PN 713.00.01+YOUR LOCAL PARTNER130 YEARS STRONGExhibit 13CSB BANCORP, INC.2009ANNUAL
REPORTClient files were created with InDesign and are located
at:DESKTOP_O_Drive\Composition\BCL\BCL39078_BCL1\ORIGINAL




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YOUR LOCAL PARTNER130 YEARS STRONGCSB BANCORP, INC.Orrville High Street Banking Center Gnadenhutten
Banking Center New Philadelphia Banking Center North Canton Banking CenterOpened September
2009Joined CSB November 2008Joined CSB November 2008Joined CSB November 2008OUR VISIBLE COMMUNITY
PARTNERSHIPPartners in expansion. We certainly have a great history, but we have an even greater
vision for our future. Four additional banking centers in 11 months, a strong financial
performance, great community relationships, and a healthy on-going lending strategy all point
toward one positive future  yours and ours. And our plan for our partnership is to only grow
stronger.Supporting livestock auctionsSharing in practical ways in our communitiesInvesting in
educationTuscarawas County 4-H Auction55 Advantage Club food drive for food pantryWest Holmes
Financial Series




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YOUR LOCAL PARTNER130 YEARS STRONGCSB BANCORP, INC.2009ANNUAL REPORT2009 Financial Highlights
Highlights0. 4 2009 Letter to Shareholders Shareholders . 5Board of Directors 9 2009 Financial
Review10 Report on Managements Assessment of Internal Control over Financial Reporting.25 Report
of Independent Registered Public Accounting Firm 26 Consolidated Balance Sheets.27 Consolidated
Statements of Income. 28 Consolidated Statements of Shareholders Equity 29 Consolidated Statements
of Cash Flows.30 Summary of Significant Accounting Policies 32 Notes to Consolidated Financial
Statements 37 Officers of The Commercial & Savings Bank 56 Banking Center Information 57
Shareholder & General Inquiries58




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2009 FINANCIAL HIGHLIGHTS
 %FOR THE YEAR ENDED DECEMBER 31
    
    2009
    
    2008
    
    CHANGE(Dollars in thousands, except per share data)CONSOLIDATED RESULTSNet interest income
    
    $
    15,765
    
    
    $
    13,878
    
    
    
    14
    %Net interest income-fully taxable-equivalent (FTE) basis
    
    
    15,974
    
    
    
    14,009
    
    
    
    14Noninterest income
    
    
    3,215
    
    
    
    3,033
    
    
    
    6Provision for loan losses
    
    
    1,337
    
    
    
    333
    
    
    
    301Noninterest expense
    
    
    12,718
    
    
    
    11,311
    
    
    
    12Net income
    
    
    3,391
    
    
    
    3,537
    
    
    
    4AT YEAR-ENDLoans, net
    
    $
    309,423
    
    
    $
    312,897
    
    
    
    1
    %Assets
    
    
    450,666
    
    
    
    424,657
    
    
    
    6Deposits
    
    
    329,486
    
    
    
    305,453
    
    
    
    8Shareholders equity
    
    
    45,822
    
    
    
    43,468
    
    
    
    5Cash dividends declared
    
    
    0.72
    
    
    
    0.72
    
    
    
    0Book value
    
    
    16.76
    
    
    
    15.89
    
    
    
    5Tangible book value
    
    
    15.95
    
    
    
    15.17
    
    
    
    5Market price
    
    
    15.25
    
    
    
    15.00
    
    
    
    2Basic and diluted earnings per share
    
    
    1.24
    
    
    
    1.43
    
    
    
    13FINANCIAL PERFORMANCEReturn on average assets
    
    
    0.79
    %
    
    
    0.99
    %Return on average equity
    
    
    7.51
    
    
    
    9.23Net interest margin, FTE
    
    
    3.93
    
    
    
    4.13Efficiency ratio
    
    
    66.22
    
    
    
    66.17CAPITAL RATIOSRisk-based capital:Tier 1
    
    
    14.50
    %
    
    
    14.40
    %Total
    
    
    15.70
    
    
    
    15.50Leverage
    
    
    9.70
    
    
    
    10.40
 4




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2009 LETTER TO SHAREHOLDERS
 
 Paula J. Meiler
    
    Eddie L. Steiner
    
    Rick L. Ginther
    
    Paul D. GreigSenior Vice President,
    
    President,
    
    President,
    
    Senior Vice President,Chief Financial Officer
    
    Chief Executive Officer,
    
    Chief Executive Officer,
    
    Chief Operations/CSB Bancorp, Inc.
    
    The Commercial &
    
    Information OfficerSavings Bank
 Dear Fellow Shareholder
     5




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2009 LETTER TO SHAREHOLDERS
  
 The Economic Backdrop
     Financial Performance
   6




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2009 LETTER TO SHAREHOLDERS
  Credit Quality
   Expanding Market Penetration
 
   7




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2009 LETTER TO SHAREHOLDERS
  
 Positioned for Tomorrow
    (SIGNATURE)
    
    (SIGNATURE)Eddie L. Steiner
    
    John R. WaltmanPresident and
    
    Chairman,Chief Executive Officer
    
    Board of Directors
   8




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BOARD OF DIRECTORS
 
 LR, STANDINGJohn R. Waltman
    
    Eddie L. Steiner
    
    Jeffery A. Robb, Sr.
    
    J. Thomas Lang
    
    Daniel J. MillerAttorney, Of Counsel
    
    President,
    
    President,
    
    Veterinarian, Dairy Farmer,
    
    Retired Physician,Critchfield, Critchfield
    
    Chief Executive Officer,
    
    Robb Companies, Inc.
    
    Spring Hill Farms, Inc.
    
    East Holmes Family Care, Inc.& Johnston
    
    CSB Bancorp, Inc.Chairman of the Board,
    
    Chairman of the Board,CSB Bancorp, Inc.
    
    The Commercial & Savings BankLR, SEATEDRobert K. Baker
    
    
    
    Ronald E. HoltmanCo-owner and Controller,
    
    
    
    Attorney,Bakerwell, Inc.
    
    
    
    Logee, Hostetler, Stutzman & Lehman
 9




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2009 FINANCIAL REVIEW
 INTRODUCTION
     FORWARD-LOOKING STATEMENTS
  10




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2009 FINANCIAL REVIEW
 SELECTED FINANCIAL DATA
  2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands, except per share data)Statements of income:Total interest income
    
    $
    22,105
    
    
    $
    20,621
    
    
    $
    21,231
    
    
    $
    20,045
    
    
    $
    17,358Total interest expense
    
    
    6,340
    
    
    
    6,743
    
    
    
    7,905
    
    
    
    6,877
    
    
    
    4,812Net interest income
    
    
    15,765
    
    
    
    13,878
    
    
    
    13,326
    
    
    
    13,168
    
    
    
    12,546Provision for loan losses
    
    
    1,337
    
    
    
    333
    
    
    
    472
    
    
    
    302
    
    
    
    283Net interest income after
provision for loan losses
    
    
    14,428
    
    
    
    13,545
    
    
    
    12,854
    
    
    
    12,866
    
    
    
    12,263Noninterest income
    
    
    3,215
    
    
    
    3,033
    
    
    
    3,035
    
    
    
    2,592
    
    
    
    2,581Noninterest expenses
    
    
    12,718
    
    
    
    11,311
    
    
    
    10,701
    
    
    
    10,915
    
    
    
    10,803Income before income taxes
    
    
    4,925
    
    
    
    5,267
    
    
    
    5,188
    
    
    
    4,543
    
    
    
    4,041Income tax provision
    
    
    1,534
    
    
    
    1,730
    
    
    
    1,674
    
    
    
    1,433
    
    
    
    1,168Net income
    
    $
    3,391
    
    
    $
    3,537
    
    
    $
    3,514
    
    
    $
    3,110
    
    
    $
    2,873Per share of common stock:Basic income per share
    
    $
    1.24
    
    
    $
    1.43
    
    
    $
    1.42
    
    
    $
    1.23
    
    
    $
    1.09Diluted income per share
    
    
    1.24
    
    
    
    1.43
    
    
    
    1.42
    
    
    
    1.23
    
    
    
    1.09Dividends
    
    
    0.72
    
    
    
    0.72
    
    
    
    0.72
    
    
    
    0.64
    
    
    
    0.56Book value
    
    
    16.76
    
    
    
    15.89
    
    
    
    14.82
    
    
    
    14.03
    
    
    
    13.64Average basic common shares outstanding
    
    
    2,734,799
    
    
    
    2,482,335
    
    
    
    2,467,110
    
    
    
    2,526,914
    
    
    
    2,638,697Average diluted common shares outstanding
    
    
    2,734,799
    
    
    
    2,482,335
    
    
    
    2,467,812
    
    
    
    2,532,592
    
    
    
    2,642,301Year-end balances:Loans, net
    
    $
    309,423
    
    
    $
    312,897
    
    
    $
    254,073
    
    
    $
    229,825
    
    
    $
    212,574Securities
    
    
    80,621
    
    
    
    81,888
    
    
    
    74,526
    
    
    
    70,241
    
    
    
    81,220Total assets
    
    
    450,666
    
    
    
    424,657
    
    
    
    350,270
    
    
    
    327,240
    
    
    
    320,989Deposits
    
    
    329,486
    
    
    
    305,453
    
    
    
    259,386
    
    
    
    260,178
    
    
    
    255,403Borrowings
    
    
    73,773
    
    
    
    73,889
    
    
    
    53,329
    
    
    
    30,521
    
    
    
    29,485Shareholders equity
    
    
    45,822
    
    
    
    43,468
    
    
    
    36,278
    
    
    
    35,070
    
    
    
    35,170Average balances:Loans, net
    
    $
    313,726
    
    
    $
    260,132
    
    
    $
    239,405
    
    
    $
    222,952
    
    
    $
    218,187Securities
    
    
    75,597
    
    
    
    70,680
    
    
    
    66,966
    
    
    
    74,994
    
    
    
    71,866Total assets
    
    
    427,613
    
    
    
    357,667
    
    
    
    327,771
    
    
    
    319,749
    
    
    
    316,612Deposits
    
    
    304,902
    
    
    
    257,478
    
    
    
    253,221
    
    
    
    247,543
    
    
    
    249,007Borrowings
    
    
    75,734
    
    
    
    60,472
    
    
    
    37,278
    
    
    
    35,824
    
    
    
    30,083Shareholders equity
    
    
    45,184
    
    
    
    38,308
    
    
    
    35,772
    
    
    
    34,766
    
    
    
    36,290Selected ratios:Net interest margin, tax equivalent basis
    
    
    3.93
    %
    
    
    4.13
    %
    
    
    4.35
    %
    
    
    4.45
    %
    
    
    4.35
    %Return on average total assets
    
    
    0.79
    
    
    
    0.99
    
    
    
    1.07
    
    
    
    0.97
    
    
    
    0.91Return on average shareholders equity
    
    
    7.51
    
    
    
    9.23
    
    
    
    9.82
    
    
    
    8.95
    
    
    
    7.92Average shareholders equity as a percent
of average total assets
    
    
    10.57
    
    
    
    10.71
    
    
    
    10.91
    
    
    
    10.87
    
    
    
    11.46Net loan charge-offs (recoveries) as a
percent of average loans
    
    
    0.21
    
    
    
    (0.01
    )
    
    
    0.20
    
    
    
    0.06
    
    
    
    0.19Allowance for loan losses as a percent of
loans at year-end
    
    
    1.29
    
    
    
    1.07
    
    
    
    1.01
    
    
    
    1.12
    
    
    
    1.14Shareholders equity as a percent of total
year-end assets
    
    
    10.17
    
    
    
    10.24
    
    
    
    10.36
    
    
    
    10.72
    
    
    
    10.96Dividend payout ratio
    
    
    58.06
    
    
    
    50.99
    
    
    
    50.41
    
    
    
    51.89
    
    
    
    51.47
 11




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2009 FINANCIAL REVIEW
 RESULTS OF OPERATIONS
 Net Income
   Net Interest Income(Dollars in thousands)
    
    2009
    
    
    2008
    
    
    2007Net interest income
    
    $
    15,765
    
    
    $
    13,878
    
    
    $
    13,326Taxable equivalent adjustment (1)
    
    
    209
    
    
    
    131
    
    
    
    144Net interest income, fully taxable equivalent
    
    $
    15,974
    
    
    $
    14,009
    
    
    $
    13,470Net interest yield
    
    
    3.88
    %
    
    
    4.09
    %
    
    
    4.31
    %Taxable equivalent adjustment (1)
    
    
    .05
    %
    
    
    .04
    %
    
    
    .04
    %Net interest yieldtaxable equivalent
    
    
    3.93
    %
    
    
    4.13
    %
    
    
    4.35
    %
 
 (1)
    
    Taxable equivalent adjustments have been computed assuming a 34% tax rate.     12




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2009 FINANCIAL REVIEW
   AVERAGE BALANCE SHEETS AND NET INTEREST MARGIN ANALYSIS2009
    
    
    
    2008
    
    
    
    2007AVERAGE
    
    
    
    
    
    
    
    
    
    
    
    AVERAGE
    
    
    
    
    
    
    
    
    
    
    
    AVERAGE(Dollars in thousands)
    
    BALANCE1
    
    
    INTEREST
    
    
    RATE2
    
    
    
    BALANCE1
    
    
    INTEREST
    
    
    RATE2
    
    
    
    BALANCE1
    
    
    INTEREST
    
    
    RATE2Interest-earning assetsFederal funds sold
    
    $
    195
    
    
    $
    0
    
    
    
    0.15
    %
    
    
    $
    5,645
    
    
    $
    121
    
    
    
    2.13
    %
    
    
    $
    458
    
    
    $
    25
    
    
    
    5.44
    %Interest-earning deposits
    
    
    13,520
    
    
    
    31
    
    
    
    0.23
    
    
    
    
    115
    
    
    
    1
    
    
    
    1.13
    
    
    
    
    62
    
    
    
    2
    
    
    
    2.58Securities:Taxable
    
    
    67,019
    
    
    
    3,218
    
    
    
    4.80
    
    
    
    
    65,109
    
    
    
    3,252
    
    
    
    5.00
    
    
    
    
    61,673
    
    
    
    2,928
    
    
    
    4.75Tax exempt
    
    
    8,578
    
    
    
    317
    
    
    
    3.70
    
    
    
    
    5,571
    
    
    
    225
    
    
    
    4.01
    
    
    
    
    5,293
    
    
    
    251
    
    
    
    4.75Loans3
    
    
    317,254
    
    
    
    18,539
    
    
    
    5.84
    
    
    
    
    262,933
    
    
    
    17,022
    
    
    
    6.47
    
    
    
    
    241,979
    
    
    
    18,025
    
    
    
    7.45Total interest-earning assets
    
    
    406,566
    
    
    
    22,105
    
    
    
    5.44
    %
    
    
    
    339,373
    
    
    
    20,621
    
    
    
    6.08
    %
    
    
    
    309,465
    
    
    
    21,231
    
    
    
    6.86
    %Noninterest-earning assetsCash and due from banks
    
    
    7,951
    
    
    
    
    
    
    
    
    
    
    
    
    10,523
    
    
    
    
    
    
    
    
    
    
    
    
    10,980Bank premises and
equipment, net
    
    
    8,696
    
    
    
    
    
    
    
    
    
    
    
    
    7,691
    
    
    
    
    
    
    
    
    
    
    
    
    7,719Other assets
    
    
    7,928
    
    
    
    
    
    
    
    
    
    
    
    
    2,881
    
    
    
    
    
    
    
    
    
    
    
    
    2,181Allowance for loan losses
    
    
    (3,528
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,801
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,574
    )Total assets
    
    $
    427,613
    
    
    
    
    
    
    
    
    
    
    
    $
    357,667
    
    
    
    
    
    
    
    
    
    
    
    $
    327,771Interest-bearing liabilitiesDemand deposits
    
    $
    46,107
    
    
    
    45
    
    
    
    0.10
    %
    
    
    $
    45,166
    
    
    
    133
    
    
    
    0.29
    %
    
    
    $
    45,606
    
    
    
    257
    
    
    
    0.56
    %Savings deposits
    
    
    58,672
    
    
    
    244
    
    
    
    0.42
    
    
    
    
    45,591
    
    
    
    376
    
    
    
    0.82
    
    
    
    
    41,123
    
    
    
    511
    
    
    
    1.24Time deposits
    
    
    153,735
    
    
    
    4,017
    
    
    
    2.61
    
    
    
    
    124,123
    
    
    
    4,328
    
    
    
    3.49
    
    
    
    
    124,752
    
    
    
    5,585
    
    
    
    4.48Borrowed funds
    
    
    75,734
    
    
    
    2,034
    
    
    
    2.69
    
    
    
    
    60,472
    
    
    
    1,906
    
    
    
    3.15
    
    
    
    
    37,278
    
    
    
    1,552
    
    
    
    4.16Total interest-bearing liabilities
    
    
    334,248
    
    
    
    6,340
    
    
    
    1.90
    %
    
    
    
    275,352
    
    
    
    6,743
    
    
    
    2.45
    %
    
    
    
    248,759
    
    
    
    7,905
    
    
    
    3.18
    %Noninterest-bearing liabilities
and shareholders equityDemand deposits
    
    
    46,388
    
    
    
    
    
    
    
    
    
    
    
    
    42,598
    
    
    
    
    
    
    
    
    
    
    
    
    41,740Other liabilities
    
    
    1,793
    
    
    
    
    
    
    
    
    
    
    
    
    1,409
    
    
    
    
    
    
    
    
    
    
    
    
    1,500Shareholders equity
    
    
    45,184
    
    
    
    
    
    
    
    
    
    
    
    
    38,308
    
    
    
    
    
    
    
    
    
    
    
    
    35,772Total liabilities and equity
    
    $
    427,613
    
    
    
    
    
    
    
    
    
    
    
    $
    357,667
    
    
    
    
    
    
    
    
    
    
    
    $
    327,771Net interest income
    
    
    
    
    
    $
    15,765
    
    
    
    
    
    
    
    
    
    
    
    $
    13,878
    
    
    
    
    
    
    
    
    
    
    
    $
    13,326Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.88
    %
    
    
    
    
    
    
    
    
    
    
    
    4.09
    %
    
    
    
    
    
    
    
    
    
    
    
    4.31
    %Net interest spread
    
    
    
    
    
    
    
    
    
    
    3.54
    %
    
    
    
    
    
    
    
    
    
    
    
    3.63
    %
    
    
    
    
    
    
    
    
    
    
    
    3.68
    %
 
 (1)
    
    Average balances have been computed on an average daily basis.(2)
    
    Average rates have been computed based on the amortized cost of the corresponding asset or liability.(3)
    
    Average loan balances include nonaccrual loans. 13




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##### 



2009 FINANCIAL REVIEW
 RATE/VOLUME ANALYSIS OF CHANGES IN INCOME AND EXPENSE12009 v. 2008
    
    
    2008 v. 2007NET INCREASE
    
    
    
    
    
    
    
    
    
    
    NET INCREASE(Dollars in thousands)
    
    (DECREASE)
    
    
    VOLUME
    
    
    RATE
    
    
    (DECREASE)
    
    
    VOLUME
    
    
    RATEIncrease (decrease) in interest income:Federal funds sold
    
    $
    (121
    )
    
    $
    (8
    )
    
    $
    (113
    )
    
    $
    95
    
    
    $
    110
    
    
    $
    (15
    )Interest-earning deposits
    
    
    30
    
    
    
    31
    
    
    
    (1
    )
    
    
    
    
    
    
    1
    
    
    
    (1
    )Securities:Taxable
    
    
    (34
    )
    
    
    92
    
    
    
    (126
    )
    
    
    326
    
    
    
    172
    
    
    
    154Tax exempt
    
    
    92
    
    
    
    111
    
    
    
    (19
    )
    
    
    (28
    )
    
    
    11
    
    
    
    (39
    )Loans
    
    
    1,517
    
    
    
    3,174
    
    
    
    (1,657
    )
    
    
    (1,003
    )
    
    
    1,357
    
    
    
    (2,360
    )Total interest income change
    
    
    1,484
    
    
    
    3,400
    
    
    
    (1,916
    )
    
    
    (610
    )
    
    
    1,651
    
    
    
    (2,261
    )Increase (decrease) in interest expense:Demand deposits
    
    
    (88
    )
    
    
    1
    
    
    
    (89
    )
    
    
    (124
    )
    
    
    (1
    )
    
    
    (123
    )Savings deposits
    
    
    (132
    )
    
    
    54
    
    
    
    (186
    )
    
    
    (135
    )
    
    
    37
    
    
    
    (172
    )Time deposits
    
    
    (311
    )
    
    
    774
    
    
    
    (1,085
    )
    
    
    (1,257
    )
    
    
    (22
    )
    
    
    (1,235
    )Other borrowed funds
    
    
    128
    
    
    
    410
    
    
    
    (282
    )
    
    
    354
    
    
    
    731
    
    
    
    (377
    )Total interest expense change
    
    
    (403
    )
    
    
    1,239
    
    
    
    (1,642
    )
    
    
    (1,162
    )
    
    
    745
    
    
    
    (1,907
    )Net interest income
    
    $
    1,887
    
    
    $
    2,161
    
    
    $
    (274
    )
    
    $
    552
    
    
    $
    906
    
    
    $
    (354
    )
 
 (1)
    
    Changes attributable to both volume and rate, which cannot be segregated, have been allocated
based on the absolute value of the change due to volume and the change due to rate. Provision for Loan Losses
  Noninterest Income
 YEAR ENDED DECEMBER 31CHANGE FROM 2008
    
    
    CHANGE FROM 2007(Dollars in thousands)
    
    2009
    
    
    AMOUNT
    
    
    %
    
    
    2008
    
    
    AMOUNT
    
    
    %
    
    
    2007Service charges on deposit accounts
    
    $
    1,234
    
    
    $
    (39
    )
    
    
    (3.1
    )%
    
    $
    1,273
    
    
    $
    42
    
    
    
    3.4
    %
    
    $
    1,231Trust services
    
    
    547
    
    
    
    (99
    )
    
    
    (15.3
    )
    
    
    646
    
    
    
    (85
    )
    
    
    (11.6
    )
    
    
    731Debit card interchange fees
    
    
    393
    
    
    
    76
    
    
    
    24.0
    
    
    
    317
    
    
    
    41
    
    
    
    14.9
    
    
    
    276Credit card fee income
    
    
    74
    
    
    
    (92
    )
    
    
    (55.4
    )
    
    
    166
    
    
    
    (96
    )
    
    
    36.6
    
    
    
    262Insurance recovery
    
    
    
    
    
    
    
    
    
    
    N.M.
    
    
    
    
    
    
    
    (187
    )
    
    
    N.M.
    
    
    
    187Securities gain (loss)
    
    
    82
    
    
    
    117
    
    
    
    N.M.
    
    
    
    (35
    )
    
    
    (52
    )
    
    
    N.M.
    
    
    
    17Gain on sale of loans, including MSRs
    
    
    463
    
    
    
    175
    
    
    
    60.8
    
    
    
    288
    
    
    
    270
    
    
    
    N.M.
    
    
    
    18Gain (loss) sale of other real estate
    
    
    (28
    )
    
    
    (31
    )
    
    
    N.M.
    
    
    
    3
    
    
    
    4
    
    
    
    N.M.
    
    
    
    (1
    )Other
    
    
    450
    
    
    
    75
    
    
    
    20.0
    
    
    
    375
    
    
    
    61
    
    
    
    19.4
    
    
    
    314Total noninterest income
    
    $
    3,215
    
    
    $
    182
    
    
    
    6.0
    %
    
    $
    3,033
    
    
    $
    (2
    )
    
    
    (0.1
    )%
    
    $
    3,035
 N.M., not a meaningful value
 14




---



##### 



2009 FINANCIAL REVIEW
   Noninterest Expenses
 YEAR ENDED DECEMBER 31CHANGE FROM 2008
    
    
    CHANGE FROM 2007(Dollars in thousands)
    
    2009
    
    
    AMOUNT
    
    
    %
    
    
    2008
    
    
    AMOUNT
    
    
    %
    
    
    2007Salaries and employee benefits
    
    $
    6,900
    
    
    $
    639
    
    
    
    10.2
    %
    
    $
    6,261
    
    
    $
    407
    
    
    
    7.0
    %
    
    $
    5,854Occupancy expense
    
    
    1,014
    
    
    
    (20
    )
    
    
    (1.9
    )
    
    
    1,034
    
    
    
    301
    
    
    
    41.1
    
    
    
    733Equipment expense
    
    
    539
    
    
    
    19
    
    
    
    3.6
    
    
    
    520
    
    
    
    16
    
    
    
    3.2
    
    
    
    504Professional and directors fees
    
    
    641
    
    
    
    129
    
    
    
    25.2
    
    
    
    512
    
    
    
    (68
    )
    
    
    11.7
    
    
    
    580Franchise tax expense
    
    
    506
    
    
    
    69
    
    
    
    15.8
    
    
    
    437
    
    
    
    20
    
    
    
    4.8
    
    
    
    417Marketing and public relations
    
    
    350
    
    
    
    (14
    )
    
    
    (3.8
    )
    
    
    364
    
    
    
    (9
    )
    
    
    (2.5
    )
    
    
    373Telecommunications
    
    
    206
    
    
    
    (15
    )
    
    
    (6.8
    )
    
    
    221
    
    
    
    (4
    )
    
    
    (1.8
    )
    
    
    225Amortization of intangible assets
    
    
    65
    
    
    
    54
    
    
    
    N.M.
    
    
    
    11
    
    
    
    11
    
    
    
    N.M.
    
    
    
    FDIC assessment
    
    
    542
    
    
    
    477
    
    
    
    733.8
    
    
    
    65
    
    
    
    35
    
    
    
    N.M.
    
    
    
    30Other
    
    
    1,955
    
    
    
    69
    
    
    
    3.7
    
    
    
    1,886
    
    
    
    (99
    )
    
    
    (5.0
    )
    
    
    1,985Total noninterest expenses
    
    $
    12,718
    
    
    $
    1,407
    
    
    
    12.4
    %
    
    $
    11,311
    
    
    $
    610
    
    
    
    5.7
    %
    
    $
    10,701
 N.M., not a meaningful value
  15




---



##### 



2009 FINANCIAL REVIEW
  Income Taxes
  FINANCIAL CONDITION
  Securities
    Loans
   16




---



##### 



2009 FINANCIAL REVIEW
     Nonperforming Assets, Impaired Loans and Loans Past Due 90 Days Or More
  NONPERFORMING ASSETS
    
    FOR THE YEAR ENDED(Dollars in thousands)
    
    2009
    
    
    2008Nonaccrual loans:Commercial
    
    $
    102
    
    
    $
    20Commercial real estate
    
    
    1,499
    
    
    
    1,113Residential real estate
    
    
    2,185
    
    
    
    1,094Loans past due 90 days and still accruing
    
    
    355
    
    
    
    416Total nonperforming loans
    
    
    4,141
    
    
    
    2,643Other real estate owned
    
    
    162
    
    
    
    79Total nonperforming assets
    
    $
    4,303
    
    
    $
    2,722Nonperforming assets as a percentage of: loans + other real estate
    
    
    1.37
    %
    
    
    0.86
    %
 17




---



##### 



2009 FINANCIAL REVIEW
 Allowance for Loan Losses
  ALLOWANCE FOR LOAN LOSSES
    
    FOR THE YEAR ENDED(Dollars in thousands)
    
    2009
    
    
    2008Beginning balance of allowance for loan losses
    
    $
    3,394
    
    
    $
    2,586Provision for loan losses
    
    
    1,337
    
    
    
    333Addition from acquisition
    
    
    
    
    
    
    458Charge-offs:Commercial
    
    
    320
    
    
    
    55Commercial real estate
    
    
    254
    
    
    
    10Consumer
    
    
    93
    
    
    
    36Residential real estate and home equity
    
    
    177
    
    
    
    19Deposit accounts
    
    
    41
    
    
    
    28Credit cards
    
    
    
    
    
    
    6Total charge-offs
    
    
    885
    
    
    
    154Recoveries:Commercial
    
    
    55
    
    
    
    6Commercial real estate
    
    
    86
    
    
    
    4Consumer
    
    
    49
    
    
    
    131Residential real estate and home equity
    
    
    
    
    
    
    10Deposit accounts
    
    
    19
    
    
    
    13Credit cards
    
    
    5
    
    
    
    7Total recoveries
    
    
    214
    
    
    
    171Net charge-offs (recoveries)
    
    
    671
    
    
    
    (17
    )Ending balance of allowance for loan losses
    
    $
    4,060
    
    
    $
    3,394Net charge-offs (recoveries) as a percentage of average total loans
    
    
    0.21
    %
    
    
    (0.01
    )%Allowance for loan losses as a percent of total loans
    
    
    1.29
    %
    
    
    1.07
    %Allowance for loan losses to total nonperforming loans
    
    
    0.98
    ×
    
    
    1.28
    ×Components of the allowance for loan losses:General reserves
    
    $
    3,695
    
    
    $
    3,059Specific reserves
    
    
    365
    
    
    
    335Total allowance for loan losses
    
    $
    4,060
    
    
    $
    3,394
   18




---



##### 



2009 FINANCIAL REVIEW
  Other Assets
  Deposits
  Other Funding Sources
  CAPITAL RESOURCES
   19




---



##### 



2009 FINANCIAL REVIEW
  LIQUIDITY
   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    20




---



##### 



2009 FINANCIAL REVIEW
 Net Interest Income at Risk
 DECEMBER 31, 2009CHANGE IN
    
    NET INTEREST
    
    DOLLARINTEREST RATES
    
    INCOME
    
    CHANGE
    
    PERCENTAGE
    
    BOARD(BASIS POINTS)
    
    (Dollars in thousands)
    
    CHANGE
    
    POLICY LIMITS+200
    
    
    $
    17,287
    
    
    $
    849
    
    
    
    5.2
    %
    
    
    ± 15.0
    %+100
    
    
    
    16,739
    
    
    
    301
    
    
    
    1.8
    
    
    
    ± 10.00
    
    
    
    16,438
    
    
    
    
    
    
    
    100
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    ± 10.0200
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    ± 15.0
 DECEMBER 31, 2008CHANGE IN
    
    NET INTEREST
    
    DOLLARINTEREST RATES
    
    INCOME
    
    CHANGE
    
    PERCENTAGE
    
    BOARD(BASIS POINTS)
    
    (Dollars in thousands)
    
    CHANGE
    
    POLICY LIMITS+200
    
    
    $
    16,084
    
    
    $
    651
    
    
    
    4.2
    %
    
    
    ± 15.0
    %+100
    
    
    
    15,786
    
    
    
    353
    
    
    
    2.3
    
    
    
    ± 10.00
    
    
    
    15,433
    
    
    
    
    
    
    
    100
    
    
    
    15,532
    
    
    
    99
    
    
    
    0.6
    
    
    
    ± 10.0200
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    ± 15.0
  Economic Value of Equity at Risk
 CHANGE ININTEREST RATES
    
    PERCENTAGE
    
    BOARD(BASIS POINTS)
    
    CHANGE
    
    POLICY LIMITSDecember 31, 2009+200
    
    
    
     4.1
    %
    
    
    ± 20
    %+100
    
    
    
     0.5
    
    
    
    ± 15100
    
    
    
    N/A
    
    
    
    ± 15200
    
    
    
    N/A
    
    
    
    ± 20December 31, 2008+200
    
    
    
     18.1
    %
    
    
    ± 20
    %+100
    
    
    
     6.8
    
    
    
    ± 15100
    
    
    
    N/A
    
    
    
    ± 15200
    
    
    
    N/A
    
    
    
    ± 20
  SIGNIFICANT ASSUMPTIONS AND OTHER CONSIDERATIONS
  21




---



##### 



2009 FINANCIAL REVIEW
  FAIR VALUE MEASUREMENTS
  OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS, AND CONTINGENT LIABILITIES AND COMMITMENTS
  AMOUNT OF COMMITMENT TO EXPIRE PER PERIOD(Dollars in thousands)TOTAL
    
    
    LESS THAN
    
    
    1 TO 3
    
    
    3 TO 5
    
    
    OVER 5TYPE OF COMMITMENT
    
    AMOUNT
    
    
    1 YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    YEARSCommercial lines-of-credit
    
    $
    33,498
    
    
    $
    32,538
    
    
    $
    916
    
    
    $
    30
    
    
    $
    14Real estate lines-of-credit
    
    
    22,725
    
    
    
    144
    
    
    
    1,696
    
    
    
    5,344
    
    
    
    15,541Consumer lines-of-credit
    
    
    897
    
    
    
    897
    
    
    
    
    
    
    
    
    
    
    
    Overdraft Privilege
    
    
    5,491
    
    
    
    5,491
    
    
    
    
    
    
    
    
    
    
    
    Commercial real estate loan commitment
    
    
    3,600
    
    
    
    3,600
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    1,213
    
    
    
    583
    
    
    
    630
    
    
    
    
    
    
    
    Total commitments
    
    $
    67,424
    
    
    $
    43,253
    
    
    $
    3,242
    
    
    $
    5,374
    
    
    $
    15,555
  22




---



##### 



2009 FINANCIAL REVIEW
  PAYMENT DUE BY PERIOD(Dollars in thousands)TOTAL
    
    
    LESS THAN
    
    
    1 TO 3
    
    
    3 TO 5
    
    
    OVER 5CONTRACTUAL OBLIGATIONS
    
    AMOUNT
    
    
    1 YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    YEARSTotal time deposits
    
    $
    148,014
    
    
    $
    78,784
    
    
    $
    60,466
    
    
    $
    8,565
    
    
    $
    199Short-term borrowings
    
    
    28,764
    
    
    
    28,764
    
    
    
    
    
    
    
    
    
    
    
    Other borrowings
    
    
    45,010
    
    
    
    22,102
    
    
    
    10,237
    
    
    
    403
    
    
    
    12,267Operating leases
    
    
    277
    
    
    
    133
    
    
    
    144
    
    
    
    
    
    
    
    Total obligations
    
    $
    222,065
    
    
    $
    129,783
    
    
    $
    70,847
    
    
    $
    8,968
    
    
    $
    12,466
  CRITICAL ACCOUNTING POLICIES
     23




---



##### 



2009 FINANCIAL REVIEW
 IMPACT OF INFLATION AND CHANGING PRICES
  COMMON STOCK AND SHAREHOLDER INFORMATION
  QUARTER ENDED
    
    HIGH
    
    LOW
    
    DIVIDENDS DECLAREDMarch 31, 2009
    
    $
    14.50
    
    
    $
    12.25
    
    
    $
    492,264June 30, 2009
    
    
    17.00
    
    
    
    13.26
    
    
    
    492,264September 30, 2009
    
    
    16.00
    
    
    
    14.25
    
    
    
    492,264December 31, 2009
    
    
    15.50
    
    
    
    14.57
    
    
    
    492,264March 31, 2008
    
    $
    17.90
    
    
    $
    15.75
    
    
    $
    439,353June 30, 2008
    
    
    18.00
    
    
    
    15.75
    
    
    
    435,969September 30, 2008
    
    
    16.25
    
    
    
    14.40
    
    
    
    435,957December 31, 2008
    
    
    16.00
    
    
    
    14.00
    
    
    
    492,264
  24




---



##### 



2009 FINANCIAL REVIEW
 REPORT ON MANAGEMENTS ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING
     -s- Eddie L Steiner
    
    -s- Paula J. MeilerEddie L Steiner
    
    Paula J. MeilerPresident, Chief Executive Officer
    
    Senior Vice President, Chief Financial Officer
 25




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 The
Board of Directors and Shareholders
CSB Bancorp, Inc.
     
 Wexford, Pennsylvania
March 11, 2010
 26




---



##### 



CONSOLIDATED BALANCE SHEETS
  2009
    
    
    2008ASSETSCash and cash equivalentsCash and due from banks
    
    $
    8,803,514
    
    
    $
    8,698,917Interest-earning deposits in other banks
    
    
    33,857,933
    
    
    
    2,961,153Federal funds sold
    
    
    
    
    
    
    1,086,000Total cash and cash equivalents
    
    
    42,661,447
    
    
    
    12,746,070SecuritiesAvailable-for-sale, at fair value
    
    
    75,157,451
    
    
    
    76,655,816Restricted stock, at cost
    
    
    5,463,100
    
    
    
    5,231,800Total securities
    
    
    80,620,551
    
    
    
    81,887,616Loans held for sale
    
    
    340,150
    
    
    
    Loans
    
    
    313,482,342
    
    
    
    316,290,412Less allowance for loan losses
    
    
    4,059,575
    
    
    
    3,393,685Net loans
    
    
    309,422,767
    
    
    
    312,896,727Premises and equipment, net
    
    
    8,353,869
    
    
    
    8,470,855Core deposit intangible
    
    
    469,000
    
    
    
    534,000Goodwill
    
    
    1,725,422
    
    
    
    1,448,029Bank-owned life insurance
    
    
    2,853,945
    
    
    
    2,748,909Accrued interest receivable and other assets
    
    
    4,218,830
    
    
    
    3,924,976TOTAL ASSETS
    
    $
    450,665,981
    
    
    $
    424,657,182LIABILITIES AND SHAREHOLDERS EQUITYLIABILITIESDepositsNoninterest-bearing
    
    $
    53,974,358
    
    
    $
    49,058,592Interest-bearing
    
    
    275,511,744
    
    
    
    256,394,147Total deposits
    
    
    329,486,102
    
    
    
    305,452,739Short-term borrowings
    
    
    28,763,604
    
    
    
    22,891,593Other borrowings
    
    
    45,009,781
    
    
    
    50,997,537Accrued interest payable and other liabilities
    
    
    1,584,432
    
    
    
    1,846,841Total liabilities
    
    
    404,843,919
    
    
    
    381,188,710SHAREHOLDERS EQUITYCommon stock, $6.25 par value. Authorized 9,000,000
shares; issued 2,980,602 shares;
outstanding 2,734,799 shares in 2009 and 2008
    
    
    18,628,767
    
    
    
    18,628,767Additional paid-in capital
    
    
    9,993,812
    
    
    
    9,986,499Retained earnings
    
    
    21,146,199
    
    
    
    19,723,972Treasury stock at cost  245,803 shares in 2009
and 2008
    
    
    (5,014,541
    )
    
    
    (5,014,541
    )Accumulated other comprehensive income
    
    
    1,067,825
    
    
    
    143,775Total shareholders equity
    
    
    45,822,062
    
    
    
    43,468,472TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    450,665,981
    
    
    $
    424,657,182
  27




---



##### 



CONSOLIDATED STATEMENTS OF INCOME
  2009
    
    
    2008
    
    
    2007INTEREST AND DIVIDEND INCOMELoans, including fees
    
    $
    18,538,930
    
    
    $
    17,021,867
    
    
    $
    18,025,190Taxable securities
    
    
    3,216,403
    
    
    
    3,252,073
    
    
    
    2,927,840Nontaxable securities
    
    
    318,693
    
    
    
    225,287
    
    
    
    251,551Other
    
    
    30,861
    
    
    
    121,499
    
    
    
    26,540Total interest and dividend income
    
    
    22,104,887
    
    
    
    20,620,726
    
    
    
    21,231,121INTEREST EXPENSEDeposits
    
    
    4,306,121
    
    
    
    4,836,598
    
    
    
    6,352,732Short-term borrowings
    
    
    270,894
    
    
    
    569,854
    
    
    
    1,185,377Other borrowings
    
    
    1,763,201
    
    
    
    1,336,365
    
    
    
    366,630Total interest expense
    
    
    6,340,216
    
    
    
    6,742,817
    
    
    
    7,904,739NET INTEREST INCOME
    
    
    15,764,671
    
    
    
    13,877,909
    
    
    
    13,326,382PROVISION FOR LOAN LOSSES
    
    
    1,337,044
    
    
    
    333,094
    
    
    
    472,100Net interest income, after provision for
loan losses
    
    
    14,427,627
    
    
    
    13,544,815
    
    
    
    12,854,282NONINTEREST INCOMEService charges on deposit accounts
    
    
    1,234,513
    
    
    
    1,273,094
    
    
    
    1,231,020Trust services
    
    
    546,918
    
    
    
    645,941
    
    
    
    730,715Debit card interchange fees
    
    
    393,260
    
    
    
    317,392
    
    
    
    276,467Credit card, other fee income
    
    
    73,619
    
    
    
    165,727
    
    
    
    261,784Insurance recovery
    
    
    
    
    
    
    
    
    
    
    186,526Securities gain (loss), net
    
    
    151,890
    
    
    
    
    
    
    
    16,830Other-than-temporary impairment losses
    
    
    (70,000
    )
    
    
    (35,000
    )
    
    
    Gain on sale of loans, net
    
    
    463,175
    
    
    
    287,902
    
    
    
    18,348Gain (loss) on sale of other real estate owned,
net
    
    
    (28,000
    )
    
    
    3,300
    
    
    
    (994
    )Other
    
    
    449,922
    
    
    
    374,531
    
    
    
    313,929Total noninterest income
    
    
    3,215,297
    
    
    
    3,032,887
    
    
    
    3,034,625NONINTEREST EXPENSESSalaries and employee benefits
    
    
    6,900,025
    
    
    
    6,261,348
    
    
    
    5,853,523Occupancy expense
    
    
    1,014,198
    
    
    
    1,033,780
    
    
    
    732,850Equipment expense
    
    
    538,698
    
    
    
    520,596
    
    
    
    504,356Professional and director fees
    
    
    640,874
    
    
    
    511,768
    
    
    
    579,923Franchise tax expense
    
    
    506,370
    
    
    
    437,250
    
    
    
    416,712Marketing and public relations
    
    
    350,146
    
    
    
    363,891
    
    
    
    372,902Telecommunications
    
    
    205,823
    
    
    
    220,663
    
    
    
    225,284Amortization of intangible assets
    
    
    65,000
    
    
    
    11,000
    
    
    
    FDIC assessment expense
    
    
    542,300
    
    
    
    64,585
    
    
    
    29,500Other expenses
    
    
    1,954,207
    
    
    
    1,886,351
    
    
    
    1,985,743Total noninterest expenses
    
    
    12,717,641
    
    
    
    11,311,232
    
    
    
    10,700,793Income before income taxes
    
    
    4,925,283
    
    
    
    5,266,470
    
    
    
    5,188,114FEDERAL INCOME TAX PROVISION
    
    
    1,534,000
    
    
    
    1,729,400
    
    
    
    1,674,200NET INCOME
    
    $
    3,391,283
    
    
    $
    3,537,070
    
    
    $
    3,513,914NET INCOME PER SHAREBasic
    
    $
    1.24
    
    
    $
    1.43
    
    
    $
    1.42Diluted
    
    $
    1.24
    
    
    $
    1.43
    
    
    $
    1.42
  28




---



##### 



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
  ADDITIONAL
    
    
    
    
    
    
    
    
    
    
    ACCUMULATED OTHERPAID-IN
    
    
    RETAINED
    
    
    TREASURY
    
    
    COMPREHENSIVECOMMON STOCK
    
    
    CAPITAL
    
    
    EARNINGS
    
    
    STOCK
    
    
    INCOME (LOSS)
    
    
    TOTALBALANCE AT
DECEMBER 31, 2006
    
    $
    16,673,667
    
    
    $
    6,427,765
    
    
    $
    16,248,608
    
    
    $
    (3,696,102
    )
    
    $
    (583,618
    )
    
    $
    35,070,320Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,513,914
    
    
    
    
    
    
    
    
    
    
    
    3,513,914Change in net unrealized gain,
net of reclassification
adjustments and related
income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    344,517
    
    
    
    344,517Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,858,431Stock-based compensation expense
    
    
    
    
    
    
    24,554
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,554Issuance of 40 shares from treasury
    
    
    
    
    
    
    
    
    
    
    (586
    )
    
    
    1,230
    
    
    
    
    
    
    
    644Purchase of 51,597 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (904,410
    )
    
    
    
    
    
    
    (904,410
    )Cash dividends declared,
$.72 per share
    
    
    
    
    
    
    
    
    
    
    (1,771,491
    )
    
    
    
    
    
    
    
    
    
    
    (1,771,491
    )BALANCE AT
DECEMBER 31, 2007
    
    
    16,673,667
    
    
    
    6,452,319
    
    
    
    17,990,445
    
    
    
    (4,599,282
    )
    
    
    (239,101
    )
    
    
    36,278,048Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,537,070
    
    
    
    
    
    
    
    
    
    
    
    3,537,070Change in net unrealized gain,
net of reclassification
adjustments and related
income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382,876
    
    
    
    382,876Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,919,946Stock-based compensation expense
    
    
    
    
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000Issuance of 312,816 shares
for acquisition
    
    
    1,955,100
    
    
    
    3,519,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,474,280Purchase of 25,641 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (415,259
    )
    
    
    
    
    
    
    (415,259
    )Cash dividends declared,
$.72 per share
    
    
    
    
    
    
    
    
    
    
    (1,803,543
    )
    
    
    
    
    
    
    
    
    
    
    (1,803,543
    )BALANCE AT
DECEMBER 31, 2008
    
    
    18,628,767
    
    
    
    9,986,499
    
    
    
    19,723,972
    
    
    
    (5,014,541
    )
    
    
    143,775
    
    
    
    43,468,472Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,391,283
    
    
    
    
    
    
    
    
    
    
    
    3,391,283Change in net unrealized gain,
net of reclassification
adjustments and related
income tax provision
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    924,050
    
    
    
    924,050Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,315,333Stock-based compensation expense
    
    
    
    
    
    
    7,313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,313Cash dividends declared,
$.72 per share
    
    
    
    
    
    
    
    
    
    
    (1,969,056
    )
    
    
    
    
    
    
    
    
    
    
    (1,969,056
    )BALANCE AT
DECEMBER 31, 2009
    
    $
    18,628,767
    
    
    $
    9,993,812
    
    
    $
    21,146,199
    
    
    $
    (5,014,541
    )
    
    $
    1,067,825
    
    
    $
    45,822,062
  29




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
  2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    3,391,283
    
    
    $
    3,537,070
    
    
    $
    3,513,914Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization of
premises, equipment and software
    
    
    758,502
    
    
    
    734,053
    
    
    
    685,832Building impairment
    
    
    134,000
    
    
    
    250,000
    
    
    
    Deferred income taxes
    
    
    402,900
    
    
    
    (46,900
    )
    
    
    (113,050
    )Provision for loan losses
    
    
    1,337,044
    
    
    
    333,094
    
    
    
    472,100Gain on sale of loans, net
    
    
    (463,175
    )
    
    
    (287,902
    )
    
    
    (18,348
    )Securities (gain) loss, net
    
    
    (151,890
    )
    
    
    
    
    
    
    (16,830
    )(Gain) loss on sale of other
real estate owned, net
    
    
    28,000
    
    
    
    (3,300
    )
    
    
    994Security amortization, net of
accretion
    
    
    103,685
    
    
    
    104,901
    
    
    
    26,141Other-than-temporary impairment
of investments
    
    
    70,000
    
    
    
    35,000
    
    
    
    Secondary market loan sale proceeds
    
    
    21,004,609
    
    
    
    2,152,806
    
    
    
    1,474,148Originations of secondary market
loans
held-for-sale
    
    
    (20,985,623
    )
    
    
    (2,132,362
    )
    
    
    (1,455,800
    )Stock compensation expense
    
    
    7,313
    
    
    
    15,000
    
    
    
    24,554Effects of changes in operating
assets
and liabilities:Net deferred loan costs
    
    
    78,391
    
    
    
    41,916
    
    
    
    7,495Accrued interest receivable
    
    
    70,378
    
    
    
    370,772
    
    
    
    4,717Accrued interest payable
    
    
    (95,753
    )
    
    
    (212,800
    )
    
    
    24,910Prepaid FDIC assessment
    
    
    (1,482,308
    )
    
    
    59,311
    
    
    
    (7,265
    )Other assets and liabilities
    
    
    (780,993
    )
    
    
    (384,117
    )
    
    
    (328,518
    )Net cash provided by operating activities
    
    $
    3,426,363
    
    
    $
    4,566,542
    
    
    $
    4,294,994CASH FLOWS FROM INVESTING ACTIVITIESSecurities available-for-sale:Proceeds from maturities and repayments
    
    $
    33,768,512
    
    
    $
    35,582,233
    
    
    $
    15,634,028Proceeds from sale
    
    
    1,305,425
    
    
    
    
    
    
    
    Purchases
    
    
    (32,197,290
    )
    
    
    (31,641,213
    )
    
    
    (19,406,047
    )Purchase of restricted stock
    
    
    (231,300
    )
    
    
    (114,900
    )
    
    
    Loan originations, net of repayments
    
    
    1,863,826
    
    
    
    (4,743,118
    )
    
    
    (25,027,508
    )Net cash from acquisition
    
    
    
    
    
    
    6,762,056
    
    
    
    Proceeds from sale of credit cards
    
    
    
    
    
    
    2,513,671
    
    
    
    Proceeds from sale of other real estate
    
    
    83,500
    
    
    
    105,000
    
    
    
    196,881Property, equipment and software acquisitions
    
    
    (670,950
    )
    
    
    (513,633
    )
    
    
    (492,856
    )Net cash provided by (used in) investing
activities
    
    $
    3,921,723
    
    
    $
    7,950,096
    
    
    $
    (29,095,502
    )
  30




---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
  2009
    
    
    2008
    
    
    2007CASH FLOWS FROM FINANCING ACTIVITIESNet change in deposits
    
    $
    24,245,740
    
    
    $
    (12,759,396
    )
    
    $
    (791,630
    )Net change in short-term borrowings
    
    
    (2,000,000
    )
    
    
    (2,700,000
    )
    
    
    (300,000
    )Net change in securities sold under
repurchase agreements
    
    
    7,872,011
    
    
    
    (1,713,564
    )
    
    
    (416,920
    )Federal Home Loan Bank borrowings:Proceeds
    
    
    4,000,000
    
    
    
    8,000,000
    
    
    
    24,000,000Repayments
    
    
    (9,581,404
    )
    
    
    (572,168
    )
    
    
    (475,511
    )Purchase of treasury shares
    
    
    
    
    
    
    (415,259
    )
    
    
    (904,410
    )Issuance of treasury shares
    
    
    
    
    
    
    
    
    
    
    644Cash dividends paid
    
    
    (1,969,056
    )
    
    
    (1,803,543
    )
    
    
    (1,771,491
    )Net cash provided by (used in)
financing activities
    
    $
    22,567,291
    
    
    $
    (11,963,930
    )
    
    $
    19,340,682NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
    
    
    29,915,377
    
    
    
    552,708
    
    
    
    (5,459,826
    )CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
    
    
    12,746,070
    
    
    
    12,193,362
    
    
    
    17,653,188CASH AND CASH EQUIVALENTS AT
END OF YEAR
    
    $
    42,661,447
    
    
    $
    12,746,070
    
    
    $
    12,193,362SUPPLEMENTAL DISCLOSURESCash paid during the year for:Interest
    
    $
    7,054,700
    
    
    $
    6,700,616
    
    
    $
    7,879,829Income taxes
    
    
    920,000
    
    
    
    1,786,000
    
    
    
    2,065,000Noncash investing activities:Transfer of loans to other real estate owned
    
    $
    194,700
    
    
    $
    20,000
    
    
    $
    299,575SUMMARY OF BUSINESS ACQUISITIONFair value of tangible assets acquired
    
    $
    
    
    
    $
    81,303,000
    
    
    $
    Fair value of core deposit intangible acquired
    
    
    
    
    
    
    545,000
    
    
    
    Fair value of liabilities assumed
    
    
    
    
    
    
    (77,740,000
    )
    
    
    Stock issued for the purchase of acquired companys
common stock
    
    
    
    
    
    
    (5,474,000
    )
    
    
    Cash paid in the acquisition
    
    
    
    
    
    
    (2,232,000
    )
    
    
    Deferred tax asset
    
    
    
    
    
    
    1,873,000
    
    
    
    Goodwill recognized
    
    $
    
    
    
    $
    (1,725,000
    )
    
    $
    
  31




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
  PRINCIPLES OF CONSOLIDATION
   CASH AND CASH EQUIVALENTS
  CASH RESERVE REQUIREMENTS
  SECURITIES
     32




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 LOANS
   ALLOWANCE FOR LOAN LOSSES
     OTHER REAL ESTATE OWNED
  PREMISES AND EQUIPMENT
  33




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS
   MORTGAGE SERVICING RIGHTS
  BANK-OWNED LIFE INSURANCE
  REPURCHASE AGREEMENTS
  ADVERTISING COSTS
  FEDERAL INCOME TAXES
   STOCK-BASED COMPENSATION
  34




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  2009
    
    2008
    
    2007Risk-free interest rate
    
    
    2.53
    %
    
    
    3.52
    %
    
    
    N/ADividend yield
    
    
    4.80
    %
    
    
    4.47
    %Volatility
    
    
    18.40
    %
    
    
    12.00
    %Expected option life
    
    5.0 yrs.
    
    5.0 yrs.
    COMPREHENSIVE INCOME
  TRANSFERS OF FINANCIAL ASSETS
  PER SHARE DATA
   2009
    
    2008
    
    2007Weighted average common shares
outstanding
    
    
    2,980,602
    
    
    
    2,719,922
    
    
    
    2,667,786Average treasury shares
    
    
    (245,803
    )
    
    
    (237,587
    )
    
    
    (200,676
    )Total weighted average common
shares outstanding (basic)
    
    
    2,734,799
    
    
    
    2,482,335
    
    
    
    2,467,110Dilutive effect of assumed exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    702Weighted average common shares
outstanding (diluted)
    
    
    2,734,799
    
    
    
    2,482,335
    
    
    
    2,467,812
  35




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  ACCOUNTING DEVELOPMENTS
 Topic 105  Generally Accepted Accounting Principles 
FASB Accounting Standards Codification  and the Hierarchy of Generally Accepted
Accounting Principles.
 Fair Value
Measurements and Disclosures.
 Fair Value Measurements and
Disclosures.
 Fair Value Measurements and Disclosures
(Topic 820)  Measuring Liabilities at Fair Value.
 Financial
Instruments,
 Investments  Debt and
Equity Securities,
 Transfers and Servicing.
 36




---



##### 



SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 RECLASSIFICATION OF COMPARATIVE AMOUNTS
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  SECURITIES
  GROSS
    
    
    GROSSAMORTIZED
    
    
    UNREALIZED
    
    
    UNREALIZED
    
    
    FAIRCOST
    
    
    GAINS
    
    
    LOSSES
    
    
    VALUEDecember 31, 2009Available-for-sale:U.S. Treasury security
    
    $
    100,130
    
    
    $
    54
    
    
    $
    
    
    
    $
    100,184Obligations of U.S. Government
corporations and agencies
    
    
    14,164,378
    
    
    
    10,812
    
    
    
    142,085
    
    
    
    14,033,105Mortgage-backed securities
    
    
    49,705,578
    
    
    
    1,828,018
    
    
    
    176,149
    
    
    
    51,357,447Obligations of states and
political subdivisions
    
    
    9,504,636
    
    
    
    131,356
    
    
    
    22,182
    
    
    
    9,613,810Total debt securities
    
    
    73,474,722
    
    
    
    1,970,240
    
    
    
    340,416
    
    
    
    75,104,546Equity securities
    
    
    64,811
    
    
    
    209
    
    
    
    12,115
    
    
    
    52,905Total available-for-sale
    
    
    73,539,533
    
    
    
    1,970,449
    
    
    
    352,531
    
    
    
    75,157,451Restricted stock
    
    
    5,463,100
    
    
    
    
    
    
    
    
    
    
    
    5,463,100Total securities
    
    $
    79,002,633
    
    
    $
    1,970,449
    
    
    $
    352,531
    
    
    $
    80,620,551December 31, 2008Available-for-sale:U.S. Treasury security
    
    $
    99,988
    
    
    $
    473
    
    
    $
    
    
    
    $
    100,461Obligations of U.S. Government
corporations and agencies
    
    
    12,447,301
    
    
    
    93,055
    
    
    
    
    
    
    
    12,540,356Mortgage-backed securities
    
    
    56,697,763
    
    
    
    618,677
    
    
    
    417,495
    
    
    
    56,898,945Obligations of states and
political subdivisions
    
    
    7,045,468
    
    
    
    77,901
    
    
    
    83,073
    
    
    
    7,040,296Total debt securities
    
    
    76,290,520
    
    
    
    790,106
    
    
    
    500,568
    
    
    
    76,580,058Equity securities
    
    
    147,458
    
    
    
    645
    
    
    
    72,345
    
    
    
    75,758Total available-for-sale
    
    
    76,437,978
    
    
    
    790,751
    
    
    
    572,913
    
    
    
    76,655,816Restricted stock
    
    
    5,231,800
    
    
    
    
    
    
    
    
    
    
    
    5,231,800Total securities
    
    $
    81,669,778
    
    
    $
    790,751
    
    
    $
    572,913
    
    
    $
    81,887,616
 37




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  SECURITIES (CONTINUED)
  AMORTIZED
    
    
    FAIRCOST
    
    
    VALUEAvailable-for-sale:Due in one year or less
    
    $
    2,688,420
    
    
    $
    2,701,588Due after one through five years
    
    
    7,429,744
    
    
    
    7,473,983Due after five through ten years
    
    
    15,897,104
    
    
    
    15,995,153Due after ten years
    
    
    47,459,454
    
    
    
    48,933,822Total debt securities available-for-sale
    
    $
    73,474,722
    
    
    $
    75,104,546
    FOR THE YEARS ENDED DECEMBER 31,2009
    
    
    2008
    
    
    2007Proceeds
    
    $
    1,305,425
    
    
    $
    
    
    
    $
    Realized gains
    
    
    152,467
    
    
    
    
    
    
    
    16,830Realized losses
    
    
    577
    
    
    
    
    
    
    
    Impairment losses
    
    
    70,000
    
    
    
    35,000
    
    
    
    Net securities gains (losses)
    
    $
    81,890
    
    
    $
    (35,000
    )
    
    $
    16,830
   38




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  SECURITIES (CONTINUED)
 SECURITIES IN A CONTINUOUS UNREALIZED LOSS POSITIONLESS THAN
    
    
    12 MONTHS12 MONTHS
    
    
    OR MORE
    
    
    TOTALGROSS
    
    
    
    
    
    
    GROSS
    

    
    
    

    
    
    GROSSUNREALIZED
    
    
    FAIR
    
    
    UNREALIZED
    
    
    FAIR
    
    
    UNREALIZED
    
    
    FAIRLOSSES
    
    
    VALUE
    
    
    LOSSES
    
    
    VALUE
    
    
    LOSSES
    
    
    VALUE2009Obligations of U.S.
Corporations and
Agencies
    
    $
    142,085
    
    
    $
    10,007,915
    
    
    $
    
    
    
    $
    
    
    
    $
    142,085
    
    
    $
    10,007,915Mortgage-backed
securities
    
    
    5,798
    
    
    
    48,622
    
    
    
    170,351
    
    
    
    2,107,044
    
    
    
    176,149
    
    
    
    2,155,666Obligations of
state & political
subdivisions
    
    
    22,182
    
    
    
    3,033,076
    
    
    
    
    
    
    
    
    
    
    
    22,182
    
    
    
    3,033,076Total debt
securities
    
    
    170,065
    
    
    
    13,089,613
    
    
    
    170,351
    
    
    
    2,107,044
    
    
    
    340,416
    
    
    
    15,196,657Equity securities
    
    
    
    
    
    
    
    
    
    
    12,115
    
    
    
    41,620
    
    
    
    12,115
    
    
    
    41,620Total temporarily
impaired
securities
    
    $
    170,065
    
    
    $
    13,089,613
    
    
    $
    182,466
    
    
    $
    2,148,664
    
    
    $
    352,531
    
    
    $
    15,238,2772008Mortgage-backed
securities
    
    $
    312,520
    
    
    $
    9,327,561
    
    
    $
    104,975
    
    
    $
    1,101,425
    
    
    $
    417,495
    
    
    $
    10,428,986Obligations of
state & political
subdivisions
    
    
    83,073
    
    
    
    4,291,747
    
    
    
    
    
    
    
    
    
    
    
    83,073
    
    
    
    4,291,747Total debt
securities
    
    
    395,593
    
    
    
    13,619,308
    
    
    
    104,975
    
    
    
    1,101,425
    
    
    
    500,568
    
    
    
    14,720,733Equity securities
    
    
    
    
    
    
    
    
    
    
    72,345
    
    
    
    64,038
    
    
    
    72,345
    
    
    
    64,038Total temporarily
impaired
securities
    
    $
    395,593
    
    
    $
    13,619,308
    
    
    $
    177,320
    
    
    $
    1,165,463
    
    
    $
    572,913
    
    
    $
    14,784,771
  39




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2  LOANS
  2009
    
    
    2008Commercial
    
    $
    69,350,408
    
    
    $
    61,859,176Commercial real estate
    
    
    107,794,230
    
    
    
    109,284,157Residential real estate
    
    
    114,881,413
    
    
    
    125,148,884Installment and credit card
    
    
    7,464,121
    
    
    
    8,676,948Construction
    
    
    13,761,260
    
    
    
    11,238,597Deferred loan costs
    
    
    230,910
    
    
    
    82,650Total Loans
    
    $
    313,482,342
    
    
    $
    316,290,412
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    3,393,685
    
    
    $
    2,585,901
    
    
    $
    2,607,118Provision for loan losses
    
    
    1,337,044
    
    
    
    333,094
    
    
    
    472,100Loans charged-off
    
    
    (884,554
    )
    
    
    (154,299
    )
    
    
    (612,723
    )Recoveries
    
    
    213,400
    
    
    
    170,850
    
    
    
    119,406Addition from acquisition
    
    
    
    
    
    
    458,139
    
    
    
    Ending balance
    
    $
    4,059,575
    
    
    $
    3,393,685
    
    
    $
    2,585,901
  2009
    
    2008Year-end loans accounted for under ASC Topic 310
    
    $
    874,339
    
    
    $
    816,270Year-end loans with no allowance for
loan losses allocated
    
    
    181,192
    
    
    
    20,381Year-end loans with allowance for loan
losses allocated
    
    
    1,023,329
    
    
    
    1,568,393Amount of the allowance allocated
    
    
    343,283
    
    
    
    335,492
 2009
    
    2008
    
    2007Average of impaired loans during the year
    
    $
    1,866,796
    
    
    $
    469,712
    
    
    $
    729,699Interest income recognized during
impairment
    
    
    17,328
    
    
    
    8,439
    
    
    
    25,876Cash-basis interest income recognized
    
    
    15,703
    
    
    
    7,890
    
    
    
    25,674Accrued interest not recognized
    
    
    96,306
    
    
    
    24,937
    
    
    
    35,166
  2009
    
    2008Loans past due over 90 days still accruing interest
    
    $
    354,683
    
    
    $
    415,861Nonaccrual loans
    
    
    3,785,846
    
    
    
    2,226,867Interest income on nonaccrual loans not recognized
    
    
    194,290
    
    
    
    52,517
 40




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2  LOANS (CONTINUED)
  Mortgage Servicing Rights
  NOTE 3  BUSINESS COMBINATION
    FAIR VALUE OF(Dollars in thousands)
    
    NET ASSETS ACQUIREDLoans
    
    $
    56,206Other tangible assets
    
    
    27,392Goodwill
    
    
    1,725Core deposit intangible
    
    
    545Deposits
    
    
    (58,880
    )Borrowings
    
    
    (17,616
    )Other liabilities
    
    
    (1,244
    )Total purchase price
    
    $
    8,128
  41




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3  BUSINESS COMBINATION (CONTINUED)
 pro forma
 (in thousands, except per share amounts)
    
    2008Net interest income
    
    $
    15,858Provision for loan losses
    
    
    1,130Net interest income after provision for loan losses
    
    
    14,728Noninterest income
    
    
    3,188Noninterest expense
    
    
    14,310Income before income taxes
    
    
    3,606Federal income tax provision
    
    
    1,219Net income
    
    $
    2,387Net income per common shareBasic
    
    $
    0.87Diluted
    
    $
    0.87Average common shares outstanding:Basic
    
    
    2,743,015Diluted
    
    
    2,743,015
 pro forma pro forma pro forma
 NOTE 4  PREMISES AND EQUIPMENT
  2009
    
    
    2008Land and improvements
    
    $
    1,417,762
    
    
    $
    1,267,762Buildings and improvements
    
    
    9,606,409
    
    
    
    9,009,325Furniture and equipment
    
    
    6,222,622
    
    
    
    6,023,404Leasehold improvements
    
    
    172,483
    
    
    
    675,48417,419,276
    
    
    
    16,975,975Accumulated depreciation
    
    
    9,065,407
    
    
    
    8,505,120Premises and equipment, net
    
    $
    8,353,869
    
    
    $
    8,470,855
   42




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 5  GOODWILL AND OTHER INTANGIBLE ASSETS
 Goodwill
   Goodwill acquired October 31, 2008
    
    $
    1,448,029Balance as of December 31, 2008
    
    
    1,448,029Adjustments to goodwill during the period
    
    
    277,393Balance as of December 31, 2009
    
    $
    1,725,422
 Core Deposit Intangible
  DECEMBER 31,2009
    
    
    2008Gross carrying amount
    
    $
    545,000
    
    
    $
    545,000Accumulated amortization
    
    
    (76,000
    )
    
    
    (11,000
    )Net carrying amount
    
    $
    469,000
    
    
    $
    534,000
  Core deposit amortization2010
    
    $
    63,0002011
    
    
    61,0002012
    
    
    59,0002013
    
    
    56,0002014
    
    
    52,000Thereafter
    
    
    178,000$
    469,000
 NOTE 6  INTEREST-BEARING DEPOSITS
 Interest-bearing deposits at December 31, 2009 and 2008 are as follows:
 2009
    
    
    2008Demand
    
    $
    57,941,477
    
    
    $
    47,515,178Savings
    
    
    69,556,055
    
    
    
    54,654,402Time deposits:In excess of $100,000
    
    
    45,739,746
    
    
    
    48,458,513Other
    
    
    102,274,466
    
    
    
    105,766,054Total interest-bearing deposits
    
    $
    275,511,744
    
    
    $
    256,394,147
 43




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 6  INTEREST-BEARING DEPOSITS (CONTINUED)
 At December 31, 2009, stated maturities of time deposits were as follows:
 20092010
    
    $
    78,783,6452011
    
    
    45,809,5072012
    
    
    14,657,0092013
    
    
    5,744,0722014
    
    
    2,820,8222015 and beyond
    
    
    199,157Total
    
    $
    148,014,212
 NOTE 7  BORROWINGS
 Short-term borrowings
  2009
    
    2008Balance at year-end
    
    $
    28,763,604
    
    
    $
    22,891,593Average balance outstanding
    
    
    25,443,564
    
    
    
    25,761,283Maximum month-end balance
    
    
    30,163,621
    
    
    
    28,826,290Weighted-average rate at year-end
    
    
    0.76
    %
    
    
    1.52
    %Weighted-average rate during the year
    
    
    1.06
    
    
    
    2.23
  Other borrowings
 The following table sets forth information concerning other borrowings:
 STATED INTERESTMATURITY RANGE
    
    WEIGHTED AVERAGE
    
    
    RATE RANGE
    
    
    AT DECEMBER 31DESCRIPTION
    
    FROM
    
    TO
    
    INTEREST RATE
    
    
    FROM
    
    
    TO
    
    
    2009
    
    
    2008Fixed rate
    
    1/19/10
    
    12/21/17
    
    
    4.08
    %
    
    
    1.82
    %
    
    
    6.23
    %
    
    $
    42,198,367
    
    
    $
    47,104,719Fixed rate amortizing
    
    12/01/10
    
    3/01/17
    
    
    5.04
    %
    
    
    3.40
    %
    
    
    7.15
    %
    
    
    2,811,414
    
    
    
    3,892,818$
    45,009,781
    
    
    $
    50,997,537
  WEIGHTED-YEAR ENDING DECEMBER 31,
    
    AMOUNT
    
    
    AVERAGE RATE2010
    
    $
    22,102,133
    
    
    
    3.39
    %2011
    
    
    3,747,602
    
    
    
    3.362012
    
    
    6,490,196
    
    
    
    2.552013
    
    
    212,962
    
    
    
    6.062014
    
    
    189,782
    
    
    
    6.032015 and beyond
    
    
    12,267,106
    
    
    
    3.67$
    45,009,781
    
    
    
    3.37
    %
  44




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8  INCOME TAXES
  2009
    
    
    2008
    
    
    2007Current
    
    $
    1,131,100
    
    
    $
    1,776,300
    
    
    $
    1,787,250Deferred
    
    
    402,900
    
    
    
    (46,900
    )
    
    
    (113,050
    )Total income tax provision
    
    $
    1,534,000
    
    
    $
    1,729,400
    
    
    $
    1,674,200
  2009
    
    
    2008
    
    
    2007Expected provision using statutory
federal income tax rate
    
    $
    1,674,600
    
    
    $
    1,790,600
    
    
    $
    1,763,900Tax-exempt income on state and municipal
securities and political subdivision loans
    
    
    (138,300
    )
    
    
    (86,100
    )
    
    
    (94,760
    )Interest expense associated with carrying
certain state and municipal securities
and political subdivision loans
    
    
    7,900
    
    
    
    7,900
    
    
    
    9,400Other
    
    
    (10,200
    )
    
    
    17,000
    
    
    
    (4,340
    )Total income tax provision
    
    $
    1,534,000
    
    
    $
    1,729,400
    
    
    $
    1,674,200
  2009
    
    
    2008Allowance for loan losses
    
    $
    1,472,500
    
    
    $
    1,274,500Net operating loss carryforward
    
    
    983,800
    
    
    
    1,087,800Purchase accounting adjustments
    
    
    
    
    
    
    295,300Capital loss carryforward
    
    
    35,400
    
    
    
    93,200Other
    
    
    83,900
    
    
    
    65,3002,575,600
    
    
    
    2,816,100Valuation allowance on deferred tax assets
    
    
    (35,400
    )
    
    
    (93,200
    )Deferred tax assets
    
    
    2,540,200
    
    
    
    2,722,900Depreciation of premises and equipment
    
    
    (226,300
    )
    
    
    (210,500
    )Federal Home Loan Bank stock dividends
    
    
    (736,200
    )
    
    
    (736,200
    )Deferred loan fees
    
    
    (80,500
    )
    
    
    (77,700
    )Unrealized gain on securities available for sale
    
    
    (550,100
    )
    
    
    (74,100
    )Prepaid FDIC assessments and other
    
    
    (205,300
    )
    
    
    (98,400
    )Other
    
    
    (119,900
    )
    
    
    (25,200
    )Deferred tax liabilities
    
    
    (1,918,300
    )
    
    
    (1,222,100
    )Net deferred tax asset
    
    $
    621,900
    
    
    $
    1,500,800
 45




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8  INCOME TAXES (CONTINUED)
   Accounting for Uncertainty in Income
Taxes.
 NOTE 9  EMPLOYEE BENEFITS
   46




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 9  EMPLOYEE BENEFITS (CONTINUED)
  2009
    
    2008
    
    2007WEIGHTED
    
    
    
    
    
    WEIGHTED
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    AVERAGE
    
    
    
    
    
    AVERAGEEXERCISE
    
    
    
    
    
    EXERCISE
    
    
    
    
    
    EXERCISESHARES
    
    PRICE
    
    SHARES
    
    PRICE
    
    SHARES
    
    PRICEOutstanding at beginning
of year
    
    
    40,720
    
    
    $
    17.55
    
    
    
    50,840
    
    
    $
    17.64
    
    
    
    51,245
    
    
    $
    17.63Granted
    
    
    1,000
    
    
    
    15.00
    
    
    
    2,000
    
    
    
    16.10
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40
    )
    
    
    (16.05
    )Forfeited
    
    
    (1,525
    )
    
    
    (17.98
    )
    
    
    (12,120
    )
    
    
    (17.77
    )
    
    
    (365
    )
    
    
    (16.05
    )Outstanding at end of year
    
    
    40,195
    
    
    $
    17.47
    
    
    
    40,720
    
    
    $
    17.55
    
    
    
    50,840
    
    
    $
    17.64Options exercisable
at year-end
    
    
    40,195
    
    
    $
    17.47
    
    
    
    34,768
    
    
    $
    17.45
    
    
    
    32,984
    
    
    $
    17.45Weighted-average fair
value of options
granted during year
    
    
    
    
    
    $
    1.40
    
    
    
    
    
    
    $
    1.09
    
    
    
    
    
    
    
    N/A
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTEDAVERAGE
    
    
    
    
    
    
    WEIGHTEDRANGE OF
    
    
    
    
    
    REMAINING
    
    
    
    
    
    
    AVERAGEEXERCISABLE
    
    
    
    
    
    CONTRACTUAL LIFE
    
    
    
    
    
    
    EXERCISEPRICES
    
    NUMBER
    
    
    (YEARS)
    
    
    NUMBER
    
    
    PRICE$15.00
    
    
    1,000
    
    
    
    4.55
    
    
    
    1,000
    
    
    $
    15.0016.05
    
    
    7,435
    
    
    
    2.96
    
    
    
    7,435
    
    
    
    16.0516.10
    
    
    2,000
    
    
    
    3.53
    
    
    
    2,000
    
    
    
    16.1018.00
    
    
    29,760
    
    
    
    6.16
    
    
    
    29,760
    
    
    
    18.00Outstanding at year-end
    
    
    40,195
    
    
    
    5.40
    
    
    
    40,195
    
    
    $
    17.47
  NOTE 10  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
  47




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 10  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED)
  CONTRACT AMOUNT2009
    
    
    2008Commitments to extend credit
    
    $
    66,211,000
    
    
    $
    61,019,000Letters of credit
    
    $
    1,213,000
    
    
    $
    772,000
   NOTE 11  RELATED-PARTY TRANSACTIONS
  2009Balance at beginning of year
    
    $
    5,597,649New loans and advances
    
    
    286,150Repayments, including loans sold
    
    
    (955,250
    )Balance at end of year
    
    $
    4,928,549
  NOTE 12  REGULATORY MATTERS
  48




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 12  REGULATORY MATTERS (CONTINUED)
    MINIMUM
    
    MINIMUM REQUIREDREQUIRED
    
    TO BE WELLFOR CAPITAL
    
    CAPITALIZED UNDERADEQUACY
    
    PROMPT CORRECTIVEACTUAL
    
    PURPOSES
    
    ACTION REGULATIONS(Dollars in thousands)
    
    AMOUNT
    
    RATIO
    
    AMOUNT
    
    RATIO
    
    AMOUNT
    
    RATIOAs of December 31, 2009Total capital(to risk-weighted assets)Consolidated
    
    $
    46,229
    
    
    
    15.7
    %
    
    $
    23,552
    
    
    
    8.0
    %
    
    $
    29,440
    
    
    
    10.0
    %Bank
    
    
    45,269
    
    
    
    15.4
    
    
    
    23,541
    
    
    
    8.0
    
    
    
    29,426
    
    
    
    10.0Tier I capital(to risk-weighted assets)Consolidated
    
    
    42,546
    
    
    
    14.5
    
    
    
    11,776
    
    
    
    4.0
    
    
    
    17,664
    
    
    
    6.0Bank
    
    
    41,586
    
    
    
    14.1
    
    
    
    11,770
    
    
    
    4.0
    
    
    
    17,655
    
    
    
    6.0Tier I capital(to average assets)Consolidated
    
    
    42,546
    
    
    
    9.7
    
    
    
    17,499
    
    
    
    4.0
    
    
    
    21,874
    
    
    
    5.0Bank
    
    
    41,586
    
    
    
    9.5
    
    
    
    17,491
    
    
    
    4.0
    
    
    
    21,864
    
    
    
    5.0As of December 31, 2008Total capital(to risk-weighted assets)Consolidated
    
    $
    44,683
    
    
    
    15.5
    %
    
    $
    23,011
    
    
    
    8.0
    %
    
    $
    28,764
    
    
    
    10.0
    %Bank
    
    
    43,600
    
    
    
    15.2
    
    
    
    22,968
    
    
    
    8.0
    
    
    
    28,711
    
    
    
    10.0Tier I capital(to risk-weighted assets)Consolidated
    
    
    41,289
    
    
    
    14.4
    
    
    
    11,505
    
    
    
    4.0
    
    
    
    17,258
    
    
    
    6.0Bank
    
    
    40,206
    
    
    
    14.0
    
    
    
    11,484
    
    
    
    4.0
    
    
    
    17,226
    
    
    
    6.0Tier I capital(to average assets)Consolidated
    
    
    41,289
    
    
    
    10.4
    
    
    
    15,955
    
    
    
    4.0
    
    
    
    19,944
    
    
    
    5.0Bank
    
    
    40,206
    
    
    
    10.1
    
    
    
    15,929
    
    
    
    4.0
    
    
    
    19,912
    
    
    
    5.0
 49




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 12  REGULATORY MATTERS (CONTINUED)
  NOTE 13  CONDENSED PARENT COMPANY FINANCIAL INFORMATION
  CONDENSED BALANCE SHEETS
    
    2009
    
    
    2008ASSETSCash deposited with subsidiary bank
    
    $
    646,347
    
    
    $
    601,525Investment in subsidiary bank
    
    
    44,870,127
    
    
    
    42,384,823Securities available-for-sale
    
    
    52,905
    
    
    
    75,758Other assets
    
    
    267,883
    
    
    
    589,094Total assets
    
    $
    45,837,262
    
    
    $
    43,651,200LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Other liabilities
    
    $
    15,200
    
    
    $
    182,728Total shareholders equity
    
    
    45,822,062
    
    
    
    43,468,472Total liabilities and shareholders equity
    
    $
    45,837,262
    
    
    $
    43,651,200
 CONDENSED STATEMENTS OF INCOME
    
    2009
    
    
    2008
    
    
    2007Interest on securities
    
    $
    1,454
    
    
    $
    2,084
    
    
    $
    11,242Other income
    
    
    
    
    
    
    24,072
    
    
    
    Dividends from subsidiary
    
    
    2,200,000
    
    
    
    3,500,000
    
    
    
    2,500,000Securities gain
    
    
    810
    
    
    
    
    
    
    
    5,430Other-than-temporary impairment losses
    
    
    (70,000
    )
    
    
    (35,000
    )
    
    
    Total income
    
    
    2,132,264
    
    
    
    3,491,156
    
    
    
    2,516,672Operating expenses
    
    
    517,699
    
    
    
    421,797
    
    
    
    450,030Income before taxes and
undistributed equity income of subsidiary
    
    
    1,614,565
    
    
    
    3,069,359
    
    
    
    2,066,642Income tax benefit
    
    
    (176,000
    )
    
    
    (135,000
    )
    
    
    (150,000
    )Equity earnings in subsidiary, net of dividends
    
    
    1,600,718
    
    
    
    332,711
    
    
    
    1,297,272Net income
    
    $
    3,391,283
    
    
    $
    3,537,070
    
    
    $
    3,513,914
 50




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 13  CONDENSED PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
 CONDENSED STATEMENTS OF CASH FLOWS
    
    2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    3,391,283
    
    
    $
    3,537,070
    
    
    $
    3,513,914Adjustments to reconcile net income to
cash provided by operations:Security accretion
    
    
    
    
    
    
    
    
    
    
    (508
    )Securities gain
    
    
    (810
    )
    
    
    
    
    
    
    (5,430
    )Other-than-temporary impairment
of investments
    
    
    70,000
    
    
    
    35,000
    
    
    
    Software amortization
    
    
    
    
    
    
    1,667
    
    
    
    6,667Equity earnings in subsidiary,
net of dividends
    
    
    (1,600,718
    )
    
    
    (332,711
    )
    
    
    (1,297,272
    )Stock compensation expense
    
    
    7,313
    
    
    
    15,000
    
    
    
    24,554Change in other assets, liabilities
    
    
    133,353
    
    
    
    (187,022
    )
    
    
    (21,451
    )Net cash provided by operating activities
    
    
    2,000,421
    
    
    
    3,069,004
    
    
    
    2,220,474Cash flows from investing activities:Purchase of investment securities
    
    
    
    
    
    
    (7,370
    )
    
    
    (95,787
    )Proceeds from sale of investment securities
    
    
    13,457
    
    
    
    
    
    
    
    Maturities, calls of investment securities
    
    
    
    
    
    
    
    
    
    
    504,985Acquisition of Indian Village
    
    
    
    
    
    
    (1,989,555
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    13,457
    
    
    
    (1,996,925
    )
    
    
    409,198Cash flows from financing activities:Purchase of treasury shares
    
    
    
    
    
    
    (415,259
    )
    
    
    (904,410
    )Issuance of treasury shares
    
    
    
    
    
    
    
    
    
    
    644Cash dividends paid
    
    
    (1,969,056
    )
    
    
    (1,803,543
    )
    
    
    (1,771,491
    )Net cash used in financing activities
    
    
    (1,969,056
    )
    
    
    (2,218,802
    )
    
    
    (2,675,257
    )Net change in cash
    
    
    44,822
    
    
    
    (1,146,723
    )
    
    
    (45,585
    )Cash at beginning of year
    
    
    601,525
    
    
    
    1,748,248
    
    
    
    1,793,833Cash at end of year
    
    $
    646,347
    
    
    $
    601,525
    
    
    $
    1,748,248
 NOTE 14  OTHER COMPREHENSIVE INCOME
  2009
    
    
    2008
    
    
    2007Unrealized holding gains on
available-for-sale securities
    
    $
    1,481,966
    
    
    $
    545,115
    
    
    $
    538,825Less reclassification adjustment for securities
losses (gains) recognized in income
    
    
    (81,890
    )
    
    
    35,000
    
    
    
    (16,830
    )Net unrealized holding gains
    
    
    1,400,076
    
    
    
    580,115
    
    
    
    521,995Federal income tax provision
    
    
    476,026
    
    
    
    197,239
    
    
    
    177,478Other comprehensive income
    
    $
    924,050
    
    
    $
    382,876
    
    
    $
    344,517
 51




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 15  FAIR VALUE MEASUREMENTS
  Level I:
    
    Inputs to the
valuation methodology are unadjusted quoted prices for identical assets or liabilities in active
markets that the Company has the ability to access.Level II:
    
    Inputs to the valuation methodology include quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or similar assets or liabilities in
inactive markets; inputs other than quoted prices that are observable for the asset or liability;
inputs that are derived principally from or corroborated by observable market data or other means
(including certified appraisals). If the asset or liability has a specified (contractual) term, the
Level II input must be observable for substantially the full term of the asset or liability.Level III:
    
    Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
  52




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 15  FAIR VALUE MEASUREMENTS (CONTINUED)
 Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalDecember 31, 2009Assets:Securities available-for-saleU.S. Treasury security
    
    $
    100,184
    
    
    $
    
    
    
    $
    
    
    
    $
    100,184Obligations of U.S. government corporations
and agencies
    
    
    
    
    
    
    14,033,105
    
    
    
    
    
    
    
    14,033,105Mortgage-backed securities
    
    
    
    
    
    
    51,357,447
    
    
    
    
    
    
    
    51,357,447Obligations of states and political subdivisions
    
    
    
    
    
    
    9,613,810
    
    
    
    
    
    
    
    9,613,810Total debt securities
    
    
    100,184
    
    
    
    75,004,362
    
    
    
    
    
    
    
    75,104,546Equity securities
    
    
    52,905
    
    
    
    
    
    
    
    
    
    
    
    52,905Total available-for-sale securities
    
    $
    153,089
    
    
    $
    75,004,362
    
    
    $
    
    
    
    $
    75,157,451December 31, 2008Securities available-for-saleU.S. Treasury security
    
    $
    100,461
    
    
    $
    
    
    
    $
    
    
    
    $
    100,461Obligations of U.S. government corporations
and agencies
    
    
    
    
    
    
    12,540,356
    
    
    
    
    
    
    
    12,540,356Mortgage-backed securities
    
    
    
    
    
    
    56,898,945
    
    
    
    
    
    
    
    56,898,945Obligations of states and political subdivisions
    
    
    
    
    
    
    7,040,296
    
    
    
    
    
    
    
    7,040,296Total debt securities
    
    
    100,461
    
    
    
    76,479,597
    
    
    
    
    
    
    
    76,580,058Equity securities
    
    
    75,758
    
    
    
    
    
    
    
    
    
    
    
    75,758Total available-for-sale securities
    
    $
    176,219
    
    
    $
    76,479,597
    
    
    $
    
    
    
    $
    76,655,816
   Level I
    
    Level II
    
    Level III
    
    TotalDecember 31, 2009Assets Measured on a Nonrecurring Basis:Impaired loans
    
    $
    
    
    
    $
    1,735,577
    
    
    $
    
    
    
    $
    1,735,577Other real estate owned
    
    
    
    
    
    
    162,200
    
    
    
    
    
    
    
    162,200Premises
    
    
    
    
    
    
    180,538
    
    
    
    
    
    
    
    180,538Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    138,036
    
    
    
    138,036December 31, 2008Impaired loans
    
    $
    
    
    
    $
    2,049,171
    
    
    $
    
    
    
    $
    2,049,171Other real estate owned
    
    
    
    
    
    
    79,000
    
    
    
    
    
    
    
    79,000Premises
    
    
    
    
    
    
    327,112
    
    
    
    
    
    
    
    327,112Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    63,014
    
    
    
    63,014
 53




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 16  FAIR VALUES OF FINANCIAL INSTRUMENTS
  2009
    
    2008CARRYING
    
    FAIR
    
    CARRYING
    
    FAIR(Dollars in thousands)
    
    VALUE
    
    VALUE
    
    VALUE
    
    VALUEFinancial assets:Cash and cash equivalents
    
    $
    42,661
    
    
    $
    42,661
    
    
    $
    12,746
    
    
    $
    12,746Securities
    
    
    80,621
    
    
    
    80,621
    
    
    
    81,888
    
    
    
    81,888Loans, net
    
    
    309,423
    
    
    
    313,993
    
    
    
    312,897
    
    
    
    318,529Accrued Interest Receivable
    
    
    1,315
    
    
    
    1,315
    
    
    
    1,386
    
    
    
    1,386Financial liabilities:Deposits
    
    $
    329,486
    
    
    $
    331,511
    
    
    $
    305,453
    
    
    $
    308,213Short-term borrowings
    
    
    28,764
    
    
    
    28,764
    
    
    
    22,892
    
    
    
    22,892Other borrowings
    
    
    45,010
    
    
    
    46,535
    
    
    
    50,998
    
    
    
    53,073Accrued Interest Payable
    
    
    322
    
    
    
    322
    
    
    
    417
    
    
    
    417
  Cash and cash equivalents; Accrued interest receivable; Short-term borrowings, Accrued interest
payable
  Securities
  Loans
  Deposits and Other Borrowed Funds
    54




---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 17  CONTINGENT LIABILITIES
   NOTE 18  QUARTERLY FINANCIAL DATA (UNAUDITED)
  BASIC
    
    DILUTEDNET
    
    
    
    
    
    EARNINGS
    
    EARNINGSINTEREST
    
    INTEREST
    
    NET
    
    PER
    
    PERINCOME
    
    INCOME
    
    INCOME
    
    SHARE
    
    SHARE2009First quarter
    
    $
    5,579,344
    
    
    $
    3,893,560
    
    
    $
    895,943
    
    
    $
    .33
    
    
    $
    .33Second quarter
    
    
    5,465,886
    
    
    
    3,832,067
    
    
    
    706,051
    
    
    
    .26
    
    
    
    .26Third quarter
    
    
    5,434,331
    
    
    
    3,864,577
    
    
    
    858,322
    
    
    
    .31
    
    
    
    .31Fourth quarter
    
    
    5,625,326
    
    
    
    4,174,467
    
    
    
    930,967
    
    
    
    .34
    
    
    
    .342008First quarter
    
    $
    5,283,411
    
    
    $
    3,379,765
    
    
    $
    1,001,760
    
    
    $
    .41
    
    
    $
    .41Second quarter
    
    
    4,893,331
    
    
    
    3,285,764
    
    
    
    877,762
    
    
    
    .36
    
    
    
    .36Third quarter
    
    
    4,966,317
    
    
    
    3,439,827
    
    
    
    890,564
    
    
    
    .37
    
    
    
    .37Fourth quarter
    
    
    5,477,667
    
    
    
    3,772,553
    
    
    
    766,984
    
    
    
    .29
    
    
    
    .29
 55




---



##### 



OFFICERS OF THE COMMERCIAL & SAVINGS BANK
 Linda C. Amos
 Rebecca A. Baker
 Pamela S. Basinger
 Deborah S. Berner
 Pamela L. Bromund
 Wendy D. Brown
 C. Dawn Butler
 Beverly A. Carr
 Colby M. Chamberlin
 Dale J. Clinton
 G. Gail Cochran
 Peggy L. Conn
 Marianne Davis
 Paula S. Foy
 Lori S. Frantz
 Carrie A. Gerber
 Eric R. Giauque
 Rick L. Ginther
 Loretta Gray
 Paul D. Greig
 Jason B. Hummel
 Julie A. Jones
 Stephen K. Kilpatrick
 Larry S. Kutcher
 Betty C. Lyon
 Kevin J. McAllister
 Jason R. McCulloch
 Sherry A. McRobie
 Paula J. Meiler
 A. Lee Miller
 Edward J. Miller
 Daniel L. Muse
 Lisa M. Nelson
 Shawn E. Oswald
 Amy R. Patterson
 Christopher S. Rickly
 Thomas S. Rumbaugh
 Rebecca J. Shultz
 Melissa F. Sprang
 Scott A. Stallman
 Harland L. Stebbins
 Eddie L. Steiner
 Steven J. Stiffler
 Eric D. Strouse
 Elaine A. Tedrow
 Jennifer M. Thorpe
 William R. Tinlin
 Brian D. Troyer
 Jane C. Whitmer
 56




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##### 



BANKING CENTER INFORMATION
 THE COMMERCIAL & SAVINGS BANKINFORMATION & CUSTOMER SERVICE
    
    330-674-9015 or 1-800-654-901524 HOUR XPRESS PHONE BANKING
    
    330-674-2720 or 1-888-438-272024 HOUR XPRESS NET BANKING & BILLPAY
    
    
    
    www.csb1.comLOAN SERVICES91 N. Clay St., Millersburg
    
    Personal Loans
    
    330-763-2823Business Loans
    
    330-763-2822OPERATIONS CENTER91 N. Clay St., Millersburg
    
    
    
    330-674-9015TRUST & INVESTMENT SERVICES91 N. Clay St., Millersburg
    
    Holmes, Stark & Tuscarawas County
    
    330-674-2397TRUST & INVESTMENT SERVICES146 E. Liberty St., Suite 230, Wooster
    
    Wayne County
    
    330-264-0334CSB BANKING CENTERSMillersburg LocationsCLINTON COMMONS BANKING CENTER2102 Glen Dr., Millersburg (Drive-Up ATM)
    
    330-674-2265SOUTH CLAY BANKING CENTER91 S. Clay St., Millersburg (Drive-Up ATM)
    
    330-674-0687Holmes, Tuscarawas, Wayne & Stark County LocationsBERLIN BANKING CENTER4587 S.R. 39, Berlin (Drive-Up ATM)
    
    330-893-3565CHARM BANKING CENTER4440 C.R. 70, Charm (Walk-Up ATM)

    
    330-893-3323GNADENHUTTEN BANKING CENTER100 S. Walnut St., Gnadenhutten
    
    740-254-4313NEW PHILADELPHIA BANKING CENTER635 W. High Ave., New Philadelphia (Drive-Up ATM)

    
    330-308-4867NORTH CANTON BANKING CENTER1210 North Main St., North Canton (Drive-Up ATM)

    
    330-497-0839ORRVILLE AREA BANKING CENTER461 Wadsworth Rd., Orrville (Drive-Up ATM)
    
    330-682-8000ORRVILLE HIGH STREET BANKING CENTER330 W. High St., Orrville (Drive-Up ATM)

    
    330-682-8001SHREVE BANKING CENTER 333 W. South St., Shreve (Drive-Up ATM)

    
    330-567-2226SUGARCREEK BANKING CENTER 127 S. Broadway, Sugarcreek (Drive-Up ATM)

    
    330-852-4444WALNUT CREEK BANKING CENTER4980 Olde Pump St., Walnut Creek (Walk-Up ATM)

    
    330-893-2961WINESBURG BANKING CENTER2225 U.S. 62, Winesburg (Drive-Up ATM)

    
    330-359-5543OTHER CSB ATMS TO SERVE YOUPOMERENE HOSPITAL981 Wooster Rd., MillersburgSKIPS CONVENIENCE STORE213 Main St., GnadenhuttenTONYS UNION 763054 E. Main St., Port WashingtonUNION HOSPITAL659 Boulevard, Dover
    

(CSB LOGO)    (CSB LOGO)




---



##### 



SHAREHOLDER & GENERAL INQUIRIES
 CSBB.OB
 CORPORATE OFFICE91 N. Clay St., Millersburg
    
    330-674-9015
 If you have questions regarding your
CSB Bancorp, Inc. stock, please contact:
Registrar and Transfer Company
Attn: Investor Relations 
10 Commerce Drive 
Cranford, New Jersey 07016
800-368-5948
www.rtco.com
Peggy L. Conn
Corporate Secretary 
CSB Bancorp, Inc. 
91 North Clay Street 
Millersburg, Ohio 44654
330-674-9015  800-654-9015
Legal Counsel
Bricker & Eckler LLP 
100 South Third Street 
Columbus, Ohio 43215
    
    If you are interested in purchasing shares of
CSB Bancorp, Inc., you may contact your local
broker or one of the following:
Jay McCulloch
Investment Executive 
CSB Investment ServicesLocated at The Commercial & Savings Bank

91 North Clay Street 
P.O. Box 50
Millersburg, Ohio 44654
330-674-2397  800-654-9015George Geissbuhler
Sweney Cartwright & Co. 
17 South High Street, Suite 300
Columbus, Ohio 43215
800-334-7481Nicolas Nick P. Bicking
Boenning & Scattergood 
9916 Brewster Lane 
Powell, Ohio 43065
866-326-8113
    
    CSB Bancorp, Inc. is required to
file an annual report on Form 10-K
annually with the Securities and
Exchange Commission. Copies of
the Form 10-K annual report and
the Companys quarterly reports
may be obtained without charge by
contacting:
Paula J. Meiler
Chief Financial Officer 
CSB Bancorp, Inc. 
91 North Clay Street 
Millersburg, Ohio 44654
330-674-9015  800-654-9015The annual meeting of shareholders
is currently scheduled to be held
on Wednesday, April 21, 2010 at
7:00 pm, at the Carlisle Inn in
Walnut Creek, Ohio.
 58




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##### 



A PARTNERSHIP 130 YEARS STRONG
CSB BANCORP, INC.
Awarding scholarships for 20 years Helping to strengthen established community resourcesSponsoring
community events
Hiland graduate receives $1,000Orrville Area Boys & Girls Club Christmas in Tuscora Park