Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors

You're looking at CFSB Bancorp, Inc. right now, and the headline numbers from the 2025 fiscal year tell a story of a regional bank fighting for margin in a tough rate environment, but you need to look past the surface. While the company managed to post a tiny net income of just $4,000 for the third quarter ended March 31, 2025, that small win is overshadowed by a year-to-date net loss of $164,000 for the nine-month period, which is the real anchor on performance. Honestly, the key is the balance sheet: with total assets sitting at $366.2 million as of March 31, 2025, the bank is small, and its net interest margin (NIM)-the spread between interest earned on assets and interest paid on liabilities-only nudged up to 2.05% in Q3 2025. This shows management is defintely working to improve asset returns and cut deposit costs, but the path to meaningful profitability remains a grind, which is why we need to map out what that $14.25 final stock price means for a potential investor.

Revenue Analysis

You're looking at CFSB Bancorp, Inc. (CFSB) because you want to know where the money is actually coming from, and that's smart. For a community bank like this, the revenue story is simple but the nuances matter. The direct takeaway for the fiscal year ending June 30, 2025, is a slight dip in total revenue despite strong growth in their core lending income, signaling a pinch from non-interest activities or higher funding costs.

The company's total annual revenue for FY 2025 was approximately $7.61 million. This is a small but notable -1.04% decline year-over-year, which tells you they are fighting hard to maintain top-line growth in a challenging interest rate environment. The core of their business, like any traditional bank, relies on two main streams: Net Interest Income (NII) and Non-interest Income.

Here's the quick math on their primary revenue sources for the fiscal year:

• Net Interest Income (NII): This is the profit from lending money (interest earned on loans and securities) minus the cost of borrowing it (interest paid on deposits and borrowings). This made up the bulk of their revenue at $7.0 million.
• Non-interest Income: This covers fees, service charges, income from bank-owned life insurance, and other non-lending activities. This segment brought in $679,000.

The clear picture is that NII is the dominant segment, contributing about 91.2% of the total revenue ($7.0M / $7.679M total revenue estimate based on components). This concentration is typical for a smaller, traditional bank focused on local lending in places like Norfolk County, Massachusetts, where CFSB operates three full-service branches.

The interesting part is the growth divergence. While overall revenue slipped by -1.04%, the Net Interest Income actually grew by a solid 4.1%, an increase of $0.3 million from the prior fiscal year. This NII growth was primarily driven by the repricing of assets and a focus on core residential lending. To be fair, non-interest income also saw a small increase of 2.1%, adding $14,000.

What this estimate hides is the pressure from the expense side, which is why the net income turned into a loss, but purely on the revenue side, the lending business is performing. Their loan portfolio breakdown shows a heavy reliance on residential real estate, which is where the NII is generated:

This heavy concentration in 1-4 family residential loans-nearly 80% of the portfolio-is both a strength and a risk. It provides a stable, predictable interest stream, but it also ties the bank's primary revenue driver tightly to the regional housing market's health. You can see their strategic focus on stability in their Mission Statement, Vision, & Core Values of CFSB Bancorp, Inc. (CFSB).

The key change in the revenue stream is really the underlying cost of funds, which is eating into the NII margin, even as the NII dollar amount grows. They are earning more interest, but they are defintely paying more interest on deposits to keep those funds, which is why the net interest margin (NIM) only ticked up slightly to 2.04% from 2.03% in the prior year.

Profitability Metrics

If you're looking at CFSB Bancorp, Inc. (CFSB)'s 2025 numbers, the direct takeaway is a company in transition: a recent quarterly profit, but profitability ratios that lag significantly behind industry peers. The core issue is a net interest margin (NIM) that is defintely too thin for a community bank.

For a bank, we look at profitability a little differently than a manufacturer. Your Gross Profit is essentially the Net Interest Income (NII)-what the bank earns from loans and investments minus what it pays on deposits. In the third quarter of fiscal year 2025, CFSB Bancorp, Inc. reported a NII of $1.8 million. When you factor in the Non-Interest Income of $160,000, this NII represents a Gross Margin of approximately 91.84% of total revenue, which is actually quite strong, showing that almost all revenue comes from core lending activities.

Margin Analysis: CFSB vs. Industry

The real challenge shows up when you move down the income statement. The Net Interest Margin (NIM) is the critical metric, measuring the spread between interest earned and interest paid. CFSB Bancorp, Inc.'s NIM for the third quarter of 2025 was 2.05%. Here's the quick math on why that's a problem:

• CFSB Bancorp, Inc. Q3 2025 NIM: 2.05%
• Community Bank Industry Average NIM (Q2 2025): 3.62%

You can see the nearly 160-basis-point gap. The industry average for community banks (those with less than $10 billion in assets, which CFSB Bancorp, Inc. is) was 3.62% as of the second quarter of 2025. This thin margin is what kept the company in the red for much of the year, leading to a Trailing Twelve Month (TTM) Net Profit Margin of -1.92%. What this estimate hides is the recent quarterly turnaround: the company posted a modest net income of $4,000 in Q3 2025, translating to a Net Profit Margin of about 0.20% on total revenue of $1.96 million.

Operational Efficiency and Profitability Trends

The trend shows management is fighting hard, but the macro environment is a headwind. For the nine months ended March 31, 2025, CFSB Bancorp, Inc. still incurred a Net Loss of $164,000. This is actually a deeper loss than the $127,000 loss reported for the same period in 2024, so the year-to-date trend is negative.

The silver lining is operational efficiency. Management made a clear move on costs, reducing Non-Interest Expenses by a significant 9.6% to $1.8 million in Q3 2025, primarily by cutting salaries and employee benefits. This cost control is the main reason the company flipped to a positive, albeit tiny, net income for the quarter. This focus on Pre-Provision Net Revenue (PPNR), which is your operating profit before taxes and loan loss provisions, is a solid step. The Q3 Operating Profit Margin (PPNR/Revenue) was about 8.16%, a sign that cost management is working to offset the low NIM.

Ultimately, the completion of the merger with Hometown Financial Group on November 1, 2025, provides the final context for these 2025 figures, as the company's independent profitability journey has concluded. For a full breakdown of the strategic rationale behind this move, you should read Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors. Your next step, as an investor, is to analyze the terms of that acquisition against these weak core profitability metrics.

Debt vs. Equity Structure

You want to know how CFSB Bancorp, Inc. (CFSB) funds its operations and whether that structure is safe. The direct takeaway is that CFSB operates with an exceptionally low amount of traditional debt, relying heavily on equity and customer deposits, which is a very conservative and strong position, especially compared to its peers.

For the fiscal year ending June 30, 2025, CFSB Bancorp, Inc.'s total outstanding debt was just $11.23 million, a very small figure relative to its total assets. This debt is typically composed of borrowings like Federal Home Loan Bank (FHLB) advances, which banks use for short-term liquidity, but the overall reliance is minimal. This low debt figure is a deliberate strategy for a community bank.

The key metric here is the Debt-to-Equity (D/E) ratio, which tells you how much debt a company uses to finance its assets relative to the value of shareholders' equity. For CFSB Bancorp, Inc., the D/E ratio for fiscal year 2025 stood at only 0.15 (or 15%). Here's the quick math: for every dollar of shareholder equity, the company has only 15 cents of debt.

This is defintely a low-risk profile. To be fair, the average D/E ratio for the Financials sector in the Developed economic region is much higher, closer to 0.70 (or 70.2%). CFSB's ratio is less than a quarter of the industry average. They just don't like debt.

CFSB's primary funding mechanism isn't debt financing (borrowing from the bond market), but rather customer deposits and retained earnings (equity). This is typical for a well-capitalized community bank, but CFSB takes it to an extreme. The company balances its funding with a clear preference for equity and deposits over traditional debt, keeping its financial leverage (the use of borrowed money to amplify returns) very low.

Still, you need to be aware of recent capital actions. The company was actively managing its equity, including purchasing its own stock. For instance, the company bought back $426,000 worth of its stock during the six months ended December 31, 2024. This is a form of returning capital to shareholders, which reduces total equity. Also, the biggest near-term factor affecting the capital structure is the planned acquisition by Hometown Financial Group, Inc., announced in May 2025. This event effectively changes the entire capital structure equation, as CFSB Bancorp, Inc. was delisted on November 3, 2025.

• Low debt means low interest expense.
• High equity provides a large buffer against losses.
• Acquisition changes the capital game entirely.

The low D/E ratio is a historical strength, but the acquisition means investors should now focus on the terms of the merger, not just the standalone balance sheet. You can read more about the parties involved and the investment logic in Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You want to know if CFSB Bancorp, Inc. (CFSB) had the cash to cover its near-term obligations, and the simple answer is that its traditional liquidity ratios looked rough, but that's often the case for a bank. The real liquidity story for you as an investor was the cash-out merger that closed in November 2025.

For the fiscal year 2025, CFSB's liquidity ratios were low, which is typical for a regional bank whose primary liabilities are customer deposits (current liabilities) and whose primary assets are long-term loans. The Current Ratio was 0.10 and the Quick Ratio was also 0.10 as of the trailing twelve months (TTM) ended December 2025. This means the company had only about 10 cents of liquid assets for every dollar of short-term debt.

• Current Ratio of 0.10 signals reliance on core banking activities, not quick asset liquidation.
• Net Current Asset Value, a proxy for working capital, was a negative $-260.85 million (TTM ended December 2025).
• The negative working capital is a structural reality for a bank, but it still flags an inability to cover all deposits instantly.

Cash Flow: Where the Money Moved in FY 2025

Looking at the cash flow statement for the fiscal year ended June 30, 2025, you see a clear picture of a bank focused on its core lending operations and managing its investment portfolio. Operating Cash Flow (OCF) was a positive $0.47 million. This is the cash generated from the bank's normal business-taking deposits and making loans-and it shows the core operations were still cash-generative.

Investing Cash Flow (ICF) was a significant outflow of $-5.71 million for FY 2025. This outflow was mainly driven by the net increase in loans originated, which is the bank putting its cash to work by increasing its loan portfolio. That's what a bank is supposed to do, but it is a cash drain in the short term.

The Financing Cash Flow (FCF) was primarily focused on managing the liability side of the balance sheet. The bank successfully increased its deposits by $3.0 million as of March 31, 2025, mostly through offering higher-yielding certificates of deposit (CDs) to attract and retain customers in a competitive rate environment. This deposit growth is a critical funding source, essentially the bank's financing activity.

Here's the quick math on the major cash flow movements for FY 2025 (in millions USD):

The Ultimate Liquidity Event

The biggest liquidity factor for CFSB Bancorp, Inc. (CFSB) was the acquisition by Hometown Financial Group, Inc., which closed in November 2025. This event provided the ultimate liquidity for shareholders, converting each share of common stock into the right to receive $14.25 per share in cash.

What this estimate hides is that the low operating ratios were mooted by the merger. The deal provided a definitive, high-confidence cash exit, which is the best form of liquidity an investor can ask for. If you're interested in the capital structure that led to this acquisition, you should check out Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're asking if CFSB Bancorp, Inc. (CFSB) was overvalued or undervalued, but the most important takeaway is this: the stock is no longer trading. Hometown Financial Group acquired CFSB Bancorp, Inc. in a cash deal that closed on November 3, 2025, at a price that represented a significant premium.

The acquisition price of $14.25 per share in cash effectively set the final valuation for investors. This price was near the 52-week high of $14.32 and represented a substantial 122% premium over the 52-week low of $6.41. This massive surge-a 111.11% stock price increase over the year leading up to the delisting-tells you the market was pricing in the merger long before the final closing.

Here's the quick math on the pre-merger valuation multiples, which were highly distorted by the negative earnings leading up to the deal. A bank's valuation is often best viewed through its price-to-book (P/B) ratio, which compares the stock price to the company's book value per share (the value of its assets minus liabilities):

• P/B Ratio: The ratio stood at 1.23.
• P/E Ratio: The Price-to-Earnings (P/E) ratio was a non-meaningful -356.25.
• Dividend Yield: The yield was 0%, as the company did not pay a dividend.

Honestly, a P/B of 1.23 for a bank acquisition is relatively healthy and suggests the buyer saw value in the underlying assets and the franchise, not just the recent earnings. The negative P/E ratio was a red flag, but it was offset by the merger premium. What this estimate hides is the strategic value of Colonial Federal Savings Bank's branch network in eastern Massachusetts to the acquirer.

The analyst consensus leading up to the merger was a cautious 'Hold.' This is typical in a merger situation, as the stock price tends to track the announced cash consideration, leaving little upside for new buyers. The total transaction value was approximately $44 million.

The bottom line for any investor who held CFSB Bancorp, Inc. shares was that the stock was defintely not undervalued at the time of the merger announcement, but rather fully valued at the acquisition price. For a deeper dive into who owned the stock before the deal, you should be Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

Next step for Finance: Review the merger documents to understand the full premium paid on tangible book value, as this is the true measure of the deal's value.

Risk Factors

For investors looking at CFSB Bancorp, Inc. (CFSB) through the lens of its 2025 fiscal year performance, the direct takeaway is that the company faced significant operational and liquidity headwinds that ultimately drove a strategic resolution. The risks were clear: a struggle for profitability in a high-rate environment, plus a tight liquidity profile.

Operational and Financial Headwinds

The most immediate risk was the inability to generate consistent net income, a classic challenge for smaller regional banks in a volatile rate cycle. For the nine months ended March 31, 2025, CFSB Bancorp, Inc. reported a net loss of approximately $164,000. This follows a net loss of $162,000 just for the quarter ended December 31, 2024. Honestly, you can't sustain a business with a negative Return on Equity (ROE) of -0.35% for the fiscal year 2025, as reported in September. Here's the quick math: negative earnings mean your capital base is shrinking, not growing.

This lack of profitability was compounded by a necessary increase in the provision for credit losses on loans, which rose to an allowance of 0.86% of total loans at March 31, 2025, up from 0.83% at the end of 2024. While this increase was tied to new loan originations, it signals a more cautious stance on asset quality, which eats into the thin net interest margin.

Liquidity and Funding Concentration

The bank's liquidity profile was defintely tight, creating a major financial risk. At the close of the second quarter of 2025, the current ratio-a simple measure of short-term liquidity-stood at a low 0.111. What this estimate hides is the size of the current liabilities base, which was a hefty $272.0 million.

This structure suggests potential funding concentration risk, meaning the bank was heavily reliant on a few sources or types of funding, like certificates of deposit (CDs). They had to offer CD promotions just to keep deposits coming in as customers sought higher interest rates elsewhere. This is a direct competitive risk in the current market conditions.

• Manage deposit costs.
• Maintain sufficient capital.
• Control operating expenses.

Strategic Resolution and External Factors

Beyond the internal financial struggles, CFSB Bancorp, Inc. faced the same external risks as any bank: increased competitive pressures, changes in the interest rate environment, and the ever-present threat of legislative and regulatory changes. The forward-looking statements in their filings explicitly flagged these, plus the risk of cyberattacks and the difficulty of retaining key talent.

The mitigation strategy for many of these risks ultimately materialized as a strategic exit. The single most important factor for investors is that Hometown Financial Group, Inc. completed the acquisition of CFSB Bancorp, Inc. on November 1, 2025, and the stock was delisted on November 3, 2025. This acquisition provides a clear, definitive resolution for shareholders, effectively removing the stock's exposure to the operational and liquidity risks detailed above. This move is a common strategic play for smaller institutions that cannot achieve the scale needed to compete effectively. For a deeper dive into the investor base that drove the stock up prior to the merger, you can check out Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

The acquisition is the final word on the near-term risk.

Growth Opportunities

You're looking at CFSB Bancorp, Inc. (CFSB) and its future, and the most significant near-term prospect isn't a product launch-it's the announced acquisition by Hometown Financial Group, Inc.. This move fundamentally changes the growth equation, shifting the focus from independent, organic growth to integration and scale within a larger organization.

The company's performance leading into this strategic shift showed the pressure of the current rate environment, with fiscal year 2025 annual revenue (ending June 30, 2025) at $7.61 million, a slight decline of -1.04% year-over-year. Still, the bank saw a net income of $4,000 in the final quarter of the nine months ended March 31, 2025, a sign that cost-control and rate-strategy adjustments were starting to land. The acquisition itself is the clear, actionable growth driver now.

Here's the quick math: CFSB's total assets were $366.2 million as of March 31, 2025, and integrating this into a larger entity immediately offers economies of scale (cost savings) and a wider product set for its customers.

Key Growth Drivers and Strategic Levers

CFSB's future growth is now tied to two primary levers: the successful execution of the merger and the strength of its existing community-focused model. The core growth drivers are less about new branches and more about digital reach and cost efficiency.

• Acquisition Synergy: The merger with Hometown Financial Group, Inc. is the dominant factor. Synergies will drive future earnings growth by cutting overlapping costs in technology and administration, plus they get to use the acquirer's capital base.
• Fintech Partnerships: CFSB has a significant, non-traditional income stream as the issuing bank for the Experian Smart Money™ Digital Checking Account & Debit Card. This partnership expands their market far beyond their Massachusetts regional footprint, offering a scalable source of fee income (non-interest income) that is less sensitive to local economic cycles.
• Deposit Strategy: In the high-rate environment, the bank strategically offered certificate of deposit (CD) promotions to attract customers seeking higher rates, which helped stabilize their funding base. This is a smart defensive play that maintains liquidity.

Competitive Advantages

In a crowded banking market, CFSB Bancorp, Inc.'s competitive advantage (economic moat) is twofold: its established local presence and its unique national digital partnership. Honestly, that Experian deal is defintely a game-changer for a bank of this size.

The first advantage is the classic community banking model. The bank focuses on relationship-driven banking, with local decision-making and personalized service that fosters long-term partnerships in its regional footprint. This is what keeps the core deposit base sticky.

The second, and more forward-looking, advantage is the Fintech-as-a-Service (FaaS) revenue from the Experian partnership. This allows them to generate revenue from a national customer base without the overhead of a national branch network, a high-margin business that diversifies their income away from traditional interest income.

For a detailed breakdown of the financial health that led to this strategic move, you should read our full analysis: Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors.