CFSB Bancorp, Inc. (CFSB): History, Ownership, Mission, How It Works & Makes Money

How does a regional bank, CFSB Bancorp, Inc. (CFSB), with annual revenue of only $7.61 million in fiscal year 2025, become a high-value acquisition target in a volatile market? You're looking at a classic community-bank-to-M&A-exit story, where a deep-rooted franchise founded in 1889 drove its stock price up 110.8% this year to a final trading price of $14.25 before the merger. This move by Hometown Financial Group, Inc. on November 3, 2025, wasn't just about the balance sheet-like the $75.7 million in stockholders' equity-but about the underlying value of its customer relationships and loan portfolio. We'll break down the mission and mechanics that made Colonial Federal Savings Bank's holding company a defintely attractive buy, even as it posted a nine-month net loss of $164,000.

CFSB Bancorp, Inc. (CFSB) History

CFSB Bancorp, Inc. is a financial holding company whose story is really the 136-year history of its subsidiary, Colonial Federal Savings Bank. This journey began as a community-focused mutual savings bank, which means it was owned by its depositors, not shareholders, for most of its life. That structure kept its focus fiercely local, but it also limited capital for modern expansion. The company's defining moment was its 2022 public offering, which provided the capital to compete, but ultimately set the stage for its 2025 acquisition by Hometown Financial Group, Inc.

Given Company's Founding Timeline

Year established

The original entity, Colonial Federal Savings Bank, was established in 1889.

Original location

The bank was founded and remains headquartered in Quincy, Massachusetts. Its main office is at 15 Beach Street.

Founding team members

As a mutual savings bank, Colonial Federal Savings Bank was founded by a collective of local citizens, not a single entrepreneurial team. This structure prioritizes community depositors over private shareholders. The key executive leading the company through its final transformative years was Michael E. McFarland, who served as President and Chief Executive Officer.

Initial capital/funding

The original 1889 capital is not publicly traceable, but the company's modern capital foundation was established during its 2022 reorganization. The Initial Public Offering (IPO) for CFSB Bancorp, Inc. raised gross offering proceeds of approximately $28.0 million. This capital came from the sale of 2,804,306 shares at $10.00 per share.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The shift from a century-old mutual savings bank to a publicly traded bank holding company, and then to an acquired entity, happened fast. It's a classic example of how capital needs can force a strategic pivot. CFSB Bancorp, Inc. was defintely a small player, reporting annual revenue of only $7.61M for the fiscal year ending June 30, 2025.

The 2022 IPO was the single most transformative decision. It converted the institution from a purely mutual model to a mutual holding company structure, which allowed it to access public equity markets for growth capital. This move was intended to provide the financial strength to support future growth and expansion, plus it funded the Colonial Federal Savings Bank Charitable Foundation, Inc.

Here's the quick math on the merger: As of June 30, 2025, Colonial Federal Savings Bank had Total Assets of approximately $366.3 million and Total Deposits of about $284.3 million. The merger with Hometown Financial Group, Inc. meant Colonial Federal Savings Bank was absorbed by North Shore Bank, which had Total Assets of approximately $2.9 billion and Total Deposits of about $2.4 billion as of the same date. That's a significant scale difference.

• Capital Infusion: The 2022 IPO raised $28.0 million, a necessary step to modernize and compete in the regional banking market.
• Strategic Exit: The 2025 acquisition provided a clear exit for shareholders at a market capitalization of around $93.32M, consolidating the bank's operations under a larger, more diversified regional umbrella.
• Community Commitment: The reorganization included establishing the Colonial Federal Savings Bank Charitable Foundation, Inc., funded with shares and cash, ensuring the bank's community focus continued even after the sale.

For a deeper dive into the ownership structure leading up to the acquisition, you should read Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

CFSB Bancorp, Inc. (CFSB) Ownership Structure

CFSB Bancorp, Inc. has transitioned from a publicly-traded company to a wholly-owned subsidiary of Hometown Financial Group, Inc., effectively shifting its control structure from a mix of public shareholders and a mutual holding company to a single, private corporate owner.

This major change, completed in October 2025, means the decision-making power now rests entirely with the leadership of Hometown Financial Group, Inc., a significant departure from its previous structure where the mutual holding company exerted primary control.

Given Company's Current Status

CFSB Bancorp, Inc., formerly traded on the NASDAQ Capital Market under the ticker symbol CFSB, is no longer a public entity as of November 2025. The company was acquired by Hometown Financial Group, Inc., the holding company for bankESB, bankHometown, and North Shore Bank, in a cash-out merger.

The acquisition was completed around the end of October 2025, with shareholders receiving a cash consideration of $14.25 per share for their common stock. This transaction effectively delisted CFSB Bancorp, Inc., making it a private, indirect subsidiary.

The original structure included a federal mid-tier holding company, CFSB Bancorp, Inc., which was the majority-owned subsidiary of 15 Beach, MHC (a Mutual Holding Company). This two-tiered mutual holding company structure is a common model for savings banks, but it has now been fully absorbed by the acquiring company.

You can see the dramatic shift in value that preceded this event by reviewing Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors.

Given Company's Ownership Breakdown

As of November 2025, the ownership of CFSB Bancorp, Inc. is consolidated under its new parent company. The table below reflects the definitive post-merger ownership structure, which is the current reality for the entity.

Given Company's Leadership

The leadership team that steered CFSB Bancorp, Inc. through its final year as a public company managed the institution through a period of significant change, culminating in the merger. The former leadership structure of the publicly-traded entity included:

• Michael E. McFarland: Served as Chief Executive Officer and President. In the 2025 fiscal year, his total compensation was approximately $353,586.
• Tracy Wilson: Corporate Secretary and Independent Director.
• James O'Leary: Independent Chairman of the Board.

Following the acquisition by Hometown Financial Group, Inc., the former board of directors and executive officers have transitioned out of their roles at the top-tier holding company level, consistent with the terms of the merger. The operations of Colonial Federal Savings Bank, the subsidiary bank, are now integrated into the larger corporate structure of the new parent company, which dictates the defintely new leadership and strategic direction.

CFSB Bancorp, Inc. (CFSB) Mission and Values

CFSB Bancorp, Inc. (CFSB) defines its purpose beyond simple profit, focusing instead on a four-part commitment to its stakeholders: clients, communities, stockholders, and its own team. This community-first approach is the defintely the core of its cultural DNA, guiding its operations even as the company navigated a challenging fiscal year, reporting a net income of only $4,000 for the third quarter of 2025, a modest turnaround from previous losses.

CFSB Bancorp, Inc.'s Core Purpose

You're looking for what a company truly stands for, and for CFSB Bancorp, Inc., it's a clear, multi-faceted commitment. This isn't corporate filler; it's a framework that maps directly to their business model as a community-focused financial institution, which, as of March 31, 2025, managed $366.2 million in total assets.

Official mission statement

The company's formal mission statement is a direct declaration of its stakeholder-centric model. It clearly outlines who benefits from the bank's operations, ensuring accountability across all key groups.

• We are committed to creating value for:
• Our clients by providing the best financial products, technology, and personal service.
• Our communities, through financial and personal involvement in local projects.
• Our stockholders by building a solid and profitable financial organization focused on returns.
• Our in-house teams by providing a stable and enjoyable workplace with competitive salaries.

Vision statement

While a single, aspirational sentence can be hard to pin down for a bank of this size, CFSB Bancorp, Inc.'s vision is articulated through five core 'Vision Points' that guide their long-term strategy and cultural expectations. This vision is about being a stable, reliable financial partner in their local Massachusetts market, where they operate from three full-service offices.

• Culture: Foster a service-oriented team environment where members are servant leaders.
• Community: Be a beacon of light and a source of tireless support for the region.
• Commitment: Guide clients through all facets of their finances, from daily questions to future planning.
• Value: Build a profitable organization to ensure long-term stability for all stakeholders.
• Leadership: Maintain an experienced and dedicated team guiding the bank with vision and integrity.

Honestly, the vision is simple: be the best community bank through strong relationships and financial strength. For instance, their net interest margin of 2.05% in Q3 2025 shows their focus on improving asset yields and managing deposit costs to maintain that strength.

CFSB Bancorp, Inc. slogan/tagline

CFSB Bancorp, Inc. does not use a short, catchy, national-brand tagline, but their identity is encapsulated in one word that they intentionally put in their name: Community. Their materials consistently emphasize this purpose.

• Primary Identity: "Community" is intentionally part of our name. It's who we are and it's our purpose!
• Core Message: Connecting with our clients and our community is our sole driving force.

This deep local focus is why their total deposits reached $273.8 million by March 31, 2025; people trust the local name. You can dig deeper into who's betting on this model by Exploring CFSB Bancorp, Inc. (CFSB) Investor Profile: Who's Buying and Why?

CFSB Bancorp, Inc. (CFSB) How It Works

You need to know that CFSB Bancorp, Inc., the holding company for Colonial Federal Savings Bank, ceased to operate as an independent entity in November 2025, completing its merger with Hometown Financial Group. The company's value creation model, which was centered on traditional community banking in Massachusetts, has now been integrated into the larger operational structure of North Shore Bank, a subsidiary of Hometown Financial Group.

Before the acquisition, CFSB Bancorp, Inc. primarily functioned as a savings and loan institution, generating revenue by taking in local deposits and using those funds to originate loans, especially residential mortgages. For the fiscal year ending June 30, 2025, the company had an annual revenue of approximately $7.61 million, with total assets standing at $366.2 million as of March 31, 2025.

Given Company's Product/Service Portfolio

The core of CFSB Bancorp's business was its subsidiary, Colonial Federal Savings Bank, which provided a full suite of services to individuals and local businesses on the South Shore of Massachusetts. This portfolio is now offered through the consolidated North Shore Bank platform.

Given Company's Operational Framework

The operational framework was that of a classic mutual holding company (MHC) structure, which prioritized stability and local service. The merger, valued at approximately $44 million, fundamentally changed this framework, shifting from local independence to regional scale.

Here's the quick math on the pre-merger model: The bank's net interest income was its primary driver, which rose to $1.8 million in the third quarter of fiscal year 2025, with a net interest margin of 2.05%.

• Deposit-Driven Funding: The bank's main process was gathering deposits, which totaled $273.8 million as of March 31, 2025, to fund its loan originations.
• Asset Origination: Focus was heavily placed on residential real estate lending, which provided a stable, though rate-sensitive, revenue stream.
• Cost Optimization: The company defintely focused on efficiency in its final year, reducing non-interest expenses by 9.6% to $1.8 million in Q3 2025, mainly through lower salaries and employee benefits.
• Post-Merger Integration: Colonial Federal Savings Bank's operations are now merging into North Shore Bank, which means its customers gain access to North Shore Bank's broader network and enhanced digital tools, including residential mortgage products from Hometown Mortgage.

What this estimate hides is the one-time integration costs and synergies that will now benefit the new parent company, Hometown Financial Group.

Given Company's Strategic Advantages

CFSB Bancorp's advantages were rooted in its community focus, which is precisely what made it an attractive acquisition target for Hometown Financial Group.

• Local Market Penetration: Deep relationships in its core operating areas of Quincy, Holbrook, and Weymouth, Massachusetts, established since 1889.
• Strong Asset Quality: The bank maintained a robust asset quality, notably reporting only four substandard one-to-four-family loans totaling $1.4 million in Q3 2025.
• Stable Funding Base: A loyal, local deposit base, which management strategically grew by focusing on Certificates of Deposit to maintain funding stability in a volatile interest rate environment.
• Expanded Footprint for Acquirer: The merger immediately expanded North Shore Bank's physical presence and customer base into the strategically important South Shore region of Massachusetts, creating a combined bank with 29 retail locations.

For a deeper dive into the numbers, you can read Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors.

CFSB Bancorp, Inc. (CFSB) How It Makes Money

CFSB Bancorp, Inc., the holding company for Colonial Federal Savings Bank, primarily makes money like most community banks: by borrowing money at a lower interest rate (deposits) and lending it out at a higher rate (loans), generating net interest income. The core of its financial engine, however, is its balance sheet management, given its small scale and significant investment in securities.

You need to understand that for a bank of this size, net interest income is defintely the lifeblood, but non-interest income from service fees and other sources provides a necessary, albeit small, buffer.

CFSB Bancorp's Revenue Breakdown

The company's revenue profile for the third fiscal quarter ended March 31, 2025, shows a heavy reliance on interest income, which is typical for a savings bank. Net Interest Income was $1.8 million for the quarter, while Non-Interest Income was $160,000. Here's the quick math on the breakdown:

The Net Interest Income stream, which is the difference between interest earned on assets (like loans and securities) and interest paid on liabilities (like deposits), saw a solid increase of 3.8% quarter-over-quarter (QoQ) in Q3 2025. Non-interest income, which includes customer service fees, decreased by 3.0% QoQ.

Business Economics

The core economic fundamental for CFSB Bancorp is managing its Net Interest Margin (NIM)-the spread between what it earns and what it pays. For the quarter ended March 31, 2025, the NIM stood at 2.05%.

• Pricing Strategy: The bank has been actively managing its liability costs, particularly by reducing interest expense on deposits by 3.9% in Q3 2025 compared to the previous quarter. This is a direct response to the interest rate environment.
• Asset Repricing: A key driver of interest income growth is the strategy of replacing lower-yielding assets with new, higher-yielding ones, which is pushing the average yield on its interest-earning assets up.
• Balance Sheet Composition: The bank maintains a defensively positioned balance sheet. As of Q3 2025, total assets were $366.2 million. A significant portion of its assets is in cash, equivalents, and long-term investments, which means earnings are heavily influenced by securities-related activity, not just core lending.
• Deposit Mix: The company specifically focused on attracting higher-yielding certificates of deposit (CDs) in Q3 2025 to increase its deposit base, which grew by 1.1% to $273.8 million.

CFSB Bancorp's Financial Performance

The company's financial performance in the fiscal year 2025 shows a modest return to profitability, though its overall margins remain thin. This is a small, niche regional bank model, and the numbers reflect that scale.

• Net Earnings: For the full fiscal year ended June 30, 2025, CFSB Bancorp reported net earnings of $181,000, a significant turnaround from a net loss in the prior year. For the third quarter ended March 31, 2025, net income was a modest $4,000.
• Return on Assets (ROA): The full-year ROA for FY 2025 was approximately 0.05% (calculated from $181,000 net earnings and $366.2 million in assets), indicating very low efficiency in generating profit from its asset base.
• Asset Quality: Asset quality remains robust. As of Q3 2025, the bank had only four substandard one-to-four-family loans, totaling $1.4 million. This strong asset quality is a key indicator of balance sheet health.
• Acquisition Context: A critical piece of information for any investor is that CFSB Bancorp was acquired by Hometown Financial Group, Inc. and was delisted on November 3, 2025. This event fundamentally changes the investment thesis, as the stock is no longer trading independently.

For a deeper dive into the bank's stability metrics and capital structure, you should read Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors.

CFSB Bancorp, Inc. (CFSB) Market Position & Future Outlook

The company's future outlook was decisively realized through its acquisition by Hometown Financial Group, Inc., which completed on November 3, 2025, effectively concluding CFSB Bancorp, Inc.'s operation as an independent publicly traded entity. This strategic exit, which paid shareholders $14.25 per share, was the ultimate response to the pressures facing small-cap regional banks, especially given the company's fiscal year 2025 revenue of only $7.61 million, a slight decline of -1.04% from the prior year.

The merger immediately shifts CFSB Bancorp, Inc.'s core business-community-focused banking in north-central Arkansas-into the larger operational and capital framework of Hometown Financial Group, Inc. For a deeper dive into the numbers that led to this decision, you can read Breaking Down CFSB Bancorp, Inc. (CFSB) Financial Health: Key Insights for Investors.

Competitive Landscape

As of its final period of operation, CFSB Bancorp, Inc. was a small player in the regional banking sector, competing against much larger, more geographically diverse institutions. Here's the quick math on relative asset size among a few key peers; this shows how small CFSB Bancorp, Inc.'s market presence was before the acquisition.

CFSB Bancorp, Inc.'s total assets were approximately $364.5 million in the first quarter of 2025, which is tiny compared to a peer like Southern First Bancshares, with over $4.31 billion in total assets in Q2 2025.

Opportunities & Challenges

The company's final strategic move was to execute the merger, which addressed the primary challenges of scale and margin pressure. The table below reflects the final opportunities and risks that drove the acquisition decision in 2025.

Honestly, the biggest opportunity was the merger, which provided a clear exit for shareholders at a fixed price of $14.25 per share, mitigating the ongoing risk of negative earnings.

Industry Position

CFSB Bancorp, Inc. ended its independent run as a micro-cap regional bank, a segment of the industry facing intense consolidation pressure. Its position was defined by its small geographic footprint in north-central Arkansas, which provided insulation from large national banks but exposed it to significant capital constraints.

• Scale Disadvantage: The Q1 2025 net loss of only $6,000, while small, highlighted the razor-thin margins and lack of operational leverage compared to peers.
• Strategic Pivot: The merger with Hometown Financial Group, Inc. was a common and defintely smart strategy for small banks in 2025, selling into a larger entity to ensure capital strength and service continuity for their local customers.
• Final Valuation: The acquisition price of $14.25 per share represented the market's final assessment of the company's value as a strategic asset for a larger, growing financial institution.