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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, 2023

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 8, 2023, the registrant had 6,632,642 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

6

 

Consolidated Statements of Cash Flows

8

 

Notes to Unaudited Consolidated Financial Statements

9

Item 2.

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

34

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

49

Item 4.

Controls and Procedures

50

 

 

 

PART II.

OTHER INFORMATION

51

 

 

 

Item 1.

Legal Proceedings

51

Item 1A.

Risk Factors

51

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

51

Item 3.

Defaults Upon Senior Securities

51

Item 4.

Mine Safety Disclosures

51

Item 5.

Other Information

51

Item 6.

Exhibits

52

Signatures

53

 

 

2


 

Item 1. Financial Statements.

CFSB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(In thousands, except per share data)

 

 

 

March 31,

 

 

June 30,

 

 

 

2023

 

 

2022

 

Assets:

 

 

 

 

 

 

Cash and due from banks

 

$

1,518

 

 

$

1,609

 

Short-term investments

 

 

3,824

 

 

 

30,058

 

Total cash and cash equivalents

 

 

5,342

 

 

 

31,667

 

Securities available for sale, at fair value

 

 

158

 

 

 

199

 

Securities held to maturity, at amortized cost, fair value of $136,774 at
     March 31, 2023 and $
133,593 at June 30, 2022

 

 

150,981

 

 

 

145,239

 

Federal Home Loan Bank stock, at cost

 

 

241

 

 

 

191

 

Loans, net of allowance for loan losses of $1,747 at March 31, 2023 and
     $
1,747 at June 30, 2022

 

 

176,943

 

 

 

172,593

 

Premises and equipment, net

 

 

3,411

 

 

 

3,334

 

Accrued interest receivable

 

 

1,356

 

 

 

1,265

 

Bank-owned life insurance

 

 

10,335

 

 

 

10,144

 

Deferred tax asset

 

 

1,003

 

 

 

1,079

 

Operating lease right of use asset

 

 

976

 

 

 

-

 

Other assets

 

 

930

 

 

 

472

 

Total assets

 

$

351,676

 

 

$

366,183

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Non-interest bearing

 

$

30,054

 

 

$

31,168

 

Interest-bearing

 

 

239,952

 

 

 

255,907

 

Total deposits

 

 

270,006

 

 

 

287,075

 

Mortgagors' escrow accounts

 

 

1,566

 

 

 

1,555

 

Operating lease liability

 

 

983

 

 

 

-

 

Accrued expenses and other liabilities

 

 

3,447

 

 

 

3,303

 

Total liabilities

 

 

276,002

 

 

 

291,933

 

Stockholders' Equity

 

 

 

 

 

 

Preferred Stock, $.01 par value, 10,000,000 shares authorized as
     of March 31, 2023 and June 30, 2022,
none issued and
     outstanding as of March 31, 2023 and June 30, 2022

 

$

-

 

 

$

-

 

Common Stock, $.01 par value, 90,000,000 shares authorized as
     of March 31, 2023 and June 30, 2022,
6,632,642 issued
     and outstanding as of March 31, 2023 and
6,521,642 issued and
     outstanding as of June 30, 2022

 

 

65

 

 

 

65

 

Additional paid-in capital

 

 

27,729

 

 

 

27,720

 

Retained earnings

 

 

50,311

 

 

 

48,970

 

Accumulated other comprehensive (loss) income

 

 

(2

)

 

 

-

 

Unearned compensation - ESOP, 242,866 and 250,536 shares unallocated
     at March 31, 2023 and June 30, 2022, respectively

 

 

(2,429

)

 

 

(2,505

)

Total stockholders' equity

 

 

75,674

 

 

 

74,250

 

Total liabilities and stockholders' equity

 

$

351,676

 

 

$

366,183

 

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)

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

1,700

 

 

$

1,615

 

 

$

4,976

 

 

$

4,909

 

Interest and dividends on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

837

 

 

 

548

 

 

 

2,383

 

 

 

1,507

 

Tax-exempt

 

 

101

 

 

 

117

 

 

 

315

 

 

 

360

 

Interest on short-term investments and certificates of deposit

 

 

53

 

 

 

17

 

 

 

303

 

 

 

50

 

Total interest and dividend income

 

 

2,691

 

 

 

2,297

 

 

 

7,977

 

 

 

6,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

533

 

 

 

245

 

 

 

1,115

 

 

 

774

 

Borrowings

 

 

3

 

 

 

1

 

 

 

3

 

 

 

7

 

Total interest expense

 

 

536

 

 

 

246

 

 

 

1,118

 

 

 

781

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

2,155

 

 

 

2,051

 

 

 

6,859

 

 

 

6,045

 

Provision for loan losses

 

 

-

 

 

 

1

 

 

 

-

 

 

 

26

 

Net interest income after provision for loan losses

 

 

2,155

 

 

 

2,050

 

 

 

6,859

 

 

 

6,019

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

37

 

 

 

32

 

 

 

110

 

 

 

93

 

Income on bank-owned life insurance

 

 

64

 

 

 

75

 

 

 

191

 

 

 

183

 

Gain on sale of securities available for sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Other income

 

 

47

 

 

 

46

 

 

 

199

 

 

 

205

 

Total non-interest income

 

 

148

 

 

 

153

 

 

 

500

 

 

 

529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,103

 

 

 

956

 

 

 

3,371

 

 

 

3,061

 

Occupancy and equipment

 

 

256

 

 

 

238

 

 

 

754

 

 

 

656

 

Advertising

 

 

38

 

 

 

32

 

 

 

148

 

 

 

110

 

Data processing

 

 

84

 

 

 

89

 

 

 

262

 

 

 

260

 

Deposit insurance

 

 

20

 

 

 

24

 

 

 

63

 

 

 

67

 

Charitable Foundation contribution

 

 

-

 

 

 

1,554

 

 

 

-

 

 

 

1,554

 

Other general and administrative

 

 

400

 

 

 

334

 

 

 

1,138

 

 

 

1,026

 

Total non-interest expenses

 

 

1,901

 

 

 

3,227

 

 

 

5,736

 

 

 

6,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

402

 

 

 

(1,024

)

 

 

1,623

 

 

 

(186

)

Provision (benefit) for income taxes

 

 

47

 

 

 

(196

)

 

 

282

 

 

 

(64

)

Net income (loss)

 

$

355

 

 

$

(828

)

 

$

1,341

 

 

$

(122

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.06

 

 

$

(0.15

)

 

$

0.21

 

 

N/A

 

Diluted

 

$

0.06

 

 

$

(0.15

)

 

$

0.21

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

6,300,633

 

 

 

5,500,173

 

 

 

6,282,384

 

 

N/A

 

Diluted

 

 

6,300,721

 

 

 

5,500,173

 

 

 

6,282,413

 

 

N/A

 

 

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.

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

4


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(In thousands)

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income (loss)

 

$

355

 

 

$

(828

)

 

$

1,341

 

 

$

(122

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding (losses) gains

 

 

-

 

 

 

(3

)

 

 

(2

)

 

 

30

 

Reclassification adjustment for net realized gains

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Net change in unrealized losses

 

 

-

 

 

 

(3

)

 

 

(2

)

 

 

(18

)

Tax effect

 

 

-

 

 

 

1

 

 

 

-

 

 

 

5

 

Net-of-tax amount

 

 

-

 

 

 

(2

)

 

 

(2

)

 

 

(13

)

Comprehensive income (loss)

 

$

355

 

 

$

(830

)

 

$

1,339

 

 

$

(135

)

There were no sales of securities for the three and nine months ended March 31, 2023. There were no sales of securities during the three months ended March 31, 2022. The tax effect related to the net realized gain on sale of securities available for sale was $14,000 for the nine months ended March 31, 2022.

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 (Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Unearned

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Compensation

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

ESOP

 

 

Total

 

Balance at December 31, 2022

 

 

6,521,642

 

 

$

65

 

 

$

27,714

 

 

$

49,956

 

 

$

(2

)

 

$

(2,454

)

 

$

75,279

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

355

 

 

 

-

 

 

 

-

 

 

 

355

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Restricted stock awards granted

 

 

111,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

19

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

19

 

ESOP shares committed to be released

 

 

-

 

 

 

-

 

 

 

(4

)

 

 

-

 

 

 

-

 

 

 

25

 

 

 

21

 

Balance at March 31, 2023

 

 

6,632,642

 

 

$

65

 

 

$

27,729

 

 

$

50,311

 

 

$

(2

)

 

$

(2,429

)

 

$

75,674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

-

 

 

$

-

 

 

$

-

 

 

$

49,334

 

 

$

6

 

 

$

-

 

 

$

49,340

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(828

)

 

 

-

 

 

 

-

 

 

 

(828

)

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2

)

 

 

-

 

 

 

(2

)

Transfer of cash from Colonial Federal Savings Bank to 15 Beach MHC

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(100

)

 

 

-

 

 

 

-