10-Q 1 cfsb-20221231.htm 10-Q 10-Q
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☐☐

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 001-41220

 

CFSB Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

United States of America

87-4396534

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

15 Beach Street

Quincy, Massachusetts

02170

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (617) 471-0750

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered

Stock, Par Value $0.01 Common Per Share CFSB The Nasdaq Stock Market, LLC

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of February 6, 2023, the registrant had 6,521,642 shares of common stock, $0.01 par value per share, outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Net Income

4

 

Consolidated Statements of Comprehensive Income

5

 

Consolidated Statements of Changes in Stockholders' Equity

6

 

Consolidated Statements of Cash Flows

8

 

Notes to Unaudited Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

Item 4.

Controls and Procedures

46

 

 

 

PART II.

OTHER INFORMATION

47

 

 

 

Item 1.

Legal Proceedings

47

Item 1A.

Risk Factors

47

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

47

Item 3.

Defaults Upon Senior Securities

47

Item 4.

Mine Safety Disclosures

47

Item 5.

Other Information

47

Item 6.

Exhibits

48

Signatures

49

 

 

2


 

Item 1. Financial Statements.

CFSB Bancorp, Inc. and Subsidiary

Consolidated Balance Sheets (Unaudited)

(In thousands, except per share data)

 

 

 

December 31,

 

 

June 30,

 

 

 

2022

 

 

2022

 

Assets:

 

 

 

 

 

 

Cash and due from banks

 

$

1,502

 

 

$

1,609

 

Short-term investments

 

 

9,072

 

 

 

30,058

 

Total cash and cash equivalents

 

 

10,574

 

 

 

31,667

 

Securities available for sale, at fair value

 

 

168

 

 

 

199

 

Securities held to maturity, at amortized cost, fair value of $132,624 at
     December 31, 2022 and $
133,593 at June 30, 2022

 

 

149,473

 

 

 

145,239

 

Federal Home Loan Bank stock, at cost

 

 

191

 

 

 

191

 

Loans, net of allowance for loan losses of $1,747 at December 31, 2022 and
     $
1,747 at June 30, 2022

 

 

178,569

 

 

 

172,593

 

Premises and equipment, net

 

 

3,272

 

 

 

3,334

 

Accrued interest receivable

 

 

1,303

 

 

 

1,265

 

Bank-owned life insurance

 

 

10,271

 

 

 

10,144

 

Deferred tax asset

 

 

1,001

 

 

 

1,079

 

Operating lease right of use asset

 

 

999

 

 

 

-

 

Other assets

 

 

1,012

 

 

 

472

 

Total assets

 

$

356,833

 

 

$

366,183

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

Non-interest bearing

 

$

32,618

 

 

$

31,168

 

Interest-bearing

 

 

242,844

 

 

 

255,907

 

Total deposits

 

 

275,462

 

 

 

287,075

 

Mortgagors' escrow accounts

 

 

1,680

 

 

 

1,555

 

Operating lease liability

 

 

1,003

 

 

 

-

 

Accrued expenses and other liabilities

 

 

3,409

 

 

 

3,303

 

Total liabilities

 

 

281,554

 

 

 

291,933

 

Stockholders' Equity

 

 

 

 

 

 

Preferred Stock, $.01 par value, 10,000,000 shares authorized as
     of December 31, 2022 and June 30, 2022,
none issued and
     outstanding as of December 31, 2022 and June 30, 2022

 

$

-

 

 

$

-

 

Common Stock, $.01 par value, 90,000,000 shares authorized as
     of December 31, 2022 and June 30, 2022,
6,521,642 issued
     and outstanding as of December 31, 2022 and June 30, 2022

 

 

65

 

 

 

65

 

Additional paid-in capital

 

 

27,714

 

 

 

27,720

 

Retained earnings

 

 

49,956

 

 

 

48,970

 

Accumulated other comprehensive income

 

 

(2

)

 

 

-

 

Unearned compensation - ESOP, 245,422 and 250,536 shares unallocated
     at December 31, 2022 and June 30, 2022, respectively

 

 

(2,454

)

 

 

(2,505

)

Total stockholders' equity

 

 

75,279

 

 

 

74,250

 

Total liabilities and stockholders' equity

 

$

356,833

 

 

$

366,183

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3


 

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,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

1,657

 

 

$

1,640

 

 

$

3,276

 

 

$

3,294

 

Interest and dividends on debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

795

 

 

 

492

 

 

 

1,546

 

 

 

959

 

Tax-exempt

 

 

106

 

 

 

120

 

 

 

214

 

 

 

243

 

Interest on short-term investments and certificates of deposit

 

 

123

 

 

 

16

 

 

 

250

 

 

 

33

 

Total interest and dividend income

 

 

2,681

 

 

 

2,268

 

 

 

5,286

 

 

 

4,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

340

 

 

 

255

 

 

 

582

 

 

 

529

 

Borrowings

 

 

-

 

 

 

2

 

 

 

-

 

 

 

6

 

Total interest expense

 

 

340

 

 

 

257

 

 

 

582

 

 

 

535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

2,341

 

 

 

2,011

 

 

 

4,704

 

 

 

3,994

 

Provision for loan losses

 

 

-

 

 

 

10

 

 

 

-

 

 

 

25

 

Net interest income after provision for loan losses

 

 

2,341

 

 

 

2,001

 

 

 

4,704

 

 

 

3,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

36

 

 

 

31

 

 

 

73

 

 

 

61

 

Income on bank-owned life insurance

 

 

63

 

 

 

75

 

 

 

127

 

 

 

123

 

Gain on sale of securities available for sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

48

 

Other income

 

 

53

 

 

 

55

 

 

 

152

 

 

 

159

 

Total non-interest income

 

 

152

 

 

 

161

 

 

 

352

 

 

 

391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

1,250

 

 

 

1,167

 

 

 

2,268

 

 

 

2,121

 

Occupancy and equipment

 

 

255

 

 

 

208

 

 

 

498

 

 

 

418

 

Advertising

 

 

71

 

 

 

37

 

 

 

110

 

 

 

78

 

Data processing

 

 

84

 

 

 

91

 

 

 

178

 

 

 

171

 

Deposit insurance

 

 

22

 

 

 

21

 

 

 

43

 

 

 

43

 

Other general and administrative

 

 

405

 

 

 

372

 

 

 

738

 

 

 

691

 

Total non-interest expenses

 

 

2,087

 

 

 

1,896

 

 

 

3,835

 

 

 

3,522

 

Income before income taxes

 

 

406

 

 

 

266

 

 

 

1,221

 

 

 

838

 

Provision for income taxes

 

 

65

 

 

 

32

 

 

 

235

 

 

 

132

 

Net income

 

$

341

 

 

$

234

 

 

$

986

 

 

$

706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

0.05

 

 

N/A

 

 

$

0.16

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

6,274,542

 

 

N/A

 

 

 

6,273,260

 

 

N/A

 

 

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Comprehensive Income (Unaudited)

(In thousands)

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income

 

$

341

 

 

$

234

 

 

$

986

 

 

$

706

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized holding (losses) gains

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

33

 

Reclassification adjustment for net realized gains

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(48

)

Net change in unrealized losses

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(15

)

Tax effect

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4

 

Net-of-tax amount

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(11

)

Comprehensive income

 

$

340

 

 

$

233

 

 

$

984

 

 

$

695

 

There were no sales of securities for the three and six months ended December 31, 2022. There were no sales of securities during the three months ended December 31, 2021. The tax effect related to the net realized gain on sale of securities available for sale was $14,000 for the six months ended December 31, 2021.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Unearned

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Compensation

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

ESOP

 

 

Total

 

Balance at September 30, 2022

 

 

6,521,642

 

 

$

65

 

 

$

27,718

 

 

$

49,615

 

 

$

(1

)

 

$

(2,480

)

 

$

74,917

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

341

 

 

 

-

 

 

 

-

 

 

 

341

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(1

)

ESOP shares committed to be released

 

 

-

 

 

 

-

 

 

 

(4

)

 

 

-

 

 

 

-

 

 

 

26

 

 

 

22

 

Balance at December 31, 2022

 

 

6,521,642

 

 

$

65

 

 

$

27,714

 

 

$

49,956

 

 

$

(2

)

 

$

(2,454

)

 

$

75,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2021

 

 

-

 

 

$

-

 

 

$

-

 

 

$

49,100

 

 

$

7

 

 

$

-

 

 

$

49,107

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

234

 

 

 

-

 

 

 

-

 

 

 

234

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(1

)

Balance at December 31, 2021

 

 

-

 

 

$

-

 

 

$

-

 

 

$

49,334

 

 

$

6

 

 

$

-

 

 

$

49,340

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

6


 

CFSB Bancorp, Inc. and Subsidiary

Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Unearned

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Compensation

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Income (Loss)

 

 

ESOP

 

 

Total

 

Balance at June 30, 2022

 

 

6,521,642

 

 

$

65

 

 

$

27,720

 

 

$

48,970

 

 

$

-

 

 

$

(2,505

)

 

$

74,250

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

986

 

 

 

-

 

 

 

-

 

 

 

986

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2

)