csbb-11k_20191231.htm

The Report of Independent Registered Public Accounting Firm: Statement of Net Assets Available for Benefits as of December 31, 2019 and 2018; and Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 2019 and 2018.

Consent of Independent Registered Public Accounting Firm – S.R. Snodgrass, P.C.

We have audited the accompanying statement of net assets available for benefits of the Commercial & Savings Bank 401(k) Retirement Plan (the “Plan”) as of December 31, 2019 and 2018; the related statement of changes in net assets available for benefits for the years then ended; and the related notes to the financial statements (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2019 and 2018, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Plan Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The supplemental information in the accompanying schedule, Schedule H, Line 4i – Schedule of Assets Held at Year End December 31, 2019, has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but includes supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information in the accompanying schedule, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information in the accompanying schedule is fairly stated in all material respects in relation to the financial statements as a whole.

		December 31,
		2019			2018
ASSETS
Participant directed investments at fair value:
Money market mutual funds	$		796,442	$		802,572
Mutual funds			17,078,030			13,433,220
CSB Bancorp Inc. common stock			4,223,556			3,774,347
Total Participant-directed investments			22,098,028			18,010,139

Employer profit sharing contributions receivable			261,870			248,820
Notes receivable from participants			326,774			272,439
Interest receivable			4,389			5,273
Cash and cash equivalents			5,400			-

Total assets available for benefits			22,696,461			18,536,671

LIABILITIES

Benefit Payable			3,000			-

Net assets available for benefits	$		22,693,461	$		18,536,671

		2019			2018
ADDITIONS IN NET ASSETS ATTRIBUTED TO:
Net appreciation (depreciation) in fair value of investments	$		3,160,490	$		(629,569	)
Interest and dividends			423,872			609,307
Common stock dividends			109,519			96,962
Total investment income			3,693,881			76,700

Interest income on notes receivable from participants			16,595			10,311

Employee contributions			653,582			616,872
Rollover contributions			6,116			358,787
Employer contributions			601,705			558,944
Total contributions			1,261,403			1,534,603
Total additions			4,971,879			1,621,614

DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants			812,990			841,976
Administrative fees			2,099			2,175
Total deductions			815,089			844,151

Net increase			4,156,790			777,463

NET ASSETS AVAILABLE FOR BENEFITS
Beginning of the year			18,536,671			17,759,208
End of the year	$		22,693,461	$		18,536,671

The following brief description of The Commercial & Savings Bank 401(k) Retirement Plan (the “Plan”) is provided for general information purposes only. Participants should refer to the Plan document for a more comprehensive description of the Plan’s provisions.

The Plan is a defined contribution plan covering the employees of The Commercial and Savings Bank (the “Bank”), who have completed three months of service, attained age 21, and completed required service hours. The Plan includes a 401(k) before-tax savings feature, which permits participants to defer compensation under Section 401(k) of the Internal Revenue Code. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Board of Trustees is responsible for oversight of the Plan. The Investment Committee determines the appropriateness of the Plan’s investment offerings, monitors investment performance and reports to the Plan’s Board of Trustees.

Plan participants may defer and contribute up to 100 percent of their annual compensation, as defined in the Plan’s agreement, subject to certain limitations as specified in the Internal Revenue Code. The Plan presently offers twenty mutual funds, a money market fund, and CSB Bancorp, Inc., common stock as investment options for Plan participants.

Beginning January 1, 2018, the plan is designed to qualify as a “Safe Harbor 401(K) Plan”. The Bank has agreed to make periodic Safe Harbor Matching Contributions of 100 percent of each participant’s elective deferral contribution, up to a maximum of 4 percent of Plan compensation (as defined). The Plan also stipulates the Bank may make discretionary profit sharing contributions. To receive the annual profit sharing contributions, a participant must be employed at the Bank on the last day of the Plan year. The Bank’s profit sharing contributions are generally made in the first quarter subsequent to the Plan’s year end.

Each participant’s account is credited with the participant’s compensation deferral contribution, an allocation of the Bank’s matching and profit sharing contributions, and an allocation of the investment earnings or loss of the funds in which the participant chooses to invest.

The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Participants are immediately 100% vested in their voluntary contributions and the Bank’s contributions plus or minus actual earnings or losses thereon.

Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of their account balance. The loans are secured by the balance in the participant's account and bear fixed interest rates of 4.25 to 6.50 percent, which is commensurate with local prevailing rates at the loan origination date, as determined by the plan administrator. For active employees, principal and interest is paid ratably through bi-weekly payroll deductions. Principal and interest become due and payable in full upon the Participant’s termination of employment.

The normal retirement date is the date a participant reaches age 59.5. When a participant reaches the normal retirement date, terminates employment with the Bank, becomes totally disabled, or dies while participating in the Plan, they are entitled to receive the vested amount in their individual account.

If a participant dies before receiving all of the benefits in their account, the surviving spouse will receive the remainder in the participant’s account as, a lump sum or in installments. If the participant is not married at the time of death, the participant’s beneficiary may elect to receive the remainder in the account in either a lump sum or in installments.

If benefits are elected to be received in installments, the installments may be made monthly, quarterly or annually over a period not to exceed the participant’s life expectancy or the joint life expectancy of the participant and designated beneficiary at the time the election is made.

Prior to 2018, in the event a participant terminated prior to becoming fully vested the unvested portion of the participant’s matching and profit sharing contributions represented forfeitures. Matching contribution and profit sharing forfeitures reverted back to the Plan and were allocated to all active participants based on relative compensation.

There was no forfeiture activity for the years ended December 31, 2019 and December 31, 2018.

A summary of the significant accounting and reporting policies applied in the presentation of the accompanying financial statements follows:

The financial statements of the Plan are prepared on the accrual basis of accounting.

The financial statements have been prepared in conformity with U.S. generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ significantly from those estimates.

Notes receivable from participants are measured at their unpaid principal balance plus any accrued unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2019 or 2018. If a participant ceases to make loan repayments and the Plan Administrator deems the participant loan to be in default, the participant loan balance is reduced and a benefit payment is recorded.

The Plan’s investments are stated at fair value. The fair value of mutual funds is determined using the quoted net asset value of the specified fund. The fair value of CSB Bancorp, Inc. common stock is determined based on a quoted market price. Cash equivalents are valued at cost, which approximates fair value.

The net appreciation (depreciation) in fair value of investments includes gain and loss on investments purchased and sold, as well as held during the year. Purchases and sales of investments are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to contributions. There were no excess contributions at December 31, 2019 and 2018.

Certain administrative functions are performed by officers and employees of the Bank. No such officer or employee receives compensation from the Plan. Certain other administrative expenses relating to participant record keeping, investment trust services, plan audit and Form 5500 preparation are paid directly by the Bank. Such costs amounted to $147,355 and $139,092 for the years ended December 31, 2019 and 2018, respectively.

Although it has not expressed any intent to do so, the Bank has the right, under the Plan, to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, participants will become 100 percent vested in their accounts.

Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the plan and recognize a tax liability or asset if the plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the plan, and has concluded that as of December 31, 2019, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or asset or disclosure in the financial statements. The plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2017. On January 30, 2017 the Internal Revenue Service issued a letter to Retirement Direct LLC., provider of the Bank’s Prototype Plan, that the form of Plan submitted was acceptable for use by employers for the benefit of their employees in accordance with applicable sections of the Internal Revenue Code. As a result, the Plan Administrator believes that the plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code.

The Plan investments are administered by The Commercial & Savings Bank Trust Department (Trustee).

The Plan invests in the common stock of the Bank parent. Therefore, these transactions qualify as party-in-interest transactions. Other transactions which may be considered parties-in-interest transactions relate to normal Plan management and administrative services.

The Plan 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:

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets measured at fair value.

Money Market Mutual Funds: Valued at $1, as reported on deposit for the Plan at the Trustee.

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

Mutual funds: Valued at the daily closing price as reported by the Fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the SEC. These funds are required to publish their daily net asset value (“NAV”) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31:

	December 31, 2019
		Level I			Level II				Level III			Total
Money Market Mutual Funds	$		796,442	$		-	$			-	$		796,442
Mutual funds			17,078,030			-				-			17,078,030
Common Stock:
Financial			4,223,556			-				-			4,223,556
Total assets at fair value	$		22,098,028	$		-		$		-	$		22,098,028

	December 31, 2018
		Level I			Level II				Level III			Total
Money Market Mutual Funds	$		802,572	$		-	$			-	$		802,572
Mutual funds			13,433,220			-				-			13,433,220
Common Stock:
Financial			3,774,347			-				-			3,774,347
Total assets at fair value	$		18,010,139	$		-		$		-	$		18,010,139

The Plan discloses the estimated fair value of its financial instruments. Financial instruments are defined as cash, evidence of ownership interest in an entity, or a contract, which creates an obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms. Fair value is defined as the amount at which a financial instrument could be exchanged in a current transaction between willing parties other than in a forced liquidation or sale. If a quoted market price is available for a financial instrument, the estimated fair value would be calculated based upon the market price per trading unit of the instrument.

Participant-directed investments, employer profit sharing contributions receivable, notes receivable from participants, interest receivable, and cash and cash equivalents would be considered financial instruments. At December 31, 2019 and 2018, the carrying amounts of these financial instruments approximate fair value.

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statement of Net Assets Available for Benefits. As of December 31, 2019 and 2018, 18.61% and 20.36% of the Plan’s net assets were invested in shares of CSB Bancorp, Inc. common stock, respectively.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. The rapidly developing pandemic has generated significant uncertainty in the global economy and volatility in financial markets. The COVID-19 pandemic has affected and may continue to affect the market price of CSB Bancorp, Inc. common stock and other Plan assets. Due to the ongoing economic uncertainty and volatility caused by COVID-19, the resulting financial impact to the Plan cannot be reasonably estimated

Following the declaration, the U.S. Federal government passed the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” on March 27, 2020. The CARES Act, permits suspension of loan payments due for up to one year and permits individuals to stop receiving 2020 required minimum distributions. The plan has implemented the required changes.

	Description of investment, including maturity date, rate of interest, collateral or cost
(a), (b) Indentity of issuer	(c) Shares		(d) Cost*		(e) Current Value
Federated Government Obligations Fund		796,442	N/A	$		796,442
Mutual Funds:
Baird Core Plus Bond Inst		15,809	N/A			182,755
Federated Income Trust		113,573	N/A			1,164,128
Federated U.S. Government Securities, 2-5 yr		78,888	N/A			859,092
T Rowe Price Capital Appreciation		78,874	N/A			2,464,015
T Rowe Price Growth Stock Fund		50,178	N/A			3,682,543
Vanguard 500 Index Fund Admiral		5,650	N/A			1,684,507
Vanguard Emerging Markets		7,785	N/A			287,658
Vanguard Inflation-Protected Securities		16,564	N/A			428,675
Vanguard International Value Fund Investor		31,394	N/A			1,178,221
Vanguard Mid-Cap Index Fund Admiral		10,408	N/A			2,296,664
Vanguard Small Cap Growth Index Fund Admiral		28,015	N/A			1,957,383
Vanguard Target Retirement 2020 INV		1,526	N/A			49,649
Vanguard Target Retirement 2025 INV		26,651	N/A			528,764
Vanguard Target Retirement 2030 INV		2,248	N/A			81,938
Vanguard Target Retirement 2035 INV		1,113	N/A			25,076
Vanguard Target Retirement 2040 INV		982	N/A			38,421
Vanguard Target Retirement 2045 INV		2,209	N/A			54,558
Vanguard Target Retirement 2050 INV		1,317	N/A			52,361
Vanguard Target Retirement 2055 INV		1,350	N/A			58,291
Vanguard Target Retirement 2060 INV		87	N/A			3,331
						17,078,030
**Participant loans	interest rate of 4.25-6.50%; maturing in years 2020 through 2029		N/A			326,774
**Common Stock - CSB Bancorp, Inc.		103,089	N/A			4,223,556
Cash and cash equivalents						5,400
Total				$		22,430,203

*Per ERISA guidelines, the cost of investments is not required to be included on this schedule.
**Party-in-interest

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

			Page
			Number
Report of Independent Registered Public Accounting Firm			1 - 2
Statement of Net Assets Available of Benefits			3
Statements of Changes in Net Assets Available for Benefits			4
Notes to Financial Statements			5 - 9
Supplemental Information			10