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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, 2004 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.  Ohio
    
    34-1687530(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification Number)
 6 W. Jackson Street, P.O. Box 232, Millersburg, Ohio 44654
(Address of principal executive offices) (330) 674-9015
(Registrants telephone number) Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes þ          No o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes o          No þ Indicate the number of shares outstanding of each of the registrants classes
of common stock, as of the latest practicable date. Common stock, $6.25 par value
    
    Outstanding at November 12, 2004:2,644,963 common shares




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CSB BANCORP, INC.
FORM 10-Q
QUARTER ENDED September 30, 2004   Table of Contents PagePart I  Financial InformationITEM 1 - FINANCIAL STATEMENTSConsolidated 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
    
    
    13ITEM 4 - CONTROLS AND PROCEDURES
    
    
    13Part II  Other InformationITEM 1 - Legal Proceedings
    
    
    142 - Unregistered Sales of Securities and
Use of Proceeds
    
    
    143 - Defaults upon Senior Securities
    
    
    144 - Submission of Matters to a Vote of
Security Holders
    
    
    145 - Other Information
    
    
    146 - Exhibits
    
    
    15Signatures
    
    
    16Exhibit 11 Statement Regarding Computation of Share EarningsExhibit 31.1 302 Certification of CEOExhibit 31.2 302 Certification of CFOExhibit 32.1 906 Certification of CEOExhibit 32.2 906 Certification of CFO




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CSB BANCORP, INC. 
  
  
     September 30,
    
    December 31,2004
    
    2003ASSETSCash and due from banks
    
    $
    10,255,947
    
    
    $
    12,327,227Interest-bearing deposits with other banks
    
    
    98,109
    
    
    
    147,154Federal funds sold
    
    
    8,500,000
    
    
    
    4,727,000Total cash and cash equivalents
    
    
    18,854,056
    
    
    
    17,201,381Securities available-for-sale, at fair value
    
    
    64,932,894
    
    
    
    28,990,615Securities held-to-maturity (fair value of $38,395,177)
    
    
    
    
    
    
    36,092,027Restricted stock, at cost
    
    
    2,763,800
    
    
    
    2,690,000Total securities
    
    
    67,696,694
    
    
    
    67,773,242Loans, net of allowance for loan losses of
$2,574,617 in 2004 and $2,458,864 in 2003
    
    
    212,277,414
    
    
    
    210,795,598Premises and equipment, net
    
    
    8,273,178
    
    
    
    8,563,276Accrued interest receivable and other assets
    
    
    1,946,316
    
    
    
    1,846,292Total assets
    
    $
    309,047,658
    
    
    $
    306,179,789LIABILITIESDeposits
Noninterest-bearing
    
    $
    34,274,182
    
    
    $
    33,539,061Interest-bearing
    
    
    205,294,997
    
    
    
    215,418,686Total deposits
    
    
    239,569,179
    
    
    
    248,957,747Securities sold under repurchase agreements
    
    
    12,874,576
    
    
    
    11,859,052Federal Home Loan Bank borrowings
    
    
    18,873,363
    
    
    
    9,512,481Accrued interest payable and other liabilities
    
    
    1,462,800
    
    
    
    1,132,971Total liabilities
    
    
    272,779,918
    
    
    
    271,462,251SHAREHOLDERS 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
    
    
    6,413,915
    
    
    
    6,413,915Retained earnings
    
    
    13,050,700
    
    
    
    12,214,751Treasury stock at cost: 22,824 shares in 2004 and
23,436 shares in 2003
    
    
    (627,119
    )
    
    
    (645,938
    )Accumulated other comprehensive income
    
    
    756,577
    
    
    
    61,143Total shareholders equity
    
    
    36,267,740
    
    
    
    34,717,538Total liabilities and shareholders equity
    
    $
    309,047,658
    
    
    $
    306,179,789
   See note to consolidated financial statements. 3.




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CSB BANCORP, INC. 
     Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Interest incomeLoans, including fees
    
    $
    3,017,681
    
    
    $
    3,099,353
    
    
    $
    8,968,176
    
    
    $
    9,462,091Taxable securities
    
    
    383,818
    
    
    
    233,318
    
    
    
    1,028,665
    
    
    
    793,823Non-taxable securities
    
    
    363,553
    
    
    
    471,344
    
    
    
    1,176,470
    
    
    
    1,435,405Other
    
    
    7,110
    
    
    
    10,352
    
    
    
    10,318
    
    
    
    19,979Total interest income
    
    
    3,772,162
    
    
    
    3,814,367
    
    
    
    11,183,629
    
    
    
    11,711,298Interest expenseDeposits
    
    
    794,678
    
    
    
    933,509
    
    
    
    2,418,174
    
    
    
    2,932,916Other
    
    
    165,770
    
    
    
    207,539
    
    
    
    481,624
    
    
    
    622,900Total interest expense
    
    
    960,448
    
    
    
    1,141,048
    
    
    
    2,899,798
    
    
    
    3,555,816Net interest income
    
    
    2,811,714
    
    
    
    2,673,319
    
    
    
    8,283,831
    
    
    
    8,155,482Provision (credit) for loan losses
    
    
    250,000
    
    
    
    
    
    
    
    422,621
    
    
    
    (51,000
    )Net interest income after provision
for loan losses
    
    
    2,561,714
    
    
    
    2,673,319
    
    
    
    7,861,210
    
    
    
    8,206,482Non-interest incomeService charges on deposit
accounts
    
    
    232,594
    
    
    
    198,484
    
    
    
    626,078
    
    
    
    588,680Gain on sale of securities
    
    
    559,156
    
    
    
    
    
    
    
    585,016
    
    
    
    Trust and financial services
    
    
    77,553
    
    
    
    94,192
    
    
    
    285,536
    
    
    
    281,550Other income
    
    
    213,088
    
    
    
    314,385
    
    
    
    656,306
    
    
    
    763,662Total non-interest income
    
    
    1,082,391
    
    
    
    607,061
    
    
    
    2,152,936
    
    
    
    1,633,892Non-interest expensesSalaries and employee benefits
    
    
    1,377,792
    
    
    
    1,627,730
    
    
    
    3,925,133
    
    
    
    4,277,630Occupancy expense
    
    
    160,867
    
    
    
    165,378
    
    
    
    481,698
    
    
    
    495,824Equipment expense
    
    
    130,912
    
    
    
    113,968
    
    
    
    390,131
    
    
    
    373,970State franchise tax
    
    
    107,255
    
    
    
    102,975
    
    
    
    312,273
    
    
    
    305,568Professional and director fees
    
    
    189,749
    
    
    
    284,588
    
    
    
    562,141
    
    
    
    694,383Other expenses
    
    
    706,702
    
    
    
    703,056
    
    
    
    2,052,001
    
    
    
    2,106,868Total non-interest expenses
    
    
    2,673,277
    
    
    
    2,997,695
    
    
    
    7,723,377
    
    
    
    8,254,243Income before income taxes
    
    
    970,828
    
    
    
    282,685
    
    
    
    2,290,769
    
    
    
    1,586,131Federal income tax provision (credit)
    
    
    224,000
    
    
    
    (56,000
    )
    
    
    416,000
    
    
    
    78,000Net income
    
    $
    746,828
    
    
    $
    338,685
    
    
    $
    1,874,769
    
    
    $
    1,508,131Basic and diluted earnings per share
    
    $
    0.28
    
    
    $
    0.13
    
    
    $
    0.71
    
    
    $
    0.57
   See note to consolidated financial statements. 4.




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CBS BANCORP, INC. 
   Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2004
    
    2003
    
    2004
    
    2003Balance at beginning of period
    
    $
    34,553,933
    
    
    $
    34,403,999
    
    
    $
    34,717,538
    
    
    $
    33,742,284Comprehensive income:Net income
    
    
    746,828
    
    
    
    338,685
    
    
    
    1,874,769
    
    
    
    1,508,131Change in net unrealized gain (loss), net of reclassification
adjustments and related income taxes
    
    
    1,299,450
    
    
    
    (76,922
    )
    
    
    695,434
    
    
    
    (60,375
    )Total comprehensive income
    
    
    2,046,278
    
    
    
    261,763
    
    
    
    2,570,203
    
    
    
    1,447,756Issuance of shares from treasury
under dividend reinvestment
program (612 shares in 2004,
and 3,934 and 11,336 shares in 2003)
    
    
    11,375
    
    
    
    67,390
    
    
    
    11,375
    
    
    
    193,559Purchase of treasury shares
(4 and 1,006 shares in 2003)
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (18,119
    )Cash dividends declared
($0.13 and $0.39 per share in
2004, and $0.12 and $0.36
per share in 2003)
    
    
    (343,846
    )
    
    
    (316,871
    )
    
    
    (1,031,376
    )
    
    
    (949,207
    )Balance at end of period
    
    $
    36,267,740
    
    
    $
    34,416,273
    
    
    $
    36,267,740
    
    
    $
    34,416,273
   See note to consolidated financial statements. 5.




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CSB BANCORP, INC. 
     Nine Months EndedSeptember 30,2004
    
    2003Net cash from operating activities
    
    $
    2,072,265
    
    
    $
    2,798,299Cash flows from investing activitiesSecurities available-for-sale
Proceeds from maturities, calls and repayments
    
    
    17,957,850
    
    
    
    22,353,889Proceeds from sales
    
    
    11,927,185
    
    
    
    Purchases
    
    
    (31,951,741
    )
    
    
    (30,047,912
    )Securities held to maturity
Proceeds from maturities, calls and repayments
    
    
    3,812,000
    
    
    
    6,620,000Net change in loans
    
    
    (1,880,998
    )
    
    
    (9,877,227
    )Premises and equipment expenditures, net
    
    
    (278,746
    )
    
    
    (28,158
    )Net cash from investing activities
    
    
    (414,450
    )
    
    
    (10,979,408
    )Cash flows from financing activitiesNet change in deposits
    
    
    (9,388,568
    )
    
    
    (2,832,206
    )Net change in securities sold under repurchase agreements
    
    
    1,015,524
    
    
    
    (1,221,343
    )Proceeds from FHLB borrowings
    
    
    10,000,000
    
    
    
    5,000,000Principal reductions on FHLB borrowings, net
    
    
    (639,118
    )
    
    
    (726,532
    )Purchase of treasury shares
    
    
    
    
    
    
    (18,119
    )Cash dividends paid
    
    
    (992,978
    )
    
    
    (701,803
    )Net cash from financing activities
    
    
    (5,140
    )
    
    
    (500,003
    )Net change in cash and cash equivalents
    
    
    1,652,675
    
    
    
    (8,681,112
    )Cash and cash equivalents at beginning of period
    
    
    17,201,381
    
    
    
    22,654,696Cash and cash equivalents at end of period
    
    $
    18,854,056
    
    
    $
    13,883,584Supplemental disclosuresInterest paid
    
    $
    2,917,830
    
    
    $
    3,598,681Income taxes paid
    
    
    360,000
    
    
    
    Non-cash investing activity  transfer of securities
from held-to-maturity to available-for-sale category
    
    $
    31,681,132
    
    
    
    
   See note to consolidated financial statements. 6.




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CSB BANCORP, INC. 
     NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements include the accounts of CSB
Bancorp, Inc. and its wholly-owned subsidiary, The Commercial and Savings Bank
(together referred to as the Company or CSB). All significant intercompany
transactions and balances have been eliminated in consolidation. The consolidated financial statements have been prepared without audit. In the
opinion of management, all adjustments (which include normal recurring
adjustments) necessary to present fairly the Companys financial position at
September 30, 2004, and the results of operations and changes in cash flows for
the periods presented have been made. Certain information and footnote disclosures typically included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. The Annual Report for CSB for the year ended December 31,
2003, contains consolidated financial statements and related footnote
disclosures which should be read in conjunction with the accompanying
consolidated financial statements. The results of operations for the period
ended September 30, 2004 are not necessarily indicative of the operating
results for the full year or any future interim period. NOTE 2  SECURITIES Securities consist of the following at September 30, 2004 and December 31,
2003: September 30, 2004 Gross unrealized
    
    Gross unrealized
    
    FairAmortized Cost
    
    gains
    
    losses
    
    valueAvailable-for-sale:U.S. Treasury security
    
    $
    101,563
    
    
    $
    35,218
    
    
    $
    
    
    
    $
    136,781Obligations of U.S.
government
corporations and agencies
    
    
    38,963,402
    
    
    
    72,961
    
    
    
    55,980
    
    
    
    38,980,383Obligations of states and
political subdivisions
    
    
    20,878,137
    
    
    
    1,079,860
    
    
    
    
    
    
    
    21,957,997Mortgage-backed securities
    
    
    3,843,464
    
    
    
    16,093
    
    
    
    1,824
    
    
    
    3,857,733Restricted stock
    
    
    2,763,800
    
    
    
    
    
    
    
    
    
    
    
    2,763,800Total securities
    
    $
    66,550,366
    
    
    $
    1,204,132
    
    
    $
    57,804
    
    
    $
    67,696,694
   7.




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CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)   NOTE 2  SECURITIES (continued) December 31, 2003 Amortized
    
    Gross unrealized
    
    Gross unrealized
    
    Faircost
    
    gains
    
    losses
    
    valueAvailable-for-sale:Obligations of U.S. government
corporations and agencies
    
    $
    24,018,719
    
    
    $
    73,383
    
    
    $
    7,872
    
    
    $
    24,084,230Mortgage-backed securities
    
    
    4,263,078
    
    
    
    4,782
    
    
    
    7,600
    
    
    
    4,260,260Corporate security
    
    
    616,177
    
    
    
    29,948
    
    
    
    
    
    
    
    646,125Total available-for-sale
    
    
    28,897,974
    
    
    
    108,113
    
    
    
    15,472
    
    
    
    28,990,615Held-to-maturity:U.S. Treasury security
    
    
    101,599
    
    
    
    32,557
    
    
    
    
    
    
    
    134,156Obligations of U.S. government
corporations and agencies
    
    
    1,000,000
    
    
    
    11,875
    
    
    
    
    
    
    
    1,011,875Obligations of states and
political subdivisions
    
    
    34,990,428
    
    
    
    2,258,718
    
    
    
    
    
    
    
    37,249,146Total held-to-maturity
    
    
    36,092,027
    
    
    
    2,303,150
    
    
    
    
    
    
    
    38,395,177Restricted stock
    
    
    2,690,600
    
    
    
    
    
    
    
    
    
    
    
    2,690,600Total securities
    
    $
    67,680,601
    
    
    $
    2,411,263
    
    
    $
    15,472
    
    
    $
    70,076,392
 A one-time reclassification of all held-to-maturity securities to
available-for-sale was completed during the quarter ended September 30, 2004.   8.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   
 ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS The following discussion focuses on the consolidated financial condition of CSB
Bancorp, Inc. and its subsidiary (the Company) at September 30, 2004, compared
to December 31, 2003, and the consolidated results of operations for the nine
month and quarterly periods ending September 30, 2004 compared to the same
periods in 2003. The purpose of this discussion is to provide the reader with
a more thorough understanding of the consolidated financial statements. This
discussion should be read in conjunction with the interim consolidated
financial statements and related footnote. FORWARD-LOOKING STATEMENTS Certain statements contained in this report that are not historical facts are
forward-looking statements that are subject to certain risks and uncertainties.
When used herein, the terms anticipates, plans, expects, believes, and
similar expressions as they relate to the Company or its management are
intended to identify such forward-looking statements. The Companys actual
results, performance or achievements may materially differ from those expressed
or implied in the forward-looking statements. Risks and uncertainties that
could cause or contribute to such material differences include, but are not
limited to, general economic conditions, interest rate environment, competitive
conditions in the financial services industry, changes in law, governmental
policies and regulations, and rapidly changing technology affecting financial
services. The Company does not undertake, and specifically disclaims any obligation, to
publicly revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. FINANCIAL CONDITION Total assets were $309.0 million at September 30, 2004, compared to $306.2
million at December 31, 2003, representing an increase of $2.8 million or .9%.
Cash and cash equivalents increased $1.7 million, or 9.6%, during the
nine-month period ending September 30, 2004, due to a $2.0 million decrease in
cash and due from banks and a $3.8 million increase in Federal funds sold. Net
loans increased $1.5 million (0.7%) while deposits decreased $9.4 million
(3.8%) during the nine-month period. Consequently, Federal Home Loan Bank
borrowings increased $9.4 million during the period.   9.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   As a strategic initiative, the Company is focusing on expanding its public fund
relationships to grow both lending and deposit balances. Due to the Companys
inability to secure public fund deposits with out-of-state municipal
securities, management determined that the best course of action would be to
liquidate the out-of-state portfolio previously classified as held-to-maturity.
As a result of a change in executive management and the implementation of this
strategic initiative, the Company made a one-time reclassification of all
held-to-maturity securities to available for sale with the intent to classify
all future security purchases as available for sale. The action allows
management to enhance the diversity and usage of the securities portfolio. The
amortized cost of securities transferred from held-to-maturity to
available-for-sale was $31.7 million resulting in the recording of gross
unrealized gains of $1.7 million at September 30, 2004. Net loans increased $1.5 million, or 0.7% during the nine-month period ended
September 30, 2004. This increase was due to a combination of increased loan
demand and production within the Companys market area. The allowance for loan
losses amounted to $2,575,000, or 1.20% of total loans at September
30, 2004, compared to $2,459,000, or 1.16 % of total loans at December 31,
2003. The components of the change in the allowance for loan losses during the
nine-month period ended September 30, 2004, included a provision of $423,000
and net loan charge-offs of $307,000. Loans past due more than 90 days and
still accruing interest and loans placed on nonaccrual status, aggregated
$1,673,000, or 0.78% of total loans at September 30, 2004, compared to
$1,345,000, or 0.63% of total loans at December 31, 2003. At September 30, 2004, the ratio of net loans to deposits was 88.6%, compared
to 84.7% at December 31, 2003. The increase in this ratio is due to loan growth
coupled with deposit shrinkage experienced during the nine months ended
September 30, 2004. The increase in Federal Home Loan Bank borrowings resulted from a $10 million
leverage program entered into during the first quarter of 2004. Such
borrowings have been used to fund loan growth and deposit shrinkage. An
increase of $1.0 million in securities sold under repurchase agreements during
the nine-month period have also been used to fund portions of the loan growth. Total shareholders equity amounted to $36.3 million, or 11.7% of total assets,
at September 30, 2004, compared to $34.7 million, or 11.3% of total assets, at
December 31, 2003. The increase in shareholders equity during the nine months
ended September 30, 2004 was principally due to, net income of $1,875,000,
dividends declared of $1,031,000, and the increase in unrealized gain on
securities, net of tax, of $695,000. The Company and its subsidiary met all
regulatory capital requirements at September 30, 2004.   10.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   RESULTS OF OPERATIONS Three months ended September 30, 2004 and 2003 For the quarter ended September 30, 2004, the Company recorded net income of
$747,000, or $.28 per share, as compared to net income of $339,000, or $.13 per
share for the quarter ended September 30, 2003. The increase in net income for
the quarter of $408,000 was principally due to a $139,000 increase in net
interest income, gain on the sale of securities of $559,000, a $250,000
decrease in salaries and employee benefits associated with $237,000 in
severance payments to the prior CEO, offset by a $250,000 increase in the
provision for loan losses and a $280,000 increase in the federal income tax
provision. Interest income for the quarter ended September 30, 2004 was $3.8 million a
decrease of $42,000 or 1.1%, compared to the same period in 2003. This
decrease was primarily due to a decrease in loan interest rates. Interest
expense for the quarter ended September 30, 2004 was $960,000, a decrease of
$181,000, or 15.8%, from the same period in 2003. The decline in interest
expense occurred due to both decreases in rate and average volume of
interest-bearing liabilities. The provision for loan losses for the quarter ended September 30, 2004 was
$250,000, compared to no provision for the same quarter in 2003. The provision
or credit for loan losses is determined based on managements calculation of
the allowance for loan losses, which includes provisions for classified loans,
as well as for the remainder of the portfolio based on historical data,
including past charge-offs, and current economic trends. Non-interest income for the quarter ended September 30, 2004 was $1.1 million,
an increase of $475,000, or 78.3%, compared to the same quarter in 2003. This
increase was primarily due to a gain on the sale of securities of $559,000, and
increases in the fees on deposits of $34,000. These increases were offset by
decreases in mortgage banking income of $54,000, and trust and brokerage income of $17,000. For the
quarter ended September 30, 2003 a nonrecurring gain of $79,000 was recognized
on the sale of other real estate. Non-interest expenses for the quarter ended
September 30, 2004 decreased $324,000, or 10.8%, compared to the third quarter
of 2003. This decrease was due primarily to the decrease in salary and benefit
expense explained above, as well as a $95,000, or 33.3%, decrease in
professional and director fees, which was also related to severance payments to
the prior CEO in the form of consulting fees. Nine months ended September 30, 2004 and 2003 Net income for the nine months ending September 30, 2004, was $1.9 million, or
$.71 per share, as compared to $1.5 million, or $.57 per share during the same
period in 2003. Return on average assets and return on average equity were
0.80% and 7.17%, respectively, for the nine month period of 2004 compared to
0.67% and 5.86%, respectively for 2003. Net interest income was $8.3 million for the nine months ended September 30,
2004, an increase of $129,000 of 1.6% from the same period last year. Total
non-interest expenses   11.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   decreased $531,000, or 6.4%, for the nine month period ended September 30,
2004, as compared to the same period of 2003 while non-interest income
increased $519,000, or 31.8%. These improvements in net income were partially
offset by a change in the provision (credit) for loan losses of $474,000.
        . Interest income for the nine months ended September 30, 2004 was $11.2 million,
a decrease of $528,000, or 4.5%, from the same period in 2003. Interest income
on securities decreased $24,000, or 1.1%, as short-term interest rates fell and
certain callable securities were called. Interest expense decreased $656,000 to $2.9 million for the nine months ended
September 30, 2004, compared to the nine months ended September 30, 2003.
Interest expense on deposits decreased $515,000, or 17.6%, from the same period
as last year, while interest expense on other borrowings decreased $141,000, or
22.6%. The decrease in deposit interest expense was caused by the lower rates
on transaction accounts and certificates of deposit, as well as an overall
decrease in average interest-bearing deposit balances. The net interest
margin improved by 10 basis points for the nine-month period ended September
30, 2004 to 3.83% from 3.73% for the same period in 2003. The provision for loan losses was $423,000 during the first nine months of
2004, as compared to a credit of $51,000 in the same nine-month period of 2003.
The provision or credit for loan losses is determined based on managements
calculation of the allowance for loan losses, which includes provisions for
classified loans, as well as for the remainder of the portfolio based on
historical data, including past charge-offs, and current economic trends. Non-interest income increased $519,000, or 31.8%, during the nine months ended
September 30, 2004 as compared to the same period in 2003. The increase in
non-interest income was primarily due to a $585,000 gain on sale of securities
in 2004 and a $37,000 increase in service charges on deposit accounts.
Non-interest expenses decreased $531,000, or 6.4%, for the nine months ended
September 30, 2004, compared to the same period in 2003. Salaries and employee
benefits decreased $352,000 or 8.2%. Professional and director fees decreased
$132,000, or 19.0%, primarily a result of the severance package of the prior
CEO. Other expenses decreased $55,000, or 2.6%, primarily the result of
reduced third party outsourcing fees within the Trust Department. The provision for income taxes was $416,000 (effective rate of 18.2%) for the
nine months ended September 30, 2004, compared to $78,000 (effective rate of
4.9%) for the nine months ended September 30, 2003. The increase in the
effective tax rate resulted from a decrease in tax-exempt interest income as a
portion of total income before income taxes.   12.




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CSB BANCORP, INC.   
 ITEM 3 QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the quantitative and qualitative
disclosures about market risks as of September 30, 2004 from that presented in
the Companys Annual Report on Form 10-K for the fiscal year ended December 31,
2003. Management performs a quarterly analysis of the Companys interest rate
risk. All positions are currently within the Board-approved policy. 
 ITEM 4 CONTROLS AND PROCEDURES With the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, we have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that: (a) information required to disclosed by the Company in this Quarterly Report
on Form 10-Q would be accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure; (b) information required to be disclosed by the Company in this Quarterly
Report on Form 10-Q would be recorded, processed, summarized and reported
within the time periods specified in the SECs rules and forms; and (c) the Companys disclosure controls and procedures are effective as of the
end of the period covered by this Quarterly Report on Form 10-Q to ensure that
material information relating to the Company and its consolidated subsidiary is
made known to them, particularly during the period for which our periodic
reports, including this Quarterly Report on Form 10-Q, are being prepared. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes during the period covered by this Quarterly Report on
Form 10-Q in our internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.   13.




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CSB BANCORP, INC. FORM 10-Q
Quarter ended September 30, 2004 
 PART II  OTHER
INFORMATION   
 Item 1   Legal Proceedings: There are no matters required to be reported under this item. 
 Item 2   Unregistered Sales of Securities and Use of Proceeds: There are no matters required to be reported under this item. 
 Item 3   Defaults Upon Senior Securities: There are no matters required to be reported under this item. 
 Item 4   Submission of Matters to a Vote of Security Holders: There are no matters required to be reported under this item 
 Item 5   Other Information: There are no matters required to be reported under this item.  14.




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CSB BANCORP, INC.
FORM 10-Q
Quarter ended September 30, 2004PART II  OTHER INFORMATION   
 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
   15.




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CSB BANCORP, INC. 
 SIGNATURES Pursuant to the requirements 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. /s/ CSB BANCORP, INC.CSB BANCORP, INC.(Registrant) Date: November 12, 2004
    
    /s/ John J. LimbertJohn J. LimbertPresident
Chief Executive Officer Date: November 12, 2004
    
    /s/ Paula J. MeilerPaula J. MeilerSenior Vice President
Chief Financial Officer   16.




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CSB BANCORP, INC.
Index to Exhibits   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
   17.