0000950170-22-009365.txt : 20220511 0000950170-22-009365.hdr.sgml : 20220511 20220511163118 ACCESSION NUMBER: 0000950170-22-009365 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 71 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220511 DATE AS OF CHANGE: 20220511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CFSB Bancorp, Inc. /MA/ CENTRAL INDEX KEY: 0001879103 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-41220 FILM NUMBER: 22914241 BUSINESS ADDRESS: STREET 1: 15 BEACH STREET CITY: QUINCY STATE: MA ZIP: 02170 BUSINESS PHONE: (617) 471-0750 MAIL ADDRESS: STREET 1: 15 BEACH STREET CITY: QUINCY STATE: MA ZIP: 02170 10-Q 1 cfsb-20220331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended March 31, 2022

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: 001-41220

 

CFSB Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

United States of America

87-4396534

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

15 Beach Street

Quincy, Massachusetts

02170

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 471-0750

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered

Stock, Par Value $0.01 Common Per Share CFSB The Nasdaq Stock Market, LLC

 

 

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.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

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

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

As of May 9, 2022, the registrant had 6,521,642 shares of common stock, $0.01 par value per share, outstanding.

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Net Income (Loss)

4

 

Consolidated Statements of Comprehensive Income (Loss)

5

 

Consolidated Statements of Changes in Stockholders' Equity and Retained Earnings

6

 

Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

36

 

 

 

PART II.

OTHER INFORMATION

37

 

 

 

Item 1.

Legal Proceedings

37

Item 1A.

Risk Factors

37

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3.

Defaults Upon Senior Securities

37

Item 4.

Mine Safety Disclosures

37

Item 5.

Other Information

37

Item 6.

Exhibits

38

Signatures

39

 

 

 

 

EXPLANATORY NOTE

 

CFSB Bancorp, Inc. (the “Company,” “we” or “our”) is the stock holding company for Colonial Federal Savings Bank that was created upon the reorganization of Colonial Federal Savings Bank into the mutual holding company structure that was closed on January 12, 2022. Prior to January 12, 2022, the reorganization had not been completed, and the Company was in formation and had no assets or liabilities and had not conducted any business activities other than formational activities. Accordingly, the unaudited consolidated financial statements and other financial information contained in this Quarterly Report on Form 10-Q at or for any period prior to January 12, 2022 related solely to Colonial Federal Savings Bank and its subsidiary.

 

The unaudited consolidated financial statements and other financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes of Colonial Federal Savings Bank at June 30, 2021 and 2020 and for the years then ended contained in the Company’s definitive prospectus dated November 10, 2021 (the “Prospectus”), as filed with the Securities and Exchange Commission pursuant to Securities Act Rule 424(b)(3) on November 19, 2021.

2


 

 

Item 1. Financial Statements.

 

 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(In thousands, except per share data)

 

 

 

 

March 31,
2022

 

 

June 30,
2021

 

Assets

 

Cash and due from banks

 

$

1,637

 

 

$

1,708

 

Short-term investments

 

 

35,628

 

 

 

38,970

 

Total cash and cash equivalents

 

 

37,265

 

 

 

40,678

 

Certificates of deposit

 

 

980

 

 

 

980

 

Securities available for sale, at fair value

 

 

231

 

 

 

2,294

 

Securities held to maturity, at amortized cost, fair value of $128,089 at
March 31, 2022 and $
107,391 at June 30, 2021

 

 

134,719

 

 

 

105,114

 

Federal Home Loan Bank stock, at cost

 

 

453

 

 

 

453

 

Loans, net of allowance for loan losses of $1,747 at March 31, 2022 and
$
1,722 at June 30, 2021

 

 

172,758

 

 

 

174,433

 

Premises and equipment, net

 

 

3,310

 

 

 

3,459

 

Accrued interest receivable

 

 

1,211

 

 

 

1,146

 

Bank-owned life insurance

 

 

10,068

 

 

 

9,250

 

Deferred tax asset

 

 

955

 

 

 

665

 

Other assets

 

 

589

 

 

 

382

 

Total assets

 

$

362,539

 

 

$

338,854

 

Liabilities and Stockholders' Equity

 

Deposits

 

 

 

 

 

 

Non-interest bearing

 

$

29,228

 

 

$

30,129

 

Interest-bearing

 

 

254,752

 

 

 

254,505

 

Total deposits

 

 

283,980

 

 

 

284,634

 

Short-term borrowings

 

 

115

 

 

 

918

 

Mortgagors' escrow accounts

 

 

1,540

 

 

 

1,572

 

Accrued expenses and other liabilities

 

 

3,245

 

 

 

3,085

 

Total liabilities

 

 

288,880

 

 

 

290,209

 

Stockholders' Equity

 

 

 

 

 

 

Preferred Stock, $.01 par value, 10,000,000 and -0- shares authorized as

 

 

 

 

 

 

   of March 31, 2022 and June 30, 2021, respectively, none issued and

 

 

 

 

 

 

   outstanding as of March 31, 2022 and June 30, 2021

 

 

-

 

 

 

-

 

Common Stock, $.01 par value, 90,000,000 and -0- shares authorized as

 

 

 

 

 

 

   of March 31, 2022 and June 30, 2021, respectively; 6,521,642 and -0-

 

 

 

 

 

 

   issued and outstanding as of March 31, 2022 and June 30, 2021

 

 

65

 

 

 

-

 

Additional paid-in capital

 

 

27,720

 

 

 

-

 

Retained earnings

 

 

48,406

 

 

 

48,628

 

Accumulated other comprehensive income

 

 

4

 

 

 

17

 

Unearned compensation - ESOP, 253,621 and -0- shares unallocated

 

 

 

 

 

 

   at March 31, 2022 and June 30, 2021, respectively

 

 

(2,536

)

 

 

-

 

Total stockholders' equity

 

 

73,659

 

 

 

48,645

 

Total liabilities and stockholders' equity

 

$

362,539

 

 

$

338,854

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

3


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Net Income (Loss) (Unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended
March 31,

 

 

Nine Months Ended
March 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

1,615

 

 

$

1,760

 

 

$

4,909

 

 

$

5,431

 

Interest and dividends on debt securities:

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

548

 

 

 

409

 

 

 

1,507

 

 

 

1,326

 

Tax exempt

 

117

 

 

 

141

 

 

 

360

 

 

 

426

 

Interest on short-term investments and certificates of deposit

 

17

 

 

 

13

 

 

 

50

 

 

 

35

 

Total interest and dividend income

 

2,297

 

 

 

2,323

 

 

 

6,826

 

 

 

7,218

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

245

 

 

 

442

 

 

 

774

 

 

 

1,722

 

Short-term borrowings

 

1

 

 

 

13

 

 

 

7

 

 

 

51

 

Total interest expense

 

246

 

 

 

455

 

 

 

781

 

 

 

1,773

 

Net interest income

 

2,051

 

 

 

1,868

 

 

 

6,045

 

 

 

5,445

 

Provision for loan losses

 

1

 

 

 

15

 

 

 

26

 

 

 

45

 

Net interest income, after provision for loan losses

 

2,050

 

 

 

1,853

 

 

 

6,019

 

 

 

5,400

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

32

 

 

 

27

 

 

 

93

 

 

 

87

 

Income on bank-owned life insurance

 

75

 

 

 

72

 

 

 

224

 

 

 

217

 

Gain on sale of securities available for sale

 

-

 

 

 

-

 

 

 

48

 

 

 

-

 

Other income

 

46

 

 

 

46

 

 

 

205

 

 

 

194

 

Total non-interest income

 

153

 

 

 

145

 

 

 

570

 

 

 

498

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

956

 

 

 

883

 

 

 

3,102

 

 

 

2,981

 

Occupancy and equipment

 

238

 

 

 

236

 

 

 

656

 

 

 

630

 

Advertising

 

32

 

 

 

21

 

 

 

110

 

 

 

68

 

Data processing

 

89

 

 

 

102

 

 

 

260

 

 

 

272

 

Deposit insurance

 

24

 

 

 

21

 

 

 

67

 

 

 

64

 

Charitable Foundation contribution

 

1,554

 

 

 

-

 

 

 

1,554

 

 

 

-

 

Other general and administrative

 

334

 

 

 

267

 

 

 

1,026

 

 

 

776

 

Total non-interest expense

 

3,227

 

 

 

1,530

 

 

 

6,775

 

 

 

4,791

 

Income (loss) before income taxes

 

(1,024

)

 

 

468

 

 

 

(186

)

 

 

1,107

 

Provision (benefit) for income taxes

 

(196

)

 

 

67

 

 

 

(64

)

 

 

111

 

Net income (loss)

$

(828

)

 

$

401

 

 

$

(122

)

 

$

996

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.15

)

 

N/A

 

 

N/A

 

 

N/A

 

Weighted average shares:

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

5,500,173

 

 

N/A

 

 

N/A

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

4


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

 

 

 

 

 

Three Months Ended
March 31,

 

 

Nine Months Ended
March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

(828

)

 

$

401

 

 

$

(122

)

 

$

996

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding gains (losses)

 

 

(3

)

 

 

(19

)

 

 

30

 

 

 

(21

)

Reclassification adjustment for net realized gains

 

 

-

 

 

 

-

 

 

 

(48

)

 

 

-

 

Net change in unrealized losses

 

 

(3

)

 

 

(19

)

 

 

(18

)

 

 

(21

)

Tax effect

 

 

1

 

 

 

6

 

 

 

5

 

 

 

6

 

Net-of-tax amount

 

 

(2

)

 

 

(13

)

 

 

(13

)

 

 

(15

)

Comprehensive income (loss)

 

$

(830

)

 

$

388

 

 

$

(135

)

 

$

981

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The tax effect related to net realized gain on sale of security available for sale was $14,000 for the nine months ended March 31, 2022. There were no sales for the three months ended March 31, 2022 or for the three and nine months ended March 31, 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders' Equity and Retained Earnings (Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of Common Stock

 

Common Stock

 

Additional Paid-in Capital

 

Retained Earnings

 

Accumulated Other Comprehensive Income (Loss)

 

Unearned Compensation
 ESOP

 

Total

 

Balance at June 30, 2021

 

-

 

$

-

 

$

-

 

$

48,628

 

$

17

 

$

-

 

$

48,645

 

Comprehensive income (loss)

 

-

 

 

-

 

 

-

 

 

472

 

 

(10

)

 

-

 

 

462

 

Balance at September 30, 2021

 

-

 

 

-

 

 

-

 

 

49,100

 

 

7

 

 

-

 

 

49,107

 

Comprehensive income (loss)

 

-

 

 

-

 

 

-

 

 

234

 

 

(1

)

 

-

 

 

233

 

Balance at December 31, 2021

 

-

 

 

-

 

 

-

 

 

49,334

 

 

6

 

 

-

 

 

49,340

 

Comprehensive income (loss)

 

-

 

 

-

 

 

-

 

 

(828

)

 

(2

)

 

-

 

 

(830

)

Transfer of cash from CFSB to 15 Beach MHC

 

-

 

 

-

 

 

-

 

 

(100

)

 

-

 

 

-

 

 

(100

)

Issuance of shares to the mutual holding company

 

3,586,903

 

 

36

 

 

-

 

 

-

 

 

-

 

 

-

 

 

36

 

Issuance of shares in the initial public offering, net of expenses of $1,583,000

 

2,804,306

 

 

28

 

 

26,417

 

 

-

 

 

-

 

 

-

 

 

26,445

 

Issuance and contribution of shares to the Colonial Federal Savings Bank Charitable Foundation

 

130,433

 

 

1

 

 

1,303

 

 

-

 

 

-

 

 

-

 

 

1,304

 

Purchase of 255,648 shares by the ESOP

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(2,556

)

 

(2,556

)

ESOP shares committed to be released - 2,027

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

20

 

 

20

 

Balance at March 31, 2022

 

6,521,642

 

$

65

 

$

27,720

 

$

48,406

 

$

4

 

$

(2,536

)

$

73,659

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

Retained

 

Comprehensive

 

 

 

 

 

 

 

 

Earnings

 

Income (Loss)

 

 

Total

 

Balance at June 30, 2020

 

 

 

$

47,236

 

$

10

 

 

$

47,246

 

Comprehensive income (loss)

 

 

 

 

595

 

 

(2

)

 

 

593

 

Balance at December 31, 2020

 

 

 

 

47,831

 

 

8

 

 

 

47,839

 

Comprehensive income (loss)

 

 

 

 

401

 

 

(13

)

 

 

388

 

Balance at March 31, 2021

 

 

 

$

48,232

 

$

(5

)

 

$

48,227

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

6


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes of Cash Flows (Unaudited)

(In thousands)

 

 

 

Nine Months Ended
March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

(122

)

 

$

996

 

Adjustments to reconcile net income to net cash
provided by operating activities:

 

 

 

 

 

 

Provision for loan losses

 

 

26

 

 

 

45

 

Gain on sales of securities available for sale, net

 

 

(48

)

 

 

-

 

Depreciation and amortization, net

 

 

627

 

 

 

516

 

Contribution of stock to charitable foundation

 

 

1,304

 

 

 

-

 

ESOP expense

 

 

20

 

 

 

-

 

Net change in:

 

 

 

 

 

 

Cash surrender value of bank-owned life insurance

 

 

(183

)

 

 

(181

)

Accrued interest receivable

 

 

(65

)

 

 

91

 

Other, net

 

 

(432

)

 

 

(176

)

Net cash provided by operating activities

 

 

1,127

 

 

 

1,291

 

Cash flows from investing activities:

 

 

 

 

 

 

Activity in securities available for sale:

 

 

 

 

 

 

Maturities, prepayments and calls

 

 

62

 

 

 

78

 

Purchases

 

 

-

 

 

 

(1,982

)

Sales

 

 

2,031

 

 

 

-

 

Activity in securities held to maturity:

 

 

 

 

 

 

Maturities, prepayments and calls

 

 

16,923

 

 

 

20,030

 

Purchases

 

 

(46,962

)

 

 

(22,212

)

Loan originations and payments, net

 

 

1,649

 

 

 

14,419

 

Additions to premises and equipment