Form 4: CFSB Bancorp CEO Sells All Shares Post-Merger

CFSB Bancorp's President and CEO, Michael E. McFarland, disposed of all his beneficial ownership in the company following its merger with Hometown Financial Group.

Summary

• Michael E. McFarland, President and CEO, Director, and 10% Owner of CFSB Bancorp, Inc. (CFSB), reported the disposition of all his beneficial ownership.
• The transactions occurred on October 31, 2025, pursuant to an Agreement and Plan of Merger dated May 20, 2025.
• Under the merger agreement, each outstanding share of CFSB Common Stock was converted into the right to receive $14.25 in cash without interest.
• McFarland disposed of 24,000 shares of Common Stock held directly, 4,215 shares held indirectly by an ESOP, 17,999 shares held indirectly by a 401(k) plan, and 5,000 shares held indirectly by his spouse, totaling 51,214 shares.
• All unvested restricted stock automatically vested in full at the effective time of the merger and were considered outstanding shares entitled to receive the merger consideration, net of applicable withholding taxes.
• 64,000 stock options with an exercise price of $7.99 were cancelled in exchange for a cash payment equal to the product of the excess of the merger consideration ($14.25) over the exercise price, multiplied by the number of shares, resulting in a cash payout of $400,640 for the options.
• Following these transactions, McFarland beneficially owns 0 shares of CFSB Bancorp, Inc.

Sentiment

Score: 8

Explanation: The filing reports the successful completion of a merger where shareholders received a cash consideration of $14.25 per share, and stock options were cashed out at a premium. This represents a positive liquidity event for the reporting person and other shareholders, indicating a favorable outcome from the acquisition.

Positives

• The merger provided a cash payout of $14.25 per share to shareholders, representing a liquidity event.
• Unvested restricted stock fully vested at the effective time, allowing holders to receive the merger consideration.
• Stock options were cashed out at a premium, with the merger consideration of $14.25 exceeding the exercise price of $7.99.

Negatives

• CFSB Bancorp, Inc. shares are no longer publicly traded, as the company has been acquired.
• Shareholders no longer have equity participation in CFSB Bancorp, Inc. as an independent entity.

Risks

• The filing reports a completed merger and the disposition of securities, and therefore does not detail future risks for CFSB Bancorp, Inc. as an independent operating entity, as it has been acquired.

Future Outlook

The filing reports a completed merger transaction and, as such, does not provide forward-looking statements or guidance for CFSB Bancorp, Inc. as an independent entity. The company has been acquired by Hometown Financial Group.

Industry Context

This filing reflects the ongoing consolidation trend within the banking and financial services sector, where smaller regional banks are often acquired by larger financial groups to achieve economies of scale, expand market reach, or enhance shareholder value through premium buyouts. The acquisition of CFSB Bancorp by Hometown Financial Group is consistent with this industry dynamic.

Comparison to Industry Standards

• The merger consideration of $14.25 per share for CFSB Bancorp, Inc. common stock, and the cash-out of stock options at a premium, indicates a successful exit for shareholders and management.
• Without specific details on CFSB's pre-merger valuation metrics (e.g., price-to-book, price-to-earnings) or comparable transactions in the Massachusetts banking market at the time of the merger agreement (May 2025), a direct assessment against industry benchmarks is limited.
• The premium paid over the option exercise price ($14.25 vs. $7.99) suggests a favorable outcome for option holders, aligning with typical outcomes in successful acquisitions where options are in-the-money.

Management Changes

Corporate Governance

Legal Proceedings

• No legal proceedings or regulatory matters are mentioned in the filing.

Related Party Transactions

• Disposition of 4,215 shares of Common Stock held indirectly by an Employee Stock Ownership Plan (ESOP) associated with the reporting person.
• Disposition of 17,999 shares of Common Stock held indirectly by a 401(k) plan associated with the reporting person.
• Disposition of 5,000 shares of Common Stock held indirectly by the reporting person's spouse.

Stakeholder Impact

• Shareholders: Received $14.25 cash per share, providing a liquidity event and a premium for option holders.
• Employees: Those participating in the ESOP and 401(k) plans had their shares converted to cash as part of the merger.
• Management (Michael E. McFarland): Realized significant cash proceeds from the disposition of shares and options due to the merger.

Next Steps

• The filing indicates the completion of the merger, meaning CFSB Bancorp, Inc. is no longer an independent public entity. No further actions or milestones for CFSB as a standalone company are applicable or mentioned.

Key Dates

Keywords

CFSB Bancorp, CFSB, Merger, Hometown Financial Group, Form 4, Insider Trading, Stock Options, Restricted Stock, Michael E. McFarland, Acquisition, Banking, Financial Services