Financial News

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

QUINCY, Mass., Jan. 24, 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 $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.

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.

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.

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)

%

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


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.

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


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


SOURCE Colonial Federal Savings Bank

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