CFSB Bancorp(CFSB) - 2025 Q2 - Quarterly Report

Financial Position - Total assets decreased by $681,000, or 0.2%, to$ 362.8 million at December 31, 2024, from $363.4 million at June 30, 2024[173]. - Total stockholders' equity decreased by$ 379,000, or 0.5%, to $75.7 million at December 31, 2024, primarily due to a net loss of$ 168,000 for the six months ended December 31, 2024[181]. - Deposits decreased by $483,000, or 0.2%, to$ 270.4 million at December 31, 2024, primarily due to a decrease in NOW and demand accounts of $5.3 million, or 8.5%[179]. - The company reported a net loss of$ 168,000 for the six months ended December 31, 2024, compared to a net loss of $87,000 for the same period in 2023, an increase of$ 81,000, or 93.1%[200]. - The total assets of the company as of December 31, 2024, were $362,482, compared to$ 346,411 in 2023, reflecting an increase of 4.6%[211]. Loan and Interest Income - Net loans decreased by $3.2 million, or 1.9%, to$ 167.2 million at December 31, 2024, primarily due to a decrease in commercial loans of $1.8 million, or 10.6%[175]. - Interest and dividend income increased by$ 459,000, or 16.4%, to $3.3 million for the three months ended December 31, 2024[183]. - The average yield on loans increased by 19 basis points to 4.18% for the three months ended December 31, 2024[183]. - Interest and dividend income increased by$ 946,000, or 17.2%, to $6.5 million for the six months ended December 31, 2024, from$ 5.5 million for the same period in 2023[201]. - The average yield on loans increased to 4.17% in 2024 from 3.95% in 2023[211]. Interest Expense and Net Interest Income - Net interest income increased by $50,000, or 3.1%, for the three months ended December 31, 2024[182]. - Interest expense increased by$ 409,000, or 35.1%, to $1.6 million for the three months ended December 31, 2024, primarily due to a rise in the average rate on certificates of deposit to 4.16% from 3.53%[186]. - Net interest income decreased by$ 113,000, or 3.3%, to $3.3 million for the six months ended December 31, 2024, from$ 3.4 million for the same period in 2023[203]. - Interest expense increased by $1.1 million, or 52.4%, to$ 3.2 million for the six months ended December 31, 2024, from $2.1 million for the same period in 2023[202]. Non-Interest Income and Expenses - Non-interest income decreased by$ 7,000, or 4.1%, to $165,000 for the three months ended December 31, 2024, primarily due to an$ 8,000 decrease in other income[189]. - Non-interest income increased by $3,000, or 0.9%, to$ 335,000 for the six months ended December 31, 2024, from $332,000 for the same period in 2023[206]. - Total non-interest expense decreased by$ 65,000, or 3.1%, to $2.0 million for the three months ended December 31, 2024, mainly due to a reduction in salaries and employee benefits[190]. - Total non-interest expense decreased by$ 110,000, or 2.7%, to $3.9 million for the six months ended December 31, 2024, from$ 4.0 million for the same period in 2023[208]. Tax Provision and Allowance for Credit Losses - The provision for income taxes increased to $51,000 for the three months ended December 31, 2024, compared to$ 16,000 for the same period in 2023, due to an increase in the deferred tax valuation allowance[191]. - The allowance for credit losses for loans was $1.4 million, or 0.83% of total loans, at December 31, 2024, down from$ 1.6 million, or 0.93% of total loans, at December 31, 2023[188]. - The provision for income taxes decreased by $39,000, or 35.8%, to$ 70,000 for the six months ended December 31, 2024, from $109,000 for the same period in 2023[209]. Interest Rate and Economic Value - The net interest rate spread decreased by 14 basis points to 1.32% for the three months ended December 31, 2024, compared to 1.46% for the same period in 2023[187]. - The net interest margin decreased by four basis points to 1.98% for the three months ended December 31, 2024, compared to 2.02% for the same period in 2023[187]. - The estimated economic value of equity (EVE) would decrease by 21.5% with a 200 basis point increase in interest rates, indicating significant interest rate risk exposure[226]. - The company reported a net interest rate spread of 1.27% for the six months ended December 31, 2024, down from 1.61% in 2023, a decrease of 21.1%[212]. Cash Flow and Liquidity - Net cash provided by operating activities was$ 167,000 for the six months ended December 31, 2024, compared to cash used of $64,000 for the same period in 2023[232]. - Net cash provided by investing activities was$ 2.5 million for the six months ended December 31, 2024, compared to cash used of $1.1 million for the same period in 2023[232]. - Net cash used in financing activities was$ 750,000 for the six months ended December 31, 2024, compared to net cash provided of $10.0 million for the same period in 2023[232]. - The company monitors its liquidity position daily and anticipates sufficient funds to meet current funding commitments[233]. - The company exceeded all regulatory capital requirements as of December 31, 2024[234]. Market Risk and Inflation - The primary impact of inflation on the company's operations is reflected in increased operating costs, with interest rates having a more significant impact on performance[239]. - The company is a smaller reporting company and is not required to provide certain market risk disclosures[240].