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In its first quarterly earnings statement since partially converting to a stock bank, Quincy-based Colonial Federal Savings Bank reported fourth quarter earnings of $234,000, an 8 percent increase over the fourth quarter of 2020.
The results cover the period before Colonial Federal Savings Bank completed its reorganization and initial public offering on Jan. 12. The bank’s holding company, CFSB Bancorp Inc., sold approximately 2.8 million shares of common stock in the initial public offering at $10 per share. Shares were trading on the Nasdaq exchange at $10.60 on Feb. 18.
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. Another 2 percent of the shares were donated to the Colonial Federal Savings Bank Charitable Foundation, along with $250,000 in cash.
The bank’s earnings for the final six months of 2021 were $706,000 compared to $594,000 for the same period in 2020, an 18.9 percent increase. In the earnings statement, Colonial Federal’s president and CEO, Michael McFarland, said the bank saw an increase in net interest and non-interest income that was offset by an increase in non-interest expenses.
The bank’s fourth quarter net interest income increased $195,000 year-over-year, or 10.7 percent, to $2 million. For the last six months of 2021, for the bank saw net interest income increase by 11.7 percent over the same time period in 2020 to $4 million.
The bank attributed the change primarily to an increase in the average balance of net interest-earning assets and a decrease in interest expense because of the lower funding costs for deposits. The increases were partially offset by a decrease of interest and fees on loans amid the lower interest rate environment, the bank said.
The bank’s non-interest expenses for the fourth quarter increased year-over-year by $142,000, or 8.1 percent, to $1.9 million. The increases included a $15,000 increase in advertising expense and a $124,000 increase in other expenses tied to consultant and audit costs. The final six months of 2021 saw non-interest expenses increase by $286,000 compared to the last six months of 2020, or 8.8 percent, to $3.5 million. In addition to a $181,000 increase in other expenses related to consultant and audit costs, the bank said it had a $49,000 increase in salaries and employee benefits.
Colonial Federal on Dec. 31 had total assets of $361.8 million, total deposits of $307.56 million and net loans of $172.9 million.
Net loans decreased from June 30 by $1.5 million, or 0.9 percent, because the bank had lower originations and also saw customers refinance loans with other institutions as Colonial Federal decided not to originate those loans at the lower rates being offered by its competitors, the bank said in the statement.
