(Exact ~~name~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)

~~Registrant’s address: 91 North Clay, P.O. Box 232, Millersburg, Ohio 44654~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated ~~filer”,~~filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer ( ) Accelerated filer (X) Non-accelerated filer ( ) Smaller reporting company ( X ) 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 by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate by check mark whether the ~~number of shares outstanding~~registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the ~~registrant's~~Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 1, 2020, the registrant had 2,742,350 shares of common stock, ~~as of the latest practicable date.~~

	March 31,			December 31,			September 30,			December 31,
(Dollars in thousands)	2020			2019			2020			2019
ASSETS
Cash and cash equivalents
Cash and due from banks	$	18,277		$	17,648		$	18,269		$	17,648
Interest-earning deposits in other banks		77,995			84,369			179,875			84,369
Total cash and cash equivalents		96,272			102,017			198,144			102,017
Securities
Available-for-sale, at fair value		108,263			112,146			112,279			112,146
Held-to-maturity (fair value 2020-$11,542; 2019-13,950)		11,242			13,869
Held-to-maturity (fair value 2020-$10,120; 2019-13,950)								9,901			13,869
Equity securities		79			92			82			92
Restricted stock, at cost		4,614			4,614			4,614			4,614
Total securities		124,198			130,721			126,876			130,721
Loans held for sale		256			622			1,488			622
Loans		555,320			551,633			628,084			551,633
Less allowance for loan losses		7,120			7,017			8,355			7,017
Net loans		548,200			544,616			619,729			544,616
Premises and equipment, net		12,387			12,040			12,685			12,040
Core deposit intangible		89			104			59			104
Goodwill		4,728			4,728			4,728			4,728
Bank-owned life insurance		19,023			18,894			19,284			18,894
Accrued interest receivable and other assets		4,888			4,941			4,985			4,941
TOTAL ASSETS	$	810,041		$	818,683		$	987,978		$	818,683

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest-bearing	$	188,137		$	197,780		$	252,891		$	197,780
Interest-bearing		483,025			485,766			587,765			485,766
Total deposits		671,162			683,546			840,656			683,546
Short-term borrowings		40,605			38,889			41,645			38,889
Other borrowings		6,206			6,330			9,765			6,330
Accrued interest payable and other liabilities		4,439			4,442			4,059			4,442
Total liabilities		722,412			733,207			896,125			733,207
SHAREHOLDERS' EQUITY
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,742,350 shares 2020 and 2019		18,629			18,629			18,629			18,629
Additional paid-in capital		9,815			9,815			9,815			9,815
Retained earnings		63,455			61,740			67,325			61,740
Treasury stock at cost: 238,252 shares 2020 and 2019		(4,780	)		(4,780	)		(4,780	)		(4,780	)
Accumulated other comprehensive income		510			72			864			72
Total shareholders' equity		87,629			85,476			91,853			85,476
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	810,041		$	818,683		$	987,978		$	818,683

Three Months Ended
March 31,

(Dollars in thousands, except per share data)

2020

2019

INTEREST AND DIVIDEND INCOME

Loans, including fees

$
6,850

$
7,072

Taxable securities

609

587

Nontaxable securities

119

134

Other

239

175

Total interest and dividend income

7,817

7,968

INTEREST EXPENSE

Deposits

831

825

Short-term borrowings

41

93

Other borrowings

29

39

Total interest expense

901

957

NET INTEREST INCOME

6,916

7,011

PROVISION FOR LOAN LOSSES

178

285

Net interest income, after provision for loan losses

6,738

6,726

NON INTEREST INCOME

Service charges on deposit accounts

291

292

Trust services

230

224

Debit card interchange fees

375

347

Gain on sale of loans, net

114

79

Earnings on bank owned life insurance

129

83

Unrealized gain or (loss) on equity securities, net

(13
)

6

Other income

217

193

Total noninterest income

1,343

1,224

NON INTEREST EXPENSES

Salaries and employee benefits

2,968

2,842

Occupancy expense

220

204

Equipment expense

135

137

Professional and director fees

330

339

Financial institutions and franchise tax expense

171

153

Marketing and public relations

127

117

Software expense

227

218

Debit card expense

140

127

Amortization of intangible assets

15

16

Other expenses

674

638

Total noninterest expenses

5,007

4,791

Income before income taxes

3,074

3,159

FEDERAL INCOME TAX PROVISION

591

619

NET INCOME

$
2,483

$
2,540

Basic and diluted net earnings per share

$
0.91

$
0.93

(Dollars in thousands)

Common
stock

Additional
paid-in
capital

Retained
earnings

Treasury
stock

Accumulated
other
comprehensive
income (loss)

Total

Three Months Ended March 31, 2019

Balance, beginning of period

$
18,629

$
9,815

$
54,288

$
(4,784
)

$
(1,412
)

$
76,536

Net income

—

—

2,540

—

—

2,540

Other comprehensive income

—

—

—

—

604

604

Cash dividends declared, $0.26 per share

—

—

(713
)

—

—

(713
)
Balance, end of period

$
18,629

$
9,815

$
56,115

$
(4,784
)

$
(808
)

$
78,967

Three Months Ended March 31, 2020

Balance, beginning of period

$
18,629

$
9,815

$
61,740

$
(4,780
)

$
72

$
85,476

Net income

—

—

2,483

—

—

2,483

Other comprehensive income

—

—

—

—

438

438

Cash dividends declared, $0.28 per share

—

—

(768
)

—

—

(768
)
Balance, end of period

$
18,629

$
9,815

$
63,455

$
(4,780
)

$
510

$
87,629

	Three Months Ended September 30,					Nine Months Ended September 30,
(Dollars in thousands, except per share data)	2020			2019		2020			2019
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	7,190		$	7,239	$	21,145		$	21,496
Taxable securities		372			534		1,462			1,705
Nontaxable securities		110			133		343			401
Other		42			356		312			749
Total interest and dividend income		7,714			8,262		23,262			24,351
INTEREST EXPENSE
Deposits		636			966		2,139			2,711
Short-term borrowings		14			78		75			264
Other borrowings		23			30		79			106
Total interest expense		673			1,074		2,293			3,081
NET INTEREST INCOME		7,041			7,188		20,969			21,270
PROVISION FOR LOAN LOSSES		377			285		1,272			855
Net interest income, after provision for loan losses		6,664			6,903		19,697			20,415
NON INTEREST INCOME
Service charges on deposit accounts		252			333		753			938
Trust services		236			234		662			670
Debit card interchange fees		433			377		1,209			1,093
Gain on sale of loans, net		567			132		1,189			287
Earnings on bank owned life insurance		131			120		390			326
Unrealized gain or (loss) on equity securities, net		(1	)		5		(10	)		8
Other income		244			239		653			655
Total noninterest income		1,862			1,440		4,846			3,977
NON INTEREST EXPENSES
Salaries and employee benefits		2,959			2,993		8,603			8,750
Occupancy expense		246			209		711			618
Equipment expense		172			128		505			408
Professional and director fees		232			316		843			963
Financial institutions and franchise tax expense		171			153		513			459
Marketing and public relations		96			149		289			405
Software expense		269			225		755			674
Debit card expense		165			142		451			401
Amortization of intangible assets		15			16		45			47
FDIC insurance expense		17			-		103			98
Other expenses		708			668		1,948			1,867
Total noninterest expenses		5,050			4,999		14,766			14,690
Income before income taxes		3,476			3,344		9,777			9,702
FEDERAL INCOME TAX PROVISION		676			649		1,888			1,881
NET INCOME	$	2,800		$	2,695	$	7,889		$	7,821
Basic and diluted net earnings per share	$	1.02		$	0.98	$	2.88		$	2.85

(Dollars in thousands)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive income (loss)			Total
Three Months Ended September 30, 2020
Balance, beginning of period	$	18,629	$	9,815	$	65,293		$	(4,780	)	$	1,010		$	89,967
Net income		—		—		2,800			—			—			2,800
Other comprehensive loss		—		—		—			—			(146	)		(146	)
Cash dividends declared, $0.28 per share		—		—		(768	)		—			—			(768	)
Balance, end of period	$	18,629	$	9,815	$	67,325		$	(4,780	)	$	864		$	91,853
Nine Months Ended September 30, 2020
Balance, beginning of period	$	18,629	$	9,815	$	61,740		$	(4,780	)	$	72		$	85,476
Net income		—		—		7,889			—			—			7,889
Other comprehensive income		—		—		—			—			792			792
Cash dividends declared, $0.84 per share		—		—		(2,304	)		—			—			(2,304	)
Balance, end of period	$	18,629	$	9,815	$	67,325		$	(4,780	)	$	864		$	91,853
Three Months Ended September 30, 2019
Balance, beginning of period	$	18,629	$	9,815	$	57,988		$	(4,780	)	$	(194	)	$	81,458
Net income		—		—		2,695			—			—			2,695
Other comprehensive income		—		—		—			—			229			229
Cash dividends declared, $0.28 per share		—		—		(768	)		—			—			(768	)
Balance, end of period	$	18,629	$	9,815	$	59,915		$	(4,780	)	$	35		$	83,614
Nine Months Ended September 30, 2019
Balance, beginning of period	$	18,629	$	9,815	$	54,288		$	(4,784	)	$	(1,412	)	$	76,536
Net income		—		—		7,821			—			—			7,821
Other comprehensive income		—		—		—			—			1,447			1,447
Issuance of 108 treasury shares		—		—		—			4			—			4
Cash dividends declared, $0.80 per share		—		—		(2,194	)		—			—			(2,194	)
Balance, end of period	$	18,629	$	9,815	$	59,915		$	(4,780	)	$	35		$	83,614

	Three Months Ended March 31,						Nine Months Ended September 30,
(Dollars in thousands)	2020			2019			2020			2019
NET CASH FROM OPERATING ACTIVITIES	$	2,488		$	1,894		$	9,675		$	7,565
CASH FLOWS FROM INVESTING ACTIVITIES
Securities:
Proceeds from repayments, available-for-sale		10,338			1,836			38,716			13,431
Proceeds from repayments, held-to-maturity		2,635			477			7,415			5,613
Purchases, available-for-sale		(6,055	)		(2,023	)		(38,493	)		(15,984	)
Purchases, held-to-maturity								(3,425	)		—
Loan originations, net of repayments		(3,808	)		870			(78,380	)		(17,252	)
Proceeds from sale of property and equipment								716			—
Property, equipment, and software acquisitions		(551	)		(976	)		(1,957	)		(2,150	)
Purchase of bank-owned life insurance		—			(3,000	)		—			(3,000	)
Net cash provided by (used in) investing activities		2,559			(2,816	)
Proceeds from sale of other real estate								95			—
Net cash used in investing activities								(75,313	)		(19,342	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		(12,384	)		844			157,110			51,621
Net change in short-term borrowings		1,716			(1,091	)		2,756			(2,345	)
Proceeds from other borrowings								5,000			—
Repayment of other borrowings		(124	)		(152	)		(1,565	)		(2,072	)
Net cash used in financing activities		(10,792	)		(399	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(5,745	)		(1,321	)
Cash dividends paid								(1,536	)		(1,426	)
Issuance of treasury stock								—			4
Net cash provided by financing activities								161,765			45,782
NET INCREASE IN CASH AND CASH EQUIVALENTS								96,127			34,005
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		102,017			45,564			102,017			45,564
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	96,272		$	44,243		$	198,144		$	79,569
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest	$	909		$	921		$	2,327		$	3,046
Income taxes		—			—			1,825			2,125
Noncash financing activities:
Dividends declared		768			713			768			768
Lease adoption:
Right of use lease asset		—			477			—			477
Lease liability		—			469			—			469

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,~~September 30, 2020, 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, 2019, contains Consolidated Financial Statements and related footnote disclosures, which should be read in conjunction with the accompanying condensed Consolidated Financial Statements. The results of operations for the ~~period~~periods ended ~~March 31,~~September 30, 2020 are not necessarily indicative of the operating results for the full year or any future interim period.

Certain items in the prior-year financial statements were reclassified to conform to the current-year presentation. Such reclassifications had no effect on net income or shareholders’ equity.

In preparing the Consolidated Financial Statements, in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Balance Sheets and reported amounts of revenues and expenses during each reporting period. Actual results could differ from those estimates. The most significant estimates susceptible to change in the near term relate to management’s determination of the allowance for loan losses and the fair value of financial instruments.

Management has determined the primary sources of revenue emanating from interest and dividend income on loans and securities along with noninterest revenue resulting from investment security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit cards fees, and income on bank-owned life insurance are not within the scope of ASC 606. These sources of revenue comprise ~~88%~~89% of the total revenue of the Company. Services within the scope of ASC 606 include income from fiduciary activities, brokerage fees, service charges on deposit accounts, other fee income, ATM fees, interchange fees, and gain on sale of OREO, net. For these accounts, fees are related to specific customer transactions, or attributable to specific performance obligations of the Bank where revenue is recognized at a defined point in time upon completion of the requested service/transaction.

ASU 2016-13 - Financial Instruments - Credit Losses. The Update and all subsequent ASU’s that modified Topic 326, 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. 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 any 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 expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. In November 2019, the FASB deferred the effective date for ASC 326, Financial Instruments – Credit Losses, for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company qualifies as a smaller reporting company and does not expect to early adopt these ASU’s.

ASU 2017-04 - Simplifying the Test for Goodwill Impairment. The Update, and all subsequent ASU’s, 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. In November 2019, the FASB deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a material impact on the Company’s financial statements.

ASU 2018-15 - Intangibles – Goodwill and Other – Internal-Use Software. This Update addresses customers’ accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This Update is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The amendments in this Update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. In November 2019, the FASB deferred the effective date for ASC 350, Intangibles – Goodwill and Other, for smaller reporting companies to fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. This Update is not expected to have a significant impact on the Company’s financial statements.

ASU 2019-12 - Income Taxes. This update simplifies the accounting for income taxes, changes the accounting for certain tax transactions, and makes minor improvements to the codification. This Update provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and provides guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized as a separate transaction. The Update also changes current guidance for making an intra-period allocation, if there is a loss in continuing operations and gains outside of continuing operations; determining when a deferred tax liability is recognized after an investor in a foreign entity transitions to or from the equity method of accounting; accounting for tax law changes and year-to-date losses in interim periods; and determining how to apply the income tax guidance to franchise taxes that are partially based on income. For public business entities, the amendments in this Update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. This update is not expected to have a significant impact on the Company’s financial statements.

ASU 2020-4 – Reference Rate Reform (Topic 848). This update provides temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as Secured Overnight Financing Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Also, entities can elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met, and can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. The amendments in this ASU are effective for all entities upon issuance through December 31, 2022. This Update is not expected to have a significant impact on the Company’s financial statements.

Securities consist of the following at ~~March 31,~~September 30, 2020 and December 31, 2019:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized (losses)			Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
March 31, 2020
September 30, 2020
Available-for-sale
U.S. Treasury security	$	999	$	21	$	—		$	1,020	$	999	$	16	$	—		$	1,015
U.S. Government agencies		2,000		3		—			2,003
Mortgage-backed securities of government agencies		74,328		1,104		(225	)		75,207		75,440		1,148		(200	)		76,388
Asset-backed securities of government agencies		910		—		(105	)		805		868		—		(62	)		806
State and political subdivisions		20,648		309		—			20,957		25,259		563		—			25,822
Corporate bonds		8,566		2		(297	)		8,271		8,486		36		(274	)		8,248
Total available-for-sale		107,451		1,439		(627	)		108,263		111,052		1,763		(536	)		112,279
Held-to-maturity
U.S. Government agencies		3,000		8		—			3,008
Mortgage-backed securities of government agencies		8,242		292		—			8,534		6,476		231		(12	)		6,695
State and political subdivisions											3,425		—		—			3,425
Total held-to-maturity		11,242		300		—			11,542		9,901		231		(12	)		10,120
Equity securities		53		26		—			79		53		29		—			82
Restricted stock		4,614		—		—			4,614		4,614		—		—			4,614
Total securities	$	123,360	$	1,765	$	(627	)		124,498	$	125,620	$	2,023	$	(548	)	$	127,095
December 31, 2019
Available-for-sale
U.S. Treasury security	$	998	$	1	$	—		$	999	$	998	$	1	$	—		$	999
U.S. Government agencies		5,500		—		(4	)		5,496		5,500		—		(4	)		5,496
Mortgage-backed securities of government agencies		75,676		326		(145	)		75,857		75,676		326		(145	)		75,857
Asset-backed securities of government agencies		934		—		(17	)		917		934		—		(17	)		917
State and political subdivisions		21,161		351		(1	)		21,511		21,161		351		(1	)		21,511
Corporate bonds		7,605		23		(262	)		7,366		7,605		23		(262	)		7,366
Total available-for-sale		111,874		701		(429	)		112,146		111,874		701		(429	)		112,146
Held-to-maturity
U.S. Government agencies		4,999		—		(6	)		4,993		4,999		—		(6	)		4,993
Mortgage-backed securities of government agencies		8,870		143		(56	)		8,957		8,870		143		(56	)		8,957
Total held-to-maturity		13,869		143		(62	)		13,950		13,869		143		(62	)		13,950
Equity securities		53		39		—			92		53		39		—			92
Restricted stock		4,614		—		—			4,614		4,614		—		—			4,614
Total securities	$	130,410	$	883	$	(491	)	$	130,802	$	130,410	$	883	$	(491	)	$	130,802

The amortized cost and fair value of debt securities at ~~March 31,~~September 30, 2020, 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		Amortized cost		Fair value
Available-for-sale
Due in one year or less	$	5,285	$	5,283	$	3,700	$	3,739
Due after one through five years		11,542		11,649		9,242		9,352
Due after five through ten years		18,308		18,465		17,330		17,640
Due after ten years		72,316		72,866		80,780		81,548
Total debt securities available-for-sale	$	107,451	$	108,263	$	111,052	$	112,279
Held-to-maturity
Due after one through five years	$	3,000	$	3,008
Due in one year or less					$	3,425	$	3,425
Due after ten years		8,242		8,534		6,476		6,695
Total debt securities held-to-maturity	$	11,242	$	11,542	$	9,901	$	10,120

Securities with a fair value of approximately ~~$87.6~~$92.3 million and $80.3 million were pledged at ~~March 31,~~September 30, 2020 and December 31, 2019, respectively, 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,~~September 30, 2020 and December 31, 2019. Federal Reserve Bank stock was $471 thousand at ~~March 31,~~September 30, 2020 and December 31, 2019.

There were no0 proceeds from sales of securities for the ~~three month periods ending March 31,~~nine-month period ended September 30, 2020 and 2019. All gains and losses recognized on equity securities during the ~~three month periods~~nine-month period were unrealized.

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,~~September 30, 2020 and December 31, 2019:

	Securities in a continuous unrealized loss position															Securities in a continuous unrealized loss position
	Less than 12 months					12 months or more					Total					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		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value		Gross unrealized losses			Fair value
March 31, 2020
September 30, 2020
Available-for-sale
Mortgage-backed securities of government agencies	$	(208	)	$	27,404	$	(17	)	$	2,496	$	(225	)	$	29,900	$	(193	)	$	24,097	$	(7	)	$	900	$	(200	)	$	24,997
Asset-backed securities of government agencies		—			—		(105	)		805		(105	)		805		—			—		(62	)		806		(62	)		806
Corporate bonds		(7	)		3,009		(290	)		3,686		(297	)		6,695		—			—		(274	)		3,704		(274	)		3,704
Held-to-maturity
Mortgage-backed securities of government agencies																	(12	)		1,913		—			—		(12	)		1,913
Total temporarily impaired securities	$	(215	)	$	30,413	$	(412	)	$	6,987	$	(627	)	$	37,400	$	(205	)	$	26,010	$	(343	)	$	5,410	$	(548	)	$	31,420
December 31, 2019
Available-for-sale
U.S. Government agencies		—			—	$	(4	)	$	3,496	$	(4	)	$	3,496	$	—		$	—	$	(4	)	$	3,496	$	(4	)	$	3,496
Mortgage-backed securities of government agencies	$	(74	)	$	22,702		(71	)		8,924		(145	)		31,626		(74	)		22,702		(71	)		8,924		(145	)		31,626
Asset-backed securities of government agencies		—			—		(17	)		917		(17	)		917		—			—		(17	)		917		(17	)		917
State and political subdivisions		—			—		(1	)		653		(1	)		653		—			—		(1	)		653		(1	)		653
Corporate bonds		—			—		(262	)		3,712		(262	)		3,712		—			—		(262	)		3,712		(262	)		3,712
Held-to-maturity
U.S. Government agencies		—			—		(6	)		4,993		(6	)		4,993		—			—		(6	)		4,993		(6	)		4,993
Mortgage-backed securities of government agencies		—			—		(56	)		3,009		(56	)		3,009		—			—		(56	)		3,009		(56	)		3,009
Total temporarily impaired securities	$	(74	)	$	22,702	$	(417	)	$	25,704	$	(491	)	$	48,406	$	(74	)	$	22,702	$	(417	)	$	25,704	$	(491	)	$	48,406

There were ~~twenty-four~~NaN securities in an unrealized loss position at ~~March 31,~~September 30, 2020, ~~nine~~8 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,~~September 30, 2020.

(Dollars in thousands)	March 31, 2020		December 31, 2019		September 30, 2020			December 31, 2019
Commercial	$	139,964	$	137,114
Commercial ¹					$	211,647		$	137,114
Commercial real estate		192,387		196,748		194,493			196,748
Residential real estate		177,404		174,259		176,256			174,259
Construction & land development		26,516		23,960		28,875			23,960
Consumer		18,598		19,052		18,337			19,052
Total loans before deferred costs		554,869		551,133		629,608			551,133
Deferred loan costs		451		500
Deferred loan (fees) costs						(1,524	)		500
Total Loans	$	555,320	$	551,633	$	628,084		$	551,633

¹ Includes $92.1 million of Paycheck Protection Program loans on September 30, 2020.

The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves 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 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 or other business assets such as accounts receivable or inventory and may 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 is 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.~~ loan

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 appraisal reviews, sensitivity analysis of absorption and 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, mitigates risk.

The Company maintains an independent loan review department that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures.

Loans serviced for others approximated ~~$88.1~~$105.8 million and $95.7 million at ~~March 31,~~September 30, 2020 and December 31, 2019, respectively.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020 and provides over $2 trillion in economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, the Company was automatically authorized to originate PPP loans. The PPP provides loans to small businesses who were affected by economic conditions as a result of COVID-19 to provide cash flow assistance to employers who maintain their payroll (including healthcare and certain related expenses), mortgage interest, rent, leases, utilities and interest on existing debt during the COVID-19 emergency. As of September 30, 2020, the Company had 793 PPP loans with outstanding principal balances of $92.1 million. The PPP loans are 100% guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan is made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. PPP loans are included in the Commercial loan category with no allowance for loan losses allocated.

In accordance with the SBA terms and conditions on these PPP loans, the Company received approximately $3.2 million in fees associated with the processing of these loans. Upon funding of the loan, these fees were deferred and will be amortized over the life of the loan as an adjustment to yield in accordance with FASB ASC 310-20-25-2.

Nearly all of the Company’s lending activity occurs within the state of Ohio, including the four counties of Holmes, Stark, Tuscarawas and Wayne, as well as other markets. The majority of the Company’s loan portfolio consists of commercial and commercial real estate loans. As of ~~March 31,~~September 30, 2020, and December 31, 2019, there were no0 concentrations of loans related to any single industry.

The Company has identified industries that could be at a higher risk due to the COVID-19 pandemic. As of September 30, 2020, the total balance of loans identified to COVID-19 affected businesses was $54 million, with $31 million of those loans to businesses in the hotel industry and $20 million in loans to assisted living facilities.

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

14For the three and nine months ended September 30, 2020 the increase in the provision for loan losses for commercial real estate and construction loans was primarily due to the increased risk identified for businesses affected by the COVID-19 pandemic. The decrease in provision related to the commercial loan category is primarily due to lower commercial loan volume, excluding the SBA guaranteed PPP loans along with lower historical losses. The decrease in provision related to consumer real estate and other consumer loans is due to the improvement in the unemployment rate during the third quarter as businesses reopened after the economic shutdown.

The increase in the provision for loan losses for the three and nine months ended September 30, 2019 related to commercial and commercial real estate loans was primarily due to the increase in special mention rated loans along with loan volume increases of commercial real estate loans. The decrease in the provision related to residential real estate loans was primarily due to declining historical losses. The decrease in the provision related to construction loans was related to volume changes as loans transferred to permanent financing. The increase in the provision for consumer loans was primarily due to increasing charge-offs partially offset by lower delinquencies.

For the three-month period ended March 31, 2020 the increased allocation across all categories was primarily related to worsening economic conditions and the increasing unemployment rate at the end of March associated with the COVID-19 pandemic.

The decrease in the provision for loan losses for the three months ended March 31, 2019 related to commercial loans was primarily due to a recovery related to one loan relationship which contributed to declining historical losses of loans in this category. The decrease in the provision related to construction and land development loans was primarily due to the decrease in loan balances as construction projects were completed and transferred to permanent financing. The increase in the provision for consumer loans was related to increasing charge-offs as well as an increase in historical losses partially offset by lower delinquencies.

(Dollars in thousands)	Commercial			Commercial Real Estate		Residential Real Estate			Construction & Land Development			Consumer			Unallocated			Total			Commercial			Commercial Real Estate		Residential Real Estate			Construction & Land Development			Consumer			Unallocated		Total
Three months ended March 31, 2020
Three Months Ended September 30, 2020
Beginning balance	$	2,408		$	2,153	$	1,152		$	203		$	481		$	620		$	7,017		$	2,266		$	2,781	$	1,585		$	337		$	516		$	350	$	7,835
Provision for loan losses		212			147		209			52			87			(529	)		178			(512	)		500		(390	)		229			(112	)		662		377
Charge-offs		(15	)		—		(15	)		—			(57	)					(87	)		(26	)		—		—			—			(2	)				(28	)
Recoveries		4			—		1			—			7						12			118			40		1			—			12					171
Net charge-offs		(11	)		—		(14	)		—			(50	)					(75	)
Net recoveries																						92			40		1			—			10					143
Ending balance	$	2,609		$	2,300	$	1,347		$	255		$	518		$	91		$	7,120		$	1,846		$	3,321	$	1,196		$	566		$	414		$	1,012	$	8,355
Three months ended March 31, 2019
Nine Months Ended September 30, 2020
Beginning balance	$	2,178		$	1,791	$	1,245		$	258		$	306		$	129		$	5,907		$	2,408		$	2,153	$	1,152		$	203		$	481		$	620	$	7,017
Provision for loan losses		(339	)		17		(24	)		(88	)		83			636			285			(643	)		1,127		56			363			(23	)		392		1,272
Charge-offs		(5	)		—		—			—			(65	)					(70	)		(45	)		—		(15	)		—			(71	)				(131	)
Recoveries		163			-		1			-			1						165			126			41		3			—			27					197
Net (charge-offs) recoveries		158			-		1			-			(64	)					95			81			41		(12	)		—			(44	)				66
Ending balance	$	1,997		$	1,808	$	1,222		$	170		$	325		$	765		$	6,287		$	1,846		$	3,321	$	1,196		$	566		$	414		$	1,012	$	8,355
Three Months Ended September 30, 2019
Beginning balance																					$	2,267		$	1,946	$	1,229		$	104		$	341		$	650	$	6,537
Provision for loan losses																						91			91		(74	)		12			26			139		285
Charge-offs																						(20	)		—		—			—			(55	)				(75	)
Recoveries																						5			1		2			—			21					29
Net (charge-offs) recoveries																						(15	)		1		2			—			(34	)				(46	)
Ending balance																					$	2,343		$	2,038	$	1,157		$	116		$	333		$	789	$	6,776
Nine Months Ended September 30, 2019
Beginning balance																					$	2,178		$	1,791	$	1,245		$	258		$	306		$	129	$	5,907
Provision for loan losses																						29			246		(93	)		(142	)		155			660		855
Charge-offs																						(36	)		—		—			—			(163	)				(199	)
Recoveries																						172			1		5			—			35					213
Net (charge-offs) recoveries																						136			1		5			—			(128	)				14
Ending balance																					$	2,343		$	2,038	$	1,157		$	116		$	333		$	789	$	6,776

The following table presents the balance in the allowance for loan losses and the ending loan balances by portfolio class, based on the impairment method as of ~~March 31,~~September 30, 2020 and December 31, 2019:

(Dollars in thousands)	Commercial			Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total		Commercial		Commercial Real Estate		Residential Real Estate		Construction		Consumer		Unallocated		Total
March 31, 2020
September 30, 2020
Allowance for loan losses:
Individually evaluated for impairment	$	10		$	18	$	1	$	—	$	—	$	—	$	29	$	6	$	20	$	1	$	—	$	5	$	—	$	32
Collectively evaluated for impairment		2,599			2,282		1,346		255		518		91		7,091		1,840		3,301		1,195		566		409		1,012		8,323
Total ending allowance balance	$	2,609		$	2,300	$	1,347	$	255	$	518	$	91	$	7,120	$	1,846	$	3,321	$	1,196	$	566	$	414	$	1,012	$	8,355
Loans:
Loans individually evaluated for impairment	$	2,497		$	2,577	$	834	$	—	$	—			$	5,908	$	1,944	$	2,394	$	643	$	—	$	144			$	5,125
Loans collectively evaluated for impairment		137,467			189,810		176,570		26,516		18,598				548,961		209,703		192,099		175,613		28,875		18,193				624,483
Total ending loans balance	$	139,964		$	192,387	$	177,404	$	26,516	$	18,598			$	554,869	$	211,647	$	194,493	$	176,256	$	28,875	$	18,337			$	629,608
December 31, 2019
Allowance for loan losses:
Individually evaluated for impairment	$	16		$	17	$	1	$	—	$	—	$	—	$	34	$	16	$	17	$	1	$	—	$	—	$	—	$	34
Collectively evaluated for impairment		2,392			2,136		1,151		203		481		620		6,983		2,392		2,136		1,151		203		481		620		6,983
Total ending allowance balance	$	2,408		$	2,153	$	1,152	$	203	$	481	$	620	$	7,017	$	2,408	$	2,153	$	1,152	$	203	$	481	$	620	$	7,017
Loans:
Loans individually evaluated for impairment	$	2,555		$	2,637	$	853	$	—	$	14			$	6,059	$	2,555	$	2,637	$	853	$	—	$	14			$	6,059
Loans collectively evaluated for impairment		134,559	��		194,111		173,406		23,960		19,038				545,074		134,559		194,111		173,406		23,960		19,038				545,074
Total ending loans balance	$	137,114		$	196,748	$	174,259	$	23,960	$	19,052			$	551,133	$	137,114	$	196,748	$	174,259	$	23,960	$	19,052			$	551,133

The following table presents loans individually evaluated for impairment by class of loans as of ~~March 31,~~September 30, 2020 and December 31, 2019:

(Dollars in thousands)	Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment¹		Related Allowance		Unpaid Principal Balance		Recorded Investment with no Allowance		Recorded Investment with Allowance		Total recorded investment¹		Related Allowance
March 31, 2020
September 30, 2020
Commercial	$	2,924	$	2,489	$	10	$	2,499	$	10	$	1,992	$	1,794	$	150	$	1,944	$	6
Commercial real estate		2,921		2,416		170		2,586		18		2,797		2,162		235		2,397		20
Residential real estate		1,010		577		259		836		1		838		447		196		643		1
Consumer												146		—		148		148		5
Total impaired loans	$	6,855	$	5,482	$	439	$	5,921	$	29	$	5,773	$	4,403	$	729	$	5,132	$	32
December 31, 2019
Commercial	$	2,982	$	2,541	$	16	$	2,557	$	16	$	2,982	$	2,541	$	16	$	2,557	$	16
Commercial real estate		2,952		2,471		176		2,647		17		2,952		2,471		176		2,647		17
Residential real estate		1,024		457		396		853		1		1,024		457		396		853		1
Consumer		14		14		—		14		—		14		14		—		14		—
Total impaired loans	$	6,972	$	5,483	$	588	$	6,071	$	34	$	6,972	$	5,483	$	588	$	6,071	$	34

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,				Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2020		2019		2020		2019		2020		2019
Average recorded investment:
Commercial	$	2,453	$	861	$	2,220	$	3,035	$	2,398	$	1,837
Commercial real estate		2,556		2,289		2,553		2,767		2,553		2,413
Residential real estate		846		1,018		759		1,538		808		1,172
Consumer		9		3		192		15		99		11
Average recorded investment in impaired loans	$	5,864	$	4,171	$	5,723	$	7,355	$	5,858	$	5,433
Interest income recognized:
Commercial	$	18	$	13	$	14	$	12	$	51	$	49
Commercial real estate		2		3		3		3		9		9
Residential real estate		10		12		7		20		26		43
Consumer						4		1		5		1
Interest income recognized on a cash basis on impaired loans	$	30	$	28	$	28	$	36	$	91	$	102

The following table presents the aging of past due loans and nonaccrual loans as of ~~March 31,~~September 30, 2020 and December 31, 2019 by class of loans:

			Accruing Loans														Accruing 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		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, 2020
September 30, 2020
Commercial	$	138,544	$	104	$	—	$	—	$	1,316	$	1,420	$	139,964	$	210,202	$	125	$	25	$	—	$	1,295	$	1,445	$	211,647
Commercial real estate		189,953		80		—		—		2,354		2,434		192,387		192,344		36		—		—		2,113		2,149		194,493
Residential real estate		176,176		357		207		2		662		1,228		177,404		175,507		67		18		45		619		749		176,256
Construction & land development		26,516		—		—		—		—		—		26,516		28,875		—		—		—		—		—		28,875
Consumer		18,344		198		21		—		35		254		18,598		18,219		61		28		—		29		118		18,337
Total Loans	$	549,533	$	739	$	228	$	2	$	4,367	$	5,336	$	554,869	$	625,147	$	289	$	71	$	45	$	4,056	$	4,461	$	629,608
December 31, 2019
Commercial	$	135,707	$	15	$	—	$	67	$	1,325	$	1,407	$	137,114	$	135,707	$	15	$	—	$	67	$	1,325	$	1,407	$	137,114
Commercial real estate		194,157		186		—		—		2,405		2,591		196,748		194,157		186		—		—		2,405		2,591		196,748
Residential real estate		173,023		264		277		174		521		1,236		174,259		173,023		264		277		174		521		1,236		174,259
Construction & land development		23,960		—		—		—		—		—		23,960		23,960		—		—		—		—		—		23,960
Consumer		18,640		365		—		—		47		412		19,052		18,640		365		—		—		47		412		19,052
Total Loans	$	545,487	$	830	$	277	$	241	$	4,298	$	5,646	$	551,133	$	545,487	$	830	$	277	$	241	$	4,298	$	5,646	$	551,133

The table below summarizes the Company’s deferral activity at September 30, 2020 under the COVID-19 related loan modification program to customers. Loan modifications consist of three to four months deferral of principal and interest payments, and extension of maturity date. All loans provided modifications were performing in accordance with their terms as of December 31, 2019. In accordance with the CARES Act, these loans are not required to be evaluated as TDR’s. As of September 30, 2020, there was 1 loan in the amount of $34 thousand that has been granted a second deferral.

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 ~~$2.4~~$1.9 million as of ~~March 31,~~September 30, 2020, and $2.5 million as of December 31, 2019, with ~~$18~~$29 thousandof specific reserves allocated to those loans at ~~March 31,~~September 30, 2020 and $18 thousand at December 31, 2019, respectively. At ~~March 31,~~September 30, 2020, ~~$2.1~~$1.6 million of the loans classified as TDR’s were performing in accordance with their modified terms. Of the remaining ~~$252~~$320 thousand, all were in nonaccrual of interest status.

(Dollars in thousands)	Number of loans restructured	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of loans restructured	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
For the Three months ended March 31, 2020
Nine Months Ended September 30, 2020
Commercial	1	$	69	$	69	5	$	181	$	181
Total Restructured Loans	1	$	69	$	69
For the Three months ended March 31, 2019
Commercial real estate						1		80		80
Residential real estate						1		66		66
Consumer	1	$	17	$	17	6		146		146
Total Restructured Loans	1	$	17	$	17	13	$	473	$	473
Nine Months Ended September 30, 2019
Consumer						1	$	17	$	17
Total Restructured Loans						1	$	17	$	17

The loans restructured were modified by changing the monthly payment to interest only and extending the maturity dates. There ~~was one~~were 0 new TDR’s for the three month ~~period~~periods ended ~~March 31, 2020.~~September 30, 2020 and 2019.

~~None~~NaN of the loansrestructured in 2019 have defaulted in ~~the first quarter of~~ 2020. There was ~~one~~1 loan in the amount of $200 thousand restructured in 2018 that subsequently defaulted in ~~in the first quarter of~~ 2019.

~~Other~~There was 0 other real estate owned ~~amounted to one property~~ at September 30, 2020 and $99 thousand at ~~March 31, 2020 and~~ December 31, ~~2019, respectively.~~2019. There were ~~$44~~$21 thousand in ~~consumer~~ mortgage loans in the process of foreclosure at ~~March 31,~~September 30, 2020 and $50 thousand at December 31, 2019. There were no0 other repossessed assets at ~~March 31,~~September 30, 2020 and $20 thousand at December 31, 2019.

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 $500 thousand. This analysis is performed on an annual basis. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass (Cash Secured, Exceptional, Acceptable, Monitor, 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. Assets assigned a Special Mention grade are not considered classified assets but are considered criticized. These assets exhibit potential weaknesses that, deserve management’s close attention. If

left uncorrected, those potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Loans in this rating warrant special attention but have not yet reached the point of concern for loss. These assets have deteriorated sufficiently to the point they would have difficulty refinancing elsewhere. Similarly, purchasers of the business would not be eligible for bank financing unless they represent a significantly stronger credit risk.

Substandard. Loans classified as substandard are inadequately protected by the current sound 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 known facts, conditions, and 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 $500 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,~~September 30, 2020 and December 31, 2019:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
September 30, 2020
Commercial	$	194,344	$	2,820	$	12,946	$	—	$	1,537	$	211,647
Commercial real estate		171,173		3,682		17,876		—		1,762		194,493
Residential real estate		177		—		66		—		176,013		176,256
Construction & land development		22,288		88		592		—		5,907		28,875
Consumer		—		—		56		—		18,281		18,337
Total	$	387,982	$	6,590	$	31,536	$	—	$	203,500	$	629,608
December 31, 2019
Commercial	$	110,731	$	15,040	$	10,295	$	—	$	1,048	$	137,114
Commercial real estate		174,045		11,546		9,994		—		1,163		196,748
Residential real estate		183		—		237		—		173,839		174,259
Construction & land development		19,423		104		—		—		4,433		23,960
Consumer		—		—		73		—		18,979		19,052
Total	$	304,382	$	26,690	$	20,599	$	—	$	199,462	$	551,133

(Dollars in thousands)

Pass

Special
Mention

Substandard

Doubtful

Not
Rated

Total

March 31, 2020

Commercial

$
112,315

$
8,402

$
18,190

$
—

$
1,057

$
139,964

Commercial real estate

170,352

7,221

13,615

—

1,199

192,387

Residential real estate

180

—

243

—

176,981

177,404

Construction & land development

22,626

99

—

—

3,791

26,516

Consumer

—

—

78

—

18,520

18,598

Total

$
305,473

$
15,722

$
32,126

$
—

$
201,548

$
554,869

December 31, 2019

Commercial

$
110,731

$
15,040

$
10,295

$
—

$
1,048

$
137,114

Commercial real estate

174,045

11,546

9,994

—

1,163

196,748

Residential real estate

183

—

237

—

173,839

174,259

Construction & land development

19,423

104

—

—

4,433

23,960

Consumer

—

—

73

—

18,979

19,052

Total

$
304,382

$
26,690

$
20,599

$
—

$
199,462

$
551,133

The following table presents loans that are not rated by class of loans as of ~~March 31,~~September 30, 2020 and December 31, 2019. Nonperforming loans include loans past due 90 days or more and loans on nonaccrual of interest status.

(Dollars in thousands)	Performing		Non- Performing		Total		Performing		Non- Performing		Total
March 31, 2020
September 30, 2020
Commercial	$	1,057	$	—	$	1,057	$	1,537	$	—	$	1,537
Commercial real estate		1,199		—		1,199		1,762		—		1,762
Residential real estate		176,574		407		176,981		175,493		520		176,013
Construction & land development		3,791		—		3,791		5,907		—		5,907
Consumer		18,520		—		18,520		18,252		29		18,281
Total	$	201,141	$	407	$	201,548	$	202,951	$	549	$	203,500
December 31, 2019
Commercial	$	1,048	$	—	$	1,048	$	1,048	$	—	$	1,048
Commercial real estate		1,163		—		1,163		1,163		—		1,163
Residential real estate		173,407		432		173,839		173,407		432		173,839
Construction & land development		4,433		—		4,433		4,433		—		4,433
Consumer		18,979		—		18,979		18,979		—		18,979
Total	$	199,030	$	432	$	199,462	$	199,030	$	432	$	199,462

The following table provides additional detail regarding repurchase agreements and the related collateral accounted for as secured borrowings.

	Remaining Contractual Maturity Overnight and Continuous				Remaining Contractual Maturity Overnight and Continuous
	March 31,		December 31,		September 30,		December 31,
(Dollars in thousands)	2020		2019		2020		2019
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$	40,807	$	39,058	$	41,840	$	39,058
Repurchase agreements		40,605		38,889		41,645		38,889

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:

The following table presents the assets reported on the Consolidated Balance Sheets at their fair value on a recurring basis as of ~~March 31,~~September 30, 2020 and December 31, 2019 by level within the fair value hierarchy. NoNaN 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 with readily determinable values 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. Equity securities without readily determinable values are carried at amortized cost adjusted for impairment and observable price changes.

(Dollars in thousands)	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
March 31, 2020
September 30, 2020
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,020	$	—	$	—	$	1,020	$	1,015	$	—	$	—	$	1,015
U.S. Government agencies		—		2,003		—		2,003
Mortgage-backed securities of government agencies		—		75,207		—		75,207		—		76,388		—		76,388
Asset-backed securities of government agencies		—		805		—		805		—		806		—		806
State and political subdivisions		—		20,957		—		20,957		—		25,822		—		25,822
Corporate bonds		—		8,271		—		8,271		—		8,248		—		8,248
Total available-for-sale securities	$	1,020	$	107,243	$	—	$	108,263	$	1,015	$	111,264	$	—	$	112,279
Equity securities	$	33	$	—	$	—	$	33	$	36	$	—	$	—	$	36

December 31, 2019
Assets:
Securities available-for-sale
U.S. Treasury security	$	999	$	—	$	—	$	999	$	999	$	—	$	—	$	999
U.S. Government agencies		—		5,496		—		5,496		—		5,496		—		5,496
Mortgage-backed securities of government agencies		—		75,857		—		75,857		—		75,857		—		75,857
Asset-backed securities of government agencies		—		917		—		917		—		917		—		917
State and political subdivisions		—		21,511		—		21,511		—		21,511		—		21,511
Corporate bonds		—		7,366		—		7,366		—		7,366		—		7,366
Total available-for-sale securities	$	999	$	111,147	$	—	$	112,146	$	999	$	111,147	$	—	$	112,146
Equity securities	$	46	$	—	$	—	$	46	$	46	$	—	$	—	$	46

The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of ~~March 31,~~September 30, 2020 and December 31, 2019, by level within the fair value hierarchy. An impaired loan is written down to fair value through the establishment of specific reserves or a charge down is taken to reduce the loan to fair value of the collateral (less estimated selling costs) and the loan is included in the following table as a Level III measurement. 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		Level I		Level II		Level III		Total
March 31, 2020
September 30, 2020
Assets measured on a nonrecurring basis:
Other real estate owned	$	—	$	—	$	99	$	99
Impaired loans									$	—	$	—	$	11	$	11

December 31, 2019
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	553	$	553	$	—	$	—	$	553	$	553
Other real estate owned		—		—		99		99		—		—		99		99

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. ~~As of March 31, 2020 there were no impaired loans carried at fair value under the methods described above.~~

Quantitative Information about Level III Fair Value Measurements

(Dollars in thousands)

Fair Value

Estimate

Valuation

Techniques

Unobservable

Input

Range

(Weighted Average)

Fair Value

Estimate

Valuation

Techniques

Unobservable

Input

Range

(Weighted Average)

March 31, 2020

September 30, 2020

Impaired loans

Appraisal of collateral ¹

Appraisal adjustments ²

-20%

Appraisal adjustments ²

-33

Liquidation expense ²

-10%

Other real estate

owned

Appraisal of collateral ¹

Liquidation expense ²

-10

December 31, 2019

Remaining term

3.9 yrs to 26.9 yrs / (16 yrs)

Impaired loans

553

Discounted cash flow

Discount rate

3.5% to 6.0% / (5.3%)

553

Discounted cash flow

Remaining term

3.9 yrs to 26.9 yrs / (16 yrs)

Appraisal adjustments ²

-33

Discount rate

3.5% to 6.0% / (5.3%)

Other real estate

owned

Appraisal of collateral ¹

Liquidation expense ²

-10

Appraisal of collateral ¹

Appraisal adjustments ²

-33%

Liquidation expense ²

-10%

The fair values of recognized financial instruments as of ~~March 31,~~September 30, 2020 and December 31, 2019 are as follows:

(Dollars in thousands)	Carrying Value		Level I		Level II		Level III		Fair Value		Carrying Value		Level I		Level II		Level III		Fair Value
March 31, 2020
September 30, 2020
Financial assets
Cash and cash equivalents	$	96,272	$	96,272	$	—	$	—	$	96,272	$	198,144	$	198,144	$	—	$	—	$	198,144
Securities available-for-sale		108,263		1,020		107,243		—		108,263		112,279		1,015		111,264		—		112,279
Securities held-to-maturity		11,242		—		11,542		—		11,542		9,901		—		10,120		—		10,120
Equity securities		79		33		—		46		79		82		36		—		46		82
Restricted stock		4,614	N/A		N/A		N/A		N/A			4,614	NA		N/A		N/A		N/A
Loans held for sale		256		256		—		—		256		1,488		1,488		—		—		1,488
Net loans		548,200		—		—		549,544		549,544		619,729		—		—		618,607		618,607
Bank-owned life insurance		19,023		19,023		—		—		19,023		19,284		19,284		—		—		19,284
Accrued interest receivable		1,611		1,611		—		—		1,611		2,022		2,022		—		—		2,022
Mortgage servicing rights		330		—		—		330		330		430		—		—		430		430
Financial liabilities
Deposits	$	671,162	$	544,849	$	—	$	128,022	$	672,871	$	840,656	$	714,920	$	—	$	127,123	$	842,043
Short-term borrowings		40,605		40,605		—		—		40,605		41,645		41,645		—		—		41,645
Other borrowings		6,206		—		—		6,326		6,326		9,765		—		—		9,896		9,896
Accrued interest payable		119		119		—		—		119		93		93		—		—		93

December 31, 2019
Financial assets
Cash and cash equivalents	$	102,017	$	102,017	$	—	$	—	$	102,017	$	102,017	$	102,017	$	—	$	—	$	102,017
Securities available-for-sale		112,146		999		111,147		—		112,146		112,146		999		111,147		—		112,146
Securities held-to-maturity		13,869		—		13,950		—		13,950		13,869		—		13,950		—		13,950
Equity securities		92		46		—		46		92		92		46		—		46		92
Restricted stock		4,614	N/A		N/A		N/A		N/A			4,614	N/A		N/A		N/A		N/A
Loans held for sale		622		622		—		—		622		622		622		—		—		622
Net loans		544,616		—		—		542,981		542,981		544,616		—		—		542,981		542,981
Bank-owned life insurance		18,894		18,894		—		—		18,894		18,894		18,894		—		—		18,894
Accrued interest receivable		1,641		1,641		—		—		1,641		1,641		1,641		—		—		1,641
Mortgage servicing rights		328		—		—		328		328		328		—		—		328		328
Financial liabilities
Deposits	$	683,546	$	555,985	$	—	$	127,440	$	683,425	$	683,546	$	555,985	$	—	$	127,440	$	683,425
Short-term borrowings		38,889		38,889		—		—		38,889		38,889		38,889		—		—		38,889
Other borrowings		6,330		—		—		6,273		6,273		6,330		—		—		6,273		6,273
Accrued interest payable		127		127		—		—		127		127		127		—		—		127

The Company also has unrecognized financial instruments at ~~March 31,~~September 30, 2020 and December 31, 2019. These financial instruments relate to commitments to extend credit and letters of credit. The ~~aggregated~~aggregate contract amount of such financial instruments was approximately ~~$207.1~~$236 million at ~~March 31,~~September 30, 2020 and ~~$211.3~~$211 million at December 31, 2019. Such amounts are also considered to be the fair values.

The fair value estimates of financial instruments are made at a specific point in time based on relevant market information. 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.

The following table presents the changes in accumulated other comprehensive income (loss) by component net of tax for the three ~~period~~and nine months ended ~~March 31,~~September 30, 2020 and 2019:

(Dollars in thousands)	Pretax			Tax Effect			After-tax			Pretax			Tax Effect			After-tax
Three months ended March 31, 2020
Balance as of December 31, 2019	$	92		$	(20	)	$	72
Three Months Ended September 30, 2020
Balance, beginning of period										$	1,279		$	(269	)	$	1,010
Unrealized holding loss on available-for-sale securities arising during the period											(202	)		43			(159	)
Amortization of held-to-maturity discount resulting from transfer											17			(4	)		13
Total other comprehensive loss											(185	)		39			(146	)
Balance, end of period										$	1,094		$	(230	)	$	864
Nine Months Ended September 30, 2020
Balance, beginning of period										$	92		$	(20	)	$	72
Unrealized holding gain on available-for-sale securities arising during the period		540			(113	)		427			955			(200	)		755
Amortization of held-to-maturity discount resulting from transfer		14			(3	)		11			47			(10	)		37
Total other comprehensive income		554			(116	)		438			1,002			(210	)		792
Balance as of March 31, 2020	$	646		$	(136	)	$	510
Three months ended March 31,2019
Balance as of December 31, 2018		(1,786	)		374		$	(1,412	)
Balance, end of period										$	1,094		$	(230	)	$	864
Three Months Ended September 30, 2019
Balance, beginning of period										$	(245	)	$	51		$	(194	)
Unrealized holding gain on available-for-sale securities arising during the period		749			(157	)		592			275			(58	)		217
Amortization of held-to-maturity discount resulting from transfer		15			(3	)		12			15			(3	)		12
Total other comprehensive income		764			(160	)		604			290			(61	)		229
Balance as of March 31, 2019	$	(1,022	)	$	214		$	(808	)
Balance, end of period										$	45		$	(10	)	$	35
Nine Months Ended September 30, 2019
Balance, beginning of period										$	(1,786	)	$	374		$	(1,412	)
Unrealized holding gain on available-for-sale securities arising during the period											1,786			(374	)		1,412
Amortization of held-to-maturity discount resulting from transfer											45			(10	)		35
Total other comprehensive income											1,831			(384	)		1,447
Balance, end of period										$	45		$	(10	)	$	35

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provides over $2 trillion in economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”). As a qualified SBA lender, we were automatically authorized to originate PPP loans. An eligible business can apply for a PPP loan up to the greater of: (1) 2.5 times its average monthly “payroll costs;” or (2) $10 million. PPP loans will have: (a) an interest rate of 1.0%, (b) a two-year loan term to maturity; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 75% of the loan proceeds are used for payroll expenses, with the remaining 25% of the loan proceeds used for other qualifying expenses.

~~As of May 5, 2020, we had disbursed approximately 667 loans for $91.6 million under the PPP.~~

As of May 5, we had modified 213 loans aggregating $65.7 million in loan principal, primarily consisting of three to four months deferral of principal and interest payments, and extension of maturity date. The classifications of loans modified were: 151 commercial loans totaling $61.7 million, 31 residential real estate loans totaling $3.4 million and 31 consumer loans totaling $559 thousand. All of the loans provided modifications were performing in accordance with their terms.

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,~~September 30, 2020 as compared to December 31, 2019, and the consolidated results of operations for the three ~~month period~~and nine months ended ~~March 31,~~September 30, 2020 compared to the same ~~period~~periods in 2019. 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 condensed Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

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.

Total assets were $~~810~~988 million at ~~March 31,~~September 30, 2020 as compared to $819 million at December 31, 2019. During the ~~three month period~~nine months ended ~~March 31,~~September 30, 2020, net loans increased $4 $76 million. Cash and cash equivalents, and securities ~~decreased $12~~ increased $92 million. Deposits and short-term borrowings ~~decreased $11~~increased $160 million.

Net loans increased $4 $76 million, or 1%14%, as ~~combined~~ commercial real estate and construction loans ~~decreased $2~~increased $3 million, or ~~-1%~~1%, and residential real estate loans increased $3$2 million, or 2%1%, from December 31, 2019. Commercial loans increased $3$75 million, or 2%54%, as ~~business lines of credits drew based on normal seasonality.~~loans originated under SBA Paycheck Protection Program exceeded $92 million during 2020. Consumers continued to refinance their mortgage loans for historically low long-term fixed rates while home purchase activity increased through the first ~~half~~nine-months of ~~March~~. 2020. Residential mortgage loan originations for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 totaled ~~$13~~$54 million, anincrease from ~~$12.5~~$48 million in originations during the ~~three month period~~nine months ended ~~March 31,~~September 30, 2019. Originations sold into the secondary market were ~~$4.2~~$38 million and ~~$2.6~~$11 million, respectively during the ~~three month periods~~nine months ended ~~March 31,~~September 30, 2020 and ~~March 31,~~September 30, 2019. The Bank originates and sells primarily ~~fixed-rate thirty year~~fixed rate thirty-year mortgages into the secondary market.

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

The allowance for loan losses increased ~~$833 thousand~~$1.6 million from the year ago quarter to ~~$7.1~~$8.4 million or ~~1.28%~~1.33% of total loans. The Company has not early adopted CECL which has been delayed for smaller reporting companies. Outstanding loan balances increased 1%11% to ~~$555~~$628 million at ~~March 31, 2020~~.September 30, 2020. Net ~~charge-offs~~ recoveries increased to ~~$75~~$66 thousand, or an annualized ~~0.05%~~-0.01% of average loans, in the current ~~quarter~~nine-month period compared to the ~~$95~~$14 thousand recovery, or ~~-0.07%~~-0.003% of average loans in the year-ago ~~quarter.~~nine-month period.At September 30, 2020, the allowance for total loans minus the SBA guaranteed Payroll Protection loans was 1.56%. We believe the allowance level is appropriate given the low level of problem loans and current composition of the overall loan portfolio.

Nonperforming loans ~~increased~~decreased to ~~$4.4~~$4.1 million, or ~~0.79%~~0.65% of total loans from ~~$3.2~~$4.5 million, or ~~0.58%~~0.78%, a year ago. ~~The increase is a result of one commercial real estate credit facility for $1.5 million being placed on nonaccrual status during second quarter 2019.~~ For the ~~three~~nine months ~~ending~~ ~~March 31,~~ended September 30, 2020 loans totaling ~~$174~~$257 thousand were placed on nonaccrual status, there were $26 thousand in charge-downs recognized, and pay downs of ~~$79~~$473 thousand were received.

	March 31,			December 31,			March 31,			September 30,			December 31,			September 30,
(Dollars in thousands)	2020			2019			2019			2020			2019			2019
Non-performing loans	$	4,369		$	4,539			3,188		$	4,102		$	4,539		$	4,419
Other real estate		99			99			99			—			99			99
Repossessed assets		—			20			15			—			20			—
Allowance for loan losses		7,120			7,017			6,287			8,355			7,017			6,776
Total loans		555,320			551,632			548,220		$	628,084		$	551,633		$	566,213
Allowance for loan losses as a percentage of total loans		1.28	%		1.27	%		1.15	%		1.33	%		1.27	%		1.20	%
Allowance for loan losses to total nonperforming loans	1.6x			1.5x			2.0x			2.0x			1.5x			1.5x

The ratio of gross loans to deposits was ~~82.7%~~74.7% at ~~March 31,~~September 30, 2020,, compared to 80.7% at December 31, 2019.

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 ~~$627~~$548 thousand within the available-for-sale and held-to-maturity portfolios as of ~~March 31,~~September 30, 2020, ~~were~~was 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 embedded security ~~impairments~~losses on ~~March 31,~~September 30, 2020, are considered temporary and no impairment loss relating to these securities has been recognized.

Deposits ~~decreased $12~~increased $157 million, or 2%23%, from December 31, 2019 with ~~noninterest bearing~~noninterest-bearing deposits ~~decreasing~~increasing approximately $9$55 million and interest-bearing deposit accounts ~~decreasing~~increasing approximately $3$102 million. Total deposits as of ~~March 31,~~September 30, 2020 are ~~$64~~$183 million greater than ~~March 31,~~September 30, 2019 deposit balances. On a year over year comparison, increases were recognized in noninterest-bearing demand deposits of ~~$11~~$60 million, interest-bearing demand deposits of ~~$38~~$78 million, money market accounts of $3$18 million, and savings of ~~$6 million,~~$27 million. During 2020, the Bank’s customers increased deposits through cash conservation and ~~time deposits~~stimulus payments as a result of ~~$6 million.~~the COVID-19 pandemic and ensuing unknown political climate.

Short-term borrowings consisting of overnight repurchase agreements with retail customers increased $1$3 million to ~~$41~~$42 million at ~~March 31,~~September 30, 2020 as compared to December 31, 2019 and other borrowings ~~decreased $124 thousand~~increased $3 million as the Company ~~repaid~~took out FHLB advances.

Total shareholders’ equity amounted to ~~$88~~$92 million,, or ~~10.8%~~9.3%, of total assets at ~~March 31,~~September 30, 2020 up from $85 million December 31, 2019.The increase in shareholders’ equity during the ~~three~~nine months ~~ending~~ ~~March 31,~~ended September 30, 2020 was due to net income of ~~$2.5~~$7.9 million and an increase in accumulated other comprehensive income of ~~$438~~$792 thousand offset by dividends declared of ~~$768 thousand.~~$2.3 million. The Company and the Bank met all regulatory capital requirements at ~~March 31,~~September 30, 2020.

For the quarters ended ~~March 31,~~September 30, 2020 and 2019, the Company recorded net income of ~~$2.5~~$2.8 million and ~~$2.5~~$2.7 million and ~~$0.91~~$1.02 and ~~$0.93~~$0.98 per share, respectively.The ~~$57~~$105 thousand ~~decrease~~increase in net income for the period was primarily the result of a ~~$95~~$422 thousand ~~decrease~~ increase in ~~net interest~~noninterest income and ~~an increase~~a decrease of ~~$216~~$401 thousand in ~~other noninterest~~interest expenses. The ~~decreases~~increases were partially offset by ~~an increase~~a decrease of ~~$119~~$548 thousand in ~~other noninterest income, a decrease in the provision for loan losses of $107 thousand and a $28 thousand decrease in federal income tax provision~~.interest

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

income, an increase in the provision for loan losses of $92 thousand, and a $27 thousand increase in federal income tax provision.

Return on average assets and return on average equity were ~~1.23%~~1.14% and ~~11.47%~~12.19%, respectively, for the ~~three month~~three-month period of 2020, compared to ~~1.41%~~1.38% and ~~13.20%~~12.89%, respectively for the same quarter in 2019.

	For the Three Months Ended March 31,														For the Three Months Ended September 30,
	2020							2019							2020								2019
(Dollars in thousands)	Average balance ¹		Interest		Average rate ²			Average balance ¹		Interest		Average rate ²			Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²
ASSETS
Federal funds sold	$	—	$	—		0.00	%	$	400	$	3		2.53	%	$	—	$	—			—		$	393	$	2			2.02	%
Interest-earning deposits		75,817		239		1.27			26,442		172		2.64			172,857		42			0.10	%		59,681		354			2.35
Taxable securities		104,474		609		2.34			87,058		586		2.73			97,723		372			1.51			87,091		534			2.43
Tax-exempt securities ⁴		21,186		151		2.87			23,132		170		2.98			20,673		139			2.68			23,494		168			2.84
Loans ^3,4		560,142		6,855		4.92			550,483		7,075		5.21			635,124		7,197			4.51			554,957		7,244			5.18
Total interest-earning assets		761,619		7,854		4.15	%		687,515		8,006		4.72	%		926,377		7,750			3.33	%		725,616		8,302			4.54	%
Noninterest-earning assets		50,790							42,666							53,429								47,866
TOTAL ASSETS	$	812,409						$	730,181						$	979,806							$	773,482

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	160,932		143		0.36	%		118,844		113		0.39	%	$	223,187	$	85			0.15	%	$	141,260	$	175			0.49	%
Savings deposits		201,450		128		0.26			188,255		258		0.56			232,121		72			0.12			191,124		236			0.49
Time deposits		127,198		560		1.77			118,961		454		1.55			125,028		479			1.52			124,888		555			1.76
Borrowed funds		43,582		70		0.65			45,403		132		1.18			51,345		37			0.29			43,335		108			0.99
Total interest-bearing liabilities		533,162		901		0.68	%		471,463		957		0.82	%		631,681		673			0.42	%		500,607		1,074			0.85	%
Noninterest-bearing demand deposits		188,510							177,779							252,952								186,710
Other liabilities		3,647							2,901							3,764								3,217
Shareholders' Equity		87,090							78,038							91,409								82,948
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	812,409						$	730,181						$	979,806							$	773,482
Taxable equivalent net interest income			$	6,953						$	7,049						$	7,077							$	7,228
Tax equivalent adjustment																		(36	)							(40	)
Net interest income																	$	7,041							$	7,188
Net interest margin																					3.02	%							3.93	%
Tax equivalent adjustment																					0.02								0.02
Net interest margin-taxable equivalent																					3.04	%							3.95	%
Taxable equivalent net interest spread						3.47	%						3.90	%							2.91	%							3.69	%
Taxable equivalent net interest margin						3.67	%						4.16	%

² Average rates have been computed based on the amortized cost of the corresponding asset or liability.

Interest income for the quarter ended ~~March 31,~~September 30, 2020,, was ~~$7.8~~$7.7 million representing a ~~$151~~$548 thousand decrease, or a 2%6.6% decline, compared to the same period in 2019.This decrease was primarily due to average loan rates decreasing 2967 basis points partially offset by aan average volume increase of ~~$10~~$80 million for the quarter ended ~~March 31,~~September 30, 2020 as compared to the ~~first quarter~~same period in 2019. ~~Interest~~Interest expense for the quarter ended ~~March 31,~~September 30, 2020 was ~~$901~~$673 thousand, a decrease of ~~$56~~$401 thousand, or 6%37%, from the same ~~period~~quarter in 2019.The decrease in interest expense occurred primarily due to a decrease in rates on all ~~deposit~~ liabilities ~~except time deposits~~ for the quarter ended ~~March 31, 2020.~~September 30, 2020, partially offset by increases in the average balances.

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

For the quarter ended ~~March 31,~~September 30, 2020, thethe provision for loan losses was ~~$178~~ $377 thousand, compared to a provision of $285 thousand provision for the same quarter in 2019. ~~At December 31, 2019 the allowance had an unallocated reserve portion that was allocated during first quarter 2020 including a qualitative factor for the developing Covid-19 pandemic.~~ For more discussion see Financial Condition. 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-ffs~~charge-offs and current economic trends.

26Noninterest income for the quarter ended September 30, 2020, was $1.9 million, an increase of $422 thousand, or 29%, compared to the same quarter in 2019.The gain on the sale of mortgage loans to the secondary market increased by $435 thousand for the quarter ended September 30, 2020 as additional loan volume was sold into the secondary market. Debit card interchange income increased $56 thousand, or 15%, with greater fees generated from usage in the third quarter 2020. Earnings on bank owned life insurance increased $11 thousand for the third quarter 2020 a result of adding policies in 2019. Fees from trust and brokerage services increased $2 thousand to $236 thousand for the third quarter 2020 as compared to the same quarter in 2019.Service charges on deposit accounts decreased $81 thousand, or 24%, compared to the same quarter in 2019 primarily from a volume decrease in overdraft fees.

Noninterest expenses for the quarter ended September 30, 2020 increased $51 thousand, or 1%, compared to the third quarter 2019.Salaries and employee benefits decreased $34 thousand, or 1%, a result of an increase in capitalization of approximately $54 thousand in salary and benefits expense to deferred loan origination costs related to new commercial and mortgage loan originations. The loan capitalization reductions in salary were partially offset by increases in base wage, social security benefits and incentive accruals.The Ohio financial institutions tax increased $18 thousand in the third quarter due to the Company’s increased capital base. Marketing and public relations expense decreased $53 thousand, or 36%, primarily due to events being cancelled due to COVID-19. Debit card expenses increased $23 thousand, or 16%, compared to the third quarter 2019 with increased volume.Software expense rose $44 thousand quarter over quarter with additional investment. Occupancy expense increased $37 thousand in 2020 over the third quarter 2019. Professional and director fees decreased $84 thousand for the quarter ended September 30, 2020 as compared to the third quarter 2019.This decrease resulted from a decrease in audit expense as the Company is no longer subject to an internal controls audit opinion from an outside accountant and directors fees with the decrease of one director.

Federal income tax expense increased $27 thousand, or 4%, for the quarter ended September 30, 2020 as compared to the third quarter 2019.The provision for income taxes was $676 thousand (effective rate of 19%) for the quarter ended September 30, 2020, compared to $649 thousand (effective rate of 19%) for the same quarter ended 2019.

For the nine months ended September 30, 2020 and 2019, the Company recorded net income of $7.9 million and $7.8 million and $2.88 and $2.85 per share, respectively.The $68 thousand increase in net income for the quarter was primarily the result of an increase of $869 thousand in other noninterest income and an increase in the federal income tax provision of $7 thousand. The increases were partially offset by a $301 thousand decrease in net interest income, an increase of $76 thousand in noninterest expense, and an increase in the provision for loan losses of $417 thousand.

Return on average assets and return on average equity were 1.17% and 11.80%, respectively, for the nine months ended September 30, 2020, compared to 1.39% and 13.00%, respectively for the same period in 2019.

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

	For the Nine Months Ended September 30,
	2020								2019
(Dollars in thousands)	Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²
ASSETS
Federal funds sold	$	—	$	—			—		$	335	$	6			2.23	%
Interest-earning deposits in other banks		122,382		312			0.34	%		42,087		743			2.36
Taxable securities		101,107		1,462			1.93			87,364		1,705			2.61
Tax-exempt securities⁴		20,637		435			2.82			23,317		508			2.92
Loans^3,4		605,767		21,162			4.67			551,157		21,507			5.22
Total earning assets		849,893		23,371			3.66	%		704,260		24,469			4.65	%
Other assets		52,101								45,699
TOTAL ASSETS	$	901,994							$	749,959

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	190,490	$	308			0.22	%	$	129,187	$	432			0.45	%
Savings deposits		216,463		270			0.17			188,530		746			0.53
Time deposits		126,229		1,561			1.65			122,638		1,533			1.67
Other borrowed funds		48,901		154			0.42			44,506		370			1.11
Total interest bearing liabilities		582,083		2,293			0.52	%		484,861		3,081			0.85	%
Non-interest bearing demand deposits		226,874								181,585
Other liabilities		3,729								3,054
Shareholders' Equity		89,308								80,459
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	901,994							$	749,959
Taxable equivalent net interest income			$	21,078							$	21,388
Tax equivalent adjustment				(109	)							(118	)
Net interest income			$	20,969							$	21,270
Net interest margin							3.29	%							4.04	%
Tax equivalent adjustment							0.02								0.02
Net interest margin-taxable equivalent							3.31	%							4.06	%
Taxable equivalent net interest spread							3.14	%							3.80	%

² Average rates have been computed based on the amortized cost of the corresponding asset or liability.

Noninterest income for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2020, was ~~$1.3~~$4.8 million, an increase of ~~$119~~$869 thousand, or ~~10%~~22%, compared to the same ~~quarter in 2019. Earnings on bank owned life insurance increased $46 thousand for the first quarter 2020 a result of adding policies~~period in 2019. The gain on the sale of mortgage loans to the secondary market increased ~~by $35~~$902 thousand to $1.2 million for the ~~quarter~~nine months ended ~~March 31,~~ ~~2020 as additional loan volume was sold into the secondary market.~~September 30, 2020.Debit card interchange income increased ~~$28~~$116 thousand,, or 8%11%, with ~~greater fees generated from~~increased card usage in the first ~~quarter~~nine months of 2020. Earnings on bank owned life insurance policies increased $64 thousand for the period with the additional purchase of $3 million in policies in 2019.Service charges on deposit accounts decreased $185 thousand, or 20%, compared to the same period in 2019 primarily from decreases in overdraft fees.Fees from trust and brokerage services ~~increased~~ ~~$6 thousand to $230~~decreased $8 thousand for the ~~first quarter~~period.

Noninterest expenses for the nine months ended September 30, 2020 increased $76 thousand, or less than 1%, compared to the same period in 2019.Salaries and employee benefits decreased $147 thousand, or 2%, a result of the capitalization of deferred loan origination costs related to PPP loan originations. Marketing and public relations expense decreased $116 thousand, or 29%, with decreases in market, brand recognition initiatives, and community support in the company’s market due to COVID-19. Debit card expenses increased $50 thousand, or 12%, compared to the prior period in 2019. Occupancy expense increased $93 thousand over the same period in 2019 with an increase in depreciation, maintenance, and supplies expense.Professional and director fees decreased $120 thousand for the nine months ended September 30, 2020 as compared to the same ~~quarter~~period in 2019. ~~Service charges on deposit accounts decreased $1~~

Federal income tax expense increased $7 thousand, or less than 1%, ~~compared~~ ~~to the same quarter in 2019~~ ~~primarily from a volume decrease in overdraft fees.~~

~~Noninterest expenses~~ for the ~~quarter~~nine months ended ~~March 31, 2020~~ ~~increased $216 thousand,~~ ~~or 5%, compared~~ to the first quarter of 2019. Salaries and employee benefits increased $126 thousand, or 4%, a result of increases in employees, base salary, and other benefits. The Ohio financial institutions tax increased $18 thousand in the first quarter due to the Company’s increased capital base. Marketing and public relations expense increased $10 thousand, or 9%, primarily due to brand recognition initiatives and the opening of a new banking center. Debit card expenses increased $13 thousand, ~~or 10%, compared~~ ~~to the first~~ ~~quarter 2019~~ with increased volume. Software expense rose $9 thousand quarter over quarter with additional investment. Occupancy expense increased $16 thousand in 2020 over the first quarter of 2019. Professional and director fees decreased $9 thousand for the quarter ended March 31,September 30, 2020 as compared to the ~~first quarter~~same period in 2019.

~~Federal income tax expense decreased $28 thousand, or 5%, for the~~ ~~quarter ended~~ ~~March 31, 2020~~ ~~as compared to the first quarter of 2019.~~ The provision for income taxes was ~~$591 thousand~~$1.89 million (effective rate of 19%) for the ~~quarter~~nine months ended ~~March 31,~~September 30, 2020,, compared to ~~$619 thousand~~$1.88 million (effective rate of 19%) for the same ~~quarter~~period ended 2019.

The Company maintained a strong capital position with tangible common equity to tangible assets of ~~10.3%~~ 8.9% at ~~March 31,~~September 30, 2020 compared with 9.9% at December 31, 2019.

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, 2019. As of ~~March 31,~~September 30, 2020, the Company and the Bank met all capital adequacy requirements to which they were subject.

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

During October 2019, the federal banking agencies adopted an optional community bank leverage ratio (“CBLR”). Depository institutions and depository institution holding companies, that have less than $10 billion in total consolidated assets and have a tier 1 leverage ratio of greater than 9 percent, are considered qualifying community banking organizations and are eligible to opt into the community bank leverage ratio framework. Additionally, such insured depository institutions are considered to have satisfied the risk-based and leverage capital requirements and will be considered well-capitalized under the rule, effective January 1, 2020. The Company met the well-capitalized ratios under the new standard at both ~~March 31,~~September 30, 2020 and December 31, 2019 but has not elected to opt-in to the CBLR framework as of ~~March 31,~~September 30, 2020.

	Capital Ratios				Capital Ratios
	March 31, 2020		December 31, 2019		September 30, 2020			December 31, 2019
Common Equity Tier 1 Capital To Risk Weighted Assets
Consolidated		14.5		14.3		15.8	%		14.3	%
Bank		14.3		14.1		15.3	%		14.1	%

Tier 1 Capital To Risk Weighted Assets Ratio
Consolidated		14.5		14.3		15.8	%		14.3	%
Bank		14.3		14.1		15.3	%		14.1	%

Total Capital To Risk Weighted Assets Ratio
Consolidated		15.7		15.5		17.0	%		15.5	%
Bank		15.5		15.3		16.5	%		15.3	%

Tier 1 Leverage Ratio
Consolidated		10.2		10.0		8.9	%		10.0	%
Bank		10.1		9.9		8.6	%		9.9	%

(Dollars in millions)	March 31, 2020		December 31, 2019		Change			September 30, 2020			December 31, 2019			Change
Cash and cash equivalents	$	96	$	102	$	(6	)	$	198		$	102		$	96
Available from FHLB		100		97		3			97			97			0
Unpledged AFS securities at fair market value		46		61		(15	)		46			61			(15	)
	$	242	$	260	$	(18	)	$	341		$	260		$	81
Net deposits and short-term liabilities	$	652	$	673	$	(21	)	$	822		$	673		$	149
Liquidity ratio		37.2		38.6					41.5	%		38.6	%
Minimum board approved liquidity ratio		20.0		20.0					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 37.2%~~ and on-hand liquidity ratios were 41.5% and 23.7% at September 30, 2020 as compared to 38.6% and 17.9% at ~~March 31, 2020 and~~ December 31, 2019.

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.

ITEM 3 - QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The COVID-19 pandemic added market risk disclosure which should be read with the disclosures presented in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. While 2020 began with increased loan demand and strong employment, the economic picture reversed sharply as coronavirus wreaked havoc and became the lead story by mid-March. A series of emergency health orders for public safety curtailed nonessential activity and had the effect of shutting down vast swaths of Ohio’s economy, resulting in ~~more than 8%~~a peak of approximately one million people on unemployment, or an unemployment rate of 17.6%, in Ohio during April of 2020. By late September, Ohio’s ~~active workforce filing for~~ unemployment ~~during~~rate approximated 8.4%, as 472 thousand remained unemployed. The bank is based in Holmes County which is reporting the ~~last two weeks~~lowest unemployment rate in Ohio at 3.5% in September. Of the counties within the bank’s footprint, Stark County reported the highest unemployment rate at 7.8% in September. With the virus ramping up in October 2020, the longer-term impact of ~~March alone. We anticipate that second quarter will be very difficult for many small businesses, organizations~~our response is dependent on a number of variables, including higher delinquencies should unemployment rise and ~~households, and are focused on working to address the financial needs within our primary market areas during this extraordinarily challenging health crisis. This pandemic may affect the~~increased credit deterioration in industries negatively impacted by COVID-19. The Company’s employee base ~~which has been~~continues to be dispersed amongst different buildings and home to ensure no one department could be disrupted by illness. ~~The lack of economic activity, layoffs, and illness among businesses may have a material adverse effect on the Company’s business.~~

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. All 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 -200 through +400 basis point changes, in 100 basis point increments, in market interest rates at ~~March 31,~~September 30, 2020 and December 31, 2019. 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, 2020
September 30, 2020													September 30, 2020
(Dollars in thousands)	(Dollars in thousands)												(Dollars in thousands)
Change in Interest Rates (basis points)		Net Interest Income		Dollar Change			Percentage Change			Board Policy Limits				Net Interest Income		Dollar Change			Percentage Change				Board Policy Limits
+400		$	26,615	$	(675	)		(2.5	)	+/- 25		%		$	28,987	$	2,100			7.8		%	+/- 25		%
+300			26,980		(310	)		(1.1	)	+/-15					28,440		1,553			5.8			+/-15
+200			26,969		(321	)		(1.2	)	+/-10					27,916		1,029			3.8			+/-10
+100			27,087		(203	)		(0.7	)	+/-5					27,452		565			2.1			+/-5
0			27,290		—			—			—				26,887		—			—				—
-100			27,177		(113	)		(0.4	)	+/-5					26,653		(234	)		(0.9	)		+/-5
-200			26,800		(490	)		(1.8	)	+/-10					26,430		(457	)		(1.7	)		+/-10

December 31, 2019	December 31, 2019												December 31, 2019
+400		$	30,266	$	1,481			5.1		+/- 25		%		$	30,266	$	1,481			5.1		%	+/- 25		%
+300			29,958		1,173			4.2		+/-15					29,958		1,173			4.1			+/-15
+200			29,599		814			3.0		+/-10					29,599		814			2.8			+/-10
+100			29,208		423			1.5		+/-5					29,208		423			1.5			+/-5
0			28,785		—			—			—				28,785		—			—				—
-100			27,955		(830	)		(2.9	)	+/-5					27,955		(830	)		(2.9	)		+/-5
-200			26,767		(2,018	)		(7.0	)	+/-10					26,767		(2,018	)		(7.0	)		+/-10

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:

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.

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.

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, 2019, other than the COVID-19 developments previously discussed under Item 3 - Quantitative and Qualitative Disclosures About Market Risk in Part I of this report.

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,~~September 30, 2020.

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.


Ohio		34-1687530
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
91 North Clay Street, P.O. Box 232 Millersburg, OH	44654
(Address of principal executive offices)	(~~I.R.S. Employer Identification Number)~~Zip Code)

~~Title of each class~~		~~Trading Symbol~~		~~Name of each exchange on which registered~~
~~Common Stock~~		~~CSBB~~		~~OTCPink~~

	Part I - Financial Information

		Page
ITEM 1 –		FINANCIAL STATEMENTS (Unaudited)		3
	Consolidated Balance Sheets		3
	Consolidated Statements of Income		4
	Consolidated Statements of Comprehensive Income		5
	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	28
ITEM 3 –	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	35
ITEM 4 –	CONTROLS AND PROCEDURES	36

~~ITEM 2 –~~		~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~		24
~~ITEM 3 –~~		~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~		29
~~ITEM 4 –~~		~~CONTROLS AND PROCEDURES~~		30

Part II - Other Information

ITEM1 –		Legal Proceedings		3137
ITEM1A –		Risk Factors		3137
~~ITEM~~2 ITEM2 –		Unregistered Sales of Equity Securities and Use of Proceeds		3137
ITEM3 –	Defaults upon Senior Securities	37
ITEM4 –	Mine Safety Disclosures	37
ITEM5 –	Other Information	37
ITEM6 –	Exhibits	38
	~~Defaults upon Senior Securities~~Signatures		31
~~ITEM4 –~~		~~Mine Safety Disclosures~~		31
~~ITEM~~5 –		~~Other Information~~		31
~~ITEM6 –~~		~~Exhibits~~		32
~~Signatures~~				3339

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.

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 000-21714).
3.1.1		Amended form of Article Fourth of Amended Articles of Incorporation, as effective April 9, 1998 (incorporated by reference to registrant’s Annual Report on Form 10-K filed on March 30, 1999, Exhibit 3.1.1, file number 000-21714).
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		Description of Capital Stock (incorporated by reference to registrants Annual Report on Form 10-K filed on March 16, 2020, Exhibit 4.0, file number 000-21714).

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~~financial statements from the ~~Company’s~~Company's Quarterly Report on Form 10-Q for the quarter ended ~~March 31,~~September 30, 2020, formatted in ~~XBRL (extensible Business Reporting Language):~~Inline XBRL: (i) Consolidated Balance ~~Sheets:~~Sheets, (ii) Consolidated Statements of ~~Income:~~Net Loss and Comprehensive Loss , (iii) Consolidated Statements of ~~Comprehensive Income:~~Stockholders' Equity, (iv) Consolidated Statements of ~~Changes in Shareholders’ Equity:~~Cash Flows, and (v) ~~Condensed Consolidated Statements of Cash Flows: and (vi)~~ Notes to Consolidated Financial ~~Statements.~~Statements, tagged as blocks of text and including detailed tags.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


~~Common stock, $6.25 par value~~	~~Outstanding at~~ ~~May 1, 2020,~~ ~~2,742,350 common shares~~

(Dollars in thousands)	Total loan balances		Deferred # of Loans	Total COVID Loan Deferrals		Percent of Portfolio Modified			Remaining Balance in Deferment		Remaining # of loans in Deferment
September 30, 2020
Commercial:
Commercial	$	211,647	64	$	9,995		5	%	$	119	2
Commercial real estate		194,493	73		56,789		29			12,341	3
Construction		28,875	3		462		2			—		—
Total Commercial		435,015	140		67,246		15			12,460	5
Consumer:
Residential real estate		176,256	34		3,674		2			499	6
RV		9,118	14		316		3			68	2
Other consumer		9,219	16		208		2			12	1
Total Consumer		194,593	64		4,198		2			579	9
Total Loans	$	629,608	204	$	71,444		11	%	$	13,039	14

		CSB BANCORP, INC.
		(Registrant)


Date:	~~May 8,~~November, 9 2020	/s/ Eddie L. Steiner
		Eddie L. Steiner
		President
		Chief Executive Officer


Date:	~~May 8,~~November, 9 2020	/s/ Paula J. Meiler
		Paula J. Meiler
		Senior Vice President
		Chief Financial Officer

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