SECURITY AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB



(Mark One)
(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended March 31, 1997

                                       OR

     (   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

            For the transition period from _____________ to ____________________

                         Commission File Number: 0-26650

                            CSB FINANCIAL GROUP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            United States                                      37-1336338
---------------------------------                    ---------------------------
  (State or other jurisdiction                       (I.R.S. Employer ID Number)
of incorporation or organization)

  200 South Poplar, Centralia, Illinois                          62801
----------------------------------------                      ----------
(Address of principal executive offices)                      (Zip code)


        Registrant's telephone number, including area code (618) 532-1918


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 [ X ]  NO [   ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

         Class                           Shares  outstanding  at April  14, 1997
-----------------------------            ---------------------------------------
Common Stock, Par Value $0.01                            941,850
<PAGE>



                                    CONTENTS

PART I.  FINANCIAL INFORMATION

Item I.  Financial Statements

         - Consolidated Statements of Financial Condition           

         - Consolidated Statements of Income                       

         - Consolidated Statements of Cash Flows                    

         - Notes to Consolidated Financial Statements              

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                   

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                    

Item 2.  Changes in Securities                                  

Item 3.  Defaults Upon Senior Securities                          

Item 4.  Submission of Matters to a Vote of Security Holders     

Item 5.  Other Information                                

Item 6.  Exhibits and Reports on Form 8-K              

SIGNATURES                                            





<PAGE>


CSB FINANCIAL GROUP, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
March 31, 1997 and September 30, 1996
(in thousands, except share data)
<TABLE>
                                                                  
ASSETS                                                          March 31, September 30,
                                                                  1997        1996
---------------------------------------------------------------------------------------
                                                               (Unaudited)  (Audited)
<S>                                                             <C>        <C>   
Cash and due from banks .......................................  $    717    $   598
Interest-bearing deposits .....................................     2,183      4,168
                                                                 -------------------
              Cash and cash equivalents .......................     2,900      4,766
Securities held to maturity ...................................       - -      1,987
Securities available for sale .................................    15,698     14,044
Nonmarketable equity securities ...............................       168        165
Securities purchased under agreements to resell ...............       - -        300
Loans .........................................................    27,551     27,048
Allowance for loan losses .....................................      (147)      (117)
                                                                  ------------------
              Loans, net ......................................    27,404     26,931
Premises and equipment ........................................       606        594
Accrued interest receivable ...................................       320        331
Intangible assets .............................................       691        722
Other assets ..................................................       209        176
                                                                  ------------------
              Total assets ....................................   $47,996    $50,016
                                                                  ==================


LIABILITIES:
   Deposits:
      Demand ..................................................   $ 8,573    $ 8,754
      Savings .................................................     3,708      3,779
      Time deposits > $100,000 ................................     1,069      1,889
      Other time deposits .....................................    22,383     22,432
                                                                  ------------------
              Total deposits ..................................    35,733     36,854
                                                                  ------------------
   Other liabilities ..........................................        53        297
   Deferred income taxes ......................................       177         81
                                                                  ------------------
              Total liabilities ...............................    35,963     37,232
                                                                  ------------------

COMMITMENTS, CONTINGENCIES AND CREDIT RISK

STOCKHOLDERS' EQUITY
   Preferred stock, $0.01 par value; 100,000 shares authorized;
      none issued and outstanding                                     - -        - -
   Common stock, $0.01 par value; authorized 2,000,000 shares;
      1,035,000 shares issued .................................        10         10
   Paid-in capital ............................................     8,133      7,586
   Retained earnings ..........................................     5,959      5,794
   Unrealized (loss) on securities available for sale, net  of
      income taxes ............................................       (24)       (24)
   Unearned employee stock ownership plan shares ..............      (552)      (582)
   Management recognition plan ................................      (527)       - -
                                                                  ------------------
                                                                   12,999     12,784
   Less cost of treasury stock; 1997 93,150 shares ............      (966)       - -
                                                                  ------------------
              Total stockholders' equity ......................    12,033     12,784
                                                                  ------------------
              Total liabilities and stockholders' equity ......   $47,996    $50,016
                                                                  ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>


CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended March 31, 1997 and 1996
(Unaudited, in thousands, except per share data)
<TABLE>

                                                                    Six Months Ended
                                                                        March 31,
                                                                   ------------------
                                                                     1997      1996
                                                                   ------------------
<S>                                                                <C>       <C>  
Interest income:
   Loans and fees on loans ......................................  $  1,076  $    909
   Securities ...................................................       542       519
                                                                   ------------------
              Total interest income .............................     1,618     1,428
                                                                   ------------------

Interest expense on deposits ....................................       812       639
                                                                   ------------------

              Net interest income ...............................       806       789
Provision for loan losses .......................................        45        35
                                                                   ------------------

              Net interest income after provision for loan losses       761       754
                                                                   ------------------

Noninterest income:
   Service charges on deposits ..................................        38        22
   Gain on sale of securities ...................................        39         2
   Other ........................................................        16        10
                                                                   ------------------
              Total noninterest income ..........................        93        34
                                                                   ------------------

Noninterest expense:
   Compensation and employee benefits ...........................       310       246
   Occupancy and equipment ......................................        43        31
   Data processing ..............................................        49        38
   Audit, legal and other professional ..........................        67        61
   SAIF deposit insurance .......................................        10        32
   Advertising ..................................................        12        13
   Other ........................................................       172        62
                                                                   ------------------
              Total noninterest expense .........................       663       483
                                                                   ------------------
              Income before income taxes ........................       191       305
Income taxes ....................................................        26       107
                                                                   ------------------
              Net income ........................................  $    165  $    198
                                                                   ==================

Earnings per share ..............................................  $   0.18  $   0.21
                                                                   ==================

Weighted average shares outstanding .............................   919,202   956,555
                                                                   ==================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>


CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1997 and 1996
(Unaudited, in thousands, except per share data)
<TABLE>

                                                                     Three Months Ended
                                                                         March 31,
                                                                    --------------------
                                                                      1997        1996
                                                                    --------------------
<S>                                                                 <C>         <C>   
Interest income:
   Loans and fees on loans ......................................   $    541    $    507
   Securities ...................................................        180         162
                                                                    --------------------
              Total interest income .............................        721         669
                                                                    --------------------

Interest expense on deposits ....................................        398         318
                                                                    --------------------

              Net interest income ...............................        323         351
Provision for loan losses .......................................         23          12
                                                                    --------------------

              Net interest income after provision for loan losses        300         339
                                                                    --------------------

Noninterest income:
   Service charges on deposits ..................................         19          11
   Other ........................................................          9           7
                                                                    --------------------
              Total noninterest income ..........................         28          18
                                                                    --------------------

Noninterest expense:
   Compensation and employee benefits ...........................        164         106
   Occupancy and equipment ......................................         24          16
   Data processing ..............................................         23          12
   Audit, legal and other professional ..........................         29          25
   SAIF deposit insurance .......................................        (11)         16
   Advertising ..................................................          7           7
   Other ........................................................         81          49
                                                                    --------------------
              Total noninterest expense .........................        317         231
                                                                    --------------------
              Income before income taxes ........................         11         126
Income taxes ....................................................        (46)         46
                                                                    --------------------
              Net income ........................................   $     57    $     80
                                                                    ====================

Earnings per share ..............................................   $   0.06    $   0.09
                                                                    ====================

Weighted average shares outstanding .............................    899,936     955,191
                                                                    ====================
</TABLE>
<PAGE>


CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 1997 and 1996
(Unaudited, in thousands)

<TABLE>
                                                                         Six Months Ended
                                                                             March 31,
                                                                       --------------------
                                                                         1997        1996
                                                                       --------------------
<S>                                                                   <C>          <C>  
Cash Flows from Operating Activities:
   Net income ......................................................   $    165    $    198
   Adjustments to reconcile net income to net cash provided
      by operating activities:
      Provision for loan losses ....................................         45          35
      Provision for depreciation ...................................         16          10
      Amortization of intangible assets ............................         31        --
      Employee stock ownership plan compensation expense ...........         39          60
      Management recognition plan compensation expense .............         11        --
      Deferred income taxes ........................................         96        --
      Gain on sale of securities ...................................        (39)         (2)
      Amortization and accretion on securities .....................         41           9
      Change in assets and liabilities:
        (Increase) decrease in accrued interest receivable .........         11         (47)
        (Increase) decrease in other assets ........................        (33)        626
        (Decrease) in other liabilities ............................       (244)       (135)
                                                                      ---------------------
              Net cash provided by operating activities ............        139         754
                                                                      ---------------------

Cash Flows from Investing Activities:
   Securities available for sale:
      Purchases ....................................................     (1,452)     (2,246)
      Proceeds from sales ..........................................        369       1,000
      Proceeds from maturities and paydowns ........................      1,414          --
   Securities held to maturity:
      Purchases ....................................................         --        (100)
   Nonmarketable equity securities:
      Purchases of nonmarketable equity security ...................         (3)         --
   (Increase) decrease in securities purchased under
      agreements to resell .........................................        300        (300)
   (Increase) in loans receivable ..................................       (518)     (2,274)
   Purchase of premises and equipment ..............................        (28)         (7)
                                                                      ---------------------
              Net cash provided by (used in) investing activities ..         82      (3,927)
                                                                      ---------------------


 Cash Flows from Financing Activities:
   (Decrease) in deposits ..........................................  $  (1,121)   $(10,415)
   Proceeds from sale of common stock, net of conversion expenses ..         --       6,920
   Purchase of treasury stock ......................................       (966)         --
                                                                      ---------------------
              Net cash (used in) financing activities ..............     (2,087)     (3,495)

              (Decrease) in cash and cash equivalents ..............     (1,866)     (6,668)

Cash and cash equivalents at beginning of period ...................      4,766      10,906
                                                                      ---------------------

Cash and cash equivalents at end of period .........................  $   2,900     $ 4,238
                                                                      =====================

Supplemental Disclosures:
      Cash paid for:
        Interest on deposits .......................................  $     812     $   639
        Income taxes ...............................................  $      47     $    57

      Change in gross unrealized gain/loss on securities available
        for sale ...................................................  $      --     $   (37)

      Change in deferred taxes on unrealized gain/loss on securities
        available for sale .........................................  $      --     $    14

      Transfer of securities from held to maturity to available for
        sale .......................................................  $   1,987     $ 7,983
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>



CSB FINANCIAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 1.  Background Information

On October 5, 1995, CSB Financial  Group,  Inc. (the "Company")  acquired all of
the  outstanding  shares of Centralia  Savings Bank (the "Bank") upon the Bank's
conversion  from a state  chartered  mutual  savings  bank to a state  chartered
capital stock savings bank.  Centralia Savings Bank is located in Masson County,
Illinois.  The Company  purchased 100% of the  outstanding  capital stock of the
Bank using 50% of the net proceeds  from the Company's  initial  stock  offering
which was  completed on October 5, 1995.  The Company sold  1,035,000  shares of
$0.01 par value common stock at a price of $8 per share, including 82,800 shares
purchased by the Bank's Employee Stock Ownership Plan ("ESOP").  The ESOP shares
were acquired by the Bank with  proceeds from a Company loan totaling  $662,400.
The gross  proceeds  of the  offering  were  $8,280,000.  After  reducing  gross
proceeds for conversion costs of $696,000, net proceeds totaled $7,584,000.  The
Company's stock trades on the NASDAQ Small Caps market under the symbol "CSBF".

The  acquisition of the Bank by the Company is being accounted for as a "pooling
of interests" under generally accepted accounting principles. The application of
the pooling of interests method records the assets and liabilities of the merged
entities on a historical cost basis with no goodwill or other intangible  assets
being recorded.


Note 2.  Basis of Presentation

The accompanying  consolidated  financial statements include the accounts of CSB
Financial Group, Inc., its wholly owned subsidiary,  Centralia Savings Bank, the
Bank, and the Bank's  wholly-owned  subsidiary,  Centralia  SLA.  Centralia SLA,
Inc.'s  principal  business  activity  is to  provide  insurance  services.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  The accompanying consolidated financial statements are unaudited
and should be read in conjunction with the consolidated financial statements and
notes  thereto  included in the Bank's annual report on Form 10-KSB for the year
ended  September 30, 1996. The  accompanying  unaudited  consolidated  financial
statements  have been  prepared in  accordance  with the  instructions  for Form
10-QSB and,  therefore,  do not include information or footnotes necessary for a
complete  presentation of financial condition,  results of operations,  and cash
flows in  conformity  with  generally  accepted  accounting  principles.  In the
opinion of  management  of the Company,  the  unaudited  consolidated  financial
statements  reflect all  adjustments  necessary to present  fairly the financial
position  of the Company at March 31,  1997 the  results of  operations  for the
three months ended March 31, 1997 and 1996,  and the results of  operations  and
cash flows for the six months ended March 31, 1997 and 1996. All  adjustments to
the financial statements were normal and recurring in nature.

Operating  results for the three  months and six months ended March 31, 1997 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending September 30, 1997.


Note 3.  Earnings Per Share

Earnings per share are  determined  by dividing net income for the period by the
weighted  average number of shares of common stock and common stock  equivalents
outstanding.  Common stock equivalents  assume exercise of stock options and use
of proceeds  to purchase  treasury  stock at the  average  market  price for the
period.  Shares  awarded under the  management  recognition  plan are considered
outstanding as common stock equivalents at the issuance date. Unallocated shares
of the ESOP are not considered outstanding.
<PAGE>



Note 4.  Employee Stock Ownership Plan

In connection  with the conversion to the stock form of ownership,  the Board of
Directors  established an employee stock ownership plan (ESOP) for the exclusive
benefit of participating employees. Employees age 21 or older who have completed
one year of service are eligible to participate. Upon the issuance of the common
stock,  the ESOP  acquired  82,800 shares of $0.01 par value common stock at the
subscription  price of $8 per share.  The Bank makes  contributions  to the ESOP
equal to the ESOP's  debt  service  less  dividends  received  by the ESOP.  All
dividends  received  by the ESOP are used to pay debt  service.  The ESOP shares
were  pledged as  collateral  for its debt.  As the debt is  repaid,  shares are
released from collateral and allocated to active  employees,  based on the ratio
of debt service  paid to the total  original  principal  plus the interest to be
paid.  The Bank accounts for its ESOP in accordance  with  Statement of Position
93-6.  As shares are released  from  collateral,  the Bank reports  compensation
expense equal to the current  market price of the shares,  and the shares become
outstanding for earnings-per-share  calculations.  ESOP compensation expense was
$37,000 for the six months  ended March 31, 1997.  As of March 31,  1997,  there
were 69,034 unallocated ESOP shares with a fair value of $785,262.


Note 5.  Stock Option Plan

At the annual  stockholder's  meeting on May 22,  1996,  the Stock  Option  Plan
("SOP")  was  approved.  The board  has  reserved  an amount of stock  equal to,
103,500  shares,  or 10% of the common stock sold in the conversion for issuance
under  the SOP.  The  options  will be  granted  by a  Committee,  comprised  of
directors,  to key employees and directors based on their services. The exercise
price of options  granted must be at least equal to the fair market value of the
common stock on the date the option is granted.  The options  granted  under the
plan become  exercisable  at a rate of 20 percent per year  commencing  one year
after the grant date and 20 percent on each  anniversary  date for the following
four years. As of March 31, 1997, 51,750 options had been granted.

The Board  adopted  the 1997  Nonqualified  Stock  Option  Plan (SOP)  effective
January 9, 1997.  The Board has  reserved up to 103,500  shares of common  stock
under  the SOP.  The  options  will be  granted  by a  committee,  comprised  of
directors,  to key employees and directors based on their services. The exercise
price of the option  granted  must be at least equal to the fair market value of
the common stock on the date the option is granted. The terms of the options and
the  exercise  schedule  are  at the  discretion  of the  committee  and  option
agreements  need not be  identical.  As of March 31,  1997,  no options had been
granted.


Note 6.  Management Recognition Plan

The Management  Recognition  Plan ("MRP") was approved with an effective date of
October  10,  1996 and  amended on January 9, 1997.  The MRP intends to purchase
with funds  provided  by the  Company,  whether  in the open  market or from the
Holding Company in the form of newly issued shares,  62,100 shares, or 6% of the
aggregate  number of shares of Common Stock issued and sold in  connection  with
the Conversion for issuance to officers, directors, and employees of the Holding
Company.  Directors,  officers,  and  employees  become  vested in the shares of
common stock awarded to them under the MRP at a rate of 20% per year, commencing
one year after the grant date, and 20% on the  anniversary  date thereof for the
following four years.  As of March 31, 1997,  20,700 shares have been awarded to
officers, directors, and employees. MRP compensation expense was $11,000 for the
six months ended March 31,  1997.  The bank  accounts for its MRP in  accordance
with Accounting Principle Board Statement 25. Compensation expense is recognized
over the vesting period for shares awarded under the plan.


Note 7.  New Accounting Standards

Statement of Financial  Accounting  Standard No. 128,  "Earnings per Share" (FAS
128), was issued in February 1997 by the Financial  Accounting  Standards Board.
The Statement replaces the presentation of primary earnings per share (EPS) with
a  presentation  of basic EPS. It also requires dual  presentation  of basic and
diluted  EPS on the face of the  income  statement  for  entities  with  complex
capital  structures.  Basic EPS is  computed as net income  available  to common
stockholders  divided by the weighted  average  common shares  outstanding.  The
Statement is effective for financial  statements issued for periods ending after
December  15, 1997.  The Company does not believe the adoption of the  Statement
will have a material impact on the consolidated financial statements.
<PAGE>



CSB FINANCIAL GROUP, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS



General

The  principal  assets of the Company are its  investment  in the Bank's  common
stock  and the net  proceeds  from the  sale of the  Company's  common  stock in
connection  with the  conversion.  The  Company's  principal  revenue  source is
interest and dividends on its  investments.  The principal  business of the Bank
consists of attracting deposits from the general public and using these funds to
originate  mortgage  loans  secured by one- to  four-family  residences  located
primarily in  Centralia,  Illinois and  surrounding  areas.  The Bank engages in
various forms of consumer and commercial  lending and invests in mortgage-backed
U.S.  Government and federal agency  securities,  local  municipal  issues,  and
interest-bearing deposits. The Bank's profitability depends primarily on its net
interest income, which is the difference between the interest income it earns on
its loans,  mortgage-backed  and  investment  portfolio,  and its cost of funds,
which  consists  mainly of interest  paid on deposits.  Net  interest  income is
affected by the relative amounts of  interest-earning  assets,  interest-bearing
liabilities, and the interest rates earned or paid on these balances.

The Bank's profitability is also affected by the level of noninterest income and
expense.  Noninterest  income consists primarily of late charges and other fees.
Noninterest  expense  consists  of  salaries  and  benefits,  occupancy  related
expenses,  deposit  insurance  premiums  paid to the SAIF,  and other  operating
expenses.

The  operations of the Bank are  significantly  influenced  by general  economic
conditions,  related  monetary,  and fiscal policies of financial  institutions'
regulatory  agencies.  Deposit  flows  and the cost of funds are  influenced  by
interest  rates on competing  investments  and general market rates of interest.
Lending  activities  are  affected by the demand for  financing  real estate and
other types of loans,  which in turn is affected by the interest  rates at which
such  financing may be offered and other factors  affecting  loan demand and the
availability of funds.

Business Strategy

The  business  strategy  is to operate  as a well  capitalized,  profitable  and
independent  community  savings bank  dedicated to financing  home ownership and
consumer  needs in its  primary  market  area.  The Bank  has  implemented  this
strategy by: (1) closely monitoring the needs of customers and providing quality
service; (2) emphasizing  consumer-oriented  banking by originating construction
and  permanent  loans on  residential  and  commercial  real estate and consumer
loans, and by offering other financial services and products;  (3) improving and
maintaining high asset quality;  (4) maintaining capital in excess of regulatory
requirements; and (5) managing interest rate risk by emphasizing the origination
of loans with  adjustable  rates or shorter terms and  investments in short-term
and liquid  investments.  The Bank has adopted  various new business  strategies
intended to increase its presence in its primary market area, thereby increasing
its lending activities and sources of income.

Liquidity and Capital Resources

The  Bank's  primary  sources  of funds  consists  of  deposits,  repayment  and
prepayment of loans,  maturities of investments and  interest-bearing  deposits.
Scheduled  repayments of loans and mortgage-backed  securities and maturities of
investment  securities are  predictable,  influenced by general  interest rates,
economic  conditions,  and  competition.  The Bank uses its liquidity  resources
principally  to fund  existing  and future loan  commitments,  to fund  maturing
certificates  of deposit  and  demand  deposit  withdrawals,  to invest in other
interest-earning  assets, to maintain liquidity, and to meet operating expenses.
Management  believes  that loan  repayments  and other  sources of funds will be
adequate to meet the Bank's liquidity needs for the immediate future.

A portion of the Bank's liquidity  consists of cash and cash equivalents,  which
include investments in highly liquid,  short-term  deposits.  The level of these
assets is dependent on the Bank's  operating,  investing,  lending and financing
activities  during any given  period.  At March 31, 1997 and September 30, 1996,
cash and cash equivalents  totaled $2.9 million and $4.8 million,  respectively.
The decrease in cash and cash  equivalents  is due to the repurchase of treasury
shares and the maturity of the Bank's time deposits.

Liquidity  management  is  both a  daily  and  long-term  function  of  business
management.  If the Bank  requires  funds  beyond its ability to  generate  them
internally,  the Bank may borrow  additional  funds from the FHLB.  At March 31,
1997, the Bank had no outstanding advances from the FHLB.

At March 31, 1997, the Bank had no outstanding commitments to originate loans.
<PAGE>



Regulatory Capital

Federally insured savings associations such as the Bank are required to maintain
a minimum level of regulatory  capital.  The Corporation and its subsidiary have
capital  ratios which  substantially  exceed all  regulatory  requirements.  The
Corporation's capital ratios are shown below.
<TABLE>

                                                     March 31, September 30,    Minimum
                                                       1997        1996       Requirements
                                                     -------------------------------------
<S>                                                  <C>       <C>            <C>
Total capital to risk weighted assets ........         55.70%      60.30%        8.0%
Tier I capital to risk weighted assets .......         55.00%      56.40%        4.0%
Tier I capital to average assets .............         25.61%      27.72%        4.0%
</TABLE>

Financial Condition

Total  assets  decreased  $2,020,000  to  $47,996,000  at March  31,  1997  from
$50,016,000  at  September  30,  1996.  Cash and cash  equivalents  comprise the
majority  of  the  decrease  with  a  decrease  of  $1,866,000.  Cash  and  cash
equivalents  decreased  during the period due to the purchase of treasury  stock
and the maturity of time deposits.

The increase in loans of $503,000  since  September 30, 1996 was in the mortgage
and  commercial  real  estate  markets.  This  growth  in loans  is a result  of
continued expansion into the commercial loan market started in early 1995.

The decrease in securities and securities  purchased under  agreements to resell
of $630,000 since September 30, 1996 was used to fund the increased loan demand.

Results of Operations

Three months ended March 31, 1997 compared to three months ended March 31, 1996

Net Income - The  Company's net income for the three months ended March 31, 1997
was $59,000  compared to $80,000 for the three months ended March 31, 1996.  The
decrease in net income resulted primarily from an increase in compensation costs
associated with the Employee Stock Option Plan, the Management Recognition Plan,
and the addition of personnel due to the  acquisition  of the Carlyle  branch in
September 1996.

Interest Income - Interest income increased for the three months ended March 31,
1997 by $52,000 to $721,000  from  $669,000 for the three months ended March 31,
1996.  This  increase is a result of the increase in the volume of loans held by
the Bank due to continued focus on commercial and mortgage loan growth.

Interest Expense - Interest  expense  increased for the three months ended March
31, 1997 by $80,000 to $398,000  from  $318,000 for the three months ended March
31, 1996. This increase results from an increase in the cost of funds associated
with time deposits purchased in the Carlyle branch acquisition.

Net Interest  Income - Net interest  income for the three months ended March 31,
1997  decreased by $28,000 to $323,000  from $351,000 for the three months ended
March 31, 1996. The decrease is attributable to an increase in the rates paid on
certificates of deposit associated with the Carlyle branch acquisition  combined
with the sale of higher interest earning investments in the first quarter.

The increase in noninterest expense of $84,000 is attributable to an increase of
$56,000 in compensation  and employee  benefits  expense related to the employee
stock option plan, Management Recognition Plan, and to the addition of personnel
due to the  acquisition of the Carlyle branch in September  1996.  Additionally,
the increase in noninterest  expense is attributable to amortization  expense of
intangible assets related to the Carlyle acquisition totaling $16,000.

The  Company   continues  to  fund  the   allowance  for  loan  losses  as  they
conservatively monitor their portfolio. The provision for the three months ended
March 31, 1997 was $23,000  compared to $12,000 for the three months ended March
31, 1996.

Six months ended March 31, 1997 compared to six months ended March 31, 1996

Net  Interest  Income - Net  interest  income for the six months ended March 31,
1997 was $806,000  compared to $789,000 for the six months ended March 31, 1996.
The increase is  attributable  to an  increased  loan base  associated  with the
Carlyle  branch  acquisition  on September 13, 1996.  The decrease for the three
months ended March 31, 1997 as compared to the three months ended March 31, 1996
is due to the sale of  higher  interest  earning  assets  in  order to  purchase
treasury stock and provide for repayment of matured time deposits.
<PAGE>



Interest  Income  -  Interest  income  increased  $190,000  from  $1,428,000  to
$1,618,000 or by 13.3%, during the six months of 1997 compared to the respective
period of 1996. This increase resulted from an increase in loan portfolio due to
the Carlyle branch  acquisition  combined with continued mortgage and commercial
loan growth.

Interest Expense - Interest expense  increased  $173,000 or 27%, to $812,000 for
the six months  ended March 31, 1997 from  $639,000 for the same period in 1996.
The  increase  was  primarily  attributable  to the increase in the deposit base
associated with the Carlyle acquisition in September 1996.

Net Income -The Company's net income for the six months ended March 31, 1997 was
$167,000  compared to $198,000  for the six months  ended  March 31,  1996.  The
decrease  is a result of  increased  compensation  expense  associated  with the
Employee  Stock Option Plan,  Management  Recognition  Plan,  and the additional
personnel at the Carlyle branch.  Amortization  of intangible  assets related to
the Carlyle branch acquisition also contributed to the decrease in net income.

Provision for Loan Losses - The allowance for loan losses is established through
a  provision  for loan  losses  based  on  management's  evaluation  of the risk
inherent  in its  loan  portfolio  and  the  general  economy.  Such  evaluation
considers  numerous  factors  including,   general  economic  conditions,   loan
portfolio  composition,  prior loss experience,  the estimated fair value of the
underlying  collateral  and other factors that warrant  recognition in providing
for an adequate loan loss allowance.  During the six months ended March 31, 1997
and 1996, the provision for loan losses was $45,000 and $35,000, respectively.

Allowance  for Loan Losses - The  allowance for loan losses was $147,000 or .53%
of loans  receivable at March 31, 1997,  compared to $117,000,  or .43% of loans
receivable at September 30, 1996. The level of nonperforming  loans was 1.29% of
total loans at March 31, 1997 compared to .93% as of September  30, 1996.  Based
on current  reserve levels in relation to total loans  receivable and classified
assets and the diligent  effort put forth by management to address  problem loan
situations  in recent  years,  management  believes its  reserves are  currently
adequate.

Net  charge-offs  amounted  to $7,000  during  the  second  quarter  of 1997 and
$15,000  during the first six months of 1997,  compared to net  charge-offs  of
$33,000 during the second quarter of 1996 and for the first six months of 1996.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes that the  collectibility of the principal is unlikely.  The
allowance  is an amount  that  management  believes  will be  adequate to absorb
losses on existing loans that may become  uncollectible,  based on evaluation of
the collectibility of loans and prior loss experience. The evaluation also takes
into  consideration such factors as changes in the nature and volume of the loan
portfolio,  overall  portfolio  quality,  review of specific  problem  loans and
current economic conditions that may affect the borrowers' ability to pay. While
management uses the best  information  available to make its evaluation,  future
adjustments to the allowance may be necessary if there are  significant  changes
in economic conditions. In addition, regulatory agencies, as an integral part of
their  examination  process,  periodically  review the Bank's allowance for loan
losses,  and may require the Bank to make  additions to the  allowance  based on
their  judgment  about  information  available  to  them at the  time  of  their
examinations.

Loans are considered  impaired when, based on current information and events, it
is  probable  that the Bank will not be able to collect  all  amounts  due.  The
portion of the allowance for loan losses  applicable to impaired  loans has been
computed  based on the  present  value of the  estimated  future  cash  flows of
interest and principal  discounted at the loan's  effective  interest rate or on
the fair value of the  collateral  for collateral  dependent  loans.  The entire
change  in  present  value  of  expected  cash  flows  of  impaired  loans or of
collateral  value is  reported  as bad debt  expense in the same manner in which
impairment  initially was recognized or as a reduction in the amount of bad debt
expense that otherwise would be reported. As of March 31, 1997 and September 30,
1996, management had not identified any loans as impaired.

The Bank's  effective  tax rate for the six months ended March 31, 1997 and 1996
was approximately 13.5% and 35.1%, respectively.
<PAGE>



Nonperforming Assets

At March 31, 1997, the Bank had $356,000, of nonperforming assets, .74% of total
assets.  On September 30, 1996, the Bank had $252,000 of  nonperforming  assets,
 .50% of total assets.

Impact on Inflation and Changing Prices

The  unaudited  consolidated  financial  statements  and related data  presented
herein have been  prepared in  accordance  with  generally  accepted  accounting
principles,  which require the measurement of financial  position and results of
operations in terms of historical  dollars  without  considering  changes in the
relative  purchasing power of money over time because of inflation.  Unlike most
industrial companies, virtually all of the assets and liabilities of the Company
are  monetary in nature.  As a result,  interest  rates have a more  significant
impact on the  Company's  performance  than the  effects  of  general  levels of
inflation.  Interest rates do not  necessarily  move in the same direction or in
the same magnitude as the prices of goods and services.
<PAGE>




                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         None.

Item 2.  Changes in Securities

         None.

Item 3.  Defaults Upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8K

         Exhibits:

         None.

         Reports on Form 8K:

         None.




<PAGE>


                                   SIGNATURES


Pursuant  to the  requirement  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 Financial Group, Inc.



Date:   May 13, 1997                        /s/ K. Gary Reynolds
       ------------------------------       -----------------------------------
                                            K. Gary Reynolds
                                            Chief Executive Officer and Director



Date:   May 13, 1997                        /s/ Joanne Ticknor
       ------------------------------       ------------------------------------
                                            Joanne Ticknor
                                            Secretary and Treasurer