QUINCY, Mass., Feb. 11, 2022 /PRNewswire/ -- CFSB Bancorp, Inc. (NASDAQ: CFSB) (the "Company"), the holding company for Colonial Federal Savings Bank (the "Bank"), reported net income of $234,000 for the three months ended December 31, 2021, and $706,000 for the six months ended December 31, 2021, compared to $215,000 and $594,000 for the same periods in 2020.

President and Chief Executive Officer Michael E. McFarland said "We delivered strong results for the second quarter and the year-to-date periods. The Company reported net income of $706,000 for the six months ended December 31, 2021, compared to net income of $594,000 for the six months ended December 31, 2020, an increase of $112,000, or 18.9%. The increase came primarily from an increase in net interest and non-interest income, offset by an increase in non-interest expense."

On January 12, 2022, the Company became the holding company for the Bank when it completed the reorganization of the Bank into a two-tier mutual holding company form of organization. In connection with the reorganization, the Company sold 2,804,306 shares of common stock at a price of $10.00 per share, for gross proceeds of $28.0 million. The Company also contributed 130,433 shares of common stock and $250,000 in cash to the Colonial Federal Savings Bank Charitable Foundation and issued 3,586,903 shares of common stock to 15 Beach, MHC, its federally-chartered mutual holding company. 

COVID-19 Impact

The Bank's initiative to work with borrowers that were unable to meet their contractual obligations because of the effects of COVID-19 have been successful. As of December 31, 2021, we had 13 loans with $40,000 of remaining deferred principal, all of which were performing in accordance with their contractual terms at December 31, 2021.

Income Statement Analysis

Net interest income increased $195,000, or 10.7%, to $2.0 million for the three months ended December 31, 2021 from $1.8 million for the three months ended December 31, 2020. Net interest income increased $417,000, or 11.7% to $4.0 million for the six months ended December 31, 2021, from $3.6 million for the six months ended December 31, 2020. The increases were primarily due to an increase in the average balance of net interest-earning assets combined with a decrease in interest expense due to lower costing deposits, offset by a decrease of interest and fees on loans due to the lower interest rate environment.

We recorded a provision for loan losses of $10,000 and $15,000 for the three-month periods ended December 31, 2021 and December 31, 2020, respectively and $25,000 and $30,000 for the six-month periods ended December 31, 2021 and December 31, 2020, respectively. The allowance for loan losses was $1.7 million, or 1.00% of total loans, at December 31, 2021, compared to $1.7 million, or 0.98% of total loans, at December 31, 2020. We did not have any non-performing loans at either December 31, 2021 or 2020.  We did not have any charge-offs or recoveries for the three or six months ended December 31, 2021 or December 31, 2020.

Non-interest income increased $4,000, or 2.5%, to $161,000 for the three months ended December 31, 2021 from $157,000 for the three months ended December 31, 2020. For the six months ended December 31, 2021, non-interest income increased $64,000, or 18.1%, to $417,000 compared to $353,000 for the six months ended December 31, 2020. The increase was primarily due to a $48,000 gain realized on the sale of a seven-year U.S. Treasury security in July 2021.

Non-interest expense increased $142,000, or 8.1%, to $1.9 million for the three months ended December 31, 2021 from $1.8 million for the three months ended December 31, 2020. The increase was due primarily to a $15,000 increase in advertising expense, and a $124,000 increase in other expenses due to increased consultant and audit expenses. For the six months ended December 31, 2021, non-interest expense increased $286,000, or 8.8%, to $3.5 million from $3.3 million for the six months ended December 31, 2020. The increase was due primarily to a $49,000 increase in salaries and employee benefit expense and a $181,000 increase in other expenses due to increased consultant and audit expenses.

Balance Sheet Analysis

Total assets were $361.8 million at December 31, 2021 representing an increase of $22.9 million, or 6.8%, from $338.9 million at June 30, 2021. Available for sale securities decreased $2.0 million to $254,000 at December 31, 2021 due to the sale of a $2.0 million seven-year U.S. Treasury security. Securities held to maturity increased $17.8 million, or 16.9%, to $122.9 million at December 31, 2021 as we invested excess cash into securities to increase our overall yield on our interest-earning assets. The increase was partially offset by paydowns, calls and maturities of $9.6 million. Net loans decreased $1.5 million, or 0.9%, to $172.9 million at December 31, 2021, due to lower originations and customers refinancing loans with other institutions as we elected not to originate such loans at the lower rates being offered by our competitors. Cash and cash equivalents increased $7.1 million, or 17.4%, to $47.8 million as a result of an increase in deposits of $23.0 million. The increase in deposits reflects subscription funds received in connection with the proposed stock offering, which closed on January 12, 2022, offset by a decrease of $2.6 million in certificates of deposit.

Total retained earnings increased $695,000, or 1.4%, to $49.3 million at December 31, 2021 from $48.6 million at June 30, 2021. The increase primarily resulted from net income of $706,000 for the six months ended December 31, 2021. 

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 increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, 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 and 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.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the Company's business. The extent of such impact will depend on future developments, which are highly uncertain, including if the coronavirus can continue to be controlled and abated. As a result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company could be subject to any of the following risks, any of which could have a material, adverse effect on the Company's business, financial condition, liquidity, and results of operations: demand for the Company's products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; the Company's allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect the Company's net income; and FDIC premiums may increase if the agency experiences additional resolution costs. 

Accordingly, 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.

Colonial Federal Savings Bank and Subsidiary

Consolidated Balance Sheets

(In thousands)




December 31,
2021
(Unaudited)


June 30,
2021

Assets


Cash and due from banks


$

1,475


$

1,708

Short-term investments



46,358



38,970

Total cash and cash equivalents



47,833



40,678

Certificates of deposit



980



980

Securities available for sale, at fair value



254



2,294

Securities held to maturity, at amortized cost, fair value of $123,736 at
December 31, 2021 and $107,391 at June 30, 2021



122,931



105,114

Federal Home Loan Bank stock, at cost



453



453

Loans, net of allowance for loan losses of $1,747 at December 31, 2021 and
$1,722 at June 30, 2021



172,931



174,433

Premises and equipment, net



3,337



3,459

Accrued interest receivable



1,112



1,146

Bank-owned life insurance



10,008



9,250

Deferred tax asset



592



665

Other assets



1,398



382



$

361,829


$

338,854

Liabilities and Retained Earnings

Deposits






Non-interest bearing


$

52,378


$

30,129

Interest-bearing



255,182



254,505

Total deposits



307,560



284,634

Short-term borrowings



288



918

Mortgagors' escrow accounts



1,650



1,572

Accrued expenses and other liabilities



2,991



3,085

Total liabilities



312,489



290,209

Commitments and contingencies (Note 9)





Retained earnings



49,334



48,628

Accumulated other comprehensive income



6



17

Total retained earnings



49,340



48,645



$

361,829


$

338,854


 

Colonial Federal Savings Bank and Subsidiary

Consolidated Statements of Net Income (Unaudited)

(In thousands)




Three Months Ended
December 31,



Six Months Ended
December 31,



2021


2020



2021

2020

Interest and dividend income:











Interest and fees on loans


$

1,640


$

1,820



$

3,294


$

3,671

Interest and dividends on debt securities:











Taxable



492



471




959



917

Tax exempt



120



142




243



285

Interest on short-term investments and certificates of deposit



16



11




33



22

Total interest and dividend income



2,268



2,444




4,529



4,895

Interest expense:










Deposits



255



612




529



1,280

Short-term borrowings



2



16




6



38

Total interest expense



257



628




535



1,318

Net interest income



2,011



1,816




3,994



3,577

Provision for loan losses



10



15




25



30

Net interest income, after provision for loan losses



2,001



1,801




3,969



3,547

Non-interest income:










Customer service fees



31



33




61



60

Income on bank-owned life insurance



75



73




149



145

Gain on sale of securities available for sale



-



-




48



-

Other income



55



51




159



148

Total non-interest income



161



157




417



353

Non-interest expense:










Salaries and employee benefits



1,167



1,174




2,147



2,098

Occupancy and equipment



208



202




418



394

Advertising



37



22




78



47

Data processing



91



86




171



170

Deposit insurance



21



22




43



43

Other general and administrative



372



248




691



510

Total non-interest expense



1,896



1,754




3,548



3,262

Income before income taxes



266



204




838



638

Provision (benefit) for income taxes



32



(11)




132



44

Net income


$

234


$

215



$

706


$

594


 

Cision View original content:https://www.prnewswire.com/news-releases/cfsb-bancorp-inc-announces-2022-second-quarter-and-year-to-date-financial-results-301480543.html

SOURCE Colonial Federal Savings Bank

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