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

img262294579_0.jpg 

Exhibit 99.1

News Release

For Immediate Release

January 24, 2023

For More Information, Contact:

Michael E. McFarland, President and Chief

Executive Officer (617-471-0750)

 

 

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

 

QUINCY, Massachusetts, January 24, 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 $341,000, or $0.05 per basic and diluted share, for the three months ended December 31, 2022 compared to net income of $645,000, or $0.10 per basic and diluted share, for the three months ended September 30, 2022 and net income of $234,000 for the three months ended December 31, 2021.

 

For the six months ended December 31, 2022, net income was $986,000, or $0.16 per basic and diluted share, compared to net income of $706,000, for the six months ended December 31, 2021. Net income on a non-GAAP basis, excluding certain nonrecurring items, was $666,000, for the six months ended December 31, 2021. 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, “We are pleased to see loan growth during the quarter and continued improvement in interest-earning asset yields. We are proud of the Bank's accomplishments during calendar year 2022, and I want to thank our employees for their continued efforts and commitment. Looking forward, we are likely to see headwinds in deposit pricing in our highly competitive banking environment. We will continue to focus on pricing and expense discipline in the current rising interest rate and inflationary environment.”

 

Second Quarter Operating Results

Net interest income, on a fully tax-equivalent basis decreased by $25,000, or 1.0%, to $2.4 million for the three months ended December 31, 2022 from $2.4 million for the three months ended September 30, 2022. This decrease was primarily due to a 41 basis point increase in the average rate paid for certificates of deposit, partially offset by a 13 basis point increase in the average yield earned for interest-earning assets. The interest earned on loans increased $38,000, to $1.7 million for the three months ended December 31, 2022, from $1.6 million for the three months ended September 30, 2022. The interest earned on loans benefitted from rising interest rates and from an increase in the average balance of loans of $1.0 million during the second fiscal quarter. The net interest margin increased by 1 basis point to 2.77% for the fiscal second quarter from 2.76% for the fiscal first quarter.

 

Net interest income, on a fully tax-equivalent basis increased by $324,000, or 15.9%, to $2.4 million for the three months ended December 31, 2022, from $2.0 million in the same period in the prior year. Relative to the prior year quarter, the net interest margin increased by 27 basis points to 2.77% from 2.50%. The improvement reflects growth in the average balance of loans and securities of $5.1 million and $33.8 million, respectively, from the prior year quarter and a 357 basis point increase in the interest earned on cash and short-term investments due to the higher interest rate environment. Partially offsetting the improvement in interest and dividend income was a 15 basis point increase in the cost of interest-bearing liabilities from the prior year quarter 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 quarter ended December 31, 2022 or September 30, 2022, as loan growth was offset by decreases in the unallocated portion of the allowance for loan losses. A provision for loan losses of $10,000 was recorded during the three months ended December 31, 2021, driven by loan growth. The allowance for loan losses as a percentage of total loans was 0.97%, 0.99% and 1.00% at December 31, 2022, September 30, 2022 and December 31, 2021, respectively.

 

Non-interest income decreased $48,000, or 24.0%, to $152,000 for the quarter ended December 31, 2022 from $200,000 in the quarter ended September 30, 2022, due to a decrease of $46,000 in other income. The prior quarter included $50,000 for the annual collection of safe deposit box fees.

____________________________________________________________________________________________________________

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

1

 

 

Non-interest income decreased $9,000, or 5.6%, to $152,000 for the quarter ended December 31, 2022, from $161,000 for the quarter ended December 31, 2021, principally due to a decrease of $12,000 in income on bank-owned life insurance.

 

Non-interest expenses increased $339,000, or 19.4%, to $2.1 million for the quarter ended December 31, 2022 from $1.7 million for the quarter ended September 30, 2022. The increase was due to an increase in salaries and employee benefits expense of $232,000, or 22.8%, primarily attributed to a discretionary year-end bonus awarded to employees in the quarter ended December 31, 2022. In addition, advertising expense increased $32,000 from the prior quarter due to employment agency fees, and other general and administrative expense increased by $72,000 from the prior quarter due to increases in expenses related to public filings, uncollectable check expense and directors’ compensation expense.

 

Non-interest expenses increased $191,000, or 10.1%, to $2.1 million for the quarter ended December 31, 2022 from $1.9 million for the quarter ended December 31, 2021. The increase was principally due to an increase in salaries and employee benefits of $83,000, attributed to ESOP expenses incurred in the current year, an increase in headcount, and increases to employee salaries and health insurance benefits.

 

Income tax expense was $65,000 for the three months ended December 31, 2022, compared to $170,000 for the three months ended September 30, 2022 and $32,000 for the three months ended December 31, 2021. The decrease in the effective tax rate for the three months ended December 31, 2022, compared to the three months ended September 30, 2022 was due to increases in tax-exempt municipal securities income. The increase in the effective tax rate for the three months ended December 31, 2022, compared to the three months ended December 31, 2021 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 $702,000, or 17.3%, to $4.8 million for the six months ended December 31, 2022 from $4.1 million for the six months ended December 31, 2021. Total interest-earning assets income increased $702,000 from the prior year period due to an increase in the average balance of securities and higher average yields earned on securities and cash and short-term investments. An increase in the average balance of securities of $38.1 million, or 34.0%, and a 16 basis point increase in the average yield earned on securities contributed to a $550,000 increase in securities income. The interest earned on cash and short-term investments increased $217,000 from the prior year, due to a 270 basis point improvement in the average yield earned due to the higher interest rate environment, partially offset by a $21.7 million decrease in the average balance. Partially offsetting the increase in interest and dividend income was a $47,000 increase in the interest expense. The increase in the interest paid on certificates of deposit of $49,000 from the prior year period contributed to a 5 basis point increase in the cost of interest-bearing liabilities. The net interest margin improved 26 basis points for the six months ended December 31, 2022, to 2.76%, from 2.50% in the prior year.

 

The Company did not recognize a provision for loan losses for the six months ended December 31, 2022 compared to a provision for loan losses of $25,000 in the prior year period. For the six months ended December 31, 2021, loan growth was the primary contributor to the provision for loan losses.

 

Non-interest income decreased $65,000, or 15.6%, to $352,000 for the six months ended December 31, 2022 from $417,000 in the prior year period, principally due to a decrease of $48,000 in the gain on sale of securities available for sale and a $22,000 decrease in income on bank-owned life insurance. Excluding the gain on sale of securities available for sale, which management believes is a non-recurring operating activity, non-interest income would have decreased $17,000, or 4.6% from the prior year period.

 

Non-interest expenses increased $287,000, or 8.1%, to $3.8 million for the six months ended December 31, 2022 from $3.5 million for the six months ended December 31, 2021. Salaries and benefits increased $121,000, or 5.6%, to $2.3 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 $80,000, or 19.1%, to $498,000 for the six months ended December 31, 2022 from $418,000 for the six months ended December 31, 2021, due to the renewal of a branch lease in the current fiscal year and for increases to service maintenance contracts. Advertising expense increased $32,000 from the prior year period due to an employment agency fee incurred during the six months ended December 31, 2022. Other general and administrative expense increased $47,000, or 6.8% from the prior year period due to increases in professional fees.

 

Income tax expense was $235,000 for the six months ended December 31, 2022 compared to income tax expense of $132,000 for the six months ended December 31, 2021.

 

____________________________________________________________________________________________________________

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

2

 

 

Balance Sheet

At December 31, 2022, total assets amounted to $356.8 million, compared to $360.9 million at September 30, 2022, a decrease of $4.1 million, or 1.1%, as a $5.2 million decrease in total cash and cash equivalents and a $2.7 million decrease in securities held to maturity were partially offset by a $3.4 million increase in total loans from the prior quarter. Commercial real estate loans were the main contributor to total loan growth, as commercial real estate loans grew $5.4 million, or 34.8%, to $21.1 million at December 31, 2022, from $15.6 million at September 30, 2022. Deposits decreased by $4.6 million, or 1.6%, 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 $75.3 million at December 31, 2022 compared to $74.9 million at September 30, 2022. The increase of $362,000 reflects net income of $341,000 and earned ESOP compensation of $26,000, partially offset by other comprehensive losses of $1,000.

 

Total assets at December 31, 2022 decreased $5.0 million, or 1.4%, from $361.8 million at December 31, 2021. Contributing to the decrease in assets was a decrease of $37.3 million in cash and cash equivalents to $10.6 million at December 31, 2022 from $47.8 million at December 31, 2021, partially offset by a $26.5 million increase in securities held to maturity and $5.7 million in loan growth. Commercial real estate loans increased by $5.6 million, or 35.9%, as we focused on diversifying our loan mix. Total deposits decreased by $32.1 million, or 10.4%, to $275.5 million at December 31, 2022 from $307.6 million at December 31, 2021, principally due to the utilization of subscription funds held in escrow to purchase shares in the initial public offering.

 

Total stockholders’ equity was $75.3 million at December 31, 2022 compared to $49.3 million at December 31, 2021. The increase of $25.9 million relates mainly to net proceeds from the initial public offering of $27.8 million and net income earned during the previous twelve months of $622,000, partially offset by the establishment of the Company’s ESOP plan, net of earned compensation of $2.5 million.

 

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 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

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

Dec 2022 vs.

 

 

Dec 2022 vs.

 

 

 

2022

 

 

2022

 

 

2021

 

 

Sep 2022

 

 

Dec 2021

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

1,502

 

 

$

1,481

 

 

$

1,475

 

 

 

1.4

%

 

 

1.8

%

Short-term investments

 

 

9,072

 

 

 

14,260

 

 

 

46,358

 

 

 

(36.4

)%

 

 

(80.4

)%

Total cash and cash equivalents

 

 

10,574

 

 

 

15,741

 

 

 

47,833

 

 

 

(32.8

)%

 

 

(77.9

)%

Certificates of deposit

 

 

-

 

 

 

-

 

 

 

980

 

 

-%

 

 

 

(100.0

)%

Securities available for sale, at fair value

 

 

168

 

 

 

183

 

 

 

254

 

 

 

(8.2

)%

 

 

(33.9

)%

Securities held to maturity, at amortized cost

 

 

149,473

 

 

 

152,141

 

 

 

122,931

 

 

 

(1.8

)%

 

 

21.6

%

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 family

 

 

140,898

 

 

 

143,417

 

 

 

139,079

 

 

 

(1.8

)%

 

 

1.3

%

Multifamily

 

 

13,239

 

 

 

13,055

 

 

 

16,173

 

 

 

1.4

%

 

 

(18.1

)%

Second mortgages and home equity lines of credit

 

 

2,590

 

 

 

2,514

 

 

 

2,162

 

 

 

3.0

%

 

 

19.8

%

Construction

 

 

600

 

 

 

415

 

 

 

-

 

 

 

44.6

%

 

-%

 

Commercial

 

 

21,077

 

 

 

15,639

 

 

 

15,508

 

 

 

34.8

%

 

 

35.9

%

Total mortgage loans on real estate

 

 

178,404

 

 

 

175,040

 

 

 

172,922

 

 

 

1.9

%

 

 

3.2

%

Consumer

 

 

63

 

 

 

71

 

 

 

111

 

 

 

(11.3

)%

 

 

(43.2

)%

Home improvement

 

 

2,232

 

 

 

2,231

 

 

 

1,999

 

 

 

0.0

%

 

 

11.7

%

Total loans

 

 

180,699

 

 

 

177,342

 

 

 

175,032

 

 

 

1.9

%

 

 

3.2

%

Allowance for loan losses

 

 

(1,747

)

 

 

(1,747

)

 

 

(1,747

)

 

 

0.0

%

 

 

0.0

%

Net deferred loan costs and fees, and purchase premiums

 

 

(383

)

 

 

(350

)

 

 

(354

)

 

 

9.4

%

 

 

8.2

%

Loans, net

 

 

178,569

 

 

 

175,245

 

 

 

172,931

 

 

 

1.9

%

 

 

3.3

%

Federal Home Loan Bank of Boston stock, at cost

 

 

191

 

 

 

191

 

 

 

453

 

 

 

0.0

%

 

 

(57.8

)%

Premises and equipment, net

 

 

3,272

 

 

 

3,310

 

 

 

3,337

 

 

 

(1.1

)%

 

 

(1.9

)%

Accrued interest receivable

 

 

1,303

 

 

 

1,306

 

 

 

1,112

 

 

 

(0.2

)%

 

 

17.2

%

Bank-owned life insurance

 

 

10,271

 

 

 

10,208

 

 

 

10,008

 

 

 

0.6

%

 

 

2.6

%

Deferred tax asset

 

 

1,001

 

 

 

1,139

 

 

 

592

 

 

 

(12.1

)%

 

 

69.1

%

Operating lease right of use asset

 

 

999

 

 

 

1,021

 

 

 

-

 

 

 

(2.2

)%

 

-%

 

Other assets

 

 

1,012

 

 

 

457

 

 

 

1,398

 

 

 

121.4

%

 

 

(27.6

)%

Total assets

 

$

356,833

 

 

$

360,942

 

 

$

361,829

 

 

 

(1.1

)%

 

 

(1.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest bearing NOW and demand

 

$

32,618

 

 

$

34,148

 

 

$

52,378

 

 

 

(4.5

)%

 

 

(37.7

)%

Interest bearing NOW and demand

 

 

32,241

 

 

 

32,791

 

 

 

33,082

 

 

 

(1.7

)%

 

 

(2.5

)%

Regular and other

 

 

69,924

 

 

 

74,703

 

 

 

71,975

 

 

 

(6.4

)%

 

 

(2.8

)%

Money market accounts

 

 

37,470

 

 

 

43,349

 

 

 

41,173

 

 

 

(13.6

)%

 

 

(9.0

)%

Term certificates

 

 

103,209

 

 

 

95,061

 

 

 

108,952

 

 

 

8.6

%

 

 

(5.3

)%

Total deposits

 

 

275,462

 

 

 

280,052

 

 

 

307,560

 

 

 

(1.6

)%

 

 

(10.4

)%

Federal Home Loan Bank of Boston advances

 

 

-

 

 

 

-

 

 

 

288

 

 

-%

 

 

 

(100.0

)%

Mortgagors' escrow accounts

 

 

1,680

 

 

 

1,618

 

 

 

1,650

 

 

 

3.8

%

 

 

1.8

%

Operating lease liability

 

 

1,003

 

 

 

1,023

 

 

 

-

 

 

 

(2.0

)%

 

-%

 

Accrued expenses and other liabilities

 

 

3,409

 

 

 

3,332

 

 

 

2,991

 

 

 

2.3

%

 

 

14.0

%

Total liabilities

 

 

281,554

 

 

 

286,025

 

 

 

312,489

 

 

 

(1.6

)%

 

 

(9.9

)%

Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

65

 

 

 

65

 

 

 

-

 

 

 

0.0

%

 

-%

 

Additional paid-in capital

 

 

27,714

 

 

 

27,718

 

 

 

-

 

 

 

(0.0

)%

 

-%

 

Retained earnings

 

 

49,956

 

 

 

49,615

 

 

 

49,334

 

 

 

0.7

%

 

 

1.3

%

Accumulated other comprehensive income (loss), net of tax

 

 

(2

)

 

 

(1

)

 

 

6

 

 

 

100.0

%

 

 

(133.3

)%

Unearned compensation - ESOP

 

 

(2,454

)

 

 

(2,480

)

 

 

-

 

 

 

(1.0

)%

 

-%

 

Total stockholders' equity

 

 

75,279

 

 

 

74,917

 

 

 

49,340

 

 

 

0.5

%

 

 

52.6

%

Total liabilities and stockholders' equity

 

$

356,833

 

 

$

360,942

 

 

$

361,829

 

 

 

(1.1

)%

 

 

(1.4

)%

 

____________________________________________________________________________________________________________

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 Six Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

1,657

 

 

$

1,619

 

 

$

1,640

 

 

$

3,276

 

 

$

3,294

 

Interest and dividends on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

795

 

 

 

751

 

 

 

492

 

 

 

1,546

 

 

 

959

 

Tax-exempt

 

 

106

 

 

 

108

 

 

 

120

 

 

 

214

 

 

 

243

 

Interest on short-term investments and certificates of deposit

 

 

123

 

 

 

127

 

 

 

16

 

 

 

250

 

 

 

33

 

Total interest and dividend income

 

 

2,681

 

 

 

2,605

 

 

 

2,268

 

 

 

5,286

 

 

 

4,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

340

 

 

 

242

 

 

 

255

 

 

 

582

 

 

 

529

 

Borrowings

 

 

-

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

6

 

Total interest expense

 

 

340

 

 

 

242

 

 

 

257

 

 

 

582

 

 

 

535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

2,341

 

 

 

2,363

 

 

 

2,011

 

 

 

4,704

 

 

 

3,994

 

Provision for loan losses

 

 

-

 

 

 

-

 

 

 

10

 

 

 

-

 

 

 

25

 

Net interest income after provision for loan losses

 

 

2,341

 

 

 

2,363

 

 

 

2,001

 

 

 

4,704

 

 

 

3,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

36

 

 

 

37

 

 

 

31

 

 

 

73

 

 

 

61

 

Income on bank-owned life insurance

 

 

63

 

 

 

64

 

 

 

75

 

 

 

127

 

 

 

149

 

Gain on sale of securities available for sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Other income

 

 

53

 

 

 

99

 

 

 

55

 

 

 

152

 

 

 

159

 

Total non-interest income

 

 

152

 

 

 

200

 

 

 

161

 

 

 

352

 

 

 

417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,250

 

 

 

1,018

 

 

 

1,167

 

 

 

2,268

 

 

 

2,147

 

Occupancy and equipment

 

 

255

 

 

 

243

 

 

 

208

 

 

 

498

 

 

 

418

 

Advertising

 

 

71

 

 

 

39

 

 

 

37

 

 

 

110

 

 

 

78

 

Data processing

 

 

84

 

 

 

94

 

 

 

91

 

 

 

178

 

 

 

171

 

Deposit insurance

 

 

22

 

 

 

21

 

 

 

21

 

 

 

43

 

 

 

43

 

Other general and administrative

 

 

405

 

 

 

333

 

 

 

372

 

 

 

738

 

 

 

691

 

Total non-interest expenses

 

 

2,087

 

 

 

1,748

 

 

 

1,896

 

 

 

3,835

 

 

 

3,548

 

Income before income taxes

 

 

406

 

 

 

815

 

 

 

266

 

 

 

1,221

 

 

 

838

 

Provision for income taxes

 

 

65

 

 

 

170

 

 

 

32

 

 

 

235

 

 

 

132

 

Net income

 

$

341

 

 

$

645

 

 

$

234

 

 

$

986

 

 

$

706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.05

 

 

$

0.10

 

 

N/A

 

 

$

0.16

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,274,542

 

 

 

6,271,977

 

 

N/A

 

 

 

6,273,260

 

 

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

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2021

 

 

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

$

177,648

 

 

$

1,657

 

 

 

3.73

%

 

$

176,638

 

 

$

1,619

 

 

 

3.67

%

 

$

172,505

 

 

$

1,640

 

 

 

3.80

%

Securities (1)

 

151,249

 

 

 

927

 

 

 

2.45

%

 

 

148,774

 

 

 

888

 

 

 

2.39

%

 

 

117,441

 

 

 

644

 

 

 

2.19

%

Cash and short-term investments

 

13,153

 

 

 

123

 

 

 

3.74

%

 

 

21,717

 

 

 

127

 

 

 

2.34

%

 

 

37,190

 

 

 

16

 

 

 

0.17

%

Total interest-earning assets

 

342,050

 

 

 

2,707

 

 

 

3.17

%

 

 

347,129

 

 

 

2,634

 

 

 

3.04

%

 

 

327,136

 

 

 

2,300

 

 

 

2.81

%

Noninterest-earning assets

 

16,747

 

 

 

 

 

 

 

 

 

15,933

 

 

 

 

 

 

 

 

 

14,340

 

 

 

 

 

 

 

Total assets

$

358,797

 

 

 

 

 

 

 

 

$

363,062

 

 

 

 

 

 

 

 

$

341,476

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

33,557

 

 

$

4

 

 

 

0.05

%

 

$

33,133

 

 

$

4

 

 

 

0.05

%

 

$

30,903

 

 

$

4

 

 

 

0.05

%

Savings deposits

 

72,708

 

 

 

18

 

 

 

0.10

%

 

 

75,444

 

 

 

19

 

 

 

0.10

%

 

 

72,233

 

 

 

18

 

 

 

0.10

%

Money market deposits

 

39,876

 

 

 

27

 

 

 

0.27

%

 

 

45,493

 

 

 

31

 

 

 

0.27

%

 

 

41,411

 

 

 

27

 

 

 

0.26

%

Certificates of deposit

 

99,041

 

 

 

291

 

 

 

1.18

%

 

 

97,153

 

 

 

188

 

 

 

0.77

%

 

 

109,563

 

 

 

206

 

 

 

0.75

%

Total interest-bearing deposits

 

245,182

 

 

 

340

 

 

 

0.55

%

 

 

251,223

 

 

 

242

 

 

 

0.39

%

 

 

254,110

 

 

 

255

 

 

 

0.40

%

FHLB advances

 

-

 

 

 

-

 

 

 

0.00

%

 

 

-

 

 

 

-

 

 

 

0.00

%

 

 

345

 

 

 

2

 

 

 

2.32

%

Total interest-bearing liabilities

 

245,182

 

 

 

340

 

 

 

0.55

%

 

 

251,223

 

 

 

242

 

 

 

0.39

%

 

 

254,455

 

 

 

257

 

 

 

0.40

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

32,887

 

 

 

 

 

 

 

 

 

32,522

 

 

 

 

 

 

 

 

 

34,168

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

5,554

 

 

 

 

 

 

 

 

 

3,195

 

 

 

 

 

 

 

 

 

3,515

 

 

 

 

 

 

 

Total liabilities

 

283,623

 

 

 

 

 

 

 

 

 

286,940

 

 

 

 

 

 

 

 

 

292,138

 

 

 

 

 

 

 

Total stockholders' equity

 

75,174

 

 

 

 

 

 

 

 

 

76,122

 

 

 

 

 

 

 

 

 

49,338

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

358,797

 

 

 

 

 

 

 

 

$

363,062

 

 

 

 

 

 

 

 

$

341,476

 

 

 

 

 

 

 

Net interest income

 

 

 

$

2,367

 

 

 

 

 

 

 

 

$

2,392

 

 

 

 

 

 

 

 

$

2,043

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

2.62

%

 

 

 

 

 

 

 

 

2.65

%

 

 

 

 

 

 

 

 

2.41

%

Net interest-earning assets(3)

$

96,868

 

 

 

 

 

 

 

 

$

95,906

 

 

 

 

 

 

 

 

$

72,681

 

 

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

2.77

%

 

 

 

 

 

 

 

 

2.76

%

 

 

 

 

 

 

 

 

2.50

%

Cost of deposits (5)

 

 

 

 

 

 

 

0.49

%

 

 

 

 

 

 

 

 

0.34

%

 

 

 

 

 

 

 

 

0.35

%

Cost of funds (6)

 

 

 

 

 

 

 

0.49

%

 

 

 

 

 

 

 

 

0.34

%

 

 

 

 

 

 

 

 

0.36

%

Ratio of interest-earning assets to interest-bearing liabilities

 

139.51

%

 

 

 

 

 

 

 

 

138.18

%

 

 

 

 

 

 

 

 

128.56

%

 

 

 

 

 

 
(1)
Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $26,000, $29,000, and $32,000 for the three months ended December 31, 2022, September 30, 2022 and December 31, 2021, 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

 

 

December 31, 2022

 

 

December 31, 2021

 

 

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

$

177,143

 

 

$

3,276

 

 

 

3.70

%

 

$

173,701

 

 

$

3,294

 

 

 

3.79

%

Securities (1)

 

150,011

 

 

 

1,817

 

 

 

2.42

%

 

 

111,952

 

 

 

1,267

 

 

 

2.26

%

Cash and short-term investments

 

17,435

 

 

 

250

 

 

 

2.87

%

 

 

39,107

 

 

 

33

 

 

 

0.17

%

Total interest-earning assets

 

344,589

 

 

 

5,343

 

 

 

3.10

%

 

 

324,760

 

 

 

4,594

 

 

 

2.83

%

Noninterest-earning assets

 

16,342

 

 

 

 

 

 

 

 

 

14,117

 

 

 

 

 

 

 

Total assets

$

360,931

 

 

 

 

 

 

 

 

$

338,877

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

$

33,346

 

 

$

8

 

 

 

0.05

%

 

$

30,786

 

 

$

8

 

 

 

0.05

%

Savings deposits

 

74,076

 

 

 

37

 

 

 

0.10

%

 

 

71,667

 

 

 

37

 

 

 

0.10

%

Money market deposits

 

42,685

 

 

 

58

 

 

 

0.27

%

 

 

41,266

 

 

 

54

 

 

 

0.26

%

Certificates of deposit

 

98,097

 

 

 

479

 

 

 

0.98

%

 

 

110,088

 

 

 

430

 

 

 

0.78

%

Total interest-bearing deposits

 

248,204

 

 

 

582

 

 

 

0.47

%

 

 

253,807

 

 

 

529

 

 

 

0.42

%

FHLB advances

 

-

 

 

 

-

 

 

 

0.00

%

 

 

456

 

 

 

6

 

 

 

2.63

%

Total interest-bearing liabilities

 

248,204

 

 

 

582

 

 

 

0.47

%

 

 

254,263

 

 

 

535

 

 

 

0.42

%

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing demand deposits

 

32,702

 

 

 

 

 

 

 

 

 

32,018

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

5,127

 

 

 

 

 

 

 

 

 

3,474

 

 

 

 

 

 

 

Total liabilities

 

286,033

 

 

 

 

 

 

 

 

 

289,755

 

 

 

 

 

 

 

Total stockholders' equity

 

74,898

 

 

 

 

 

 

 

 

 

49,122

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

$

360,931

 

 

 

 

 

 

 

 

$

338,877

 

 

 

 

 

 

 

Net interest income

 

 

 

$

4,761

 

 

 

 

 

 

 

 

$

4,059

 

 

 

 

Net interest rate spread(2)

 

 

 

 

 

 

 

2.63

%

 

 

 

 

 

 

 

 

2.41

%

Net interest-earning assets(3)

$

96,385

 

 

 

 

 

 

 

 

$

70,497

 

 

 

 

 

 

 

Net interest margin(4)

 

 

 

 

 

 

 

2.76

%

 

 

 

 

 

 

 

 

2.50

%

Cost of deposits (5)

 

 

 

 

 

 

 

0.41

%

 

 

 

 

 

 

 

 

0.37

%

Cost of funds (6)

 

 

 

 

 

 

 

0.41

%

 

 

 

 

 

 

 

 

0.37

%

Ratio of interest-earning assets to interest-bearing liabilities

 

138.83

%

 

 

 

 

 

 

 

 

127.73

%

 

 

 

 

 

 
(1)
Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $57,000 and $65,000 for the six months ended December 31, 2022 and December 31, 2021, 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 Six Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Securities interest income (no tax adjustment)

 

$

901

 

 

$

859

 

 

$

612

 

 

$

1,760

 

 

$

1,202

 

Tax-equivalent adjustment

 

 

26

 

 

 

29

 

 

 

32

 

 

 

57

 

 

 

65

 

Securities (tax-equivalent basis)

 

$

927

 

 

$

888

 

 

$

644

 

 

$

1,817

 

 

$

1,267

 

Net interest income (no tax adjustment)

 

 

2,341

 

 

 

2,363

 

 

 

2,011

 

 

 

4,704

 

 

 

3,994

 

Tax-equivalent adjustment

 

 

26

 

 

 

29

 

 

 

32

 

 

 

57

 

 

 

65

 

Net interest income (tax-equivalent adjustment)

 

$

2,367

 

 

$

2,392

 

 

$

2,043

 

 

$

4,761

 

 

$

4,059

 

 

____________________________________________________________________________________________________________

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

7

 

CFSB Bancorp, Inc. and Subsidiary

Selected Financial Highlights (Unaudited)

 

 

At or for the Three Months Ended

 

 

At or for the Six Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(In thousands, except share and per share amounts)

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets: (1, 5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

0.38

%

 

 

0.71

%

 

 

0.27

%

 

 

0.55

%

 

 

0.42

%

Non-GAAP (2)

 

 

0.38

%

 

 

0.71

%

 

 

0.26

%

 

 

0.55

%

 

 

0.39

%

Return on average equity: (1, 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

1.81

%

 

 

3.39

%

 

 

1.90

%

 

 

2.63

%

 

 

2.87

%

Non-GAAP (2)

 

 

1.81

%

 

 

3.39

%

 

 

1.90

%

 

 

2.63

%

 

 

2.71

%

Noninterest expense to average assets

 

 

2.33

%

 

 

1.93

%

 

 

2.22

%

 

 

2.13

%

 

 

2.09

%

Total loans to total deposits

 

 

65.6

%

 

 

63.3

%

 

 

56.9

%

 

 

65.6

%

 

 

56.9

%

Total loans to total assets

 

 

50.6

%

 

 

49.1

%

 

 

48.4

%

 

 

50.6

%

 

 

48.4

%

Efficiency ratio: (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

83.7

%

 

 

68.2

%

 

 

87.3

%

 

 

75.9

%

 

 

80.4

%

Non-GAAP (2)

 

 

83.7

%

 

 

68.2

%

 

 

87.3

%

 

 

75.9

%

 

 

81.3

%

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total capital to risk-weighted assets

 

 

32.6

%

 

 

34.3

%

 

 

29.3

%

 

 

32.6

%

 

 

29.3

%

Common equity tier 1 capital to risk-weighted assets

 

 

31.7

%

 

 

33.4

%

 

 

28.3

%

 

 

31.7

%

 

 

28.3

%

Tier 1 capital to risk-weighted assets

 

 

31.7

%

 

 

33.4

%

 

 

28.3

%

 

 

31.7

%

 

 

28.3

%

Tier 1 capital to average assets (3)

 

 

17.4

%

 

 

17.7

%

 

 

14.4

%

 

 

17.4

%

 

 

14.4

%

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

0.97

%

 

 

0.99

%

 

 

1.00

%

 

 

0.97

%

 

 

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

 

$

132,625

 

 

$

133,775

 

 

$

133,593

 

 

$

132,625

 

 

$

133,593

 

Book value per share (8)

 

$

11.54

 

 

$

11.49

 

 

N/A

 

 

$

11.54

 

 

N/A

 

Outstanding shares

 

 

6,521,642

 

 

 

6,521,642

 

 

N/A

 

 

 

6,521,642

 

 

N/A

 
(1)
Annualized for the periods presented.
(2)
See page 8 - Reconciliation of GAAP to Non-GAAP Net Income.
(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 income and non-interest income.
(8)
Represents total stockholders' equity divided by outstanding shares at period end.

 

CFSB Bancorp, Inc. and Subsidiary

Reconciliation of GAAP to Non-GAAP Net Income (Unaudited)

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

(In thousands, except per share amounts)

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income, GAAP basis

 

$

341

 

 

$

645

 

 

$

234

 

 

$

986

 

 

$

706

 

Adjustments to GAAP Net Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of available for sale securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Tax effect of adjustments to net income, GAAP basis

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8

 

Adjusted net income, non-GAAP basis

 

$

341

 

 

$

645

 

 

$

234

 

 

$

986

 

 

$

666

 

Earnings per share, non-GAAP basis

 

$

0.05

 

 

$

0.10

 

 

N/A

 

 

$

0.16

 

 

N/A

 

 

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