CFSB Bancorp(CFSB) - 2025 Q1 - Quarterly Report

Financial Position - Total assets increased by $1.1 million, or 0.3%, to$ 364.5 million at September 30, 2024, from $363.4 million at June 30, 2024[109] - Total liabilities increased by$ 1.1 million, or 0.4%, to $288.5 million at September 30, 2024[109] - Deposits increased by$ 829,000, or 0.3%, to $271.7 million at September 30, 2024[109] - The company had$ 10.4 million in outstanding advances from the FHLB and the ability to borrow an additional $49.6 million as of September 30, 2024[125] - The company exceeded all regulatory capital requirements as of September 30, 2024[125] Loan and Credit Quality - Net loans decreased by$ 2.4 million, or 1.4%, to $168.0 million at September 30, 2024, primarily due to a decrease in one- to four-family residential real estate loans[109] - The allowance for credit losses for loans was$ 1.5 million, or 0.89% of total loans, at September 30, 2024, down from $1.6 million, or 0.94% of total loans, at September 30, 2023[111] - Provision for credit losses recorded a reversal of$ 71,000 for the three months ended September 30, 2024, reflecting strong asset quality and lower loan balances[111] - Commitments to originate loans amounted to $656,000, with$ 3.9 million in unadvanced funds under home equity lines of credit as of September 30, 2024[126] Income and Expenses - Interest and dividend income increased by $487,000, or 17.8%, to$ 3.2 million for the three months ended September 30, 2024, compared to $2.7 million for the same period in 2023[110] - Net interest income decreased by$ 163,000, or 9.0%, for the three months ended September 30, 2024[110] - Non-interest income increased by $10,000, or 6.3%, for the three months ended September 30, 2024[110] - Total non-interest expense decreased by$ 45,000, or 2.3%, to $1.9 million for the three months ended September 30, 2024, primarily due to a reduction in salaries and employee benefits[113] - The provision for income taxes decreased by$ 74,000 to $19,000 for the three months ended September 30, 2024, compared to$ 93,000 for the same period in 2023[114] Interest Rates and Yields - The average yield on loans increased by 26 basis points to 4.16% for the three months ended September 30, 2024[110] - Average yield on interest-earning assets increased to 4.91% for the three months ended September 30, 2024, up from 4.67% for the same period in 2023[111] - Interest expense rose by $650,000, or 70.2%, to$ 1.6 million for the three months ended September 30, 2024, compared to $926,000 for the same period in 2023[111] - The net interest rate spread decreased by 56 basis points to 1.21% for the three months ended September 30, 2024, from 1.77% for the same period in 2023[117] Cash Flow - Net cash provided by operating activities was$ 366,000 for the three months ended September 30, 2024, compared to $436,000 for the same period in 2023[125] - Net cash provided by investing activities was$ 2.6 million for the three months ended September 30, 2024, compared to $1.9 million in 2023[125] Economic Value - Estimated economic value of equity (EVE) decreased by 36.3% with a 400 basis point increase in interest rates, resulting in an EVE of$ 35,147,000[124] - The EVE ratio was 11.7% as of September 30, 2024, indicating the EVE as a percentage of the present value of assets[124] Risk Management - The company adopted the CECL methodology for estimating credit losses on July 1, 2023, impacting the allowance for credit losses[108] - The company does not engage in hedging activities such as futures or interest rate swaps, focusing instead on asset-liability management strategies[121]