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

Rhea-AI Summary

On April 25, 2023, CFSB Bancorp reported a net income of $355,000 or $0.06 per share for Q3 2023, up from $341,000 or $0.05 in Q4 2022, marking a turnaround from a $828,000 loss in Q3 2022. For the nine months ended March 31, 2023, net income totaled $1.3 million or $0.21 per share compared to a $122,000 loss in the same period last year. Net interest income dropped by 8.0% to $2.2 million due to increased rates on deposits, despite a 4.6% year-over-year rise. Non-interest expenses fell 8.9% quarter-over-quarter to $1.9 million. However, deposit pressures and low loan demand amid rising interest rates may impact future performance.

Positive

• Net income increased to $355,000 for Q3 2023 compared to $341,000 in Q4 2022.
• Net income for the nine months ended March 31, 2023, was $1.3 million, a significant improvement from a loss of $122,000 in the prior year.
• Non-interest expenses decreased 8.9% from the previous quarter to $1.9 million.

Negative

• Net interest income decreased by $190,000 (8.0%) to $2.2 million from Q4 2022 due to higher deposit rates.
• Expectations of higher interest rate pressures causing decreased loan demand.
• Deposits fell by $5.5 million (2.0%) in the quarter, indicating potential liquidity challenges.

QUINCY, Mass., April 25, 2023 /PRNewswire/ -- 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.

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.

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.

 

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)	%

 

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

 

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.

 

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

 

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

 

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SOURCE Colonial Federal Savings Bank

FAQ

What were the earnings results for CFSB Bancorp for Q3 2023?

CFSB Bancorp reported a net income of $355,000 or $0.06 per share for Q3 2023.

How does CFSB Bancorp's Q3 2023 performance compare to previous quarters?

The net income increased from $341,000 in Q4 2022 and is a turnaround from a loss of $828,000 in Q3 2022.

What is the outlook for CFSB Bancorp given the current financials?

CFSB Bancorp faces challenges due to rising interest rates affecting deposit pricing and lower loan demand.

How much did CFSB Bancorp's non-interest expenses change in Q3 2023?

Non-interest expenses decreased by 8.9% in Q3 2023, amounting to $1.9 million.