CFSB BANCORP, INC. ANNOUNCES FISCAL SECOND QUARTER AND YEAR-TO-DATE 2024 FINANCIAL RESULTS

Rhea-AI Summary

CFSB Bancorp, Inc. reported a net loss of $210,000 for the three months ended December 31, 2023, compared to net income of $123,000 for the three months ended September 30, 2023, and net income of $341,000 for the three months ended December 31, 2022. The net loss for the six months ended December 31, 2023, was $87,000 compared to net income of $986,000 for the six months ended December 31, 2022. The company's net interest income decreased, and non-interest expenses increased. The provision for credit losses was reversed due to improved economic conditions.

Positive

• None.

Negative

• Net loss for the three and six months ended December 31, 2023
• Decrease in net interest income
• Increase in non-interest expenses

Insights

Financial Analyst

The reported net loss of $210,000 for CFSB Bancorp, Inc. marks a significant reversal from both the previous quarter and the same quarter in the prior year. This decline in profitability is a critical concern for investors, as it reflects challenges in the bank's ability to generate net interest income amidst rising interest rates. The decrease in net interest margin by 20 basis points sequentially and 75 basis points year-over-year indicates the bank's interest income is not keeping pace with the cost of funds. This compression could be due to increased competition for deposits, leading to higher rates on certificates of deposit, which increased by 235 basis points over the year.

Additionally, the bank's reversal of the provision for credit losses suggests improved expectations for loan performance. However, this accounting measure does not directly reflect cash flow and should be considered within the broader context of the bank's financial health. The decrease in non-interest income and an increase in non-interest expenses, particularly in salaries and benefits, further erode earnings. The balance sheet growth, driven by an increase in cash and equivalents and FHLB advances, suggests a strategy to bolster liquidity, which could be a response to the deposit outflows.

Market Research Analyst

The broader economic context, including the Federal Reserve's interest rate policies, directly impacts CFSB Bancorp's performance. The pause on interest rate increases mentioned by the CEO indicates that future cost of funds may stabilize, potentially improving the net interest margin if loan demand recovers. However, the bank's performance in the context of a shifting rate environment will be critical to monitor.

From a market perspective, CFSB's performance must be compared with regional and size-similar financial institutions to gauge competitiveness. The bank's asset growth strategy, reflected in increased cash and securities, may position it well for future interest rate movements, but the decline in customer deposits raises concerns about customer retention and the bank's competitive position in attracting and maintaining deposit accounts.

Economist

Adoption of the Current Expected Credit Loss methodology (CECL) under ASU 2016-13 represents a significant change in accounting for credit losses, moving from an incurred loss model to an expected loss model. This change requires banks to be more forward-looking in recognizing potential loan losses, which can affect capital reserves and reported earnings. CFSB's adoption of CECL resulted in an adjustment to retained earnings and allowances for credit losses, which could have implications for the bank's capital planning and regulatory compliance.

The bank's financials reflect a microcosm of the broader economic trends, including the effects of inflation and interest rate fluctuations. The shift in depositor behavior towards higher-yielding certificates of deposit and the reliance on FHLB advances for liquidity are indicators of the bank's need to adapt to changing market conditions. The bank's ability to navigate this environment while managing its interest rate risk and credit risk will be crucial for its long-term financial stability.

QUINCY, Mass., Jan. 26, 2024 /PRNewswire/ -- CFSB Bancorp, Inc. (the "Company") (NASDAQ Capital Market: CFSB), the holding company for Colonial Federal Savings Bank (the "Bank"), today announced a net loss of $210,000, or ($0.03) per basic and diluted share, for the three months ended December 31, 2023 compared to net income of $123,000, or $0.02 per basic and diluted share, for the three months ended September 30, 2023 and net income of $341,000, or $0.05 per basic and diluted share, for the three months ended December 31, 2022.

For the six months ended December 31, 2023, net loss was $87,000, or ($0.01) per basic and diluted share, compared to net income of $986,000, or $0.16 per basic and diluted share, for the six months ended December 31, 2022.

Michael E. McFarland, President and Chief Executive Officer, stated, "A recent pause from the Federal Reserve on interest rate increases provides some optimism going forward that the cost of funds will stabilize, and loan demand will start to show signs of recovery. We remain encouraged that the economy will land softly and we will benefit from a more stable interest rate environment."

Second Quarter Operating Results
Net interest income, on a fully tax-equivalent basis, decreased by $168,000, or 9.2%, to $1.7 million for the three months ended December 31, 2023, from $1.8 million for the three months ended September 30, 2023. This decrease was primarily due to a 53 basis point increase in the average rate on certificates of deposit, partially offset by a 9 basis point increase in the average yield on loans and a 12 basis point decrease in the average rate on FHLB advances. The interest on loans increased $36,000, for the three months ended December 31, 2023 compared to the three months ended September 30, 2023. The interest on loans benefited from rising interest rates, partially offset by a $517,000 decrease in the average balance of loans to $176.2 million during the three months ended December 31, 2023. The net interest margin decreased by 20 basis points to 2.02% for the three months ended December 31, 2023, from 2.22% for the three months ended September 30, 2023.

Net interest income, on a fully tax-equivalent basis, decreased by $703,000, or 29.7%, to $1.7 million for the three months ended December 31, 2023, from $2.4 million for the three months ended December 31, 2022. The net interest margin decreased by 75 basis points to 2.02% for the three months ended December 31, 2023, from 2.77% for the three months ended December 31, 2022. The decline was primarily due to a 235 basis point increase in the average rate for certificates of deposit, partially offset by a $16.9 million decrease in the average balance of interest-bearing deposits and a 26 basis point increase in the average yield on interest-earning assets. The interest earned on loans increased $101,000, to $1.8 million for the three months ended December 31, 2023, from $1.7 million for the three months ended December 31, 2022. The interest earned on securities increased $96,000, to $997,000 for the three months ended December 31, 2023, from $901,000 for the three months ended December 31, 2022. The interest earned on loans and securities benefited from rising interest rate, offset by decreases in the average balance.

The Company recorded reversals of the provision for credit losses of $104,000 and $166,000 for the three months ended December 31, 2023 and September 30, 2023, respectively. The reversals of the provision for credit losses were recorded due to improved forecasted economic conditions. The Company did not record a provision for loan losses during the three months ended December 31, 2022. The allowance for credit losses as a percentage of total loans was 0.93%, 0.94% and 0.97% at December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

Non-interest income increased $12,000, or 7.5%, to $172,000 for the three months ended December 31, 2023, from $160,000 for the three months ended September 30, 2023, due to an increase of $13,000 in other income.

Non-interest income increased $20,000, or 13.2%, to $172,000 for the three months ended December 31, 2023, from $152,000 for the three months ended December 31, 2022, primarily due to an increase of $14,000 in other income.

Non-interest expenses increased $193,000, or 10.1%, to $2.1 million for the three months ended December 31, 2023, from $1.9 million for the three months ended September 30, 2023. The increase was due to an increase in salaries and employee benefits of $123,000, or 10.8%, due to stock-based compensation expense and increases in other general and administrative expenses of $74,000, or 20.7%, primarily due to increases in printing, postage, legal and annual meeting expenses.

Non-interest expenses increased $22,000, or 1.1%, to $2.1 million for the three months ended December 31, 2023, from $2.1 million for the quarter ended December 31, 2022. The increase was principally due to an increase in other general and administrative expenses of $27,000, or 6.7%, due to costs associated with our annual meeting.

Income tax expense was $16,000 for the three months ended December 31, 2023, compared to $93,000 for the three months ended September 30, 2023 and $65,000 for the three months ended December 31, 2022. The decrease in income tax expense for the three months ended December 31, 2023, compared to the three months ended September 30, 2023 and compared to the three months ended December 31, 2022, was due to decreases in income before income taxes.

Year-to-Date Operating Results
Net interest income decreased, on a fully tax-equivalent basis, by $1.3 million, or 26.6%, to $3.5 million for the six months ended December 31, 2023, from $4.8 million for the six months ended December 31, 2022. Total interest-earning assets income increased $244,000 from the prior year period due to higher average yields on loans, securities and cash and short-term investments. A 25 basis point increase in the average yield on loans, offset by a decrease in the average balance of loans of $734,000, or 0.4%, contributed to a $204,000 increase in loan income. A 28 basis point increase in the average yield on securities, offset by a decrease in the average balance of securities of $788,000, or 0.5%, contributed to a $196,000 increase in securities income. The interest earned on cash and short-term investments decreased $156,000 from the prior year, due to a $13.2 million decrease in the average balance of cash and short-term investments offset by a 164 basis point increase in the average yield. Partially offsetting the increase in interest and dividend income was a $1.5 million increase in interest expense due to an increase in the interest on certificates of deposit of $1.4 million and the increase in interest on FHLB advances of $164,000 from the prior year. The Company recognized a 131 basis point increase in the cost of interest-bearing liabilities. The net interest margin decreased 64 basis points for the six months ended December 31, 2023, to 2.12%, from 2.76% in the prior year period.

The Company recognized a reversal of the provision for credit losses of $270,000 for the six months ended December 31, 2023, compared to no provision for loan losses in the prior year period. For the six months ended December 31, 2023 improvements in the economy were the primary contributor for the reversal of the provision for credit losses.

Non-interest income decreased $20,000, or 5.7%, to $332,000 for the six months ended December 31, 2023 from $352,000 in the prior year period, due to a decrease of $31,000 in other income offset by an increase of $7,000 in income on bank-owned life insurance.

Non-interest expenses increased $190,000, or 5.0%, to $4.0 million for the six months ended December 31, 2023, from $3.8 million for the six months ended December 31, 2022. Salaries and benefits increased $143,000, or 6.3%, to $2.4 million, due to annual increases to salaries and health insurance of employees and stock-based compensation expense. Other general and administrative expense increased $52,000, or 7.0%, from the prior year period due to increases in insurance, data processing and annual meeting costs.

Income tax expense decreased $126,000 to $109,000 for the six months ended December 31, 2023 compared to income tax expense of $235,000 for the six months ended December 31, 2022 due to lower pre-tax income.

Balance Sheet
Assets: At December 31, 2023, total assets amounted to $359.0 million, compared to $349.0 million at June 30, 2023, an increase of $10.0 million, or 2.9%, due to an $8.9 million increase in cash and cash equivalents and a $1.2 million increase in securities held to maturity and a $569,000 increase in FHLB stock. The increase in cash and cash equivalents was due to increased borrowings from the FHLB, the increase in securities held to maturity was a result of reinvesting accumulated cash at higher interest rates, and the increase in FHLB stock was due to the increase in FHLB advances during the six months ended December 31, 2023.

Liabilities: Deposits decreased by $5.5 million, or 2.1%, during the six months as the Bank experienced decreases of customer deposits due to increases in inflation and competition. In addition, depositors moved deposits to higher-yielding term certificates due to the higher interest rate environment. Federal Home Loan Bank advances were $19.1 million at December 31, 2023 compared to $3.7 million at June 30, 2023, to add liquidity in light of decreases in customer deposits.

Stockholders' Equity. Total stockholders' equity decreased $94,000, to $75.8 million at December 31, 2023, from $75.9 million at June 30, 2023. The decrease was primarily due to the net loss of $87,000 and the effect of adoption of ASU 2016-13, net of taxes, of $223,000, offset by the change in unearned ESOP compensation of $52,000, and stock-based compensation of $163,000, for the six months ended December 31, 2023.

On July 1, 2023, the Company adopted ASU 2016-13, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology ("CECL"). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and securities held to maturity. In addition, ASU 326 made changes to the accounting of securities available for sale. It also applies to off-balance sheet credit exposures not accounted for as insurance, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments. The following table illustrates the impact of ASC 326:

		Pre-ASC Adoption				As Reported Under ASC 326
(In thousands)		June 30, 2023				July 1, 2023				Impact of ASC 326 Adoption
Assets
Allowance for credit losses on securities held to maturity		$	-			$	(276)			$	(276)
Allowance for credit losses on loans			(1,747)				(1,759)				(12)
Deferred tax asset on allowance for credit losses			466				378				(88)
Liabilities
Allowance for credit losses on off-balance sheet exposures		$	-			$	23			$	23
Shareholders' Equity
Retained earnings		$	50,416			$	50,193			$	(223)

 

About CFSB Bancorp, Inc.
CFSB Bancorp, Inc. is the federal 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," "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 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.

 

CFSB Bancorp, Inc. and Subsidiary Consolidated Balance Sheets (Unaudited) (In thousands, except per share data)
		December 31,				June 30,
		2023				2023
Assets:
Cash and due from banks		$	1,299			$	1,486
Short-term investments			14,425				5,375
Total cash and cash equivalents			15,724				6,861
Securities available for sale, at fair value			132				146
Securities held to maturity, at amortized cost, net of allowance for credit losses			149,117				147,902
Loans:
1-4 family			138,445				140,109
Multifamily			12,692				12,638
Second mortgages and home equity lines of credit			3,542				2,699
Construction			-				-
Commercial			20,047				20,323
Total mortgage loans on real estate			174,726				175,769
Consumer			64				49
Home improvement			2,220				2,191
Total loans			177,010				178,009
Allowance for credit losses			(1,641)				(1,747)
Net deferred loan costs and fees, and purchase premiums			(395)				(351)
Loans, net			174,974				175,911
Federal Home Loan Bank of Boston stock, at cost			950				381
Premises and equipment, net			3,317				3,413
Accrued interest receivable			1,467				1,363
Bank-owned life insurance			10,536				10,402
Deferred tax asset			1,074				1,079
Operating lease right of use asset			907				953
Other assets			827				596
Total assets		$	359,025			$	349,007
Liabilities and Stockholders' Equity:
Deposits:
Non-interest bearing NOW and demand		$	29,612			$	32,760
Interest bearing NOW and demand			28,915				28,778
Regular and other			58,665				64,184
Money market accounts			24,061				26,995
Term certificates			116,687				110,659
Total deposits			257,940				263,376
Federal Home Loan Bank of Boston advances			19,100				3,675
Mortgagors' escrow accounts			1,644				1,596
Operating lease liability			920				962
Accrued expenses and other liabilities			3,626				3,509
Total liabilities			283,230				273,118
Stockholders' Equity:
Common stock			65				65
Additional paid-in capital			27,976				27,814
Retained earnings			50,106				50,416
Accumulated other comprehensive loss, net of tax			(1)				(3)
Unearned compensation - ESOP			(2,351)				(2,403)
Total stockholders' equity			75,795				75,889
Total liabilities and stockholders' equity		$	359,025			$	349,007

 

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 Six Months Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2023				2023				2022				2023				2022
Interest and dividend income:
Interest and fees on loans		$	1,758			$	1,722			$	1,657			$	3,480			$	3,276
Interest and dividends on debt securities:
Taxable			904				868				795				1,772				1,546
Tax-exempt			93				97				106				190				214
Interest on short-term investments and certificates of deposit			49				45				123				94				250
Total interest and dividend income			2,804				2,732				2,681				5,536				5,286
Interest expense:
Deposits			1,051				876				340				1,927				582
Borrowings			114				50				-				164				-
Total interest expense			1,165				926				340				2,091				582
Net interest income			1,639				1,806				2,341				3,445				4,704
Provision for (reversal of) credit losses			(104)				(166)				-				(270)				-
Net interest income after provision for (reversal of) credit losses			1,743				1,972				2,341				3,715				4,704
Non-interest income:
Customer service fees			37				40				36				77				73
Income on bank-owned life insurance			68				66				63				134				127
Other income			67				54				53				121				152
Total non-interest income			172				160				152				332				352
Non-interest expenses:
Salaries and employee benefits			1,267				1,144				1,250				2,411				2,268
Occupancy and equipment			240				254				255				494				498
Advertising			36				38				71				74				110
Data processing			101				89				84				190				178
Deposit insurance			33				33				22				66				43
Other general and administrative			432				358				405				790				738
Total non-interest expenses			2,109				1,916				2,087				4,025				3,835
Income (loss) before income taxes			(194)				216				406				22				1,221
Provision for income taxes			16				93				65				109				235
Net income (loss)		$	(210)			$	123			$	341			$	(87)			$	986
Net income (loss) per share:
Basic		$	(0.03)			$	0.02			$	0.05			$	(0.01)			$	0.16
Diluted		$	(0.03)			$	0.02			$	0.05			$	(0.01)			$	0.16
Weighted average shares outstanding:
Basic			6,284,768				6,282,203				6,274,542				6,283,485				6,273,260
Diluted			6,284,768				6,282,203				6,274,542				6,394,485				6,273,260

 

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, 2023												September 30, 2023												December 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	$	176,149			$	1,758				3.99	%		$	176,668			$	1,722				3.90	%		$	177,648			$	1,657				3.73	%
Securities (1)		149,187				1,022				2.74	%			149,259				991				2.66	%			151,249				927				2.45	%
Cash and short-term investments		4,491				49				4.36	%			3,852				45				4.67	%			13,153				123				3.74	%
Total interest-earning assets		329,827				2,829				3.43	%			329,779				2,758				3.35	%			342,050				2,707				3.17	%
Noninterest-earning assets		16,875												16,655												16,747
Total assets	$	346,702											$	346,434											$	358,797
Interest-bearing liabilities:
Interest-bearing demand deposits	$	29,746			$	4				0.05	%		$	29,912			$	4				0.05	%		$	33,557			$	4				0.05	%
Savings deposits		58,992				15				0.10	%			62,446				16				0.10	%			72,708				18				0.10	%
Money market deposits		24,153				15				0.25	%			26,271				17				0.26	%			39,876				27				0.27	%
Certificates of deposit		115,397				1,017				3.53	%			111,812				839				3.00	%			99,041				291				1.18	%
Total interest-bearing deposits		228,288				1,051				1.84	%			230,441				876				1.52	%			245,182				340				0.55	%
FHLB advances		8,323				114				5.48	%			3,571				50				5.60	%			-				-				0.00	%
Total interest-bearing liabilities		236,611				1,165				1.97	%			234,012				926				1.58	%			245,182				340				0.55	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		28,223												30,971												32,887
Other noninterest-bearing liabilities		5,968												5,740												5,554
Total liabilities		270,802												270,723												283,623
Total stockholders' equity		75,900												75,711												75,174
Total liabilities and stockholders' equity	$	346,702											$	346,434											$	358,797
Net interest income					$	1,664											$	1,832											$	2,367
Net interest rate spread(2)										1.46	%											1.77	%											2.62	%
Net interest-earning assets(3)	$	93,216											$	95,767											$	96,868
Net interest margin(4)										2.02	%											2.22	%											2.77	%
Cost of deposits(5)										1.64	%											1.34	%											0.49	%
Cost of funds(6)										1.76	%											1.40	%											0.49	%
Ratio of interest-earning assets to interest-bearing liabilities		139.40	%											140.92	%											139.51	%

(1)	Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $25,000, $26,000, and $26,000 for the three months ended December 31, 2023, September 30, 2023 and December 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 Average Balances and Yields, Fully Tax-Equivalent Basis (Unaudited) (Dollars in thousands)
	Average Balance and Yields
	Six Months Ended
	December 31, 2023												December 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	$	176,408			$	3,480				3.95	%		$	177,143			$	3,276				3.70	%
Securities (1)		149,223				2,013				2.70	%			150,011				1,817				2.42	%
Cash and short-term investments		4,172				94				4.51	%			17,435				250				2.87	%
Total interest-earning assets		329,803				5,587				3.39	%			344,589				5,343				3.10	%
Noninterest-earning assets		16,608												16,342
Total assets	$	346,411											$	360,931
Interest-bearing liabilities:
Interest-bearing demand deposits	$	29,829			$	7				0.05	%		$	33,346			$	8				0.05	%
Savings deposits		60,719				30				0.10	%			74,076				37				0.10	%
Money market deposits		25,212				32				0.25	%			42,685				58				0.27	%
Certificates of deposit		113,604				1,858				3.27	%			98,097				479				0.98	%
Total interest-bearing deposits		229,364				1,927				1.68	%			248,204				582				0.47	%
FHLB advances		5,947				164				5.52	%			-				-				0.00	%
Total interest-bearing liabilities		235,311				2,091				1.78	%			248,204				582				0.47	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		29,597												32,702
Other noninterest-bearing liabilities		5,697												5,127
Total liabilities		270,605												286,033
Total stockholders' equity		75,806												74,898
Total liabilities and stockholders' equity	$	346,411											$	360,931
Net interest income					$	3,496											$	4,761
Net interest rate spread(2)										1.61	%											2.63	%
Net interest-earning assets(3)	$	94,492											$	96,385
Net interest margin(4)										2.12	%											2.76	%
Cost of deposits(5)										1.49	%											0.41	%
Cost of funds(6)										1.58	%											0.41	%
Ratio of interest-earning assets to interest-bearing liabilities		140.16	%											138.83	%

(1)	Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $51,000 and $57,000 for the six months ended December 31, 2023 and December 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 Six Months Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
		2023				2023				2022				2023				2022
Securities interest income (no tax adjustment)		$	997			$	965			$	901			$	1,962			$	1,760
Tax-equivalent adjustment			25				26				26				51				57
Securities (tax-equivalent basis)		$	1,022			$	991			$	927			$	2,013			$	1,817
Net interest income (no tax adjustment)		$	1,639			$	1,806			$	2,341			$	3,445				4,704
Tax-equivalent adjustment			25				26				26				51				57
Net interest income (tax-equivalent adjustment)		$	1,664			$	1,832			$	2,367			$	3,496			$	4,761

 

CFSB Bancorp, Inc. and Subsidiary		At or for the Three Months Ended												At or for the Six Months Ended
Selected Financial Highlights (Unaudited)		December 31,				September 30,				December 31,				December 31,				December 31,
(In thousands, except share and per share amounts)		2023				2023				2022				2023				2022
Performance Ratios
Return (loss) on average assets (GAAP) (1, 4)			(0.24)	%			0.14	%			0.38	%			(0.05)	%			0.55	%
Return (loss) on average equity ("ROAE") (GAAP) (1, 5)			(1.11)	%			0.65	%			1.81	%			(0.23)	%			2.63	%
Noninterest expense to average assets (GAAP) (1)			2.43	%			2.21	%			2.33	%			2.21	%			2.13	%
Total loans to total deposits			68.62	%			67.56	%			65.60	%			68.62	%			65.60	%
Total loans to total assets			49.30	%			50.87	%			50.64	%			49.30	%			50.64	%
Efficiency ratio (GAAP) (6)			116.45	%			97.46	%			83.71	%			106.57	%			75.85	%
Capital Ratios
Total capital to risk-weighted assets			33.32	%			33.28	%			32.60	%			32.42	%			32.60	%
Common equity tier 1 capital to risk-weighted assets			32.41	%			32.32	%			31.70	%			32.42	%			31.70	%
Tier 1 capital to risk-weighted assets			32.41	%			32.32	%			31.70	%			33.34	%			31.70	%
Tier 1 capital to average assets (2)			18.32	%			18.35	%			17.40	%			18.32	%			17.40	%
Asset Quality Ratios
Allowance for credit losses on loans as a percentage of total loans (3)			0.93	%			0.94	%			0.97	%			0.93	%			0.97	%
Allowance for credit losses on loans as a percentage of non-performing loans			1740.46	%		NM				NM					1740.46	%		NM
Net (charge-offs) recoveries to average outstanding loans			-	%			-	%			-	%			-	%			-	%
Non-performing loans as a percentage of total loans			0.05	%			-	%			-	%			0.05	%			-	%
Non-performing loans as a percentage of total assets			0.03	%			-	%			-	%			0.03	%			-	%
Informational Items
Fair value of held to maturity securities		$	136,427			$	128,959			$	132,625			$	136,427			$	132,625
Book value per share (7)		$	11.43			$	11.44			$	11.54			$	11.43			$	11.54
Outstanding common shares			6,632,642				6,632,642				6,521,642				6,632,642				6,521,642

(1)	Annualized.
(2)	Average assets calculated on a quarterly basis.
(3)	Total loans exclude net deferred loan costs and fees.
(4)	Represents net income divided by average assets.
(5)	Represents net income divided by average stockholders' equity
(6)	Represents total non-interest expenses divided by net interest income and non-interest income.
(7)	Represents total stockholders' equity divided by outstanding shares at period end.

 

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SOURCE CFSB Bancorp, Inc.

FAQ

What was CFSB Bancorp, Inc.'s net loss for the three months ended December 31, 2023?

CFSB Bancorp, Inc. reported a net loss of $210,000 for the three months ended December 31, 2023.

What was the net income for the three months ended September 30, 2023?

CFSB Bancorp, Inc. reported net income of $123,000 for the three months ended September 30, 2023.

What was the net income for the three months ended December 31, 2022?

CFSB Bancorp, Inc. reported net income of $341,000 for the three months ended December 31, 2022.

What was the net loss for the six months ended December 31, 2023?

The net loss for the six months ended December 31, 2023, was $87,000.

What was the net income for the six months ended December 31, 2022?

CFSB Bancorp, Inc. reported net income of $986,000 for the six months ended December 31, 2022.

Why was there a reversal of the provision for credit losses?

The reversals of the provision for credit losses were recorded due to improved forecasted economic conditions.