CFSB Bancorp, Inc. (CFSB): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of CFSB Bancorp, Inc. right before it folded into Hometown Financial Group, and honestly, it's a textbook look at a classic community bank model. Before the deal closed, this operation, anchored by its Colonial Federal Savings Bank charter, managed about $366.6 million in total assets and pulled in $7.61 million in annual revenue for the fiscal year ending June 30, 2025, primarily from its $177.2 million loan book. We're breaking down exactly how they generated that value-from personalized service on the South Shore of Massachusetts to the final $14.25 per share cash-out for shareholders-so you can see the engine that was being acquired. Check out the full Business Model Canvas below to see the nine blocks that defined their strategy.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Key Partnerships

You're looking at the relationships that underpin CFSB Bancorp, Inc.'s (CFSB) operations, especially in light of its late 2025 acquisition by Hometown Financial Group, Inc. These external entities are critical for everything from capital structure to regulatory compliance and technology backbone.

The most significant recent partnership is the acquisition itself, which fundamentally changed CFSB Bancorp, Inc.'s structure, as Colonial Federal Savings Bank was amalgamated into North Shore Bank, a subsidiary of Hometown Financial Group, Inc. The deal closed on October 31, 2025.

Hometown Financial Group, Inc. (Acquirer)

Hometown Financial Group, Inc. is the new controlling entity, bringing significant scale to the former CFSB operations. This partnership is defined by the transaction terms and the resulting combined entity size.

• Transaction value: Approximately $44 million.
• Cash consideration to CFSB shareholders: $14.25 per share.
• Hometown Financial Group's consolidated assets post-merger: Projected to reach $6.9 billion.
• North Shore Bank's resulting asset base (post-merger): $3.3 billion.
• Total branch network post-merger: Expanded to 56 locations across Massachusetts, southern New Hampshire, and northeastern Connecticut.

Federal Reserve and Massachusetts Division of Banks (Regulatory Approvals)

The successful closing of the merger was entirely dependent on securing necessary governmental sign-offs. These agencies act as gatekeepers for structural changes in the banking sector.

• Regulatory approvals received date: October 21, 2025.
• Approving bodies: The Board of Governors of the Federal Reserve System and the Massachusetts Division of Banks.
• CFSB Shareholder Approval Date: September 16, 2025.

Core banking software and IT service providers

While the core system vendor for the newly integrated North Shore Bank isn't explicitly detailed for 2025, integration points with third-party software are visible. The structure relies on external technology to run daily operations.

For instance, business customers of North Shore Bank can connect their Business Online Banking accounts to QuickBooks software via a specific connector, "North Shore Bank - WI-QB DC". Historically, a related entity, North Shore Credit Union, switched to Temenos's T24 core software and used Microsoft as a major vendor.

Correspondent banks for liquidity and services

CFSB Bancorp, as Colonial Federal Savings Bank, relied on correspondent relationships for services like liquidity management, check clearing, and potentially specialized lending or treasury functions beyond its immediate scope. Post-merger, these relationships are now managed under the umbrella of Hometown Financial Group and North Shore Bank.

Local community organizations for CRA compliance

Community Reinvestment Act (CRA) compliance is managed through direct lending, qualified investments, and community development services, often facilitated through partnerships with local non-profits and municipal programs. Hometown Financial Group utilizes a dedicated charitable giving program.

• Charitable Giving Program Name: The Giving Tree.
• Latest reported charitable donation amount (2022 proxy): $1.2 million in grants and sponsorships.
• CRA Rating Context (Pre-merger for a sister bank): Hometown Bank received a High Satisfactory rating from the Division of Banks during its prior evaluation.

If onboarding takes 14+ days, churn risk rises. Finance: draft 13-week cash view by Friday.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Key Activities

You're looking at the core actions CFSB Bancorp, Inc. had to execute right up to its final moments as an independent entity, especially given the late 2025 merger activity. The key activities revolved around core banking functions while simultaneously managing a complex corporate transaction.

Generating interest income from loan portfolio

The primary engine was generating income from loans, which saw positive movement in the third quarter of fiscal 2025. For the three months ended March 31, 2025, net interest income reached $1.8 million, an increase of $65,000 compared to the previous quarter. The net interest margin (NIM) improved to 2.05%, marking an increase of seven basis points. Total assets, which underpin the loan portfolio, grew by 0.8% to reach $366.2 million as of March 31, 2025.

Attracting and managing customer deposits

Managing the deposit base was critical for funding the loan portfolio. While specific deposit totals for CFSB Bancorp, Inc. are not detailed in the latest reports, the cost of managing those deposits was a focus. For the nine months ending March 31, 2025, the average cost of interest-bearing deposits reflected a 56 basis point increase in the average cost, largely due to a higher percentage of certificates of deposit in the mix.

Managing interest rate risk and liquidity

Managing the balance sheet involved active management of funding sources. To support asset growth, CFSB Bancorp, Inc. saw an increase in Federal Home Loan Bank (FHLB) advances. For the nine months ended March 31, 2025, the average balance of FHLB advances increased by $1.7 million, representing a 19.3% rise. The bank also recorded a reversal of the provision for credit losses of $84,000 during the same nine-month period, suggesting confidence in asset quality leading up to the transaction.

Regulatory compliance and reporting

Compliance remained a constant, resource-intensive activity. While specific compliance spending for CFSB Bancorp, Inc. in late 2025 isn't itemized, the general industry context shows that banks with assets similar to CFSB's $366.2 million (as of March 31, 2025) face a significant relative burden. For context, historical data suggests banks with assets under $100 million averaged compliance costs around 8.7% of non-interest expense, double that of larger institutions.

Key reporting activities included:

• Reporting net income of $4,000 for Q3 2025.
• Reporting a net loss of $164,000 for the nine months ended March 31, 2025.
• Reporting total stockholders' equity of $75.7 million as of March 31, 2025.

Executing the merger and integration plan

This became the paramount activity in the latter half of 2025. The execution involved a multi-step process culminating in the acquisition by Hometown Financial Group, Inc.

The transaction timeline and key figures were:

The integration plan specified that Colonial Federal Savings Bank, the subsidiary of CFSB Bancorp, Inc., would merge into North Shore Bank, a subsidiary of Hometown Financial Group, with North Shore Bank surviving the bank-level merger. The final step involved CFSB Bancorp, Inc. merging into Hometown Financial Group, Inc., making Hometown the ultimate surviving entity. This activity resulted in the cessation of roles for CFSB Bancorp's directors and executive officers post-merger. It's a defintely clean break from the public market.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Key Resources

You're looking at the core assets that power CFSB Bancorp, Inc. (CFSB) as of mid-2025, right before the Hometown Financial Group acquisition closed in November. These are the tangible and intangible items that make the business run.

The most fundamental resource is the Colonial Federal Savings Bank charter and brand. This charter allows CFSB Bancorp, Inc. to operate as a federal savings and loan holding company and underpins all its banking activities in Massachusetts. The brand represents the local, community-focused banking reputation built over many years.

Financially, the scale of the operation is defined by its balance sheet items as of June 30, 2025. You need to know these numbers to gauge the size of the entity being acquired.

Tangible physical resources are centered on its local footprint. The bank maintains a physical presence designed to serve its specific market area in the residential suburbs of Boston.

• Four branch locations in Quincy, Holbrook, and Weymouth, MA.
• The Head Office is located at 15 Beach Street, Quincy, MA 02170.
• Specific branch locations include: 1000 Southern Artery, Quincy, MA; 819 South Franklin Street, Holbrook, MA; and 708 Middle Street, Weymouth, MA.

Intangible, yet critical, resources include the people running the show. You can't run a community bank without deep local ties.

• Experienced local banking personnel who understand the Norfolk and Plymouth Counties market dynamics.
• The team is responsible for maintaining the relationship-driven banking model.

To be fair, the value of the charter and the personnel is heavily influenced by the impending operational change; the Colonial Federal branches were set to merge into North Shore Bank following the acquisition completion in November 2025. Still, these resources defined CFSB Bancorp, Inc. up to that point.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Value Propositions

You're looking at the core value CFSB Bancorp, Inc., through its subsidiary Colonial Federal Savings Bank, brought to its customers before the November 2025 closing. The bank's foundation is deep; it's a long-standing community banking presence since 1889 in Massachusetts' south shore, primarily serving Norfolk and Plymouth Counties. As of March 31, 2025, CFSB Bancorp, Inc. reported total assets of \$366m.

Personalized service was key, focusing on local decision-making. The lending focus was heavily weighted toward local real estate. Here's the quick math on the loan portfolio as of June 30, 2025:

The bank delivered on traditional deposit products, offering guaranteed earnings with competitive, though modest, rates on time deposits as of late 2025. You see the commitment to local community ties in specials like the Blue & Gold CD. Still, the rates varied based on term and special promotions. Check out these figures, accurate as of November 2025:

• 10-Month Special CD APY: 3.80%
• Blue & Gold Special (6-Month Term) APY: Minimum of 3.63%, with a maximum potential of 5.00% based on specific basketball team performance.
• 12-Month CD APY: 0.05%
• 5-Year (60 Month) CD APY: 0.45%

The merger with Hometown Financial Group, Inc., which closed on November 1, 2025, immediately shifted the value proposition by integrating Colonial Federal Savings Bank into North Shore Bank. This move instantly expanded the offering set. Colonial Federal customers now gain access to enhanced products, including residential mortgage products through Hometown Mortgage. Operationally, the combined entity under Hometown Financial Group now boasts consolidated assets of nearly \$6.9 billion and a network of 56 branches across Massachusetts, southern New Hampshire, and northeastern Connecticut. North Shore Bank itself became a \$3.3 billion bank with 29 branches in eastern Massachusetts post-merger.

The promise moving forward is extending premier commercial and business deposit, lending, and Cash Management products to the South Shore business communities, leveraging the greater scale. Finance: draft the pro-forma asset comparison for Q4 2025 by Friday.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Customer Relationships

You're looking at how CFSB Bancorp, Inc. (CFSB) manages its connection with customers right before the anticipated merger closing in the fourth quarter of 2025. The relationship model clearly emphasizes a local, in-person presence, even as digital channels support the service structure.

Personal, in-branch service model

The core service model for Colonial Federal Savings Bank, the subsidiary of CFSB Bancorp, Inc., relies on physical locations. As of late 2025, the bank operates from three full-service offices and one limited-service office across Quincy, Holbrook, and Weymouth, Massachusetts. This physical footprint supports the personal touch.

Customer interaction points include:

• Text support available at (888) 226-5669.
• Team response hours for texts, emails, and chats: Monday - Saturday, 7:00 AM - 7:00 PM.
• Sunday response hours for texts, emails, and chats: 2:00 - 7:00 PM.

Dedicated local loan officers

While the exact number of dedicated local loan officers isn't public, the focus on relationship banking for businesses implies a dedicated structure. The customer acquisition strategy for deposits shows a clear push toward relationship-driven products, which often correlates with loan officer activity. For instance, in the fiscal first quarter of 2025, there was an increase of $1.9 million in higher-yielding term certificates, indicating a successful push for sticky funding relationships.

Relationship-based banking for small businesses

The emphasis on local expertise for business growth suggests a relationship-based approach for commercial clients. The drive for relationship deposits is evident in the shift in funding composition reported in Q1 FY2025:

This shift shows customers actively moving funds into interest-bearing, relationship-oriented accounts, likely guided by bank personnel. Total stockholders' equity stood at $76.0 million as of September 30, 2024, representing the capital base supporting these relationships.

Automated digital banking support

The bank promotes digital access alongside its physical presence, stating, 'Branches when you need them; online banking for the times you don't'. While specific automation metrics aren't available, the multi-channel support structure-including text, email, and chat-is supported by the in-house client service center.

High-touch for higher-yielding term certificates

The promotion of specific Certificate of Deposit (CD) specials demonstrates a high-touch approach to securing funding, often involving direct consultation to lock in rates. The minimum to open for these specials was consistently $1,000.

Examples of high-yield CD terms and rates accurate as of late 2025 include:

• Blue & Gold Special (6-Month Term): Minimum 3.63% APY, maximum 5.00% APY.
• 10-Month Special: 3.80% APY.
• 1-Year CD (IRA Variable): 3.64% APY as of October 31, 2025.

The Blue & Gold CD was available for a limited time only, from November 3, 2025, to December 31, 2025.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Channels

The way CFSB Bancorp, Inc. reaches its customers involves a mix of physical presence and digital tools, which is evolving, especially given the announced merger with Hometown Financial Group, Inc.

Branch Network Footprint

CFSB Bancorp, Inc., through its subsidiary Colonial Federal Savings Bank, maintains a localized physical presence in Massachusetts to serve its core market in Norfolk and Plymouth Counties. As of March 31, 2025, the physical channel structure was:

The merger with Hometown Financial Group, Inc. is anticipated to result in a combined entity with a branch network of 56 offices across Massachusetts, southern New Hampshire, and northeastern Connecticut following the transaction's close in the fourth quarter of 2025. This move is intended to leverage size, scale, and efficiencies.

Online and Mobile Banking Platforms

CFSB Bancorp, Inc. offers online and mobile banking platforms to support customer convenience. While CFSB-specific adoption rates for late 2025 aren't public, the general market trend shows a strong reliance on these digital channels:

• A significant majority of consumers, 77 percent, prefer to manage their bank accounts through a mobile app or a computer.
• 42 percent of consumers prefer using a mobile app to manage their finances as their go-to method.
• 36 percent of consumers prefer online banking via a website.
• 34 percent of consumers use a mobile banking app daily.

The company also provides complementary services such as remote deposit capture.

Local Advertising and Community Engagement

The distribution channel for relationship-building and brand presence relies heavily on local engagement, reflecting the community banking mission. CFSB Bancorp, Inc. has dedicated sections on its public-facing materials for 'IN THE COMMUNITY,' which includes a Scholarship Program, Community Rooms, and Community Giving. The bank's leadership team and board are composed of professionals drawn from the communities it serves.

ATMs and Debit Card Networks

While specific ATM transaction volumes or debit card network statistics for CFSB Bancorp, Inc. are not detailed in the latest reports, the availability of checking and savings products implies the use of standard debit card and ATM networks for customer access. The bank offers checking and savings accounts, including various types like Community Classic Checking and Premier Advantage Savings.

Direct Sales Force for Commercial Lending

The direct sales channel is executed through a dedicated commercial team. CFSB Bancorp, Inc. had a total of 22 Professionals listed in its profile. This team is responsible for driving lending activities, which as of June 30, 2025, included a commercial real estate component of $14.3 million in the total loan portfolio. The team structure includes roles such as Commercial Lender and Commercial Portfolio Manager.

The composition of the total loan portfolio as of June 30, 2025, shows the focus areas supported by this direct sales channel:

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Customer Segments

You're looking at the customer base of CFSB Bancorp, Inc. right before the finalization of the Hometown Financial Group merger in late 2025. The segments were quite distinct, centered on a specific geographic footprint and the resulting shareholder event.

The core market for Colonial Federal Savings Bank, CFSB Bancorp, Inc.'s subsidiary, was concentrated in the high-median-income residential suburbs of Boston, specifically operating in Norfolk and Plymouth Counties, Massachusetts. This local focus defined the retail and business segments.

The key customer groups CFSB Bancorp, Inc. served included:

• Retail customers on the South Shore of Massachusetts.
• Local small to mid-sized businesses.
• Residential real estate borrowers (mortgages).
• Depositors seeking higher-yielding certificates of deposit.
• Shareholders receiving $14.25 per share in cash from the merger.

For the residential real estate borrowers, the focus was heavily weighted toward primary residences. As of the fiscal year-end June 30, 2025, one- to four-family residential loans made up 79.4% of the entire loan portfolio. This segment represented $142.3 million of the total loans on that date.

Here's the quick math on the loan portfolio composition as of June 30, 2025, which shows where the lending focus was:

Regarding depositors, the pressure from the interest rate environment was clear. For the three months ended September 30, 2024, the interest expense on interest-bearing deposits rose significantly, partly due to an increased percentage of higher costing certificates of deposit in the portfolio. This coincided with an $8.9 million increase in the average balance of interest-bearing deposits during that same period.

The merger with Hometown Financial Group, which closed on October 31, 2025, created a specific segment of cash recipients. The total transaction value was approximately $44 million, with CFSB Bancorp shareholders receiving $14.25 in cash for every share they held. This event effectively converted the equity holders into a final cash distribution segment.

To give you a sense of the scale before the merger, the total assets stood at $364.5 million as of September 30, 2024, and the annual revenue for the fiscal year ending June 30, 2025, was reported at $7.61 million. Also, the company repurchased $495,000 of its own stock during the year ended June 30, 2025.

Post-merger, the subsidiary, Colonial Federal Savings Bank, was set to merge into North Shore Bank, forming a new entity with $3.3 billion in assets and 29 retail locations across the North Shore and South Shores of Massachusetts and southern New Hampshire.

Finance: draft the pro-forma balance sheet impact of the $44 million cash payout by Friday.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Cost Structure

You're looking at the expenses that keep Colonial Federal Savings Bank, the main asset of CFSB Bancorp, Inc., running through late 2025, right before the acquisition by Hometown Financial Group was set to finalize in the fourth quarter. Honestly, for a community bank, the cost structure is heavily weighted toward personnel and the cost of money.

The largest recurring cost component is definitely the Interest expense on customer deposits and borrowings. This reflects the competitive environment where customers are chasing higher yields. For the Fiscal Year 2025, which ended June 30, 2025, the Total Interest Expense hit $6.11 million. Breaking that down, Interest Paid on Deposits was $5.64 million, while Interest Paid on Borrowings, which includes Federal Home Loan Bank (FHLB) advances, accounted for $0.47 million. To be fair, this was a significant jump from the prior year, as evidenced by the Q1 FY2025 results where total interest expense had already increased by 70.2% year-over-year, driven by a $581,000 rise in interest expense on interest-bearing deposits alone.

Next up, you have the people costs. Salaries and employee benefits, including pension costs, were reported at $3.92 million for FY 2025. Personnel costs showed some fluctuation; for instance, in the quarter ending September 30, 2024, salaries and employee benefits rose by $66,000 sequentially, largely due to the increased cost of the pension plan. Conversely, in the quarter ending March 31, 2025, there was a sequential decrease of $180,000 following prior merit increases, and a year-over-year decrease of $79,000 primarily due to a reduction in pension costs. That's the quick math on managing a team through a transition period.

The physical footprint is relatively small, which keeps Occupancy and equipment costs manageable. For FY 2025, Occupancy Expenses were $0.97 million. CFSB Bancorp, Inc.'s subsidiary, Colonial Federal Savings Bank, operated from four locations: three full-service offices and one limited-service office in Quincy, Holbrook, and Weymouth, Massachusetts, before the merger. These costs saw minor quarterly bumps, such as a $26,000 increase in the quarter ending September 30, 2024, attributed to service contracts expense.

Keeping the lights on digitally requires investment in Data processing and technology expenses. While the FY 2025 annual total isn't isolated, quarterly trends show minor increases. For the three months ending September 30, 2024, data processing costs increased by $12,000 sequentially. For the six months ending December 31, 2024, there was a $12,000 increase in data processing fees compared to the prior year period.

Finally, you have the one-time, transaction-related costs. The definitive merger agreement with Hometown Financial Group was announced in May 2025, with an expected close in the fourth quarter of 2025. CFSB Bancorp, Inc. retained Luse Gorman, PC as legal counsel and Piper Sandler as its financial advisor for this deal. While the specific dollar amount for CFSB Bancorp, Inc.'s professional fees related to this merger for FY 2025 isn't explicitly itemized in the available reports, these advisory and legal costs represent a significant, non-recurring drain on non-interest expense leading up to the closing date.

Here is a snapshot of the key annual cost figures for CFSB Bancorp, Inc. for the fiscal year ending June 30, 2025 (all figures in millions USD):

You should keep an eye on how the integration costs-like those professional fees-will hit the final numbers for the period covering the merger close. Finance: draft the pro-forma expense model incorporating the Hometown Financial Group cost synergies by next Wednesday.

CFSB Bancorp, Inc. (CFSB) - Canvas Business Model: Revenue Streams

CFSB Bancorp, Inc.'s revenue streams are fundamentally anchored in traditional banking operations, primarily revolving around interest earned from its asset base, supplemented by non-interest fee income. For the fiscal year ending June 30, 2025, CFSB Bancorp, Inc. reported an annual revenue of $7.61 million.

The core of the revenue generation comes from net interest income from loans and securities. For the three months ended September 30, 2024 (part of FY2025), the net interest income, calculated on a fully tax-equivalent basis, was $1.7 million. This figure represented a decrease of 9.2% compared to the same period in the prior year, reflecting the pressure from elevated deposit costs.

Total interest income is derived from several sources. In the first quarter of fiscal year 2025 (three months ended September 30, 2024), total interest and dividend income saw a year-over-year increase of 17.4%, or $481,000. This growth was driven by higher yields across earning assets and changes in average balances. Here is a breakdown of the year-over-year dollar increases contributing to that total interest income growth for the quarter:

The increase in interest on cash and short-term investments was supported by an increase in the average balance of cash and short-term investments by $23.0 million during the quarter. Specifically, the interest earned on cash and short-term investments rose to $330,000 for the three months ended September 30, 2024, up from $282,000 for the three months ended June 30, 2024. Conversely, the average balance of total loans decreased by $5.2 million over the same comparative periods.

Non-interest income, which includes service charges and fees, is a smaller component of the overall revenue picture for CFSB Bancorp, Inc. The company's revenue streams are heavily weighted toward the net interest margin, making fee income a secondary, though important, source of diversification. The financial reports available for the first quarter of fiscal year 2025 do not explicitly detail the total non-interest income amount, but they do highlight the components driving interest income changes.

You should note that the specific figure of $177.2 million for interest income from total loans was not substantiated in the latest available 2025 filings; instead, we see quarterly changes like the $62,000 increase in interest and fees on loans for Q1 FY2025.

The revenue streams for CFSB Bancorp, Inc. can be summarized by the primary drivers:

• Net Interest Income: The primary driver, though facing NIM compression.
• Interest on Cash: A growing contributor due to higher average balances.
• Interest on Securities: A component showing positive growth in yield.
• Interest and Fees on Loans: A smaller, but positive, contributor to interest income growth in Q1 FY2025.