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

Indicate by check mark whether the registrant has submitted electronically 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). Yes ☒ No ☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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

As of August 1, ~~2020,~~2021, the registrant had ~~2,742,350~~2,734,244 shares of common stock, $6.25 par value per share, outstanding.

	June 30,			December 31,			June 30,			December 31,
(Dollars in thousands)	2020			2019			2021			2020
ASSETS
Cash and cash equivalents
Cash and due from banks	$	17,259		$	17,648		$	17,308		$	19,281
Interest-earning deposits in other banks		156,566			84,369			295,036			162,371
Total cash and cash equivalents		173,825			102,017			312,344			181,652
Securities
Available-for-sale, at fair value		103,202			112,146			194,164			190,438
Held-to-maturity (fair value 2020-$11,120; 2019-13,950)		10,871			13,869
Held-to-maturity (fair value 2021-$25,003; 2020-$9,225)								24,878			9,045
Equity securities		83			92			99			87
Restricted stock, at cost		4,614			4,614			4,614			4,614
Total securities		118,770			130,721			223,755			204,184
Loans held for sale		1,678			622			1,465			1,378
Loans		636,799			551,633			552,030			609,159
Less allowance for loan losses		7,835			7,017			7,875			8,274
Net loans		628,964			544,616			544,155			600,885
Premises and equipment, net		12,593			12,040			13,431			12,633
Core deposit intangible		74			104			22			44
Goodwill		4,728			4,728			4,728			4,728
Bank-owned life insurance		19,153			18,894			23,710			21,416
Accrued interest receivable and other assets		5,394			4,941			5,312			4,712
TOTAL ASSETS	$	965,179		$	818,683		$	1,128,922		$	1,031,632

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest-bearing	$	254,868		$	197,780		$	302,688		$	272,051
Interest-bearing		561,093			485,766			683,980			619,511
Total deposits		815,961			683,546			986,668			891,562
Short-term borrowings		43,865			38,889			38,475			37,215
Other borrowings		9,865			6,330			3,570			4,664
Accrued interest payable and other liabilities		5,521			4,442			4,197			4,332
Total liabilities		875,212			733,207			1,032,910			937,773
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
Common stock, $6.25 par value. Authorized 9,000,000 shares; issued 2,980,602 shares; outstanding 2,734,244 shares 2021 and 2,742,350 shares 2020								18,629			18,629
Additional paid-in capital		9,815			9,815			9,815			9,815
Retained earnings		65,293			61,740			73,196			69,209
Treasury stock at cost: 238,252 shares 2020 and 2019		(4,780	)		(4,780	)
Accumulated other comprehensive income		1,010			72
Treasury stock at cost: 246,358 shares in 2021and 238,252 shares in 2020								(5,093	)		(4,780	)
Accumulated other comprehensive income (loss)								(535	)		986
Total shareholders' equity		89,967			85,476			96,012			93,859
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	965,179		$	818,683		$	1,128,922		$	1,031,632

	Three Months Ended June 30,					Six Months Ended June 30,					Three Months Ended June 30,					Six Months Ended June 30,
(Dollars in thousands, except per share data)	2020		2019			2020			2019		2021			2020		2021			2020
INTEREST AND DIVIDEND INCOME
Loans, including fees	$	7,105	$	7,185		$	13,955		$	14,257	$	6,231		$	7,105	$	13,096		$	13,955
Taxable securities		470		584			1,090			1,171		604			470		1,163			1,090
Nontaxable securities		125		134			233			268		111			125		222			233
Other		31		218			270			393		68			31		114			270
Total interest and dividend income		7,731		8,121			15,548			16,089		7,014			7,731		14,595			15,548
INTEREST EXPENSE
Deposits		673		921			1,504			1,746		508			673		1,046			1,504
Short-term borrowings		16		93			60			186		15			16		28			60
Other borrowings		30		36			56			75		20			30		42			56
Total interest expense		719		1,050			1,620			2,007		543			719		1,116			1,620
NET INTEREST INCOME		7,012		7,071			13,928			14,082		6,471			7,012		13,479			13,928
PROVISION FOR LOAN LOSSES		717		285			895			570		(475	)		717		(445	)		895
Net interest income, after provision for loan losses		6,295		6,786			13,033			13,512		6,946			6,295		13,924			13,033
NON INTEREST INCOME
Service charges on deposit accounts		211		313			501			605		219			211		426			501
Trust services		196		212			427			436		264			196		546			427
Debit card interchange fees		400		369			776			716		526			400		997			776
Gain on sale of loans, net		508		76			622			155		417			508		904			622
Earnings on bank owned life insurance		131		122			259			205		144			131		294			259
Unrealized gain or (loss) on equity securities, net		4		(2	)		(9	)		4		(1	)		4		12			(9	)
Other income		191		223			408			416		274			191		542			408
Total noninterest income		1,641		1,313			2,984			2,537		1,843			1,641		3,721			2,984
NON INTEREST EXPENSES
Salaries and employee benefits		2,676		2,915			5,644			5,757		3,044			2,676		6,073			5,644
Occupancy expense		244		205			464			409		247			244		501			464
Equipment expense		198		143			333			280		172			198		349			333
Professional and director fees		282		308			611			647		356			282		651			611
Financial institutions and franchise tax expense		171		153			342			306		187			171		375			342
Marketing and public relations		65		139			193			256		98			65		177			193
Software expense		259		232			485			450		336			259		636			485
Debit card expense		146		132			286			259		172			146		343			286
Amortization of intangible assets		15		16			30			32		11			15		22			30
FDIC insurance expense		12		48			12			98		120			12		228			12
Other expenses		641		609			1,316			1,197		647			641		1,316			1,316
Total noninterest expenses		4,709		4,900			9,716			9,691		5,390			4,709		10,671			9,716
Income before income taxes		3,227		3,199			6,301			6,358		3,399			3,227		6,974			6,301
FEDERAL INCOME TAX PROVISION		621		613			1,212			1,232		654			621		1,344			1,212
NET INCOME	$	2,606	$	2,586		$	5,089		$	5,126	$	2,745		$	2,606	$	5,630		$	5,089
Basic and diluted net earnings per share	$	0.95	$	0.94		$	1.86		$	1.87	$	1.00		$	0.95	$	2.05		$	1.86

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2020			2019			2020			2019			2021			2020			2021			2020
Net income	$	2,606		$	2,586		$	5,089		$	5,126		$	2,745		$	2,606		$	5,630		$	5,089
Other comprehensive income
Unrealized gains arising during the period		617			762			1,157			1,511
Other comprehensive income (loss)
Unrealized (losses) gains arising during the period														1,649			617			(1,958	)		1,157
Amortization of discount on securities transferred to held-to-maturity		16			15			30			30			16			16			32			30
Income tax effect		(133	)		(163	)		(249	)		(323	)		(350	)		(133	)		405			(249	)
Other comprehensive income		500			614			938			1,218
Other comprehensive income (loss)														1,315			500			(1,521	)		938
Total comprehensive income	$	3,106		$	3,200		$	6,027		$	6,344		$	4,060		$	3,106		$	4,109		$	6,027

(Dollars in thousands)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive income (loss)			Total			Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive income (loss)			Total
Three Months Ended June 30, 2021
Balance, beginning of period																	$	18,629	$	9,815	$	71,271		$	(4,780	)	$	(1,850	)	$	93,085
Net income																		—		—		2,745			—			—			2,745
Other comprehensive income																		—		—		—			—			1,315			1,315
Purchase of 8,106 treasury shares																		—		—		—			(313	)		—			(313	)
Cash dividends declared, $0.30 per share																		—		—		(820	)		—			—			(820	)
Balance, end of period																	$	18,629	$	9,815	$	73,196		$	(5,093	)	$	(535	)	$	96,012
Six Months Ended June 30, 2021
Balance, beginning of period																	$	18,629	$	9,815	$	69,209		$	(4,780	)	$	986		$	93,859
Net income																		—		—		5,630			—			—			5,630
Other comprehensive loss																		—		—		—			—			(1,521	)		(1,521	)
Purchase of 8,106 treasury shares																		—		—		—			(313	)		—			(313	)
Cash dividends declared, $0.60 per share																		—		—		(1,643	)					—			(1,643	)
Balance, end of period																	$	18,629	$	9,815	$	73,196		$	(5,093	)	$	(535	)	$	96,012
Three Months Ended June 30, 2020
Balance, beginning of period	$	18,629	$	9,815	$	63,455		$	(4,780	)	$	510		$	87,629		$	18,629	$	9,815	$	63,455		$	(4,780	)	$	510		$	87,629
Net income		—		—		2,606			—			—			2,606			—		—		2,606			—			—			2,606
Other comprehensive income		—		—		—			—			500			500			—		—		—			—			500			500
Cash dividends declared, $0.28 per share		—		—		(768	)		—			—			(768	)		—		—		(768	)		—			—			(768	)
Balance, end of period	$	18,629	$	9,815	$	65,293		$	(4,780	)	$	1,010		$	89,967		$	18,629	$	9,815	$	65,293		$	(4,780	)	$	1,010		$	89,967
Six Months Ended June 30, 2020
Balance, beginning of period	$	18,629	$	9,815	$	61,740		$	(4,780	)	$	72		$	85,476		$	18,629	$	9,815	$	61,740		$	(4,780	)	$	72		$	85,476
Net income		—		—		5,089			—			—			5,089			—		—		5,089			—			—			5,089
Other comprehensive income		—		—		—			—			938			938			—		—		—			—			938			938
Cash dividends declared, $0.56 per share		—		—		(1,536	)		—			—			(1,536	)		—		—		(1,536	)		—			—			(1,536	)
Balance, end of period	$	18,629	$	9,815	$	65,293		$	(4,780	)	$	1,010		$	89,967		$	18,629	$	9,815	$	65,293		$	(4,780	)	$	1,010		$	89,967
Three Months Ended June 30, 2019
Balance, beginning of period	$	18,629	$	9,815	$	56,115		$	(4,784	)	$	(808	)	$	78,967
Net income		—		—		2,586			—			—			2,586
Other comprehensive income		—		—		—			—			614			614
Issuance of 108 treasury shares		—		—		—			4			—			4
Cash dividends declared, $0.26 per share		—		—		(713	)		—			—			(713	)
Balance, end of period	$	18,629	$	9,815	$	57,988		$	(4,780	)	$	(194	)	$	81,458
Six Months Ended June 30, 2019
Balance, beginning of period	$	18,629	$	9,815	$	54,288		$	(4,784	)	$	(1,412	)	$	76,536
Net income		—		—		5,126			—			—			5,126
Other comprehensive income		—		—		—			—			1,218			1,218
Issuance of 108 treasury shares		—		—		—			4			—			4
Cash dividends declared, $0.52 per share		—		—		(1,426	)		—			—			(1,426	)
Balance, end of period	$	18,629	$	9,815	$	57,988		$	(4,780	)	$	(194	)	$	81,458

	Six Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2020			2019			2021			2020
NET CASH FROM OPERATING ACTIVITIES	$	7,635		$	4,500		$	5,684		$	7,635
CASH FLOWS FROM INVESTING ACTIVITIES
Securities:
Proceeds from repayments, available-for-sale		25,028			6,268			27,598			25,028
Proceeds from repayments, held-to-maturity		6,437			1,045			5,034			6,437
Purchases, available-for-sale		(15,272	)		(5,705	)		(33,917	)		(15,272	)
Purchases, held-to-maturity		(3,425	)		—			(20,851	)		(3,425	)
Loan originations, net of repayments		(87,808	)		(1,587	)
Loan (originations) repayments, net								56,230			(87,808	)
Proceeds from sale of equipment		24			—			—			24
Property, equipment, and software acquisitions		(969	)		(2,039	)		(1,222	)		(969	)
Purchase of bank-owned life insurance		—			(3,000	)		(2,000	)		—
Net cash used in investing activities		(75,985	)		(5,018	)
Net cash provided by (used in) investing activities								30,872			(75,985	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		132,415			16,830			95,106			132,415
Net change in short-term borrowings		4,976			(1,941	)		1,260			4,976
Proceeds from other borrowings		5,000			—			—			5,000
Repayment of other borrowings		(1,465	)		(1,949	)		(1,094	)		(1,465	)
Cash dividends paid		(768	)		(713	)		(823	)		(768	)
Issuance of treasury stock		—			4
Purchase of treasury shares								(313	)		—
Net cash provided by financing activities		140,158			12,231			94,136			140,158
NET INCREASE IN CASH AND CASH EQUIVALENTS		71,808			11,713			130,692			71,808
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		102,017			45,564			181,652			102,017
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	173,825		$	57,277		$	312,344		$	173,825
SUPPLEMENTAL DISCLOSURES
Cash paid during the year for:
Interest	$	1,645		$	1,969		$	1,137		$	1,645
Income taxes		—			1,475			1,375			—
Noncash financing activities:
Dividends declared		768			713			820			768
Lease adoption:
Right of use lease asset		—			450
Lease liability		—			424

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 June 30, ~~2020,~~2021, 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,~~2020, 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 periods ended June 30, ~~2020~~2021 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 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 held-to-maturity 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.

A~~SU 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 aton June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

(Dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized (losses)			Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
June 30, 2020
June 30, 2021
Available-for-sale
U.S. Treasury security	$	999	$	19	$	—		$	1,018
U.S. Treasury securities										$	3,926	$	6	$	(71	)	$	3,861
U.S. Government agencies											13,999		—		(171	)		13,828
Mortgage-backed securities of government agencies		74,063		1,362		(211	)		75,214		143,421		850		(1,695	)		142,576
Asset-backed securities of government agencies		895		—		(64	)		831		805		—		(19	)		786
State and political subdivisions		18,828		549		—			19,377		24,291		459		(14	)		24,736
Corporate bonds		6,988		56		(282	)		6,762		8,314		76		(13	)		8,377
Total available-for-sale		101,773		1,986		(557	)		103,202		194,756		1,391		(1,983	)		194,164
Held-to-maturity
Mortgage-backed securities of government agencies		7,446		264		(15	)		7,695		24,395		145		(21	)		24,519
State and political subdivisions		3,425		—		—			3,425		483		1		—			484
Total held-to-maturity		10,871		264		(15	)		11,120		24,878		146		(21	)		25,003
Equity securities		53		30		—			83		53		46		—			99
Restricted stock		4,614		—		—			4,614		4,614		—		—			4,614
Total securities	$	117,311	$	2,280	$	(572	)	$	119,019	$	224,301	$	1,583	$	(2,004	)	$	223,880
December 31, 2019
December 31, 2020
Available-for-sale
U.S. Treasury security	$	998	$	1	$	—		$	999	$	999	$	12	$	—		$	1,011
U.S. Government agencies		5,500		—		(4	)		5,496		13,998		8		—			14,006
Mortgage-backed securities of government agencies		75,676		326		(145	)		75,857		138,964		1,184		(136	)		140,012
Asset-backed securities of government agencies		934		—		(17	)		917		848		—		(11	)		837
State and political subdivisions		21,161		351		(1	)		21,511		23,422		544		—			23,966
Corporate bonds		7,605		23		(262	)		7,366		10,841		42		(277	)		10,606
Total available-for-sale		111,874		701		(429	)		112,146		189,072		1,790		(424	)		190,438
Held-to-maturity
U.S. Government agencies		4,999		—		(6	)		4,993
Mortgage-backed securities of government agencies		8,870		143		(56	)		8,957		5,620		192		(12	)		5,800
State and political subdivisions											3,425		—		—			3,425
Total held-to-maturity		13,869		143		(62	)		13,950		9,045		192		(12	)		9,225
Equity securities		53		39		—			92		53		34		—			87
Restricted stock		4,614		—		—			4,614		4,614		—		—			4,614
Total securities	$	130,410	$	883	$	(491	)	$	130,802	$	202,784	$	2,016	$	(436	)	$	204,364

The amortized cost and fair value of debt securities aton June 30, ~~2020,~~2021, 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	$	3,679	$	3,722	$	1,458	$	1,467
Due after one through five years		10,258		10,394		23,130		23,298
Due after five through ten years		16,003		16,293		32,624		32,790
Due after ten years		71,833		72,793		137,544		136,609
Total debt securities available-for-sale	$	101,773	$	103,202	$	194,756	$	194,164
Held-to-maturity
Due in one year or less	$	3,425	$	3,425
Due after five through ten years						110		111
Due after ten years		7,446		7,695		24,768		24,892
Total debt securities held-to-maturity	$	10,871	$	11,120	$	24,878	$	25,003

Securities with a fair value of approximately ~~$89.6~~$107.8 million and ~~$80.3~~$91.0 million were pledged aton June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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 aton June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. Federal Reserve Bank stock was $471 thousand aton June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

There were 0 proceeds from sales of securities for the ~~six month~~three and six-month periods ~~ending~~ended June 30, ~~2020~~2021 and ~~2019.~~2020. All gains and losses recognized on equity securities during the ~~six month~~three and six-month periods 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, aton June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

	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
June 30, 2020
June 30, 2021
Available-for-sale
U.S. Treasury Securities																$	(71	)	$	2,856	$	—		$	—	$	(71	)	$	2,856
U.S. Government agencies																	(171	)		13,828		—			—		(171	)		13,828
Mortgage-backed securities of government agencies																	(1,692	)		92,155		(3	)		328		(1,695	)		92,483
Asset-backed securities of government agencies																	—			—		(19	)		786		(19	)		786
State and political subdivisions																	(14	)		795		—			—		(14	)		795
Corporate bonds																	—			—		(13	)		987		(13	)		987
Held-to-maturity
Mortgage-backed securities of government agencies																	—			—		(21	)		1,308		(21	)		1,308
Total temporarily impaired securities																$	(1,948	)	$	109,634	$	(56	)	$	3,409	$	(2,004	)	$	113,043
December 31, 2020
Available-for-sale
Mortgage-backed securities of government agencies	$	(197	)	$	21,770	$	(14	)	$	1,672	$	(211	)	$	23,442	$	(70	)	$	10,808	$	(66	)	$	8,974	$	(136	)	$	19,782
Asset-backed securities of government agencies		—			—		(64	)		831		(64	)		831		—			—		(11	)		837		(11	)		837
Corporate bonds		—			—		(282	)		3,695		(282	)		3,695		(32	)		1,968		(245	)		3,733		(277	)		5,701
Held-to-maturity																														—
Mortgage-backed securities of government agencies		(15	)		2,076		—			—		(15	)		2,076		(12	)		1,734		—			—		(12	)		1,734
Total temporarily impaired securities	$	(212	)	$	23,846	$	(360	)	$	6,198	$	(572	)	$	30,044	$	(114	)	$	14,510	$	(322	)	$	13,544	$	(436	)	$	28,054
December 31, 2019
Available-for-sale
U.S. Government agencies	$	—		$	—	$	(4	)	$	3,496	$	(4	)	$	3,496
Mortgage-backed securities of government agencies		(74	)		22,702		(71	)		8,924		(145	)		31,626
Asset-backed securities of government agencies		—			—		(17	)		917		(17	)		917
State and political subdivisions		—			—		(1	)		653		(1	)		653
Corporate bonds		—			—		(262	)		3,712		(262	)		3,712
Held-to-maturity
U.S. Government agencies		—			—		(6	)		4,993		(6	)		4,993
Mortgage-backed securities of government agencies		—			—		(56	)		3,009		(56	)		3,009
Total temporarily impaired securities	$	(74	)	$	22,702	$	(417	)	$	25,704	$	(491	)	$	48,406

There were NaN securities in an unrealized loss position aton June 30, ~~2020, 9~~2021, 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 aton June 30, ~~2020.~~2021.

(Dollars in thousands)	June 30, 2020			December 31, 2019		June 30, 2021			December 31, 2020
Commercial	$	215,139		$	137,114
Commercial ¹						$	146,138		$	191,540
Commercial real estate		198,948			196,748		184,677			187,221
Residential real estate		177,799			174,259		171,496			177,155
Construction & land development		28,123			23,960		34,393			36,038
Consumer		18,851			19,052		16,550			17,916
Total loans before deferred costs		638,860			551,133		553,254			609,870
Deferred loan (fees) costs		(2,061	)		500
Deferred loan (fees) costs, net							(1,224	)		(711	)
Total Loans	$	636,799		$	551,633	$	552,030		$	609,159

¹ Includes $39.0 million and $70.1 million of Paycheck Protection Program loans on June 30, 2021, and December 31, 2020, respectively.

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 equipment, 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 loan~~occupied.

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~~credit 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 ~~$96.7~~$133.4 million and ~~$95.7~~$117.5 million at on June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and ~~provides~~provided 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 June 30, 2020, the~~The Company had ~~752~~499 PPP loans with outstanding principal balances of ~~$91.1 million.~~$39.0 million as of March 31, 2021, and 671 PPP loans with balances of $70.1 million outstanding as of December 31, 2020. 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, as of June 30, 2021, the Company has received approximately ~~$3.2~~$5.4 million in fees associated with the processing of these ~~loans.~~ loans since the inception of the program. Upon funding of the ~~loan, these~~loans, the fees ~~were~~are deferred and ~~will be~~ amortized over the life of the loan with the unearned balance fully recognized at the time a loan is forgiven as an adjustment to yield in accordance with FASB ASC 310-20-25-2. For the six months ended June 30, 2021 and 2020, interest and fee income recognized on PPP loans was $1.7 million and $724 thousand, respectively. For the three months ended June 30, 2021 and

2020, interest and fee income recognized on PPP loans was $691 thousand and $724 thousand, respectively. As of June 30, 2021, there were $1.5 million in remaining unearned fees on PPP loans outstanding.

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~~Credit concentrations, including commitments, as determined using North American Industry Classification Codes (NAICS), to the 2 largest industries compared to total loans at June 30, ~~2020~~2021, included $43 million, or 8%, of total loans to lessors of non-residential buildings or dwellings, and ~~December 31, 2019, there were 0 concentrations~~$34 million, or 6%, of total loans ~~related~~ to ~~any single industry.~~assisted living facilities for the elderly. These loans are generally secured by real property and equipment, with repayment expected from operational cash flow. Credit evaluation is based on a review of cash flow coverage of principal, interest payments, and the adequacy of the collateral received.

The Company has identified industries that could be at a higher risk due to the COVID-19 pandemic. As of June 30, ~~2020~~2021, the total balance of loans identified to COVID-19 affected businesses was ~~$36.2~~$43 million, with ~~$31.6~~$27 million inof those loans to assisted living facilities and $13 million to businesses in the hotel industry.

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, ~~2020~~2021, and ~~2019.~~2020. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

For the three months ended June 30, 2021, the decrease in the provision for loan losses for commercial loans was primarily related to a payoff. For the six months ended June 30, 2021 the decrease in the provision for commercial loans was primarily related to payoffs, partially offset by an increase in specific reserves. The decrease in provision for all other categories is related to the improvement in economic conditions along with fewer delinquent and ~~six month~~nonperforming loans and improvement in classified loan balances.

For the three- and six-month periods ended June 30, 2020, the decrease in the provision for loan losses for commercial loans and the increase for commercial real estate loans was due to the reallocation of allowance related to loans affected by the COVID-19 pandemic. The increase in all other categories is primarily related to the slowing economy and the continuing elevated unemployment rates associated with the pandemic.

The decrease in the provision for loan losses for the six months ended June 30, 2019 for 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 and the increase for commercial real estate loans was primarily due to the change 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

Three months ended June 30, 2020

Beginning balance

$
2,609

$
2,300

$
1,347

$
255

$
518

$
91

$
7,120

Provision for loan losses

(343
)

480

237

82

2

259

717

Charge-offs

(4
)

—

—

—

(12
)

(16
)
Recoveries

4

1

1

—

8

14

Net charge-offs

—

1

1

—

(4
)

(2
)
Ending balance

$
2,266

$
2,781

$
1,585

$
337

$
516

$
350

$
7,835

Six months ended June 30, 2020

Beginning balance

$
2,408

$
2,153

$
1,152

$
203

$
481

$
620

$
7,017

Provision for loan losses

(131
)

627

446

134

89

(270
)

895

Charge-offs

(19
)

—

(15
)

—

(69
)

(103
)
Recoveries

8

1

2

—

15

26

Net recoveries

(11
)

1

(13
)

—

(54
)

(77
)
Ending balance

$
2,266

$
2,781

$
1,585

$
337

$
516

$
$
350

$
7,835

Three months ended June 30, 2019

Beginning balance

$
1,997

$
1,808

$
1,222

$
170

$
325

$
765

$
6,287

Provision for loan losses

277

138

5

(66
)

46

(115
)

285

Charge-offs

(11
)

—

—

—

(43
)

(54
)
Recoveries

4

—

2

—

13

19

Net (charge-offs) recoveries

(7
)

—

2

—

(30
)

(35
)
Ending balance

$
2,267

$
1,946

$
1,229

$
104

$
341

$
650

$
6,537

Six months ended June 30, 2019

Beginning balance

$
2,178

$
1,791

$
1,245

$
258

$
306

$
129

$
5,907

Provision for loan losses

(62
)

155

(19
)

(154
)

129

521

570

Charge-offs

(16
)

—

—

—

(108
)

(124
)
Recoveries

167

—

3

—

14

184

Net charge-offs

151

—

3

—

(94
)

60

Ending balance

$
2,267

$
1,946

$
1,229

$
104

$
341

$
650

$
6,537

(Dollars in thousands)	Commercial			Commercial Real Estate			Residential Real Estate			Construction & Land Development			Consumer			Unallocated			Total
Three Months Ended June 30, 2021
Beginning balance	$	1,640		$	3,489		$	1,134		$	800		$	290		$	985		$	8,338
Provision for loan losses		(306	)		(86	)		(75	)		(33	)		(21	)		46			(475	)
Charge-offs		(3	)		—			—			—			(17	)					(20	)
Recoveries		4			1			1			—			26						32
Net recoveries		1			1			1			—			9						12
Ending balance	$	1,335		$	3,404		$	1,060		$	767		$	278		$	1,031		$	7,875
Six Months Ended June 30, 2021
Beginning balance	$	1,739		$	3,469		$	1,156		$	756		$	352		$	802		$	8,274
Provision for loan losses		(421	)		(66	)		(98	)		11			(100	)		229			(445	)
Charge-offs		(6	)		—			—			—			(19	)					(25	)
Recoveries		23			1			2			—			45						71
Net recoveries		17			1			2			—			26						46
Ending balance	$	1,335		$	3,404		$	1,060		$	767		$	278		$	1,031		$	7,875
Three Months Ended June 30, 2020
Beginning balance	$	2,609		$	2,300		$	1,347		$	255		$	518		$	91		$	7,120
Provision for loan losses		(343	)		480			237			82			2			259			717
Charge-offs		(4	)		—			—			—			(12	)					(16	)
Recoveries		4			1			1			—			8						14
Net (charge-offs) recoveries		—			1			1			—			(4	)					(2	)
Ending balance	$	2,266		$	2,781		$	1,585		$	337		$	516		$	350		$	7,835
Six Months Ended June 30, 2020
Beginning balance	$	2,408		$	2,153		$	1,152		$	203		$	481		$	620		$	7,017
Provision for loan losses		(131	)		627			446			134			89			(270	)		895
Charge-offs		(19	)		—			(15	)		—			(69	)					(103	)
Recoveries		8			1			2			—			15						26
Net (charge-offs) recoveries		(11	)		1			(13	)		—			(54	)					(77	)
Ending balance	$	2,266		$	2,781		$	1,585		$	337		$	516		$	350		$	7,835

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 June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

(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
June 30, 2020
June 30, 2021
Allowance for loan losses:
Individually evaluated for impairment	$	6	$	19	$	1	$	—	$	7	$	—	$	33	$	218	$	19	$	4	$	—	$	3	$	—	$	244
Collectively evaluated for impairment		2,260		2,762		1,584		337		509		350		7,802		1,117		3,385		1,056		767		275		1,031		7,631
Total ending allowance balance	$	2,266	$	2,781	$	1,585	$	337	$	516	$	350	$	7,835	$	1,335	$	3,404	$	1,060	$	767	$	278	$	1,031	$	7,875
Loans:
Loans individually evaluated for impairment	$	2,465	$	2,596	$	728	$	—	$	146			$	5,935	$	1,515	$	2,390	$	818	$	—	$	133			$	4,856
Loans collectively evaluated for impairment		212,674		196,352		177,071		28,123		18,705				632,925		144,623		182,287		170,678		34,393		16,417				548,398
Total ending loans balance	$	215,139	$	198,948	$	177,799	$	28,123	$	18,851			$	638,860	$	146,138	$	184,677	$	171,496	$	34,393	$	16,550			$	553,254
December 31, 2019
December 31, 2020
Allowance for loan losses:
Individually evaluated for impairment	$	16	$	17	$	1	$	—	$	—	$	—	$	34	$	4	$	20	$	1	$	—	$	5	$	—	$	30
Collectively evaluated for impairment		2,392		2,136		1,151		203		481		620		6,983		1,735		3,449		1,155		756		347		802		8,244
Total ending allowance balance	$	2,408	$	2,153	$	1,152	$	203	$	481	$	620	$	7,017	$	1,739	$	3,469	$	1,156	$	756	$	352	$	802	$	8,274
Loans:
Loans individually evaluated for impairment	$	2,555	$	2,637	$	853	$	—	$	14			$	6,059	$	2,560	$	2,875	$	756	$	—	$	141			$	6,059
Loans collectively evaluated for impairment		134,559		194,111		173,406		23,960		19,038				545,074		188,980		184,346		176,399		36,038		17,775				603,538
Total ending loans balance	$	137,114	$	196,748	$	174,259	$	23,960	$	19,052			$	551,133	$	191,540	$	187,221	$	177,155	$	36,038	$	17,916			$	609,870

The following table presents loans individually evaluated for impairment by class of loans as of June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

(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
June 30, 2020
June 30, 2021
Commercial	$	2,899	$	2,281	$	183	$	2,464	$	6	$	1,715	$	1,263	$	251	$	1,514	$	218
Commercial real estate		2,968		2,363		241		2,604		19		2,915		2,271		118		2,389		19
Residential real estate		920		549		180		729		1		884		439		385		824		4
Consumer		148		—		151		151		7		136		12		126		138		3
Total impaired loans	$	6,935	$	5,193	$	755	$	5,948	$	33	$	5,650	$	3,985	$	880	$	4,865	$	244
December 31, 2019
December 31, 2020
Commercial	$	2,982	$	2,541	$	16	$	2,557	$	16	$	2,604	$	1,965	$	597	$	2,562	$	4
Commercial real estate		2,952		2,471		176		2,647		17		3,755		2,673		211		2,884		20
Residential real estate		1,024		457		396		853		1		923		513		247		760		1
Consumer		14		14		—		14		—		143		—		146		146		5
Total impaired loans	$	6,972	$	5,483	$	588	$	6,071	$	34	$	7,425	$	5,151	$	1,201	$	6,352	$	30

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

	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2020		2019		2020		2019		2021		2020		2021		2020
Average recorded investment:
Commercial	$	2,523	$	1,582	$	2,488	$	1,228	$	1,979	$	2,523	$	2,002	$	2,488
Commercial real estate		2,550		2,152		2,553		2,233		2,337		2,550		2,738		2,553
Residential real estate		820		943		833		986		834		820		822		833
Consumer		95		15		52		9		135		95		137		52
Average recorded investment in impaired loans	$	5,988	$	4,692	$	5,926	$	4,456	$	5,285	$	5,988	$	5,699	$	5,926
Interest income recognized:
Commercial	$	19	$	28	$	37	$	37	$	9	$	19	$	19	$	37
Commercial real estate		4		3		6		6		21		4		51		6
Residential real estate		9		12		19		23		8		9		16		19
Consumer		1		—		1		—		2		1		4		1
Interest income recognized on a cash basis on impaired loans	$	33	$	43	$	63	$	66	$	40	$	33	$	90	$	63

The following table presents the aging of past due loans and nonaccrual loans as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 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
June 30, 2020
June 30, 2021
Commercial	$	213,726	$	4	$	3	$	25	$	1,381	$	1,413	$	215,139	$	144,796	$	—	$	—	$	—	$	1,342	$	1,342	$	146,138
Commercial real estate		196,634		11		—		—		2,303		2,314		198,948		184,152		—		—		—		525		525		184,677
Residential real estate		176,946		202		10		—		641		853		177,799		170,650		267		—		—		579		846		171,496
Construction & land development		28,123		—		—		—		—		—		28,123		34,064		—		—		—		329		329		34,393
Consumer		18,795		23		1		—		32		56		18,851		16,429		97		13		—		11		121		16,550
Total Loans	$	634,224	$	240	$	14	$	25	$	4,357	$	4,636	$	638,860	$	550,091	$	364	$	13	$	—	$	2,786	$	3,163	$	553,254
December 31, 2019
December 31, 2020
Commercial	$	135,707	$	15	$	—	$	67	$	1,325	$	1,407	$	137,114	$	190,264	$	51	$	—	$	—	$	1,225	$	1,276	$	191,540
Commercial real estate		194,157		186		—		—		2,405		2,591		196,748		185,005		11		—		—		2,205		2,216		187,221
Residential real estate		173,023		264		277		174		521		1,236		174,259		175,812		606		—		49		688		1,343		177,155
Construction & land development		23,960		—		—		—		—		—		23,960		35,721		—		—		—		317		317		36,038
Consumer		18,640		365		—		—		47		412		19,052		17,713		168		22		—		13		203		17,916
Total Loans	$	545,487	$	830	$	277	$	241	$	4,298	$	5,646	$	551,133	$	604,515	$	836	$	22	$	49	$	4,448	$	5,355	$	609,870

The table below summarizes the Company’s deferral activity at June 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 at the time of modification. In a~~ccordance with the CARES Act, these loans are not required to be evaluated as TDR’s.~~

All troubled debt restructurings (“~~TDR’s)~~TDRs”) are individually evaluated for impairment and a related allowance is recorded, as needed. Loans whose terms have been modified as ~~TDR’s~~TDRs totaled ~~$2.4~~$4.1 million as of June 30, ~~2020,~~2021, and ~~$2.5~~$2.8 million as of December 31, ~~2019,~~2020, with ~~$31~~$27 thousand of specific reserves allocated to those loans at June 30, ~~2020~~2021 and ~~$18~~$30 thousand at December 31, ~~2019,~~2020, respectively. AtOn June 30, ~~2020, $2.1~~2021, $2.5 million of the loans classified as ~~TDR’s~~TDRs were performing in accordance with their modified terms. Of the remaining ~~$327 thousand,~~$1.6 million, all were in nonaccrual of interest status.

Loan modifications considered TDRs completed during the three and six-months ended June 30 were as follows:

(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 June 30, 2020
Three Months Ended June 30, 2021
Commercial	4	$	112	$	112	3	$	894	$	894
Commercial Real Estate	1		80		80
Residential	1		66		66
Commercial real estate						1		386		386
Total Restructured Loans						4	$	1,280	$	1,280
Six Months Ended June 30, 2021
Commercial						3	$	894	$	894
Commercial real estate						2		1,686		1,686
Residential real estate						1		88		88
Total Restructured Loans						6	$	2,668	$	2,668

Three Months Ended June 30, 2020
Commercial						4	$	112	$	112
Commercial real estate						1		80		80
Residential real estate						1		66		66
Consumer	6		146		146	6		146		146
Total Restructured Loans	12	$	404	$	404
For the Six months ended June 30, 2019
						12	$	404	$	404
Six Months Ended June 30, 2020
Commercial	5	$	181	$	181	5	$	181	$	181
Commercial Real Estate	1		80		80
Residential	1		66		66
Commercial real estate						1		80		80
Residential real estate						1		66		66
Consumer	6		146		146	6		146		146
Total Restructured Loans	13	$	473	$	473
						13	$	473	$	473

The loans restructured were modified by changing the monthly payment to interest only and ~~extending~~modifying the maturity dates.

NaN of the loans restructured in ~~2019~~2020 have defaulted in three or six months ended 2021. NaN of the loans restructured in 2019 defaulted in 2020.

There was ~~1 loan in the amount of $200 thousand restructured in 2018 that subsequently defaulted in 2019.~~

~~Other~~0 other real estate owned ~~amounted to 1 property at $98 thousand at~~on June 30, ~~2020~~2021 and ~~$99 thousand at~~ December 31, ~~2019, respectively.~~2020. There were ~~$61 thousand in~~0 mortgage loans in the process of foreclosure aton June 30, ~~2020~~2021 and ~~$50~~$21 thousand aton December 31, ~~2019.~~2020. There were 0 other repossessed assets aton June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

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 all commercial loans before origination and an annual review of those with an outstanding ~~balance~~commitment 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~~(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 collectibleand 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~~above-described process are considered to be pass rated loans. Loans listed as not rated annually 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 June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Not Rated		Total
June 30, 2021
Commercial	$	140,233	$	489	$	4,174	$	—	$	1,242	$	146,138
Commercial real estate		166,796		1,250		15,482		—		1,149		184,677
Residential real estate		168		—		121		—		171,207		171,496
Construction & land development		26,667		—		329		—		7,397		34,393
Consumer		—		—		13		—		16,537		16,550
Total	$	333,864	$	1,739	$	20,119	$	—	$	197,532	$	553,254
December 31, 2020
Commercial	$	177,620	$	2,352	$	9,644	$	—	$	1,924	$	191,540
Commercial real estate		161,091		2,545		21,812		—		1,773		187,221
Residential real estate		174		—		114		—		176,867		177,155
Construction & land development		29,182		—		—		317		6,539		36,038
Consumer		—		—		105		—		17,811		17,916
Total	$	368,067	$	4,897	$	31,675	$	317	$	204,914	$	609,870

(Dollars in thousands)

Pass

Special
Mention

Substandard

Doubtful

Not
Rated

Total

June 30, 2020

Commercial

$
192,349

$
4,601

$
15,408

$
—

$
2,781

$
215,139

Commercial real estate

171,443

9,930

15,547

—

2,028

198,948

Residential real estate

180

—

21

—

177,598

177,799

Construction & land development

22,513

93

478

—

5,039

28,123

Consumer

—

—

71

—

18,780

18,851

Total

$
386,485

$
14,624

$
31,525

$
—

$
206,226

$
638,860

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 June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. 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
June 30, 2020
June 30, 2021
Commercial	$	2,781	$	—	$	2,781	$	1,242	$	—	$	1,242
Commercial real estate		2,028		—		2,028		1,149		—		1,149
Residential real estate		177,016		582		177,598		170,632		575		171,207
Construction & land development		5,039		—		5,039		7,397		—		7,397
Consumer		18,766		14		18,780		16,526		11		16,537
Total	$	205,630	$	596	$	206,226	$	196,946	$	586	$	197,532
December 31, 2019
December 31, 2020
Commercial	$	1,048	$	—	$	1,048	$	1,924	$	—	$	1,924
Commercial real estate		1,163		—		1,163		1,773		—		1,773
Residential real estate		173,407		432		173,839		176,278		589		176,867
Construction & land development		4,433		—		4,433		6,539		—		6,539
Consumer		18,979		—		18,979		17,798		13		17,811
Total	$	199,030	$	432	$	199,462	$	204,312	$	602	$	204,914

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
	June 30,		December 31,		June 30,		December 31,
(Dollars in thousands)	2020		2019		2021		2020
Securities of U.S. Government Agencies and mortgage-backed securities of government agencies pledged, fair value	$	44,040	$	39,058	$	38,670	$	37,393
Repurchase agreements		43,865		38,889		38,475		37,215

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 June 30, ~~2020~~2021 and December 31, ~~2019~~2020 by level within the fair value hierarchy. NaN 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.~~changes and are not included in the table below.

(Dollars in thousands)	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
June 30, 2020
Assets:
Securities available-for-sale
U.S. Treasury security	$	1,018	$	—	$	—	$	1,018
Mortgage-backed securities of government agencies		—		75,214		—		75,214
Asset-backed securities of government agencies		—		831		—		831
State and political subdivisions		—		19,377		—		19,377
Corporate bonds		—		6,762		—		6,762
Total available-for-sale securities	$	1,018	$	102,184	$	—	$	103,202
Equity securities	$	37	$	—	$	—	$	37

December 31, 2019
June 30, 2021
Assets:
Securities available-for-sale
U.S. Treasury security	$	999	$	—	$	—	$	999	$	3,861	$	—	$	—	$	3,861
U.S. Government agencies		—		5,496		—		5,496		—		13,828		—		13,828
Mortgage-backed securities of government agencies		—		75,857		—		75,857		—		142,576		—		142,576
Asset-backed securities of government agencies		—		917		—		917		—		786		—		786
State and political subdivisions		—		21,511		—		21,511		—		24,736		—		24,736
Corporate bonds		—		7,366		—		7,366		—		8,377		—		8,377
Total available-for-sale securities	$	999	$	111,147	$	—	$	112,146	$	3,861	$	190,303	$	—	$	194,164
Equity securities	$	46	$	—	$	—	$	46	$	54	$	—	$	—	$	54

December 31, 2020
Assets:
Securities available-for-sale
U.S. Treasury security									$	1,011	$	—	$	—	$	1,011
U.S. Government agencies										—		14,006		—		14,006
Mortgage-backed securities of government agencies										—		140,012		—		140,012
Asset-backed securities of government agencies										—		837		—		837
State and political subdivisions										—		23,966		—		23,966
Corporate bonds										—		10,606		—		10,606
Total available-for-sale securities									$	1,011	$	189,427	$	—	$	190,438
Equity securities									$	41	$	—	$	—	$	41

There were 0 assets measured on a nonrecurring basis at June 30, 2021. The following table presents the assets measured on a nonrecurring basis on the Consolidated Balance Sheets at their fair value as of ~~June 30, 2020 and~~ December 31, ~~2019,~~2020, 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
June 30, 2020
December 31, 2020
Assets measured on a nonrecurring basis:
Impaired loans	$	—	$	—	$	10	$	10	$	—	$	—	$	10	$	10
Other real estate owned		—		—		98		98

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

The fair values of recognized financial instruments as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 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
June 30, 2020
June 30, 2021
Financial assets
Cash and cash equivalents	$	173,825	$	173,825	$	—	$	—	$	173,825	$	312,344	$	312,344	$	—	$	—	$	312,344
Securities available-for-sale		103,202		1,018		102,184		—		103,202
Securities held-to-maturity		10,871		—		11,120		—		11,120		24,878		—		25,003		—		25,003
Equity securities		83		37		—		46		83
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		1,678		1,678		—		—		1,678		1,465		1,465		—		—		1,465
Net loans		628,964		—		—		630,125		630,125		544,155		—		—		548,622		548,622
Bank-owned life insurance		19,153		19,153		—		—		19,153		23,710		23,710		—		—		23,710
Accrued interest receivable		1,581		1,581		—		—		1,581		1,659		1,659		—		—		1,659
Mortgage servicing rights		381		—		—		381		381		561		—		—		561		561
Financial liabilities
Deposits	$	815,961	$	690,584	$	—	$	126,988	$	817,572	$	986,668	$	861,672	$	—	$	125,568	$	987,240
Short-term borrowings		43,865		43,865		—		—		43,865		38,475		38,475		—		—		38,475
Other borrowings		9,865		—		—		9,993		9,993		3,570		—		—		3,640		3,640
Accrued interest payable		102		102		—		—		102		69		69		—		—		69

December 31, 2019
December 31, 2020
Financial assets
Cash and cash equivalents	$	102,017	$	102,017	$	—	$	—	$	102,017	$	181,652	$	181,652	$	—	$	—	$	181,652
Securities available-for-sale		112,146		999		111,147		—		112,146
Securities held-to-maturity		13,869		—		13,950		—		13,950		9,045		—		9,225		—		9,225
Equity securities		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		1,378		1,378		—		—		1,378
Net loans		544,616		—		—		542,981		542,981		600,885		—		—		598,583		598,583
Bank-owned life insurance		18,894		18,894		—		—		18,894		21,416		21,416		—		—		21,416
Accrued interest receivable		1,641		1,641		—		—		1,641		2,159		2,159		—		—		2,159
Mortgage servicing rights		328		—		—		328		328		488		—		—		488		488
Financial liabilities
Deposits	$	683,546	$	555,985	$	—	$	127,440	$	683,425	$	891,562	$	768,230	$	—	$	124,127	$	892,357
Short-term borrowings		38,889		38,889		—		—		38,889		37,215		37,215		—		—		37,215
Other borrowings		6,330		—		—		6,273		6,273		4,664		—		—		4,775		4,775
Accrued interest payable		127		127		—		—		127		90		90		—		—		90

The Company also has unrecognized financial instruments aton June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. 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~~$237 million aton June 30, ~~2020~~2021 and ~~$211.3~~$228 million aton December 31, ~~2019.~~2020. 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 and six ~~month periods~~months ended June 30, ~~2020~~2021 and ~~2019:~~2020:

(Dollars in thousands)	Pretax			Tax Effect			After-tax			Pretax			Tax Effect			After-tax
Three months ended June 30, 2020
Balance as of March 31, 2020	$	646		$	(136	)	$	510
Three Months Ended June 30, 2021
Balance as of March 31, 2021										$	(2,342	)	$	492		$	(1,850	)
Unrealized holding gain on available-for-sale securities arising during the period											1,649			(346	)		1,303
Amortization of held-to-maturity discount resulting from transfer											16			(4	)		12
Total other comprehensive income											1,665			(350	)		1,315
Balance as of June 30, 2021										$	(677	)	$	142		$	(535	)

Six Months Ended June 30, 2021
Balance, beginning of period										$	1,249		$	(263	)	$	986
Unrealized holding loss on available-for-sale securities arising during the period											(1,958	)		411			(1,547	)
Amortization of held-to-maturity discount resulting from transfer											32			(6	)		26
Total other comprehensive loss											(1,926	)		405			(1,521	)
Balance as of June 30, 2021										$	(677	)	$	142		$	(535	)

Three Months ended June 30,2020
Balance as of March 31,2020										$	646		$	(136	)	$	510
Unrealized holding gain on available-for-sale securities arising during the period		617			(130	)		487			617			(130	)		487
Amortization of held-to-maturity discount resulting from transfer		16			(3	)		13			16			(3	)		13
Total other comprehensive income		633			(133	)		500			633			(133	)		500
Balance as of June 30, 2020	$	1,279		$	(269	)	$	1,010		$	1,279		$	(269	)	$	1,010
Six months ended June 30, 2020
Balance as of December 31, 2019	$	92		$	(20	)	$	72

Six Months Ended June 30, 2020
Balance, beginning of period										$	92		$	(20	)	$	72
Unrealized holding gain on available-for-sale securities arising during the period		1,157			(243	)		914			1,157			(243	)		914
Amortization of held-to-maturity discount resulting from transfer		30			(6	)		24			30			(6	)		24
Total other comprehensive income		1,187			(249	)		938			1,187			(249	)		938
Balance as of June 30, 2020	$	1,279		$	(269	)	$	1,010		$	1,279		$	(269	)	$	1,010
Three months ended June 30,2019
Balance as of March 31, 2019		(1,022	)		214		$	(808	)
Unrealized holding gain on available-for-sale securities arising during the period		762			(160	)		602
Amortization of held-to-maturity discount resulting from transfer		15			(3	)		12
Total other comprehensive income		777			(163	)		614
Balance as of June 30, 2019	$	(245	)	$	51		$	(194	)
Six months ended June 30, 2019
Balance as of December 31, 2018	$	(1,786	)	$	374		$	(1,412	)
Unrealized holding loss on available-for-sale securities arising during the period		1,511			(317	)		1,194
Amortization of held-to-maturity discount resulting from transfer		30			(6	)		24
Total other comprehensive loss		1,541			(323	)		1,218
Balance as of June 30, 2019	$	(245	)	$	51		$	(194	)

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 June 30, ~~2020~~2021 as compared to December 31, ~~2019,~~2020, and the consolidated results of operations for the three and six ~~month periods~~months ended June 30, ~~2020~~2021 compared to the same periods in ~~2019.~~2020. 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 $~~965 million~~1.1 billion at June 30, ~~2020~~2021 as compared to ~~$819 million~~$1.0 billion at December 31, ~~2019.~~ 2020.During the ~~six-month period~~six months ended June 30, ~~2020~~,2021, net loans ~~increased $84~~decreased $57 million. Cash and cash equivalents, and securities increased ~~$60~~$150 million. Deposits and short-term borrowings increased ~~$137~~$96 million.

Net loans ~~increased $84~~decreased $57 million, or ~~13%~~9%, as commercial real estate and construction loans ~~increased $6~~decreased $4 million, or 3%2%, and residential real estate loans ~~increased $3.5~~decreased $6 million, or 2%3%, from December 31, ~~2019.~~2020. Commercial loans ~~increased $78~~decreased $47 million, or ~~36%, as loans~~24%.Loans originated under SBA Paycheck Protection Program ~~exceeded $90~~totaled $37 million ~~in second quarter~~during the first six months of 2021 and $92 million during 2020. Consumers continued to refinance their mortgage loans for historically low long-term fixed rates while home purchase activity ~~increased~~remained robust despite limited inventory through the first half of ~~2020.~~2021. Residential mortgage loan originations for the six months ended June 30, ~~2020~~2021 totaled ~~$56~~$58.7 million, an increase from ~~$28~~$55.9 million in originations during the ~~six-month period~~six months ended June 30, ~~2019.~~2020. Originations sold into the secondary market were ~~$22~~$27 million and ~~$5.9~~$22 million, respectively during the ~~six-month periods~~six months ended June 30, ~~2020~~2021 and June 30, ~~2019.~~2020. The Bank originates and sells primarily 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 ~~$1.3 million~~$40 thousand from the year ago quarter to ~~$7.8 million or 1.23% of total loans.~~$7.9 million. The Company has not early adopted CECL which has been delayed for smaller reporting companies. ~~Outstanding~~Year over year outstanding loan balances ~~increased~~decreased 13% to ~~$637~~$552 million at June 30, ~~2020.~~2021. Net ~~charge-offs increased to $77~~recoveries were $46 thousand, or an annualized ~~0.03%~~-0.02% of average loans, in the current six-month period compared to the ~~$60~~$77 thousand ~~recovery,~~net charge-off, or ~~-0.02%~~0.03% of average loans in the year-ago six-month period. At June 30, ~~2020~~2021, the allowance for total loans minus the SBA guaranteed Payroll Protection loans was ~~1.44%~~1.53%. We believe the allowance level is appropriate given the low level of problem loans and current composition of the overall loan ~~portfolio.~~ portfolio in the current economic environment.

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

Nonperforming loans decreased $1.6 million to $2.8 million, or 0.50%, of total loans from $4.4 million, or ~~1.23% of total loans~~ ~~from $4.5 million, or 1.19%~~0.69%, a year ago. For the six months ~~ending~~ended June 30, ~~2020~~2021, $321 thousand loans ~~totaling $257 thousand~~ were placed on nonaccrual status, ~~there were $26~~$348 thousand in ~~charge-downs recognized,~~paydowns, and ~~pay downs of $172 thousand were received~~.the bank returned $1.6 million back to accrual status due to ongoing payment performance.

	June 30,			December 31,			June 30,			June 30,			December 31,			June 30,
(Dollars in thousands)	2020			2019			2019			2021			2020			2020
Non-performing loans	$	4,382		$	4,539		$	4,497		$	2,786		$	4,497		$	4,382
Other real estate		98			99			99			—			—			98
Repossessed assets		—			20			—			—			—			—
Allowance for loan losses		7,835			7,017			6,537			7,875			8,274			7,835
Total loans	$	636,799		$	551,633		$	550,612		$	552,030		$	609,159		$	636,799
Allowance for loan losses as a percentage of total loans		1.23	%		1.27	%		1.19	%		1.43	%		1.36	%		1.23	%
Allowance for loan losses to total nonperforming loans	1.7x			1.5x			1.5x			2.8x			1.8x			1.7x

The ratio of gross loans to deposits was ~~78.0%~~55.9% at June 30, ~~2020,~~2021, compared to ~~80.7%~~68.3% at December 31, ~~2019.~~2020.

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 ~~gain~~losses of $2$2.0 million within the available-for-sale and held-to-maturity portfolios as of June 30, ~~2020, were~~2021, was primarily the result of ~~customary and expected fluctuations in~~current market yields compared to the ~~bond market~~yields at the time the investments were purchased by the Company and not ~~necessarily the expected cash flows of the individual securities.~~due to credit quality. As a result, all embedded security ~~impairments~~losses on June 30, ~~2020,~~2021, are considered temporary and no impairment loss relating to these securities has been recognized.

Deposits increased ~~$132~~$95 million, or ~~19%~~11%, from December 31, ~~2019~~ 2020with ~~noninterest bearing~~noninterest-bearing deposits increasing approximately ~~$57~~$31 million and interest-bearing deposit accounts increasing approximately ~~$75~~$64 million. Total deposits as of June 30, ~~2020~~2021 are ~~$193~~$987 million, or 21%, greater than June 30, ~~2019~~2020 deposit balances. On a year over year comparison, increases were recognized in noninterest-bearing demand deposits of ~~$74~~$48 million, interest-bearing demand deposits of ~~$79~~$68 million, money market accounts of ~~$17~~$13 million, savings of ~~$22~~$42 million, and time deposits remained stable. During 2020 and continuing into 2021, the Bank’s customers increased deposits through stimulus payments and cash conservation as a result of ~~$1 million.~~the COVID-19 pandemic.

Short-term borrowings consisting of overnight repurchase agreements with retail customers increased $5$1.3 million to ~~$44~~$38 million at June 30, ~~2020~~2021 as compared to December 31, ~~2019~~ 2020and other borrowings ~~increased $4~~decreased $1 million as the Company ~~took out~~repaid FHLB advances.

Total shareholders’ equity amounted to ~~$90~~$96 million, or ~~9.3%~~8.5%, of total assets at June 30, ~~2020 up~~2021 an increase from ~~$85~~$93.9 million December 31, ~~2019.~~ 2020.The increase in shareholders’ equity during the six months ~~ending~~ended June 30, ~~2020~~2021 was due to net income of ~~$5.1~~$5.6 million partially offset by cash dividends of $1.6 million, other comprehensive loss of $1.5 million and ~~an increase in accumulated other comprehensive income~~the repurchase of ~~$938 thousand offset by dividends declared of $1.5 million.~~treasury shares for $313 thousand. The Company and the Bank met all regulatory capital requirements at June 30, ~~2020.~~2021.

For the quarters ended June 30, ~~2020~~2021 and ~~2019,~~2020, the Company recorded net income of ~~$2.61~~$2.7 million and ~~$2.59~~$2.6 million and ~~$0.95~~$1.00 and ~~$0.94~~$0.95 per share, respectively.The ~~$20~~$139 thousand increase in net income for the period was primarily the result of a ~~$328~~reversal of provision for loan losses of $475 thousand and a $202 thousand increase in noninterest ~~income and a decrease of $191 thousand in other noninterest expenses.~~income. The increases were partially offset by an increase in noninterest expenses of $681 thousand, a $541 thousand decrease ~~of $59 thousand~~ in net interest income anand a $33 thousand increase in the ~~provision for loan losses of $432 thousand and a $8 thousand increase in~~ federal income tax provision.Return on average assets and return on average equity were 0.97% and 11.62%, respectively, for the three-month period of 2021, compared to 1.15% and 11.72%, respectively for the same quarter in 2020.

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

~~Return on average assets and return on average equity were 1.15% and 11.72%, respectively, for the three-month period of 2020, compared to 1.39% and 12.91%, respectively for the same quarter in 2019.~~

	For the Three Months Ended June 30,																For the Three Months Ended June 30,
	2020								2019								2021								2020
(Dollars in thousands)	Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²
ASSETS
Federal funds sold	$	—	$	—			—		$	212	$	1			2.08	%
Interest-earning deposits		117,916		31			0.11	%		39,772		217			2.19		$	291,587	$	68			0.09	%	$	117,916	$	31			0.11	%
Taxable securities		99,353		481			1.95			87,942		584			2.66			193,252		604			1.25			99,353		481			1.95
Tax-exempt securities ⁴		21,858		145			2.65			23,322		169			2.92			24,029		141			2.35			21,858		145			2.65
Loans ^3,4		621,710		7,110			4.60			547,981		7,190			5.26			564,997		6,239			4.43			621,710		7,110			4.60
Total interest-earning assets		860,837		7,767			3.63	%		699,229		8,161			4.68	%		1,073,865		7,052			2.63	%		860,837		7,767			3.63	%
Noninterest-earning assets		52,038								46,429								57,386								52,038
TOTAL ASSETS	$	912,875							$	745,658							$	1,131,251							$	912,875

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	186,993	$	79			0.17	%	$	127,211	$	145			0.46	%	$	281,376	$	94			0.13	%	$	186,993		79			0.17	%
Savings deposits		215,644		70			0.13			186,179		252			0.54			276,746		70			0.10			215,644		70			0.13
Time deposits		126,475		523			1.66			124,001		524			1.69			124,436		345			1.11			126,475		523			1.66
Borrowed funds		51,748		47			0.37			44,803		129			1.15			44,956		34			0.30			51,748		47			0.37
Total interest-bearing liabilities		580,860		719			0.50	%		482,194		1,050			0.87	%		727,514		543			0.30	%		580,860		719			0.50	%
Noninterest-bearing demand deposits		238,876								180,167								305,459								238,876
Other liabilities		3,735								2,959								3,492								3,735
Shareholders' Equity		89,404								80,338								94,786								89,404
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	912,875							$	745,658							$	1,131,251							$	912,875
Taxable equivalent net interest income			$	7,048							$	7,111
Tax equivalent adjustment				(36	)							(40	)
Net interest income			$	7,012							$	7,071
Taxable equivalent net interest margin							3.29	%							4.08	%
Tax equivalent adjustment							(0.02	)							(0.02	)
Net interest margin							3.27	%							4.06	%
Taxable equivalent net interest income, (Non-GAAP)																			$	6,509							$	7,048
Tax equivalent adjustment ⁴																				(38	)							(36	)
Net interest income, (GAAP)																			$	6,471							$	7,012
Net interest margin, (GAAP)																							2.42	%							3.27	%
Tax equivalent adjustment ⁴																							0.01								0.02
Net interest margin-taxable equivalent, (Non-GAAP)																							2.43	%							3.29	%
Taxable equivalent net interest spread							3.13	%							3.81	%							2.33	%							3.13	%

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

⁴ Interest income is shown on a fully tax-equivalent ~~basis.~~basis, which is a Non-GAAP measure and is reconciled to the GAAP measure at the bottom of the table.

Interest income for the quarter ended June 30, ~~2020,~~2021, was ~~$7.7~~$7 million representing a ~~$390~~$717 thousand decrease, or a 5%9% decline, compared to the same period in ~~2019.~~ 2020.This decrease was primarily due to average loan volume decreasing $57 million as well as average loan rates decreasing 6617 basis points ~~partially offset by a volume increase of $74 million~~ for the quarter ended June 30, ~~2020~~2021 as compared to the ~~second quarter 2019.~~same period in 2020. Interest expense for the quarter ended June 30, ~~2020~~2021 was ~~$719~~$543 thousand, a decrease of ~~$331~~$176 thousand, or ~~32%~~24%, from the same ~~period~~quarter in ~~2019.~~2020. The decrease in interest expense occurred primarily due to a decrease in rates on all liabilities for the quarter ended June 30, ~~2020.~~2021, partially offset by increases in the average deposit balances.

For the quarter ended June 30, 2020, the provision for loan losses was $717 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

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

determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

~~Noninterest income for~~For the quarter ended June 30, ~~2020, was $1.6 million, an increase~~2021, with stimulus programs, improving credit quality, and a decrease of ~~$328~~outstanding loan balances, the bank recognized a negative (credit) provision of $475 thousand ~~or 25%,~~to the provision for loan losses, compared to a loss provision of $717 thousand for the same quarter in ~~2019~~. ~~Earnings on bank owned life insurance increased $9 thousand~~2020. The Company’s provision for loan losses for the second quarter 2020 a result of adding policies in 2019. The gain on the sale of mortgage loans to the secondary market increased by $432 thousand for the quarter ended June 30, 2020 as additional loan volume was sold into the secondary market. Debit card interchange income increased $31 thousand, or 8%, with greater fees generated from usage in the second quarter of 2020. Fees from trust and brokerage services decreased $16 thousand to $196 thousand for the second quarter 2020 as compared to the same quarter in 2019. Service charges on deposit accounts decreased $102 thousand, or 33%, compared to the same quarter in 2019 primarily from a volume decrease in overdraft fees.

Noninterest expenses for the quarter ended June 30, 2020 decreased $191 thousand, or 4%, compared to the second quarter of 2019. Salaries and employee benefits decreased $239 thousand, or 8%, a result of the capitalization of approximately $300 thousand in salary and benefits expense to deferred loan origination costs related to PPP loan originations. The Ohio financial institutions tax increased $18 thousand in the second quarter due to the Company’s increased capital base. Marketing and public relations expense decreased $74 thousand, or 53%, primarily due to events being cancelled due to COVID-19. ~~Debit card expenses increased $14 thousand, or 11%, compared to the second quarter 2019 with increased volume. Software expense rose $27 thousand quarter over quarter with additional investment~~. Occupancy expense increased $39 thousand in 2020 over the second quarter of 2019. Professional and director fees decreased $26 thousand for the quarter ended June 30, 2020 as compared to the second quarter 2019.

~~Federal income tax expense increased $8 thousand, or 1%, for the quarter ended June 30, 2020 as compared to the second quarter of 2019~~. ~~The provision for income taxes was $621 thousand (effective rate of 19%) for the quarter ended June 30, 2020, compared to $613 thousand (effective rate of 19%) for the same quarter ended 2019.~~

~~For~~reflected the ~~six months ended June 30, 2020 and 2019, the Company recorded net income of $5.09 million and $5.13 million and $1.86 and $1.87 per share, respectively~~. ~~The $37 thousand decrease in net income for the quarter was primarily the result of a $154 thousand decrease in net interest income, an increase of $25 thousand in noninterest expense,~~unknown COVID-19 pandemic and an ~~increase in the~~elevated qualitative factor adjustment (“Q-factor”) under managements estimate of loss at that time. The recapture of provision for loan losses ~~of $325 thousand~~. ~~The decreases were partially offset by an increase of $447 thousand in other noninterest income and a decrease in the federal income tax provision of $20 thousand.~~

~~Return on average assets and return on average equity were 1.19% and 11.60%, respectively,~~ for the ~~six-month period of 2020, compared to 1.40% and 13.05%, respectively for the same period in 2019.~~

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

For the Six Months Ended June 30,

2020

2019

(Dollars in thousands)

Average
balance¹

Interest

Average
rate²

Average
balance¹

Interest

Average
rate²

ASSETS

Federal funds sold

$
—

$
—

—

$
305

$
4

2.38
%
Interest-earning deposits in other banks

96,867

270

0.56
%

33,144

389

2.37

Taxable securities

101,915

1,090

2.14

87,502

1,171

2.70

Tax-exempt securities⁴

21,521

296

2.76

23,228

340

2.95

Loans^3,4

590,926

13,965

4.74

549,225

14,263

5.24

Total earning assets

811,229

15,621

3.86
%

693,404

16,167

4.70
%
Other assets

51,410

44,598

TOTAL ASSETS

$
862,639

$
738,002

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing demand deposits

$
173,962

$
223

0.26
%

$
123,050

$
258

0.42
%
Savings deposits

208,546

198

0.19

187,211

510

0.55

Time deposits

126,837

1,083

1.72

121,495

978

1.62

Other borrowed funds

47,665

116

0.49

45,101

261

1.17

Total interest bearing liabilities

557,010

1,620

0.58
%

476,857

2,007

0.85
%
Non-interest bearing demand deposits

213,694

178,980

Other liabilities

3,688

2,971

Shareholders' Equity

88,247

79,194

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
862,639

$
738,002

Taxable equivalent net interest income

$
14,001

$
14,160

Tax equivalent adjustment

(73
)

(78
)

Net interest income

$
13,928

$
14,082

Taxable equivalent net interest margin

3.47
%

4.12
%
Tax equivalent adjustment

(0.02
)

(0.02
)
Net interest margin

3.45
%

4.10
%
Taxable equivalent net interest spread

3.28
%

3.85
%

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

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

~~Interest income for the six months ended June 30, 2020, was $15.5 million representing a $541 thousand decrease, or a 3.4% decline, compared to the same period in 2019~~. ~~This decrease was~~current quarter primarily ~~due to~~reflects the decrease in ~~average~~ loan ~~rates,~~balances, as well as the improvement in economic indicators including unemployment, residential real estate prices and consumer confidence over 2020. of 50 basis points the period ended June 30, 2020 as compared to the same period in 2019. Interest expense for the six months ended June 30, 2020 was $1.6 million, a decrease of $387 thousand, or 19%, from the same period in 2019. The decrease in interest expense occurred primarily due to a decrease in rates on all interest-bearing liabilities, except time deposits for the six-month period ended June 30, 2020.

For the six-month period ended June 30, 2020, the provision for loan losses was $895 thousand, compared to a provision of $570 thousand provision for the same period in 2019. 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-offs and current economic trends.

Noninterest income for the ~~six-month period~~quarter ended June 30, ~~2020,~~2021, was $3$1.8 million, an increase of ~~$447~~$202 thousand, or 12%, compared to the same quarter in 2020.The gain on the sale of mortgage loans to the secondary market decreased by $90 thousand for the quarter ended June 30, 2021as fewer loans were sold into the secondary market due to decreasing inventories of homes available for sale and decreasing demand for mortgage rewrites. Debit card interchange income increased $126 thousand, or 32%, with greater fees generated from usage in the second quarter 2021.Earnings on bank owned life insurance increased $13 thousand for the second quarter 2021 a result of adding policies in 2020. Fees from trust and brokerage services amounted to $264 thousand for the second quarter 2021, an increase of $68 thousand, or 35%, as compared to the same quarter in 2020. Service charges on deposit accounts increased $8 thousand, or 4%, compared to the same quarter in 2020 primarily from a slight volume increase in overdraft fees.

Noninterest expenses for the quarter ended June 30, 2021 increased $681 thousand, or 14%, compared to the second quarter 2020. Salaries and employee benefits increased $368 thousand, or 14%, a result of a decrease in capitalization of approximately $262 thousand in salary and benefits expense to deferred loan origination costs related to new commercial and mortgage loan originations. Increases were recognized in base wage, social security benefits and incentive accruals. FDIC assessment amounted to $120 thousand as compared to $12 thousand in the second quarter 2020 due to small bank assessment credits being utilized in 2020.The Ohio financial institutions tax increased $16 thousand in the second quarter due to the Company’s increased capital base. Marketing and public relations expense increased $33 thousand, or 51%, primarily due to more events taking place after being cancelled due to COVID-19. Debit card expenses increased $26 thousand, or 18%, compared to the second quarter 2020 with increased volume. Software expense rose $77 thousand quarter over quarter with additional investment. Occupancy expense increased $3 thousand in 2021 over the second quarter 2020. Professional and director fees increased $74 thousand for the quarter ended June 30, 2021 as compared to the second quarter 2020. This increase resulted from an increase in collection legal fees, an increase in audit expense and an increase in director’s compensation.

Federal income tax expense increased $33 thousand, or 5%, for the quarter ended June 30, 2021 as compared to the second quarter 2020. The provision for income taxes was $654 thousand (effective rate of 19%) for the quarter ended June 30, 2021, compared to $621 thousand (effective rate of 19%) for the same quarter ended 2020.

For the six months ended June 30, 2021 and 2020, the Company recorded net income of $5.6 million and $5.1 million and $2.05 and $1.86 per share, respectively. The $541 thousand increase in net income for the six-month period was primarily the result of a negative loan loss provision of $445 thousand for the period as compared to a loss provision of $895 thousand for the same period in ~~2019. Service charges~~2020. Other income increased $737 thousand. The increases were partially offset by an increase of $955 thousand in noninterest expense, a $449 thousand decrease in net interest income, and an $132 thousand increase in the federal income tax provision.Return on ~~deposit accounts decreased $104~~average assets and return on average equity were 1.04% and 11.97%, respectively, for the six months ended June 30, 2021, compared to 1.19% and 11.60%, respectively for the same period in 2020.

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

	For the Six Months Ended June 30,
	2021								2020
(Dollars in thousands)	Average balance¹		Interest			Average rate²			Average balance¹		Interest			Average rate²
ASSETS
Interest-earning deposits in other banks		247,638		114			0.09	%		96,867		270			0.56	%
Taxable securities		187,476		1,163			1.25			101,915		1,090			2.14
Tax-exempt securities⁴		23,700		281			2.39			21,521		296			2.76
Loans^3,4		580,572		13,113			4.55			590,926		13,965			4.74
Total earning assets		1,039,386		14,671			2.85	%		811,229		15,621			3.86	%
Other assets		56,692								51,410
TOTAL ASSETS	$	1,096,078							$	862,639

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing demand deposits	$	266,799	$	180			0.14	%	$	173,962	$	223			0.26	%
Savings deposits		269,826		140			0.10			208,546		198			0.19
Time deposits		123,584		726			1.18			126,837		1,083			1.72
Other borrowed funds		44,138		70			0.32			47,665		116			0.49
Total interest bearing liabilities		704,347		1,116			0.32	%		557,010		1,620			0.58	%
Non-interest bearing demand deposits		293,024								213,694
Other liabilities		3,850								3,688
Shareholders' Equity		94,857								88,247
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,096,078							$	862,639
Taxable equivalent net interest income, (Non-GAAP)			$	13,555							$	14,001
Tax equivalent adjustment ⁴				(76	)							(73	)
Net interest income, (GAAP)			$	13,479							$	13,928
Net interest margin, (GAAP)							2.61	%							3.45	%
Tax equivalent adjustment ⁴							0.02								0.02
Net interest margin-taxable equivalent, (Non-GAAP)							2.63	%							3.47	%
Taxable equivalent net interest spread							2.53	%							3.28	%

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

⁴Interest income is shown on a fully tax-equivalent basis, which is a Non-GAAP measure and is reconciled to the GAAP measure at the bottom of the table.

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

Interest income for the six months ended June 30, 2021, was $14.6 million representing a $953 thousand decrease, or a 6% decline, compared to the same period in 2020. This decrease was primarily due to yield decreases as follows: 19 basis points in average loan rates, 89 basis points in average taxable security yields, and 47 basis points in interest-earning deposits in other banks for the period ended June 30, 2021 as compared to the same period in 2020. Interest expense for the six months ended June 30, 2021 was $1.1 million, a decrease of $504 thousand, or ~~17%~~31%, from the same period in 2020. The decrease in interest expense occurred primarily due to a decrease in rates on all interest-bearing liabilities for the six months ended June 30, 2021, partially offset by increases in the average balances.

For the six months ended June 30, 2021, the provision for loan losses was a credit (reversal) of provision of $445 thousand, compared to a provision of $895 thousand for the same period in 2020. For more discussion see Results of Operations, three months. The provision for loan losses is determined based on management’s calculation of the adequacy of the allowance for loan losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income for the six months ended June 30, 2020, was $3.7 million, an increase of $737 thousand, or 25%, compared to the same period in ~~2019 primarily from decreases in overdraft fees. Debit card interchange income increased $60 thousand, or 8%, with increased card usage in the first six months of~~ 2020. ~~Earnings on bank owned life insurance policies increased $54 thousand for the period with the additional purchase of $3 million in policies in 2019.~~ The gain on the sale of mortgage loans to the secondary market increased ~~$467~~$282 thousand to ~~$622~~$904 thousand for the ~~six-month period~~six months ended June 30, ~~2020. Fees from trust and brokerage services decreased $9~~2021. Debit card interchange income increased $221 thousand, or 29%, with increased card usage in the first six months of 2021. Earnings on bank owned life insurance policies increased $35 thousand for the ~~period.~~

~~Noninterest expenses for~~period with the ~~six-month period ended June 30, 2020 increased $25~~additional purchase of $2 million in policies in 2021. Service charges on deposit accounts decreased $75 thousand, or ~~less than 1%~~15%, compared to the same period in ~~2019.~~2020 primarily from decreases in overdraft fees. Fees from trust and brokerage services increased $119 thousand for the period.

Noninterest expenses for the six months ended June 30, 2021 increased $955 thousand, or 10%, compared to the same period in 2020. Salaries and employee benefits ~~decreased $113~~increased $429 thousand, or 2%8%, a result ~~of the capitalization~~increased salary, with additions to lending staff, and reduced capital gain of deferred loan ~~origination~~ costs ~~related to PPP loan originations.~~with less volume originated in commercial loans. Marketing and public relations expense decreased ~~$63~~$16 thousand, or ~~25%~~8%, with ~~decreases in market,~~marketing, brand recognition initiatives, and community support in the company’s market slowly increasing in volume due to ~~Covid-19.~~increasing opportunities presenting after previous cancellations due to COVID-19. Debit card expenses increased ~~$27~~$57 thousand, or ~~10%~~20%, compared to the prior period in ~~2019.~~2020. Occupancy expense increased ~~$55~~$37 thousand over the same period in ~~2019~~2020 with an increase in depreciation, maintenance, and supplies expense. Professional and director fees ~~decreased $36~~increased $40 thousand for the ~~six-month period~~six months ended June 30, ~~2020~~2021 as compared to the same period in ~~2019.~~2020.

Federal income tax expense ~~decreased $20~~increased $132 thousand, or 2%11%, for the six months ended June 30, ~~2020~~2021 as compared to the same period in ~~2019.~~2020. The provision for income taxes was ~~$1.21~~$1.3 million (effective rate of 19%) for the ~~six-month period~~six months ended June 30, ~~2020,~~2021, compared to ~~$1.23~~$1.2 million (effective rate of 19%) for the same period ended ~~2019.~~2020.

The Company maintained a strong capital position with tangible common equity to tangible assets of ~~8.9%~~8.1% at June 30, ~~2020~~2021 compared with ~~9.9%~~8.7% at December 31, ~~2019.~~2020.

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~~common equity tier 1 (“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%.

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

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.~~2020. As of June 30, ~~2020,~~2021, 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 June 30, 2020 and December 31, 2019 but~~ has not elected to opt-in to the CBLR framework as of June 30, ~~2020.~~2021.

	Capital Ratios						Capital Ratios
	June 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Common Equity Tier 1 Capital To Risk Weighted Assets
Consolidated		15.1	%		14.3	%		17.0	%		15.7	%
Bank		14.6	%		14.1	%		16.7	%		15.4	%

Tier 1 Capital To Risk Weighted Assets Ratio
Consolidated		15.1	%		14.3	%		17.0	%		15.7	%
Bank		14.6	%		14.1	%		16.7	%		15.4	%

Total Capital To Risk Weighted Assets Ratio
Consolidated		16.4	%		15.5	%		18.2	%		16.9	%
Bank		15.9	%		15.3	%		17.9	%		16.6	%

Tier 1 Leverage Ratio
Consolidated		9.3	%		10.0	%		8.1	%		8.7	%
Bank		9.0	%		9.9	%		8.0	%		8.5	%

(Dollars in millions)	June 30, 2020			December 31, 2019			Change
(Dollars in thousands)										June 30, 2021			December 31, 2020			Change
Cash and cash equivalents	$	174		$	102		$	72		$	312,343		$	181,652		$	130,691
Available from FHLB		95			97			(2	)		106,400			101,616			4,784
Unpledged AFS securities at fair market value		33			61			(28	)		132,109			130,702			1,407
	$	302		$	260		$	42		$	550,852		$	413,970		$	136,882
Net deposits and short-term liabilities	$	797		$	673		$	124		$	964,239		$	870,498		$	93,741
Liquidity ratio		37.9	%		38.6	%					57.1	%		47.6	%
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 growth in core deposits was largely a result of PPP loan funds deposited into customer accounts and an increase in general customer liquidity due to reduced business investment and ~~on-hand liquidity ratios were 37.9% and 21.0% at June 30, 2020 as compared to 38.6% and 17.9% at December 31, 2019.~~consumer spending during the COVID-19 pandemic.

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

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.

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.~~ 2020. 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 a peak of approximately 1one million people on unemployment, or an unemployment rate of 17.6%, in Ohio during April of 2020. By ~~late~~ June 2021, Ohio’s unemployment rate approximated ~~11%~~6%. The ~~longer-term impact~~bank is based in Holmes County which is reporting the lowest unemployment rate in Ohio at 3.8% in June 2021. Of the counties within the bank’s footprint, Stark County reported the highest unemployment rate at 6.3% in June. With vaccination rates and government stimulus funds slowing, the Federal Reserve is projecting bottlenecks, hiring difficulties, and other constraints as well as the possibility that inflation could turn out to be higher and more persistent than expected. The effects of ~~our response is dependent~~the pandemic on ~~a number of variables, including higher delinquencies from continued high unemployment and increased credit deterioration in industries highly impacted by Covid-19. This pandemic may affect~~ the ~~Company’s employee base which has been dispersed amongst different buildings and home~~economy have continue to ~~ensure no one department could be disrupted by illness.~~diminish, but risks to the economy remain.

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.~~policy for the first twelve- month period. For the twenty-four month periods in the rising interest rate scenarios the increase in interest income is favorably above board policy limits.

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 June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. 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.

June 30, 2020
June 30, 2021														June 30, 2021
(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		$	29,542	$	1,344			4.8		%	+/- 25		%		$	28,153	$	3,040			12.1		%	+/- 25		%
+300			29,097		899			3.2			+/-15					27,379		2,266			9.0			+/-15
+200			28,693		495			1.8			+/-10					26,607		1,494			5.9			+/-10
+100			28,413		215			0.8			+/-5					25,827		714			2.8			+/-5
0			28,198		—			—				—				25,113		—			—				—
-100			27,746		(452	)		(1.6	)		+/-5					24,975		(138	)		(0.5	)		+/-5
-200			27,286		(912	)		(3.2	)		+/-10					24,614		(499	)		(2.0	)		+/-10

December 31, 2019
December 31, 2020														December 31, 2020
+400		$	30,266	$	1,481			5.1		%	+/- 25		%		$	28,036	$	2,121			8.2		%	+/- 25		%
+300			29,958		1,173			4.2			+/-15					27,495		1,580			6.1			+/-15
+200			29,599		814			3.0			+/-10					26,969		1,054			4.1			+/-10
+100			29,208		423			1.5			+/-5					26,430		515			2.0			+/-5
0			28,785		—			—				—				25,915		—			—				—
-100			27,955		(830	)		(2.9	)		+/-5					25,767		(148	)		(0.6	)		+/-5
-200			26,767		(2,018	)		(7.0	)		+/-10					25,414		(501	)		(1.9	)		+/-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,~~2020, 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~~March 2, 2021, 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%~~5% of the Company’s common shares ~~then outstanding.~~or 137,117 of the Company’s outstanding shares. 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~~The Company repurchased 8,106 shares under the repurchase authorization during the quarterly period ended June 30, ~~2020~~.2021.

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)	(Zip Code)

	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	27
ITEM 3 –	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3435
ITEM 4 –	CONTROLS AND PROCEDURES	3536

	Part II - Other Information
ITEM1 –	Legal Proceedings	3637
ITEM1A –	Risk Factors	3637
ITEM2 –	Unregistered Sales of Equity Securities and Use of Proceeds	3637
ITEM3 –	Defaults upon Senior Securities	3637
ITEM4 –	Mine Safety Disclosures	3637
ITEM5 –	Other Information	3637
ITEM6 –	Exhibits	3738
	Signatures	3839

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.

Period	Total Number of Common Shares Purchased		Average Price Paid per Common Share		Total Number of Shares Purchases as Part of Publicly Announced Authorization		Maximum Number of Remaining Shares that May be Purchased as Part of Publicly Announced Authorization
April 1 ,2021 - April 30, 2021		—		—		—		137,117
May 1, 2021 - May 31, 2021		—		—		—		137,117
June 1, 2021 - June 30, 2021		8,106		38.50		8,106		129,011
Total for quarter		8,106		38.50		8,106		129,011

	June 30, 2020
	Deferred		Outstanding
(Dollars in thousands)	# of loans		Portfolio		Deferred		%
Commercial:
Commercial	72		$	215,139	$	10,450		5
Commercial real estate	77			198,948		51,645		26
Construction		3		28,123		535		2
Total Commercial		152		442,210		62,630		14
Consumer:
Residential real estate	33			177,799		3,663		2
RV	12			9,271		254		3
Other consumer		15		9,580		211		2
Total Consumer		60		196,650		4,128		2
Total Loans	212		$	638,860	$	66,758		10

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).
3.2.2		Amended Article II of the Code of Regulations of CSB Bancorp, Inc. (incorporated by reference to Registrant’s Form DEF 14a file on March 16, 2021, Appendix A, file number 000-21714.

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 financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2020,~~2021, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Net Loss and Comprehensive Loss , (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial 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).

		CSB BANCORP, INC.
		(Registrant)


Date:	August ~~10, 2020~~9, 2021	/s/ Eddie L. Steiner
		Eddie L. Steiner
		President
		Chief Executive Officer


Date:	August ~~10, 2020~~9, 2021	/s/ Paula J. Meiler
		Paula J. Meiler
		Senior Vice President
		Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company