EX-99 2 cfsb-ex99_1.htm EX-99.1 EX-99

img262294579_0.jpg 

Exhibit 99.1

News Release -

For Immediate Release

April 25, 2023

For More Information, Contact:

Michael E. McFarland, President and Chief

Executive Officer (617-471-0750)

 

CFSB BANCORP, INC. ANNOUNCES FISCAL THIRD QUARTER 2023 FINANCIAL RESULTS

 

QUINCY, Massachusetts, April 25, 2023 – CFSB Bancorp, Inc. (the “Company”) (NASDAQ Capital Market: CFSB), the holding company for Colonial Federal Savings Bank (the “Bank”), today announced net income of $355,000, or $0.06 per basic and diluted share, for the three months ended March 31, 2023 compared to net income of $341,000, or $0.05 per basic and diluted share, for the three months ended December 31, 2022 and a net loss of $828,000, or $0.15 per basic and diluted share for the three months ended March 31, 2022. Net income on a non-GAAP basis, excluding the contribution to the charitable foundation established in connection with the Bank's mutual holding company reorganization, was $429,000, or $0.08 per basic and diluted share for the three months ended March 31, 2022. Please see the tables attached hereto for a reconciliation of these and other non-GAAP financial measures.

For the nine months ended March 31, 2023, net income was $1.3 million, or $0.21 per basic and diluted share, compared to a net loss of $122,000, for the nine months ended March 31, 2022. Net income on a non-GAAP basis, excluding the charitable contribution and gain on the sale of securities, was $1.1 million, for the nine months ended March 31, 2022. Please see the tables attached hereto for a reconciliation of these and other non-GAAP financial measures.

Michael E. McFarland, President and Chief Executive Officer, stated, “In light of recent events in the banking industry, we want to emphasize that we are a well-capitalized, liquid, conservatively managed community bank with pristine asset quality. Looking at the third quarter's operating results, we were pleased to see a reduction in non-interest expense translate into increased net income as compared to the linked quarter. However, we expect to see the higher interest rate environment continue to create deposit pricing pressures and decreased loan demand.”

Third Quarter Operating Results

Net interest income, on a fully tax-equivalent basis decreased by $190,000, or 8.0%, to $2.2 million for the three months ended March 31, 2023 from $2.4 million for the three months ended December 31, 2022. This decrease was primarily due to a 66 basis point increase in the average rate paid for certificates of deposit, partially offset by a six basis point increase in the average yield earned for interest-earning assets. The interest earned on loans increased $43,000, to $1.7 million for the three months ended March 31, 2023, from $1.7 million for the three months ended December 31, 2022. The interest earned on loans benefitted from rising interest rates and from an increase in the average balance of loans of $1.8 million during the three months ended March 31, 2023. The net interest margin decreased by 18 basis points to 2.59% for the three months ended March 31, 2023 from 2.77% for the three months ended December 31, 2022.

Net interest income, on a fully tax-equivalent basis increased by $95,000, or 4.6%, to $2.2 million for the three months ended March 31, 2023, from $2.1 million for the three months ended March 31, 2022. The net interest margin increased by 17 basis points to 2.59% for the three months ended March 31, 2023 from 2.42% for the three months ended March 31, 2022. The improvement reflects growth in the average balance of loans and securities of $5.0 million and $23.1 million, respectively, and increases in the average yield earned on loans, securities, and cash and short-term investments of nine, 36 and 385 basis points, respectively, from the three months ended March 31, 2022. Partially offsetting the improvement in interest and dividend income was a 50 basis point increase in the cost of interest-bearing liabilities from the three months ended March 31, 2022 due primarily to increased interest paid on certificates of deposit in the higher interest rate environment.

The Company did not record a provision for loan losses for the three months ended March 31, 2023 or December 31, 2022. A provision for loan losses of $1,000 was recorded during the three months ended March 31, 2022. The allowance for loan losses as a percentage of total loans was 0.98%, 0.97% and 1.00% at March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

Non-interest income decreased $4,000, or 2.6%, to $148,000 for the quarter ended March 31, 2023 from $152,000 in the quarter ended December 31, 2022, due to a decrease of $6,000 in other income.

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

1

 

 

Non-interest income decreased $5,000, or 3.3%, to $148,000 for the quarter ended March 31, 2023, from $153,000 for the quarter ended March 31, 2022, principally due to a decrease of $11,000 in income on bank-owned life insurance.

Non-interest expenses decreased $186,000, or 8.9%, to $1.9 million for the quarter ended March 31, 2023 from $2.1 million for the quarter ended December 31, 2022. The decrease was due to a decrease in salaries and employee benefits expense of $147,000, or 11.8%, primarily attributed to a discretionary year-end bonus awarded to employees in the quarter ended December 31, 2022. In addition, advertising expense decreased $33,000 from the prior quarter due to decreases in employment agency fees.

Non-interest expenses decreased $1.3 million, or 41.1%, to $1.9 million for the quarter ended March 31, 2023 from $3.2 million for the quarter ended March 31, 2022. A $1.6 million charitable foundation contribution made during the three months ended March 31, 2022 was the primary reason for the decline in non-interest expenses from the prior year quarter. Excluding this item, which management considers to be a non-recurring item, non-interest expenses would have increased $228,000, or 13.6%, to $1.9 million for the three months ended March 31, 2023, from $1.7 million for the three months ended March 31, 2022. The increase was principally due to an increase in salaries and employee benefits of $147,000, attributed to ESOP expenses incurred in the current year, an increase in headcount, and increases to employee salaries and health insurance benefits and due to increases in other general and administrative expenses of $66,000, attributed to the costs of being a public company.

Income tax expense was $47,000 for the three months ended March 31, 2023, compared to $65,000 for the three months ended December 31, 2022 and a benefit for income taxes of $196,000 for the three months ended March 31, 2022. The decrease in the effective tax rate for the three months ended March 31, 2023, compared to the three months ended December 31, 2022 was due to charitable contributions made during the three months ended March 31, 2022. The increase in the effective tax rate for the three months ended March 31, 2023, compared to the three months ended March 31, 2022 was due to decreases in tax-exempt municipal securities income and decreases in bank-owned life insurance income.

Year-to-Date Operating Results

Net interest income increased on a fully tax-equivalent basis by $802,000, or 13.1%, to $6.9 million for the nine months ended March 31, 2023 from $6.1 million for the nine months ended March 31, 2022. Total interest-earning assets income increased $1.1 million from the prior year period due to an increase in the average balance of securities and loans, and due to higher average yields earned on securities and cash and short-term investments, offset by a decrease in the average balance of cash and short-term investments. An increase in the average balance of loans of $7.0 million, or 4.1%, contributed to a $67,000 increase in loan income, partially offset by a 10 basis point decline in the average yield earned. An increase in the average balance of securities of $33.1 million, or 28.3%, and a 24 basis point increase in the average yield earned on securities contributed to a $819,000 increase in securities income. Partially offsetting the increase in interest and dividend income was a $337,000 increase in interest expense. The increase was primarily due to an increase in the interest paid on certificates of deposit of $345,000 from the prior year period due to a 52 basis point increase in the cost of such deposits. The net interest margin improved 22 basis points for the nine months ended March 31, 2023, to 2.71%, from 2.49% in the prior year.

The Company did not recognize a provision for loan losses for the nine months ended March 31, 2023, compared to a provision for loan losses for the nine months ended March 31, 2022 of $26,000.

Non-interest income decreased $29,000, or 5.5%, to $500,000 for the nine months ended March 31, 2023 from $529,000 in the prior year period, principally due to a decrease of $48,000 in the gain on sale of securities available for sale. Excluding the gain on sale of securities available for sale, which management believes was a non-recurring operating activity, non-interest income would have increased $19,000, or 4.0% from the prior year period, due to increases in customer service fees.

Non-interest expenses decreased $998,000, or 14.8%, to $5.7 million for the nine months ended March 31, 2023 from $6.7 million for the nine months ended March 31, 2022. A $1.6 million charitable foundation contribution made during the nine months ended March 31, 2022 was the primary reason for the decline in non-interest expense from the prior year. Excluding this item, which management considers to be a non-recurring item, non-interest expense would have increased $556,000, or 10.7%, for the nine months ended March 31, 2023. Salaries and benefits increased $310,000, or 10.1%, to $3.4 million, due to annual increases to salaries and health insurance of employees, an increase in headcount, and the addition of ESOP expense in the current year. Occupancy and equipment expense increased $98,000, or 14.9%, to $754,000 for the nine months ended March 31, 2023 from $656,000 for the nine months ended March 31, 2022, due to the renewal of a branch lease in the current fiscal year and for increases to service maintenance contracts. Other general and administrative expense increased $112,000, or 10.9% from the prior year period due to increases in professional fees.

Income tax expense was $282,000 for the nine months ended March 31, 2023 compared to an income tax benefit of $64,000 for the nine months ended March 31, 2022. The income tax benefit during the nine months ended March 31, 2022 was primarily due to the charitable foundation established in connection with the Bank's mutual holding company reorganization.

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

2

 

 

 

Balance Sheet

At March 31, 2023, total assets amounted to $351.7 million, compared to $356.8 million at December 31, 2022, a decrease of $5.2 million, or 1.4%, as a $5.2 million decrease in total cash and cash equivalents and a $1.6 million decrease in net loans were partially offset by a $1.5 million increase in securities held to maturity. The decrease in net loans was due to decreased loan demand in the higher interest rate environment. The net unrealized loss position on our securities held to maturity decreased $2.6 million to $14.2 million at March 31, 2023, from $16.8 million at December 31, 2022. Deposits decreased by $5.5 million, or 2.0%, in the quarter, as the Bank is experiencing decreases of customer deposits with the absence of government stimulus and increases in inflation, in addition to mix-shift changes by depositors to higher-yielding term certificates due to the higher interest rate environment.

 

Total stockholders’ equity was $75.7 million at March 31, 2023 compared to $75.3 million at December 31, 2022. The increase of $395,000 reflects net income of $355,000, earned ESOP compensation of $25,000, and stock-based award expense of $19,000.

Total assets at March 31, 2023 decreased $10.9 million, or 3.0%, from $362.5 million at March 31, 2022. Contributing to the decrease in assets was a decrease of $31.9 million in cash and cash equivalents to $5.3 million at March 31, 2023 from $37.3 million at March 31, 2022, partially offset by a $16.3 million increase in securities held to maturity and $4.2 million in loan growth. Commercial real estate loans increased by $5.3 million, or 34.4%, as we focused on diversifying our loan mix. Total deposits decreased by $14.0 million, or 4.9%, to $270.0 million at March 31, 2023 from $284.0 million at March 31, 2022, principally due to decreases in customer deposits with the absence of government stimulus and increases in inflation, in addition to mix-shift changes by depositors to higher-yielding term certificates in the higher interest rate environment.

Total stockholders’ equity was $75.7 million at March 31, 2023 compared to $73.7 million at March 31, 2022. The increase of $2.0 million was due to net income earned during the previous twelve months of $1.9 million and earned ESOP compensation of $107,000.

About CFSB Bancorp, Inc.

CFSB Bancorp, Inc. is a federal corporation organized as the mid-tier holding company of Colonial Federal Savings Bank and is the majority-owned subsidiary of 15 Beach, MHC. Colonial Federal Savings Bank is a federally chartered stock savings bank that has served the banking needs of its customers on the south shore of Massachusetts since 1889. It operates from three full-service offices and one limited-service office in Quincy, Holbrook and Weymouth, Massachusetts.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “believe,” “contemplate,” “continue,” “target” and words of similar meaning. These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Certain factors that could cause actual results to differ materially from expected results include the impact of the COVID-19 pandemic or any other pandemic on our operations and financial results and those of our customers, increased competitive pressures, demand for loan products, deposit flows, changes in the interest rate environment, the effects of inflation, potential recessionary conditions, general economic conditions or conditions within the securities markets, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the FRB, changes in the quality, size and composition of our loan and securities portfolios, changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio; changes in demand for our products and services, legislative, accounting, tax and regulatory changes, the current or anticipated impact of military conflict, terrorism or other geopolitical events, a failure in or breach of our operational or security systems or infrastructure, including cyberattacks that could adversely affect the Company’s financial condition and results of operations and the business in which the Company and the Bank are engaged, the failure to maintain current technologies and the failure to retain or attract employees.

You should not place undue reliance on forward-looking statements. CFSB Bancorp, Inc. undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures, such as return on average assets, return on average equity, the efficiency ratio, profit percentage, tangible book value per share, non-interest income to total income and, where applicable, as adjusted for non-recurring items. These non-GAAP financial measures provide information for investors to effectively analyze financial trends of on-going business activities, and to enhance comparability with peers across the financial services sector.

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

3

 

 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

Mar 2023 vs.

 

 

Mar 2023 vs.

 

 

 

2023

 

 

2022

 

 

2022

 

 

Dec 2022

 

 

Mar 2022

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

1,518

 

 

$

1,502

 

 

$

1,637

 

 

 

1.1

%

 

 

(7.3

)%

Short-term investments

 

 

3,824

 

 

 

9,072

 

 

 

35,628

 

 

 

(57.8

)%

 

 

(89.3

)%

Total cash and cash equivalents

 

 

5,342

 

 

 

10,574

 

 

 

37,265

 

 

 

(49.5

)%

 

 

(85.7

)%

Certificates of deposit

 

 

-

 

 

 

-

 

 

 

980

 

 

 

-

%

 

 

(100.0

)%

Securities available for sale, at fair value

 

 

158

 

 

 

168

 

 

 

231

 

 

 

(6.0

)%

 

 

(31.6

)%

Securities held to maturity, at amortized cost

 

 

150,981

 

 

 

149,473

 

 

 

134,719

 

 

 

1.0

%

 

 

12.1

%

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

140,164

 

 

 

140,898

 

 

 

140,080

 

 

 

(0.5

)%

 

 

0.1

%

Multifamily

 

 

12,638

 

 

 

13,239

 

 

 

15,353

 

 

 

(4.5

)%

 

 

(17.7

)%

Second mortgages and home equity lines of credit

 

 

2,687

 

 

 

2,590

 

 

 

1,955

 

 

 

3.7

%

 

 

37.4

%

Construction

 

 

807

 

 

 

600

 

 

 

-

 

 

 

34.5

%

 

 

-

%

Commercial

 

 

20,576

 

 

 

21,077

 

 

 

15,307

 

 

 

(2.4

)%

 

 

34.4

%

Total mortgage loans on real estate

 

 

176,872

 

 

 

178,404

 

 

 

172,695

 

 

 

(0.9

)%

 

 

2.4

%

Consumer

 

 

54

 

 

 

63

 

 

 

97

 

 

 

(14.3

)%

 

 

(44.3

)%

Home improvement

 

 

2,130

 

 

 

2,232

 

 

 

2,062

 

 

 

(4.6

)%

 

 

3.3

%

Total loans

 

 

179,056

 

 

 

180,699

 

 

 

174,854

 

 

 

(0.9

)%

 

 

2.4

%

Allowance for loan losses

 

 

(1,747

)

 

 

(1,747

)

 

 

(1,747

)

 

 

0.0

%

 

 

0.0

%

Net deferred loan costs and fees, and purchase premiums

 

 

(366

)

 

 

(383

)

 

 

(349

)

 

 

(4.4

)%

 

 

4.9

%

Loans, net

 

 

176,943

 

 

 

178,569

 

 

 

172,758

 

 

 

(0.9

)%

 

 

2.4

%

Federal Home Loan Bank of Boston stock, at cost

 

 

241

 

 

 

191

 

 

 

453

 

 

 

26.2

%

 

 

(46.8

)%

Premises and equipment, net

 

 

3,411

 

 

 

3,272

 

 

 

3,310

 

 

 

4.2

%

 

 

3.1

%

Accrued interest receivable

 

 

1,356

 

 

 

1,303

 

 

 

1,211

 

 

 

4.1

%

 

 

12.0

%

Bank-owned life insurance

 

 

10,335

 

 

 

10,271

 

 

 

10,068

 

 

 

0.6

%

 

 

2.7

%

Deferred tax asset

 

 

1,003

 

 

 

1,001

 

 

 

955

 

 

 

0.2

%

 

 

5.0

%

Operating lease right of use asset

 

 

976

 

 

 

999

 

 

 

-

 

 

 

(2.3

)%

 

 

-

%

Other assets

 

 

930

 

 

 

1,012

 

 

 

589

 

 

 

(8.1

)%

 

 

57.9

%

Total assets

 

$

351,676

 

 

$

356,833

 

 

$

362,539

 

 

 

(1.4

)%

 

 

(3.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing NOW and demand

 

$

30,054

 

 

$

32,618

 

 

$

29,228

 

 

 

(7.9

)%

 

 

2.8

%

Interest bearing NOW and demand

 

 

30,660

 

 

 

32,241

 

 

 

32,873

 

 

 

(4.9

)%

 

 

(6.7

)%

Regular and other

 

 

66,849

 

 

 

69,924

 

 

 

73,229

 

 

 

(4.4

)%

 

 

(8.7

)%

Money market accounts

 

 

31,326

 

 

 

37,470

 

 

 

43,683

 

 

 

(16.4

)%

 

 

(28.3

)%

Term certificates

 

 

111,117

 

 

 

103,209

 

 

 

104,967

 

 

 

7.7

%

 

 

5.9

%

Total deposits

 

 

270,006

 

 

 

275,462

 

 

 

283,980

 

 

 

(2.0

)%

 

 

(4.9

)%

Federal Home Loan Bank of Boston advances

 

 

-

 

 

 

-

 

 

 

115

 

 

 

-

%

 

 

(100.0

)%

Mortgagors' escrow accounts

 

 

1,566

 

 

 

1,680

 

 

 

1,540

 

 

 

(6.8

)%

 

 

1.7

%

Operating lease liability

 

 

983

 

 

 

1,003

 

 

 

-

 

 

 

(2.0

)%

 

 

-

%

Accrued expenses and other liabilities

 

 

3,447

 

 

 

3,409

 

 

 

3,245

 

 

 

1.1

%

 

 

6.2

%

Total liabilities

 

 

276,002

 

 

 

281,554

 

 

 

288,880

 

 

 

(2.0

)%

 

 

(4.5

)%

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

65

 

 

 

65

 

 

 

65

 

 

 

0.0

%

 

 

0.0

%

Additional paid-in capital

 

 

27,729

 

 

 

27,714

 

 

 

27,720

 

 

 

0.1

%

 

 

0.0

%

Retained earnings

 

 

50,311

 

 

 

49,956

 

 

 

48,406

 

 

 

0.7

%

 

 

3.9

%

Accumulated other comprehensive (loss) income, net of tax

 

 

(2

)

 

 

(2

)

 

 

4

 

 

 

0.0

%

 

 

(150.0

)%

Unearned compensation - ESOP

 

 

(2,429

)

 

 

(2,454

)

 

 

(2,536

)

 

 

(1.0

)%

 

 

(4.2

)%

Total stockholders' equity

 

 

75,674

 

 

 

75,279

 

 

 

73,659

 

 

 

0.5

%

 

 

2.7

%

Total liabilities and stockholders' equity

 

$

351,676

 

 

$

356,833

 

 

$

362,539

 

 

 

(1.4

)%

 

 

(3.0

)%

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

4

 

 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Net Income (Unaudited)

(In thousands, except per share data)

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2023

 

 

2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

1,700

 

 

$

1,657

 

 

$

1,615

 

 

$

4,976

 

 

$

4,909

 

Interest and dividends on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

837

 

 

 

795

 

 

 

548

 

 

 

2,383

 

 

 

1,507

 

Tax-exempt

 

 

101

 

 

 

106

 

 

 

117

 

 

 

315

 

 

 

360

 

Interest on short-term investments and certificates of deposit

 

 

53

 

 

 

123

 

 

 

17

 

 

 

303

 

 

 

50

 

Total interest and dividend income

 

 

2,691

 

 

 

2,681

 

 

 

2,297

 

 

 

7,977

 

 

 

6,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

533

 

 

 

340

 

 

 

245

 

 

 

1,115

 

 

 

774

 

Borrowings

 

 

3

 

 

 

-

 

 

 

1

 

 

 

3

 

 

 

7

 

Total interest expense

 

 

536

 

 

 

340

 

 

 

246

 

 

 

1,118

 

 

 

781

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

2,155

 

 

 

2,341

 

 

 

2,051

 

 

 

6,859

 

 

 

6,045

 

Provision for loan losses

 

 

-

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

26

 

Net interest income after provision for loan losses

 

 

2,155

 

 

 

2,341

 

 

 

2,050

 

 

 

6,859

 

 

 

6,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

37

 

 

 

36

 

 

 

32

 

 

 

110

 

 

 

93

 

Income on bank-owned life insurance

 

 

64

 

 

 

63

 

 

 

75

 

 

 

191

 

 

 

183

 

Gain on sale of securities available for sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Other income

 

 

47

 

 

 

53

 

 

 

46

 

 

 

199

 

 

 

205

 

Total non-interest income

 

 

148

 

 

 

152

 

 

 

153

 

 

 

500

 

 

 

529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,103

 

 

 

1,250

 

 

 

956

 

 

 

3,371

 

 

 

3,061

 

Occupancy and equipment

 

 

256

 

 

 

255

 

 

 

238

 

 

 

754

 

 

 

656

 

Advertising

 

 

38

 

 

 

71

 

 

 

32

 

 

 

148

 

 

 

110

 

Data processing

 

 

84

 

 

 

84

 

 

 

89

 

 

 

262

 

 

 

260

 

Deposit insurance

 

 

20

 

 

 

22

 

 

 

24

 

 

 

63

 

 

 

67

 

Charitable Foundation contribution

 

 

-

 

 

 

-

 

 

 

1,554

 

 

 

-

 

 

 

1,554

 

Other general and administrative

 

 

400

 

 

 

405

 

 

 

334

 

 

 

1,138

 

 

 

1,026

 

Total non-interest expenses

 

 

1,901

 

 

 

2,087

 

 

 

3,227

 

 

 

5,736

 

 

 

6,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

402

 

 

 

406

 

 

 

(1,024

)

 

 

1,623

 

 

 

(186

)

Provision (benefit) for income taxes

 

 

47

 

 

 

65

 

 

 

(196

)

 

 

282

 

 

 

(64

)

Net income (loss)

 

$

355

 

 

$

341

 

 

$

(828

)

 

$

1,341

 

 

$

(122

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.06

 

 

$

0.05

 

 

$

(0.15

)

 

$

0.21

 

 

N/A

 

Diluted

 

$

0.06

 

 

$

0.05

 

 

$

(0.15

)

 

$

0.21

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

6,300,633

 

 

 

6,271,977

 

 

 

5,500,173

 

 

 

6,282,384

 

 

N/A

 

Diluted

 

 

6,300,721

 

 

 

6,271,977

 

 

 

5,500,173

 

 

 

6,282,413

 

 

N/A

 

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

5

 

 

CFSB Bancorp, Inc. and Subsidiary

Average Balances and Yields, Fully Tax-Equivalent Basis (Unaudited)

(Dollars in thousands)

 

Average Balance and Yields

 

 

Three Months Ended

 

 

March 31, 2023

 

 

December 31, 2022

 

 

March 31, 2022

 

 

Average

 

 

Interest

 

 

Average

 

 

Average

 

 

Interest

 

 

Average

 

 

Average

 

 

Interest

 

 

Average

 

 

Outstanding

 

 

Earned/

 

 

Yield/

 

 

Outstanding

 

 

Earned/

 

 

Yield/

 

 

Outstanding

 

 

Earned/

 

 

Yield/

 

(Dollars in thousands)

Balance

 

 

Paid

 

 

Rate

 

 

Balance

 

 

Paid

 

 

Rate

 

 

Balance

 

 

Paid

 

 

Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

179,452

 

 

$

1,700

 

 

 

3.79

%

 

$

177,648

 

 

$

1,657

 

 

 

3.73

%

 

$

174,485

 

 

$

1,615

 

 

 

3.70

%

Securities (1)

 

150,945

 

 

 

960

 

 

 

2.54

%

 

 

151,249

 

 

 

927

 

 

 

2.45

%

 

 

127,837

 

 

 

696

 

 

 

2.18

%

Cash and short-term investments

 

5,287

 

 

 

53

 

 

 

4.01

%

 

 

13,153

 

 

 

123

 

 

 

3.74

%

 

 

42,130

 

 

 

17

 

 

 

0.16

%

Total interest-earning assets

 

335,684

 

 

 

2,713

 

 

 

3.23

%

 

 

342,050

 

 

 

2,707

 

 

 

3.17

%

 

 

344,452

 

 

 

2,328

 

 

 

2.70

%

Noninterest-earning assets

 

17,207

 

 

 

 

 

 

 

 

 

16,747

 

 

 

 

 

 

 

 

 

17,417

 

 

 

 

 

 

 

Total assets

$

352,891

 

 

 

 

 

 

 

 

$

358,797

 

 

 

 

 

 

 

 

$

361,869

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

32,245

 

 

$

4

 

 

 

0.05

%

 

$

33,557

 

 

$

4

 

 

 

0.05

%

 

$

31,088

 

 

$

6

 

 

 

0.08

%

Savings deposits

 

68,097

 

 

 

17

 

 

 

0.10

%

 

 

72,708

 

 

 

18

 

 

 

0.10

%

 

 

73,426

 

 

 

18

 

 

 

0.10

%

Money market deposits

 

34,377

 

 

 

22

 

 

 

0.26

%

 

 

39,876

 

 

 

27

 

 

 

0.27

%

 

 

42,077

 

 

 

27

 

 

 

0.26

%

Certificates of deposit

 

106,555

 

 

 

490

 

 

 

1.84

%

 

 

99,041

 

 

 

291

 

 

 

1.18

%

 

 

107,464

 

 

 

194

 

 

 

0.72

%

Total interest-bearing deposits

 

241,274

 

 

 

533

 

 

 

0.88

%

 

 

245,182

 

 

 

340

 

 

 

0.55

%

 

 

254,055

 

 

 

245

 

 

 

0.39

%

FHLB advances

 

244

 

 

 

3

 

 

 

4.92

%

 

 

-

 

 

 

-

 

 

 

0.00

%

 

 

174

 

 

 

1

 

 

 

2.30

%

Total interest-bearing liabilities

 

241,518

 

 

 

536

 

 

 

0.89

%

 

 

245,182

 

 

 

340

 

 

 

0.55

%

 

 

254,229

 

 

 

246

 

 

 

0.39

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Noninterest-bearing demand deposits

 

30,352

 

 

 

 

 

 

 

 

 

32,887

 

 

 

 

 

 

 

 

 

31,936

 

 

 

 

 

 

 

  Other noninterest-bearing liabilities

 

5,554

 

 

 

 

 

 

 

 

 

5,554

 

 

 

 

 

 

 

 

 

4,315

 

 

 

 

 

 

 

Total liabilities

 

277,424

 

 

 

 

 

 

 

 

 

283,623

 

 

 

 

 

 

 

 

 

290,480

 

 

 

 

 

 

 

Total stockholders' equity

 

75,467

 

 

 

 

 

 

 

 

 

75,174

 

 

 

 

 

 

 

 

 

71,389

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

352,891

 

 

 

 

 

 

 

 

$

358,797

 

 

 

 

 

 

 

 

$

361,869

 

 

 

 

 

 

 

Net interest income

 

 

 

$

2,177

 

 

 

 

 

 

 

 

$

2,367

 

 

 

 

 

 

 

 

$

2,082

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

2.34

%

 

 

 

 

 

 

 

 

2.62

%

 

 

 

 

 

 

 

 

2.31

%

Net interest-earning assets(3)

$

94,166

 

 

 

 

 

 

 

 

$

96,868

 

 

 

 

 

 

 

 

$

90,223

 

 

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

2.59

%

 

 

 

 

 

 

 

 

2.77

%

 

 

 

 

 

 

 

 

2.42

%

Cost of deposits (5)

 

 

 

 

 

 

 

0.78

%

 

 

 

 

 

 

 

 

0.49

%

 

 

 

 

 

 

 

 

0.34

%

Cost of funds (6)

 

 

 

 

 

 

 

0.79

%

 

 

 

 

 

 

 

 

0.49

%

 

 

 

 

 

 

 

 

0.34

%

Ratio of interest-earning assets to interest-bearing liabilities

 

138.99

%

 

 

 

 

 

 

 

 

139.51

%

 

 

 

 

 

 

 

 

135.49

%

 

 

 

 

 

 
(1)
Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $22,000, $26,000, and $31,000 for the three months ended March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
(2)
Net interest rate spread represents the difference between the weighted average yield earned on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents net interest income divided by average total interest-earning assets.
(5)
Cost of deposits represents the total interest paid on deposits, divided by total interest-bearing deposits plus total noninterest-bearing deposits.
(6)
Cost of funds represents the total interest paid on liabilities, divided by total interest-bearing liabilities plus total noninterest-bearing deposits.

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

6

 

 

CFSB Bancorp, Inc. and Subsidiary

Average Balances and Yields, Fully Tax-Equivalent Basis (Unaudited)

(Dollars in thousands)

 

Average Balance and Yields

 

 

Year to Date

 

 

March 31, 2023

 

 

March 31, 2022

 

 

Average

 

 

Interest

 

 

Average

 

 

Average

 

 

Interest

 

 

Average

 

 

Outstanding

 

 

Earned/

 

 

Yield/

 

 

Outstanding

 

 

Earned/

 

 

Yield/

 

(Dollars in thousands)

Balance

 

 

Paid

 

 

Rate

 

 

Balance

 

 

Paid

 

 

Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

$

177,898

 

 

$

4,976

 

 

 

3.73

%

 

$

170,944

 

 

$

4,909

 

 

 

3.83

%

Securities (1)

 

150,318

 

 

 

2,782

 

 

 

2.47

%

 

 

117,169

 

 

 

1,963

 

 

 

2.23

%

Cash and short-term investments

 

13,445

 

 

 

303

 

 

 

3.00

%

 

 

40,100

 

 

 

50

 

 

 

0.17

%

Total interest-earning assets

 

341,661

 

 

 

8,061

 

 

 

3.15

%

 

 

328,213

 

 

 

6,922

 

 

 

2.81

%

Noninterest-earning assets

 

16,401

 

 

 

 

 

 

 

 

 

15,863

 

 

 

 

 

 

 

Total assets

$

358,062

 

 

 

 

 

 

 

 

$

344,076

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

32,982

 

 

$

12

 

 

 

0.05

%

 

$

30,885

 

 

$

14

 

 

 

0.06

%

Savings deposits

 

72,112

 

 

 

54

 

 

 

0.10

%

 

 

72,245

 

 

 

55

 

 

 

0.10

%

Money market deposits

 

39,956

 

 

 

80

 

 

 

0.27

%

 

 

41,533

 

 

 

81

 

 

 

0.26

%

Certificates of deposit

 

100,875

 

 

 

969

 

 

 

1.28

%

 

 

109,226

 

 

 

624

 

 

 

0.76

%

Total interest-bearing deposits

 

245,925

 

 

 

1,115

 

 

 

0.60

%

 

 

253,889

 

 

 

774

 

 

 

0.41

%

FHLB advances

 

80

 

 

 

3

 

 

 

5.00

%

 

 

363

 

 

 

7

 

 

 

2.57

%

Total interest-bearing liabilities

 

246,005

 

 

 

1,118

 

 

 

0.61

%

 

 

254,252

 

 

 

781

 

 

 

0.41

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Noninterest-bearing demand deposits

 

31,928

 

 

 

 

 

 

 

 

 

32,130

 

 

 

 

 

 

 

  Other noninterest-bearing liabilities

 

5,044

 

 

 

 

 

 

 

 

 

1,151

 

 

 

 

 

 

 

Total liabilities

 

282,977

 

 

 

 

 

 

 

 

 

287,533

 

 

 

 

 

 

 

Total stockholders' equity

 

75,085

 

 

 

 

 

 

 

 

 

56,543

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

358,062

 

 

 

 

 

 

 

 

$

344,076

 

 

 

 

 

 

 

Net interest income

 

 

 

$

6,943

 

 

 

 

 

 

 

 

$

6,141

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

2.54

%

 

 

 

 

 

 

 

 

2.40

%

Net interest-earning assets(3)

$

95,656

 

 

 

 

 

 

 

 

$

73,961

 

 

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

2.71

%

 

 

 

 

 

 

 

 

2.49

%

Cost of deposits (5)

 

 

 

 

 

 

 

0.54

%

 

 

 

 

 

 

 

 

0.36

%

Cost of funds (6)

 

 

 

 

 

 

 

0.54

%

 

 

 

 

 

 

 

 

0.36

%

Ratio of interest-earning assets to interest-bearing liabilities

 

138.88

%

 

 

 

 

 

 

 

 

129.09

%

 

 

 

 

 

 
(1)
Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $84,000 and $96,000 for the nine months ended March 31, 2023 and March 31, 2022, respectively.
(2)
Net interest rate spread represents the difference between the weighted average yield earned on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.
(3)
Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4)
Net interest margin represents net interest income divided by average total interest-earning assets.
(5)
Cost of deposits represents the total interest paid on deposits, divided by total interest-bearing deposits plus total noninterest-bearing deposits.
(6)
Cost of funds represents the total interest paid on liabilities, divided by total interest-bearing liabilities plus total noninterest-bearing deposits.

CFSB Bancorp, Inc. and Subsidiary

Reconciliation of Fully Tax-Equivalent Income (Unaudited)

(In thousands)

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2022

 

 

2023

 

 

2022

 

Securities interest income (no tax adjustment)

 

$

938

 

 

$

901

 

 

$

665

 

 

$

2,698

 

 

$

1,867

 

Tax-equivalent adjustment

 

 

22

 

 

 

26

 

 

 

31

 

 

 

84

 

 

 

96

 

Securities (tax-equivalent basis)

 

$

960

 

 

$

927

 

 

$

696

 

 

$

2,782

 

 

$

1,963

 

Net interest income (no tax adjustment)

 

$

2,155

 

 

$

2,341

 

 

$

2,051

 

 

$

6,859

 

 

$

6,045

 

Tax-equivalent adjustment

 

 

22

 

 

 

26

 

 

 

31

 

 

 

84

 

 

 

96

 

Net interest income (tax-equivalent adjustment)

 

$

2,177

 

 

$

2,367

 

 

$

2,082

 

 

$

6,943

 

 

$

6,141

 

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

7

 

 

 

CFSB Bancorp, Inc. and Subsidiary

 

At or for the Three Months Ended

 

 

At or for the Nine Months Ended

 

Selected Financial Highlights (Unaudited)

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

(In thousands, except share and per share amounts)

 

2023

 

 

2022

 

 

2022

 

 

2023

 

 

2022

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (GAAP) (1, 5)

 

 

0.40

%

 

 

0.38

%

 

 

(0.92

%)

 

 

0.50

%

 

 

(0.05

%)

Return on average assets (Non-GAAP) (1, 2, 5)

 

 

0.40

%

 

 

0.38

%

 

 

0.48

%

 

 

0.50

%

 

 

0.43

%

Return on average equity (GAAP) (1, 6)

 

 

1.88

%

 

 

1.81

%

 

 

(4.64

%)

 

 

2.38

%

 

 

(0.29

%)

Return on average equity (Non-GAAP) (1, 2, 6)

 

 

1.88

%

 

 

1.81

%

 

 

2.40

%

 

 

2.38

%

 

 

2.60

%

Noninterest expense to average assets (GAAP) (1)

 

 

2.15

%

 

 

2.33

%

 

 

3.57

%

 

 

2.14

%

 

 

2.61

%

Noninterest expense to average assets (Non-GAAP) (1, 2)

 

 

2.15

%

 

 

2.33

%

 

 

1.85

%

 

 

2.14

%

 

 

2.01

%

Total loans to total deposits

 

 

66.3

%

 

 

65.6

%

 

 

61.6

%

 

 

66.3

%

 

 

61.6

%

Total loans to total assets

 

 

50.9

%

 

 

50.6

%

 

 

48.2

%

 

 

50.9

%

 

 

48.2

%

Efficiency ratio (GAAP) (7)

 

 

82.5

%

 

 

83.7

%

 

 

146.4

%

 

 

77.9

%

 

 

102.4

%

Efficiency ratio (Non-GAAP) (2, 7)

 

 

82.5

%

 

 

83.7

%

 

 

75.9

%

 

 

77.9

%

 

 

79.5

%

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital to risk-weighted assets

 

 

32.6

%

 

 

32.6

%

 

 

35.0

%

 

 

32.6

%

 

 

35.0

%

Common equity tier 1 capital to risk-weighted assets

 

 

31.7

%

 

 

31.7

%

 

 

34.0

%

 

 

31.7

%

 

 

34.0

%

Tier 1 capital to risk-weighted assets

 

 

31.7

%

 

 

31.7

%

 

 

34.0

%

 

 

31.7

%

 

 

34.0

%

Tier 1 capital to average assets (3)

 

 

17.9

%

 

 

17.4

%

 

 

17.4

%

 

 

17.9

%

 

 

17.4

%

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a percentage of total loans (4)

 

 

0.98

%

 

 

0.97

%

 

 

1.00

%

 

 

0.98

%

 

 

1.00

%

Allowance for loan losses as a percentage of non-performing loans

 

NM

 

 

NM

 

 

NM

 

 

NM

 

 

NM

 

Net (charge-offs) recoveries to average outstanding loans

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percentage of total loans

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percentage of total assets

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Total non-performing loans as a percentage of total assets

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

0.00

%

Informational Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of held to maturity securities

 

$

136,774

 

 

$

132,625

 

 

$

128,089

 

 

$

136,774

 

 

$

128,089

 

Book value per share (8)

 

$

11.41

 

 

$

11.54

 

 

$

11.29

 

 

$

11.41

 

 

N/A

 

Outstanding common shares

 

 

6,632,642

 

 

 

6,521,642

 

 

 

6,521,642

 

 

 

6,632,642

 

 

N/A

 
(1)
Annualized.
(2)
See Reconciliation of GAAP to Non-GAAP Earnings Metrics below.
(3)
Average assets calculated on a quarterly and year to date basis for the periods presented.
(4)
Total loans exclude net deferred loan costs and fees.
(5)
Represents net income divided by average assets.
(6)
Represents net income divided by average stockholders' equity
(7)
Represents total non-interest expenses divided by net interest income and non-interest income.
(8)
Represents total stockholders' equity divided by outstanding shares at period end.

CFSB Bancorp, Inc. and Subsidiary

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

Reconciliation of Non-GAAP Earnings Metrics (Unaudited)

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

(In thousands, except per share amounts)

 

2023

 

 

2022

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss), GAAP basis

 

$

355

 

 

$

341

 

 

$

(828

)

 

$

1,341

 

 

$

(122

)

Adjustments to GAAP Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charitable Foundation contribution

 

 

-

 

 

 

-

 

 

 

1,554

 

 

 

-

 

 

 

1,554

 

Gain on sale of available for sale securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Tax effect of adjustments to net income, GAAP basis

 

 

-

 

 

 

-

 

 

 

(297

)

 

 

-

 

 

 

(280

)

Adjusted net income, non-GAAP basis

 

$

355

 

 

$

341

 

 

$

429

 

 

$

1,341

 

 

$

1,104

 

Earnings per share, non-GAAP basis

 

$

0.06

 

 

$

0.05

 

 

$

0.08

 

 

$

0.21

 

 

N/A

 

Non-interest expenses

 

$

1,901

 

 

$

2,087

 

 

$

3,227

 

 

$

5,736

 

 

$

6,734

 

Charitable Foundation contribution

 

 

-

 

 

 

-

 

 

 

(1,554

)

 

 

-

 

 

 

(1,554

)

Adjusted non-interest expenses, non-GAAP basis

 

$

1,901

 

 

$

2,087

 

 

$

1,673

 

 

$

5,736

 

 

$

5,180

 

Non-interest income

 

$

148

 

 

$

152

 

 

$

153

 

 

$

500

 

 

$

529

 

Gain on sale of available for sale securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Adjusted non-interest income, non-GAAP basis

 

$

148

 

 

$

152

 

 

$

153

 

 

$

500

 

 

$

481

 

 

____________________________________________________________________________________________________________

15 Beach Street, Quincy, MA 02170 | 617.471.0750 | colonialfed.com

8