iStock illustration
In a quarter that included its partial conversion to a stock bank, Quincy-based Colonial Federal Savings Bank saw a first-quarter earnings loss, driven by a donation to its new charitable foundation.
Colonial Federal Savings Bank’s holding company, CFSB Bancorp Inc., had a first-quarter net loss of $828,000 compared to a net income of $401,000 in the first quarter of 2021, before the bank’s partial stock conversion. For the nine months ending March 31, the bank had a net loss of $122,000 compared to a net income of $996,000 for the nine months ending March 31, 2021.
The bank had reorganized into a two-tier form mutual holding company and completed an initial public offering on Jan. 12, selling approximately 2.8 million shares of common stock at $10 per share. The first-step conversion to a stock bank saw 42 percent of the company’s shares sold in the IPO, while the majority of the shares, 55 percent, went to the bank’s federally chartered mutual holding company, 15 Beach.
As part of the transaction, the bank established the Colonial Federal Savings Bank Charitable Foundation and donated $1.6 million in cash and stock to the foundation, President and CEO Michael McFarland said in the bank’s first-quarter earnings statement.
“This will benefit both our institution and our local communities over many years,” McFarland said of the donation.
He added that the bank’s asset quality and mix of loan and investment portfolios continued to be strong.
“We expect performance to improve due to rising interest rates for the remainder of the year,” McFarland said.
The bank had a first-quarter net interest income of $2.1 million, up to $183,000, or 9.8 percent, year-over-year. Noninterest income was $153,000 in the first quarter, up from $145,000 in the first quarter of 2021.
The bank’s first-quarter noninterest expenses were $3.2 million compared to $1.5 million in the first quarter of 2021. In addition to the $1.6 million donation to the charitable foundation, the bank said it had a $73,000 increase in salaries and employee benefits from normal employee annual merit salary benefit increases and expenses connected to its employee stock ownership plan, which was established in the offering. The bank said it also had a $67,000 increase in other expenses due to increased consultant and audit expenses.
Colonial Federal Savings Bank’s total assets were $362.5 million at the end of the first quarter, up $23.6 million, or 7.0 percent, from $338.9 million on June 30, 2021.
Total deposits were $283.98 million on March 31 compared to $284.63 million on June 30.
The bank’s net loans were $172.8 million in the first quarter, compared to $174.4 million on June 30. The bank said it had decreases of $515,000, or 3.2 percent, in multi-family real estate loans, $499,000 or 20.3 percent, in second mortgages and $1.1 million, or 6.5 percent, in commercial real estate loans. These decreases were offset by increases of $393,000, or 0.3 percent, in one-to-four family residential real estate loans, the bank said.
