10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: March 31, 2017

OR

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

Commission file number: 0-21714

CSB Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Ohio	34-1687530
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

91 North Clay, P.O. Box 232, Millersburg, Ohio 44654

(Address of principal executive offices)

(330) 674-9015

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Emerging growth company    ☐

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 the number of shares outstanding of the registrant’s common stock, as of the latest practicable date.

Common stock, $6.25 par value	Outstanding at May 1, 2017:
	2,742,242 common shares

CSB BANCORP, INC.

FORM 10-Q

QUARTER ENDED March 31, 2017

Table of Contents

		Page
Part I - Financial Information
ITEM 1 – FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets			3
Consolidated Statements of Income			4
Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Statements of Changes in Shareholders’ Equity			6
Condensed Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			8
ITEM 2 –	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		25
ITEM 3 –	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		30
ITEM 4 –	CONTROLS AND PROCEDURES		31
Part II - Other Information
ITEM 1. –	Legal Proceedings		32
ITEM 1A –	Risk Factors		32
ITEM 2 –	Unregistered Sales of Equity Securities and Use of Proceeds		32
ITEM 3 –	Defaults upon Senior Securities		32
ITEM 4 –	Mine Safety Disclosures		32
ITEM 5 –	Other Information		32
ITEM 6 –	Exhibits		33
Signatures			34

2

CSB BANCORP, INC.

PART I – FINANCIAL INFORMATION

ITEM 1. – FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31,			December 31,
(Dollars in thousands)	2017			2016
ASSETS
Cash and cash equivalents
Cash and due from banks	$	13,911		$	13,590
Interest-earning deposits in other banks		24,476			23,248
Total cash and cash equivalents		38,387			36,838
Securities
Available-for-sale, at fair value		102,158			103,875
Held-to-maturity (fair value 2017-$27,675; 2016-$23,444)		27,892			23,883
Restricted stock, at cost		4,614			4,614
Total securities		134,664			132,372
Loans held for sale		264			—
Loans		480,709			475,449
Less allowance for loan losses		5,454			5,291
Net loans		475,255			470,158
Premises and equipment, net		8,656			8,749
Core deposit intangible		354			383
Goodwill		4,728			4,728
Bank-owned life insurance		12,959			10,361
Accrued interest receivable and other assets		4,170			6,389
TOTAL ASSETS	$	679,437		$	669,978
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Deposits
Noninterest-bearing	$	171,235		$	167,824
Interest-bearing		370,945			372,961
Total deposits		542,180			540,785
Short-term borrowings		54,022			48,742
Other borrowings		12,304			12,385
Accrued interest payable and other liabilities		4,004			2,651
Total liabilities		612,510			604,563
SHAREHOLDERS’ EQUITY
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding (shares 2017 and 2016 - 2,742,242)		18,629			18,629
Additional paid-in capital		9,815			9,815
Retained earnings		43,810			42,629
Treasury stock at cost (shares 2017 and 2016 - 238,360)		(4,784	)		(4,784	)
Accumulated other comprehensive loss		(543	)		(874	)
Total shareholders’ equity		66,927			65,415
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	679,437		$	669,978

See notes to unaudited consolidated financial statements.

3

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands, except per share data)	2017			2016
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	5,449		$	4,742
Taxable securities		598			737
Nontaxable securities		165			154
Other		34			28
Total interest and dividend income		6,246			5,661
INTEREST EXPENSE
Deposits		267			259
Short-term borrowings		22			17
Other borrowings		95			100
Total interest expense		384			376
NET INTEREST INCOME		5,862			5,285
(CREDIT) PROVISION FOR LOAN LOSSES		(160	)		164
Net interest income, after (credit) provision for loan losses		6,022			5,121
NONINTEREST INCOME
Service charges on deposit accounts		291			278
Trust services		207			226
Debit card interchange fees		288			262
Gain on sale of loans, net		42			32
Other income		278			194
Total noninterest income		1,106			992
NONINTEREST EXPENSES
Salaries and employee benefits		2,459			2,327
Occupancy expense		210			244
Equipment expense		170			174
Professional and director fees		169			174
Franchise tax expense		131			107
Marketing and public relations		78			85
Software expense		210			187
Debit card expense		130			104
Amortization of intangible assets		29			30
FDIC insurance expense		51			84
Provision for unfunded loan commitments		540			—
Other expenses		469			473
Total noninterest expenses		4,646			3,989
Income before income taxes		2,482			2,124
FEDERAL INCOME TAX PROVISION		752			644
NET INCOME	$	1,730		$	1,480
Basic and diluted net earnings per share	$	0.63		$	0.54

See notes to unaudited consolidated financial statements.

4

CSB BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands)	2017			2016
Net income	$	1,730		$	1,480
Other comprehensive income
Unrealized gains arising during the period		471			808
Amounts reclassified from accumulated other comprehensive income, held-to-maturity		31			46
Income tax effect		(171	)		(290	)
Other comprehensive income		331			564
Total comprehensive income	$	2,061		$	2,044

See notes to unaudited consolidated financial statements.

5

CSB BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands, except per share data)	2017			2016
Balance at beginning of period	$	65,415		$	61,266
Net income		1,730			1,480
Other comprehensive income		331			564
Stock options exercised 1,246 shares issued in 2016		—			7
Cash dividends declared		(549	)		(521	)
Balance at end of period	$	66,927		$	62,796
Cash dividends declared per share	$	0.20		$	0.19

See notes to unaudited consolidated financial statements.

6

CSB BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
(Dollars in thousands)	2017			2016
NET CASH FROM OPERATING ACTIVITIES	$	4,407		$	1,382
CASH FLOWS FROM INVESTING ACTIVITIES
Securities:
Proceeds from repayments, available-for-sale		4,430			11,625
Proceeds from repayments, held-to-maturity		709			6,827
Purchases, available-for-sale		(2,379	)		(5,281	)
Purchases, held-to-maturity		(4,700	)		—
Loan originations, net of repayments		(4,899	)		(10,398	)
Property, equipment, and software acquisitions		(113	)		(50	)
Purchase of bank-owned life insurance		(2,500	)		—
Net cash (used in) provided by investing activities		(9,452	)		2,723
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		1,395			(15,062	)
Net change in short-term borrowings		5,280			189
Repayment of other borrowings		(81	)		(133	)
Net cash provided by (used in) financing activities		6,594			(15,006	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	$	1,549		$	(10,901	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		36,838			38,272
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	38,387		$	27,371
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest	$	389		$	378
Income taxes		—			400
Noncash financing activities:
Dividends declared		549			521
					—

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 March 31, 2017, 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 (“U.S. GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2016, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying Consolidated Financial Statements. The results of operations for the period ended March 31, 2017 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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ASU 2014-09 - Revenue from Contracts with Customers. The amendments in ASU 2014-09 require an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and the FASB issued a one-year deferral for implementation, which results in new guidance being effective for annual and interim reporting periods beginning after December 15, 2017. For public entities with a calendar year-end, the new guidance is effective in the quarter and year beginning January 1, 2018. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities. This Update sets forth targeted improvements to GAAP including, but not limited to, requiring an entity to recognize the changes in fair value of equity investments in the income statement, requiring public business entities to use the exit price when measuring the fair value of financial instruments for financial statement disclosure purposes, eliminating certain disclosures required by existing GAAP, and providing for additional disclosures. The Update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Update is not expected to have a significant impact on the Company’s financial position or results of operations.

ASU 2016-02 – Leases. This Update sets forth a new lease accounting model for lessors and lessees. For lessees, virtually all leases will be required to be recognized on the balance sheet by recording a right-of-use asset. Subsequent accounting for leases varies depending on whether the lease is an operating lease or a finance lease. The accounting provided by a lessor is largely unchanged from that applied under the existing guidance. The ASU requires additional qualitative and quantitative disclosures with the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Update is effective for fiscal years beginning after December 15, 2018, with early application permitted. We expect the Update will result in an increase in total assets and liabilities. The amount of the increase will be impacted by the leases outstanding at the time of adoption and their remaining term at that time. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

8

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

ASU 2016-13 - Financial Instruments - Credit Losses. The Update requires that financial assets be presented at the net amount expected to be collected (i.e. net of expected credit losses), eliminating the probable recognition threshold for credit losses on financial assets measured at amortized cost. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Update is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect the Update will result in an increase in the allowance for credit losses for the estimated life of the financial asset, including an estimate for debt securities. The amount of the increase will be impacted by the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. A cumulative-effect adjustment to retained earnings is required as of the beginning of the year of adoption. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. Current guidance lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. FASB issued the ASU with the intent of reducing diversity in practice with respect to several types of cash flows. The amendments in this Update are effective using a retrospective transition approach for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update simplifies the goodwill impairment test. Under the new guidance, Step 2 of the goodwill impairment process that requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities, is eliminated. Instead, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. The amendment is not expected to have a material impact on the Company’s Unaudited Consolidated Financial Statements.

ASU 2017-08 - Premium Amortization on Purchased Callable Debt Securities. The Update amends the guidance related to amortization for certain callable debt securities held at a premium. The new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities purchased at discount. The Update was adopted in the current reporting period and did not have a significant impact on the Company’s Unaudited Consolidated Financial Statements.

9

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SECURITIES

Securities consist of the following at March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		8,500		—		79		8,421
Mortgage-backed securities of government agencies		53,306		296		438		53,164
Other mortgage-backed securities		55		—		—		55
Asset-backed securities of government agencies		1,272		—		26		1,246
State and political subdivisions		28,768		195		276		28,687
Corporate bonds		9,615		45		156		9,504
Equity securities		53		28		—		81
Total available-for-sale		102,569		564		975		102,158
Held-to-maturity
U.S. Government agencies		9,473		21		303		9,191
Mortgage-backed securities of government agencies		13,719		169		137		13,751
State and political subdivisions		4,700		33		—		4,733
Total held-to-maturity		27,892		223		440		27,675
Restricted stock		4,614		—		—		4,614
Total securities	$	135,075	$	787	$	1,415	$	134,447
December 31, 2016
Available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		6,500		—		98		6,402
Mortgage-backed securities of government agencies		56,187		239		589		55,837
Other mortgage-backed securities		65		—		—		65
Asset-backed securities of government agencies		1,312		—		46		1,266
State and political subdivisions		30,007		140		439		29,708
Corporate bonds		9,632		28		144		9,516
Equity securities		53		27		—		80
Total available-for-sale		104,757		434		1,316		103,875
Held-to-maturity
U.S. Government agencies		9,472		17		396		9,093
Mortgage-backed securities of government agencies		14,411		141		201		14,351
Total held-to-maturity		23,883		158		597		23,444
Restricted stock		4,614		—		—		4,614
Total securities	$	133,254	$	592	$	1,913	$	131,933

10

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SECURITIES (CONTINUED)

The amortized cost and fair value of debt securities at March 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	3,269	$	3,272
Due after one through five years		24,328		24,391
Due after five through ten years		22,266		22,174
Due after ten years		52,653		52,240
Total debt securities available-for-sale	$	102,516	$	102,077
Held-to-maturity
Due in one year or less	$	4,700	$	4,733
Due after one through five years		—		—
Due after five through ten years		3,475		3,359
Due after ten years		19,717		19,583
Total debt securities held-to-maturity	$	27,892	$	27,675

Securities with a carrying value of approximately $92.2 million and $94.8 million were pledged at March 31, 2017 and December 31, 2016 to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $4.1 million at March 31, 2017 and December 31, 2016. Federal Reserve Bank stock was $471 thousand at March 31, 2017 and December 31, 2016.

There were no proceeds from sales of available-for-sale securities for the three month periods ending March 31, 2017 and 2016.

11

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SECURITIES (CONTINUED)

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2017 and December 31, 2016:

	Securities in a continuous unrealized loss position
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Government agencies	$	79	$	8,420	$	—	$	—	$	79	$	8,420
Mortgage-backed securities of government agencies		438		30,345		—		—		438		30,345
Asset-backed securities of government agencies				—		26		1,246		26		1,246
State and political subdivisions		276		10,713		—		—		276		10,713
Corporate bonds		1		941		155		2,345		156		3,286
Held-to-maturity
U.S. Government agencies		303		8,695		—		—		303		8,695
Mortgage-backed securities of government agencies		12		1,938		125		3,517		137		5,455
Total temporarily impaired securities	$	1,109	$	61,052	$	306	$	7,108	$	1,415	$	68,160
December 31, 2016
Available-for-sale
U.S. Government agencies	$	98	$	6,402	$	—	$	—	$	98	$	6,402
Mortgage-backed securities of government agencies		589		27,243		—		—		589		27,243
Asset-backed securities of government agencies		—		—		46		1,266		46		1,266
State and political subdivisions		439		19,328		—		—		439		19,328
Corporate bonds		33		3,593		111		1,889		144		5,482
Held-to-maturity
U.S. Government agencies		396		8,602		—		—		396		8,602
Mortgage-backed securities of government agencies		28		2,018		173		3,621		201		5,639
Total temporarily impaired securities	$	1,583	$	67,186	$	330	$	6,776	$	1,913	$	73,962

There were seventy-one securities in an unrealized loss position at March 31, 2017, six (6) of which were in a continuous loss position for twelve months or more. At least quarterly, the Company conducts a comprehensive security-level impairment assessment. The assessments are based on the nature of the securities, the extent and duration of the securities in an unrealized loss position, the extent and duration of the loss and management’s intent to sell or if it is more likely than not that management will be required to sell a security before recovery of its amortized cost basis, which may be maturity. Management believes the Company will fully recover the cost of these securities. It does not intend to sell these securities and likely will not be required to sell them before the anticipated recovery of the remaining amortized cost basis, which may be maturity. As a result, management concluded that these securities were not other-than-temporarily impaired at March 31, 2017.

12

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS

Loans consist of the following:

(Dollars in thousands)	March 31, 2017		December 31, 2016
Commercial	$	132,455	$	134,268
Commercial real estate		167,203		159,475
Residential real estate		149,007		144,489
Construction & land development		16,996		23,428
Consumer		14,528		13,308
Total loans before deferred costs		480,189		474,968
Deferred loan costs		520		481
Total Loans	$	480,709	$	475,449

Loan Origination/Risk Management

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management and the Board of Directors review and approve these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies, and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines past, current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed, other business assets such as accounts receivable, or inventory and usually incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans are largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. At March 31, 2017 approximately 78% of the outstanding principal balances of the Company’s commercial real estate loans were secured by owner-occupied properties as compared to 77% at December 31, 2016.

With respect to loans to developers and builders that are secured by non-owner occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisals, sensitivity analysis of absorption, lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Construction and land development loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk.

The Company maintains a credit department that reviews and validates the credit risk program on a periodic basis. The Company engages an outside firm on an annual basis to provide a third party review of the commercial loan portfolio. Results of these reviews are presented to management. The loan review processes complement and reinforce the risk identification, assessment decisions made by lenders, and credit personnel, as well as the Company’s policies and procedures.

Loans serviced for others approximated $86.0 million and $85.9 million at March 31, 2017 and December 31, 2016, respectively.

Concentrations of Credit

Nearly all of the Company’s lending activity occurs within the state of Ohio, including the four (4) counties of Holmes, Stark, Tuscarawas, and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial, industrial, and commercial real estate loans. As of March 31, 2017, there were four business segment concentrations of credit. Loan balances as a percentage of capital included: $42 million, or 69%, to lessors of non-residential buildings, $25 million, or 41%, to logging and sawmill operations, $22 million, or 36%, to borrowers in the hotel, motel and lodging business, and $19 million, or 32%, to lessors of residential buildings at March 31, 2017.

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2017 and 2016. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

The change in the provision for loan losses for the three months ended March 31, 2017 related to commercial loans was primarily due to the decrease in the specific allocation related to one commercial relationship, as well as the recovery of prior loan charge-offs. The increase in the provision for loan losses related to commercial real estate loans was due to the increase of nonaccrual loans in this category, as well as the increase in volume of loans.

The changes in the provision for loan losses for the three months ended March 31, 2016 related to commercial and industrial loans were primarily due to the increase in a specific reserve amount for one commercial relationship as well as the increase in loan volume. The decrease in the provision related to commercial real estate loans was primarily due to a recovery of a prior charge-off as well as a decrease in a specific reserve amount related to one loan relationship.

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CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated		Total
Three months ended March 31, 2017
Beginning balance	$	2,207		$	1,264		$	1,189		$	178		$	141		$	312	$	5,291
(Credit) provision for loan losses		(831	)		274			114			6			29			248		(160	)
Charge-offs		(8	)		—			—			—			(5	)				(13	)
Recoveries		336			—			—			—			—					336
Net recoveries (charge-offs)		328			—			—			—			(5	)				323
Ending balance	$	1,704		$	1,538		$	1,303		$	184		$	165		$	560	$	5,454
Three months ended March 31, 2016
Beginning balance	$	1,664		$	1,271		$	1,086		$	123		$	86		$	432	$	4,662
(Credit) provision for loan losses		394			(228	)		(4	)		(17	)		8			11		164
Charge-offs		(9	)		—			—			—			(1	)				(10	)
Recoveries		4			182			2			—			1					189
Net recoveries (charge-offs)		(5	)		182			2			—			—					179
Ending balance	$	2,053		$	1,225		$	1,084		$	106		$	94		$	443	$	5,005

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class and based on the impairment method as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
March 31, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	51	$	—	$	25	$	—	$	—	$	—	$	76
Collectively evaluated for impairment		1,653		1,538		1,278		184		165		560		5,378
Total ending allowance balance	$	1,704	$	1,538	$	1,303	$	184	$	165	$	560	$	5,454
Loans:
Loans individually evaluated for impairment	$	2,000	$	3,543	$	1,520	$	—	$	—			$	7,063
Loans collectively evaluated for impairment		130,455		163,660		147,487		16,996		14,528				473,126
Total ending loans balance	$	132,455	$	167,203	$	149,007	$	16,996	$	14,528			$	480,189
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	705	$	—	$	24	$	—	$	—	$	—	$	729
Collectively evaluated for impairment		1,502		1,264		1,165		178		141		312		4,562
Total ending allowance balance	$	2,207	$	1,264	$	1,189	$	178	$	141	$	312	$	5,291
Loans:
Loans individually evaluated for impairment	$	5,028	$	621	$	1,507	$	—	$	—			$	7,156
Loans collectively evaluated for impairment		129,240		158,854		142,982		23,428		13,308				467,812
Total ending loans balance	$	134,268	$	159,475	$	144,489	$	23,428	$	13,308			$	474,968

15

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance
March 31, 2017
Commercial	$	2,084	$	1,882	$	121	$	2,003	$	51
Commercial real estate		3,435		3,522		20		3,542		—
Residential real estate		1,727		1,056		465		1,521		25
Total impaired loans	$	7,246	$	6,460	$	606	$	7,066	$	76
December 31, 2016
Commercial	$	5,476	$	1,690	$	3,354	$	5,044	$	705
Commercial real estate		796		600		21		621		—
Residential real estate		1,681		1,036		472		1,508		24
Total impaired loans	$	7,953	$	3,326	$	3,847	$	7,173	$	729

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three months ended March 31,
(Dollars in thousands)	2017		2016
Average recorded investment:
Commercial	$	4,216	$	6,016
Commercial real estate		438		984
Residential real estate		1,488		1,530
Average recorded investment in impaired loans	$	6,142	$	8,530
Interest income recognized:
Commercial	$	14	$	65
Commercial real estate		—		4
Residential real estate		15		15
Interest income recognized on a cash basis on impaired loans	$	29	$	84

16

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The following table presents the aging of past due loans and nonaccrual loans as of March 31, 2017 and December 31, 2016 by class of loans:

(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
March 31, 2017
Commercial	$	131,447	$	148	$	—	$	—	$	860	$	1,008	$	132,455
Commercial real estate		163,273		272		95		40		3,523		3,930		167,203
Residential real estate		148,011		347		197		30		422		996		149,007
Construction & land development		16,996		—		—		—		—		—		16,996
Consumer		14,455		38		1		—		34		73		14,528
Total Loans	$	474,182	$	805	$	293	$	70	$	4,839	$	6,007	$	480,189
December 31, 2016
Commercial	$	133,630	$	151	$	62	$	—	$	425	$	638	$	134,268
Commercial real estate		158,504		435		—		39		497		971		159,475
Residential real estate		142,926		816		61		196		490		1,563		144,489
Construction & land development		23,428		—		—		—		—		—		23,428
Consumer		13,234		21		16		—		37		74		13,308
Total Loans	$	471,722	$	1,423	$	139	$	235	$	1,449	$	3,246	$	474,968

Troubled Debt Restructurings

All troubled debt restructurings (“TDR’s) are individually evaluated for impairment and a related allowance is recorded, as needed. Loans whose terms have been modified as TDR’s totaled $2.8 million as of March 31, 2017, and $6.4 million as of December 31, 2016, with $25 thousand and $711 thousand of specific reserves allocated to those loans, respectively. At March 31, 2017, $2.5 million of the loans classified as TDR’s were performing in accordance with their modified terms. Of the remaining $348 thousand, all were in nonaccrual of interest status.

There were no new TDR’s during the three month periods ended March 31, 2017 and 2016. None of the loans that were restructured in 2015 or 2016 have subsequently defaulted in the three month periods ended March 31, 2017 and 2016.

The Company held no foreclosed real estate as of March 31, 2017 or December 31, 2016. Consumer mortgage loans in the process of foreclosure were $487 thousand at March 31, 2017 and $448 thousand at December 31, 2016.

17

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes commercial loans with an outstanding balance greater than $300 thousand. This analysis is performed on an annual basis. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass (Acceptable, Low Acceptable or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity, and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.

Special Mention. Loans classified as special mention have material weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, values, highly questionable, and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $300 thousand or are included in groups of homogeneous loans. Based on the most recent analysis performed, the risk category of loans by class is as follows as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
March 31, 2017
Commercial	$	115,363	$	9,316	$	6,767	$	—	$	1,009	$	132,455
Commercial real estate		150,517		9,845		5,829		—		1,012		167,203
Residential real estate		213		—		55		—		148,739		149,007
Construction & land development		12,491		1,169		—		—		3,336		16,996
Consumer		—		—		—		—		14,528		14,528
Total	$	278,584	$	20,330	$	12,651	$	—	$	168,624	$	480,189
December 31, 2016
Commercial	$	116,739	$	6,874	$	9,704	$	—	$	951	$	134,268
Commercial real estate		149,630		4,168		4,766		—		911		159,475
Residential real estate		216		—		175		—		144,098		144,489
Construction & land development		17,183		981		504		—		4,760		23,428
Consumer		—		—		—		—		13,308		13,308
Total	$	283,768	$	12,023	$	15,149	$	—	$	164,028	$	474,968

18

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3 – LOANS (CONTINUED)

The following table presents loans that are not rated by class of loans as of March 31, 2017 and December 31, 2016. Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

(Dollars in thousands)	Performing		Non-Performing		Total
March 31, 2017
Commercial	$	857	$	152	$	1,009
Commercial real estate		1,012		—		1,012
Residential real estate		148,404		335		148,739
Construction & land development		3,336		—		3,336
Consumer		14,494		34		14,528
Total	$	168,103	$	521	$	168,624
December 31, 2016
Commercial	$	951	$	—	$	951
Commercial real estate		911		—		911
Residential real estate		143,440		658		144,098
Construction & land development		4,760		—		4,760
Consumer		13,271		37		13,308
Total	$	163,333	$	695	$	164,028

NOTE 4 – SHORT-TERM BORROWINGS

The following table provides additional detail regarding repurchase agreements accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
(Dollars in thousands)	March 31, 2017		December 31, 2016
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$	54,226	$	48,866
Repurchase agreements		54,022		48,742

NOTE 5 – FAIR VALUE MEASUREMENTS

The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:

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

19

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5- FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents the assets reported on the Consolidated Balance Sheet at their fair value as of March 31, 2017 and December 31, 2016 by level within the fair value hierarchy. No liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. Government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, and corporate bonds are valued at observable market data for similar assets.

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		—		8,421		—		8,421
Mortgage-backed securities of government agencies		—		53,164		—		53,164
Other mortgage-backed securities		—		55		—		55
Asset-backed securities of government agencies		—		1,246		—		1,246
State and political subdivisions		—		28,687		—		28,687
Corporate bonds		—		9,504		—		9,504
Total debt securities		1,000		101,077		—		102,077
Equity securities		81		—		—		81
Total available-for-sale securities	$	1,081	$	101,077	$	—	$	102,158
December 31, 2016
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		—		6,402		—		6,402
Mortgage-backed securities of government agencies		—		55,837		—		55,837
Other mortgage-backed securities		—		65		—		65
Asset-backed securities of government agencies		—		1,266		—		1,266
State and political subdivisions		—		29,708		—		29,708
Corporate bonds		—		9,516		—		9,516
Total debt securities		1,001		102,794		—		103,795
Equity securities		80		—		—		80
Total available-for-sale securities	$	1,081	$	102,794	$	—	$	103,875

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2017 and December 31, 2016, by level within the fair value hierarchy. Impaired loans are written down to fair value through the establishment of specific reserves. Techniques used to value the collateral that secure the impaired loans include: quoted market prices for identical assets classified as Level I inputs; and observable inputs, employed by certified appraisers, for similar assets classified as Level II inputs. In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level III inputs.

20

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5- FAIR VALUE MEASUREMENTS (CONTINUED)

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,987	$	6,987
December 31, 2016
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,427	$	6,427

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level III inputs to determine fair value:

(Dollars in thousands)
March 31, 2017
Impaired loans	$	5,678	Discounted cash flow	Remaining term Discount rate	2 mos to 30 yrs (154 months) 3.1% to 9.8% (4.7%)
		1,309	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-23%) -10%
December 31, 2016
Impaired loans	$	5,331	Discounted cash flow	Remaining term Discount rate	6 mos to 29.9 yrs / (61.1 mos) 3.1% to 12.0% / (4.9%)
		1,096	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-21.7%) -10%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

21

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of recognized financial instruments as of March 31, 2017 and December 31, 2016 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2017
Financial assets
Cash and cash equivalents	$	38,387	$	38,387	$	—	$	—	$	38,387
Securities available-for-sale		102,158		1,081		101,077		—		102,158
Securities held-to-maturity		27,892		—		27,675		—		27,675
Restricted stock		4,614		4,614				—		4,614
Loans held for sale		264		264		—		—		264
Net loans		475,255		—		—		478,673		478,673
Bank-owned life insurance		12,959		12,959		—		—		12,959
Accrued interest receivable		1,604		1,604		—		—		1,604
Mortgage servicing rights		260		—		—		260		260
Financial liabilities
Deposits	$	542,180	$	430,366	$	—	$	112,062	$	542,428
Short-term borrowings		54,022		54,022		—				54,022
Other borrowings		12,304		—		—		12,434		12,434
Accrued interest payable		71		71		—		—		71
December 31, 2016
Financial assets
Cash and cash equivalents	$	36,838	$	36,838	$	—	$	—	$	36,838
Securities available-for-sale		103,875		1,081		102,794		—		103,875
Securities held-to-maturity		23,883		—		23,444		—		23,444
Restricted stock		4,614		4,614		—		—		4,614
Loans held for sale		—		—		—		—		—
Net loans		470,158		—		—		471,815		471,815
Bank-owned life insurance		10,361		10,361		—		—		10,361
Accrued interest receivable		1,409		1,409		—		—		1,409
Mortgage servicing rights		261		—		—		261		261
Financial liabilities
Deposits	$	540,785	$	428,676	$	—	$	112,642	$	541,318
Short-term borrowings		48,742		48,742		—		—		48,742
Other borrowings		12,385		—		—		12,511		12,511
Accrued interest payable		76		76		—		—		76

For purposes of the above disclosures of estimated fair value, the following assumptions are used:

Cash and cash equivalents; Loans held for sale; Accrued interest receivable; Short-term borrowings and Accrued interest payable

The fair value of the above instruments is considered to be carrying value, classified as Level I in the fair value hierarchy.

22

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)

Securities

The fair value of securities available-for-sale and securities held-to-maturity which are measured on a recurring basis are determined primarily by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on securities’ relationship to other similar securities, classified as Level I or Level II in the fair value hierarchy.

Net loans

The fair value for loans is estimated by discounting future cash flows using current market inputs at which loans with similar terms and qualities would be made to borrowers of similar credit quality. Where quoted market prices were available, primarily for certain residential mortgage loans, such market rates were utilized as estimates for fair value. Fair value of non-accrual loans is based on carrying value, classified as Level III.

Bank-owned life insurance

The carrying amount of bank-owned life insurance is based on the cash surrender value of the policies and is a reasonable estimate of fair value, classified as Level I.

Restricted stock

Restricted stock includes Federal Home Loan Bank Stock and Federal Reserve Bank Stock. It is not practicable to determine the fair value of regulatory equity securities due to restrictions placed on their transferability. Fair value is based on carrying value, classified as Level I.

Mortgage servicing rights

The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates discounted cash flow and repayment assumptions based on management’s best judgment. As a result, these rights are measured at fair value on a recurring basis and are classified within Level III of the fair value hierarchy.

Deposits

The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rates are estimated using market rates currently offered for similar instruments with similar remaining maturities, resulting in a Level III classification. Demand, savings, and money market deposit accounts are valued at the amount payable on demand as of quarter end, resulting in a Level I classification.

Other borrowings

The fair value of Federal Home Loan Bank advances are estimated using a discounted cash flow analysis based on the current borrowing rates for similar types of borrowings, resulting in a Level III classification.

The Company also has unrecognized financial instruments at March 31, 2017 and December 31, 2016. These financial instruments relate to commitments to extend credit and letters of credit. The aggregated contract amount of such financial instruments was approximately $164.4 million at March 31, 2017 and $163.7 million at December 31, 2016. Such amounts are also considered to be the estimated fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument over the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

23

CSB BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 7- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive income (loss) by component net of tax for the three month periods ended March 31, 2017 and 2016:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three months ended March 31, 2017
Balance as of December 31, 2016	$	(1,323	)	$	449		$	(874	)
Unrealized holding gain on available-for-sale securities arising during the period		471			(161	)		310
Amortization of held-to-maturity discount resulting from transfer		31			(10	)		21
Total other comprehensive income		502			(171	)		331
Balance as of March 31, 2017	$	(821	)	$	278		$	(543	)
Three months ended March 31, 2016
Balance as of December 31, 2015	$	(631	)	$	214		$	(417	)
Unrealized holding gain on available-for-sale securities arising during the period		808			(275	)		533
Amortization of held-to-maturity discount resulting from transfer		46			(15	)		31
Total other comprehensive income		854			(290	)		564
Balance as of March 31, 2016	$	223		$	(76	)	$	147

24

CSB BANCORP, INC.

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

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis focuses on the consolidated financial condition of the Company at March 31, 2017 as compared to December 31, 2016, and the consolidated results of operations for the three month period ended March 31, 2017 compared to the same period in 2016. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report are not historical facts but rather are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms “anticipates”, “plans”, “expects”, “believes”, and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company’s actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, general economic conditions, interest rate environment, competitive conditions in the financial services industry, changes in law, governmental policies and regulations, and rapidly changing technology affecting financial services. Other factors not currently anticipated may also materially and adversely affect the Company’s results of operations, cash flows, and financial position. There can be no assurance that future results will meet expectations. While the Company believes that the forward-looking statements in this report are reasonable, the reader should not place undue reliance on any forward-looking statement.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by applicable law.

FINANCIAL CONDITION

Total assets were $679 million at March 31, 2017 as compared to $670 million at December 31, 2016. During the three month period ended March 31, 2017, net loans increased $5 million. Cash, cash equivalents, and investments increased $4 million. On the liability side, deposits and repurchase agreements increased by $7 million.

Net loans increased $5 million, or 1%, during the three months ended March 31, 2017. The increase occurred as demand for both business and consumer loans within the bank’s markets continued. The bank has added lending and operations staff to accommodate the increase in demand. Commercial loans including commercial real estate loans increased $6 million, or 2%, while construction and land development loans decreased $6 million, or 27%, as loans transferred to permanent financing. Residential real estate loans increased $4 million, or 3%, and consumer loans increased $1 million, or 9% from December 31, 2016. Home purchase activity has increased and consumers continued to refinance their mortgage loans for lower long-term fixed rates. Residential mortgage loan originations for the three months ended March 31, 2017 and 2016 were $12 million and $7 million, respectively. Originations sold into the secondary market were $1.5 million during the three month period ended March 31, 2017 as compared to $1 million during the three months ended March 31, 2016. The Bank originates and sells primarily fixed-rate thirty year mortgages into the secondary market.

The allowance for loan losses as a percentage of total loans was 1.13% at March 31, 2017 as compared to 1.11% at December 31, 2016. Outstanding loan balances increased 1% to $5 million at March 31, 2017. A provision credit of $160 thousand and net recoveries of $323 thousand, increased the allowance for loan losses to $5.5 million at March 31, 2017.

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CSB BANCORP, INC.

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

Nonaccrual loans increased during the first three months of 2017. For the three months ending March 31, 2017 loans totaling $3.9 million were placed on nonaccrual status, there were no charge-offs recognized, and pay downs of $552 thousand were received. The increase in nonaccrual loans was primarily due to two lending relationships comprised of several loans. Although payments on these loans were current, these loans were classified as nonaccrual loans as of the end of the first quarter. It is anticipated that collection efforts on several of the non-performing loans should result in repayment of their full carrying value.

(Dollars in thousands)	March 31, 2017			December 31, 2016			March 31, 2016
Non-performing loans	$	4,909		$	1,684		$	1,915
Other real estate		—			—			—
Allowance for loan losses		5,454			5,291			5,005
Total loans		480,709			475,449			433,453
Allowance: Loans		1.13	%		1.11	%		1.15	%
Allowance: Non-performing loans		1.1x			3.1x			2.6x

The ratio of gross loans to deposits was 88.7% at March 31, 2017, compared to 87.9% at December 31, 2016.

The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. Management has considered industry analyst reports, sector credit reports, and the volatility within the bond market in concluding that the gross unrealized losses of $1.4 million within the available-for-sale and held-to-maturity portfolios as of March 31, 2017, were primarily the result of customary and expected fluctuations in the bond market and not necessarily the expected cash flows of the individual securities. As a result, all security impairments on March 31, 2017, are considered temporary and no impairment loss relating to these securities has been recognized.

Deposits increased $1 million, or less than 1%, from December 31, 2016 with noninterest bearing deposits increasing $3 million and interest-bearing deposit accounts decreasing $2 million. Total deposits as of March 31, 2017 are $32 million greater than March 31, 2016 deposit balances. On a year over year comparison, increases were recognized in noninterest-bearing demand deposits, interest-bearing demand, savings, and money market savings accounts.

Short-term borrowings consisting of overnight repurchase agreements with retail customers increased $5 million to $54 million at March 31, 2017 as compared to December 31, 2016 and other borrowings decreased $81 thousand as the Company repaid FHLB advances with required monthly amortization.

Total shareholders’ equity amounted to $67 million, or 9.9%, of total assets, at March 31, 2017, compared to $65 million, or 9.8%, of total assets, at December 31, 2016. The increase in shareholders’ equity during the three months ending March 31, 2017 was due to net income of $1.7 million and other comprehensive income of $331 thousand, partially offset by dividends declared of $549 thousand. The Company and the Bank met all regulatory capital requirements at March 31, 2017.

RESULTS OF OPERATIONS

Three months ended March 31, 2017 and 2016

For the quarters ended March 31, 2017 and 2016, the Company recorded net income of $1.7 million and $1.5 million and $0.63 and $0.54 per share, respectively. The $250 thousand increase in net income for the quarter was primarily the result of a $577 thousand increase in net interest income combined with a credit in the provision for loan losses of $160 thousand. The increase was partially offset by an increase in noninterest expenses of $657 thousand. Return on average assets and return on average equity were 1.05% and 10.54%, respectively, for the three month period of 2017, compared to 0.93% and 9.48%, respectively for the same quarter in 2016.

26

CSB BANCORP, INC.

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

Average Balance Sheets and Net Interest Margin Analysis

	For the three months ended March 31,
	2017					2016
(Dollars in thousands)	Average balance		Average rate			Average balance		Average rate
ASSETS
Interest-earning deposits in other banks	$	12,493		1.04	%	$	15,833		0.71	%
Federal funds sold		990		0.70			538		0.45
Taxable securities		102,717		2.36			134,580		2.20
Tax-exempt securities		30,664		3.33			26,044		3.60
Loans		480,656		4.60			427,916		4.46
Total earning assets		627,520		4.10	%		604,911		3.81	%
Other assets		39,130					35,759
TOTAL ASSETS	$	666,650				$	640,670
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing demand deposits	$	86,169		0.06	%	$	82,203		0.03	%
Savings deposits		164,924		0.13			167,181		0.07
Time deposits		111,560		0.74			118,591		0.75
Other borrowed funds		65,781		0.73			63,738		0.74
Total interest bearing liabilities		428,434		0.36	%		431,713		0.35	%
Non-interest bearing demand deposits		168,727					144,217
Other liabilities		2,929					2,115
Shareholders’ Equity		66,560					62,625
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	666,650				$	640,670
Taxable equivalent net interest spread				3.74	%				3.46	%
Taxable equivalent net interest margin				3.85	%				3.57	%

Interest income for the quarter ended March 31, 2017, was $6.2 million representing a $585 thousand increase, or a 10% improvement, compared to the same period in 2016. This increase was primarily due to average loan volume increasing $53 million for the quarter ended March 31, 2017 as compared to the first quarter 2016. The volume of taxable securities declined $32 million on a year over year comparison, resulting in a decrease in interest income of $186 thousand from the volume reduction. Interest expense for the quarter ended March 31, 2017 was $384 thousand, an increase of $8 thousand, or 2%, from the same period in 2016. The increase in interest expense occurred primarily due to an increase in rate on interest-bearing demand and savings deposits for the quarter ended March 31, 2017.

For the quarter ended March 31, 2017, the provision for loan losses reflected a $160 thousand credit, compared to a provision of $164 thousand for the same quarter in 2016. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends. Favorable settlements of prior charged-off loans and impaired loans can result in a reduction in the required allowance for loan losses and a negative provision, or credit, being reflected in current operations.

Noninterest income for the quarter ended March 31, 2017, was $1.1 million, an increase of $114 thousand, or 11%, compared to the same quarter in 2016. Service charges on deposit accounts increased $13 thousand, or 5%, compared to the same quarter in 2016 primarily from increases in overdraft fees. The gain on the sale of mortgage loans to the secondary market increased to $42 thousand for the quarter ending March 31, 2017, from $32 thousand in the same quarter in 2016. Debit card interchange income increased $26 thousand, or 10%, with greater fee income in the first quarter of 2017. A loss on asset retirement of $39 thousand was recognized during the first quarter of 2016 that did not recur in 2017.

27

CSB BANCORP, INC.

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

Fees from trust and brokerage services decreased $19 thousand to $207 thousand for the first quarter 2017 as compared to the same quarter in 2016 due to decreased assets under management.

Noninterest expenses for the quarter ended March 31, 2017 increased $657 thousand, or 16%, compared to the first quarter of 2016. The provision for unfunded loan commitments increased $540 thousand during first quarter 2017 related to an impaired commercial credit facility line on March 31, 2017. The allowance for unfunded loan commitments is included in other liabilities. Salaries and employee benefits increased $132 thousand, or 6%, a result of increases in base salary, medical, and other benefits. Debit card expenses increased $26 thousand, or 25%, compared to the first quarter 2016 due to the replacement of all outstanding debit cards with EMV chip cards. Software expense rose $23 thousand quarter over quarter with additional investment.    Occupancy and equipment expenses decreased $38 thousand in 2017 over the first quarter of 2016 due to expense reductions that resulted from the reduction of office lease expense. FDIC assessment declined $33 thousand due to the new rate structure beginning third quarter 2016. Professional and director fees decreased $5 thousand for the quarter ended March 31, 2017 as compared to the first quarter 2016. The decrease resulted from a reduction of general legal and collection fees offset by an increase in internal audit fees

Federal income tax expense increased $108 thousand, or 17%, for the quarter ended March 31, 2017 as compared to the first quarter of 2016. The provision for income taxes was $752 thousand (effective rate of 30.3%) for the quarter ended March 31, 2017, compared to $644 thousand (effective rate of 30.3%) for the same quarter ended 2016.

CAPITAL RESOURCES

CSB maintained a strong capital position with tangible common equity to tangible assets of 9.2% at March 31, 2017 compared with 9.1% at December 31, 2016.

Effective January 1, 2015 the Federal Reserve adopted final rules implementing Basel III and regulatory capital changes required by the Dodd-Frank Act. The rules apply to both the Company and the Bank. The rules established minimum risk-based and leverage capital requirements for all banking organizations. The quality of capital will be provided by the new measurement of Tier 1 capital called common equity tier 1 or (“CET1”). Effective with the March 31, 2015 Call Report the Bank selected the opt-out election for accumulated other comprehensive income (“AOCI”). This election will neutralize the effects of unrealized gains and losses from available-for-sale securities and other elements of the AOCI account for regulatory capital purposes.

Consistent with the Board of Director’s commitment to public confidence and safe and sound banking operations, capital targets and minimum risk-based capital ratios for CSB were established to maintain excess capital to well-capitalized standards. To be considered well-capitalized, an institution must have a total risk-based capital ratio of at least 10%, a tier 1 capital ratio of at least 8%, a leverage capital ratio of at least 5%, a CET1 ratio of at least 6.5%, and must not be subject to any order or directive requiring the institution to improve its capital level. An adequately capitalized institution has a total risk-based capital ratio of at least 8%, a tier 1 capital ratio of at least 6%, a CET1 ratio of at least 4.5%, and a leverage ratio of at least 4%.

Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. As of March 31, 2017 the Company and the Bank met all capital adequacy requirements to which they were subject.

28

CSB BANCORP, INC.

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

	March 31, 2017			December 31, 2016
Common Equity Tier 1 Capital To Risk Weighted Assets
Consolidated		12.7	%		12.6	%
Bank		12.5	%		12.4	%
Tier 1 Capital To Risk Weighted Assets Ratio
Consolidated		12.7	%		12.6	%
Bank		12.5	%		12.4	%
Total Capital To Risk Weighted Assets Ratio
Consolidated		14.0	%		13.7	%
Bank		13.7	%		13.5	%
Tier 1 Leverage Ratio
Consolidated		9.4	%		9.3	%
Bank		9.3	%		9.1	%

LIQUIDITY

(Dollars in millions)	March 31, 2017			December 31, 2016			Change
Cash and cash equivalents	$	38		$	37		$	1
Unused lines of credit		81			66			15
Unpledged AFS securities at fair market value		30			37			(7	)
	$	149		$	140		$	9
Net deposits and short-term liabilities	$	535		$	533		$	2
Liquidity ratio		27.9	%		26.1	%		1.8
Minimum board approved liquidity ratio		20.0	%		20.0	%		—

Liquidity refers to the Company’s ability to generate sufficient cash to fund current loan demand, meet deposit withdrawals, pay operating expenses, and meet other obligations. Liquidity is monitored by the Company’s Asset Liability Committee. Other sources of liquidity include, but are not limited to, purchases of federal funds, advances from the FHLB, adjustments of interest rates to attract deposits, brokered deposits, and borrowing at the Federal Reserve discount window. Management believes that its sources of liquidity are adequate to meet cash flow obligations for the foreseeable future.

The liquidity ratio was 27.9% and 26.1% at March 31, 2017 and December 31, 2016.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements (as such term is defined in applicable Securities and Exchange Commission (the “Commission”) rules) that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources.

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CSB BANCORP, INC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3 –QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the quantitative and qualitative disclosures about market risks as of March 31, 2017, from the disclosures presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Management performs a quarterly analysis of the Company’s interest rate risk over a twenty-four month horizon. The analysis includes two balance sheet models, one based on a static balance sheet and one on a dynamic balance sheet with projected growth in assets and liabilities. Minor variances with net interest income exceeding the board approved policy are being projected in the March 2017 dynamic balance sheet simulation coupled with immediate rate shocks. All other balance sheet positions and interest rate projections are currently within the Company’s board-approved policy.

The following table presents an analysis of the estimated sensitivity of the Company’s annual net interest income to sudden and sustained -100 through +400 basis point changes, in 100 basis point increments, in market interest rates at March 31, 2017 and December 31, 2016. The net interest income reflected is for the first twelve month period of the modeled twenty-four month horizon. The underlying balance sheet for illustrative purposes is dynamic with projected growth in assets and liabilities.    

March 31, 2017
(Dollars in thousands)
Change in Interest Rates (basis points)		Net Interest Income		Dollar Change			Percentage Change			Board Policy Limits
	+400	$	25,949	$	1,668			6.9	%		+/- 25	%
	+300		25,558		1,277			5.3			+/-15
	+200		25,133		852			3.5			+/-10
	+100		24,706		425			1.8			+/-5
	0		24,281		—			—			—
	-100		23,421		(860	)		(3.5	)		+/-5
December 31, 2016
	+400	$	25,519	$	1,889			8.0	%		+/- 25	%
	+300		25,063		1,433			6.1			+/-15
	+200		24,577		947			4.0			+/-10
	+100		24,092		462			2.0			+/-5
	0		23,630		—			—			—
	-100		22,841		(789	)		(3.3	)		+/-5

30

CSB BANCORP, INC.

CONTROLS AND PROCEDURES

ITEM 4 - CONTROLS AND PROCEDURES

With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that:

(a) information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure;

(b) information required to be disclosed by the Company in this Quarterly Report on Form 10-Q would be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms; and

(c) the Company’s disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that material information relating to the Company and its consolidated subsidiary is made known to them, particularly during the period for which the Company’s periodic reports, including this Quarterly Report on Form 10-Q, are being prepared.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes during the period covered by this Quarterly Report on Form 10-Q in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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CSB BANCORP, INC.

FORM 10-Q

Quarter ended March 31, 2017

PART II – OTHER INFORMATION

ITEM 1- LEGAL PROCEEDINGS.

In the opinion of management there are no outstanding legal proceedings that are reasonably likely to have a material adverse effect on the company’s financial condition or results of operations.

ITEM 1A- RISK FACTORS.

There have been no material changes to the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

ITEM 2- UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On July 7, 2005 CSB Bancorp, Inc. filed Form 8-K with the Commission announcing that its Board of Directors approved a Stock Repurchase Program authorizing the repurchase of up to 10% of the Company’s common shares then outstanding. Repurchases may be made from time to time as market and business conditions warrant, in the open market, through block purchases, and in negotiated private transactions. No repurchases were made during the quarterly period ended March 31, 2017.

ITEM 3- DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4- MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5- OTHER INFORMATION.

Not applicable.

32

CSB BANCORP, INC.

FORM 10-Q

Quarter ended March 31, 2017

PART II – OTHER INFORMATION

ITEM 6- Exhibits.

Exhibit Number	Description of Document
3.1	Amended Articles of Incorporation of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q filed August 6, 2004, Exhibit 3.1, film number 04958544).
3.2	Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Form 10-SB).
3.2.1	Amended Article VIII of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a filed on March 25, 2009, Appendix A, film number 09703970).
4.0	Specimen stock certificate (incorporated by reference to Registrant’s Form 10-SB).
11	Statement Regarding Computation of Per Share Earnings.
31.1	Rule 13a-14(a)/15d-14(a) Chief Executive Officer’s Certification.
31.2	Rule 13a-14(a)/15d-14(a) Chief Financial Officer’s Certification.
32.1	Section 1350 Chief Executive Officer’s Certification.
32.2	Section 1350 Chief Financial Officer’s Certification.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Balance Sheets: (ii) Consolidated Statements of Income: (iii) Consolidated Statements of Comprehensive Income: (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity: (v) Condensed Consolidated Statements of Cash Flows: and (vi) Notes to Consolidated Financial Statements.

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CSB BANCORP, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CSB BANCORP, INC.
	(Registrant)
Date: May 12, 2017	/s/ Eddie L. Steiner
	Eddie L. Steiner
	President
	Chief Executive Officer
Date: May 12, 2017	/s/ Paula J. Meiler
	Paula J. Meiler
	Senior Vice President
	Chief Financial Officer

34

CSB BANCORP, INC.

INDEX TO EXHIBITS

Exhibit Number	Description of Document
3.1	Amended Articles of Incorporation of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q filed August 6, 2004, Exhibit 3.1, film number 04958544).
3.2	Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to the Registrant’s Form 10-SB).
3.2.1	Amended Article VIII of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a filed on March 25, 2009, Appendix A, film number 09703970).
4.0	Specimen stock certificate (incorporated by reference to Registrant’s Form 10-SB).
11	Statement Regarding Computation of Per Share Earnings.
31.1	Rule 13a-14(a)/15d-14(a) Chief Executive Officer’s Certification.
31.2	Rule 13a-14(a)/15d-14(a) Chief Financial Officer’s Certification.
32.1	Section 1350 Chief Executive Officer’s Certification.
32.2	Section 1350 Chief Financial Officer’s Certification.
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (extensible Business Reporting Language): (i) Consolidated Balance Sheets: (ii) Consolidated Statements of Income: (iii) Consolidated Statements of Comprehensive Income: (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity: (v) Condensed Consolidated Statements of Cash Flows: and (vi) Notes to Consolidated Financial Statements.

35

EX-11

CSB BANCORP, INC.

EXHIBIT 11

STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS

	Three months ended March, 31
(Dollars in thousands)	2017		2016
Basic Earnings Per Share
Net income	$	1,730	$	1,480
Weighted average common shares		2,742,242		2,741,379
Basic Earnings Per Share	$	0.63	$	0.54
Diluted Earnings Per Share
Net income	$	1,730	$	1,480
Weighted average common shares		2,742,242		2,741,379
Weighted average effect of assumed stock options		—		—
Total		2,742,242		2,741,379
Diluted Earnings Per Share	$	0.63	$	0.54

EX-31.1

CSB BANCORP, INC.

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

President and Chief Executive Officer

I, Eddie L. Steiner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CSB Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 12, 2017

/s/ Eddie L. Steiner

Eddie L. Steiner

President and Chief Executive Officer

EX-31.2

CSB BANCORP, INC.

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

Senior Vice President and Chief Financial Officer

I, Paula J. Meiler, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CSB Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material factor omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 12, 2017

/s/ Paula J. Meiler

Paula J. Meiler

Senior Vice President and Chief Financial Officer

EX-32.1

CSB BANCORP, INC.

EXHIBIT 32.1

SECTION 1350 CERTIFICATION

In connection with the quarterly report of CSB Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof, (the “Report”), I, Eddie L. Steiner, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 12, 2017

/s/ Eddie L. Steiner

Eddie L. Steiner

President and Chief Executive Officer

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

EX-32.2

CSB BANCORP, INC.

EXHIBIT 32.2

SECTION 1350 CERTIFICATION

In connection with the quarterly report of CSB Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof, (the “Report”), I, Paula J. Meiler, Senior Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 12, 2017

/s/ Paula J. Meiler

Paula J. Meiler

Senior Vice President and Chief Financial Officer

* This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Trading Symbol	CSBB
Entity Registrant Name	CSB BANCORP INC /OH
Entity Central Index Key	0000880417
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,742,242

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Cash and cash equivalents
Cash and due from banks	$ 13,911	$ 13,590
Interest-earning deposits in other banks	24,476	23,248
Total cash and cash equivalents	38,387	36,838
Securities
Available-for-sale, at fair value	102,158	103,875
Held-to-maturity (fair value 2017-$27,675; 2016-$23,444)	27,892	23,883
Restricted stock, at cost	4,614	4,614
Total securities	134,664	132,372
Loans held for sale	264
Loans	480,709	475,449
Less allowance for loan losses	5,454	5,291
Net loans	475,255	470,158
Premises and equipment, net	8,656	8,749
Core deposit intangible	354	383
Goodwill	4,728	4,728
Bank-owned life insurance	12,959	10,361
Accrued interest receivable and other assets	4,170	6,389
TOTAL ASSETS	679,437	669,978
Deposits
Noninterest-bearing	171,235	167,824
Interest-bearing	370,945	372,961
Total deposits	542,180	540,785
Short-term borrowings	54,022	48,742
Other borrowings	12,304	12,385
Accrued interest payable and other liabilities	4,004	2,651
Total liabilities	612,510	604,563
SHAREHOLDERS' EQUITY
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding (shares 2017 and 2016 - 2,742,242)	18,629	18,629
Additional paid-in capital	9,815	9,815
Retained earnings	43,810	42,629
Treasury stock at cost (shares 2017 and 2016 - 238,360)	(4,784)	(4,784)
Accumulated other comprehensive loss	(543)	(874)
Total shareholders' equity	66,927	65,415
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 679,437	$ 669,978

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Held-to-maturity, fair value	$ 27,675	$ 23,444
Common stock, par value	$ 6.25	$ 6.25
Common stock, authorized shares	9,000,000	9,000,000
Common stock, shares issued	2,980,602	2,980,602
Common stock, shares outstanding	2,742,242	2,742,242
Treasury stock, at cost	238,360	238,360

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
INTEREST AND DIVIDEND INCOME
Loans, including fees	$ 5,449	$ 4,742
Taxable securities	598	737
Nontaxable securities	165	154
Other	34	28
Total interest and dividend income	6,246	5,661
INTEREST EXPENSE
Deposits	267	259
Short-term borrowings	22	17
Other borrowings	95	100
Total interest expense	384	376
NET INTEREST INCOME	5,862	5,285
(Credit) provision for loan losses	(160)	164
Net interest income, after (credit) provision for loan losses	6,022	5,121
NONINTEREST INCOME
Service charges on deposit accounts	291	278
Trust services	207	226
Debit card interchange fees	288	262
Gain on sale of loans, net	42	32
Other income	278	194
Total noninterest income	1,106	992
NONINTEREST EXPENSES
Salaries and employee benefits	2,459	2,327
Occupancy expense	210	244
Equipment expense	170	174
Professional and director fees	169	174
Franchise tax expense	131	107
Marketing and public relations	78	85
Software expense	210	187
Debit card expense	130	104
Amortization of intangible assets	29	30
FDIC insurance expense	51	84
Provision for unfunded loan commitments	540
Other expenses	469	473
Total noninterest expenses	4,646	3,989
Income before income taxes	2,482	2,124
FEDERAL INCOME TAX PROVISION	752	644
NET INCOME	$ 1,730	$ 1,480
Basic and diluted net earnings per share	$ 0.63	$ 0.54

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 1,730	$ 1,480
Other comprehensive income
Unrealized gains arising during the period	471	808
Amounts reclassified from accumulated other comprehensive income, held-to-maturity	31	46
Income tax effect	(171)	(290)
Other comprehensive income	331	564
Total comprehensive income	$ 2,061	$ 2,044

XML

Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) $ in Thousands	USD ($) $ / shares
Balance at beginning of period at Dec. 31, 2015	$ 61,266
Statement of Stockholders' Equity [Abstract]
Net income	1,480
Other comprehensive income (loss)	564
Stock options exercised	7
Cash dividends declared	(521)
Balance at end of period at Mar. 31, 2016	$ 62,796
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per share | $ / shares	$ 0.19
Balance at beginning of period at Dec. 31, 2016	$ 65,415
Statement of Stockholders' Equity [Abstract]
Net income	1,730
Other comprehensive income (loss)	331
Cash dividends declared	(549)
Balance at end of period at Mar. 31, 2017	$ 66,927
Statement of Stockholders' Equity [Abstract]
Cash dividends declared per share | $ / shares	$ 0.20

XML

Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2016 shares
Statement of Stockholders' Equity [Abstract]
Stock options exercised, shares	1,246

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Cash Flows [Abstract]
NET CASH FROM OPERATING ACTIVITIES	$ 4,407	$ 1,382
Securities:
Proceeds from repayments, available-for-sale	4,430	11,625
Proceeds from repayments, held-to-maturity	709	6,827
Purchases, available-for-sale	(2,379)	(5,281)
Purchases, held-to-maturity	(4,700)
Loan originations, net of repayments	(4,899)	(10,398)
Property, equipment and software acquisitions	(113)	(50)
Purchase of bank-owned life insurance	(2,500)
Net cash (used in) provided by investing activities	(9,452)	2,723
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits	1,395	(15,062)
Net change in short-term borrowings	5,280	189
Repayment of other borrowings	(81)	(133)
Net cash provided by (used in) financing activities	6,594	(15,006)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,549	(10,901)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	36,838	38,272
CASH AND CASH EQUIVALENTS AT END OF PERIOD	38,387	27,371
Cash paid during the year for:
Interest	389	378
Income taxes		400
Noncash financing activities:
Dividends declared	$ 549	$ 521

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 March 31, 2017, 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 (“U.S. GAAP”) have been omitted. The Annual Report for CSB for the year ended December 31, 2016, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying Consolidated Financial Statements. The results of operations for the period ended March 31, 2017 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.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

ASU 2014-09 - Revenue from Contracts with Customers. The amendments in ASU 2014-09 require an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and the FASB issued a one-year deferral for implementation, which results in new guidance being effective for annual and interim reporting periods beginning after December 15, 2017. For public entities with a calendar year-end, the new guidance is effective in the quarter and year beginning January 1, 2018. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities. This Update sets forth targeted improvements to GAAP including, but not limited to, requiring an entity to recognize the changes in fair value of equity investments in the income statement, requiring public business entities to use the exit price when measuring the fair value of financial instruments for financial statement disclosure purposes, eliminating certain disclosures required by existing GAAP, and providing for additional disclosures. The Update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Update is not expected to have a significant impact on the Company’s financial position or results of operations.

ASU 2016-02 – Leases. This Update sets forth a new lease accounting model for lessors and lessees. For lessees, virtually all leases will be required to be recognized on the balance sheet by recording a right-of-use asset. Subsequent accounting for leases varies depending on whether the lease is an operating lease or a finance lease. The accounting provided by a lessor is largely unchanged from that applied under the existing guidance. The ASU requires additional qualitative and quantitative disclosures with the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Update is effective for fiscal years beginning after December 15, 2018, with early application permitted. We expect the Update will result in an increase in total assets and liabilities. The amount of the increase will be impacted by the leases outstanding at the time of adoption and their remaining term at that time. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

ASU 2016-13 - Financial Instruments - Credit Losses. The Update requires that financial assets be presented at the net amount expected to be collected (i.e. net of expected credit losses), eliminating the probable recognition threshold for credit losses on financial assets measured at amortized cost. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Update is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect the Update will result in an increase in the allowance for credit losses for the estimated life of the financial asset, including an estimate for debt securities. The amount of the increase will be impacted by the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. A cumulative-effect adjustment to retained earnings is required as of the beginning of the year of adoption. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. Current guidance lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. FASB issued the ASU with the intent of reducing diversity in practice with respect to several types of cash flows. The amendments in this Update are effective using a retrospective transition approach for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update simplifies the goodwill impairment test. Under the new guidance, Step 2 of the goodwill impairment process that requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities, is eliminated. Instead, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. The amendment is not expected to have a material impact on the Company’s Unaudited Consolidated Financial Statements.

ASU 2017-08 - Premium Amortization on Purchased Callable Debt Securities. The Update amends the guidance related to amortization for certain callable debt securities held at a premium. The new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities purchased at discount. The Update was adopted in the current reporting period and did not have a significant impact on the Company’s Unaudited Consolidated Financial Statements.

XML

Securities

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Securities

NOTE 2 – SECURITIES

Securities consist of the following at March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		8,500		—		79		8,421
Mortgage-backed securities of government agencies		53,306		296		438		53,164
Other mortgage-backed securities		55		—		—		55
Asset-backed securities of government agencies		1,272		—		26		1,246
State and political subdivisions		28,768		195		276		28,687
Corporate bonds		9,615		45		156		9,504
Equity securities		53		28		—		81
Total available-for-sale		102,569		564		975		102,158
Held-to-maturity
U.S. Government agencies		9,473		21		303		9,191
Mortgage-backed securities of government agencies		13,719		169		137		13,751
State and political subdivisions		4,700		33		—		4,733
Total held-to-maturity		27,892		223		440		27,675
Restricted stock		4,614		—		—		4,614
Total securities	$	135,075	$	787	$	1,415	$	134,447
December 31, 2016
Available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		6,500		—		98		6,402
Mortgage-backed securities of government agencies		56,187		239		589		55,837
Other mortgage-backed securities		65		—		—		65
Asset-backed securities of government agencies		1,312		—		46		1,266
State and political subdivisions		30,007		140		439		29,708
Corporate bonds		9,632		28		144		9,516
Equity securities		53		27		—		80
Total available-for-sale		104,757		434		1,316		103,875
Held-to-maturity
U.S. Government agencies		9,472		17		396		9,093
Mortgage-backed securities of government agencies		14,411		141		201		14,351
Total held-to-maturity		23,883		158		597		23,444
Restricted stock		4,614		—		—		4,614
Total securities	$	133,254	$	592	$	1,913	$	131,933

The amortized cost and fair value of debt securities at March 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	3,269	$	3,272
Due after one through five years		24,328		24,391
Due after five through ten years		22,266		22,174
Due after ten years		52,653		52,240
Total debt securities available-for-sale	$	102,516	$	102,077
Held-to-maturity
Due in one year or less	$	4,700	$	4,733
Due after one through five years		—		—
Due after five through ten years		3,475		3,359
Due after ten years		19,717		19,583
Total debt securities held-to-maturity	$	27,892	$	27,675

Securities with a carrying value of approximately $92.2 million and $94.8 million were pledged at March 31, 2017 and December 31, 2016 to secure public deposits, as well as other deposits and borrowings as required or permitted by law.

Restricted stock primarily consists of investments in Federal Home Loan Bank of Cincinnati (FHLB) and Federal Reserve Bank stock. The Bank’s investment in FHLB stock amounted to approximately $4.1 million at March 31, 2017 and December 31, 2016. Federal Reserve Bank stock was $471 thousand at March 31, 2017 and December 31, 2016.

There were no proceeds from sales of available-for-sale securities for the three month periods ending March 31, 2017 and 2016.

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2017 and December 31, 2016:

	Securities in a continuous unrealized loss position
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Government agencies	$	79	$	8,420	$	—	$	—	$	79	$	8,420
Mortgage-backed securities of government agencies		438		30,345		—		—		438		30,345
Asset-backed securities of government agencies				—		26		1,246		26		1,246
State and political subdivisions		276		10,713		—		—		276		10,713
Corporate bonds		1		941		155		2,345		156		3,286
Held-to-maturity
U.S. Government agencies		303		8,695		—		—		303		8,695
Mortgage-backed securities of government agencies		12		1,938		125		3,517		137		5,455
Total temporarily impaired securities	$	1,109	$	61,052	$	306	$	7,108	$	1,415	$	68,160
December 31, 2016
Available-for-sale
U.S. Government agencies	$	98	$	6,402	$	—	$	—	$	98	$	6,402
Mortgage-backed securities of government agencies		589		27,243		—		—		589		27,243
Asset-backed securities of government agencies		—		—		46		1,266		46		1,266
State and political subdivisions		439		19,328		—		—		439		19,328
Corporate bonds		33		3,593		111		1,889		144		5,482
Held-to-maturity
U.S. Government agencies		396		8,602		—		—		396		8,602
Mortgage-backed securities of government agencies		28		2,018		173		3,621		201		5,639
Total temporarily impaired securities	$	1,583	$	67,186	$	330	$	6,776	$	1,913	$	73,962

There were seventy-one securities in an unrealized loss position at March 31, 2017, six (6) of which were in a continuous loss position for twelve months or more. At least quarterly, the Company conducts a comprehensive security-level impairment assessment. The assessments are based on the nature of the securities, the extent and duration of the securities in an unrealized loss position, the extent and duration of the loss and management’s intent to sell or if it is more likely than not that management will be required to sell a security before recovery of its amortized cost basis, which may be maturity. Management believes the Company will fully recover the cost of these securities. It does not intend to sell these securities and likely will not be required to sell them before the anticipated recovery of the remaining amortized cost basis, which may be maturity. As a result, management concluded that these securities were not other-than-temporarily impaired at March 31, 2017.

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Loans

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Loans

NOTE 3 – LOANS

Loans consist of the following:

(Dollars in thousands)	March 31, 2017		December 31, 2016
Commercial	$	132,455	$	134,268
Commercial real estate		167,203		159,475
Residential real estate		149,007		144,489
Construction & land development		16,996		23,428
Consumer		14,528		13,308
Total loans before deferred costs		480,189		474,968
Deferred loan costs		520		481
Total Loans	$	480,709	$	475,449

Loan Origination/Risk Management

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management and the Board of Directors review and approve these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies, and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.

Commercial loans are underwritten after evaluating and understanding the borrower’s ability to operate profitably and prudently expand its business. Underwriting standards are designed to promote relationship banking rather than transactional banking. The Company’s management examines past, current and occasionally projected cash flows to determine the ability of the borrower to repay their obligations as agreed. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers; however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed, other business assets such as accounts receivable, or inventory and usually incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans, in addition to those of real estate loans. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans are largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company’s commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company’s exposure to adverse economic events that affect any single industry. Management monitors and evaluates commercial real estate loans based on collateral, geography, and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. At March 31, 2017 approximately 78% of the outstanding principal balances of the Company’s commercial real estate loans were secured by owner-occupied properties as compared to 77% at December 31, 2016.

With respect to loans to developers and builders that are secured by non-owner occupied properties, the Company generally requires the borrower to have had an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing independent appraisals, sensitivity analysis of absorption, lease rates, and financial analysis of the developers and property owners. Construction and land development loans are generally based upon estimates of costs and value associated with the completed project. These estimates may be inaccurate.

Construction and land development loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property, or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions, and the availability of long-term financing.

The Company originates consumer loans utilizing a judgmental underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk.

The Company maintains a credit department that reviews and validates the credit risk program on a periodic basis. The Company engages an outside firm on an annual basis to provide a third party review of the commercial loan portfolio. Results of these reviews are presented to management. The loan review processes complement and reinforce the risk identification, assessment decisions made by lenders, and credit personnel, as well as the Company’s policies and procedures.

Loans serviced for others approximated $86.0 million and $85.9 million at March 31, 2017 and December 31, 2016, respectively.

Concentrations of Credit

Nearly all of the Company’s lending activity occurs within the state of Ohio, including the four (4) counties of Holmes, Stark, Tuscarawas, and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial, industrial, and commercial real estate loans. As of March 31, 2017, there were four business segment concentrations of credit. Loan balances as a percentage of capital included: $42 million, or 69%, to lessors of non-residential buildings, $25 million, or 41%, to logging and sawmill operations, $22 million, or 36%, to borrowers in the hotel, motel and lodging business, and $19 million, or 32%, to lessors of residential buildings at March 31, 2017.

Allowance for Loan Losses

The following tables detail activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2017 and 2016. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

The change in the provision for loan losses for the three months ended March 31, 2017 related to commercial loans was primarily due to the decrease in the specific allocation related to one commercial relationship, as well as the recovery of prior loan charge-offs. The increase in the provision for loan losses related to commercial real estate loans was due to the increase of nonaccrual loans in this category, as well as the increase in volume of loans.

The changes in the provision for loan losses for the three months ended March 31, 2016 related to commercial and industrial loans were primarily due to the increase in a specific reserve amount for one commercial relationship as well as the increase in loan volume. The decrease in the provision related to commercial real estate loans was primarily due to a recovery of a prior charge-off as well as a decrease in a specific reserve amount related to one loan relationship.

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated		Total
Three months ended March 31, 2017
Beginning balance	$	2,207		$	1,264		$	1,189		$	178		$	141		$	312	$	5,291
(Credit) provision for loan losses		(831	)		274			114			6			29			248		(160	)
Charge-offs		(8	)		—			—			—			(5	)				(13	)
Recoveries		336			—			—			—			—					336
Net recoveries (charge-offs)		328			—			—			—			(5	)				323
Ending balance	$	1,704		$	1,538		$	1,303		$	184		$	165		$	560	$	5,454
Three months ended March 31, 2016
Beginning balance	$	1,664		$	1,271		$	1,086		$	123		$	86		$	432	$	4,662
(Credit) provision for loan losses		394			(228	)		(4	)		(17	)		8			11		164
Charge-offs		(9	)		—			—			—			(1	)				(10	)
Recoveries		4			182			2			—			1					189
Net recoveries (charge-offs)		(5	)		182			2			—			—					179
Ending balance	$	2,053		$	1,225		$	1,084		$	106		$	94		$	443	$	5,005

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class and based on the impairment method as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
March 31, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	51	$	—	$	25	$	—	$	—	$	—	$	76
Collectively evaluated for impairment		1,653		1,538		1,278		184		165		560		5,378
Total ending allowance balance	$	1,704	$	1,538	$	1,303	$	184	$	165	$	560	$	5,454
Loans:
Loans individually evaluated for impairment	$	2,000	$	3,543	$	1,520	$	—	$	—			$	7,063
Loans collectively evaluated for impairment		130,455		163,660		147,487		16,996		14,528				473,126
Total ending loans balance	$	132,455	$	167,203	$	149,007	$	16,996	$	14,528			$	480,189
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	705	$	—	$	24	$	—	$	—	$	—	$	729
Collectively evaluated for impairment		1,502		1,264		1,165		178		141		312		4,562
Total ending allowance balance	$	2,207	$	1,264	$	1,189	$	178	$	141	$	312	$	5,291
Loans:
Loans individually evaluated for impairment	$	5,028	$	621	$	1,507	$	—	$	—			$	7,156
Loans collectively evaluated for impairment		129,240		158,854		142,982		23,428		13,308				467,812
Total ending loans balance	$	134,268	$	159,475	$	144,489	$	23,428	$	13,308			$	474,968

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance
March 31, 2017
Commercial	$	2,084	$	1,882	$	121	$	2,003	$	51
Commercial real estate		3,435		3,522		20		3,542		—
Residential real estate		1,727		1,056		465		1,521		25
Total impaired loans	$	7,246	$	6,460	$	606	$	7,066	$	76
December 31, 2016
Commercial	$	5,476	$	1,690	$	3,354	$	5,044	$	705
Commercial real estate		796		600		21		621		—
Residential real estate		1,681		1,036		472		1,508		24
Total impaired loans	$	7,953	$	3,326	$	3,847	$	7,173	$	729

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three months ended March 31,
(Dollars in thousands)	2017		2016
Average recorded investment:
Commercial	$	4,216	$	6,016
Commercial real estate		438		984
Residential real estate		1,488		1,530
Average recorded investment in impaired loans	$	6,142	$	8,530
Interest income recognized:
Commercial	$	14	$	65
Commercial real estate		—		4
Residential real estate		15		15
Interest income recognized on a cash basis on impaired loans	$	29	$	84

The following table presents the aging of past due loans and nonaccrual loans as of March 31, 2017 and December 31, 2016 by class of loans:

(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
March 31, 2017
Commercial	$	131,447	$	148	$	—	$	—	$	860	$	1,008	$	132,455
Commercial real estate		163,273		272		95		40		3,523		3,930		167,203
Residential real estate		148,011		347		197		30		422		996		149,007
Construction & land development		16,996		—		—		—		—		—		16,996
Consumer		14,455		38		1		—		34		73		14,528
Total Loans	$	474,182	$	805	$	293	$	70	$	4,839	$	6,007	$	480,189
December 31, 2016
Commercial	$	133,630	$	151	$	62	$	—	$	425	$	638	$	134,268
Commercial real estate		158,504		435		—		39		497		971		159,475
Residential real estate		142,926		816		61		196		490		1,563		144,489
Construction & land development		23,428		—		—		—		—		—		23,428
Consumer		13,234		21		16		—		37		74		13,308
Total Loans	$	471,722	$	1,423	$	139	$	235	$	1,449	$	3,246	$	474,968

Troubled Debt Restructurings

All troubled debt restructurings (“TDR’s) are individually evaluated for impairment and a related allowance is recorded, as needed. Loans whose terms have been modified as TDR’s totaled $2.8 million as of March 31, 2017, and $6.4 million as of December 31, 2016, with $25 thousand and $711 thousand of specific reserves allocated to those loans, respectively. At March 31, 2017, $2.5 million of the loans classified as TDR’s were performing in accordance with their modified terms. Of the remaining $348 thousand, all were in nonaccrual of interest status.

There were no new TDR’s during the three month periods ended March 31, 2017 and 2016. None of the loans that were restructured in 2015 or 2016 have subsequently defaulted in the three month periods ended March 31, 2017 and 2016.

The Company held no foreclosed real estate as of March 31, 2017 or December 31, 2016. Consumer mortgage loans in the process of foreclosure were $487 thousand at March 31, 2017 and $448 thousand at December 31, 2016.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis includes commercial loans with an outstanding balance greater than $300 thousand. This analysis is performed on an annual basis. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass (Acceptable, Low Acceptable or Pass Watch) may exhibit a wide array of characteristics but at a minimum represent an acceptable risk to the Bank. Borrowers in this rating may have leveraged but acceptable balance sheet positions, satisfactory asset quality, stable to favorable sales and earnings trends, acceptable liquidity, and adequate cash flow. Loans are considered fully collectible and require an average amount of administration. While generally adhering to credit policy, these loans may exhibit occasional exceptions that do not result in undue risk to the Bank. Borrowers are generally capable of absorbing setbacks, financial and otherwise, without the threat of failure.

Special Mention. Loans classified as special mention have material weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the loan at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, values, highly questionable, and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $300 thousand or are included in groups of homogeneous loans. Based on the most recent analysis performed, the risk category of loans by class is as follows as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
March 31, 2017
Commercial	$	115,363	$	9,316	$	6,767	$	—	$	1,009	$	132,455
Commercial real estate		150,517		9,845		5,829		—		1,012		167,203
Residential real estate		213		—		55		—		148,739		149,007
Construction & land development		12,491		1,169		—		—		3,336		16,996
Consumer		—		—		—		—		14,528		14,528
Total	$	278,584	$	20,330	$	12,651	$	—	$	168,624	$	480,189
December 31, 2016
Commercial	$	116,739	$	6,874	$	9,704	$	—	$	951	$	134,268
Commercial real estate		149,630		4,168		4,766		—		911		159,475
Residential real estate		216		—		175		—		144,098		144,489
Construction & land development		17,183		981		504		—		4,760		23,428
Consumer		—		—		—		—		13,308		13,308
Total	$	283,768	$	12,023	$	15,149	$	—	$	164,028	$	474,968

The following table presents loans that are not rated by class of loans as of March 31, 2017 and December 31, 2016. Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

(Dollars in thousands)	Performing		Non-Performing		Total
March 31, 2017
Commercial	$	857	$	152	$	1,009
Commercial real estate		1,012		—		1,012
Residential real estate		148,404		335		148,739
Construction & land development		3,336		—		3,336
Consumer		14,494		34		14,528
Total	$	168,103	$	521	$	168,624
December 31, 2016
Commercial	$	951	$	—	$	951
Commercial real estate		911		—		911
Residential real estate		143,440		658		144,098
Construction & land development		4,760		—		4,760
Consumer		13,271		37		13,308
Total	$	163,333	$	695	$	164,028

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Short-Term Borrowings

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Short-Term Borrowings

NOTE 4 – SHORT-TERM BORROWINGS

The following table provides additional detail regarding repurchase agreements accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
(Dollars in thousands)	March 31, 2017		December 31, 2016
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$	54,226	$	48,866
Repurchase agreements		54,022		48,742

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Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 5 – FAIR VALUE MEASUREMENTS

The Company provides disclosures about assets and liabilities carried at fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. The three broad levels of the fair value hierarchy are described below:

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

The following table presents the assets reported on the Consolidated Balance Sheet at their fair value as of March 31, 2017 and December 31, 2016 by level within the fair value hierarchy. No liabilities are carried at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Equity securities and U.S. Treasury Notes are valued at the closing price reported on the active market on which the individual securities are traded. Obligations of U.S. Government agencies, mortgage-backed securities, asset-backed securities, obligations of states and political subdivisions, and corporate bonds are valued at observable market data for similar assets.

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		—		8,421		—		8,421
Mortgage-backed securities of government agencies		—		53,164		—		53,164
Other mortgage-backed securities		—		55		—		55
Asset-backed securities of government agencies		—		1,246		—		1,246
State and political subdivisions		—		28,687		—		28,687
Corporate bonds		—		9,504		—		9,504
Total debt securities		1,000		101,077		—		102,077
Equity securities		81		—		—		81
Total available-for-sale securities	$	1,081	$	101,077	$	—	$	102,158
December 31, 2016
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		—		6,402		—		6,402
Mortgage-backed securities of government agencies		—		55,837		—		55,837
Other mortgage-backed securities		—		65		—		65
Asset-backed securities of government agencies		—		1,266		—		1,266
State and political subdivisions		—		29,708		—		29,708
Corporate bonds		—		9,516		—		9,516
Total debt securities		1,001		102,794		—		103,795
Equity securities		80		—		—		80
Total available-for-sale securities	$	1,081	$	102,794	$	—	$	103,875

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2017 and December 31, 2016, by level within the fair value hierarchy. Impaired loans are written down to fair value through the establishment of specific reserves. Techniques used to value the collateral that secure the impaired loans include: quoted market prices for identical assets classified as Level I inputs; and observable inputs, employed by certified appraisers, for similar assets classified as Level II inputs. In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level III inputs.

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,987	$	6,987
December 31, 2016
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,427	$	6,427

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level III inputs to determine fair value:

(Dollars in thousands)
March 31, 2017
Impaired loans	$	5,678	Discounted cash flow	Remaining term Discount rate	2 mos to 30 yrs (154 months) 3.1% to 9.8% (4.7%)
		1,309	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-23%) -10%
December 31, 2016
Impaired loans	$	5,331	Discounted cash flow	Remaining term Discount rate	6 mos to 29.9 yrs / (61.1 mos) 3.1% to 12.0% / (4.9%)
		1,096	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-21.7%) -10%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

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Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2017

Investments, All Other Investments [Abstract]

Fair Values of Financial Instruments

NOTE 6 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of recognized financial instruments as of March 31, 2017 and December 31, 2016 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2017
Financial assets
Cash and cash equivalents	$	38,387	$	38,387	$	—	$	—	$	38,387
Securities available-for-sale		102,158		1,081		101,077		—		102,158
Securities held-to-maturity		27,892		—		27,675		—		27,675
Restricted stock		4,614		4,614				—		4,614
Loans held for sale		264		264		—		—		264
Net loans		475,255		—		—		478,673		478,673
Bank-owned life insurance		12,959		12,959		—		—		12,959
Accrued interest receivable		1,604		1,604		—		—		1,604
Mortgage servicing rights		260		—		—		260		260
Financial liabilities
Deposits	$	542,180	$	430,366	$	—	$	112,062	$	542,428
Short-term borrowings		54,022		54,022		—				54,022
Other borrowings		12,304		—		—		12,434		12,434
Accrued interest payable		71		71		—		—		71
December 31, 2016
Financial assets
Cash and cash equivalents	$	36,838	$	36,838	$	—	$	—	$	36,838
Securities available-for-sale		103,875		1,081		102,794		—		103,875
Securities held-to-maturity		23,883		—		23,444		—		23,444
Restricted stock		4,614		4,614		—		—		4,614
Loans held for sale		—		—		—		—		—
Net loans		470,158		—		—		471,815		471,815
Bank-owned life insurance		10,361		10,361		—		—		10,361
Accrued interest receivable		1,409		1,409		—		—		1,409
Mortgage servicing rights		261		—		—		261		261
Financial liabilities
Deposits	$	540,785	$	428,676	$	—	$	112,642	$	541,318
Short-term borrowings		48,742		48,742		—		—		48,742
Other borrowings		12,385		—		—		12,511		12,511
Accrued interest payable		76		76		—		—		76

For purposes of the above disclosures of estimated fair value, the following assumptions are used:

Cash and cash equivalents; Loans held for sale; Accrued interest receivable; Short-term borrowings and Accrued interest payable

The fair value of the above instruments is considered to be carrying value, classified as Level I in the fair value hierarchy.

Securities

The fair value of securities available-for-sale and securities held-to-maturity which are measured on a recurring basis are determined primarily by obtaining quoted prices on nationally recognized securities exchanges or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on securities’ relationship to other similar securities, classified as Level I or Level II in the fair value hierarchy.

Net loans

The fair value for loans is estimated by discounting future cash flows using current market inputs at which loans with similar terms and qualities would be made to borrowers of similar credit quality. Where quoted market prices were available, primarily for certain residential mortgage loans, such market rates were utilized as estimates for fair value. Fair value of non-accrual loans is based on carrying value, classified as Level III.

Bank-owned life insurance

The carrying amount of bank-owned life insurance is based on the cash surrender value of the policies and is a reasonable estimate of fair value, classified as Level I.

Restricted stock

Restricted stock includes Federal Home Loan Bank Stock and Federal Reserve Bank Stock. It is not practicable to determine the fair value of regulatory equity securities due to restrictions placed on their transferability. Fair value is based on carrying value, classified as Level I.

Mortgage servicing rights

The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates discounted cash flow and repayment assumptions based on management’s best judgment. As a result, these rights are measured at fair value on a recurring basis and are classified within Level III of the fair value hierarchy.

Deposits

The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rates are estimated using market rates currently offered for similar instruments with similar remaining maturities, resulting in a Level III classification. Demand, savings, and money market deposit accounts are valued at the amount payable on demand as of quarter end, resulting in a Level I classification.

Other borrowings

The fair value of Federal Home Loan Bank advances are estimated using a discounted cash flow analysis based on the current borrowing rates for similar types of borrowings, resulting in a Level III classification.

The Company also has unrecognized financial instruments at March 31, 2017 and December 31, 2016. These financial instruments relate to commitments to extend credit and letters of credit. The aggregated contract amount of such financial instruments was approximately $164.4 million at March 31, 2017 and $163.7 million at December 31, 2016. Such amounts are also considered to be the estimated fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument over the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Since no ready market exists for a significant portion of the financial instruments, fair value estimates are largely based on judgments after considering such factors as future expected credit losses, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

NOTE 7- ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive income (loss) by component net of tax for the three month periods ended March 31, 2017 and 2016:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three months ended March 31, 2017
Balance as of December 31, 2016	$	(1,323	)	$	449		$	(874	)
Unrealized holding gain on available-for-sale securities arising during the period		471			(161	)		310
Amortization of held-to-maturity discount resulting from transfer		31			(10	)		21
Total other comprehensive income		502			(171	)		331
Balance as of March 31, 2017	$	(821	)	$	278		$	(543	)
Three months ended March 31, 2016
Balance as of December 31, 2015	$	(631	)	$	214		$	(417	)
Unrealized holding gain on available-for-sale securities arising during the period		808			(275	)		533
Amortization of held-to-maturity discount resulting from transfer		46			(15	)		31
Total other comprehensive income		854			(290	)		564
Balance as of March 31, 2016	$	223		$	(76	)	$	147

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Revenue Recognition

ASU 2014-09 - Revenue from Contracts with Customers. The amendments in ASU 2014-09 require an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this Update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and the FASB issued a one-year deferral for implementation, which results in new guidance being effective for annual and interim reporting periods beginning after December 15, 2017. For public entities with a calendar year-end, the new guidance is effective in the quarter and year beginning January 1, 2018. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

Recognition and Measurement of Financial Assets and Financial Liabilities

ASU 2016-01 - Recognition and Measurement of Financial Assets and Financial Liabilities. This Update sets forth targeted improvements to GAAP including, but not limited to, requiring an entity to recognize the changes in fair value of equity investments in the income statement, requiring public business entities to use the exit price when measuring the fair value of financial instruments for financial statement disclosure purposes, eliminating certain disclosures required by existing GAAP, and providing for additional disclosures. The Update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Update is not expected to have a significant impact on the Company’s financial position or results of operations.

Lease

ASU 2016-02 – Leases. This Update sets forth a new lease accounting model for lessors and lessees. For lessees, virtually all leases will be required to be recognized on the balance sheet by recording a right-of-use asset. Subsequent accounting for leases varies depending on whether the lease is an operating lease or a finance lease. The accounting provided by a lessor is largely unchanged from that applied under the existing guidance. The ASU requires additional qualitative and quantitative disclosures with the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Update is effective for fiscal years beginning after December 15, 2018, with early application permitted. We expect the Update will result in an increase in total assets and liabilities. The amount of the increase will be impacted by the leases outstanding at the time of adoption and their remaining term at that time. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

Credit Losses

ASU 2016-13 - Financial Instruments - Credit Losses. The Update requires that financial assets be presented at the net amount expected to be collected (i.e. net of expected credit losses), eliminating the probable recognition threshold for credit losses on financial assets measured at amortized cost. The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Update is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for annual and interim periods beginning after December 15, 2018. We expect the Update will result in an increase in the allowance for credit losses for the estimated life of the financial asset, including an estimate for debt securities. The amount of the increase will be impacted by the portfolio composition and quality at the adoption date, as well as economic conditions and forecasts at that time. A cumulative-effect adjustment to retained earnings is required as of the beginning of the year of adoption. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

Classification of Certain Cash Receipts and Cash Payments

ASU 2016-15 - Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. Current guidance lacks consistent principles for evaluating the classification of cash payments and receipts in the statement of cash flows. FASB issued the ASU with the intent of reducing diversity in practice with respect to several types of cash flows. The amendments in this Update are effective using a retrospective transition approach for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

Goodwill Impairment

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update simplifies the goodwill impairment test. Under the new guidance, Step 2 of the goodwill impairment process that requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities, is eliminated. Instead, the entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. The amendment is not expected to have a material impact on the Company’s Unaudited Consolidated Financial Statements.

Premium Amortization on Purchased Callable Debt Securities

ASU 2017-08 - Premium Amortization on Purchased Callable Debt Securities. The Update amends the guidance related to amortization for certain callable debt securities held at a premium. The new guidance requires the premium to be amortized to the earliest call date. The guidance does not require an accounting change for securities purchased at discount. The Update was adopted in the current reporting period and did not have a significant impact on the Company’s Unaudited Consolidated Financial Statements.

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Securities (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Summary of Securities Available-for-Sale and Restricted Stock

Securities consist of the following at March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		8,500		—		79		8,421
Mortgage-backed securities of government agencies		53,306		296		438		53,164
Other mortgage-backed securities		55		—		—		55
Asset-backed securities of government agencies		1,272		—		26		1,246
State and political subdivisions		28,768		195		276		28,687
Corporate bonds		9,615		45		156		9,504
Equity securities		53		28		—		81
Total available-for-sale		102,569		564		975		102,158
Held-to-maturity
U.S. Government agencies		9,473		21		303		9,191
Mortgage-backed securities of government agencies		13,719		169		137		13,751
State and political subdivisions		4,700		33		—		4,733
Total held-to-maturity		27,892		223		440		27,675
Restricted stock		4,614		—		—		4,614
Total securities	$	135,075	$	787	$	1,415	$	134,447
December 31, 2016
Available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		6,500		—		98		6,402
Mortgage-backed securities of government agencies		56,187		239		589		55,837
Other mortgage-backed securities		65		—		—		65
Asset-backed securities of government agencies		1,312		—		46		1,266
State and political subdivisions		30,007		140		439		29,708
Corporate bonds		9,632		28		144		9,516
Equity securities		53		27		—		80
Total available-for-sale		104,757		434		1,316		103,875
Held-to-maturity
U.S. Government agencies		9,472		17		396		9,093
Mortgage-backed securities of government agencies		14,411		141		201		14,351
Total held-to-maturity		23,883		158		597		23,444
Restricted stock		4,614		—		—		4,614
Total securities	$	133,254	$	592	$	1,913	$	131,933

Summary of Amortized Cost and Fair Value of Debt Securities

The amortized cost and fair value of debt securities at March 31, 2017, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	3,269	$	3,272
Due after one through five years		24,328		24,391
Due after five through ten years		22,266		22,174
Due after ten years		52,653		52,240
Total debt securities available-for-sale	$	102,516	$	102,077
Held-to-maturity
Due in one year or less	$	4,700	$	4,733
Due after one through five years		—		—
Due after five through ten years		3,475		3,359
Due after ten years		19,717		19,583
Total debt securities held-to-maturity	$	27,892	$	27,675

Summary of Gross Unrealized Losses and Fair Value of Available for Sale Securities

The following table presents gross unrealized losses and fair value of securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2017 and December 31, 2016:

	Securities in a continuous unrealized loss position
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Gross unrealized losses		Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Fair value
March 31, 2017
Available-for-sale
U.S. Government agencies	$	79	$	8,420	$	—	$	—	$	79	$	8,420
Mortgage-backed securities of government agencies		438		30,345		—		—		438		30,345
Asset-backed securities of government agencies				—		26		1,246		26		1,246
State and political subdivisions		276		10,713		—		—		276		10,713
Corporate bonds		1		941		155		2,345		156		3,286
Held-to-maturity
U.S. Government agencies		303		8,695		—		—		303		8,695
Mortgage-backed securities of government agencies		12		1,938		125		3,517		137		5,455
Total temporarily impaired securities	$	1,109	$	61,052	$	306	$	7,108	$	1,415	$	68,160
December 31, 2016
Available-for-sale
U.S. Government agencies	$	98	$	6,402	$	—	$	—	$	98	$	6,402
Mortgage-backed securities of government agencies		589		27,243		—		—		589		27,243
Asset-backed securities of government agencies		—		—		46		1,266		46		1,266
State and political subdivisions		439		19,328		—		—		439		19,328
Corporate bonds		33		3,593		111		1,889		144		5,482
Held-to-maturity
U.S. Government agencies		396		8,602		—		—		396		8,602
Mortgage-backed securities of government agencies		28		2,018		173		3,621		201		5,639
Total temporarily impaired securities	$	1,583	$	67,186	$	330	$	6,776	$	1,913	$	73,962

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Loans (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Summary of Loans

Loans consist of the following:

(Dollars in thousands)	March 31, 2017		December 31, 2016
Commercial	$	132,455	$	134,268
Commercial real estate		167,203		159,475
Residential real estate		149,007		144,489
Construction & land development		16,996		23,428
Consumer		14,528		13,308
Total loans before deferred costs		480,189		474,968
Deferred loan costs		520		481
Total Loans	$	480,709	$	475,449

Schedule of Allowances for Loan Losses by Portfolio Segment

The following tables detail activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2017 and 2016.

Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated		Total
Three months ended March 31, 2017
Beginning balance	$	2,207		$	1,264		$	1,189		$	178		$	141		$	312	$	5,291
(Credit) provision for loan losses		(831	)		274			114			6			29			248		(160	)
Charge-offs		(8	)		—			—			—			(5	)				(13	)
Recoveries		336			—			—			—			—					336
Net recoveries (charge-offs)		328			—			—			—			(5	)				323
Ending balance	$	1,704		$	1,538		$	1,303		$	184		$	165		$	560	$	5,454
Three months ended March 31, 2016
Beginning balance	$	1,664		$	1,271		$	1,086		$	123		$	86		$	432	$	4,662
(Credit) provision for loan losses		394			(228	)		(4	)		(17	)		8			11		164
Charge-offs		(9	)		—			—			—			(1	)				(10	)
Recoveries		4			182			2			—			1					189
Net recoveries (charge-offs)		(5	)		182			2			—			—					179
Ending balance	$	2,053		$	1,225		$	1,084		$	106		$	94		$	443	$	5,005

Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class and based on the impairment method as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
March 31, 2017
Allowance for loan losses:
Individually evaluated for impairment	$	51	$	—	$	25	$	—	$	—	$	—	$	76
Collectively evaluated for impairment		1,653		1,538		1,278		184		165		560		5,378
Total ending allowance balance	$	1,704	$	1,538	$	1,303	$	184	$	165	$	560	$	5,454
Loans:
Loans individually evaluated for impairment	$	2,000	$	3,543	$	1,520	$	—	$	—			$	7,063
Loans collectively evaluated for impairment		130,455		163,660		147,487		16,996		14,528				473,126
Total ending loans balance	$	132,455	$	167,203	$	149,007	$	16,996	$	14,528			$	480,189
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	705	$	—	$	24	$	—	$	—	$	—	$	729
Collectively evaluated for impairment		1,502		1,264		1,165		178		141		312		4,562
Total ending allowance balance	$	2,207	$	1,264	$	1,189	$	178	$	141	$	312	$	5,291
Loans:
Loans individually evaluated for impairment	$	5,028	$	621	$	1,507	$	—	$	—			$	7,156
Loans collectively evaluated for impairment		129,240		158,854		142,982		23,428		13,308				467,812
Total ending loans balance	$	134,268	$	159,475	$	144,489	$	23,428	$	13,308			$	474,968

Schedule of Impairment by Class of Loans

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance
March 31, 2017
Commercial	$	2,084	$	1,882	$	121	$	2,003	$	51
Commercial real estate		3,435		3,522		20		3,542		—
Residential real estate		1,727		1,056		465		1,521		25
Total impaired loans	$	7,246	$	6,460	$	606	$	7,066	$	76
December 31, 2016
Commercial	$	5,476	$	1,690	$	3,354	$	5,044	$	705
Commercial real estate		796		600		21		621		—
Residential real estate		1,681		1,036		472		1,508		24
Total impaired loans	$	7,953	$	3,326	$	3,847	$	7,173	$	729

Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated.

	Three months ended March 31,
(Dollars in thousands)	2017		2016
Average recorded investment:
Commercial	$	4,216	$	6,016
Commercial real estate		438		984
Residential real estate		1,488		1,530
Average recorded investment in impaired loans	$	6,142	$	8,530
Interest income recognized:
Commercial	$	14	$	65
Commercial real estate		—		4
Residential real estate		15		15
Interest income recognized on a cash basis on impaired loans	$	29	$	84

Schedule of Aging of Past Due and Nonaccrual Loans

The following table presents the aging of past due loans and nonaccrual loans as of March 31, 2017 and December 31, 2016 by class of loans:

(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days + Past Due		Non- Accrual		Total Past Due and Non- Accrual		Total Loans
March 31, 2017
Commercial	$	131,447	$	148	$	—	$	—	$	860	$	1,008	$	132,455
Commercial real estate		163,273		272		95		40		3,523		3,930		167,203
Residential real estate		148,011		347		197		30		422		996		149,007
Construction & land development		16,996		—		—		—		—		—		16,996
Consumer		14,455		38		1		—		34		73		14,528
Total Loans	$	474,182	$	805	$	293	$	70	$	4,839	$	6,007	$	480,189
December 31, 2016
Commercial	$	133,630	$	151	$	62	$	—	$	425	$	638	$	134,268
Commercial real estate		158,504		435		—		39		497		971		159,475
Residential real estate		142,926		816		61		196		490		1,563		144,489
Construction & land development		23,428		—		—		—		—		—		23,428
Consumer		13,234		21		16		—		37		74		13,308
Total Loans	$	471,722	$	1,423	$	139	$	235	$	1,449	$	3,246	$	474,968

Summary of Loans by Credit Quality Indicator

Based on the most recent analysis performed, the risk category of loans by class is as follows as of March 31, 2017 and December 31, 2016:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
March 31, 2017
Commercial	$	115,363	$	9,316	$	6,767	$	—	$	1,009	$	132,455
Commercial real estate		150,517		9,845		5,829		—		1,012		167,203
Residential real estate		213		—		55		—		148,739		149,007
Construction & land development		12,491		1,169		—		—		3,336		16,996
Consumer		—		—		—		—		14,528		14,528
Total	$	278,584	$	20,330	$	12,651	$	—	$	168,624	$	480,189
December 31, 2016
Commercial	$	116,739	$	6,874	$	9,704	$	—	$	951	$	134,268
Commercial real estate		149,630		4,168		4,766		—		911		159,475
Residential real estate		216		—		175		—		144,098		144,489
Construction & land development		17,183		981		504		—		4,760		23,428
Consumer		—		—		—		—		13,308		13,308
Total	$	283,768	$	12,023	$	15,149	$	—	$	164,028	$	474,968

Schedule of Loans Not Rated by Class of Loans

The following table presents loans that are not rated by class of loans as of March 31, 2017 and December 31, 2016. Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

(Dollars in thousands)	Performing		Non-Performing		Total
March 31, 2017
Commercial	$	857	$	152	$	1,009
Commercial real estate		1,012		—		1,012
Residential real estate		148,404		335		148,739
Construction & land development		3,336		—		3,336
Consumer		14,494		34		14,528
Total	$	168,103	$	521	$	168,624
December 31, 2016
Commercial	$	951	$	—	$	951
Commercial real estate		911		—		911
Residential real estate		143,440		658		144,098
Construction & land development		4,760		—		4,760
Consumer		13,271		37		13,308
Total	$	163,333	$	695	$	164,028

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Short-Term Borrowings (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Summary of Repurchase Agreements Accounted for as Secured Borrowings

The following table provides additional detail regarding repurchase agreements accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous
(Dollars in thousands)	March 31, 2017		December 31, 2016
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$	54,226	$	48,866
Repurchase agreements		54,022		48,742

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets Measured on Recurring Basis

The following table presents the assets reported on the Consolidated Balance Sheet at their fair value as of March 31, 2017 and December 31, 2016 by level within the fair value hierarchy.

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,000	$	—	$	—	$	1,000
U.S. Government agencies		—		8,421		—		8,421
Mortgage-backed securities of government agencies		—		53,164		—		53,164
Other mortgage-backed securities		—		55		—		55
Asset-backed securities of government agencies		—		1,246		—		1,246
State and political subdivisions		—		28,687		—		28,687
Corporate bonds		—		9,504		—		9,504
Total debt securities		1,000		101,077		—		102,077
Equity securities		81		—		—		81
Total available-for-sale securities	$	1,081	$	101,077	$	—	$	102,158
December 31, 2016
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,001	$	—	$	—	$	1,001
U.S. Government agencies		—		6,402		—		6,402
Mortgage-backed securities of government agencies		—		55,837		—		55,837
Other mortgage-backed securities		—		65		—		65
Asset-backed securities of government agencies		—		1,266		—		1,266
State and political subdivisions		—		29,708		—		29,708
Corporate bonds		—		9,516		—		9,516
Total debt securities		1,001		102,794		—		103,795
Equity securities		80		—		—		80
Total available-for-sale securities	$	1,081	$	102,794	$	—	$	103,875

Schedule of Fair Value of Assets Measured on Nonrecurring Basis

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of March 31, 2017 and December 31, 2016, by level within the fair value hierarchy.

(Dollars in thousands)	Level I		Level II		Level III		Total
March 31, 2017
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,987	$	6,987
December 31, 2016
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	6,427	$	6,427

Schedule of Quantitative Information of Assets Measured at Fair Value on Nonrecurring Basis

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level III inputs to determine fair value:

(Dollars in thousands)
March 31, 2017
Impaired loans	$	5,678	Discounted cash flow	Remaining term Discount rate	2 mos to 30 yrs (154 months) 3.1% to 9.8% (4.7%)
		1,309	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-23%) -10%
December 31, 2016
Impaired loans	$	5,331	Discounted cash flow	Remaining term Discount rate	6 mos to 29.9 yrs / (61.1 mos) 3.1% to 12.0% / (4.9%)
		1,096	Appraisal of collateral (1)	Appraisal adjustments (2) Liquidation expense (2)	0% to -50% (-21.7%) -10%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

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Fair Values of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Investments, All Other Investments [Abstract]

Schedule of Estimated Fair Values of Recognized Financial Instruments

The estimated fair values of recognized financial instruments as of March 31, 2017 and December 31, 2016 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2017
Financial assets
Cash and cash equivalents	$	38,387	$	38,387	$	—	$	—	$	38,387
Securities available-for-sale		102,158		1,081		101,077		—		102,158
Securities held-to-maturity		27,892		—		27,675		—		27,675
Restricted stock		4,614		4,614				—		4,614
Loans held for sale		264		264		—		—		264
Net loans		475,255		—		—		478,673		478,673
Bank-owned life insurance		12,959		12,959		—		—		12,959
Accrued interest receivable		1,604		1,604		—		—		1,604
Mortgage servicing rights		260		—		—		260		260
Financial liabilities
Deposits	$	542,180	$	430,366	$	—	$	112,062	$	542,428
Short-term borrowings		54,022		54,022		—				54,022
Other borrowings		12,304		—		—		12,434		12,434
Accrued interest payable		71		71		—		—		71
December 31, 2016
Financial assets
Cash and cash equivalents	$	36,838	$	36,838	$	—	$	—	$	36,838
Securities available-for-sale		103,875		1,081		102,794		—		103,875
Securities held-to-maturity		23,883		—		23,444		—		23,444
Restricted stock		4,614		4,614		—		—		4,614
Loans held for sale		—		—		—		—		—
Net loans		470,158		—		—		471,815		471,815
Bank-owned life insurance		10,361		10,361		—		—		10,361
Accrued interest receivable		1,409		1,409		—		—		1,409
Mortgage servicing rights		261		—		—		261		261
Financial liabilities
Deposits	$	540,785	$	428,676	$	—	$	112,642	$	541,318
Short-term borrowings		48,742		48,742		—		—		48,742
Other borrowings		12,385		—		—		12,511		12,511
Accrued interest payable		76		76		—		—		76

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component Net of Tax

The following table presents the changes in accumulated other comprehensive income (loss) by component net of tax for the three month periods ended March 31, 2017 and 2016:

(Dollars in thousands)	Pretax			Tax Effect			After-tax
Three months ended March 31, 2017
Balance as of December 31, 2016	$	(1,323	)	$	449		$	(874	)
Unrealized holding gain on available-for-sale securities arising during the period		471			(161	)		310
Amortization of held-to-maturity discount resulting from transfer		31			(10	)		21
Total other comprehensive income		502			(171	)		331
Balance as of March 31, 2017	$	(821	)	$	278		$	(543	)
Three months ended March 31, 2016
Balance as of December 31, 2015	$	(631	)	$	214		$	(417	)
Unrealized holding gain on available-for-sale securities arising during the period		808			(275	)		533
Amortization of held-to-maturity discount resulting from transfer		46			(15	)		31
Total other comprehensive income		854			(290	)		564
Balance as of March 31, 2016	$	223		$	(76	)	$	147

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Securities - Summary of Securities Available-for-Sale and Restricted Stock (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	$ 102,569	$ 104,757
Gross Unrealized Gains, Available-for-sale	564	434
Gross Unrealized Losses, Available-for-sale	975	1,316
Fair Value, Available-for-sale	102,158	103,875
Amortized Cost, Held to maturity	27,892	23,883
Gross Unrealized Gains, Held to maturity	223	158
Gross Unrealized Losses, Held to maturity	440	597
Fair Value, Held to maturity	27,675	23,444
Amortized Cost	135,075	133,254
Gross Unrealized Gains	787	592
Gross Unrealized Losses	1,415	1,913
Fair Value	134,447	131,933
U.S. Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	8,500	6,500
Gross Unrealized Losses, Available-for-sale	79	98
Fair Value, Available-for-sale	8,421	6,402
Amortized Cost, Held to maturity	9,473	9,472
Gross Unrealized Gains, Held to maturity	21	17
Gross Unrealized Losses, Held to maturity	303	396
Fair Value, Held to maturity	9,191	9,093
Mortgage-Backed Securities of Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	53,306	56,187
Gross Unrealized Gains, Available-for-sale	296	239
Gross Unrealized Losses, Available-for-sale	438	589
Fair Value, Available-for-sale	53,164	55,837
Amortized Cost, Held to maturity	13,719	14,411
Gross Unrealized Gains, Held to maturity	169	141
Gross Unrealized Losses, Held to maturity	137	201
Fair Value, Held to maturity	13,751	14,351
State and Political Subdivisions [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	28,768	30,007
Gross Unrealized Gains, Available-for-sale	195	140
Gross Unrealized Losses, Available-for-sale	276	439
Fair Value, Available-for-sale	28,687	29,708
Amortized Cost, Held to maturity	4,700
Gross Unrealized Gains, Held to maturity	33
Fair Value, Held to maturity	4,733
U.S. Treasury Security [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	1,000	1,001
Fair Value, Available-for-sale	1,000	1,001
Other Mortgage-Backed Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	55	65
Fair Value, Available-for-sale	55	65
Asset-Backed Securities of Government Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	1,272	1,312
Gross Unrealized Losses, Available-for-sale	26	46
Fair Value, Available-for-sale	1,246	1,266
Corporate Bonds [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	9,615	9,632
Gross Unrealized Gains, Available-for-sale	45	28
Gross Unrealized Losses, Available-for-sale	156	144
Fair Value, Available-for-sale	9,504	9,516
Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost, Available-for-sale	53	53
Gross Unrealized Gains, Available-for-sale	28	27
Fair Value, Available-for-sale	81	80
Restricted Stock [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Amortized Cost	4,614	4,614
Fair Value	$ 4,614	$ 4,614

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Securities - Summary of Amortized Cost and Fair Value of Debt Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale
Due in one year or less, Amortized Cost	$ 3,269
Due after one through five years, Amortized Cost	24,328
Due after five through ten years, Amortized Cost	22,266
Due after ten years, Amortized Cost	52,653
Total debt securities available-for-sale, Amortized Cost	102,516
Due in one year or less, Fair Value	3,272
Due after one through five years, Fair Value	24,391
Due after five through ten years, Fair Value	22,174
Due after ten years, Fair Value	52,240
Total debt securities available-for-sale, Fair Value	102,077
Held-to-maturity
Due in one year or less, Amortized Cost	4,700
Due after one through five years, Amortized Cost	0
Due after five through ten years, Amortized Cost	3,475
Due after ten years, Amortized cost	19,717
Amortized Cost, Held to maturity	27,892	$ 23,883
Due in one year or less, Fair Value	4,733
Due after one through five years, Fair Value	0
Due after five through ten years, Fair Value	3,359
Due after ten years, Fair Value	19,583
Total debt securities held-to-maturity, Fair Value	$ 27,675	$ 23,444

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Securities - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2017 USD ($) Securities	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Investments, Debt and Equity Securities [Abstract]
Carrying value of pledged securities	$ 92,200,000		$ 94,800,000
Restricted stock investment in FHLB stock	4,100,000		4,100,000
Federal Reserve Bank stock	471,000		$ 471,000
Proceeds from sales of available-for-sale securities	$ 0	$ 0
Number of securities in an unrealized loss position, Total | Securities	71
Number of securities in continuous unrealized loss position, 12 months or more | Securities	6

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Securities - Summary of Gross Unrealized Losses and Fair Value of Available for Sale Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Held-to-maturity, Gross Unrealized Losses, Total	$ 440	$ 597
Gross Unrealized Losses, Total	975	1,316
Gross Unrealized Losses, Less Than 12 Months	1,109	1,583
Fair Value, Less Than 12 Months	61,052	67,186
Gross Unrealized Losses, 12 Months Or More	306	330
Fair Value, 12 Months Or More	7,108	6,776
Gross Unrealized Losses, Total	1,415	1,913
Fair Value, Total	68,160	73,962
U.S. Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months	303	396
Held-to-maturity, Fair Value, Less Than 12 Months	8,695	8,602
Held-to-maturity, Gross Unrealized Losses, Total	303	396
Held-to-maturity, Fair Value, Total	8,695	8,602
Gross Unrealized Losses, Less Than 12 Months	79	98
Fair Value, Less Than 12 Months	8,420	6,402
Gross Unrealized Losses, Total	79	98
Fair Value, Total	8,420	6,402
Mortgage-Backed Securities of Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Held-to-maturity, Gross Unrealized Losses, Less Than 12 Months	12	28
Held-to-maturity, Fair Value, Less Than 12 Months	1,938	2,018
Held-to-maturity, Gross Unrealized Losses, 12 Months Or More	125	173
Held-to-maturity, Fair Value, 12 Months Or More	3,517	3,621
Held-to-maturity, Gross Unrealized Losses, Total	137	201
Held-to-maturity, Fair Value, Total	5,455	5,639
Gross Unrealized Losses, Less Than 12 Months	438	589
Fair Value, Less Than 12 Months	30,345	27,243
Gross Unrealized Losses, Total	438	589
Fair Value, Total	30,345	27,243
Asset-Backed Securities of Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses, 12 Months Or More	26	46
Fair Value, 12 Months Or More	1,246	1,266
Gross Unrealized Losses, Total	26	46
Fair Value, Total	1,246	1,266
State and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses, Less Than 12 Months	276	439
Fair Value, Less Than 12 Months	10,713	19,328
Gross Unrealized Losses, Total	276	439
Fair Value, Total	10,713	19,328
Corporate Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses, Less Than 12 Months	1	33
Fair Value, Less Than 12 Months	941	3,593
Gross Unrealized Losses, 12 Months Or More	155	111
Fair Value, 12 Months Or More	2,345	1,889
Gross Unrealized Losses, Total	156	144
Fair Value, Total	$ 3,286	$ 5,482

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Loans - Summary of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	$ 480,189	$ 474,968
Deferred loan costs	520	481
Total Loans	480,709	475,449
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	132,455	134,268
Commercial Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	167,203	159,475
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	149,007	144,489
Construction & Land Development [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	16,996	23,428
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans before deferred costs	$ 14,528	$ 13,308

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Loans - Additional Information (Detail)		3 Months Ended		12 Months Ended
	Mar. 31, 2017 USD ($) Segment	Mar. 31, 2017 USD ($) Segment Contract	Mar. 31, 2016 Contract	Dec. 31, 2016 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of outstanding principal balance of commercial real estate loans secured by owner-occupied properties	78.00%	78.00%	77.00%
Loans serviced for others		$ 86,000,000		$ 85,900,000
Business segment concentrations of credit | Segment	4	4
Loan balance	$ 480,189,000	$ 480,189,000		474,968,000
Loans classified as troubled debt restructurings	2,800,000	2,800,000		6,400,000
Reserves allocated to customers whose loan terms are modified in troubled debt restructurings	25,000	25,000		711,000
Loans payable in nonaccrual of interest status	348,000	$ 348,000
Number of new TDR's | Contract		0	0
Loans restructured, subsequently defaulted | Contract		0	0
Foreclosed real estate	0	$ 0		0
Mortgage loans in process of foreclosure amount		487,000		448,000
Outstanding balance of commercial loans classified under credit risk, minimum amount	300,000	300,000
Loans listed as not rated under risk category, maximum amount	300,000	300,000
Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan balance	149,007,000	149,007,000		$ 144,489,000
Credit Concentration [Member] | Non Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan balance	42,000,000	42,000,000
Credit Concentration [Member] | Logging and Sawmill Operations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan balance	25,000,000	25,000,000
Credit Concentration [Member] | Hotel, Motel and Lodging Business [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan balance	22,000,000	22,000,000
Credit Concentration [Member] | Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loan balance	$ 19,000,000	19,000,000
Credit Concentration [Member] | Capital [Member] | Non Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration percentage	69.00%
Credit Concentration [Member] | Capital [Member] | Logging and Sawmill Operations [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration percentage	41.00%
Credit Concentration [Member] | Capital [Member] | Hotel, Motel and Lodging Business [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration percentage	36.00%
Credit Concentration [Member] | Capital [Member] | Residential Real Estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration percentage	32.00%
Performing [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans classified as troubled debt restructurings	$ 2,500,000	$ 2,500,000

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Loans - Schedule of Allowances for Loan Losses by Portfolio Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 5,291	$ 4,662
(Credit) provision for loan losses	(160)	164
Charge-offs	(13)	(10)
Recoveries	336	189
Net recoveries (charge-offs)	323	179
Ending balance	5,454	5,005
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	2,207	1,664
(Credit) provision for loan losses	(831)	394
Charge-offs	(8)	(9)
Recoveries	336	4
Net recoveries (charge-offs)	328	(5)
Ending balance	1,704	2,053
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	1,264	1,271
(Credit) provision for loan losses	274	(228)
Recoveries		182
Net recoveries (charge-offs)		182
Ending balance	1,538	1,225
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	1,189	1,086
(Credit) provision for loan losses	114	(4)
Recoveries		2
Net recoveries (charge-offs)		2
Ending balance	1,303	1,084
Construction & Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	178	123
(Credit) provision for loan losses	6	(17)
Ending balance	184	106
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	141	86
(Credit) provision for loan losses	29	8
Charge-offs	(5)	(1)
Recoveries		1
Net recoveries (charge-offs)	(5)
Ending balance	165	94
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	312	432
(Credit) provision for loan losses	248	11
Ending balance	$ 560	$ 443

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Loans - Allowances for Loan Losses and Ending Balances by Portfolio Class and Based on Impairment Method (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	$ 76	$ 729
Collectively evaluated for impairment	5,378	4,562
Total ending allowance balance	5,454	5,291	$ 5,005	$ 4,662
Loans:
Loans individually evaluated for impairment	7,063	7,156
Loans collectively evaluated for impairment	473,126	467,812
Total ending loans balance	480,189	474,968
Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	51	705
Collectively evaluated for impairment	1,653	1,502
Total ending allowance balance	1,704	2,207	2,053	1,664
Loans:
Loans individually evaluated for impairment	2,000	5,028
Loans collectively evaluated for impairment	130,455	129,240
Total ending loans balance	132,455	134,268
Commercial Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	1,538	1,264
Total ending allowance balance	1,538	1,264	1,225	1,271
Loans:
Loans individually evaluated for impairment	3,543	621
Loans collectively evaluated for impairment	163,660	158,854
Total ending loans balance	167,203	159,475
Residential Real Estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Individually evaluated for impairment	25	24
Collectively evaluated for impairment	1,278	1,165
Total ending allowance balance	1,303	1,189	1,084	1,086
Loans:
Loans individually evaluated for impairment	1,520	1,507
Loans collectively evaluated for impairment	147,487	142,982
Total ending loans balance	149,007	144,489
Construction & Land Development [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	184	178
Total ending allowance balance	184	178	106	123
Loans:
Loans collectively evaluated for impairment	16,996	23,428
Total ending loans balance	16,996	23,428
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	165	141
Total ending allowance balance	165	141	94	86
Loans:
Loans collectively evaluated for impairment	14,528	13,308
Total ending loans balance	14,528	13,308
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Collectively evaluated for impairment	560	312
Total ending allowance balance	$ 560	$ 312	$ 443	$ 432

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Loans - Schedule of Impairment by Class of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 7,246	$ 7,953
Recorded Investment with no Allowance	6,460	3,326
Recorded Investment with Allowance	606	3,847
Total Recorded Investment	7,066	7,173
Related Allowance	76	729
Commercial [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	2,084	5,476
Recorded Investment with no Allowance	1,882	1,690
Recorded Investment with Allowance	121	3,354
Total Recorded Investment	2,003	5,044
Related Allowance	51	705
Commercial Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	3,435	796
Recorded Investment with no Allowance	3,522	600
Recorded Investment with Allowance	20	21
Total Recorded Investment	3,542	621
Residential Real Estate [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,727	1,681
Recorded Investment with no Allowance	1,056	1,036
Recorded Investment with Allowance	465	472
Total Recorded Investment	1,521	1,508
Related Allowance	$ 25	$ 24

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Loans - Schedule of Average Recorded Investment in Impaired Loans and Related Interest Income Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Average recorded investment:
Average recorded investment in impaired loans	$ 6,142	$ 8,530
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	29	84
Commercial [Member]
Average recorded investment:
Average recorded investment in impaired loans	4,216	6,016
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	14	65
Commercial Real Estate [Member]
Average recorded investment:
Average recorded investment in impaired loans	438	984
Interest income recognized:
Interest income recognized on a cash basis on impaired loans		4
Residential Real Estate [Member]
Average recorded investment:
Average recorded investment in impaired loans	1,488	1,530
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	$ 15	$ 15

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Loans - Schedule of Aging of Past Due and Nonaccrual Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 474,182	$ 471,722
Nonaccrual	4,839	1,449
Total Past Due and Nonaccrual	6,007	3,246
Total ending loans balance	480,189	474,968
30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	805	1,423
60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	293	139
90 Days Plus Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	70	235
Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	131,447	133,630
Nonaccrual	860	425
Total Past Due and Nonaccrual	1,008	638
Total ending loans balance	132,455	134,268
Commercial [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	148	151
Commercial [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		62
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	163,273	158,504
Nonaccrual	3,523	497
Total Past Due and Nonaccrual	3,930	971
Total ending loans balance	167,203	159,475
Commercial Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	272	435
Commercial Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	95
Commercial Real Estate [Member] | 90 Days Plus Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	40	39
Residential Real Estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	148,011	142,926
Nonaccrual	422	490
Total Past Due and Nonaccrual	996	1,563
Total ending loans balance	149,007	144,489
Residential Real Estate [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	347	816
Residential Real Estate [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	197	61
Residential Real Estate [Member] | 90 Days Plus Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	30	196
Construction & Land Development [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	16,996	23,428
Total ending loans balance	16,996	23,428
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	14,455	13,234
Nonaccrual	34	37
Total Past Due and Nonaccrual	73	74
Total ending loans balance	14,528	13,308
Consumer [Member] | 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	38	21
Consumer [Member] | 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 1	$ 16

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Loans - Summary of Loans by Credit Quality Indicator (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 480,189	$ 474,968
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	132,455	134,268
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	167,203	159,475
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	149,007	144,489
Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,996	23,428
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	14,528	13,308
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	278,584	283,768
Pass [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	115,363	116,739
Pass [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	150,517	149,630
Pass [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	213	216
Pass [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,491	17,183
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,330	12,023
Special Mention [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,316	6,874
Special Mention [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,845	4,168
Special Mention [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,169	981
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,651	15,149
Substandard [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,767	9,704
Substandard [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,829	4,766
Substandard [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	55	175
Substandard [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans		504
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	168,624	164,028
Not Rated [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,009	951
Not Rated [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,012	911
Not Rated [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	148,739	144,098
Not Rated [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,336	4,760
Not Rated [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 14,528	$ 13,308

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Loans - Schedule of Loans Not Rated by Class of Loans (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	$ 168,624	$ 164,028
Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	1,009	951
Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	1,012	911
Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	148,739	144,098
Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	3,336	4,760
Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	14,528	13,308
Performing [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	168,103	163,333
Performing [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	857	951
Performing [Member] | Commercial Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	1,012	911
Performing [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	148,404	143,440
Performing [Member] | Construction & Land Development [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	3,336	4,760
Performing [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	14,494	13,271
Nonperforming [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	521	695
Nonperforming [Member] | Commercial [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	152
Nonperforming [Member] | Residential Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	335	658
Nonperforming [Member] | Consumer [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans not rated by class of loans	$ 34	$ 37

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Short-Term Borrowings - Summary of Repurchase Agreements Accounted for as Secured Borrowings (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Short-term Debt [Abstract]
Securities of U.S. Government agencies and mortgage-backed securities of government agencies pledged, fair value	$ 54,226	$ 48,866
Repurchase agreements	$ 54,022	$ 48,742

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Fair Value Measurements - Additional Information (Detail) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Liabilities carried at fair value	$ 0	$ 0

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Fair Value Measurements - Schedule of Fair Value of Assets Measured on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Total Securities Available-for-sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	$ 102,158	$ 103,875
U.S. Treasury Security [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,000	1,001
U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	8,421	6,402
Mortgage-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	53,164	55,837
Other Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	55	65
Asset-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,246	1,266
State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	28,687	29,708
Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	9,504	9,516
Total Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	102,077	103,795
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	81	80
Level I [Member] | Total Securities Available-for-sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,081	1,081
Level I [Member] | U.S. Treasury Security [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,000	1,001
Level I [Member] | Total Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,000	1,001
Level I [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	81	80
Level II [Member] | Total Securities Available-for-sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	101,077	102,794
Level II [Member] | U.S. Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	8,421	6,402
Level II [Member] | Mortgage-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	53,164	55,837
Level II [Member] | Other Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	55	65
Level II [Member] | Asset-Backed Securities of Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	1,246	1,266
Level II [Member] | State and Political Subdivisions [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	28,687	29,708
Level II [Member] | Corporate Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	9,504	9,516
Level II [Member] | Total Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	$ 101,077	$ 102,794

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Fair Value Measurements - Schedule of Fair Value of Assets Measured on Nonrecurring Basis (Detail) - Fair Value, Measurements, Nonrecurring [Member] - Impaired Loans [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	$ 6,987	$ 6,427
Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Assets	$ 6,987	$ 6,427

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Fair Value Measurements - Schedule of Quantitative Information of Assets Measured at Fair Value on Nonrecurring Basis (Detail) - Level III [Member] - Impaired Loans [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Discounted Cash Flow [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Estimate	$ 5,678	$ 5,331
Discounted Cash Flow [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Remaining term	2 months	6 months
Discount rate	3.10%	3.10%
Discounted Cash Flow [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Remaining term	30 years	29 years 10 months 24 days
Discount rate	9.80%	12.00%
Discounted Cash Flow [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Remaining term	154 months	61 months 3 days
Discount rate	4.70%	4.90%
Appraisal of Collateral [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Estimate	$ 1,309	$ 1,096
Liquidation expense	(10.00%)	(10.00%)
Appraisal of Collateral [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Appraisal adjustments	0.00%	0.00%
Appraisal of Collateral [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Appraisal adjustments	(50.00%)	(50.00%)
Appraisal of Collateral [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Appraisal adjustments	(23.00%)	(21.70%)

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Fair Values of Financial Instruments - Schedule of Estimated Fair Values of Recognized Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial assets
Securities available-for-sale	$ 102,158	$ 103,875
Securities held-to-maturity	27,675	23,444
Loans held for sale	264
Bank-owned life insurance	12,959	10,361
Carrying Value [Member]
Financial assets
Cash and cash equivalents	38,387	36,838
Securities available-for-sale	102,158	103,875
Securities held-to-maturity	27,892	23,883
Restricted stock	4,614	4,614
Loans held for sale	264
Net loans	475,255	470,158
Bank-owned life insurance	12,959	10,361
Accrued interest receivable	1,604	1,409
Financial liabilities
Deposits	542,180	540,785
Short-term borrowings	54,022	48,742
Other borrowings	12,304	12,385
Accrued interest payable	71	76
Carrying Value [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	260	261
Fair Value [Member]
Financial assets
Cash and cash equivalents	38,387	36,838
Securities available-for-sale	102,158	103,875
Securities held-to-maturity	27,675	23,444
Restricted stock	4,614	4,614
Loans held for sale	264
Net loans	478,673	471,815
Bank-owned life insurance	12,959	10,361
Accrued interest receivable	1,604	1,409
Financial liabilities
Deposits	542,428	541,318
Short-term borrowings	54,022	48,742
Other borrowings	12,434	12,511
Accrued interest payable	71	76
Fair Value [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	260	261
Fair Value [Member] | Level I [Member]
Financial assets
Cash and cash equivalents	38,387	36,838
Securities available-for-sale	1,081	1,081
Restricted stock	4,614	4,614
Loans held for sale	264
Bank-owned life insurance	12,959	10,361
Accrued interest receivable	1,604	1,409
Financial liabilities
Deposits	430,366	428,676
Short-term borrowings	54,022	48,742
Accrued interest payable	71	76
Fair Value [Member] | Level II [Member]
Financial assets
Securities available-for-sale	101,077	102,794
Securities held-to-maturity	27,675	23,444
Fair Value [Member] | Level III [Member]
Financial assets
Net loans	478,673	471,815
Financial liabilities
Deposits	112,062	112,642
Other borrowings	12,434	12,511
Fair Value [Member] | Level III [Member] | Mortgage Servicing Rights [Member]
Financial assets
Mortgage servicing rights	$ 260	$ 261

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Fair Values of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Commitments to extend credit and letters of credit	$ 164.4	$ 163.7

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Accumulated Other Comprehensive Income (Loss) - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) by Component Net of Tax (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized holding gain on available-for-sale securities arising during the period, Pretax	$ 471	$ 808
Total other comprehensive income, Tax Effect	171	290
Beginning balance, After-tax	(874)
Other comprehensive income	331	564
Ending Balance, After-tax	(543)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, Pretax	(1,323)	(631)
Unrealized holding gain on available-for-sale securities arising during the period, Pretax	471	808
Amortization of held-to-maturity discount resulting from transfer, Pretax	31	46
Total other comprehensive income, Pretax	502	854
Ending balance, Pretax	(821)	223
Beginning balance, Tax Effect	449	214
Unrealized holding gain on available-for-sale securities arising during the period, Tax Effect	(161)	(275)
Amortization of held-to-maturity discount resulting from transfer, Tax Effect	(10)	(15)
Total other comprehensive income, Tax Effect	(171)	(290)
Ending Balance, Tax Effect	278	(76)
Beginning balance, After-tax	(874)	(417)
Unrealized holding gain on available-for-sale securities arising during the period, After-tax	310	533
Amortization of held-to-maturity discount resulting from transfer, After-tax	21	31
Other comprehensive income	331	564
Ending Balance, After-tax	$ (543)	$ 147