CFSB Bancorp, Inc. ( CFSB ) shares are surging premarket Wednesday after the company announced on Tuesday that it, along with its subsidiary, Colonial Federal Savings Bank, had entered into a definitive merger agreement to be acquired by Hometown Financial Group, Inc.

As per the deal, CFSB shareholders will receive $14.25 in cash per share, valuing the transaction at approximately $44 million. The boards of both companies have unanimously approved the deal.

The merger is expected to close in the fourth quarter of 2025, pending regulatory and CFSB shareholder approvals, among other standard conditions.

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Post-acquisition, Colonial Federal Savings Bank will merge into North Shore Bank, forming a $3.3 billion entity with 29 branches spanning Massachusetts’ North and South Shores and southern New Hampshire.

Matthew S. Sosik, chairman and CEO of Hometown Financial Group, said, “This merger will increase our presence in eastern Massachusetts, and we’re eager to share the power and resources of Hometown Financial Group and North Shore Bank with the employees and customers of Colonial Federal.”

Upon completion, Hometown will boast nearly $6.9 billion in consolidated assets and a 56-office network across Massachusetts, southern New Hampshire, and northeastern Connecticut.

Sosik added, “Our holding company structure offers the best of both worlds to our customers, employees, and communities. Each bank is deeply rooted in the neighborhoods they call home, so each can harness their own local branding power while leveraging an expansive, best-in-class array of shared operational resources and technology, which allow us to take advantage of size, scale, and efficiency.”

CFSB and Colonial Federal Savings Bank President and CEO Michael E. McFarland added, “This transaction partners two outstanding banking organizations and represents another step for us in ensuring our long-term success. Colonial Federal customers will enjoy enhanced products and services, innovative digital banking tools, and an expanded branch network to help meet their evolving needs.”

As of March 31, 2025, CFSB’s cash and cash equivalents stood at $1.3 million.

Price Action: CFSB shares are up 73.70% at $13.67 premarket at the last check on Wednesday.

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