UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(g) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes
As of November 1, 2024, the registrant had
CSB BANCORP, INC.
FORM 10-Q
QUARTER ENDED September 30, 2024
Table of Contents
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Page |
ITEM 1 – |
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3 |
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4 |
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5 |
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6 |
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7 |
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8 |
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ITEM 2 – |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
28 |
ITEM 3 – |
36 |
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ITEM 4 – |
37 |
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Part II - Other Information |
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ITEM 1 – |
38 |
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ITEM 1A – |
38 |
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ITEM 2 – |
38 |
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ITEM 3 – |
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ITEM 4 – |
38 |
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ITEM 5 – |
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ITEM 6 – |
39 |
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40 |
2
CSB BANCORP, INC.
PART I – FINANCIAL INFORMATION
ITEM 1. – FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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September 30, |
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December 31, |
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(Dollars in thousands, except per share data) |
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2024 |
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2023 |
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ASSETS |
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Cash and cash equivalents |
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Cash and due from banks |
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$ |
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$ |
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Interest-earning deposits in other banks |
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Federal funds sold |
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Total cash and cash equivalents |
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Securities |
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Available-for-sale, at fair value |
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Held-to-maturity; fair value of $ |
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Equity securities |
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Restricted stock, at cost |
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Total securities |
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Loans held for sale |
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Loans |
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Less allowance for credit losses |
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Net loans |
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Premises and equipment, net |
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Bank-owned life insurance |
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Goodwill |
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Accrued interest receivable and other assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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LIABILITIES |
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Deposits |
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Noninterest-bearing |
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$ |
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$ |
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Interest-bearing |
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Total deposits |
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Short-term borrowings |
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Other borrowings |
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Allowance for credit losses on off-balance sheet commitments |
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Accrued interest payable and other liabilities |
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TOTAL LIABILITIES |
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SHAREHOLDERS' EQUITY |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Treasury stock at cost: |
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Accumulated other comprehensive loss |
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TOTAL SHAREHOLDERS' EQUITY |
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
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$ |
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$ |
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See notes to unaudited consolidated financial statements.
3
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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(Dollars in thousands, except per share data) |
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2024 |
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2023 |
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2024 |
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2023 |
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INTEREST AND DIVIDEND INCOME |
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Loans, including fees |
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$ |
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$ |
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$ |
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$ |
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Taxable securities |
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Nontaxable securities |
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Other |
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Total interest and dividend income |
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INTEREST EXPENSE |
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Deposits |
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Short-term borrowings |
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Other borrowings |
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Total interest expense |
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NET INTEREST INCOME |
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CREDIT LOSS EXPENSE |
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Provision for credit loss expense - loans |
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Provision (recovery) for credit loss expense - off-balance sheet commitments |
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( |
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Total provision for credit loss expense |
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NET INTEREST INCOME AFTER CREDIT LOSS EXPENSE |
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NONINTEREST INCOME |
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Service charges on deposit accounts |
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Trust services |
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Debit card interchange fees |
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Credit card fees |
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Gain on sale of loans, net |
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Earnings on bank owned life insurance |
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Unrealized gain (loss) on equity securities |
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( |
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Other income |
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Total noninterest income |
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NONINTEREST EXPENSES |
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Salaries and employee benefits |
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Occupancy expense |
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Equipment expense |
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Professional and director fees |
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Financial institutions tax |
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Marketing and public relations |
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Software expense |
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Debit card expense |
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FDIC insurance expense |
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Other expenses |
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Total noninterest expenses |
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Income before income taxes |
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FEDERAL INCOME TAX PROVISION |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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Basic and diluted net earnings per share |
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$ |
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$ |
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$ |
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$ |
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See notes to unaudited consolidated financial statements
4
CSB BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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(Dollars in thousands) |
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2024 |
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2023 |
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2024 |
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2023 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss) |
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Unrealized gain (loss) arising during the period |
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( |
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Amortization of discount on securities transferred to held-to-maturity |
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Income tax effect |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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( |
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Total comprehensive income |
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$ |
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$ |
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$ |
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$ |
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See notes to unaudited consolidated financial statements.
5
CSB BANCORP, INC.
(Unaudited)
(Dollars in thousands, except per share data) |
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Common |
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Additional |
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Retained |
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Treasury |
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Accumulated |
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Total |
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Three Months Ended September 30, 2024 |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Purchase of |
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— |
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— |
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— |
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( |
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— |
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( |
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Cash dividends declared, $ |
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— |
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— |
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( |
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— |
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— |
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( |
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Balance at September 30, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Nine Months Ended September 30, 2024 |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive income |
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— |
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— |
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— |
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— |
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Purchase of |
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— |
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— |
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— |
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( |
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— |
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( |
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Cash dividends declared, $ |
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— |
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— |
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( |
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— |
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— |
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( |
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Balance at September 30, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Three Months Ended |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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( |
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( |
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Purchase of |
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— |
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— |
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— |
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( |
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— |
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( |
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Cash dividends declared, $ |
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— |
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— |
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( |
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— |
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— |
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( |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Nine Months Ended September 30, 2023 |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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Cumulative effect of adoption of |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Purchase of |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Cash dividends declared, $ |
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— |
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— |
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( |
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— |
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— |
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( |
) |
Balance, September 30, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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See notes to unaudited consolidated financial statements.
6
CSB BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
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Nine Months Ended |
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(Dollars in thousands) |
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2024 |
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2023 |
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NET CASH PROVIDED BY OPERATING ACTIVITIES |
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$ |
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$ |
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CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES |
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Securities: |
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Proceeds from repayments, available-for-sale |
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Proceeds from repayments, held-to-maturity |
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Purchases, available-for-sale |
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( |
) |
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( |
) |
Redemption of FHLB stock |
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Loan originations, net |
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( |
) |
|
|
( |
) |
Property, equipment, and software acquisitions |
|
|
( |
) |
|
|
( |
) |
Purchase of bank-owned life insurance |
|
|
( |
) |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
|
|
|
( |
) |
|
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Net increase (decrease) in deposits |
|
|
|
|
|
( |
) |
|
Net decrease in short-term borrowings |
|
|
( |
) |
|
|
( |
) |
Repayment of other borrowings |
|
|
( |
) |
|
|
( |
) |
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Purchase of treasury shares |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
|
|
|
( |
) |
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
|
|
$ |
|
||
SUPPLEMENTAL DISCLOSURES |
|
|
|
|
|
|
||
Cash paid during the year for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
Income taxes |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
See notes to unaudited consolidated financial statements.
7
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements include the accounts of CSB Bancorp, Inc. and its wholly-owned subsidiaries, The Commercial and Savings Bank (the “Bank”) and CSB Investment Services, LLC (together referred to as the “Company” or “CSB”). All significant intercompany transactions and balances have been eliminated in consolidation.
The condensed consolidated financial statements have been prepared without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the Company’s financial position at September 30, 2024, and the results of operations and changes in cash flows for the periods presented have been made.
Certain information and footnote disclosures typically included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2023, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements. The results of operations for the period ended September 30, 2024 are not necessarily indicative of the operating results for the full year or any future interim period.
Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.
USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for credit losses and the fair value of financial instruments.
RECENTLY ISSUED ACCOUNTING PRONOUNCMENTS
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosure. This new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this Update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This Update also includes certain other amendments to improve the effectiveness of income tax disclosures. It is effective for public business entities for annual periods beginning after December 15, 2024. This update is not expected to have a significant impact on the Company's financial statements.
8
CSB BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 – SECURITIES
Securities consisted of the following on September 30, 2024 and December 31, 2023:
(Dollars in thousands) |
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Allowance for Credit Losses |
|
|
Fair |
|
|||||
September 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury securities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|||
U.S. Government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Mortgage-backed securities of government agencies |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Asset-backed securities of government agencies |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
State and political subdivisions |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
||
Corporate bonds |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Total available-for-sale |
|
|