CFSB BANCORP, INC. ANNOUNCES FISCAL FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL RESULTS

Rhea-AI Summary

CFSB Bancorp, Inc. (NASDAQ: CFSB) reported net income of $160,000, or $0.03 per share, for Q4 2024, compared to a net loss of $40,000 in Q3 2024 and net income of $105,000 in Q4 2023. For the full year 2024, net income was $33,000, down from $1.4 million in 2023. The company faced challenges due to the inverted yield curve, with liabilities repricing faster than assets. Key financial highlights include:

- Net interest income decreased 1.2% quarter-over-quarter to $1.6 million
- Net interest margin declined to 1.93% from 1.96% in Q3 2024
- Non-interest expense decreased 7.5% quarter-over-quarter to $1.8 million
- Total assets increased 4.1% year-over-year to $363.4 million
- Deposits grew 2.8% year-over-year to $7.5 million

The company adopted the CECL methodology on July 1, 2023, impacting its allowance for credit losses and retained earnings.

Positive

• Net income improved to $160,000 in Q4 2024 from a net loss in Q3 2024
• Non-interest expense decreased 7.5% quarter-over-quarter to $1.8 million
• Total assets increased 4.1% year-over-year to $363.4 million
• Deposits grew 2.8% year-over-year to $7.5 million
• Strong asset quality with no non-performing or delinquent loans at June 30, 2024

Negative

• Full year 2024 net income decreased to $33,000 from $1.4 million in 2023
• Net interest income decreased 1.2% quarter-over-quarter to $1.6 million
• Net interest margin declined to 1.93% from 1.96% in Q3 2024
• Net interest income for the full year 2024 decreased 23.3% to $6.8 million
• Adoption of CECL methodology resulted in a $223,000 reduction in retained earnings

Insights

Financial Analyst

As a Financial Analyst, I find this earnings report for CFSB Bancorp to be concerning. The company's net income for the fiscal year 2024 dropped significantly to $33,000 from $1.4 million in the previous year, representing a 97.6% decrease. This substantial decline in profitability is a red flag for investors.

The primary culprit appears to be the challenging interest rate environment. The company's net interest margin decreased by 58 basis points year-over-year to 2.03%, indicating pressure on the bank's core earnings. This compression is largely due to the faster repricing of liabilities compared to assets in the current inverted yield curve scenario.

On a positive note, the bank's asset quality remains strong with no non-performing or delinquent loans. The reversal of $322,000 in provision for credit losses also suggests confidence in the loan portfolio. However, this benefit was far outweighed by the decline in net interest income.

The bank's strategy of increasing higher-yielding term certificates and implementing a leverage strategy to boost liquidity and interest income shows management's efforts to navigate the challenging environment. However, these actions have yet to translate into improved bottom-line results.

Investors should closely monitor the bank's ability to manage its interest rate risk and improve its net interest margin in the coming quarters. The potential for interest rate cuts by the Federal Reserve, as hinted by the CEO, could provide some relief, but the timing and magnitude of such cuts remain uncertain.

Banking Industry Expert

As a Banking Industry Expert, I see CFSB Bancorp facing challenges typical of many smaller banks in the current economic environment. The bank's struggle with the inverted yield curve is evident in its compressed net interest margin, which fell to 1.93% in the most recent quarter from 2.31% a year ago.

The shift in deposit composition is noteworthy. The $21.6 million increase in higher-yielding term certificates, coupled with decreases in regular and money market accounts, indicates customers are seeking better returns. While this helps retain deposits, it also increases the bank's cost of funds, further pressuring margins.

The bank's adoption of the Current Expected Credit Loss (CECL) methodology is a significant accounting change. The $223,000 reduction in retained earnings upon adoption suggests a more conservative approach to credit loss estimation, which could provide more stability in future reporting periods.

The increase in cash and cash equivalents by $20.1 million improves liquidity but may drag on profitability if not deployed effectively. The slight decrease in the loan portfolio ($5.5 million) in a rising rate environment is not unusual but could limit future earning potential.

Looking ahead, the bank's ability to grow its loan portfolio, manage deposit costs and potentially benefit from any Federal Reserve rate cuts will be important for improving performance. The strong asset quality provides a solid foundation, but the bank needs to find ways to enhance its core profitability in this challenging rate environment.

QUINCY, Mass., July 30, 2024 /PRNewswire/ -- CFSB Bancorp, Inc. (the "Company") (NASDAQ Capital Market: CFSB), the holding company for Colonial Federal Savings Bank (the "Bank"), announced net income of $160,000, or $0.03 per basic and diluted share, for the three months ended June 30, 2024 compared to a net loss of $40,000, or $0.01 per basic and diluted share, for the three months ended March 31, 2024 and net income of $105,000, or $0.02 per basic and diluted share, for the three months ended June 30, 2023.

For the twelve months ended June 30, 2024, net income was $33,000, or $0.01 per basic and diluted share, compared to net income of $1.4 million, or $0.23 per basic and diluted share, for the twelve months ended June 30, 2023.

Michael E. McFarland, President and Chief Executive Officer, stated "Liabilities continue to reprice at a faster pace than assets. Our business model has been strained over the last two years due to continued inversion of the yield curve. As assets reprice upward combined with some reductions from the Federal Reserve on interest rates these challenges should begin to diminish."

Fourth Quarter Operating Results
Net interest income, on a fully tax-equivalent basis, decreased by $20,000, or 1.2%, to $1.6 million for the three months ended June 30, 2024, from $1.7 million for the three months ended March 31, 2024. The net interest margin decreased by three basis points to 1.93% for the three months ended June 30, 2024, from 1.96%, for the three months ended March 31, 2024. Interest income increased $119,000, or 3.9%, due to a $27,000 increase in interest and dividends on debt securities and a $106,000 increase in interest on short-term investments, offset by a $14,000 decrease in interest and fees on loans. These changes reflect an overall increased yield on interest-earning assets of 8 basis points, due to the high rate environment as well as an increase in the average balance of cash and short-term investments of $5.3 million, or 35.7%, and an increase in interest-bearing deposits of $3.9 million, or 1.7%, offset by a decrease in loans of $2.9 million, or 1.7%. Interest expense increased $139,000, or 10.2%, due to an increase of $192,000 in interest expense on interest-bearing deposits, offset by a $53,000 decrease in interest expense on FHLB advances. The increase in interest expense on interest-bearing deposits, reflected a 29 basis point increase in the average cost, primarily due to the higher interest rate environment and a higher percentage of higher costing certificates of deposit in the portfolio, and a $3.9 million increase in the average balance. The decrease in the expense on FHLB advances, was due to a $3.8 million, or 27.0%, decrease in the average balances for the three months ended June 30, 2024 compared to the three months ended March 31, 2024 and a 26 basis point decrease in the average cost. 

Net interest income, on a fully tax-equivalent basis, decreased by $274,000, or 14.3%, to $1.6 million for the three months ended June 30, 2024, from $1.9 million for the three months ended June 30, 2023. The net interest margin decreased by 38 basis points to 1.93% for the three months ended June 30, 2024, from 2.31% for the three months ended June 30, 2023. The decline was primarily due to a 161 basis point increase in the average rate for certificates of deposit and an $18.3 million increase in the average balance of certificates of deposit, offset by a 41 basis point increase in the average yield on interest-earning assets and a $9.0 million increase in the average balance of interest-earning assets. The increase in certificates of deposits and a corresponding decrease of $17.0 million in the average balance of other interest-bearing deposits reflected customers desire to seek higher interest-earning accounts. The interest earned on loans increased $44,000, to $1.8 million for the three months ended June 30, 2024, from $1.7 million for the three months ended June 30, 2023. The interest earned on securities increased $137,000, to $1.1 million for the three months ended June 30, 2024, from $968,000 for the three months ended June 30, 2023. The interest earned on cash and short-term investments increased $244,000, to $282,000 for the three months ended June 30, 2024 from $38,000 for the three months ended June 30, 2023. The interest earned on interest-earning assets was due to higher average cash balances as well as higher yields due to the higher interest rate environment, offset by $6.3 million decrease in the average balance of loans and a $1.6 million decrease in the average balance of securities.

The Company recorded reversals of the provision for credit losses of $32,000 and $20,000 for the three months ended June 30, 2024 and March 31, 2024, respectively. The Company did not record a provision for loan losses during the three months ended June 30, 2023. The reversals of the provision for credit losses and the absence of a provision were due to changes in economic conditions, lower loan balances and continued strong asset quality. The allowance for credit losses as a percentage of total loans was 0.90%, 0.90%, and 0.98% at June 30, 2024, March 31, 2024 and June 30, 2023, respectively.

Non-interest income decreased $1,000, or 0.6%, to $166,000 for the three months ended June 30, 2024, from $167,000 for the three months ended March 31, 2024, primarily due to a decrease of $4,000 in customer service fees and a decrease of $1,000 in income on bank-owned life insurance, offset by an increase of $4,000 in other income.

Non-interest income increased $2,000, or 1.2%, to $166,000 for the three months ended June 30, 2024, from $164,000 for the three months ended June 30, 2023, primarily due to an increase in other income of $2,000, or 3.3%.

Non-interest expense decreased $143,000, or 7.5%, to $1.8 million for the three months ended June 30, 2024, from $1.9 million for the three months ended March 31, 2024. The decrease was due to a decrease in salaries and employee benefits of $87,000, or 7.8%, primarily due to the reduced cost of the pension plan, a decrease in occupancy and equipment expense of $31,000, or 12.1%, due to a reduction in service contracts expense and the lack of snow removal costs, a decrease of $15,000, or 15.5%, in data processing fees and a decrease of $13,000, or 3.5% in other general and administrative costs.

Non-interest expense decreased $168,000, or 8.7%, to $1.8 million for the three months ended June 30, 2024, from $1.9 million for the three months ended June 30, 2023. The decrease was due to a decrease in salaries and employee benefits of $116,000, or 10.1%, primarily due to the reduced cost of the pension plan and a decrease in headcount, a decrease in occupancy and equipment expense of $49,000, or 17.9%, due to a reduction in service contracts expense offset by an increase in utilities expense and a decrease of $9,000, or 20.9%, in deposit insurance.

The Company recorded an income tax benefit of $106,000 for the three months ended June 30, 2024, compared to an income tax benefit of $42,000 for the three months ended March 31, 2024 and income tax expense of $19,000 for the three months ended June 30, 2023. The decrease in income tax expense for the three months ended June 30, 2024, compared to the three months ended March 31, 2024 was due to an income tax benefit related to the recognition of a post-retirement benefit and adjustments to the net deferred tax asset. The decrease in income tax expense for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was due to a decrease in income before income taxes, an income tax benefit related to the recognition of a post-retirement benefit and adjustments to the net deferred tax asset.

Full Year Operating Results
Net interest income decreased, on a fully tax-equivalent basis, by $2.1 million, or 23.3%, to $6.8 million for the twelve months ended June 30, 2024 from $8.9 million for the twelve months ended June 30, 2023, due to a $3.0 million increase in interest expense due to an increase in the interest on certificates of deposit of $2.7 million and the increase in interest on FHLB advances of $399,000. The Company recognized a 127 basis point increase in the cost of interest-bearing liabilities, due to higher interest rates and a greater percentage of interest-bearing liabilities in higher-costing certificates of deposit and increased borrowings. The increase in interest expense was offset by an increase in interest income of $979,000 due to higher average yields. Interest income on loans increased $325,000 due to a 25 basis point increase in the average yield on loans, offset by a decrease in the average balance of loans of $3.0 million, or 1.7%. Income on securities increased $443,000 due to a 31 basis point increase in the average yield on securities, offset by a decrease in the average balance of securities of $1.1 million, or 0.8%. The interest earned on cash and short-term investments increased $211,000 from the prior year, due to a 197 basis point increase in the average yield, offset by a decrease of $74,000 in the average balance of cash and short-term investments. The net interest margin decreased 58 basis points for the twelve months ended June 30, 2024, to 2.03%, from 2.61% in the prior year.

The Company recognized a reversal of the provision for credit losses of $322,000 for the twelve months ended June 30, 2024, compared to no provision for loan losses in the prior year period. The reversal of the provision for credit losses for the twelve months ended June 30, 2024 was recorded due to improved economic conditions, lower loan balances and continued strong asset quality.

Non-interest income increased $1,000, or 0.2%, to $665,000 for the twelve months ended June 30, 2024, from $664,000 for the twelve months ended June 30, 2023. The decrease was primarily due to increases in customer service fees of $9,000 and income on bank-owned life insurance of $9,000, offset by a decrease of $17,000 in safe deposit box fees as we now recognize fees over the rental period.

Non-interest expense increased $29,000, or 0.4%, to $7.7 million for the twelve months ended June 30, 2024, compared to $7.7 million for the twelve months ended June 30, 2023. Salaries and benefits increased $41,000, or 0.9%, to $4.6 million, due to annual increases to salaries and health insurance of employees and employee stock-based compensation expense. Deposit insurance increased $27,000, data processing costs increased $25,000 and other general and administrative expenses increased $34,000, offset by a decrease of $53,000 in occupancy and equipment expense and a decrease of $45,000 in advertising costs.

Income tax expense decreased $340,000 to an income tax benefit of $39,000 for the twelve months ended June 30, 2024, compared to an income tax expense of $301,000 for the twelve months ended June 30, 2023, due to the decrease in income before income taxes, partially offset by an increase in the deferred tax valuation allowance.

Balance Sheet
Assets: At June 30, 2024, total assets amounted to $363.4 million, compared to $349.0 million at June 30, 2023, an increase of $14.4 million, or 4.1%, primarily due to a $20.1 million increase in cash and cash equivalents, a $323,000 increase in FHLB of Boston stock, a $268,000 increase in bank-owned life insurance, a $166,000 increase in deferred tax asset and a $216,000 increase in other assets, offset by a $5.5 million decrease in net loans, a $941,000 decrease in securities, a $167,000 decrease in premises and equipment and a $93,000 decrease in operating lease right of use asset. The increase in cash and cash equivalents was due to increases in deposits and FHLBB advances. The decrease in loans was a result of borrower principal payments exceeding new originations, due to the higher interest rate environment.

Asset Quality: At June 30, 2024, there were four current loans rated substandard with a provision for credit loss of $10,000. There were no loans rated special mention, doubtful or loss and no non-performing or delinquent loans at June 30, 2024. There were no charge-offs of loans for the three or twelve months ended June 30, 2024 or 2023.

Liabilities: Deposits increased by $7.5 million, or 2.8%, during the twelve months ended June 30, 2024, due to an increase of $21.6 million in higher-yielding term certificates, offset by a decrease of $10.0 million in regular accounts and $5.0 million in money market accounts. FHLBB advances were $10.4 million at June 30, 2024 compared to $3.7 million at June 30, 2023, as we implemented a leverage strategy to increase liquidity and interest income.  

Stockholders' Equity: Total stockholders' equity increased $161,000, to $76.1 million at June 30, 2024, from $75.9 million at June 30, 2023. The increase was primarily due to the changes in unearned ESOP compensation of $102,000, and stock-based compensation of $358,000 and  net income of $33,000, offset by the effect of the adoption of ASU 2016-13, net of taxes, of $223,000, and the repurchase of company stock of $78,000 for the twelve months ended June 30, 2024.

On July 1, 2023, the Company adopted ASU 2016-13, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss ("CECL") methodology. 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, ASC 326 made changes to the accounting for 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 326 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, 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, and the percentage of uninsured deposits in the portfolio; changes in asset quality, prepayment speeds, charge-offs and/or credit loss provisions, our ability to access cost-effective funding; 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)
		June 30,				June 30,
		2024				2023
Assets:
Cash and due from banks		$	1,339			$	1,486
Short-term investments			25,620				5,375
Total cash and cash equivalents			26,959				6,861
Securities available for sale, at fair value			113				146
Securities held to maturity, at amortized cost, net of allowance for credit losses			146,994				147,902
Loans:
1-4 family			138,005				140,109
Multifamily			12,066				12,638
Second mortgages and home equity lines of credit			3,372				2,699
Construction			-				-
Commercial			16,833				20,323
Total mortgage loans on real estate			170,276				175,769
Consumer			65				49
Home improvement			2,037				2,191
Total loans			172,378				178,009
Allowance for credit losses			(1,553)				(1,747)
Net deferred loan costs and fees, and purchase premiums			(387)				(351)
Loans, net			170,438				175,911
Federal Home Loan Bank of Boston stock, at cost			704				381
Premises and equipment, net			3,246				3,413
Accrued interest receivable			1,398				1,363
Bank-owned life insurance			10,670				10,402
Deferred tax asset			1,245				1,079
Operating lease right of use asset			860				953
Other assets			812				596
Total assets		$	363,439			$	349,007
Liabilities and Stockholders' Equity:
Deposits:
Non-interest bearing NOW and demand		$	34,124			$	32,760
Interest bearing NOW and demand			28,262				28,778
Regular and other			54,192				64,184
Money market accounts			21,956				26,995
Term certificates			132,307				110,659
Total deposits			270,841				263,376
Federal Home Loan Bank of Boston advances			10,350				3,675
Mortgagors' escrow accounts			1,525				1,596
Operating lease liability			877				962
Accrued expenses and other liabilities			3,796				3,509
Total liabilities			287,389				273,118
Stockholders' Equity:
Common stock			65				65
Additional paid-in capital			28,139				27,814
Treasury Stock			(78)				-
Retained earnings			50,226				50,416
Accumulated other comprehensive loss, net of tax			(1)				(3)
Unearned compensation - ESOP			(2,301)				(2,403)
Total stockholders' equity			76,050				75,889
Total liabilities and stockholders' equity		$	363,439			$	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 Year Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Interest and dividend income:
Interest and fees on loans		$	1,763			$	1,777			$	1,719			$	7,020			$	6,695
Interest and dividends on debt securities:
Taxable			999				965				845				3,736				3,228
Tax-exempt			84				89				99				363				414
Interest on short-term investments			282				176				38				552				341
Total interest and dividend income			3,128				3,007				2,701				11,671				10,678
Interest expense:
Deposits			1,389				1,197				757				4,513				1,872
Borrowings			118				171				51				453				54
Total interest expense			1,507				1,368				808				4,966				1,926
Net interest income			1,621				1,639				1,893				6,705				8,752
Provision for (reversal of) credit losses			(32)				(20)				-				(322)				-
Net interest income after provision for (reversal of) credit losses			1,653				1,659				1,893				7,027				8,752
Non-interest income:
Customer service fees			37				41				36				155				146
Income on bank-owned life insurance			66				67				67				267				258
Other income			63				59				61				243				260
Total non-interest income			166				167				164				665				664
Non-interest expense:
Salaries and employee benefits			1,030				1,117				1,146				4,558				4,517
Occupancy and equipment			225				256				274				975				1,028
Advertising			34				32				37				140				185
Data processing			82				97				82				369				344
Deposit insurance			34				33				43				133				106
Other general and administrative			360				373				351				1,523				1,489
Total non-interest expense			1,765				1,908				1,933				7,698				7,669
Income (loss) before income taxes			54				(82)				124				(6)				1,747
Provision (benefit) for income taxes			(106)				(42)				19				(39)				301
Net income (loss)		$	160			$	(40)			$	105			$	33			$	1,446
Net income (loss) per share:
Basic		$	0.03			$	(0.01)			$	0.02			$	0.01			$	0.23
Diluted		$	0.03			$	(0.01)			$	0.02			$	0.01			$	0.23
Weighted average shares outstanding:
Basic			6,307,261				6,292,060				6,279,656				6,291,529				6,275,819
Diluted			6,307,261				6,292,060				6,279,790				6,291,529				6,275,874

 

CFSB Bancorp, Inc. and Subsidiary Average Balances and Yields, Fully Tax-Equivalent Basis (Unaudited) (Dollars in thousands)
	Average Balance and Yields
	Three Months Ended
	June 30, 2024												March 31, 2024												June 30, 2023
	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	$	172,191			$	1,763				4.10	%		$	175,072			$	1,777				4.06	%			178,474				1,719				3.85	%
Securities (1)		148,748				1,105				2.97	%			149,442				1,078				2.89	%			150,383				968				2.57	%
Cash and short-term investments		20,266				282				5.57	%			14,933				176				4.71	%			3,331				38				4.56	%
Total interest-earning assets		341,205				3,150				3.69	%			339,447				3,031				3.57	%			332,188				2,725				3.28	%
Noninterest-earning assets		17,059												17,082												17,118
Total assets	$	358,264											$	356,529											$	349,306
Interest-bearing liabilities:
Interest-bearing demand deposits	$	29,463			$	4				0.05	%		$	30,261			$	4				0.05	%		$	30,051			$	4				0.05	%
Savings deposits		55,173				14				0.10	%			57,619				14				0.10	%			64,996				16				0.10	%
Money market deposits		22,332				13				0.23	%			23,396				15				0.26	%			28,890				19				0.26	%
Certificates of deposit		129,340				1,358				4.20	%			121,108				1,164				3.84	%			111,041				718				2.59	%
Total interest-bearing deposits		236,308				1,389				2.35	%			232,384				1,197				2.06	%			234,978				757				1.29	%
FHLB advances		10,350				118				4.56	%			14,186				171				4.82	%			3,916				51				5.21	%
Total interest-bearing liabilities		246,658				1,507				2.44	%			246,570				1,368				2.22	%			238,894				808				1.35	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		29,790												28,530												28,881
Other noninterest-bearing liabilities		6,011												5,650												5,726
Total liabilities		282,459												280,750												273,501
Total stockholders' equity		75,805												75,779												75,805
Total liabilities and stockholders' equity	$	358,264											$	356,529											$	349,306
Net interest income					$	1,643											$	1,663											$	1,917
Net interest rate spread(2)										1.25	%											1.35	%											1.93	%
Net interest-earning assets(3)	$	94,547											$	92,877											$	93,294
Net interest margin(4)										1.93	%											1.96	%											2.31	%
Cost of deposits(5)										2.09	%											1.84	%											1.15	%
Cost of funds(6)										2.18	%											1.99	%											1.21	%
Ratio of interest-earning assets to interest- bearing liabilities		138.33	%											137.67	%											139.05	%

(1) Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $22,000, $24,000, and $24,000 for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, 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
	Twelve Months Ended
	June 30, 2024												June 30, 2023
	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	$	175,028			$	7,020				4.01	%		$	178,044			$	6,695				3.76	%
Securities (1)		149,160				4,195				2.81	%			150,334				3,752				2.50	%
Cash and short-term investments		10,849				552				5.09	%			10,923				341				3.12	%
Total interest-earning assets		335,037				11,767				3.51	%			339,301				10,788				3.18	%
Noninterest-earning assets		16,838												16,701
Total assets	$	351,875											$	356,002
Interest-bearing liabilities:
Interest-bearing demand deposits	$	29,845			$	14				0.05	%		$	32,252			$	16				0.05	%
Savings deposits		58,569				61				0.10	%			70,338				70				0.10	%
Money market deposits		24,044				59				0.25	%			37,197				98				0.26	%
Certificates of deposit		119,382				4,379				3.67	%			103,410				1,688				1.63	%
Total interest-bearing deposits		231,840				4,513				1.95	%			243,197				1,872				0.77	%
FHLB advances		9,091				453				4.98	%			1,037				54				5.21	%
Total interest-bearing liabilities		240,931				4,966				2.06	%			244,234				1,926				0.79	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		29,380												31,170
Other noninterest-bearing liabilities		5,765												5,334
Total liabilities		276,076												280,738
Total stockholders' equity		75,799												75,264
Total liabilities and stockholders' equity	$	351,875											$	356,002
Net interest income					$	6,801											$	8,862
Net interest rate spread(2)										1.45	%											2.39	%
Net interest-earning assets(3)	$	94,106											$	95,067
Net interest margin(4)										2.03	%											2.61	%
Cost of deposits(5)										1.73	%											0.68	%
Cost of funds(6)										1.84	%											0.70	%
Ratio of interest-earning assets to interest-bearing liabilities		139.06	%											138.92	%

(1)  Includes tax equivalent adjustments for municipal securities, based on a statutory tax rate of 21%, of $96,000 and $110,000 for the twelve months ended June 30, 2024 and June 30, 2023, 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 Year Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024					2023			2024				2023
Securities interest income (no tax adjustment)		$	1,083			$	1,054			$	944			$	4,099			$	3,642
Tax-equivalent adjustment			22				24				24				96				110
Securities (tax-equivalent basis)		$	1,105			$	1,078			$	968			$	4,195			$	3,752
Net interest income (no tax adjustment)		$	1,621			$	1,639			$	1,893			$	6,705				6,859
Tax-equivalent adjustment			22				24				24				96				110
Net interest income (tax-equivalent adjustment)		$	1,643			$	1,663			$	1,917			$	6,801			$	6,969

 

CFSB Bancorp, Inc. and Subsidiary		At or for the Three Months Ended												At or for the Twelve Months Ended
Selected Financial Highlights (Unaudited)		June 30,				March 31,				June 30,				June 30,				June 30,
(In thousands, except share and per share amounts)		2024				2024					2023			2024				2023
Performance Ratios
Return (loss) on average assets (GAAP) (1, 4)			0.18	%			(0.04)	%			0.12	%			0.01	%			0.41	%
Return (loss) on average equity ("ROAE") (GAAP) (1, 5)			0.84	%			(0.21)	%			0.55	%			0.04	%			1.92	%
Noninterest expense to average assets (GAAP) (1)			1.97	%			2.14	%			2.21	%			2.14	%			2.15	%
Total loans to total deposits			63.65	%			65.07	%			67.59	%			63.65	%			67.59	%
Total loans to total assets			47.43	%			48.27	%			51.00	%			47.43	%			51.00	%
Efficiency ratio (GAAP) (6)			98.77	%			105.65	%			93.97	%			104.45	%			81.45	%
Capital Ratios
Total capital to risk-weighted assets			33.82	%			34.07	%			32.90	%			34.07	%			32.90	%
Common equity tier 1 capital to risk-weighted assets			32.93	%			33.15	%			32.00	%			33.15	%			32.00	%
Tier 1 capital to risk-weighted assets			32.93	%			33.15	%			32.00	%			33.15	%			32.00	%
Tier 1 capital to average assets (2)			17.82	%			17.83	%			18.20	%			17.83	%			18.20	%
Asset Quality Ratios
Allowance for credit losses on loans as a percentage of total loans (3)			0.90	%			0.90	%			0.98	%			0.90	%			0.98	%
Allowance for credit losses on loans as a percentage of non- performing loans		NM				NM				NM				NM				NM
Net (charge-offs) recoveries to average outstanding loans			-	%			-	%			-	%			-	%			-	%
Non-performing loans as a percentage of total loans			-	%			-	%			-	%			-	%			-	%
Non-performing loans as a percentage of total assets			-	%			-	%			-	%			-	%			-	%
Informational Items
Fair value of held to maturity securities		$	132,946			$	132,946			$	132,273			$	132,946			$	132,273
Book value per share (7)		$	11.47			$	11.44			$	11.44			$	11.44			$	11.44
Outstanding common shares			6,632,642				6,632,642				6,632,642				6,632,642				6,632,642

(1) Annualized, where appropriate..

(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's net income for Q4 2024?

CFSB Bancorp reported net income of $160,000, or $0.03 per share, for Q4 2024.

How did CFSB's full year 2024 net income compare to 2023?

CFSB's full year 2024 net income was $33,000, significantly down from $1.4 million in 2023.

What was the impact of CECL adoption on CFSB's financials?

The adoption of CECL methodology on July 1, 2023, resulted in a $223,000 reduction in retained earnings and changes to allowances for credit losses.

How did CFSB's total assets change year-over-year as of June 30, 2024?

CFSB's total assets increased by 4.1% year-over-year to $363.4 million as of June 30, 2024.

What was CFSB's net interest margin for Q4 2024?

CFSB's net interest margin for Q4 2024 was 1.93%, down from 1.96% in Q3 2024.