##### Table of Contents



Exhibit 13




---



##### 



Report to
 2006 Financial Highlights
    
    
    32006 Letter to Shareholders
    
    
    42006 Financial Review
    
    
    10Report of
Independent Registered Public Accounting Firm
    
    
    26Consolidated Balance Sheets
    
    
    27Consolidated Statements of Income
    
    
    28Consolidated Statements of Shareholders Equity
    
    
    29Consolidated Statements of Cash Flows
    
    
    30Summary of Significant Accounting Policies
    
    
    32Notes to Consolidated Financial Statements
    
    
    36Officers of The Commercial & Savings Bank
    
    
    50General Information
    
    
    51




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##### Table of Contents



2006
    
    FINANCIAL HIGHLIGHTS
          For
the years ended December 31, 2006 and 2005
    

(CSB BANCORP, INC LOGO)
 Dollars in thousands, except per share data
    
    2006
    
    2005
    
    % ChangeConsolidated ResultsNet interest income
    
    $
    13,168
    
    
    $
    12,546
    
    
    
    5
    %Net interest
incomefully taxable-equivalent (FTE) basis
    
    
    13,377
    
    
    
    12,879
    
    
    
    4Noninterest income
    
    
    2,592
    
    
    
    2,580
    
    
    
    < 1Provision for loan losses
    
    
    302
    
    
    
    283
    
    
    
    7Noninterest expense
    
    
    10,915
    
    
    
    10,803
    
    
    
    1Net income
    
    
    3,110
    
    
    
    2,873
    
    
    
    8At Year-endLoans, net
    
    $
    229,825
    
    
    $
    212,574
    
    
    
    8
    %Assets
    
    
    327,240
    
    
    
    320,989
    
    
    
    2Deposits
    
    
    260,178
    
    
    
    255,403
    
    
    
    2Shareholders equity
    
    
    35,070
    
    
    
    35,170
    
    
    
    < 1Cash dividends declared
    
    
    0.64
    
    
    
    0.56
    
    
    
    14Book value
    
    
    14.03
    
    
    
    13.64
    
    
    
    3Market price
    
    
    19.00
    
    
    
    21.00
    
    
    
     10Basic earnings per share
    
    
    1.23
    
    
    
    1.09
    
    
    
    13Diluted earnings per share
    
    
    1.23
    
    
    
    1.09
    
    
    
    13Financial PerformanceReturn on average assets
    
    
    0.97
    %
    
    
    0.91
    %Return on average equity
    
    
    8.95
    
    
    
    7.92Net interest margin
    
    
    4.38
    
    
    
    4.23Efficiency ratio
    
    
    68.35
    
    
    
    69.88Capital RatiosRisk-based capital:Tier 1
    
    
    15.90
    %
    
    
    17.10
    %Total
    
    
    17.10
    
    
    
    18.20Leverage
    
    
    10.80
    
    
    
    11.10
 3




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##### Table of Contents



CSB
Bancorp, Inc.
 
 2006 LETTER TO SHAREHOLDERS
     
  Eddie L. Steiner
    
    Rick L. Ginther
    
    Paul D. Greig
    
    Paula J. MeilerPresident,
    
    President,
    
    (Seated)
    
    Senior Vice President,Chief Executive Officer,
    
    Chief Executive Officer,
    
    Senior Vice President,
    
    Chief Financial OfficerCSB Bancorp, Inc.
    
    The Commercial &
Savings Bank
    
    Chief Operations/Information
Officer
     CLOSING PRICEper share
    
    EARNINGSper share
    
    ANNUAL DIVIDENDSper share
    
    BOOK VALUEper share(BAR CHART)
    
    (BAR CHART)
    
    (BAR CHART)
    
    (BAR CHART)
 4




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##### Table of Contents



2006 Report to Shareholders
 continued
 
 Xpress Remote
Deposit Capture
   EFFICIENCY
    
    ALLOWANCE FORRATIO
    
    LOAN LOSSES(tax equivalent basis)
    
    to nonperforming loans(BAR CHART)
    
    (BAR CHART)
 Success
 
 BUSINESS
DEVELOPMENT TEAM
 Helping Our Partners Grow
 Back row, LR: Eric Strouse, Chris Rickly, Bud Stebbins, Colby Chamberlin, Jason Hummel
Seated at desk: Ervin Yoder
    330-674-9015 1-800-654-9015
 5




---



##### Table of Contents



CSB
Bancorp, Inc.
 continued
 
 Success
 
 FREE & EASY
XPRESS BILLPAY
 Its time to start living Free & Easy
    www.csb1.com.
       return onNET INTEREST
    
    AVERAGEmargin
    
    EQUITY(BAR CHART)
    
    (BAR CHART)
 6




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##### Table of Contents



2006 Report to Shareholders
 continued
 
      return onAVERAGE
    
    averageASSETS
    
    TOTAL ASSETS(BAR CHART)
    
    (BAR CHART)
 New in
 
 ORRVILLE AREA BANKING CENTER
 Our Second Wayne County Banking Center
 7




---



##### Table of Contents



CSB
Bancorp, Inc.
 continued
 
 New in
 
 XPRESS REMOTE DEPOSIT CAPTURE
 Business Banking Made Easy
    330-674-9015 1-800-654-9015 webadmin@csb1.com
     -s- Eddie L. Steiner
    

-s- Robert K. BakerEddie L. Steiner
    
    Robert K. BakerPresident and
    
    Chairman,Chief Executive Officer
    
    Board of Directors
 average securities sold underaverage
    
    AGREEMENTS TODEPOSITS
    
    REPURCHASE(BAR CHART)
    
    (BAR CHART)
 8




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##### Table of Contents



2006 Report to Shareholders
  
  John R. Waltman
    
    Eddie L. Steiner
    
    Jeffery A. Robb, Sr.
    
    Samuel M. Steimel
    
    J. Thomas LangAttorney,
    
    President,
    
    President,
    
    Attorney,
    
    Veterinarian, Dairy Farmer,Critchfield, Critchfield & Johnston
    
    Chief Executive Officer,
    
    Robb Companies, Inc.
    
    Steimel Law Office
    
    Spring Hill Farms, Inc.CSB Bancorp, Inc.Chairman of the Board,The Commercial & Savings BankL-R, SEATEDRobert K. Baker
    
    Daniel J. Miller
    
    Ronald E. HoltmanChairman of the Board,
    
    Retired Physician,
    
    Attorney,CSB Bancorp, Inc.
    
    East Holmes Family Care, Inc.
    
    Logee, Hostetler, Stutzman & LehmanCo-owner and ControllerBakerwell, Inc.
 NET LOAN
    
    ALLOWANCE AS A
    
    EMPLOYEESaverage
    
    CHARGE-OFFS
    
    PERCENTAGE
    
    AT YEAR ENDNET LOANS
    
    as a percent of average loans
    
    of loans
    
    (full-time equivalent)(BAR CHART)
    
    (BAR CHART)
    
    (BAR CHART)
    
    (BAR CHART)
 9




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##### Table of Contents



CSB Bancorp, Inc.
 FINANCIAL REVIEW
 INTRODUCTION
    FORWARD-LOOKING STATEMENTS
  10




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##### Table of Contents



2006 Report to Shareholders
 continued
 SELECTED FINANCIAL DATA
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(Dollars in thousands, except per share data)Statements of income:Total interest income
    
    $
    20,045
    
    
    $
    17,358
    
    
    $
    15,074
    
    
    $
    15,414
    
    
    $
    16,700Total interest expense
    
    
    6,877
    
    
    
    4,812
    
    
    
    3,874
    
    
    
    4,631
    
    
    
    6,467Net interest income
    
    
    13,168
    
    
    
    12,546
    
    
    
    11,200
    
    
    
    10,783
    
    
    
    10,233Provision (credit) for loan losses
    
    
    302
    
    
    
    283
    
    
    
    423
    
    
    
    (51
    )
    
    
    (587
    )Net interest income after provision (credit)
for loan losses
    
    
    12,866
    
    
    
    12,263
    
    
    
    10,777
    
    
    
    10,834
    
    
    
    10,820Noninterest income
    
    
    2,592
    
    
    
    2,580
    
    
    
    2,680
    
    
    
    2,155
    
    
    
    2,037Noninterest expenses
    
    
    10,915
    
    
    
    10,803
    
    
    
    10,278
    
    
    
    10,799
    
    
    
    10,999Income before income taxes
    
    
    4,543
    
    
    
    4,041
    
    
    
    3,179
    
    
    
    2,190
    
    
    
    1,858Income tax provision (credit)
    
    
    1,433
    
    
    
    1,168
    
    
    
    653
    
    
    
    130
    
    
    
    (65
    )Net income
    
    $
    3,110
    
    
    $
    2,873
    
    
    $
    2,526
    
    
    $
    2,060
    
    
    $
    1,923Per share of common stock:Basic income per share
    
    $
    1.23
    
    
    $
    1.09
    
    
    $
    0.96
    
    
    $
    0.78
    
    
    $
    0.73Diluted income per share
    
    
    1.23
    
    
    
    1.09
    
    
    
    0.95
    
    
    
    0.78
    
    
    
    0.73Dividends
    
    
    0.64
    
    
    
    0.56
    
    
    
    0.52
    
    
    
    0.48
    
    
    
    0.30Book value
    
    
    14.03
    
    
    
    13.64
    
    
    
    13.69
    
    
    
    13.13
    
    
    
    12.83Average basic common shares outstanding
    
    
    2,526,914
    
    
    
    2,638,697
    
    
    
    2,644,582
    
    
    
    2,638,360
    
    
    
    2,630,931Average diluted common shares outstanding
    
    
    2,532,592
    
    
    
    2,642,301
    
    
    
    2,650,948
    
    
    
    2,641,887
    
    
    
    2,634,558Year-end balances:Loans, net
    
    $
    229,825
    
    
    $
    212,574
    
    
    $
    215,510
    
    
    $
    210,796
    
    
    $
    197,109Securities
    
    
    70,241
    
    
    
    81,220
    
    
    
    76,228
    
    
    
    67,773
    
    
    
    73,088Total assets
    
    
    327,240
    
    
    
    320,989
    
    
    
    317,340
    
    
    
    306,180
    
    
    
    304,713Deposits
    
    
    260,178
    
    
    
    255,403
    
    
    
    247,951
    
    
    
    248,958
    
    
    
    239,976Borrowings
    
    
    30,521
    
    
    
    29,485
    
    
    
    32,062
    
    
    
    21,372
    
    
    
    29,828Shareholders equity
    
    
    35,070
    
    
    
    35,170
    
    
    
    36,208
    
    
    
    34,718
    
    
    
    33,742Average balances:Loans, net
    
    $
    222,952
    
    
    $
    218,187
    
    
    $
    214,330
    
    
    $
    206,685
    
    
    $
    177,592Securities
    
    
    74,994
    
    
    
    71,866
    
    
    
    73,342
    
    
    
    70,027
    
    
    
    80,176Total assets
    
    
    319,749
    
    
    
    316,612
    
    
    
    312,534
    
    
    
    302,601
    
    
    
    295,399Deposits
    
    
    247,543
    
    
    
    249,007
    
    
    
    241,674
    
    
    
    236,525
    
    
    
    235,080Borrowings
    
    
    35,824
    
    
    
    30,083
    
    
    
    34,540
    
    
    
    30,981
    
    
    
    25,971Shareholders equity
    
    
    34,766
    
    
    
    36,290
    
    
    
    35,332
    
    
    
    34,360
    
    
    
    33,382Selected ratios:Net interest margin
    
    
    4.38
    %
    
    
    4.23
    %
    
    
    3.83
    %
    
    
    3.81
    %
    
    
    3.73
    %Return on average total assets
    
    
    0.97
    
    
    
    0.91
    
    
    
    0.81
    
    
    
    0.68
    
    
    
    0.65Return on average shareholders equity
    
    
    8.95
    
    
    
    7.92
    
    
    
    7.15
    
    
    
    6.00
    
    
    
    5.76Average shareholders equity
as a percent of average total assets
    
    
    10.87
    
    
    
    11.46
    
    
    
    11.31
    
    
    
    11.35
    
    
    
    11.30Net loan charge-offs as a percent of
average loans
    
    
    0.06
    
    
    
    0.19
    
    
    
    0.14
    
    
    
    0.09
    
    
    
    0.40Allowance for loan losses as a percent
of loans at year-end
    
    
    1.12
    
    
    
    1.14
    
    
    
    1.18
    
    
    
    1.15
    
    
    
    1.35Shareholders equity as a percent of
total year-end assets
    
    
    10.72
    
    
    
    10.96
    
    
    
    11.41
    
    
    
    11.34
    
    
    
    11.07Dividend payout ratio
    
    
    51.89
    
    
    
    51.47
    
    
    
    54.44
    
    
    
    61.48
    
    
    
    41.04
 11




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##### Table of Contents



CSB Bancorp, Inc.
 
 continued
 RESULTS OF OPERATIONS
 Net Income
   Net Interest Income
      12




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##### Table of Contents



2006 Report to Shareholders
 continued
   AVERAGE BALANCES, RATES AND YIELDS(Dollars in thousands)2006
    
    
    
    2005
    
    
    
    2004AVERAGE
    
    
    
    
    
    
    
    
    
    
    
    AVERAGE
    
    
    
    
    
    
    
    
    
    
    
    AVERAGEBALANCE(1)
    
    
    INTEREST
    
    
    RATE(2)
    
    
    
    BALANCE(1)
    
    
    INTEREST
    
    
    RATE(2)
    
    
    
    BALANCE(1)
    
    
    INTEREST
    
    
    RATE(2)Interest-earning assetsFederal funds sold
    
    $
    250
    
    
    $
    11
    
    
    
    4.28
    %
    
    
    $
    3,848
    
    
    $
    145
    
    
    
    3.77
    %
    
    
    $
    2,263
    
    
    $
    40
    
    
    
    1.77
    %Interest-earning deposits
    
    
    18
    
    
    
    1
    
    
    
    9.44
    
    
    
    
    36
    
    
    
    1
    
    
    
    1.39
    
    
    
    
    43
    
    
    
    0
    
    
    
    0.47Securities:Taxable
    
    
    66,951
    
    
    
    3,006
    
    
    
    4.49
    
    
    
    
    57,930
    
    
    
    2,243
    
    
    
    3.87
    
    
    
    
    44,072
    
    
    
    1,502
    
    
    
    3.41Tax exempt
    
    
    8,043
    
    
    
    383
    
    
    
    4.76
    
    
    
    
    13,936
    
    
    
    625
    
    
    
    4.49
    
    
    
    
    29,270
    
    
    
    1,409
    
    
    
    4.81Loans(3)
    
    
    225,445
    
    
    
    16,644
    
    
    
    7.38
    
    
    
    
    220,655
    
    
    
    14,344
    
    
    
    6.50
    
    
    
    
    216,864
    
    
    
    12,123
    
    
    
    5.59Total interest-earning assets
    
    
    300,707
    
    
    
    20,045
    
    
    
    6.67
    
    
    
    
    296,405
    
    
    
    17,358
    
    
    
    5.86
    
    
    
    
    292,512
    
    
    
    15,074
    
    
    
    5.15Noninterest-earning assetsCash and due from banks
    
    
    11,027
    
    
    
    
    
    
    
    
    
    
    
    
    11,821
    
    
    
    
    
    
    
    
    
    
    
    
    11,734Bank premises and
equipment, net
    
    
    7,864
    
    
    
    
    
    
    
    
    
    
    
    
    8,323
    
    
    
    
    
    
    
    
    
    
    
    
    8,413Other assets
    
    
    2,644
    
    
    
    
    
    
    
    
    
    
    
    
    2,532
    
    
    
    
    
    
    
    
    
    
    
    
    2,409Allowance for loan losses
    
    
    (2,493
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,468
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,534
    )Total assets
    
    $
    319,749
    
    
    
    
    
    
    
    
    
    
    
    $
    316,612
    
    
    
    
    
    
    
    
    
    
    
    $
    312,534Interest-bearing liabilitiesDemand deposits
    
    $
    46,096
    
    
    $
    232
    
    
    
    0.50
    %
    
    
    $
    49,021
    
    
    $
    192
    
    
    
    0.39
    %
    
    
    $
    48,042
    
    
    $
    105
    
    
    
    0.22
    %Savings deposits
    
    
    41,528
    
    
    
    411
    
    
    
    0.99
    
    
    
    
    44,759
    
    
    
    357
    
    
    
    0.80
    
    
    
    
    42,904
    
    
    
    189
    
    
    
    0.44Time deposits
    
    
    120,981
    
    
    
    4,775
    
    
    
    3.95
    
    
    
    
    117,372
    
    
    
    3,579
    
    
    
    3.05
    
    
    
    
    116,418
    
    
    
    2,944
    
    
    
    2.53Other borrowed funds
    
    
    35,824
    
    
    
    1,459
    
    
    
    4.07
    
    
    
    
    30,083
    
    
    
    684
    
    
    
    2.27
    
    
    
    
    34,540
    
    
    
    636
    
    
    
    1.84Total interest-bearing liabilities
    
    
    244,429
    
    
    
    6,877
    
    
    
    2.81
    
    
    
    
    241,235
    
    
    
    4,812
    
    
    
    1.99
    
    
    
    
    241,904
    
    
    
    3,874
    
    
    
    1.60Noninterest-bearing liabilities
and shareholders equityDemand deposits
    
    
    38,938
    
    
    
    
    
    
    
    
    
    
    
    
    37,855
    
    
    
    
    
    
    
    
    
    
    
    
    34,310Other liabilities
    
    
    1,616
    
    
    
    
    
    
    
    
    
    
    
    
    1,232
    
    
    
    
    
    
    
    
    
    
    
    
    988Shareholders equity
    
    
    34,766
    
    
    
    
    
    
    
    
    
    
    
    
    36,290
    
    
    
    
    
    
    
    
    
    
    
    
    35,332Total liabilities and equity
    
    $
    319,749
    
    
    
    
    
    
    
    
    
    
    
    $
    316,612
    
    
    
    
    
    
    
    
    
    
    
    $
    312,534Net interest income
    
    
    
    
    
    $
    13,168
    
    
    
    
    
    
    
    
    
    
    
    $
    12,546
    
    
    
    
    
    
    
    
    
    
    
    $
    11,200Net interest margin
    
    
    
    
    
    
    
    
    
    
    4.38
    %
    
    
    
    
    
    
    
    
    
    
    
    4.23
    %
    
    
    
    
    
    
    
    
    
    
    
    3.83
    %Net interest spread
    
    
    
    
    
    
    
    
    
    
    3.86
    %
    
    
    
    
    
    
    
    
    
    
    
    3.87
    %
    
    
    
    
    
    
    
    
    
    
    
    3.55
    %
 
 (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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##### Table of Contents



CSB Bancorp, Inc.
 continued
 RATE / VOLUME ANALYSIS OF CHANGES IN INCOME AND EXPENSE (1)(Dollars in thousands)2006 v. 2005
    
    
    
    2005 v. 2004CHANGE IN
    
    
    
    
    
    
    
    
    
    
    
    CHANGE ININCOME/
    
    
    VOLUME
    
    
    RATE
    
    
    
    INCOME/
    
    
    VOLUME
    
    
    RATEEXPENSE
    
    
    EFFECT
    
    
    EFFECT
    
    
    
    EXPENSE
    
    
    EFFECT
    
    
    EFFECTInterest IncomeFederal funds sold
    
    $
    (134
    )
    
    $
    (154
    )
    
    $
    20
    
    
    
    $
    105
    
    
    $
    60
    
    
    $
    45Interest-earning deposits
    
    
    1
    
    
    
    (2
    )
    
    
    3
    
    
    
    
    1
    
    
    
    1
    
    
    
    Securities:Taxable
    
    
    763
    
    
    
    405
    
    
    
    358
    
    
    
    
    741
    
    
    
    537
    
    
    
    204Tax exempt
    
    
    (243
    )
    
    
    (281
    )
    
    
    38
    
    
    
    
    (784
    )
    
    
    (688
    )
    
    
    (96
    )Loans
    
    
    2,300
    
    
    
    354
    
    
    
    1,946
    
    
    
    
    2,221
    
    
    
    245
    
    
    
    1,976Total interest income
    
    
    2,687
    
    
    
    322
    
    
    
    2,365
    
    
    
    
    2,284
    
    
    
    155
    
    
    
    2,129Interest ExpenseDemand deposits
    
    
    39
    
    
    
    (15
    )
    
    
    54
    
    
    
    
    87
    
    
    
    3
    
    
    
    84Savings deposits
    
    
    54
    
    
    
    (32
    )
    
    
    86
    
    
    
    
    168
    
    
    
    15
    
    
    
    153Time deposits
    
    
    1,196
    
    
    
    142
    
    
    
    1,054
    
    
    
    
    635
    
    
    
    30
    
    
    
    605Other borrowed funds
    
    
    776
    
    
    
    234
    
    
    
    542
    
    
    
    
    48
    
    
    
    (101
    )
    
    
    149Total interest expense
    
    
    2,065
    
    
    
    329
    
    
    
    1,736
    
    
    
    
    938
    
    
    
    (53
    )
    
    
    991Net interest income
    
    $
    622
    
    
    $
    (7
    )
    
    $
    629
    
    
    
    $
    1,346
    
    
    $
    208
    
    
    $
    1,138
 
 (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.  2006
    
    
    2005
    
    
    2004Net interest income
    
    $
    13,167,461
    
    
    $
    12,545,579
    
    
    $
    11,199,632Taxable equivalent adjustment (1)
    
    
    209,890
    
    
    
    333,531
    
    
    
    739,703Net interest incomefully taxable equivalent
    
    $
    13,377,351
    
    
    $
    12,879,110
    
    
    $
    11,939,335Net interest yield
    
    
    4.38
    %
    
    
    4.23
    %
    
    
    3.83
    %Taxable equivalent adjustment (1)
    
    
    .07
    
    
    
    .12
    
    
    
    .25Net interest yield  taxable equivalent
    
    
    4.45
    %
    
    
    4.35
    %
    
    
    4.08
    %
 
 (1)
    
    Taxable equivalent adjustments have been computed assuming a 34% tax rate. Provision for Loan Losses
  14




---



##### Table of Contents



2006 Report to Shareholders
 continued
 Noninterest Income
   Noninterest Expenses
  Other Expense
  (Dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004Marketing and public relations
    
    $
    334
    
    
    $
    302
    
    
    $
    319Telecommunications
    
    
    221
    
    
    
    275
    
    
    
    244Cash irregularity
    
    
    237
    
    
    
    
    
    
    
    Other
    
    
    1,964
    
    
    
    2,249
    
    
    
    2,207Total Other Expense
    
    $
    2,756
    
    
    $
    2,826
    
    
    $
    2,770
 15




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
   Income Taxes
  FINANCIAL CONDITION
  Securities
   16




---



##### Table of Contents



2006 Report to Shareholders
 continued
 Loans
     Allowance for Loan Losses
    17




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
  Other Assets
  Deposits
  Other Funding Sources
  CAPITAL RESOURCES
   18




---



##### Table of Contents



2006 Report to Shareholders
 continued
   LIQUIDITY
   19




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     2006(Dollars in Thousands)CHANGE ININTEREST RATES
    
    NET INTEREST
    
    DOLLAR
    
    PERCENTAGE(BASIS POINTS)
    
    INCOME
    
    CHANGE
    
    CHANGE+200
    
    
    $
    14,165
    
    
    $
    682
    
    
    
    5.1
    %+100
    
    
    
    13,767
    
    
    
    284
    
    
    
    2.10
    
    
    
    13,483
    
    
    
    0
    
    
    
    0.0100
    
    
    
    13,290
    
    
    
    (193
    )
    
    
    (1.4
    )200
    
    
    
    12,937
    
    
    
    (546
    )
    
    
    (4.1
    )
 2005(Dollars in Thousands)CHANGE ININTEREST RATES
    
    NET INTEREST
    
    DOLLAR
    
    PERCENTAGE(BASIS POINTS)
    
    INCOME
    
    CHANGE
    
    CHANGE+200
    
    
    $
    15,042
    
    
    $
    1,198
    
    
    
    8.7
    %+100
    
    
    
    14,387
    
    
    
    543
    
    
    
    3.90
    
    
    
    13,844
    
    
    
    0
    
    
    
    0.0100
    
    
    
    13,383
    
    
    
    (461
    )
    
    
    (3.3
    )200
    
    
    
    12,741
    
    
    
    (1,103
    )
    
    
    (8.0
    )
  20




---



##### Table of Contents



2006 Report to Shareholders
 continued
 SIGNIFICANT ASSUMPTIONS AND OTHER CONSIDERATIONS
   FAIR VALUE OF FINANCIAL INSTRUMENTS
  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
    
    
    13
    
    
    45
    
    
    OVER 5Type of Commitment
    
    AMOUNT
    
    
    YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    YEARSCommercial lines-of-credit
    
    $
    32,529
    
    
    $
    29,405
    
    
    $
    3,062
    
    
    
    
    
    
    $
    62Real estate lines-of-credit
    
    
    19,125
    
    
    
    1,256
    
    
    
    66
    
    
    $
    926
    
    
    
    16,877Consumer lines-of-credit
    
    
    283
    
    
    
    283Credit card lines-of-credit
    
    
    11,364
    
    
    
    11,364Overdraft Privilege
    
    
    6,688
    
    
    
    6,688Letters of credit
    
    
    882
    
    
    
    202
    
    
    
    625
    
    
    
    55Total Commitments
    
    $
    70,871
    
    
    $
    49,198
    
    
    $
    3,753
    
    
    $
    981
    
    
    $
    16,939
 21




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
   PAYMENT DUE BY PERIOD(Dollars in Thousands)TOTAL
    
    
    LESS THAN 1
    
    
    13
    
    
    45
    
    
    OVER 5Contractual Obligations
    
    AMOUNT
    
    
    YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    YEARSTotal time deposits
    
    $
    125,749
    
    
    $
    100,392
    
    
    $
    19,030
    
    
    $
    6,289
    
    
    $
    38Short-term borrowings
    
    
    28,022
    
    
    
    28,022Other borrowings
    
    
    2,499
    
    
    
    476
    
    
    
    786
    
    
    
    570
    
    
    
    667Capital leasesOperating leases
    
    
    365
    
    
    
    81
    
    
    
    154
    
    
    
    123
    
    
    
    7Unconditional purchase obligationsOtherTotal Obligations
    
    $
    156,635
    
    
    $
    128,971
    
    
    $
    19,970
    
    
    $
    6,982
    
    
    $
    712
  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Accounting for Certain Hybrid Instruments, as an
amendment of FASB Statements No. 133 and 140.
 Accounting for Servicing of Financial Assets.
 22




---



##### Table of Contents



2006 Report to Shareholders
 continued
  Fair Value Measurements,
 Accounting for
Uncertainty in Income Taxes. Accounting for Income
Taxes,
 Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements.
 Accounting for Purchases of Life InsuranceDetermining the Amount
That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4, Accounting for
Purchases of Life Insurance.
 23




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
 CRITICAL ACCOUNTING POLICIES
    IMPACT OF INFLATION AND CHANGING PRICES
  24




---



##### Table of Contents



2006 Report to Shareholders
 continued
 COMMON STOCK AND SHAREHOLDER INFORMATION
  DIVIDENDSQUARTER ENDED
    
    HIGH
    
    LOW
    
    DECLAREDMarch 31, 2006
    
    $
    21.25
    
    
    $
    20.50
    
    
    $
    410,785June 30, 2006
    
    
    20.87
    
    
    
    20.00
    
    
    
    403,158September 30, 2006
    
    
    20.75
    
    
    
    18.70
    
    
    
    399,916December 31, 2006
    
    
    20.25
    
    
    
    18.00
    
    
    
    399,888March 31, 2005
    
    $
    21.40
    
    
    $
    19.85
    
    
    $
    370,295June 30, 2005
    
    
    21.15
    
    
    
    20.05
    
    
    
    370,295September 30, 2005
    
    
    22.55
    
    
    
    20.35
    
    
    
    370,296December 31, 2005
    
    
    25.00
    
    
    
    21.00
    
    
    
    367,760
  25




---



##### Table of Contents



CSB Bancorp, Inc.
 
 Report of
 
 The Board of Directors and Shareholders
CSB Bancorp, Inc.
    
 Wexford, Pennsylvania
March 7, 2007
 26




---



##### Table of Contents



2006 Report to Shareholders
 
 December 31, 2006 & 2005
 2006
    
    
    2005ASSETSCash and cash equivalentsCash and due from banks
    
    $
    12,643,440
    
    
    $
    14,785,250Interest-earning deposits in other banks
    
    
    9,748
    
    
    
    124,726Federal funds sold
    
    
    5,000,000
    
    
    
    1,740,000Total cash and cash equivalents
    
    
    17,653,188
    
    
    
    16,649,976SecuritiesAvailable-for-sale, at fair value
    
    
    67,135,126
    
    
    
    78,273,248Restricted stock, at cost
    
    
    3,105,900
    
    
    
    2,947,000Total securities
    
    
    70,241,026
    
    
    
    81,220,248Loans
    
    
    232,431,938
    
    
    
    215,019,673Less allowance for loan losses
    
    
    2,607,118
    
    
    
    2,445,494Net loans
    
    
    229,824,820
    
    
    
    212,574,179Premises and equipment, net
    
    
    7,390,182
    
    
    
    7,671,822Accrued interest receivable and other assets
    
    
    2,130,631
    
    
    
    2,873,007Total Assets
    
    $
    327,239,847
    
    
    $
    320,989,232LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesDeposits:Noninterest-bearing
    
    $
    44,455,131
    
    
    $
    41,807,069Interest-bearing
    
    
    215,722,541
    
    
    
    213,595,648Total deposits
    
    
    260,177,672
    
    
    
    255,402,717Short-term borrowings
    
    
    28,022,077
    
    
    
    21,417,616Other borrowings
    
    
    2,499,399
    
    
    
    8,067,840Accrued interest payable and other liabilities
    
    
    1,470,379
    
    
    
    930,800Total liabilities
    
    
    292,169,527
    
    
    
    285,818,973Shareholders EquityCommon stock, $6.25 par value. Authorized 9,000,000 shares;
issued 2,667,786 shares
    
    
    16,673,667
    
    
    
    16,673,667Additional paid-in capital
    
    
    6,427,765
    
    
    
    6,413,915Retained earnings
    
    
    16,248,608
    
    
    
    14,752,250Treasury stock at cost  168,605 shares in 2006
and 89,287 shares in 2005
    
    
    (3,696,102
    )
    
    
    (2,086,686
    )Accumulated other comprehensive loss
    
    
    (583,618
    )
    
    
    (582,887
    )Total shareholders equity
    
    
    35,070,320
    
    
    
    35,170,259Total Liabilities and Shareholders Equity
    
    $
    327,239,847
    
    
    $
    320,989,232
 These consolidated financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to consolidated financial statements.
 27




---



##### Table of Contents



CSB Bancorp, Inc.
 
 Years Ended December 31, 2006, 2005 & 2004
 2006
    
    
    2005
    
    
    2004INTEREST AND DIVIDEND INCOMELoans, including fees
    
    $
    16,643,728
    
    
    $
    14,343,888
    
    
    $
    12,122,379Taxable securities
    
    
    3,006,055
    
    
    
    2,243,081
    
    
    
    1,501,812Nontaxable securities
    
    
    382,479
    
    
    
    624,911
    
    
    
    1,409,263Other
    
    
    12,490
    
    
    
    145,395
    
    
    
    40,094Total interest and dividend income
    
    
    20,044,752
    
    
    
    17,357,275
    
    
    
    15,073,548INTEREST EXPENSEDeposits
    
    
    5,418,616
    
    
    
    4,128,130
    
    
    
    3,237,803Short-term borrowings
    
    
    1,265,850
    
    
    
    331,540
    
    
    
    117,127Other borrowings
    
    
    192,825
    
    
    
    352,026
    
    
    
    518,986Total interest expense
    
    
    6,877,291
    
    
    
    4,811,696
    
    
    
    3,873,916NET INTEREST INCOME
    
    
    13,167,461
    
    
    
    12,545,579
    
    
    
    11,199,632PROVISION FOR LOAN LOSSES
    
    
    301,667
    
    
    
    282,664
    
    
    
    422,621Net interest income, after provision
for loan losses
    
    
    12,865,794
    
    
    
    12,262,915
    
    
    
    10,777,011NONINTEREST INCOMEService charges on deposit accounts
    
    
    1,278,842
    
    
    
    1,037,377
    
    
    
    846,935Merchant fees
    
    
    31,132
    
    
    
    19,080
    
    
    
    163,086Trust services
    
    
    540,299
    
    
    
    484,468
    
    
    
    386,469Securities gain (loss)
    
    
    (56,800
    )
    
    
    247,047
    
    
    
    587,916Gain on sale of loans
    
    
    12,078
    
    
    
    23,502
    
    
    
    13,481Gain (loss) on sale of other real estate owned
    
    
    (25,640
    )
    
    
    10,000
    
    
    
    Other
    
    
    812,015
    
    
    
    759,015
    
    
    
    682,423Total noninterest income
    
    
    2,591,926
    
    
    
    2,580,489
    
    
    
    2,680,310NONINTEREST EXPENSESSalaries and employee benefits
    
    
    5,885,857
    
    
    
    5,671,149
    
    
    
    5,250,732Occupancy expense
    
    
    685,728
    
    
    
    677,067
    
    
    
    642,048Equipment expense
    
    
    498,517
    
    
    
    524,112
    
    
    
    515,267Franchise tax expense
    
    
    430,050
    
    
    
    427,435
    
    
    
    419,527Professional and director fees
    
    
    658,843
    
    
    
    677,252
    
    
    
    680,043Marketing and public relations
    
    
    333,753
    
    
    
    302,331
    
    
    
    318,992Cash irregularity
    
    
    236,547
    
    
    
    
    
    
    
    Telecommunications
    
    
    221,223
    
    
    
    274,618
    
    
    
    243,742Other expenses
    
    
    1,964,097
    
    
    
    2,248,801
    
    
    
    2,207,735Total noninterest expenses
    
    
    10,914,615
    
    
    
    10,802,765
    
    
    
    10,278,086Income before income taxes
    
    
    4,543,105
    
    
    
    4,040,639
    
    
    
    3,179,235FEDERAL INCOME TAX PROVISION
    
    
    1,433,000
    
    
    
    1,168,000
    
    
    
    653,000NET INCOME
    
    $
    3,110,105
    
    
    $
    2,872,639
    
    
    $
    2,526,235NET INCOME PER SHAREBasic
    
    $
    1.23
    
    
    $
    1.09
    
    
    $
    .96Diluted
    
    $
    1.23
    
    
    $
    1.09
    
    
    $
    .95
 These consolidated financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to consolidated financial statements.
 28




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##### Table of Contents



2006 Report to Shareholders
 
 Years Ended December 31, 2006, 2005 & 2004
 ADDITIONAL
    
    
    
    
    
    
    
    
    
    
    ACCUMULATED OTHERCOMMON
    
    
    PAID-IN
    
    
    RETAINED
    
    
    TREASURY
    
    
    COMPREHENSIVESTOCK
    
    
    CAPITAL
    
    
    EARNINGS
    
    
    STOCK
    
    
    INCOME (LOSS)
    
    
    TOTALBALANCE AT
DECEMBER 31, 2003
    
    $
    16,673,667
    
    
    $
    6,413,915
    
    
    $
    12,214,751
    
    
    $
    (645,938
    )
    
    $
    61,143
    
    
    $
    34,717,538Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    2,526,235
    
    
    
    
    
    
    
    
    
    
    
    2,526,235Change in net unrealized gain,
net of reclassification
adjustments and related
income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327,580
    
    
    
    327,580Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,853,815Issuance of 612 shares from
treasury under dividend
reinvestment program
    
    
    
    
    
    
    
    
    
    
    (7,444
    )
    
    
    18,819
    
    
    
    
    
    
    
    11,375Cash dividends declared,
$.52 per share
    
    
    
    
    
    
    
    
    
    
    (1,375,221
    )
    
    
    
    
    
    
    
    
    
    
    (1,375,221
    )BALANCE AT
DECEMBER 31, 2004
    
    
    16,673,667
    
    
    
    6,413,915
    
    
    
    13,358,321
    
    
    
    (627,119
    )
    
    
    388,723
    
    
    
    36,207,507Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    2,872,639
    
    
    
    
    
    
    
    
    
    
    
    2,872,639Change in net unrealized loss,
net of reclassification
adjustments and related
income taxes benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (971,610
    )
    
    
    (971,610
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,901,029Issuance of 6 shares from treasury
    
    
    
    
    
    
    
    
    
    
    (64
    )
    
    
    185
    
    
    
    
    
    
    
    121Purchase of 66,469 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,459,752
    )
    
    
    
    
    
    
    (1,459,752
    )Cash dividends declared,
$.56 per share
    
    
    
    
    
    
    
    
    
    
    (1,478,646
    )
    
    
    
    
    
    
    
    
    
    
    (1,478,646
    )BALANCE AT
DECEMBER 31, 2005
    
    
    16,673,667
    
    
    
    6,413,915
    
    
    
    14,752,250
    
    
    
    (2,086,686
    )
    
    
    (582,887
    )
    
    
    35,170,259Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    3,110,105
    
    
    
    
    
    
    
    
    
    
    
    3,110,105Change in net unrealized loss,
net of reclassification
adjustments and related
income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (731
    )
    
    
    (731
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,109,374Stock-based compensation expense
    
    
    
    
    
    
    13,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,850Purchase of 79,318 treasury shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,609,416
    )
    
    
    
    
    
    
    (1,609,416
    )Cash dividends declared,
$.64 per share
    
    
    
    
    
    
    
    
    
    
    (1,613,747
    )
    
    
    
    
    
    
    
    
    
    
    (1,613,747
    )BALANCE AT
DECEMBER 31, 2006
    
    $
    16,673,667
    
    
    $
    6,427,765
    
    
    $
    16,248,608
    
    
    $
    (3,696,102
    )
    
    $
    (583,618
    )
    
    $
    35,070,320
 These consolidated financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to consolidated financial statements.
 29




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##### Table of Contents



CSB Bancorp, Inc.
 
 Years Ended December 31, 2006, 2005 & 2004
 2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    3,110,105
    
    
    $
    2,872,639
    
    
    $
    2,526,235Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization of
premises, equipment and software
    
    
    692,461
    
    
    
    758,310
    
    
    
    760,009Deferred income taxes
    
    
    198,675
    
    
    
    408,837
    
    
    
    115,246Provision for loan losses
    
    
    301,667
    
    
    
    282,664
    
    
    
    422,621Gain on sale of loans
    
    
    (12,078
    )
    
    
    (23,502
    )
    
    
    (13,481
    )Securities (gain) loss
    
    
    56,800
    
    
    
    (247,047
    )
    
    
    (587,916
    )Gain (loss) on sale of other real estate owned
    
    
    25,640
    
    
    
    (10,000
    )
    
    
    Security amortization, net of accretion
    
    
    47,328
    
    
    
    83,699
    
    
    
    31,448Federal Home Loan Bank stock dividends
    
    
    (158,900
    )
    
    
    (156,600
    )
    
    
    (99,800
    )Secondary market loan sale proceeds
    
    
    1,231,578
    
    
    
    2,868,967
    
    
    
    1,281,531Originations of secondary market loans
held-for-sale
    
    
    (1,219,500
    )
    
    
    (2,845,465
    )
    
    
    (1,268,050
    )Stock compensation expense
    
    
    13,850
    
    
    
    
    
    
    
    Effects of changes in operating assets
and liabilities:Net deferred loan fees
    
    
    21,130
    
    
    
    (39,536
    )
    
    
    (104,489
    )Accrued interest receivable
    
    
    (82,270
    )
    
    
    (201,106
    )
    
    
    (118,785
    )Accrued interest payable
    
    
    106,691
    
    
    
    41,649
    
    
    
    (10,309
    )Other assets and liabilities
    
    
    485,803
    
    
    
    125,107
    
    
    
    (61,750
    )Net cash provided by operating activities
    
    $
    4,818,980
    
    
    $
    3,918,616
    
    
    $
    2,872,510CASH FLOWS FROM INVESTING ACTIVITIESSecurities available-for-sale:Proceeds from maturities and repayments
    
    $
    12,867,830
    
    
    $
    15,056,944
    
    
    $
    25,896,718Proceeds from sale
    
    
    3,943,200
    
    
    
    5,094,640
    
    
    
    11,928,699Purchases
    
    
    (5,778,145
    )
    
    
    (26,295,553
    )
    
    
    (48,940,043
    )Securities held-to-maturity:Proceeds from maturities and repayments
    
    
    
    
    
    
    
    
    
    
    3,812,000Loan originations, net of repayments
    
    
    (17,606,716
    )
    
    
    2,067,227
    
    
    
    (5,032,068
    )Proceeds from sale of other real estate
    
    
    454,000
    
    
    
    195,000
    
    
    
    Property, equipment and software expenditures
    
    
    (283,749
    )
    
    
    (624,692
    )
    
    
    (440,730
    )Net cash used in investing activities
    
    $
    (6,403,580
    )
    
    $
    (4,506,434
    )
    
    $
    (12,775,424
    )
 These consolidated financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to consolidated financial statements.
 30




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##### Table of Contents



2006 Report to Shareholders
 Years Ended December 31 , 2006 , 2005 & 2004
 2006
    
    
    2005
    
    
    2004CASH FLOWS FROM FINANCING ACTIVITIESNet change in deposits
    
    $
    4,774,955
    
    
    $
    7,451,998
    
    
    $
    (1,007,028
    )Net change in short-term borrowings
    
    
    
    
    
    
    5,000,000
    
    
    
    Net change in securities sold under
repurchase agreements
    
    
    6,604,461
    
    
    
    3,101,143
    
    
    
    1,457,421Federal Home Loan Bank borrowings:Proceeds
    
    
    
    
    
    
    
    
    
    
    10,000,000Repayments
    
    
    (5,568,441
    )
    
    
    (10,667,396
    )
    
    
    (767,245
    )Purchase of treasury shares
    
    
    (1,609,416
    )
    
    
    (1,459,752
    )
    
    
    Cash dividends paid
    
    
    (1,613,747
    )
    
    
    (1,822,491
    )
    
    
    (1,337,323
    )Net cash provided by financing activities
    
    $
    2,587,812
    
    
    $
    1,593,502
    
    
    $
    8,345,825NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
    
    
    1,003,212
    
    
    
    1,005,684
    
    
    
    (1,557,089
    )CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
    
    
    16,649,976
    
    
    
    15,644,292
    
    
    
    17,201,381CASH AND CASH EQUIVALENTS
AT END OF YEAR
    
    $
    17,653,188
    
    
    $
    16,649,976
    
    
    $
    15,644,292SUPPLEMENTAL DISCLOSURESCash paid during the year for:Interest
    
    $
    6,770,600
    
    
    $
    4,770,048
    
    
    $
    3,884,225Income taxes
    
    
    965,000
    
    
    
    665,000
    
    
    
    550,000Noncash investing activities:Transfer of loans to other real estate owned
    
    
    39,640
    
    
    
    625,000
    
    
    
    Transfer of securities from held-to-maturity
to available-for-sale
    
    
    
    
    
    
    
    
    
    
    31,681,132Noncash financing activity  payments
of dividends through issuance of
treasury shares, under dividend
reinvestment program
    
    $
    
    
    
    $
    
    
    
    $
    11,375
 These consolidated financial statements should be read only in connection with the accompanying summary of significant accounting policies and notes to consolidated financial statements.
 31




---



##### Table of Contents



CSB Bancorp, Inc.
 
     USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
  PRINCIPLES OF CONSOLIDATION
   CASH AND CASH EQUIVALENTS
  CASH RESERVE REQUIREMENTS
  SECURITIES
     32




---



##### Table of Contents



2006 Report to Shareholders
 continued
 LOANS
   ALLOWANCE FOR LOAN LOSSES
     OTHER REAL ESTATE OWNED
  PREMISES AND EQUIPMENT
  33




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
 REPURCHASE AGREEMENTS
  ADVERTISING COSTS
  FEDERAL INCOME TAXES
   STOCK-BASED COMPENSATION
    2005
    
    2004Net income as reported
    
    $
    2,872,639
    
    
    $
    2,526,235Pro forma net income
    
    
    2,867,223
    
    
    
    2,469,434Basic earnings per share as reported
    
    
    1.09
    
    
    
    .96Pro forma basic earnings per share
    
    
    1.09
    
    
    
    .93Diluted earnings per share as reported
    
    
    1.09
    
    
    
    .95Pro forma diluted earnings per share
    
    
    1.09
    
    
    
    .93
  2006
    
    2005
    
    2004Risk-free interest rate
    
    
    4.57
    %
    
    
    N/A
    
    
    
    3.34
    %Dividend yield
    
    
    3.56
    %
    
    
    
    
    
    
    2.60
    %Volatility
    
    
    9.00
    %
    
    
    
    
    
    
    37.00
    %Expected option life
    
    3.0 yrs.
    
    
    
    
    
    3.5 yrs.
 34




---



##### Table of Contents



2006 Report to Shareholders
 continued
    COMPREHENSIVE INCOME
  TRANSFERS OF FINANCIAL ASSETS
  PER SHARE DATA
   2006
    
    2005
    
    2004Weighted average common shares
outstanding
    
    
    2,667,786
    
    
    
    2,667,786
    
    
    
    2,667,786Average treasury shares
    
    
    (140,872
    )
    
    
    (29,089
    )
    
    
    (23,204
    )Total weighted average common
shares outstanding (basic)
    
    
    2,526,914
    
    
    
    2,638,697
    
    
    
    2,644,582Dilutive effect of assumed exercise
of stock options
    
    
    5,678
    
    
    
    3,604
    
    
    
    6,366Weighted average common shares
outstanding (diluted)
    
    
    2,532,592
    
    
    
    2,642,301
    
    
    
    2,650,948
  RECLASSIFICATION OF COMPARATIVE AMOUNTS
  35




---



##### Table of Contents



CSB Bancorp, Inc.
 
  NOTE 1  SECURITIES
  GROSS
    
    
    GROSSAMORTIZED
    
    
    UNREALIZED
    
    
    UNREALIZED
    
    
    FAIRCOST
    
    
    GAINS
    
    
    LOSSES
    
    
    VALUEDecember 31, 2006Available-for-sale:U.S. Treasury security
    
    $
    99,992
    
    
    $
    
    
    
    $
    172
    
    
    $
    99,820Obligations of U.S. Government
corporations and agencies
    
    
    33,493,189
    
    
    
    
    
    
    
    576,494
    
    
    
    32,916,695Mortgage-backed securities
    
    
    28,453,336
    
    
    
    591
    
    
    
    405,963
    
    
    
    28,047,964Obligations of states and
political subdivisions
    
    
    5,666,915
    
    
    
    103,482
    
    
    
    1,103
    
    
    
    5,769,294Total debt securities
    
    
    67,713,432
    
    
    
    104,073
    
    
    
    983,732
    
    
    
    66,833,773Equity securities
    
    
    305,965
    
    
    
    8,194
    
    
    
    12,806
    
    
    
    301,353Total available-for-sale
    
    
    68,019,397
    
    
    
    112,267
    
    
    
    996,538
    
    
    
    67,135,126Restricted stock
    
    
    3,105,900
    
    
    
    
    
    
    
    
    
    
    
    3,105,900Total securities
    
    $
    71,125,297
    
    
    $
    112,267
    
    
    $
    996,538
    
    
    $
    70,241,026December 31, 2005Available-for-sale:U.S. Treasury security
    
    $
    99,938
    
    
    $
    
    
    
    $
    1,313
    
    
    $
    98,625Obligations of U.S. Government
corporations and agencies
    
    
    42,991,204
    
    
    
    4,376
    
    
    
    765,254
    
    
    
    42,230,326Mortgage-backed securities
    
    
    27,368,053
    
    
    
    14,166
    
    
    
    376,262
    
    
    
    27,005,957Obligations of states and
political subdivisions
    
    
    8,392,840
    
    
    
    242,499
    
    
    
    1,943
    
    
    
    8,633,396Total debt securities
    
    
    78,852,035
    
    
    
    261,041
    
    
    
    1,144,772
    
    
    
    77,968,304Equity securities
    
    
    304,376
    
    
    
    6,080
    
    
    
    5,512
    
    
    
    304,944Total available-for-sale
    
    
    79,156,411
    
    
    
    267,121
    
    
    
    1,150,284
    
    
    
    78,273,248Restricted stock
    
    
    2,947,000
    
    
    
    
    
    
    
    
    
    
    
    2,947,000Total securities
        $
    82,103,411
    
    
    $
    267,121
    
    
    $
    1,150,284
    
    
    $
    81,220,248
 36




---



##### Table of Contents



2006 Report to Shareholders
 continued
 AMORTIZED
    
    
    FAIRCOST
    
    
    VALUEAvailable-for-sale:Due in one year or less
    
    $
    3,008,046
    
    
    $
    2,993,333Due after one through five years
    
    
    37,306,656
    
    
    
    36,829,510Due after five years through ten years
    
    
    3,846,063
    
    
    
    3,749,516Due after ten years
    
    
    23,552,667
    
    
    
    23,261,414Total available-for-sale
    
    $
    67,713,432
    
    
    $
    66,833,773
     37




---



##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 1  SECURITIES (continued)
  SECURITIES IN A CONTINUOUS UNREALIZED LOSS POSITIONLESS THAN 12 MONTHS
    
    
    12 MONTHS OR MORE
    
    
    TOTALGROSS
    
    
    
    
    
    
    GROSS
    
    
    
    
    
    
    GROSSUNREALIZED
    
    
    FAIR
    
    
    UNREALIZED
    
    
    FAIR
    
    
    UNREALIZED
    
    
    FAIRLOSSES
    
    
    VALUE
    
    
    LOSSES
    
    
    VALUE
    
    
    LOSSES
    
    
    VALUE2006Obligations of U.S. Government
corporations and agencies
    
    $
    5,620
    
    
    $
    1,994,380
    
    
    $
    570,874
    
    
    $
    30,922,315
    
    
    $
    576,494
    
    
    $
    32,916,695Mortgage-backed securities
    
    
    34,629
    
    
    
    7,768,042
    
    
    
    371,334
    
    
    
    15,384,068
    
    
    
    405,963
    
    
    
    23,152,110Obligations of states
and political subdivisions
    
    
    
    
    
    
    
    
    
    
    1,103
    
    
    
    250,313
    
    
    
    1,103
    
    
    
    250,313U.S. Treasury security
    
    
    
    
    
    
    
    
    
    
    172
    
    
    
    99,820
    
    
    
    172
    
    
    
    99,820Total debt securities
    
    
    40,249
    
    
    
    9,762,422
    
    
    
    943,483
    
    
    
    46,656,516
    
    
    
    983,732
    
    
    
    56,418,938Equity securities
    
    
    145
    
    
    
    1,445
    
    
    
    12,661
    
    
    
    128,500
    
    
    
    12,806
    
    
    
    129,945Total temporarily
impaired securities
    
    $
    40,394
    
    
    $
    9,763,867
    
    
    $
    956,144
    
    
    $
    46,785,016
    
    
    $
    996,538
    
    
    $
    56,548,8832005Obligations of U.S. Government
corporations and agencies
    
    $
    118,828
    
    
    $
    12,375,473
    
    
    $
    646,426
    
    
    $
    27,850,477
    
    
    $
    765,254
    
    
    $
    40,225,950Mortgage-backed securities
    
    
    175,196
    
    
    
    10,604,264
    
    
    
    201,066
    
    
    
    7,595,041
    
    
    
    376,262
    
    
    
    18,199,305Obligations of states
and political subdivisions
    
    
    1,943
    
    
    
    249,793
    
    
    
    
    
    
    
    
    
    
    
    1,943
    
    
    
    249,793U.S. Treasury security
    
    
    1,313
    
    
    
    98,625
    
    
    
    
    
    
    
    
    
    
    
    1,313
    
    
    
    98,625Total debt securities
    
    
    297,280
    
    
    
    23,328,155
    
    
    
    847,492
    
    
    
    35,445,518
    
    
    
    1,144,772
    
    
    
    58,773,673Equity securities
    
    
    5,512
    
    
    
    135,650
    
    
    
    
    
    
    
    
    
    
    
    5,512
    
    
    
    135,650Total temporarily
impaired securities
    
    $
    302,792
    
    
    $
    23,463,805
    
    
    $
    847,492
    
    
    $
    35,445,518
    
    
    $
    1,150,284
    
    
    $
    58,909,323
  NOTE 2  LOANS
  2006
    
    
    2005Commercial
    
    $
    55,512,802
    
    
    $
    69,922,000Commercial real estate
    
    
    72,706,863
    
    
    
    52,660,795Residential real estate
    
    
    85,933,260
    
    
    
    78,722,274Installment and credit card
    
    
    10,509,913
    
    
    
    11,539,910Construction
    
    
    7,735,618
    
    
    
    2,120,081Deferred loan costs, net
    
    
    33,482
    
    
    
    54,613Total Loans
    
    $
    232,431,938
    
    
    $
    215,019,673
 38




---



##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 2  LOANS (Continued)
  2006
    
    
    2005
    
    
    2004Beginning balance
    
    $
    2,445,494
    
    
    $
    2,574,945
    
    
    $
    2,458,864Provision for loan losses
    
    
    301,667
    
    
    
    282,664
    
    
    
    422,621Loans charged-off
    
    
    (309,644
    )
    
    
    (575,556
    )
    
    
    (434,055
    )Recoveries
    
    
    169,601
    
    
    
    163,441
    
    
    
    127,515Ending balance
    
    $
    2,607,118
    
    
    $
    2,445,494
    
    
    $
    2,574,945
  2006
    
    2005Year-end loans with no allowance for
loan losses allocated
    
    $
    
    
    
    $
    61,338Year-end loans with allowance for loan
losses allocated
    
    
    987,897
    
    
    
    502,246Amount of the allowance allocated
    
    
    326,705
    
    
    
    174,394
 2006
    
    2005
    
    2004Average of impaired loans during the year
    
    $
    700,202
    
    
    $
    576,907
    
    
    $
    823,793Interest income recognized during impairment
    
    
    25,717
    
    
    
    2,764
    
    
    
    24,105Cash-basis interest income recognized
    
    
    24,762
    
    
    
    472
    
    
    
    23,415
  2006
    
    2005Loans past due over 90 days still accruing interest
    
    $
    
    
    
    $
    168,438Nonaccrual loans
    
    
    1,508,577
    
    
    
    632,868
  NOTE 3  PREMISES AND EQUIPMENT
  2006
    
    
    2005Land and improvements
    
    $
    1,007,927
    
    
    $
    1,007,927Buildings and improvements
    
    
    8,616,211
    
    
    
    8,576,855Furniture and equipment
    
    
    5,453,248
    
    
    
    5,208,855Leasehold improvements
    
    
    79,979
    
    
    
    79,97915,157,365
    
    
    
    14,873,616Accumulated depreciation
    
    
    7,767,183
    
    
    
    7,201,794Premises and equipment, net
    
    $
    7,390,182
    
    
    $
    7,671,822
  39




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##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 4  INTEREST-BEARING DEPOSITS
  2006
    
    
    2005Demand
    
    $
    50,602,872
    
    
    $
    50,729,989Savings
    
    
    39,370,654
    
    
    
    45,734,653Time deposits:In excess of $100,000
    
    
    32,304,548
    
    
    
    29,623,053Other
    
    
    93,444,467
    
    
    
    87,507,953Total interest-bearing deposits
    
    $
    215,722,541
    
    
    $
    213,595,648
  2007
    
    $
    100,391,5002008
    
    
    14,698,9872009
    
    
    4,331,4802010
    
    
    4,236,6872011
    
    
    2,052,2052012 and beyond
    
    
    38,156Total
    
    $
    125,749,015
 NOTE 5  BORROWINGS
   2006
    
    2005Balance at year-end
    
    $
    28,022,077
    
    
    $
    21,417,616Average balance outstanding
    
    
    32,974,064
    
    
    
    20,243,476Maximum month-end balance
    
    
    41,468,292
    
    
    
    29,467,123Weighted-average rate at year-end
    
    
    3.71
    %
    
    
    1.54
    %Weighted-average rate during the year
    
    
    3.84
    
    
    
    1.64Other borrowings
  MATURITY RANGE
    
    WEIGHTED AVERAGE
    
    STATED INTEREST RATE
    
    AT DECEMBER 31,Description
    
    From
    
    To
    
    INTEREST RATE
    
    From
    
    To
    
    2006
    
    2005       Fixed rate
    
    
    3/03/06
    
    
    
    3/03/06
    
    
    
    2.15
    %
    
    
    2.15
    %
    
    
    2.15
    %
    
    $
    
    
    
    $
    5,000,000Fixed rate amortizing
    
    
    1/01/07
    
    
    
    3/01/17
    
    
    
    6.45
    
    
    
    5.60
    
    
    
    7.15
    
    
    
    2,499,399
    
    
    
    3,067,840$
    2,499,399
    
    
    $
    8,067,840
  YEAR ENDING DECEMBER 31,
    
    AMOUNT
    
    
    WEIGHTED-AVERAGE RATE2007
    
    $
    475,513
    
    
    
    6.42
    %2008
    
    
    417,127
    
    
    
    6.422009
    
    
    369,517
    
    
    
    6.422010
    
    
    322,234
    
    
    
    6.422011
    
    
    247,456
    
    
    
    6.472012 and beyond
    
    
    667,552
    
    
    
    6.48$
    2,499,399
    
    
    
    6.44
    %
  40




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##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 6  INCOME TAXES
  2006
    
    
    2005
    
    
    2004Current
    
    $
    1,234,325
    
    
    $
    759,163
    
    
    $
    537,754Deferred
    
    
    198,675
    
    
    
    408,837
    
    
    
    115,246Total income tax provision
    
    $
    1,433,000
    
    
    $
    1,168,000
    
    
    $
    653,000
  2006
    
    
    2005
    
    
    2004Expected provision using statutory
federal income tax rate
    
    $
    1,544,700
    
    
    $
    1,373,800
    
    
    $
    1,080,900Tax-exempt income on state and municipal
securities and political subdivision loans
    
    
    (138,600
    )
    
    
    (218,400
    )
    
    
    (474,500
    )Interest expense associated with carrying
certain state and municipal securities
and political subdivision loans
    
    
    11,800
    
    
    
    14,300
    
    
    
    24,700Other
    
    
    15,100
    
    
    
    (1,700
    )
    
    
    21,900Total income tax provision
    
    $
    1,433,000
    
    
    $
    1,168,000
    
    
    $
    653,000
  2006
    
    
    2005Allowance for loan losses
    
    $
    626,600
    
    
    $
    524,000Alternative minimum tax credit carryforwards
    
    
    
    
    
    
    296,000Unrealized loss on securities available-for-sale
    
    
    300,650
    
    
    
    300,275Other
    
    
    26,950
    
    
    
    24,225Deferred tax assets
    
    
    954,200
    
    
    
    1,144,500Depreciation of premises and equipment
    
    
    (334,200
    )
    
    
    (389,800
    )Federal Home Loan Bank stock dividends
    
    
    (459,600
    )
    
    
    (405,600
    )Deferred loan fees
    
    
    (81,700
    )
    
    
    (68,300
    )Other
    
    
    (68,200
    )
    
    
    (72,000
    )Deferred tax liabilities
    
    
    (943,700
    )
    
    
    (935,700
    )Net deferred tax assets
    
    $
    10,500
    
    
    $
    208,800
   41




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##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 6  INCOME TAXES (Continued)
  NOTE 7  EMPLOYEE BENEFITS
    2006
    
    
    2005
    
    
    2004WEIGHTED
    
    
    
    
    
    
    WEIGHTED
    
    
    
    
    
    
    WEIGHTEDAVERAGE
    
    
    
    
    
    
    AVERAGE
    
    
    
    
    
    
    AVERAGEEXERCISE
    
    
    
    
    
    
    EXERCISE
    
    
    
    
    
    
    EXERCISESHARES
    
    
    PRICE
    
    
    SHARES
    
    
    PRICE
    
    
    SHARES
    
    
    PRICEOutstanding at beginning of year
    
    
    21,970
    
    
    $
    17.09
    
    
    
    42,820
    
    
    $
    16.09
    
    
    
    42,485
    
    
    $
    16.02Granted
    
    
    29,760
    
    
    
    18.00
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    19.00Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (485
    )
    
    
    (16.05
    )
    
    
    (20,850
    )
    
    
    (15.04
    )
    
    
    (665
    )
    
    
    (16.05
    )Outstanding at end of year
    
    
    51,245
    
    
    $
    17.63
    
    
    
    21,970
    
    
    $
    17.09
    
    
    
    42,820
    
    
    $
    16.09Options exercisable at year-end
    
    
    19,788
    
    
    $
    17.20
    
    
    
    18,361
    
    
    $
    17.29
    
    
    
    36,964
    
    
    $
    16.10Weighted-average fair value of
options granted during year
    
    
    
    
    
    $
    1.26
    
    
    
    
    
    
    
    N/A
    
    
    
    
    
    
    $
    2.94
 42




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##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 7  EMPLOYEE BENEFITS (Continued)
  OUTSTANDING
    
    
    EXERCISABLEWEIGHTED AVERAGE
    
    
    
    
    
    
    WEIGHTEDREMAINING
    
    
    
    
    
    
    AVERAGERANGE OF
    
    
    
    
    
    CONTRACTUAL LIFE
    
    
    
    
    
    
    EXERCISEEXERCISABLE PRICES
    
    NUMBER
    
    
    (YEARS)
    
    
    NUMBER
    
    
    PRICE$16.05
    
    
    8,485
    
    
    
    5.92
    
    
    
    6,788
    
    
    $
    16.0517.50
    
    
    2,000
    
    
    
    1.56
    
    
    
    2,000
    
    
    
    17.5017.75
    
    
    10,000
    
    
    
    1.37
    
    
    
    10,000
    
    
    
    17.7518.00
    
    
    29,760
    
    
    
    9.12
    
    
    
    
    
    
    
    19.00
    
    
    1,000
    
    
    
    2.57
    
    
    
    1,000
    
    
    
    19.00Outstanding at year-end
    
    
    51,245
    
    
    
    3.01
    
    
    
    19,788
    
    
    $
    17.20
 NOTE 8  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
    CONTRACT AMOUNT2006
    
    
    2005Commitments to extend credit
    
    $
    69,989,000
    
    
    $
    58,527,000Letters of credit
    
    $
    882,000
    
    
    $
    541,000
   43




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##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 9  RELATED-PARTY TRANSACTIONS
  CONTRACT AMOUNT2006Balance at beginning of year
    
    $
    6,160,817New loans and advances
    
    
    423,142Repayments, including loans sold
    
    
    (1,436,501
    )Balance at end of year
    
    $
    5,147,458
  NOTE 10  REGULATORY MATTERS
    44




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##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 10  REGULATORY MATTERS (Continued)
  MINIMUM REQUIREDMINIMUM REQUIRED
    
    TO BE WELL-CAPITALIZEDFOR CAPITAL
    
    UNDER PROMPT CORRECTIVEACTUAL
    
    ADEQUACY PURPOSES
    
    ACTION REGULATIONSAMOUNT
    
    RATIO
    
    AMOUNT
    
    RATIO
    
    AMOUNT
    
    RATIOAs of December 31, 2006Total capital
(to risk-weighted assets)Consolidated
    
    $
    38,259
    
    
    
    17.7
    %
    
    $
    17,337
    
    
    
    8.0
    %
    
    $
    21,671
    
    
    
    10.0
    %Bank
    
    
    35,460
    
    
    
    16.4
    
    
    
    17,298
    
    
    
    8.0
    
    
    
    21,623
    
    
    
    10.0Tier I capital
(to risk-weighted assets)Consolidated
    
    
    35,652
    
    
    
    16.5
    
    
    
    8,668
    
    
    
    4.0
    
    
    
    13,002
    
    
    
    6.0Bank
    
    
    32,853
    
    
    
    15.2
    
    
    
    8,649
    
    
    
    4.0
    
    
    
    12,974
    
    
    
    6.0Tier I capital
(to average assets)Consolidated
    
    
    35,652
    
    
    
    11.1
    
    
    
    12,816
    
    
    
    4.0
    
    
    
    16,020
    
    
    
    5.0Bank
    
    
    32,853
    
    
    
    10.3
    
    
    
    12,781
    
    
    
    4.0
    
    
    
    15,976
    
    
    
    5.0As of December 31, 2005Total capital
(to risk-weighted assets)Consolidated
    
    $
    38,196
    
    
    
    18.2
    %
    
    $
    16,772
    
    
    
    8.0
    %
    
    $
    20,965
    
    
    
    10.0
    %Bank
    
    
    35,562
    
    
    
    17.0
    
    
    
    16,766
    
    
    
    8.0
    
    
    
    20,957
    
    
    
    10.0Tier I capital
(to risk-weighted assets)Consolidated
    
    
    35,750
    
    
    
    17.1
    
    
    
    8,386
    
    
    
    4.0
    
    
    
    12,579
    
    
    
    6.0Bank
    
    
    33,116
    
    
    
    15.8
    
    
    
    8,383
    
    
    
    4.0
    
    
    
    12,574
    
    
    
    6.0Tier I capital
(to average assets)Consolidated
    
    
    35,750
    
    
    
    11.1
    
    
    
    12,905
    
    
    
    4.0
    
    
    
    16,131
    
    
    
    5.0Bank
    
    
    33,116
    
    
    
    10.3
    
    
    
    12,869
    
    
    
    4.0
    
    
    
    16,087
    
    
    
    5.0
  45




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##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 11  CONDENSED PARENT COMPANY FINANCIAL INFORMATION
  CONDENSED BALANCE SHEETS
 2006
    
    
    2005AssetsCash deposited with subsidiary bank
    
    $
    1,793,833
    
    
    $
    1,620,795Investment in subsidiary bank
    
    
    32,271,581
    
    
    
    32,528,304Securities available-for-sale
    
    
    805,281
    
    
    
    816,179Other assets
    
    
    199,625
    
    
    
    204,981Total assets
    
    $
    35,070,320
    
    
    $
    35,170,259Liabilities and Shareholders EquityShareholders equity:Common stock
    
    
    16,673,667
    
    
    
    16,673,667Additional paid-in capital
    
    
    6,427,765
    
    
    
    6,413,915Retained earnings
    
    
    16,248,608
    
    
    
    14,752,250Treasury stock
    
    
    (3,696,102
    )
    
    
    (2,086,686
    )Accumulated other comprehensive income
    
    
    (583,618
    )
    
    
    (582,887
    )Total shareholders equity
    
    
    35,070,320
    
    
    
    35,170,259Total liabilities and shareholders equity
    
    $
    35,070,320
    
    
    $
    35,170,259
  2006
    
    
    2005
    
    
    2004Interest on securities
    
    $
    27,230
    
    
    $
    25,273
    
    
    $
    24,837Dividends from subsidiary
    
    
    3,600,000
    
    
    
    3,910,886
    
    
    
    1,375,221Total income
    
    
    3,627,230
    
    
    
    3,936,159
    
    
    
    1,400,058Operating expenses
    
    
    377,769
    
    
    
    377,211
    
    
    
    157,521Income before taxes and undistributed
equity income of subsidiary
    
    
    3,249,461
    
    
    
    3,558,948
    
    
    
    1,242,537Income tax benefit
    
    
    125,000
    
    
    
    128,000
    
    
    
    54,000Equity income in subsidiary, net of dividends
    
    
    (264,356
    )
    
    
    (814,309
    )
    
    
    1,229,698Net income
    
    $
    3,110,105
    
    
    $
    2,872,639
    
    
    $
    2,526,235
 46




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##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 11  CONDENSED PARENT COMPANY FINANCIAL INFORMATION (Continued)
  2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income
    
    $
    3,110,105
    
    
    $
    2,872,639
    
    
    $
    2,526,235Adjustments to reconcile net income
to cash provided by operations:Security accretion
    
    
    (187
    )
    
    
    (187
    )
    
    
    (187
    )Software amortization
    
    
    6,667
    
    
    
    5,000
    
    
    
    Equity income in subsidiary, net of dividends
    
    
    264,356
    
    
    
    814,309
    
    
    
    (1,229,698
    )Stock compensation expense
    
    
    13,850
    
    
    
    
    
    
    
    Change in other assets, liabilities
    
    
    3,000
    
    
    
    (73,879
    )
    
    
    (17,000
    )Net cash provided by operating activities
    
    
    3,397,791
    
    
    
    3,617,882
    
    
    
    1,279,350Cash flows from investing activities:Purchase of investment securities
    
    
    (1,590
    )
    
    
    (304,376
    )
    
    
    Purchase of software
    
    
    
    
    
    
    (20,000
    )
    
    
    Net cash used in investing activities
    
    
    (1,590
    )
    
    
    (324,376
    )
    
    
    Cash flows from financing activities:Purchase of treasury shares
    
    
    (1,609,416
    )
    
    
    (1,459,752
    )
    
    
    Cash dividends paid
    
    
    (1,613,747
    )
    
    
    (1,822,491
    )
    
    
    (1,337,323
    )Net cash used in financing activities
    
    
    (3,223,163
    )
    
    
    (3,282,243
    )
    
    
    (1,337,323
    )Net change in cash
    
    
    173,038
    
    
    
    11,263
    
    
    
    (57,973
    )Cash at beginning of year
    
    
    1,620,795
    
    
    
    1,609,532
    
    
    
    1,667,505Cash at end of year
    
    $
    1,793,833
    
    
    $
    1,620,795
    
    
    $
    1,609,532
 NOTE 12  OTHER COMPREHENSIVE INCOME (LOSS)
  2006
    
    
    2005
    
    
    2004Unrealized holding losses on
available-for-sale securities
    
    $
    (57,908
    )
    
    $
    (1,225,090
    )
    
    $
    (555,212
    )Unrealized holding gains on held-to-maturity
securities transferred to the available-for-sale category
    
    
    
    
    
    
    
    
    
    
    1,639,462Less reclassification adjustment for securities losses
(gains) recognized in income
    
    
    56,800
    
    
    
    (247,047
    )
    
    
    (587,916
    )Net unrealized holding gains (losses)
    
    
    (1,108
    )
    
    
    (1,472,137
    )
    
    
    496,334Federal income tax provision (benefit)
    
    
    (377
    )
    
    
    (500,527
    )
    
    
    168,754Other comprehensive income (loss)
    
    $
    (731
    )
    
    $
    (971,610
    )
    
    $
    327,580
 47




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##### Table of Contents



CSB Bancorp, Inc.
 continued
 NOTE 13  FAIR VALUES OF FINANCIAL INSTRUMENTS
  2006
    
    (Dollars in Thousands)
    
    2005CARRYING
    
    FAIR
    
    
    
    
    
    CARRYING
    
    FAIRAMOUNTS
    
    VALUE
    
    
    
    
    
    AMOUNTS
    
    VALUEFinancial assets:Cash and cash equivalents
    
    $
    17,653
    
    
    $
    17,653
    
    
    
    
    
    
    $
    16,650
    
    
    $
    16,650Securities
    
    
    70,241
    
    
    
    70,241
    
    
    
    
    
    
    
    81,220
    
    
    
    81,220Loans, net
    
    
    229,825
    
    
    
    226,830
    
    
    
    
    
    
    
    212,574
    
    
    
    212,139Accrued Interest Receivable
    
    
    1,414
    
    
    
    1,414
    
    
    
    
    
    
    
    1,389
    
    
    
    1,389Financial liabilities:Deposits
    
    $
    260,178
    
    
    $
    259,702
    
    
    
    
    
    
    $
    255,403
    
    
    $
    255,053Short-term borrowings
    
    
    28,022
    
    
    
    28,022
    
    
    
    
    
    
    
    21,418
    
    
    
    21,418Other borrowings
    
    
    2,499
    
    
    
    2,515
    
    
    
    
    
    
    
    8,068
    
    
    
    7,998Accrued Interest Payable
    
    
    350
    
    
    
    350
    
    
    
    
    
    
    
    244
    
    
    
    244
    48




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##### Table of Contents



2006 Report to Shareholders
 continued
 NOTE 13  FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)
  NOTE 14  CONTINGENT LIABILITIES
   NOTE 15  QUARTERLY FINANCIAL DATA (UNAUDITED)
  BASIC
    
    DILUTEDINTEREST
    
    NET INTEREST
    
    NET
    
    EARNINGS
    
    EARNINGSINCOME
    
    INCOME
    
    INCOME
    
    PER SHARE
    
    PER SHARE2006First quarter
    
    $
    4,708,719
    
    
    $
    3,294,273
    
    
    $
    773,906
    
    
    $
    .30
    
    
    $
    .30Second quarter
    
    
    5,006,077
    
    
    
    3,272,933
    
    
    
    676,653
    
    
    
    .27
    
    
    
    .27Third quarter
    
    
    5,156,066
    
    
    
    3,294,090
    
    
    
    813,564
    
    
    
    .32
    
    
    
    .32Fourth quarter
    
    
    5,173,890
    
    
    
    3,306,165
    
    
    
    845,982
    
    
    
    .34
    
    
    
    342005First quarter
    
    $
    3,974,179
    
    
    $
    2,928,704
    
    
    $
    666,813
    
    
    $
    .25
    
    
    $
    .25Second quarter
    
    
    4,218,725
    
    
    
    3,028,387
    
    
    
    613,744
    
    
    
    .23
    
    
    
    .23Third quarter
    
    
    4,471,807
    
    
    
    3,213,989
    
    
    
    689,373
    
    
    
    .26
    
    
    
    .26Fourth quarter
    
    
    4,692,564
    
    
    
    3,374,499
    
    
    
    902,709
    
    
    
    .35
    
    
    
    .35
 49




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##### Table of Contents



CSB Bancorp, Inc.
 
  Linda C. Amos
 Becky A. Baker
 Pamela S. Basinger
 Deborah S. Berner
 Pamela L. Bromund
 C. Dawn Butler
 Beverly A. Carr
 Colby M. Chamberlin
 Dale J. Clinton
 G. Gail Cochran
 Peggy L. Conn
 Marianne Davis
 Paula S. Foy
 Rick L. Ginther
 Loretta Gray
 Paul D. Greig
 Marcella K. Hawkins
 Julie A. Jones
 Stephen K. Kilpatrick
 Betty C. Lyon
 Jason R. McCulloch
 Sherry A. McRobie
 Paula J. Meiler
 A. Lee Miller
 Edward J. Miller
 Daniel L. Muse
 Lisa M. Nelson
 Pamela S. Null
 Shawn E. Oswald
 Chris S. Rickly
 Thomas S. Rumbaugh
 Rebecca J. Shultz
 Scott A. Stallman
 Harland L. Stebbins
 Eddie L. Steiner
 Eric D. Strouse
 Ronald L. Stutzman
 Jennifer M. Thorpe
 William R. Tinlin
 Brian D. Troyer
 Marsha Walker
 I. Milton Wayland
 Jane C. Whitmer
 Ervin C. Yoder
 50




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##### Table of Contents



2006 Report to Shareholders
 
   Information & Customer Service
    
    330-674-9015 or 1-800-654-901524 Hour Xpress Phone Banking
    
    330-674-2720 or 1-888-438-2720Loan Services91 N. Clay, Millersburg
    
    Personal Loans 330-763-2823Business Loans 330-763-2822Trust & Investment Services91 N. Clay, Millersburg
    
    Holmes & Tuscarawas County  330-674-2397Trust & Investment Services146 E. Liberty, Suite 230, Wooster
    
    Wayne County 330-264-033424 Hour Xpress Net Banking & BillPay
    
    www.csb1.comCSB BANKING CENTERSMillersburg Banking CentersClinton Commons2102 Glen Dr. (Drive-Up ATM)
    
    
    330-674-2265Jackson6 W. Jackson
    
    
    330-674-9015South Clay91 S. Clay (Drive-Up ATM)
    
    
    330-674-0687Berlin Banking Center4587 S.R. 39, Berlin (Drive-Up ATM)
    
    
    330-893-3565Charm Banking Center4440 C.R. 70, Charm (Walk-Up ATM)
    
    
    330-893-3323Orrville Area Banking Center461 Wadsworth Road, Orrville (Drive-Up ATM)
    
    
    330-682-8000Shreve Banking Center333 W. South, Shreve (Drive-Up ATM)
    
    
    330-567-2226Sugarcreek Banking Center127 S. Broadway, Sugarcreek (Drive-Up ATM)
    
    
    330-852-4444Walnut Creek Banking Center4980 Olde Pump, Walnut Creek (Walk-Up ATM)
    
    
    330-893-2961Winesburg Banking Center2225 U.S. 62, Winesburg (Drive-Up ATM)
    
    
    330-359-5543
 SHAREHOLDER & GENERAL INQUIRIES
    
    Stock Listing Common Symbol: CSBB.OBCorporate Office91 N. Clay, Millersburg
    
    330-674-9015
 If you have questions regarding your CSB Bancorp, Inc. stock, please contact:
 Registrar and Transfer Company
 Legal Counsel
 If you are interested in purchasing shares of CSB Bancorp, Inc., you may contact your local broker
or one of the following:
 Jay McCulloch        
 George Geissbuhler
 Linda Reall
 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      
 The annual meeting of shareholders is currently scheduled to be held on Wednesday, April 25, 2007
at 7:00 pm, at the Carlisle Inn in Walnut Creek, Ohio.
 (MEMBER FDIC LOGO)
    
    (LENDER LOGO)




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##### Table of Contents