    
    
    13,290
    
    
    
    (193
    )
    
    
    (1.4
    )-200
    
    
    12,937
    
    
    
    (546
    )
    
    
    (4.1
    )
 
 15.




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ITEM 4  CONTROLS AND PROCEDURES
       
 16.




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ITEM 1  LEGAL PROCEEDINGS
  
 ITEM 1A   RISK FACTORS
  
 ITEM 2  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Issuer Purchase of Equity Securities
 MaximumTotal Number of
    
    Number of SharesTotal Number
    
    Average
    
    Shares Purchased
    
    that May Yet beof Shares
    
    Price Paid
    
    as Part of Publicly
    
    Purchased UnderPeriod
    
    Purchased
    
    Per Share
    
    Announced Plans
    
    the PlanJuly 1, 2007 to
July 31, 2007
    
    None
    
    None
    
    None
    
    
    82,376August 1, 2007 to
August 31, 2007
    
    
    8
    
    
    $
    17.00
    
    
    
    8
    
    
    
    82,368September 1, 2007 to
September 30, 2007
    
    None
    
    None
    
    None
    
    
    82,368
  
 Item 3  Defaults Upon Senior Securities:
  
 Item 4  Submission of Matters to a Vote of Security Holders
  
 Item 5  Other Information:
  
 17.




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Item 6  Exhibits:
 ExhibitNumber
    
    Description of Document11
    
    Statement Regarding Computation of Per Share Earnings (reference
is hereby made to Consolidated Statements of Income on page 4 hereof.)31.1
    
    Rule 13a-14(a)/15d-14(a) CEOs Certification31.2
    
    Rule 13a-14(a)/15d-14(a) CFOs Certification32.1
    
    Section 1350 CEOs Certification32.2
    
    Section 1350 CFOs Certification
 
 18.




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##### Table of Contents



CSB BANCORP, INC.(Registrant)Date: November 12, 2007
    
    /s/ Eddie L. Steiner

Eddie L. SteinerPresidentChief Executive OfficerDate: November 12, 2007
    
    /s/ Paula J. MeilerPaula J. MeilerSenior Vice PresidentChief Financial Officer
 
 19.




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Exhibit
    
    
    
    SequentialNumber
    
    Description of Document
    
    Page11
    
    Statement Regarding Computation of Per Share Earnings
(reference is hereby made to Consolidated Statements of Income on
page 4 hereof.)31.1
    
    Rule 13a-14(a)/15d-14(a) CEOs Certification31.2
    
    Rule 13a-14(a)/15d-14(a) CFOs Certification32.1
    
    Section 1350 CEOs Certification32.2
    
    Section 1350 CFOs Certification
 
 20.