SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File Number: 0-26650
CSB FINANCIAL GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
United States 37-1336338
- -------------------------------- -----------------------------
(State of other jurisdiction (I.R.S. Employer I.D. Number)
of incorporation or organization
200 South Poplar, Centralia, Illinois 62801
- -----------------------------------------------------
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (618) 532-1918
--------------
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 preceeding 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. [X] YES [ ] NO
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Shares outstanding at May 10, 1996
- ----------------------------- -----------------------------------
Common Stock, Par Value $0.01 1,035,000
<PAGE>
CONTENTS
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
- Consolidated Statements of Financial Condition
- Consolidated Statements of Income
- Consolidated Statements of Cash Flows
- Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, 1996 and September 30, 1995
<TABLE>
March 31, September 30,
1996 1995
--------- -------------
Unaudited Audited
--------- -------------
(1,000's)
-----------------------
<S> <C> <C>
Cash and cash equivalents:
Cash ........................................................ $ 265 $ 321
Interest bearing deposits ................................... 3,973 10,585
------- -------
Total cash and cash equivalents .................. 4,238 10,906
Securities purchased under agreements to resell ................ 300
Securities available for sale .................................. 12,139 2,218
Securities held to maturity .................................... 2,360 10,979
Loans receivable, net .......................................... 21,516 19,277
Accrued interest receivable .................................... 337 290
Premises and equipment, net .................................... 249 252
Other assets ................................................... 72 698
------- -------
Total assets ..................................... $41,211 $44,620
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits ....................................................... $28,281 $38,696
Accrued interest payable ....................................... 8 8
Deferred income taxes .......................................... 148 162
Other liabilities .............................................. 44 179
------- -------
Total liabilities ................................ 28,481 39,045
------- -------
Stockholders' Equity
Preferred stock, par value $0.01 par value; 100,000 shares
authorized and unissued 0 0
Common stock, $0.01 par value; authorized 2,000,000 shares
1,035,000 shares issued and outstanding .................. 10 0
Paid-in capital ............................................. 7,581 0
Retained earnings ........................................... 5,757 5,559
Unrealized gain (loss) on securities held available for sale,
net of income tax effect ................................. (7) 16
Unearned employee stock ownership plan shares ............... (611) 0
------- -------
Total stockholders' equity ....................... 12,730 5,575
------- -------
Total liabilities and stockholders' equity ....... $41,211 $44,620
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended March 31, 1996 and 1995
(Unaudited, in thousands except per share data)
<TABLE>
Six Months Ended
March 31,
----------------
1996 1995
------- -------
<S> <C> <C>
Interest income:
Interest and fees on loans ................................... $ 909 $ 651
Interest on investments ...................................... 519 537
------- -------
Total interest income ............................. 1,428 1,188
------- -------
Interest expense:
Interest on deposits ......................................... 639 550
Interest on other borrowings ................................. 0 5
------- -------
Total interest expense ............................ 639 555
------- -------
Net interest income ............................... 789 633
Provision for loan losses ....................................... 35 24
------- -------
Net interest income after provision for loan losses 754 609
------- -------
Non-interest income:
Other fees ................................................... 22 21
Insurance commissions ........................................ 2 8
Other ........................................................ 10 6
------- -------
Total other income ................................ 34 35
------- -------
Non-interest expense:
Compensation and employee benefits ........................... 246 190
Occupancy and equipment ...................................... 31 56
Data processing .............................................. 38 37
Audit, legal and other professional .......................... 61 22
SAIF deposit insurance ....................................... 32 34
Advertising .................................................. 13 12
Other ........................................................ 62 16
------- -------
483 367
------- -------
Income before income taxes ........................ 305 277
Income taxes .................................................... 107 73
------- -------
Net income ........................................ $ 198 $ 204
======= =======
Earnings per share .............................................. $ 0.21 $ 0.21
======= =======
Weighted average shares outstanding ............................. 956,555 952,200
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1996 and 1995
(Unaudited, in thousands except per share data)
<TABLE>
Three Months Ended
March 31,
------------------
1996 1995
------- -------
<S> <C> <C>
Interest income:
Interest on loans ............................................ $ 507 $ 389
Interest on investments ...................................... 162 206
------- -------
Total interest income ............................. 669 595
------- -------
Interest expense:
Interest on deposits ......................................... 318 286
Interest on other borrowings ................................. 0 4
------- -------
Total interest expense ............................ 318 290
------- -------
Net interest income ............................... 351 305
Provision for loan losses ....................................... 12 18
------- -------
Net interest income after provision for loan losses 339 287
------- -------
Non-interest income:
Other fees ................................................... 11 11
Insurance commissions ........................................ 1 0
Other ........................................................ 6 1
------- -------
Total other income ................................ 18 12
------- -------
Non-interest expense:
Compensation and employee benefits ........................... 106 94
Occupancy and equipment ...................................... 16 13
Data processing .............................................. 12 15
Audit, legal and other professional .......................... 25 11
SAIF deposit insurance ....................................... 16 16
Advertising .................................................. 7 5
Other ........................................................ 49 31
------- -------
231 185
------- -------
Income before income taxes ..................... 126 114
Income taxes .................................................... 46 29
------- -------
Net income ........................................ $ 80 $ 85
======= =======
Earnings per share .............................................. $ 0.09 $ 0.09
======= =======
Weighted average shares outstanding ............................. 955,191 952,200
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
CSB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 1996 and 1995
(Unaudited, in thousands)
<TABLE>
Six Months Ended
March 31,
-----------------
1996 1995
------ -------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income ...................................................... $ 198 $ 181
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses .................................... 35 24
Provision for depreciation ................................... 10 10
Employee stock ownership plan compensation expense ........... 60
Deferred income taxes ........................................ (41)
Amortization and accretion on securities ..................... 7 (8)
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable ......... (47) 5
Decrease (increase) in other assets ........................ 626 (152)
Increase in accrued interest payable ....................... 17
(Decrease) increase in other liabilities ................... (135) 127
------- -------
Net cash provided by operating activities ............ 754 163
------- -------
Cash Flows from Investing Activities:
(Increase) in securities purchased under agreements to resell ... (300) 0
Proceeds from sale of securities available for sale ............. 1,000 269
Purchase of securities available for sale ....................... (2,246) 0
Purchase of securities held to maturity ......................... (100) 0
Increase in loans receivable .................................... (2,274) (645)
Purchase of premises and equipment .............................. (7) (3)
Proceeds from sale of other repossessed property ................ 32
------- -------
Net cash (used in) investing activities .............. (3,927) (347)
------- -------
Cash Flows from Financing Activities:
Repayments of short-term borrowings ............................. $ 0 $ (360)
(Decrease) increase in deposits ................................. (10,415) 924
Issuance of common stock, net of conversion expenses ............ 6,920 0
------- -------
Net cash (used in) financing activities .............. (3,495) 564
(Decrease) increase in cash and cash equivalents ..... (6,668) 380
Cash and cash equivalents at beginning of period ................... 10,906 1,202
------- -------
Cash and cash equivalents at end of period ......................... $ 4,238 $ 1,582
------- -------
Supplemental Disclosures:
Cash paid for:
Interest on deposits ....................................... $ 639 $ 538
Interest on other borrowings ............................... 0 5
Income taxes ............................................... $ 57 $ 126
Change in gross unrealized gain/loss on securities available
for sale ................................................... $ (37) $ 15
Change in deferred taxes on unrealized gain/loss on securities
available for sale ......................................... $ 14 $ (6)
Transfer of securities from held to maturity to available for
sale ....................................................... $ 7,983 $ 0
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
<PAGE>
CSB FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note1. Background Information
On October 5, 1995, CSB Financial Group, Inc. (the "Company") acquired all of
the outstanding shares of Centralia Savings Bank (the "Bank") upon the Bank's
conversion from a state chartered mutual savings bank to a state chartered
capital stock savings bank. The Company purchased 100% of the outstanding
capital stock of the Bank using 50% of the net proceeds from the Company's
initial stock offering which was completed on October 5, 1995. The Company sold
1,035,000 shares of $0.01 par value common stock at a price of $8 per share,
including 82,800 shares purchased by the Bank's Employee Stock Ownership Plan
("ESOP"). The ESOP shares were acquired by the Bank with proceeds from a Company
loan totaling $662,400. The gross proceeds of the offering were $8,280,000.
After reducing gross proceeds for conversion costs of $698,000, net proceeds
totaled $7,582,000. The Company's stock trades on the NASDAQ Small Caps market
under the symbol "CSBF".
The acquisition of the Bank by the Company is being accounted for as a "pooling
of interests" under generally accepted accounting principles. The application of
the pooling of interests method records the assets and liabilities of the merged
entities on a historical cost basis with no goodwill or other intangible assets
being recorded.
Note 2. Basis of Presentation
The accompanying consolidated financial statements include the accounts of CSB
Financial Group, Inc. and its wholly owned subsidiary, Centralia Savings Bank.
All significant intercompany accounts and transactions have been eliminated in
consolidation. The accompanying consolidated financial statements are unaudited
and should be read in conjunction with the consolidated financial statements and
notes thereto included in the Bank's annual report on Form 10-KSB for the year
ended September 30, 1995. The accompanying unaudited consolidated financial
statements have been prepared in accordance with the instructions for Form
10-QSB and, therefore, do not include information or footnotes necessary for a
complete presentation of financial condition, results of operations, and cash
flows in conformity with generally accepted accounting principles. In the
opinion of management of the Company, the unaudited consolidated financial
statements reflect all adjustments necessary to present fairly the financial
position of the Company at March 31, 1996 the results of operations for the
three months ended March 31, 1996 and 1995, and the results of its operations
and cash flows for the six months ended March 31, 1996 and 1995. All adjustments
to the financial statements were normal and recurring in nature.
Operating results for the three months and six months ended March 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ending September 30, 1996.
Note 3. Earnings Per Share
Earnings per share is computed based upon the weighted average common shares
outstanding during the period. Unallocated shares of the ESOP are not considered
outstanding. For comparative purposes, the earnings per share presentation
assumes the stock offering occurred at the beginning of the earliest period
presented or October 1, 1994.
Note 4. Employee Stock Ownership Plan
In connection with the conversion of the stock form of ownership, the Board of
Directors established an employee stock ownership plan (ESOP) for the exclusive
benefit of participating employees. Employees age 21 or older who have completed
one year of service are eligible to participate. Upon the issuance of the common
stock, the ESOP acquired 82,800 shares of $0.01 par value common stock at the
subscription price of $8 per share. The Bank makes contributions to the ESOP
equal to the ESOP's debt service less dividends received by the ESOP. All
dividends received by the ESOP are used to pay debt service. The ESOP shares
were pledged as collateral for its debt. As the debt is repaid, shares are
released from collateral and allocated to active employees, based on the ratio
of debt service paid to the total original principal plus the interest to be
paid. The Bank accounts for its ESOP in accordance with Statement of Position
93-6. As shares are released from collateral, the Bank reports compensation
expense equal to the current market price of the shares, and the shares become
outstanding for earnings-per-share calculations. ESOP compensation expense was
$60,000 for the six months ended March 31, 1996. As of March 31, 1996, there
were 77,003 unallocated ESOP shares with a fair value of $702,652.
<PAGE>
CSB FINANCIAL GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The principal assets of the Company are its investment in the Bank's common
stock and the net proceeds from the sale of the Company's common stock in
connection with the conversion. The Company's principal revenue source is
interest and dividends on its investments. The principal business of the Bank
consists of attracting deposits from the general public and using these funds to
originate mortgage loans secured by one- to four-family residences located
primarily in Centralia, Illinois and surrounding areas. The Bank engages in
various forms of consumer and commercial lending and invests in mortgage-backed
U.S. Government and federal agency securities, local municipal issues, and
interest-bearing deposits. The Bank's profitability depends primarily on its net
interest income, which is the difference between the interest income it earns on
its loans, mortgage-backed and investment portfolio, and its cost of funds,
which consists mainly of interest paid on deposits. Net interest income is
affected by the relative amounts of interest-earning assets, interest-bearing
liabilities, and the interest rates earned or paid on these balances.
The Bank's profitability is also affected by the level of noninterest income and
expense. Noninterest income consists primarily of late charges and other fees.
Noninterest expense consists of salaries and benefits, occupancy related
expenses, deposit insurance premiums paid to the SAIF, and other operating
expenses.
The operations of the Bank are significantly influenced by general economic
conditions, related monetary, and fiscal policies of financial institutions'
regulatory agencies. Deposit flows and the cost of funds are influenced by
interest rates on competing investments and general market rates of interest.
Lending activities are affected by the demand for financing real estate and
other types of loans, which in turn is affected by the interest rates at which
such financing may be offered and other factors affecting loan demand and the
availability of funds.
Business Strategy
The business strategy is to operate as a well capitalized, profitable and
independent community savings bank dedicated to financing home ownership and
consumer needs in its primary market area. The Bank has implemented this
strategy by: (1) closely monitoring the needs of customers and providing quality
service; (2) emphasizing consumer-oriented banking by originating construction
and permanent loans on residential and commercial real estate and consumer
loans, and by offering other financial services and products; (3) improving and
maintaining high asset quality; (4) maintaining capital in excess of regulatory
requirements; and (5) managing interest rate risk by emphasizing the origination
of loans with adjustable rates or shorter terms and investments in short-term
and liquid investments. The Bank has adopted various new business strategies
intended to increase its presence in its primary market area, thereby increasing
its lending activities and sources of income.
<PAGE>
Liquidity and Capital Resources
The Bank's primary sources of funds consists of deposits, repayment and
prepayment of loans, maturities of investments and interest-bearing deposits.
Scheduled repayments of loans and mortgage-backed securities and maturities of
investment securities are predictable, influenced by general interest rates,
economic conditions, and competition. The Bank uses its liquidity resources
principally to fund existing and future loan commitments, to fund maturing
certificates of deposit and demand deposit withdrawals, to invest in other
interest-earning assets, to maintain liquidity, and to meet operating expenses.
Management believes that loan repayments and other sources of funds will be
adequate to meet the Bank's liquidity needs for the immediate future.
A portion of the Bank's liquidity consists of cash and cash equivalents, which
include investments in highly liquid, short-term deposits. The level of these
assets is dependent on the Bank's operating, investing, lending and financing
activities during any given period. At March 31, 1996 and September 30, 1995,
cash and cash equivalents totaled $4.2 million and $10.9 million, respectively.
September 30, 1995 amount included deposits of 9.2 million for the purchase of
stock on October 5, 1995.
Liquidity management is both a daily and long-term function of business
management. If the Bank requires funds beyond its ability to generate them
internally, the Bank may borrow additional funds from the FHLB. At March 31,
1996, the Bank had no outstanding advances from the FHLB.
At December 31, 1995, the Bank had $609,000 in outstanding commitments to
originate loans. The Bank anticipates that it will have sufficient funds
available to meet its current loan origination commitments.
Regulatory Capital
Federally insured savings associations such as the Bank are required to maintain
a minimum level of regulatory capital. The capital regulations require
institutions to have tangible capital equal to 1.5% of total adjusted assets (as
defined by regulation), a minimum core capital ratio of 3% of adjusted total
assets, and a risk-based capital ratio of 8% of risk-based assets (as defined by
regulation). The risk-based capital requirement is calculated based on the
credit risk presented by both on-balance-sheet assets and off-balance-sheet
commitments and obligations. Assets are assigned a credit-risk weighting based
upon their relative risk ranging from 0% for assets backed by the full faith and
credit of the United States or that pose no credit risk to the institution to
100% for assets such as delinquent or repossessed assets. As of March 31, 1996,
the Bank was in compliance with all of these capital requirements.
Financial Condition
Total assets decreased $3,409,000 to $41,211,000 at March 31, 1996 from
$44,620,000 at September 30, 1995. Cash and cash equivalents decreased
$6,668,000. Cash and cash equivalents was higher at September 30, 1995 due to
$6,920,000 net proceeds generated by the Company's stock offering: $8,280,000 of
gross proceeds less $698,000 of conversion expenses, less $662,400 related to
shares purchased by the ESOP.
The increase in loans of $2,239,000 since September 30, 1995 was primarily
commercial real estate. This growth in loans was due to expansion into the
commercial loan market in early 1995.
<PAGE>
The increase in securities of $1,602,000 since September 30, 1995 was due to the
investment of funds generated by the Company's stock offering.
Deposits at September 30, 1995 were higher due primarily to $9,200,000 of stock
conversion deposits. The stock offering was completed on October 5, 1995 thus
utilizing those deposits.
Results of Operations
Three months ended
Net Income - The Company's net income for the three months ended March 31, 1996
was $80,000 compared to $85,000 for the three months ended March 31, 1995. The
decrease in net earnings resulted primarily from an increase in noninterest
expense of $46,000 offset by an increase in net interest income of $46,000, an
increase in other income of $6,000, a decrease in the provision for loan losses
of $6,000, an increase in other income of $6,000, and an increase in income
taxes of $17,000.
The increase in noninterest expense of $46,000 is attributable to an increase of
$12,000 in compensation and employee benefits and a $14,000 increase in
professional fees and an increase of $18,000 in other nonoperating expenses.
The increase in compensation and employee benefits is due to the recording of
$16,000 of compensation expense related to adoption of the ESOP. The increase in
professional fees was associated with the implementation of the ESOP.
Net Interest Income - Interest income for the three months ended March 31, 1996
increased by $46,000 to $351,000 from $305,000 for the three months ended March
31, 1995. The increase is attributable to an increase in the yield on interest
earning assets.
Six months ended
Net Interest Income - Net interest income for the six months ended March 31,
1996 was $789,000 compared to $633,000 for the six months ended March 31, 1995.
Interest Income - Interest income increased by $240,000 from $1,188,000 to
$1,428,000 or by 20%, during the first six months of 1996 compared to the
respective period of 1995. This increase resulted from an increase in yields on
interest earning assets. Yield on interest earning assets was 7.39% for the six
months ended March 31, 1996 compared to 7.10% for the six months ended March 31,
1995.
Interest Expense - Interest expense increased $84,000 or 15%, to $639,000 for
the six months ended March 31, 1996 from $555,000 for the same period in 1995.
The increase was primarily attributable to the increase in the average cost of
deposits from 3.9% in 1995 to 4.6% in 1996 This increase in the cost of deposits
was reflective of the general increase in rates paid to depositors during this
period. Due to the increasing interest rate environment for calendar year 1995,
there was an increase in the percentage of savings customers using higher yield
certificates of deposit instead of demand deposit accounts. This shift in the
deposit mix has also had an effect on the increase in the average cost of
deposits.
<PAGE>
Net Income - The Company's net income for the six months ended March 31, 1996
was $198,000 compared to $204,000 for the six months ended March 31, 1995.
Provision for Loan Losses - The allowance for loan losses is established through
a provision for loan losses based on management's evaluation of the risk
inherent in its loan portfolio and the general economy. Such evaluation
considers numerous factors including, general economic conditions, loan
portfolio composition, prior loss experience, the estimated fair value of the
underlying collateral and other factors that warrant recognition in providing
for an adequate loan loss allowance. During the six months ended March 31, 1996
and 1995, the provision for loan losses was $35,000 and $24,000, respectively.
Allowance for Loan Losses - The allowance for loan losses was $120,000 or .56%
of loans receivable at March 31, 1996, compared to $113,000, or .58% of loans
receivable at September 30, 1995. The level of non-performing loans was 1.39% of
total loans at March 31, 1996 compared to 1.85% as of September 30, 1995. Based
on current reserve levels in relation to total loans receivable and classified
assets and the diligent effort put forth by management to address problem loan
situations in recent years, management believes its reserves are currently
adequate.
Net charge-offs amounted to $28,000 for the six months ended March 31, 1996
compared to net charge-offs of $19,000 for the six months ended March 31, 1995.
The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management believes that the collectibility of the principal is unlikely. The
allowance is an amount that management believes will be adequate to absorb
losses on existing loans that may become uncollectible, based on evaluation of
the collectibility of loans and prior loss experience. The evaluation also takes
into consideration such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem loans and
current economic conditions that may affect the borrowers' ability to pay. While
management uses the best information available to make its evaluation, future
adjustments to the allowance may be necessary if there are significant changes
in economic conditions. In addition, regulatory agencies, as an integral part of
their examination process, periodically review the Bank's allowance for loan
losses, and may require the Bank to make additions to the allowance based on
their judgment about information available to them at the time of their
examinations.
On October 1, 1995, the Company adopted Financial Accounting Standards Board
Statement No. 114 (Statement No. 114). "Accounting by Creditors for the
Impairment of a Loan," as amended by Statement No. 118, which requires loans to
be considered impaired when, based on current information and events, it is
probable that the Bank will not be able to collect all amounts due. The portion
of the allowance for loan losses applicable to impaired loans has been computed
based on the present value of the estimated future cash flows of interest and
principal discounted at the loan's effective interest rate or on the fair value
of the collateral for collateral dependent loans. The entire change in present
value of expected cash flows of impaired loans or of collateral value is
reported as bad debt expense in the same manner in which impairment initially
was recognized or as a reduction in the amount of bad debt expense that
otherwise would be reported.
The adoption of Statement No. 114 had no effect on the financial statements.
<PAGE>
Noninterest Income - Noninterest income was $ 34,000 for the six months ended
March 31, 1996 compared to $35,000 for the six months ended March 31, 1995.
Noninterest Expense - Noninterest expense increased $119,000 for the six months
ended March 31, 1996 to $483,000 from $364,000 for the six months ended March
31, 1996. This increase resulted from increases in compensation expense and
professional fees. The increase in compensation expense was attributable to the
recording of $60,000 of compensation expense related to the adoption of the
ESOP. The increase in professional fees was associated with the acquisition of
the Carlyle branch, implementation of the ESOP and a marketing study for branch
expansion.
The Bank's effective tax rate for the six months ended March 31, 1996 and 1995
was approximately 35.1% and 35.4%, respectively.
Nonperforming Assets
At March 31, 1996, the Bank had $321,000 of nonperforming assets. On September
30, 1995, the Bank had $362,000 nonperforming assets.
Impact on Inflation and Changing Prices
The unaudited consolidated financial statements and related data presented
herein have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and results of
operations in terms of historical dollars without considering changes in the
relative purchasing power of money over time because of inflation. Unlike most
industrial companies, virtually all of the assets and liabilities of the Company
are monetary in nature. As a result, interest rates have a more significant
impact on the Company's performance than the effects of general levels of
inflation. Interest rates do not necessarily move in the same direction or in
the same magnitude as the prices of goods and services.
Federal Deposit Insurance Corporation's Assessment
A number of proposals are being considered to recapitalize the SAIF in order to
eliminate the insurance premium disparity. One proposal being considered by the
FDIC provides for a one-time assessment of as much as 85 to 90 basis points
which would be imposed on all SAIF insured deposits. Based on the Bank's
SAIF-assessable deposits as of March 31, 1996, an 85 basis point assessment
could result in a one-time charge, net of taxes, of $156,000.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8K
Exhibits:
EX-27 Financial Data Schedule
Reports on Form 8K:
None.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CSB Financial Group, Inc.
Date: May 14, 1996 /s/ K. Gary Reynolds
------------------------------ ------------------------------------
K. Gary Reynolds
Chief Executive Officer and Director
Date: May 14, 1996 /s/ Joanne Ticknor
------------------------------- ------------------------------------
Joanne Ticknor
Secretary and Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1996 10-QSB OF CSB FINANCIAL GROUP, INC. AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 265
<INT-BEARING-DEPOSITS> 3,973
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,139
<INVESTMENTS-CARRYING> 2,360
<INVESTMENTS-MARKET> 0
<LOANS> 21,636
<ALLOWANCE> 120
<TOTAL-ASSETS> 41,211
<DEPOSITS> 28,281
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<LONG-TERM> 0
0
0
<COMMON> 10
<OTHER-SE> 12,720
<TOTAL-LIABILITIES-AND-EQUITY> 41,211
<INTEREST-LOAN> 909
<INTEREST-INVEST> 519
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,428
<INTEREST-DEPOSIT> 639
<INTEREST-EXPENSE> 639
<INTEREST-INCOME-NET> 789
<LOAN-LOSSES> 35
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 483
<INCOME-PRETAX> 305
<INCOME-PRE-EXTRAORDINARY> 198
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 198
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 113
<CHARGE-OFFS> 28
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 120
<ALLOWANCE-DOMESTIC> 120
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
