##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: MARCH 31, 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
    
    (I.R.S. Employer Identification Number)incorporation or organization)
 6 W. Jackson Street, P.O. Box 232, Millersburg, Ohio 44654   (330) 674-9015   Indicate by check mark whether the registrant (1) 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. x Yes o No Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). o Yes x No Indicate the number of shares outstanding of each of the registrants classes
of common stock, as of the latest practicable date. Outstanding at April 27, 2004:2,644,350 common shares




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CSB BANCORP, INC.
FORM 10-Q
QUARTER ENDED MARCH 31, 2004 Table of Contents PagePart I - Financial InformationITEM 1 - FINANCIAL STATEMENTS
    
    
    3Consolidated Balance Sheets
    
    
    3Consolidated Statements of Income
    
    
    4Condensed Consolidated Statements of Shareholders Equity
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Note to Consolidated Financial Statements
    
    
    7ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    8ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    11ITEM 4  CONTROLS AND PROCEDURES
    
    
    11Part II - Other InformationITEM 1  Legal Proceedings
    
    
    122  Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
    
    
    123  Defaults upon Senior Securities
    
    
    124  Submission of Matters to a Vote of Security Holders
    
    
    125  Other Information
    
    
    126  Exhibits and Reports on Form 8-K
    
    
    12Signatures
    
    
    14EX-11 STATEMENT REGARDING COMPUTATION OF PER SHAREEX-31.1 CERTIFICATION OF PRESIDENT AND CEOEX-31.2 CERTIFICATION OF VP AND CFOEX-32.1 SECTION 1350 CERTIFICATION - PRES. AND CEOEX-32.2 SECTION 1350 CERTIFICATION - VP AND CFO




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CSB BANCORP, INC. 
  
  
   March 31,
    
    December 31,2004
    
    2003ASSETSCash and due from banks
    
    $
    11,539,493
    
    
    $
    12,327,227Interest-bearing deposits with other banks
    
    
    124,636
    
    
    
    147,154Federal funds sold
    
    
    
    
    
    
    4,727,000Total cash and cash equivalents
    
    
    11,664,129
    
    
    
    17,201,381Securities available-for-sale, at fair value
    
    
    43,094,537
    
    
    
    28,990,615Securities held-to-maturity (Fair value of
$36,321,685 in 2004 and $38,395,177 in 2003)
    
    
    33,998,032
    
    
    
    36,092,027Restricted stock, at cost
    
    
    2,715,000
    
    
    
    2,690,000Total securities
    
    
    79,807,569
    
    
    
    67,773,242Loans, net of allowance for loan losses of
$2,453,280 in 2004 and $2,458,864 in 2003
    
    
    215,767,553
    
    
    
    210,795,598Premises and equipment, net
    
    
    8,525,038
    
    
    
    8,563,276Accrued interest receivable and other assets
    
    
    2,495,464
    
    
    
    1,846,292Total assets
    
    $
    318,259,753
    
    
    $
    306,179,789LIABILITIESDepositsNoninterest-bearing
    
    $
    31,727,689
    
    
    $
    33,539,061Interest-bearing
    
    
    207,739,088
    
    
    
    215,418,686Total deposits
    
    
    239,466,777
    
    
    
    248,957,747Securities sold under repurchase agreements
    
    
    12,531,144
    
    
    
    11,859,052Federal funds purchased
    
    
    11,100,000
    
    
    
    Federal Home Loan Bank borrowings
    
    
    19,221,119
    
    
    
    9,512,481Accrued interest payable and other liabilities
    
    
    993,305
    
    
    
    1,132,971Total liabilities
    
    
    283,312,345
    
    
    
    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
    
    
    12,392,436
    
    
    
    12,214,751Treasury stock at cost: 23,436 shares
    
    
    (645,938
    )
    
    
    (645,938
    )Accumulated other comprehensive income
    
    
    113,328
    
    
    
    61,143Total shareholders equity
    
    
    34,947,408
    
    
    
    34,717,538Total liabilities and shareholders equity
    
    $
    318,259,753
    
    
    $
    306,179,789
 See note to consolidated financial statements. 3.




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CSB BANCORP, INC. 
   Three Months EndedMarch 31,2004
    
    2003Interest incomeLoans, including fees
    
    $
    2,992,946
    
    
    $
    3,173,099Taxable securities
    
    
    271,471
    
    
    
    292,932Non-taxable securities
    
    
    400,618
    
    
    
    483,777Other
    
    
    2,998
    
    
    
    9,340Total interest income
    
    
    3,668,033
    
    
    
    3,959,148Interest expenseDeposits
    
    
    834,830
    
    
    
    1,027,368Other
    
    
    137,418
    
    
    
    198,946Total interest expense
    
    
    972,248
    
    
    
    1,226,314Net interest income
    
    
    2,695,785
    
    
    
    2,732,834Provision (credit) for loan losses
    
    
    94,000
    
    
    
    (71,000
    )Net interest income after provision for loan losses
    
    
    2,601,785
    
    
    
    2,803,834Non-interest incomeService charges on deposit accounts
    
    
    182,415
    
    
    
    185,360Gain on sale of securities
    
    
    25,860
    
    
    
    Trust and financial services
    
    
    93,642
    
    
    
    93,141Other income
    
    
    197,117
    
    
    
    189,193Total non-interest income
    
    
    499,034
    
    
    
    467,694Non-interest expensesSalaries and employee benefits
    
    
    1,259,139
    
    
    
    1,308,711Occupancy expense
    
    
    162,178
    
    
    
    168,602Equipment expense
    
    
    125,640
    
    
    
    129,034State franchise tax
    
    
    101,856
    
    
    
    104,095Professional and director fees
    
    
    186,331
    
    
    
    182,811Other expenses
    
    
    679,224
    
    
    
    699,443Total non-interest expenses
    
    
    2,514,368
    
    
    
    2,592,696Income before income taxes
    
    
    586,451
    
    
    
    678,832Federal income tax provision
    
    
    65,000
    
    
    
    81,000Net income
    
    $
    521,451
    
    
    $
    597,832Basic and diluted earnings per share
    
    $
    0.20
    
    
    $
    0.23
 See note to consolidated financial statements. 4.




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CSB BANCORP, INC. 
   Three Months EndedMarch 31,2004
    
    2003Balance at beginning of period
    
    $
    34,717,538
    
    
    $
    33,742,284Net income
    
    
    521,451
    
    
    
    597,832Other comprehensive income, net of income tax
    
    
    52,185
    
    
    
    (24,543
    )Total comprehensive income
    
    
    573,636
    
    
    
    573,289Issuance of 3,554 shares from treasury under dividend
reinvestment program
    
    
    
    
    
    
    59,106Purchase of 1,002 treasury shares
    
    
    
    
    
    
    (18,035
    )Cash dividends declared, $0.13 per share in 2004,
$0.12 per share in 2003
    
    
    (343,766
    )
    
    
    (315,937
    )Balance at end of period
    
    $
    34,947,408
    
    
    $
    34,040,707
 See note to consolidated financial statements. 5.




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CSB BANCORP, INC. 
   Three Months EndedMarch 31,2004
    
    2003Net cash from operating activities
    
    $
    (85,799
    )
    
    $
    442,001Cash flows from investing activitiesSecurities available-for-saleProceeds from maturities, calls, and repayments
    
    
    8,326,348
    
    
    
    10,597,000Proceeds from sales
    
    
    666,696
    
    
    
    Purchases
    
    
    (22,997,891
    )
    
    
    (8,339,602
    )Securities held to maturityProceeds from maturities, calls and repayments
    
    
    2,087,000
    
    
    
    1,565,000Purchases
    
    
    
    
    
    
    Net change in loans
    
    
    (5,059,423
    )
    
    
    (9,083,786
    )Premises and equipment expenditures
    
    
    (146,621
    )
    
    
    (57,348
    )Net cash from investing activities
    
    
    (17,123,891
    )
    
    
    (5,318,736
    )Cash flows from financing activitiesNet change in deposits
    
    
    (9,490,970
    )
    
    
    (6,359,043
    )Net change in securities sold under repurchase agreements
    
    
    672,092
    
    
    
    (1,172,156
    )Net change in federal funds purchased
    
    
    11,100,000
    
    
    
    4,601,000Proceeds from FHLB borrowings
    
    
    10,000,000
    
    
    
    Principal payments on FHLB borrowings
    
    
    (291,362
    )
    
    
    (335,425
    )Purchase of treasury shares
    
    
    
    
    
    
    (18,035
    )Cash dividends paid
    
    
    (317,322
    )
    
    
    (203,920
    )Net cash from financing activities
    
    
    11,672,438
    
    
    
    (3,487,579
    )Net change in cash and cash equivalents
    
    
    (5,537,252
    )
    
    
    (8,364,314
    )Cash and cash equivalents at beginning of period
    
    
    17,201,381
    
    
    
    22,564,696Cash and cash equivalents at end of period
    
    $
    11,664,129
    
    
    $
    14,200,382Supplemental disclosuresInterest paid
    
    $
    983,040
    
    
    $
    1,206,156Income taxes paid
    
    
    150,000
    
    
    
    
 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 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
balances and transactions 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
March 31, 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 March 31, 2004, are not necessarily indicative of the operating results
for the full year or any future interim period. 7.




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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. (the Company) at March 31, 2004, compared to December 31, 2003,
and the consolidated results of operations for the quarterly period ending
March 31, 2004 compared to the same period 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
footnotes. 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 $318.3 million at March 31, 2004, compared to $306.2 million
at December 31, 2003, representing an increase of $12.1 million or 3.9%. Cash
and cash equivalents decreased $5.5 million, or 32.2%, during the quarter,
including a $4.7 million decrease in federal funds sold. Total securities
increased approximately $12.0 million, or 17.8 %, during the quarter. Since
one of the primary functions of the securities portfolio is to provide a source
of liquidity, it is structured such that securities maturities and cash flows
satisfy the Companys liquidity needs and asset-liability management
requirements. The decrease in cash and cash equivalents, as well as the increase in federal
funds purchased, were used to fund cash outflows for deposit withdrawals, as
deposits decreased $9.5 million, or 3.8%, during the quarter. The Bank has
historically experienced an outflow of deposit funds during the first quarter
of the year, partially due to the slowdown in tourism. The Bank had $11.1
million of federal funds purchased at March 31, 2004 (none at December 31,
2003). Federal 8.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS funds purchased were used as a source to fund loan growth, as well as run off
of certain interest-bearing deposits. The increase in the investment portfolio was a result of a $10 million leverage
program with the Company purchasing U.S. Agencies funded by Federal Home Loan
Bank borrowings in March 2004. Management has determined any offset on
interest rate risk as a result of the mismatch of maturities will be minimal
and is compensated for in the current spread. Net loans increased $5.0 million, or 2.4% from December 31, 2003, to $215.8
million at March 31, 2004. The loan growth in the first quarter of 2004 was
primarily due to a $3.2 million increase in commercial and commercial real
estate loans and a $2.3 million increase in mortgage and home equity loans.
The allowance for loan losses amounted to $2.5 million, or 1.12% of total loans, at March 31, 2004, compared
to $2.5 million, or 1.15% of total loans at December 31, 2003. The components
of the change in the allowance for loan loss during the quarter ended March 31,
2004, included a loan loss provision of $94,000 and net loan charge-offs of
$100,000. Loans past due more than 90 days and still accruing interest and
loans placed on nonaccrual status, aggregated approximately $728,000, or 0.33%
of total loans at March 31, 2004, compared to $1.3 million, or 0.63% of loans
at December 31, 2003. At March 31, 2004, the ratio of net loans to deposits was 90.1%, compared to
84.7% at the end of 2003. The increase in this ratio is due to deposit
shrinkage normally experienced during the first quarter along with the loan
growth during the three months ended March 31, 2004. Total shareholders equity increased to $34.9 million, or 11.0% of total
assets, primarily due to year-to-date net income of $521,000, less the dividend
declared of $344,000. The Company and its subsidiary met all applicable
regulatory capital requirements at March 31, 2004. RESULTS OF OPERATIONS Net income for the quarter ending March 31, 2004, was $521,000, or $0.20 per
share, as compared to $598,000, or $0.23 per share during the same period in
2003, a decrease of $77,000, or 12.9%. The decrease was primarily due to a
$94,000 provision for loan loss for the first three months of 2004 compared to
a $71,000 credit for loan losses in the same period last year. Other changes
included a $37,000 (1.4%), decrease in net interest income, a $78,000 (3.0%)
decrease in non-interest expenses, and a $31,000 (6.7%) increase in
non-interest income. The increase in non-interest income was primarily a result
of a $26,000 gain on sale of securities in the first quarter of 2004. 9.




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CSB BANCORP, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS Interest income for the quarter ended March 31, 2004 was $3.7 million, a
decrease of $291,000, or 7.4%, over the same period last year. Interest and
fees on loans decreased $180,000, or 5.7%. Interest on taxable securities
decreased $21,000, or 7.3%, while interest on non-taxable securities decreased
$83,000, or 17.2%. The average balance of non-taxable securities decreased
$6.0 million during the first quarter of 2004. Other interest income decreased
$6,000, or 67.9%, due to liquidation of federal funds sold to fund loan
portfolio growth and deposit shrinkage. Interest expense decreased $254,000, or 20.7%, to $972,000 for the quarter
ended March 31, 2004, compared to $1.2 million for the quarter ended March 31,
2003. Interest expense on deposits decreased $193,000, or 18.7%, from the same
period as last year. This decrease was primarily due to a decrease of 40 basis
points in the average cost of deposits. A provision for loan losses of $94,000 was recorded during the first quarter of
2004 compared to a credit of $71,000 in the first quarter of the prior year.
The provision is determined based on managements analysis of the Allowance for
Loan Losses, including, but not limited to, loan growth, delinquencies, trends,
and classified loans. The credit in 2003 was due to the payoff of classified
assets. Non-interest expenses decreased $78,000, or 3.0%, for the three months ended
March 31, 2004, compared to the same period in 2003. Salaries and employee
benefits decreased $50,000, or 3.8%; occupancy expense decreased $6,000, or
3.8%; professional and director fees increased $4,000, or 1.9%; and other
expenses decreased $20,000, or 2.9%. The provision for income taxes was $65,000
during the first quarter of 2004, as compared to a provision of $81,000 for the
first quarter of 2003. 10.




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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 March 31, 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 limits. 
 ITEM 4  CONTROLS AND PROCEDURES EVALUATION OF 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 Rules 13a-15 and 15d-15 of
the Securities Exchange Act of 1934 (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 such 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 significant changes during the period covered by this Quarterly
Report on Form 10-Q in our internal control over financial reporting (as
defined in Rules 13a-15 and 15d-15 of the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting. 11.




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CSB BANCORP, INC.
FORM 10-Q
Quarter ended March 31, 2004 
  
 Item 1   Legal Proceedings: There are no matters required to be reported under this item. 
 Item 2   Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities: 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. 
 Item 6   Exhibits and Reports on Form 8-K: (a) Exhibits: ExhibitNumber
    
    Description of Document3.1
    
    Amended Articles of Incorporation of CSB
Bancorp, Inc. (incorporated by reference to Registrants
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 Registrants 1998 Form 10-K)3.2
    
    Code of Regulations of CSB Bancorp, Inc.
(incorporated by reference to Registrants Form 10-SB)11
    
    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 Certification
 12.




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CSB BANCORP, INC. ExhibitNumber
    
    Description of Document32.2
    
    Section 1350 CFOs Certification(b)
    
    Reports on Form 8-K:Form 8-K dated January 23, 2004, containing a press release announcing
the Companys unaudited financial results for the year ended December
31, 2003.Form 8-K dated January 27, 2004, containing a quarterly report to
shareholders that included financial statements for the period ended
December 31, 2003.Form 8-K dated March 26, 2004 containing a press release announcing the
quarterly dividend.
 13.




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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. CSB BANCORP, INC.(Registrant)Date: May 14, 2004
    
    /s/ John J. LimbertJohn J. LimbertPresidentChief Executive OfficerDate: May 14, 2004
    
    /s/ A. Lee MillerA. Lee MillerSenior Vice PresidentChief Financial Officer
 14.




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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.)
    
    
    1631.1
    
    Rule 13a-14(a)/15d-14(a) CEOs Certification
    
    
    1731.2
    
    Rule 13a-14(a)/15d-14(a) CFOs Certification
    
    
    1932.1
    
    Section 1350 CEOs Certification
    
    
    2132.2
    
    Section 1350 CFOs Certification
    
    
    22
 15.