In its first full quarter since its partial conversion to a stock bank, Quincy-based Colonial Federal Savings Bank posted positive profits after a loss in first-quarter profit due to a donation to its new charitable foundation.
Colonial Federal Savings Bank’s holding company, CFSB Bancorp Inc., reported net income of $544,000 in the second quarter, compared to net income of $396,000 in the second quarter of 2021, before the partial conversion of shares in the bank. For the 12 months ending June 30, the bank had net income of $442,000, compared to net income of $1.39 million for the 12-month period ending June 30, 2021.
“Colonial Federal saw improvements in both interest-earning assets and net interest margin during the year,” said Michael McFarland, President and CEO of Colonial Federal, in a statement. announcing second quarter results yesterday. “Our mortgage portfolio saw an increase in purchase volume and a decline in refinance volume due to rising rates. The quality of our assets remains excellent and expenses were very well controlled during the year. We expect performance to improve due to rising interest rates for the rest of the year.
The bank had completed a reorganization into a two-tier mutual holding company and launched an initial public offering on Jan. 12, selling about 2.8 million common shares at $10 a share. The first stage of the conversion to stock banking saw 42% of the company’s stock sold in the IPO, while the majority of the stock, 55%, went to the federally chartered mutual holding company of the bank, 15 Beach.
The bank had recorded a net loss of $828,000 in the first quarter. As part of the conversion, the bank had established the Colonial Federal Savings Bank Charitable Foundation and donated $1.6 million in cash and stock to the foundation.
The bank reported net interest income of $2.2 million in the second quarter, up $200,000, or 10.2%, year-over-year. Non-interest revenue was $167,000 in the second quarter, compared to $146,000 in the second quarter of 2021.
The bank’s non-interest expense in the second quarter was $1.8 million, compared to $1.6 million in the second quarter of 2021. The bank attributed the rise in expenses to an increase of 42 $000 in salaries and payroll taxes related to normal annual employee merit salary increases and bank-related expenses. employee share ownership plan, a $27,000 increase in occupancy costs and a $13,000 increase in data processing costs. The bank said it also recorded a $128,000 increase in other expenses due to higher consultancy and audit expenses.
Colonial Federal Savings Bank’s total assets were $366.2 million at the end of the second quarter, compared to $338.9 million as of June 30, 2021.
Total deposits stood at $287.07 million as of June 30, compared to $284.67 million on the same date last year.
The bank’s net lending was $172.6 million in the second quarter, compared to $174.4 million in the second quarter of 2021. The bank said it recorded a decline of $1.6 million, or 10, 1%, multi-family real estate loans; $484,000, or 19.7%, as a second mortgage; and $1.6 million, or 9.8%, in commercial real estate loans. These decreases were offset by increases of $1.7 million, or 1.2%, in one to four family residential real estate loans and $89,000, or 4.2%, in other loans.