Executive Summary

Q1 2024 EPS of $1.10 and net income of $2.93M declined versus both Q4 2023 ($1.38, $3.70M) and Q1 2023 ($1.46, $3.93M), driven by a sharp step-up in credit provisioning despite stable NIM and solid loan growth .
Net interest margin (FTE) held at 3.37% (flat YoY; +1 bp QoQ), while total revenue (NII + noninterest) was $10.92M, up vs Q1 2023 ($10.59M) but down vs Q4 2023 ($11.02M) .
Provision for credit losses rose to $1.15M vs a $31k recovery in Q1 2023 and $156k in Q4 2023; management flagged one identified commercial relationship with $1.5M of combined allowances (loans + off-balance sheet), which remains current and performing .
Depositor rate pressure persisted (cost of deposits 1.31% vs 0.64% YoY), offset by loan yield expansion (5.83% vs 5.07% YoY) and 10% YoY loan growth; asset quality remains strong (NPAs/loans 0.05%) .
Potential stock catalysts: resolution path on the identified commercial relationship; confirmation of stable-to-improving margin in a higher-for-longer rate environment; and incremental growth from the new Medina, OH loan production office opened March 20, 2024 .

What Went Well and What Went Wrong

What Went Well
- Net interest margin (FTE) held steady at 3.37% YoY, with GAAP NII up modestly YoY (+2%), supported by higher loan yields and a continued mix shift into loans .
- Noninterest income grew 9% YoY, led by trust and brokerage fees (+$136k), gain on sale of mortgage loans (+$33k), and higher BOLI income (+$19k) .
- Loan growth persisted: +$9M QoQ and +$63M YoY, with commercial and residential balances higher; NPAs remained low at 0.05% of loans and net charge-offs were 0.04% annualized .
- “The Bank has maintained its net interest margin and is closely monitoring overall credit conditions, which remain acceptable at the present time.” – Eddie Steiner, CEO .
What Went Wrong
- EPS fell to $1.10 from $1.38 in Q4 2023 and $1.46 in Q1 2023 as the provision for credit losses increased to $1.15M vs $156k in Q4 2023 and a $31k recovery in Q1 2023 .
- Cost of deposits rose to 1.31% from 0.64% YoY, reflecting competitive rate pressure and mix shift toward interest-bearing/time deposits alongside a $52M YoY decline in noninterest-bearing balances .
- Efficiency ratio worsened YoY to 56.0% (from 53.86%), as noninterest expense rose 7% (notably salaries/benefits, FDIC assessment, debit card and software) despite slight sequential improvement vs Q4 2023 (56.67%) .

Financial Results

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Total Revenue (NII + Noninterest) ($M)	$10.593	$10.542	$11.023	$10.920
Net Interest Income (GAAP) ($M)	$8.965	$8.837	$9.345	$9.148
Noninterest Income ($M)	$1.628	$1.705	$1.678	$1.772
Provision for Credit Losses ($M)	($0.031)	$0.177	$0.156	$1.152
Net Income ($M)	$3.934	$3.481	$3.697	$2.933
Diluted EPS ($)	$1.46	$1.30	$1.38	$1.10
NIM (FTE) (%)	3.37%	3.21%	3.36%	3.37%
Efficiency Ratio (%)	53.86%	56.99%	56.67%	56.00%

KPIs

KPI	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Loans, Ending Balance ($M)	$647.773	$680.949	$701.404	$710.822
Deposits, Ending Balance ($M)	$1,007.507	$1,018.075	$1,027.427	$1,010.115
Loan Yield (%)	5.07%	5.39%	5.64%	5.83%
Cost of Deposits (%)	0.64%	1.08%	1.16%	1.31%
ROA (%)	1.39%	1.19%	1.25%	1.02%
ROE (%)	16.39%	13.63%	14.22%	10.84%
NPAs / Loans (%)	0.03%	0.04%	0.06%	0.05%
Allowance / Loans (%)	0.97%	0.98%	0.94%	1.00%
Net Charge-off Ratio (%)	0.00%	-0.07%	0.00%	0.04%

Segment breakdown: Not applicable; CSB reports as a single banking segment per furnished materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q1 2024	$0.38 (Q4 2023 declared)	$0.39 (Q1 2024 declared)	Raised
Formal revenue/expense/margin guidance	2024	None provided	None provided	Maintained

Note: Management commentary suggests rates “will remain elevated through 2024,” but no numeric guidance ranges were issued .

Earnings Call Themes & Trends

Note: No separate Q1 2024 earnings call transcript was furnished; themes reflect management commentary across Q3 2023, Q4 2023, and Q1 2024 press materials.

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Rate environment & NIM	Higher-for-longer stance; margin expansion vs 2022, but funding costs rising	NIM (FTE) up to 3.36%; Fed expected to start cuts later in 2024	NIM (FTE) steady at 3.37%; rates seen elevated through 2024	Stable NIM; cautious on rate path
Loan demand	Active construction/CRE and homebuilding; borrowers favor ARMs	Continued demand; borrowers waiting for Fed to ease	Loan growth +$9M QoQ; commercial demand continued albeit softening	Moderating but positive
Deposit costs & mix	Cost up to 1.08%; shift toward time/IBD; lower NIB	Cost to 1.16%; deposit base >$1B steady	Cost to 1.31%; NIB down $52M YoY; time +$80M YoY	Ongoing pressure
Credit quality & provisioning	NPAs 0.04%; recoveries; CECL adopted	NPAs 0.06%; stable delinquencies	NPAs 0.05%; provision elevated; specific commercial relationship allocated $1.5M total allowances (performing)	Strong asset quality; higher reserves
Capital & liquidity	Equity/assets 8.72%; tangible equity 8.39%	Equity/assets 8.80%; tangible equity 8.79%	Equity/assets 9.38%; tangible equity 9.10%	Improving

Management Commentary

“Borrowing appetite has been restrained by the highest interest rate environment in almost 25 years… The Bank has maintained its net interest margin and is closely monitoring overall credit conditions, which remain acceptable at the present time… it appears that rates will remain elevated through 2024.” – Eddie Steiner, President & CEO .
“An identified commercial lending relationship that has experienced credit deterioration was allocated $1.5 million of the combined total allowance… The relationship remains current and is performing.” .
“CSB’s capital and liquidity levels are strong, our deposit base held steady at more than $1 billion throughout 2023, and loan balances grew by 12%.” – CEO, Q4 commentary framing the exit run-rate into 2024 .

Q&A Highlights

No separate public earnings call transcript was furnished for Q1 2024; management commentary and quantitative detail are drawn from the Q1 8-K press release and financial tables .

Estimates Context

We attempted to retrieve S&P Global (Capital IQ) consensus for Q1 2024 EPS and revenue but were unable to due to API request limits; CSBB’s OTC micro-cap profile typically has limited analyst coverage. As a result, no vs-consensus comparisons are presented here (treat estimates as Not Available).*

Key Takeaways for Investors

Margin resilience with NIM (FTE) 3.37% and modest YoY NII growth despite funding cost pressures underscores disciplined balance sheet management .
The primary earnings headwind was provisioning ($1.15M), tied partly to one identified commercial relationship; resolving this exposure or demonstrating continued performance would be an upside catalyst .
Underlying growth remains intact: loans +$63M YoY (+10%) with continued commercial and residential activity; Medina loan production office could support incremental loan origination .
Deposit betas remain the swing factor: cost of deposits rose to 1.31% (from 0.64% YoY) and mix shifted away from NIB; sustained stabilization here would support EPS recovery .
Asset quality metrics remain strong (NPAs/loans 0.05%, very low charge-offs) even as reserves were prudently increased; affords flexibility if macro softens .
Dividend increased to $0.39 (from $0.38 in Q4), signaling confidence in capital while maintaining conservative posture .
Near-term trading setup: watch for updates on the identified credit, deposit pricing discipline, and any signs of margin trajectory change in a “higher for longer” environment .

CSB Bancorp, Inc. (CSBB)·Q1 2024 Earnings Summary