DEFM14A

DEFM14A 1 d28565ddefm14a.htm DEFM14A DEFM14A

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐	Preliminary Proxy Statement

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒	Definitive Proxy Statement

☐	Definitive Additional Materials

☐	Soliciting Material under §240.14a-12

CFSB Bancorp, Inc.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☒	No fee required.

☐	Fee paid previously with preliminary materials.

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i) (1) and 0-11.

CFSB Bancorp, Inc.

15 Beach Street

Quincy, Massachusetts 02170

Merger Proposal – Your Vote is Very Important

August 15, 2025

Dear Shareholder:

You are cordially invited to attend the special meeting of shareholders of CFSB Bancorp, Inc. (the “Company”). The meeting will be held on Tuesday, September 16, 2025 at 5:00 p.m., local time, at 15 Beach Street, Quincy, Massachusetts.

On May 20, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Hometown Financial Group, MHC (“Hometown MHC”), Hometown Financial Group, Inc. (“Hometown Financial”), Hometown Financial Acquisition Corp. II, a wholly owned subsidiary of Hometown Financial formed solely to facilitate the Merger (“Merger Sub”) and 15 Beach, MHC, the Company’s mutual holding company parent. The Company, 15 Beach, MHC and Colonial Federal Savings Bank, the wholly owned subsidiary of the Company (“Colonial Federal”), are sometimes collectively referred to as “Colonial” herein.

Pursuant to the Merger Agreement, 15 Beach, MHC will merge with Hometown MHC, with Hometown MHC as the surviving corporation (the “MHC Merger”). After the MHC Merger, the Company will merge with Merger Sub, with the Company as the surviving corporation and a wholly owned subsidiary of Hometown Financial (the “Merger”). Following the Merger, the Company will merge with and into Hometown Financial, with Hometown Financial as the surviving corporation (the “Second Step Merger”), and following the Second Step Merger, Colonial Federal will merge with and into North Shore Bank, a wholly owned subsidiary of Hometown Financial (the “Bank Merger”).

If the Merger is completed, at the closing, your shares of Company common stock will be converted into the right to receive $14.25 in cash for each share.

At the special meeting, you will be asked to vote upon proposals to: (1) approve the Merger Agreement and the Merger; and (2) approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger. The notice of special meeting and the proxy statement appearing on the following pages describe the Merger Agreement, the Merger and the other formal business to be transacted at the meeting and includes, as Annex A, a copy of the Merger Agreement. We urge you to read the enclosed materials carefully for a complete description of the Merger. Our directors and officers will be present to respond to appropriate questions from shareholders.

The completion of the Merger is subject to certain conditions, including the approval of the Merger Agreement by the affirmative vote of (1) the holders of at least a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, including the shares of Company common stock held by 15 Beach, MHC, and (2) the holders of at least a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, excluding the shares of Company common stock held by 15 Beach, MHC, as well as the approval of the Merger Agreement and the Merger by Hometown MHC’s corporators and the approval or receipt of waivers from various bank regulatory authorities. We urge you to read the attached proxy statement carefully. It describes the Merger Agreement in detail and includes a copy of the Merger Agreement as Annex A.

The board of directors has unanimously approved the Merger Agreement and unanimously recommends that you vote “FOR” approval of the Merger Agreement and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger.

The receipt of cash in exchange for your Company common stock in the Merger generally will be a taxable transaction for United States federal income tax purposes. We urge you to consult your own tax advisor for a full understanding of the Merger’s tax consequences that are particular to you.

Your Vote Is Very Important!

Whether or not you plan to attend the special meeting, please complete, date and sign the enclosed proxy card and return it promptly in the postage-paid envelope provided or vote via telephone or the Internet. If you hold shares in “street name” through a bank or broker, please follow the instructions on the voting instruction card furnished by the bank or broker.

IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE VOTING YOUR SHARES, PLEASE CONTACT OUR PROXY SOLICITOR, LAUREL HILL ADVISORY GROUP, AT (888) 742-1305.

On behalf of the board of directors, I thank you for your prompt attention to this important matter.

Sincerely,

LOGO

Michael E. McFarland

President and Chief Executive Officer

This proxy statement and the enclosed proxy card are being first mailed to shareholders of record on or about August 15, 2025.

CFSB Bancorp, Inc.

15 Beach Street

Quincy, Massachusetts 02170

(617) 471-0750

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

DATE AND TIME

Tuesday, September 16, 2025 at 5:00 p.m., local time.

PLACE

15 Beach Street, Quincy, Massachusetts

ITEMS OF BUSINESS

(1) The approval of the Agreement and Plan of Merger (the “Merger Agreement”), by and among Hometown Financial Group, MHC, Hometown Financial Group, Inc. (“Hometown Financial”), Hometown Financial Acquisition Corp. II (“Merger Sub”), a newly-formed wholly-owned subsidiary of Hometown Financial, 15 Beach, MHC and CFSB Bancorp, Inc. (the “Company”), pursuant to which the Company will merge with Merger Sub, with the Company as the surviving corporation and a wholly owned subsidiary of Hometown Financial (the “Merger”). A copy of the Merger Agreement is included as Annex A to the accompanying proxy statement.

(2) A proposal to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger.

RECORD DATE

To vote, you must have been a shareholder at the close of business on August 8, 2025.

PROXY VOTING

It is important that your shares be represented and voted at the special meeting. You can vote your shares via the Internet, by telephone or by completing and returning the proxy card sent to you. Voting instructions are printed on your proxy card.

By Order of the Board of Directors

Tracy L. Wilson

Corporate Secretary

August 15, 2025

The board of directors of the Company unanimously recommends that you vote “FOR” the approval of the Merger Agreement and Merger and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger.

Whether or not you plan to attend the special meeting, please vote via the Internet, by telephone or by marking, signing, dating and promptly returning the enclosed proxy card in the enclosed envelope.

TABLE OF CONTENTS


	Page
SUMMARY		1
QUESTIONS AND ANSWERS ABOUT THE MERGER		10
THE SPECIAL MEETING		14
Place, Date and Time		14
Purpose of the Meeting		14
Who Can Vote at the Meeting; Record Date		14
Ownership of Shares		14
Attending the Meeting		15
Quorum and Vote Required		15
Shares Held by Directors and Officers of the Company; Voting Agreements		15
Voting by Proxy		16
Voting via the Internet or by Telephone		16
How to Revoke Your Proxy		16
Participants in the ESOP and the 401(k) Plan		16
Proxy Solicitation Costs		17
PROPOSAL 1: APPROVAL OF THE MERGER AGREEMENT		18
THE MERGER		18
The Parties to the Merger		18
Form of the Merger		18
Merger Consideration		19
Company Common Stock Price		19
Procedures for Surrendering Your Certificates		19
Material Federal Income Tax Consequences of the Merger		20
Background of the Merger		21
The Company’s Reasons for the Merger		27
Opinion of the Company’s Financial Advisor		30
Interests of Directors and Officers in the Merger that are Different From Your Interests		38
Approvals Needed to Complete the Merger		40
Financing the Merger		41
THE MERGER AGREEMENT		42
Structure of the Merger		42
Closing of the Merger		42
Conditions to Completing the Merger		43
Other Provisions of the Merger Agreement		44
PROPOSAL 2: ADJOURNMENT OF THE SPECIAL MEETING		52
STOCK OWNERSHIP		53
THE VOTING AGREEMENTS		54
SHAREHOLDER PROPOSALS		55
ANNEX A Agreement and Plan of Merger		A-1
ANNEX B Opinion of Piper Sandler & Co.		B-1

SUMMARY

This summary highlights selected information regarding the Merger from this proxy statement and does not contain all the information that is important to you. For a more complete description of the terms of the proposed Merger, we urge you to carefully read the entire document and the other documents to which we refer, including the Merger Agreement, attached as Annex A.

THE COMPANIES

CFSB Bancorp, Inc.
15 Beach, MHC
Colonial Federal Savings Bank
15 Beach Street
Quincy, Massachusetts 02170
(617) 471-0750

CFSB Bancorp, Inc. (Nasdaq: CFSB) (the “Company”) is the parent company of Colonial Federal Savings Bank (“Colonial Federal”). 15 Beach, MHC is the parent mutual holding company of the Company. The Company, 15 Beach, MHC and Colonial Federal are sometimes collectively referred to as “Colonial” herein. As of June 30, 2025, the Company had total assets of $366.6 million, total loans of $177.2 million, total deposits of $274.2 million and total shareholders’ equity of $75.7 million.

Colonial Federal is a federally chartered stock savings bank that has served the banking needs of its customers on the South Shore of Massachusetts since 1889. It operates from three full-service offices and one limited-service office in Quincy, Holbrook and Weymouth, Massachusetts.

Hometown Financial Group, MHC
Hometown Financial Group, Inc.
North Shore Bank
36 Main Street
Easthampton, Massachusetts 01027
(855) 527-4111

Hometown Financial Group, MHC (“Hometown MHC”) is a Massachusetts-chartered mutual holding company that is the parent company of Hometown Financial Group, Inc. (“Hometown Financial”).

Hometown Financial is a Massachusetts-chartered stock holding company headquartered in Easthampton, Massachusetts, and is the parent company of bankESB, bankHometown and North Shore Bank, each of which is a Massachusetts-chartered bank. Together, the banks offer a complete line of consumer and business deposit and lending products and services through 52 branch offices located throughout Massachusetts, northeastern Connecticut, and southern New Hampshire. Hometown Financial takes advantage of the size, scale, and efficiencies of shared centralized resources to fulfill its community banking mission—providing individualized financial support, a suite of comprehensive products and services, smart banking technology, and increased lending capacity—all to ensure its customers can unlock their potential and build a successful future. As of June 30, 2025, Hometown Financial had total assets of $6.6 billion, total loans of $5.2 billion, total deposits of $5.5 billion and total equity of $689 million.

North Shore Bank, headquartered in Peabody, Massachusetts, has served the community for more than 130 years. North Shore Bank offers a complete line of consumer and business deposit and lending products and services through 25 branches located throughout the

North and South Shore regions of Massachusetts and southern New Hampshire.

Hometown Financial Acquisition Corp. II

Hometown Financial Acquisition Corp. II (“Merger Sub”) is a Massachusetts corporation and wholly-owned subsidiary of Hometown Financial formed solely to facilitate the Merger (as defined below).

THE SPECIAL MEETING

Place, Date and Time

The special meeting of our shareholders will be held at 15 Beach Street, Quincy, Massachusetts 02170 on Tuesday, September 16, 2025 at 5:00 p.m., local time.

Purpose of the Meeting

At the special meeting, our shareholders will be asked to approve and adopt the merger agreement with Hometown MHC, Hometown Financial, Merger Sub, 15 Beach, MHC, the Company and Colonial Federal, dated as of May 20, 2025 (the “Merger Agreement”), pursuant to which, among other things, the Company will merge with Merger Sub, with the Company as the surviving corporation (the “Merger”), as well as the other proposals set forth in the enclosed notice of special meeting.

Who Can Vote at the Meeting

You can vote at the special meeting if you owned our common stock at the close of business on August 8, 2025. You will be able to cast one vote for each share of our common stock you owned on that date. As of August 8, 2025, there were 6,548,575 shares of our common stock outstanding.

What Vote is Required for Approval of the Merger Agreement

The approval of the Merger Agreement requires the affirmative vote of (1) at least a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, including the shares of Company common stock held by 15 Beach, MHC, and (2) at least a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, excluding the shares of Company common stock held by 15 Beach, MHC. You can vote your shares by attending the special meeting and voting in person, via the Internet, by telephone or by completing and mailing the enclosed proxy card.

Shares held by Directors and Officers; Voting Agreements

As of the record date for the special meeting, the directors and executive officers of the Company owned, in the aggregate, shares of Company common stock having the power to cast approximately 4.3% of the total votes eligible to be cast at the special meeting.

Each of our directors and executive officers have entered into voting agreements with Hometown Financial requiring each to vote all of the shares of Company common stock each owns in favor of the proposal to approve the Merger Agreement. Accordingly, shares of Company stock having the power to cast approximately 4.3% of the total votes eligible to be cast at the special meeting and 9.5% of the shares held

by persons other than 15 Beach, MHC are subject to the voting agreements.

THE MERGER

Overview of the Transaction

We propose a business combination in which 15 Beach, MHC will merge with Hometown MHC, with Hometown MHC as the surviving corporation (the “MHC Merger”). Following the MHC Merger, the Company will merge with Merger Sub, with the Company as the surviving entity. Following the Merger, the Company will merge with and into Hometown Financial, with Hometown Financial as the surviving corporation (the “Second Step Merger”), and following the Second Step Merger, Colonial Federal will merge with and into North Shore Bank (the “Bank Merger”), with North Shore Bank as the surviving entity.

Each Share of Company Common Stock Will Be Exchanged for $14.25 in Cash

As a Company shareholder, upon the closing of the Merger, each of your shares of our common stock will automatically be converted into the right to receive $14.25 in cash. Shares of our common stock that are held by 15 Beach, MHC, Hometown Financial, or any of their respective subsidiaries will be cancelled without receiving cash consideration.

How to Receive Cash in Exchange for Your Company Stock Certificates

To receive cash in exchange for your shares of Company common stock, you will need to surrender your Company stock certificates. You should not return your Company stock certificates with the enclosed proxy, and you should not send your stock certificates to the paying agent until you receive the letter of transmittal. Hometown Financial’s paying agent will send you written instructions for surrendering your Company stock certificates as promptly as practicable following the closing of the Merger. If your shares of Company common stock are held in “street” name, you broker, bank or nominee will process the exchange on your behalf.

Company Stock Price

Our common stock trades on the Nasdaq Capital Market under the symbol “CFSB.” During the 60-day period prior to the announcement of the Merger, our common stock closed as low as $7.40 per share and as high as $8.19 per share. On May 20, 2025, which was the last trading day before we announced the Merger, our common stock closed at $8.19 per share. On August 7, 2025, which is the last practicable trading day before the printing of this proxy statement, our common stock closed at $13.88 per share.

Tax Consequences of the Merger

The receipt of the merger consideration in exchange for shares of Company common stock will generally be a taxable transaction for U.S. federal income tax purposes. In general, you will recognize any gain or loss equal to the difference between the amount of cash you receive in the Merger and the adjusted tax basis of your shares of Company common stock. See “Proposal 1—Approval of the Merger Agreement—The Merger—Material Federal Income Tax Consequences of the Merger.”

This tax treatment may not apply to all shareholders. Determining the actual tax consequences of the Merger to you can be complicated. You should consult your own tax advisor for a full understanding of the Merger’s tax consequences that are particular to you.

The Company’s Board of Directors Recommends That
Shareholders Approve the Merger

Our board of directors believes that the Merger is fair and in our shareholders’ best interests, and unanimously recommends that you vote “FOR” the proposal to approve the Merger Agreement and the Merger. For a discussion of the circumstances surrounding the Merger and the factors considered by our board of directors in approving the Merger Agreement, see “Proposal 1—Approval of the Merger Agreement—The Merger—The Company’s Reasons for the Merger.”

The Opinion of the Company’s Financial Advisor
in connection with the Merger

In connection with the Merger, the Company’s financial advisor, Piper Sandler & Co. (“Piper Sandler”), delivered a written opinion, dated May 20, 2025, to the Company’s board of directors as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of the Company’s common stock (other than 15 Beach, MHC) of the merger consideration to be received by such shareholders in the Merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Piper Sandler in preparing the opinion, is attached as Annex B to this proxy statement. The opinion was solely for the information of, and was directed solely to, the Company’s board of directors (solely in its capacity as such) in connection with its consideration of the financial terms of the Merger. Piper Sandler’s opinion is included in this proxy statement solely because it was considered by the Company’s board of directors for the aforementioned purpose and is not to be relied upon by any other entity or person or used for any other purpose. The opinion did not address the underlying business decision of the Company to engage in the Merger or enter into the Merger Agreement or constitute a recommendation to the Company’s board of directors in connection with the Merger, and it does not constitute a recommendation to any holder of the Company’s common stock as to how to vote in connection with the Merger or any other matter.

Interests of Company’s Directors and Officers
in the Merger That Differ From Your Interests

Certain of our directors and officers have interests in the Merger that are different from, or are in addition to, their interests as shareholders in the Company. The members of our board of directors knew about these additional interests, and considered them, when they approved the Merger. These include:

•

each of Michael E. McFarland, President and Chief Executive Officer of the Company, and Susan J. Shea, Chief Operating Officer and Treasurer of the Company, entering into settlement agreements with Colonial that will provide for lump sum cash payments to the executives in exchange for the termination of their employment agreements with Colonial;

•

Mr. McFarland entering into a restrictive covenant agreement with Hometown Financial and North Shore Bank that provides for an additional cash payment at the effective time of the Merger;

•

Ms. Shea entering into a consulting agreement with Hometown Financial that provides for cash payments over an eight-month period following the effective time of the Merger;

•

Hometown Financial agreeing to honor obligations under existing change in control agreements, supplemental retirement agreements and supplemental retirement plan and life insurance arrangements, which will result in either lump sum cash payments or installment cash payments being made to directors and officers;

•

the acceleration of vesting of Company outstanding stock options and the receipt by the holders of such options of a cash payment equal to $14.25 less the exercise price of such option for each option;

•

the acceleration of vesting of outstanding restricted stock awards, each of which will receive the $14.25 merger consideration;

•

provisions in the Merger Agreement that provide for the possibility of retention bonuses to be paid to Colonial Federal employees (potentially including officers) to remain employed at Colonial Federal through the effective time of the Merger or for an interim period thereafter;

•

the consideration by North Shore Bank of the appointment of current Colonial Federal board members to the board of North Shore Bank following the effective time of the Merger, although North Shore Bank is under no obligation to do so; and

•

provisions in the Merger Agreement relating to the rights of directors and officers of 15 Beach, MHC, the Company and Colonial Federal to continued indemnification coverage and continued coverage under directors’ and officers’ liability insurance policies.

Regulatory Approval Needed to Complete the Merger

We cannot complete the Merger unless the required regulatory approvals have been received. North Shore Bank filed the necessary regulatory applications with the Board of Governors of the Federal Reserve System (the “FRB”) and the Massachusetts Division of Banks on July 23, 2025. Hometown MHC and Hometown Financial filed a holding company application with the FRB on July 23, 2025 in connection with the transaction.

No Dissenters’ or Appraisal Rights

Shareholders of the Company do not have dissenters’ or appraisal rights in connection with the Merger.

THE MERGER AGREEMENT

A copy of the Merger Agreement is provided as Annex A to this proxy statement. Please read the entire Merger Agreement carefully. It is the legal document that governs the Merger.

Conditions to Completing the Merger

The completion of the Merger depends on a number of conditions being met. These conditions include, among other items:

•

receipt of approval by the Company’s shareholders and, if required, 15 Beach, MHC’s members;

•

receipt of approval by Hometown MHC’s corporators;

•

receipt of all regulatory approvals and the expiration of all statutory waiting periods;

•

the absence of any order, decree or injunction of a court or governmental agency that enjoins or prohibits the consummation of the Merger and that no governmental entity has instituted any proceeding to enjoin or prohibit the consummation of the Merger;

•

the absence of any statute, rule or regulation having been enacted, entered, promulgated or enforced that prohibits or makes illegal consummation of the Merger;

•

the receipt of all required third-party consents;

•

the continued accuracy of the representations and warranties made by the parties on the date of the Merger Agreement (subject to the applicable materiality standard), and the parties having materially performed their obligations under the Merger Agreement;

•

neither 15 Beach, MHC nor the Company having experienced a materially adverse effect;

•

the absence of any conditions in the required regulatory approvals that would (1) prohibit or materially limit the ownership or operation by Hometown of all or any material portion of the business or assets of the Colonial or of Hometown, (2) compel Hometown or Colonial to dispose of or hold separate all or any material portion of its business or assets or (3) compel Hometown to take any action, or commit to take any action, or agree to any condition or request, if the prohibition, limitation, condition or other requirement described in clauses (1) through (3) above could reasonably be expected to have a material adverse effect on Hometown or the combined businesses and operations of Hometown Financial’s banking subsidiaries and Colonial Federal, taken as a whole (referred to herein as a “Burdensome Condition”); and

•

Colonial Federal having entered into the bank merger agreement.

See “The Merger Agreement—Conditions to Completing the Merger” below for a discussion of all of the conditions to completing the Merger. We cannot be certain when or if the conditions to the Merger will be satisfied or waived, or that the Merger will be completed.

Regarding the required regulatory approvals, North Shore Bank filed the necessary regulatory applications with the FRB and the Massachusetts Division of Banks on July 23, 2025. Hometown MHC and Hometown Financial filed the necessary application with the FRB on July 23, 2025.

Agreement Not to Solicit Other Proposals

Between the signing of the Merger Agreement and the completion of the Merger or the termination of the Merger Agreement, the Company has agreed (and will use its reasonable best efforts to cause its subsidiaries and representatives) not to (1) solicit, initiate, induce, encourage or take any action (including furnishing information) to facilitate any competing proposal with a third party, (2) continue or otherwise participate in any discussions or negotiations, or otherwise communicate in any way with any person other than to notify such person of the existence of the non-solicitation provisions, (3) approve, endorse or recommend any third-party proposal, or (4) enter into or consummate any agreement, agreement in principle arrangement, letter of intent or understanding contemplating any third-party proposal or requiring it to abandon, terminate or fail to consummate the transactions contemplated hereby.

Notwithstanding these restrictions, at any time before shareholder approval of the Merger, the Company may participate in discussions or negotiations regarding an acquisition proposal or furnish non-public information with respect to the Company or otherwise relating to an acquisition proposal with a third party who makes an unsolicited proposal, provided that, among other things:

•

our board of directors concludes, in good faith, after considering the advice of the Company’s legal counsel and with respect to financial matters, our financial advisor, the acquisition proposal constitutes or could reasonably be likely to result in a proposal superior to Hometown Financial’s proposal, as set forth in the Merger Agreement;

•

the Company has not otherwise breached its covenants not to solicit acquisition proposals as set forth in the Merger Agreement;

•

our board of directors determines, in good faith, after considering the advice of our outside counsel, that taking such action would be required for the Company’s directors to comply with their fiduciary duties to the Company’s shareholders under applicable law; and

•

if furnishing information to a third party, the Company has first given Hometown Financial written notice of the identity of the third party and the Company obtains a confidentiality agreement from the soliciting party no less favorable to the Company than those in its confidentiality agreement with Hometown Financial.

See “The Merger Agreement—Other Provisions of the Merger Agreement—Agreement Not to Solicit Other Proposals” below for a

discussion of what constitutes an “acquisition proposal” and a “superior proposal.”

We May Amend the Terms of the Merger and
Waive Some Conditions

The Company and Hometown Financial may agree to amend the Merger Agreement, and each of us may waive our right to require the other party to adhere to the terms and conditions of the Merger Agreement that are beneficial to the waiving party.

Terminating the Merger Agreement

The Company and Hometown Financial may mutually agree at any time to terminate the Merger Agreement. In addition, either we or Hometown Financial may decide, without the consent of the other, to terminate the Merger Agreement if:

•

the Company’s shareholders do not approve the Merger, or, if their approval is required for the Merger, the members of 15 Beach, MHC do not approve the Merger or Hometown MHC’s corporators do not approve the Merger; provided in each case a party cannot terminate the Merger if it did not comply with its obligations to hold the required meeting and solicit votes;

•

regulatory approval is denied, or if a regulatory approval contains a Burdensome Condition;

•

the Merger is not consummated by March 31, 2026 (unless the failure to consummate is due to the action or failure to act by the party seeking to terminate the Merger Agreement); or

•

Hometown Financial may also terminate the Merger Agreement if the Company does not comply with its non-solicitation requirements or changes its recommendation to the Company shareholders regarding the Merger, or it or 15 Beach, MHC breach their obligations to call meetings of their shareholders or members, as required.

We may also terminate the Merger Agreement to enter into an agreement with respect to a superior proposal, but only if, among other things, we have complied with our obligation not to solicit competing proposals. See “Summary—The Merger Agreement—Termination Fees” and “The Merger Agreement—Other Provisions of the Merger Agreement—Agreement Not to Solicit Other Proposals” below for a discussion of situations requiring the Company’s payment of a termination fee to Hometown Financial.

Termination Fee

Under certain circumstances, we may be required to pay Hometown Financial a fee of $1,550,000. Specifically, the Company must pay the

fee to Hometown Financial if the Merger Agreement is terminated under the following circumstances:

•

the Company terminates the Merger Agreement to enter into an agreement with respect to a superior proposal;

•

Hometown Financial terminates the Merger Agreement because the Company breaches its agreements in the Merger Agreement with respect to its solicitation of other acquisition proposals or because 15 Beach, MHC or the Company breach their obligation to hold a meeting of Company shareholders or 15 Beach, MHC members (if required) to vote on the Merger Agreement; provided at the time Hometown Financial is not in material breach of any representation, warranty or material covenant in the Merger Agreement; or

•

if (1) Hometown Financial terminates the Merger Agreement because (a) the Company’s shareholders do not approve the Merger, or, if their approval is required for the Merger, the members of 15 Beach, MHC do not approve the Merger or Hometown MHC’s corporators do not approve the Merger; provided in each case a party cannot terminate the Merger if it did not comply with its obligations to hold the required meeting and solicit votes or (b) there is a breach by the other party of any representation, warranty, covenant or agreement contained in the Merger Agreement such that certain conditions to closing of the Merger cannot be met, which breach cannot be cured, or has not been cured within 30 days after the giving of written notice to such party of such breach if the breach giving rise to the termination was knowing or intentional; (2) at the time Hometown Financial is not in material breach of any representation, warranty or material covenant in the Merger Agreement; (3) either before the Company shareholder meeting or 15 Beach, MHC member meeting, or before the date of termination, a third-party acquisition proposal has been publicly announced, disclosed or communicated and not withdrawn at least two business days before the applicable meeting; and (4) within 12 months of the termination of the Merger Agreement the Company consummates or enters into an agreement with a third party, then the payment will be made to Hometown Financial.

QUESTIONS AND ANSWERS ABOUT THE MERGER

What am I being asked to vote on and how does the board of directors recommend that I vote?

You are being asked to vote “FOR” the approval of the Merger Agreement and the Merger and “FOR” a proposal to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger (the “Adjournment Proposal”). The Company’s board of directors has determined that the proposed Merger is in the best interests of the shareholders of the Company, has approved the Merger Agreement and unanimously recommends that shareholders vote “FOR” the approval of the Merger Agreement and “FOR” the Adjournment Proposal.

What vote is required to adopt the Merger Agreement?

What will I receive in the Merger?

Under the Merger Agreement, each share of Company common stock you own will be converted into the right to receive $14.25 in cash. Shares of Company common stock held by Hometown Financial or 15 Beach, MHC or their respective subsidiaries will be cancelled without receiving cash consideration. Following completion of the Merger, you will no longer have any rights or interests in the Company.

What are the tax consequences of the Merger to me?

Company shareholders will generally recognize a gain or loss for federal income tax purposes on each share of Company common stock exchanged for the merger consideration in an amount equal to the difference between the adjusted tax basis in each share of Company common stock and the value of the per share merger consideration received in connection with the Merger. Company shareholders are urged to consult their own tax advisor for a full understanding of the tax consequences of the Merger.

How do I exchange my Company stock certificates?

Please do not send in your stock certificates at this time. You will receive instructions on where and how to surrender your Company stock certificates from Hometown Financial’s paying agent after the Merger is completed. In any event, you should not forward your Company stock certificates with your proxy card.

What should I do now?

After you have carefully read this document, please vote.

You may vote your shares by completing and signing the enclosed proxy card and returning it in the enclosed postage-paid envelope or you may vote at the special meeting. Alternatively, you may choose to vote your shares using the Internet or telephone voting options explained on your proxy card. You should complete and return the proxy card accompanying this document, or vote using the Internet or telephone voting options, to ensure that your vote is counted at the special meeting, or at any adjournment or postponement of the special meeting, regardless of whether you plan to attend the special meeting.

Shareholders whose shares are held in the name of a broker, bank or other holder of record must vote in the manner directed by such holder. Check your proxy card or the information forwarded by your broker, bank or other holder of record to see which options are available to you.

If you do not return a properly executed proxy card or vote via telephone or the Internet and do not vote at the special meeting, this will have the same effect as a vote against the Merger Agreement. If you sign, date and return your proxy card, but you do not indicate how you want to vote, your proxy will be voted in favor of approval of the Merger Agreement and the Adjournment Proposal. You may change your vote or revoke your proxy before the special meeting by filing with the Company’s Corporate Secretary a duly executed revocation of proxy, submitting a new proxy card with a later date or voting again via telephone or the Internet or at the special meeting.

If my shares are held in “street name” by my broker, bank or nominee, will my broker, bank or nominee automatically vote my shares for me?

No. Your broker, bank or nominee will not be able to vote your shares of Company common stock unless you provide instructions on how to vote. You should instruct your broker, bank or nominee how to vote your shares by following the procedures your broker provides. If you do not provide instructions to your broker, bank or nominee, your shares will not be voted, and this will have the effect of voting against adoption of the Merger Agreement. Please check the voting form used by your broker, bank or nominee to see if it offers telephone or Internet voting.

What happens if I sell my shares of common stock before the special meeting?

The record date for the special meeting will be earlier than the effective time of the Merger. If you transfer your shares of common stock after the record date but before the special meeting, you will, unless other arrangements are made, retain your right to vote at the special meeting but will not be entitled to receive the merger consideration for such shares. You will be entitled to receive the merger consideration only if the Merger is completed and only if you own shares of our common stock at the time the Merger is completed.

What do I do if I lost my stock certificates?

You should review the letter of transmittal for instructions on how to proceed if you have lost your Company stock certificates. If your Company stock certificates have been lost, stolen or destroyed, you will have to prove your ownership of these certificates and that they were lost, stolen or destroyed and, if required by the paying agent or Hometown Financial, you may have to post a bond in such amount as the paying agent may direct as indemnity against any claim that may be made against it, the Company, or another party with respect to such certificate, before you receive any payment for the shares represented by that certificate.

Who can help answer my questions?

If you want additional copies of this document, or if you want to ask any questions about the Merger or how to submit your proxy, you should contact:

Laurel Hill Advisory Group

Proxy Solicitor

(888) 742-1305

Michael E. McFarland

President and Chief Executive Officer

CFSB Bancorp, Inc.

(617) 471-0750

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this proxy statement that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements, which are based on certain current assumptions, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. Colonial intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of complying with these safe harbor provisions. You should read statements that contain these words carefully because they discuss the Colonial’s future expectations, contain projections of Colonial’s future results of operations or financial condition, or other “forward-looking” information.

Such forward-looking statements are necessarily estimates reflecting the judgment of our management and are subject to numerous assumptions, risks and uncertainties, which change over time and could cause our actual results to differ materially from those suggested by the forward-looking statements. In addition to other factors and matters contained in this document, these statements are subject to risks, uncertainties and other factors, including, among others:

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the ability to satisfy closing conditions to the Merger, including approval by our shareholders and members, if required, on the expected terms and schedule;

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delays in closing the Merger;

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the possibility that the required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction;

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disruptions and uncertainty, including diversion of management attention, resulting from the Merger, which may make it more difficult for us to maintain relationships with our customers, employees or suppliers, and may cause our business to suffer;

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the restrictions on our conduct before closing contained in the Merger Agreement, which may have a negative effect on our flexibility and our business operations;

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the possibility that alternative acquisition proposals will or will not be made;

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the outcome of any legal proceedings that may be instituted against us or Hometown Financial and others related to the Merger Agreement;

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the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts;

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increased competitive pressures;

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changes in asset quality and credit risk;

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the inability to sustain revenue and earnings growth;

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changes in interest rates, securities markets and inflation;

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changes in general economic conditions, including potential recessionary conditions;

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customer borrowing, repayment, investment and deposit practices;

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customer disintermediation;

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the introduction, withdrawal, success and timing of business initiatives;

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changes in the competitive environment in which we operate; and

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the impact, extent and timing of technological changes, capital management activities, and legislative and regulatory actions and reforms.

The forward-looking statements contained in this proxy statement speak only as of the date the statement is made, and we undertake no obligation to publicly update or revise forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made. You are cautioned that our forward-looking statements could be wrong in light of these and other risks, uncertainties and assumptions, which change over time. Actual results, developments and outcomes may differ materially from those expressed in, or implied by, our forward-looking statements. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed above. We operate in a continually changing business environment, and new risk factors emerge from time to time. We cannot predict these new risk factors, nor can we assess the impact, if any, of the new risk factors on our business or the extent to which any factor or combination of factors may cause actual results or outcomes to differ materially from those expressed or implied by any forward-looking statement. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this proxy statement might not occur. You are cautioned not to place undue reliance on these statements.

THE SPECIAL MEETING

This proxy statement is furnished in connection with the solicitation of proxies by the board of directors of the Company to be used at the special meeting of shareholders.

Place, Date and Time

The special meeting will be held at 15 Beach Street, Quincy, Massachusetts 02170 on Tuesday, September 16, 2025 at 5:00 p.m., local time.

Purpose of the Meeting

The purpose of the meeting is to consider and vote upon proposals to: (1) approve the Merger Agreement and the Merger; and (2) approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Agreement and the Merger (the “Adjournment Proposal”).

Who Can Vote at the Meeting; Record Date

You are entitled to vote your Company common stock only if the records of the Company show that you held your shares as of the close of business on August 8, 2025. You are entitled to one vote at the special meeting for each share of the Company’s common stock that you owned on the record date. The number of shares you own (and may vote) is listed on your proxy card.

Our Charter provides that record holders of our common stock who beneficially own, either directly or indirectly, more than 10% of our outstanding shares (other than 15 Beach, MHC) are not entitled to any vote with respect to the shares held in excess of the 10% limit.

As of the close of business on August 8, 2025, 6,548,575 shares of Company common stock were outstanding.

Ownership of Shares

You may own your shares of Company common stock in one or more of the following ways:

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Directly in your name as the shareholder of record;

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Indirectly through a broker, bank or other holder of record in “street name”; or

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Indirectly through the Colonial Federal Savings Bank 401(k) Savings Plan (the “401(k) Plan”) or the Colonial Federal Savings Bank Employee Stock Ownership Plan (the “ESOP”).

If your shares are registered directly in your name, you are the holder of record of those shares and we are sending these proxy materials directly to you. As the holder of record, you have the right to give your proxy directly to us to vote at the special meeting or you may vote in person at the special meeting.

If you hold your shares in “street name,” you are considered the beneficial owner of your shares and your broker, bank or other holder of record is sending these proxy materials to you. As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote by completing a voting instruction form provided by your broker, bank or other holder of record that accompanies your proxy materials. Your broker, bank or other holder of record may allow you to provide voting instructions by telephone or by the Internet. Refer to the voting instruction form that accompanies your proxy materials. If you want to vote your shares of common stock held in street name in person at the special meeting, you must obtain a written proxy in your name from the broker, bank or other holder who is the record holder of your shares.

If you own shares of common stock indirectly through the 401(k) Plan or are a participant in the ESOP, see “Participants in the ESOP and 401(k) Plan” below.

Attending the Meeting

Shareholders are invited to attend the special meeting. If you hold your shares in street name, you will need proof of ownership to be admitted to the meeting. Examples of proof of ownership are a recent brokerage account statement or a letter from your bank or broker.

Quorum and Vote Required

Quorum. The special meeting will be held only if there is a quorum present. We will have a quorum and will be able to conduct the business of the special meeting if a majority of the outstanding shares of the Company entitled to vote, represented in person or by proxy, are present at the meeting. If you return valid proxy instructions or attend the meeting in person, your shares will be counted to determine whether there is a quorum present, even if you abstain from voting. Broker non-votes, if any, will also be counted to determine the existence of a quorum. A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. Broker non-votes occur when there are both routine and non-routine proposals at a meeting. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting and does not expect any broker non-votes to count towards the special meeting quorum.

Votes Required.

Proposal 1. The approval of the Merger Agreement requires the affirmative vote of (1) at least a majority of the outstanding shares of Company common stock entitled to vote, including the shares of Company common stock held by 15 Beach, MHC, and (2) a majority of the outstanding shares of Company common stock entitled to vote, excluding the shares of Company common stock held by 15 Beach, MHC. Abstentions and broker non-votes will have the same effect as a vote “Against” the approval of the Merger Agreement.

Proposal 2. The Adjournment Proposal requires the affirmative vote of at least a majority of the shares of Company common stock represented at the meeting and entitled to vote on the subject matter. Abstentions will have the same effect as a vote “Against” the proposal, while broker non-votes will have no effect on this proposal.

Shares Held by Directors and Officers of the Company; Voting Agreements

All of our directors, executive officers and our parent company, 15 Beach, MHC, each entered into voting agreements with Hometown Financial requiring each to vote all of the shares of Company common stock each owns in favor of the proposal to approve the Merger Agreement. As of the record date for the special meeting, directors and executive officers of the Company beneficially owned, in the aggregate, 281,068 shares, or 4.3% of the outstanding shares of the Company’s common stock. Including the 3,586,903 shares held by 15 Beach, MHC, 3,867,971 shares of Company stock having the power to cast approximately 59.1% of the total votes eligible to be cast at the special meeting are subject to the voting agreements.

15 Beach, MHC’s presence in person or by proxy at the special meeting is sufficient to guarantee that quorum will be met at the special meeting. In addition, 15 Beach, MHC’s vote in favor of the proposal to approve the Merger Agreement would represent a vote of at least a majority of the outstanding shares of Company stock entitled to vote. 15 Beach, MHC’s vote would therefore satisfy one of the two voting standards that are required to approve the Merger Agreement proposal. See “—Votes Required” above for more information.

Voting by Proxy

The board of directors of the Company is sending you this proxy statement to request that you allow your shares of Company common stock to be represented at the special meeting by the persons named in the enclosed proxy card. All shares of Company common stock represented at the special meeting by properly executed proxies will be voted according to the instructions indicated on the proxy card. You may also vote your shares via the Internet or by telephone. Specific instructions for Internet or telephone voting are set forth on the enclosed proxy card. The deadline for voting by telephone or via the Internet is 11:59 p.m., local time on September 15, 2025.

If you sign, date and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Company’s board of directors. The board of directors unanimously recommends a vote “FOR” the approval of the Merger Agreement and the Merger and “FOR” the Adjournment Proposal.

If any matter not described in this proxy statement is properly presented at the special meeting, the persons named in the proxy card will use their judgment to determine how to vote your shares. If the special meeting is postponed or adjourned, Company common stock may be voted by the persons named in the proxy card on the new special meeting date as well, unless you have revoked your proxy. The Company does not know of any other matters to be presented at the special meeting.

If your Company common stock is held in “street name,” you will receive instructions from your broker, bank or other nominee that you must follow to have your shares voted. Your broker or bank may allow you to deliver your voting instructions via the Internet or by telephone. Please see the instruction form that accompanies this proxy statement.

Voting via the Internet or by Telephone

Instead of voting by mailing a proxy card, registered shareholders can vote their shares of Company common stock via the Internet or by telephone. The Internet and telephone voting procedures are designed to authenticate shareholders’ identities, allow shareholders to provide their voting instructions and confirm that their instructions have been recorded properly. Specific instructions for Internet and telephone voting are set forth on the proxy card. The deadline for voting via the Internet or by telephone is 11:59 p.m., Eastern Time, on September 15, 2025.

How to Revoke Your Proxy

You may revoke your proxy at any time before the vote is taken at the meeting. To revoke your proxy you must either advise the Corporate Secretary of the Company in writing before the vote is taken at the special meeting, deliver a later dated proxy card, or attend the special meeting and vote your shares in person. Attendance at the special meeting will not in itself constitute revocation of your proxy.

The Company’s Corporate Secretary can be reached at the following address:

Tracy Wilson

Corporate Secretary and Director

CFSB Bancorp, Inc.

15 Beach Street

Quincy, Massachusetts 02170

(617) 471-0750

Participants in the ESOP and the 401(k) Plan

If you are a participant in the ESOP, you will receive a voting instruction card that reflects all the shares that you may direct the ESOP trustee to vote on your behalf under the ESOP. Under the terms of the ESOP, the ESOP

trustee votes all shares held by the ESOP, but you may direct the trustee how to vote the shares of Company common stock allocated to your ESOP account. The ESOP trustee will vote all unallocated shares of Company common stock held by the ESOP and all allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions.

If you hold Company common stock in the 401(k) Plan, you will receive a voting instruction card that reflects all shares that you may direct the 401(k) Plan trustee to vote on your behalf under the 401(k) Plan. Under the terms of the 401(k) Plan, you may direct the 401(k) Plan trustee how to vote the shares allocated to your account. If the 401(k) Plan trustee does not receive your voting instructions, the 401(k) Plan trustee will be instructed to vote your shares in the same proportion as the voting instructions received from other 401(k) Plan participants.

The deadline for returning your voting instruction cards to the ESOP trustee and/or the 401(k) Plan trustee is September 8, 2025.

Proxy Solicitation Costs

The Company will pay the cost of this proxy solicitation. In addition to the solicitation of proxies by mail, Laurel Hill Advisory Group, LLC, a proxy solicitation firm, will assist the Company in soliciting proxies for the special meeting. The Company will pay Laurel Hill Advisory Group a fee of $7,000, plus reasonable out of pocket expenses and additional fees for any necessary shareholder phone calls, for these services. Additionally, directors, officers and employees of the Company may solicit proxies personally or by telephone without receiving additional compensation. None of these persons will receive additional or special compensation for soliciting proxies. The Company will reimburse brokers, banks, nominees and other fiduciaries for their expenses in sending proxy materials to their customers who are beneficial owners and obtaining their voting instructions.

PROPOSAL 1:

APPROVAL OF THE MERGER AGREEMENT

THE MERGER

The following discussion of the Merger is qualified by reference to the Merger Agreement, which is attached to this proxy statement as Annex A. You should read the entire Merger Agreement carefully. It is the legal document that governs the Merger.

The Parties to the Merger

15 Beach, MHC. 15 Beach, MHC is the parent mutual holding company of the Company. 15 Beach, MHC owns approximately 54.8% of the outstanding shares of Company common stock.

CFSB Bancorp, Inc. The Company (Nasdaq: CFSB) is a federally chartered savings and loan holding company and the parent company of Colonial Federal. As of June 30, 2025, CFSB Bancorp had total assets of $366.6 million, total loans of $177.2 million, total deposits of $274.2 million and total shareholders’ equity of $75.7 million.

Colonial Federal Savings Bank. Colonial Federal is a federally chartered stock savings bank that has served the banking needs of its customers on the South Shore of Massachusetts since 1889. It operates from three full-service offices and one limited-service office in Quincy, Holbrook and Weymouth, Massachusetts.

Hometown Financial Group, MHC. Hometown MHC is a Massachusetts-chartered mutual holding company that is the parent company of Hometown Financial.

Hometown Financial Group, Inc. Hometown Financial is a Massachusetts-chartered stock holding company headquartered in Easthampton, Massachusetts, and is the parent company of bankESB, bankHometown and North Shore Bank, each of which are Massachusetts-chartered banks. Together, the banks offer a complete line of consumer and business deposit and lending products and services through 52 branch offices located throughout Massachusetts, northeastern Connecticut, and southern New Hampshire. Hometown Financial takes advantage of the size, scale, and efficiencies of shared centralized resources to fulfill its community banking mission—providing individualized financial support, a suite of comprehensive products and services, smart banking technology, and increased lending capacity—all to ensure its customers can unlock their potential and build a successful future. As of June 30, 2025, Hometown Financial had total assets of $6.6 billion, total loans of $5.2 billion, total deposits of $5.5 billion and total equity of $689 million.

North Shore Bank. North Shore Bank, headquartered in Peabody, Massachusetts, has served the community for more than 130 years. North Shore Bank offers a complete line of consumer and business deposit and lending products and services through 25 branches located throughout the North and South Shore regions of Massachusetts and southern New Hampshire.

Hometown Financial Acquisition Corp. II. Hometown Financial Acquisition Corp. II (“Merger Sub”) is a Massachusetts corporation and wholly-owned subsidiary of Hometown Financial formed solely to facilitate in the Merger.

Form of the Merger

The boards of directors of the Company and Hometown Financial have each unanimously approved the Merger Agreement and the transactions contemplated under the Merger Agreement. Upon completion of the Merger, each share of Company common stock, excluding the shares of common stock held by 15 Beach, MHC and Hometown Financial and their respective subsidiaries, will be converted into the right to receive $14.25 in cash (without interest), and Company shareholders will no longer have any right or interest in the Company.

As soon as possible after the conditions to consummation of the Merger have been satisfied or waived, and unless the Merger Agreement has been terminated or an alternative structure is used, the mergers contemplated under the Merger Agreement will be effected as follows:

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15 Beach, MHC will merge with and into Hometown MHC, with Hometown MHC as the surviving corporation (the “MHC Merger”);

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Immediately following the MHC Merger, the Company will merge with Merger Sub, with the Company as the surviving corporation and a wholly owned subsidiary of Hometown Financial (the “Merger”);

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Immediately following the Merger, the Company will merge with and into Hometown Financial, with Hometown Financial as the surviving corporation (the “Second Step Merger”); and

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Immediately following the Second Step Merger, Colonial Federal will merge with and into North Shore Bank (the “Bank Merger”).

Merger Consideration

Each outstanding share of Company common stock, except for shares held by 15 Beach, MHC, Hometown Financial, or their respective subsidiaries, will be converted into the right to receive $14.25 per share at the closing of the Merger.

Company Common Stock Price

The Company’s common stock trades on the Nasdaq Capital Market under the symbol “CFSB.” During the 60-day period prior to the announcement of the Merger, our common stock closed as low as $7.40 per share and as high as $8.19 per share. On May 20, 2025, which was the last trading day before we announced the Merger, our common stock closed at $8.19 per share. On August 7, 2025, which is the last practicable trading day before the printing of this proxy statement, our common stock closed at $13.88 per share.

Procedures for Surrendering Your Certificates

Before the closing of the Merger, Hometown Financial will deposit with its paying agent, Continental Stock Transfer and Trust Company, an amount of cash equal to the aggregate merger consideration. Continental Stock Transfer and Trust Company will act as paying agent for the benefit of the holders of Company common stock. Each holder of Company common stock who properly surrenders his or her Company shares to the paying agent will be entitled to receive a cash payment of $14.25 per share of Company common stock, net of any required tax withholding upon acceptance of the shares by the paying agent.

As soon as reasonably practicable after the closing of the Merger, but in no event later than five business days after the closing of the Merger, the paying agent will send a letter of transmittal that will contain detailed instructions for surrendering certificates of Company common stock. If you hold your Company common stock in “street name,” your broker, bank or nominee will process the exchange on your behalf.

You should not return your Company common stock certificates with the enclosed proxy, and you should not send your stock certificates to the paying agent until you receive the letter of transmittal.

If your Company stock certificates have been lost, stolen or destroyed, you will have to prove your ownership of these certificates and that they were lost, stolen or destroyed and, if required by the paying agent or Hometown Financial, you may have to post a bond in such amount as the paying agent may direct as indemnity against any claim that may be made against it, the Company, or another party with respect to such certificate, before you receive any payment for the shares represented by that certificate.

Neither Hometown Financial nor any other person involved in the Merger will be liable to any former holder of Company common stock for any amount properly delivered to a public official under applicable abandoned property or escheat laws.

Material Federal Income Tax Consequences of the Merger

Tax matters are complicated, and the tax consequences of the Merger depend upon the particular circumstances of each U.S. holder. Accordingly, each shareholder should seek advice with respect to the potential tax consequences based on his, her or its particular circumstances from an independent tax advisor.

The following is a general discussion of certain material United States federal income tax consequences of the Merger to U.S. holders (as defined below) of Company common stock. This discussion applies only to shareholders that hold their shares of Company common stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Further, this discussion does not address all aspects of United States federal taxation that may be relevant to a particular shareholder in light of its personal circumstances or to shareholders subject to special treatment under the United States federal income tax laws, including: banks or trusts; tax-exempt organizations; insurance companies; dealers in securities or foreign currency; traders in securities who elect to apply a mark-to-market method of accounting; mutual funds; S corporations or other pass-through entities and investors in such entities; foreign persons; shareholders who received their shares of Company common stock through the exercise of employee stock options, through a tax-qualified retirement plan or otherwise as compensation; shareholders who hold Company common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated instrument; and shareholders subject to the alternative minimum tax provisions of the Code.

This discussion is based on the Code, Treasury regulations, administrative rulings and judicial decisions, all as in effect as of the date of this proxy statement and all of which are subject to change (possibly with retroactive effect) and to differing interpretations that could affect the accuracy of the statements and conclusions set forth in this discussion. Tax considerations under state, local and foreign laws are not addressed in this document.

Determining the actual tax consequences of the Merger to you may be complex. They will depend on your specific situation and on factors that are not within our control. You should consult with your own tax advisor as to the tax consequences of the Merger in your circumstances, including the applicability and effect of the alternative minimum tax and any state, local, foreign or other tax laws and of changes in those laws.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Company common stock that is for United States federal income tax purposes (1) an individual citizen or resident of the United States, (2) a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and with respect to which one or more “United States persons” (as defined in the Code) have the authority to control all substantial decisions, or (B) that has a valid election in place under applicable Treasury Regulations to be treated as a United States person.

The United States federal income tax consequences to a partner in an entity or arrangement treated as a partnership, for United States federal income tax purposes, that holds Company common stock generally will depend on the status of the partner and the activities of the partnership. Partners in a partnership holding Company common stock should consult their own tax advisors.

Neither the Company nor Hometown Financial has requested or will request a ruling from the Internal Revenue Service as to any of the tax effects to Company shareholders of the Merger, and no opinion of counsel has been or will be rendered to Company shareholders with respect to any of the tax effects of the Merger to Company shareholders.

The receipt of the merger consideration by a U.S. holder in exchange for Company common stock pursuant to the Merger will generally be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder of Company common stock will recognize gain or loss for federal income tax purposes equal to the difference, if any, between:

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the per share cash merger consideration received by the U.S. holder in exchange for such Company common stock; and

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the U.S. holder’s adjusted tax basis in such Company common stock.

Such gain or loss will be a capital gain or loss if such shares were held as capital assets by the U.S. holder at the effective time of the Merger. The gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period is more than one year at the effective time of the Merger; otherwise, the capital gain or loss will be short-term. Gain or loss, as well as the holding period, will be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered pursuant to the Merger. Long-term capital gains of individuals are generally eligible for reduced rates of taxation. Additionally, a 3.8% Net Income Tax (or Medicare Tax) may apply to all or a portion of the gain recognized by individuals, trusts and estates whose income exceeds certain threshold levels.

Under the Code, a U.S. holder of Company common stock may be subject, under certain circumstances, to information reporting on the cash received in the Merger unless such U.S. holder is a corporation or other exempt recipient. Backup withholding will also apply (currently at a rate of 24%) with respect to the amount of cash received, unless a U.S. holder provides proof of an applicable exemption or a correct taxpayer identification number and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax liability and any amount withheld under the backup withholding rules may generally be refunded or credited against a U.S. holder’s United States federal income tax liability, if any, provided that such U.S. holder furnishes the required information to the Internal Revenue Service in a timely manner.

The foregoing discussion does not claim to be a complete discussion of the potential tax consequences of the Merger. Company shareholders should consult their tax advisors as to the specific tax consequences to them of the Merger, including the applicability and effect of U.S. federal, state, local and foreign income, estate, gift and other tax laws in their circumstances. Nothing in this discussion is intended to be, or should be construed as, tax advice.

Background of the Merger

Since Colonial Federal’s reorganization into the mutual holding company form of organization and concurrent initial public offering in January 2022, the Company’s Board of Directors (the “Board of Directors” or the “Board”) and management have periodically reviewed and assessed strategic opportunities and challenges. The Board of Directors has considered the difficulty in growing while remaining profitable and operating a publicly-traded community financial institution under current economic and competitive conditions. At the same time, like many other small financial institutions, the Company has experienced increasing costs for technology, infrastructure and regulatory compliance.

On April 19, 2024, Michael E. McFarland, President and Chief Executive Officer of the Company, met with William Parent, the Chief Strategy Officer of Hometown Financial, at which the parties discussed the banking industry in general, continuing consolidations in the local banking market, and if the Company may have any interest in discussing any potential opportunities. Mr. McFarland noted the three-year prohibition on the Company engaging in negotiations with a third party, which would not expire until January 2025. The parties agreed to keep open the lines of communication.

On May 1, 2024, Mr. McFarland met with Matthew Sosik, President and Chief Executive Officer of Hometown Financial at a banking conference. Mr. Sosik let Mr. McFarland know of Hometown Financial’s

continued interest in a business combination with the Company. The parties also discussed the institutions’ complementary branch footprint and the strengths of each organization.

Also on May 1, 2024, at that same conference, Mr. McFarland met with the President and Chief Executive Officer of a Massachusetts-chartered mutual holding company (“Company A”). The executives discussed the South Shore region of Massachusetts, the local banking market and the continued consolidation of the industry. The President and CEO of Company A also indicated that his bank would be interested in further discussions if the Company was interested.

On June 5, 2024, Mr. McFarland met with the President and Chief Executive Officer of Company A at which the parties discussed aspects of the South Shore market area, including loan and deposit demand and the local real estate market.

On July 17, 2024, Mr. McFarland met with the President and Chief Executive Officer of Company A to continue discussions about the possibility of a business combination, Company A’s continued interest and the potential synergies that could be achieved.

On July 25, 2024, Mr. McFarland met with Mr. Sosik at which Mr. Sosik expressed his continued interest in a strategic relationship with the Company. The executives discussed the current interest rate environment and certain other matters impacting financial institutions. The executives also discussed the complementary fit of the two organizations.

As part of the Board of Directors’ and management’s evaluation of ways to meet the ongoing challenges facing smaller financial institutions, they regularly have considered both internal growth strategies and strategic business combinations as means of achieving economies of scale. In connection with this ongoing assessment, on August 20, 2024, at a regular meeting of the Board of Directors, the Board held an informational session with a representative of Piper Sandler. Piper Sandler is a nationally recognized investment banking firm with substantial experience advising financial institutions generally, including with respect to mergers and acquisitions. Piper Sandler acted as financial advisor to the Company in connection with its reorganization into the mutual holding company form of organization and concurrent initial public offering in January 2022. The Piper Sandler representative discussed the strategic considerations attendant with a potential future sale of the Company, the market for community bank mergers and acquisitions, potential merger or acquisition partners for the Company, the factors to consider when evaluating or comparing various potential acquirors and an overview of a potential merger process, including a comparison of the different methods of solicitations of interest and an illustrative timeline. A representative of Luse Gorman, PC (“Luse Gorman”), the Company’s legal counsel, also participated in the session and discussed with the Board its fiduciary duties in the context of a potential future strategic transaction. Mr. McFarland also updated the Board on the previous conversations he had with the representatives from Hometown Financial and Company A.

On November 15, 2024, Mr. McFarland met with the President and Chief Executive Officer of Company A to continue discussions about the possibility of a business combination, Company A’s continued interest and the strengths of the two organizations.

On November 17, 2024, Mr. McFarland met with Mr. Sosik at which Mr. Sosik expressed Hometown Financial’s continued interest in a strategic relationship with the Company.

On November 21, 2024, at a regular meeting of the Board of Directors, the Board held another informational meeting with a representative of Piper Sandler. A representative of Luse Gorman was also present, who discussed with the Board its fiduciary duties in the context of a potential future strategic transaction. The Piper Sandler representative discussed various strategic matters to be considered in connection with the potential future sale of the Company and the market for community bank mergers and acquisitions, including an analysis of comparable New England and nationwide transactions. The Board was also provided a pricing analysis assuming a range of

prices. The presentation included an overview of a potential merger process, including a comparison of the different methods of soliciting interest and a potential timeline. A list of 30 potential acquisition partners for the Company was presented (which included mutual institutions with assets from approximately $1 billion to $8 billion located in New England), as were the factors to consider when evaluating or comparing various potential acquirors. Mr. McFarland also updated the Board on the previous conversations he had with the representatives from Hometown Financial and Company A.

On January 3, 2025, Mr. McFarland met with the President and Chief Executive Officer of a Massachusetts-chartered mutual holding company (“Company B”). The executives discussed the possibility of a business combination. The parties discussed their respective organizations, employees and the local market. The parties agreed to continue the dialogue in the future.

On January 21, 2025, at a regular meeting of the Board of Directors, the Board held another informational meeting with representatives of Piper Sandler and Luse Gorman. The representative of Piper Sandler reviewed materials that had previously been distributed to the Board, which supplemented and updated the previous conversations with the Board in August and November. Mr. McFarland also updated the Board on the previous conversations he had with interested third parties. Following discussion, the Board authorized Mr. McFarland to formally engage Piper Sandler as the Company’s financial advisor and to take all steps necessary to pursue a strategic combination.

On January 23, 2025, Mr. McFarland met with the President and Chief Executive Officer of a Massachusetts-chartered mutual holding company (“Company C”) at which the parties discussed a potential business combination and the footprint of the combined organization.

On January 29, 2025, Mr. McFarland met with the President and Chief Executive Officer of a Massachusetts-chartered mutual holding company (“Company D”). The executives discussed the possibility of a business combination. The parties discussed their respective organizations, employees and the local market.

On February 7, 2025, Mr. McFarland met with the President and Chief Executive Officer of Company C. The executives discussed a potential transaction and the President and Chief Executive Officer expressed Company C’s continued interest in a transaction.

On February 12, 2025, Mr. McFarland met with the President and Chief Executive Officer of Company A at which the President and Chief Executive Officer expressed Company A’s continued interest in a transaction.

On February 14, 2025, the Company entered into a letter agreement with Piper Sandler to engage it as the Company’s exclusive financial advisor. Following Piper Sandler’s engagement, Piper Sandler and the Company’s management began preparing a confidential information memorandum that would be provided to each potential interested bidder.

Mr. McFarland and the Company’s legal and financial advisors discussed which institutions Piper Sandler should contact to gauge their interest in entering into a business combination with the Company. The discussions balanced the need to conduct a process designed to maximize the value to be received by shareholders without being so expansive to risk the confidential nature of the process. Mr. McFarland and his advisors discussed which institutions had sufficient capital to undertake the transaction, had expressed interest to the Company or in undertaking M&A in general and were a good cultural and geographic fit. Based on such conversations, Piper Sandler was authorized to reach out to six institutions – the five that had previously contacted Mr. McFarland and one other Massachusetts-chartered mutual holding company.

On February 18, 2025, at a regular meeting of the Board of Directors, the Board held another informational meeting with representatives of Piper Sandler and Luse Gorman. The representative of Piper Sandler reviewed the likely solicitation process, including the materials that would be prepared to allow parties to make an informed bid. A representative from Luse Gorman reminded the Board of the continued importance of

confidentiality and discussed how that would be maintained throughout the solicitation and diligence process. Mr. McFarland also updated the Board on the previous conversations he had with interested third parties since the date of the last Board meeting.

Beginning on March 6, 2025, Piper Sandler, on behalf of the Company, contacted the six institutions to confirm they remained interested in a possible business combination. The Company’s identity was not disclosed to these parties at that time. Of the parties contacted, each executed non-disclosure agreements between March 6, 2025 and March 17, 2025. None of the non-disclosure agreements contained a standstill provision precluding such party from submitting a topping bid directly to the Board of Directors. Following execution of the non-disclosure agreements, each of the parties were informed of the Company’s identity and was provided a copy of a confidential information memorandum and access to a virtual data room with certain initial diligence materials. The confidential information memorandum provided detailed instructions as to the contents that any indications of interest should contain and requested that all such indications be received no later than April 2, 2025.

On March 18, 2025, at a regular meeting of the Board of Directors, the Board held another informational meeting with representatives of Piper Sandler and Luse Gorman. The Board was updated on the solicitation process.

On April 2, 2025, each of Hometown and Companies A, B, C, D submitted written non-binding indications of interest to acquire the Company in an all-cash transaction. The prices of the offers ranged from a low of $12.00 per share to a high of $14.00 per share. The indications of interest each shared the respective bidder’s financial assumptions and included its offers on other matters, including board seats, employee matters (including severance) and timing.

On April 8, 2025, a special meeting of the Board of Directors of the Company was held to review the various indications of interest. Representatives of Piper Sandler and Luse Gorman also participated in the meeting. A representative from Piper Sandler discussed its presentation materials, a copy of which had been previously provided to the Board of Directors, which provided a side-by-side comparison of the five indications of interest that had been submitted. The representative from Piper Sandler noted that subsequent to receipt of the indications of interest, he spoke with representatives of each of the bidding companies to gain any additional guidance that may not have been included in the written submissions. The presentation also included a summary of the pricing of four New England transactions announced since 2024 as well as all nationwide bank transactions with a value over $15 million over the same time period. A potential timeline for the merger transaction was discussed. Additionally, an overview of each of the bidders, including historical information, the pro forma branch footprint and pro forma loan and deposit composition was discussed as a part of the presentation materials.

The Board considered that Hometown Financial was the highest bidder and $0.50 per share higher than the upper range provided by the second highest bidder and $0.90 per share higher than the third highest bidder. Mr. McFarland shared his thoughts about the various parties based on his previous interactions with each of them. The Board also recognized Hometown Financial’s history of successfully executing and integrating other financial institutions and that its banking subsidiary and Colonial Federal shared the same data service provider, which would facilitate integration. The Board and its legal and financial advisor considered whether to invite a reduced list of parties to conduct further diligence and submit revised offers. However, the Board weighed the likelihood that such a process would result in higher bids and its desire to move expeditiously towards a definitive agreement.

After deliberation, the Board determined that it would request Piper that Sandler contact Hometown Financial to request that it increase its price to $14.25 per share. The Board further voted, that if Hometown agreed to do so, the Company would: (1) proceed with the negotiation with Hometown Financial of a definitive agreement substantially consistent with the terms outlined in the Hometown Financial indication of interest letter

for presentation to and consideration by the Board of Directors at the earliest practicable date; (2) take all necessary and appropriate action on behalf of the Company toward such end, including, in consultation with the Company’s legal and financial advisors, conducting a due diligence investigation of Hometown Financial; and (3) allow Hometown Financial to continue to conduct its due diligence investigation of the Company.

On April 8, 2025, the representative of Piper Sandler contacted Hometown Financial with the Board’s request and Hometown Financial submitted a revised indication of interest with a price of $14.25 per share, which the Company countersigned the same day. The revised indication of interest contained a provision whereby the Company agreed to negotiate exclusively with Hometown Financial for a period of 45 days from the date of the indication of interest.

In April 2025, a data room containing diligence materials requested by Hometown Financial relating to the Company was made available to Hometown Financial management and its legal advisor.

On April 21, 2025, representatives from Hometown conducted its on-site review of the Colonial Federal loan portfolio.

During April and May 2025, representatives of the management teams of Hometown Financial and the Company talked several times to discuss the Merger, the operations and business of the two companies and certain logistical issues.

On May 2, 2025, Luse Gorman provided Kilpatrick Townsend & Stockton, LLP (“Kilpatrick Townsend”), legal counsel for Hometown Financial with a draft of the Merger Agreement. Continuing through the date of execution, the parties, along with their legal counsel and financial advisors, continued to review and negotiate the Merger Agreement, along with various other ancillary documents.

In early May 2025, a data room containing diligence materials requested by the Company relating to Hometown Financial was made available to the Company management and its legal and financial advisors.

On May 8, 2025, representatives of Luse Gorman and Kilpatrick Townsend discussed certain legal and non-confidential supervisory regulatory matters.

On May 13, 2025, a special meeting of the Board of Directors was convened. Representatives of Piper Sandler and Luse Gorman participated in the meeting. A copy of the Merger Agreement that had been negotiated to date, as well as certain ancillary documents, had been sent to the members of the Board of Directors in advance of the meeting. The Luse Gorman representatives reviewed in detail the terms of the Merger Agreement, ancillary documents and the voting agreements to be entered into by the directors and certain senior management. Representatives of Luse Gorman also discussed the diligence of Hometown Financial that had been conducted.

On May 14, 2025, a meeting of the Executive Committee of North Shore Bank’s Board of Directors was convened. Representatives from Kilpatrick Townsend participated in the meeting. A copy of the Merger Agreement that had been negotiated to date, as well as certain ancillary documents, had been sent to the members of the Executive Committee in advance of the meeting. At the meeting, the Kilpatrick Townsend representatives reviewed in detail the terms of the Merger Agreement and ancillary documents with the members of the Executive Committee.

On May 20, 2025, the Company convened a regular meeting of the Board of Directors. Representatives of Piper Sander and Luse Gorman participated in the meeting. Representatives of Luse Gorman began by summarizing the fiduciary duties of a director, with an emphasis on the role of the Board in a change in control scenario. The Luse Gorman representatives reviewed changes to the Merger Agreement and the ancillary documents that had been made since the drafts that were discussed with the Board on May 13, 2025. A representative of Piper Sandler made a presentation, a copy of which had been sent in advance to the directors.

The Piper Sandler representative began by summarizing the process to date. He presented several key transaction multiples and compared the stock price performance of the Company against certain stock indices and indicated the trading volume of the Company’s stock over various periods during the past year. The Piper Sandler representative compared the financial metrics for this transaction against the financial metrics of transactions for certain selected peer groups. He also summarized the results of a discounted cash flow analysis Piper Sandler performed on the Company. He concluded his presentation by rendering Piper Sandler’s opinion, to the effect that, as of May 20, 2025 and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler as set forth in Piper Sandler’s opinion, the consideration to be received by the holders of the Company’s common stock (other than 15 Beach, MHC) was fair, from a financial point of view, to such shareholders.

Following these presentations and discussions among the members of the Board of Directors, including consideration of the factors described under “—The Company’s Reasons for the Merger,” the Board of Directors determined that the Merger Agreement and the transactions contemplated thereby, including the merger of the Company and Hometown Financial, were advisable and in the best interests of the Company and its shareholders, and the directors unanimously voted to adopt the Merger Agreement and the transactions contemplated thereby, and recommended that the Company’s shareholders approve the Merger Agreement and the Merger.

On May 20, 2025, North Shore Bank convened a meeting of its Board of Directors. Representatives of Kilpatrick Townsend participated in the meeting and reviewed the fiduciary duties of directors, with an emphasis on the role of the Board in evaluating mergers and the combination of the two companies. Representatives of Kilpatrick Townsend also reviewed the final draft of the Merger Agreement and the ancillary transaction documents and the steps to complete the combination of the two companies and subsidiary banks. Management reviewed with the North Shore Bank Board of Directors financial information with respect to the pro forma company and the subsidiary banks, focusing on the pro forma capital ratios and also the pro forma balance sheet, cost savings and pro forma net income. Following these presentations and discussions among the members of North Shore Bank’s Board of Directors, the North Shore Bank Board of Directors determined that the Merger Agreement and the transactions contemplated thereby were advisable and in the best interests of North Shore Bank and its various constituents. The North Shore Bank Board of Directors then unanimously voted to adopt the Merger Agreement and to approve the transactions contemplated thereby.

On May 20, 2025, each of Hometown MHC and Hometown Financial also convened a joint meeting of their respective Board of Directors. Representatives of Kilpatrick Townsend participated in this meeting and reviewed the fiduciary duties of directors, with an emphasis on the role of the Board in evaluating mergers and the combination of the two companies. Representatives of Kilpatrick Townsend reviewed the final draft of the Merger Agreement and the ancillary transaction documents and the steps to complete the combination of the two companies and subsidiary banks. Management of Hometown MHC and Hometown Financial reviewed with the Boards of Directors financial information with respect to the pro forma company and the subsidiary banks, focusing on the pro forma capital ratios and also the pro forma balance sheet, cost savings and pro forma net income. Following these presentations and discussions among the members of the Hometown MHC and Hometown Financial Boards of Directors, the Board of Directors of each of Hometown MHC and Hometown Financial determined that the Merger Agreement and the transactions contemplated thereby were advisable and in the best interests of Hometown MHC and Hometown Financial and their various constituents. The Board of Directors of each of Hometown MHC and Hometown Financial then each unanimously voted to adopt the Merger Agreement and to approve the transactions contemplated thereby.

Following the completion of the Company and Hometown Financial’s board meetings, the Merger Agreement and ancillary documents were executed and delivered. On May 20, 2025, Hometown Financial and the Company issued a joint press release announcing the execution of the Merger Agreement.

The Company’s Reasons for the Merger

The discussion of the information and factors considered by the Company’s board of directors is not intended to be exhaustive, but rather includes the principal material information, factors and analyses considered by the Board in reaching its conclusions and recommendation in relation to the Merger Agreement and the transactions. The Board evaluated the Merger Agreement and the transactions in consultation with Colonial’s executive management and the Company’s outside legal and financial advisors. The Board did not provide a specific assessment of, quantify or otherwise assign any relative weights to, the factors considered in determining its recommendation. Instead, the Board conducted an overall analysis of the factors and reasons described above and determined in its business judgment that, in the aggregate, the potential benefits of the Merger to the shareholders of the Company outweighed the risks or potential negative consequences. Individual members of the Board may have given different weight to different factors. In addition, in arriving at its recommendation, the directors of the Company were aware of the interests of certain officers and directors of the Company as described under “Interests of Directors and Officers in the Merger that are Different From Your Interests.”

In evaluating and reaching its decision to approve the Merger Agreement and recommend that the Company’s shareholders approve the Merger Agreement, the Company’s board of directors considered a number of factors, including the following, which are not intended to be exhaustive and are not presented in any relative order of importance:

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the belief of the board of directors that the merger consideration of $14.25 per share in cash represents fair value for shares of Company common stock, taking into account Colonial’s current and historical financial condition, results of operations, business, competitive position and prospects, particularly in comparison to Colonial’s near-term and long-term plans if the Company were to remain an independent company, and the future prospects and risks associated with remaining an independent company and the risks and uncertainties associated with the execution of the standalone plan;

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the opportunity for the Company’s shareholders to realize substantial value based on the merger consideration offered by Hometown Financial, which represents 1.23x of the Company’s tangible book value per share and an 82.5% premium over the one day prior Company common stock trading price;

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that the merger consideration consists solely of cash, which provides certainty of value and liquidity to the shareholders of the Company and does not expose them to any future risks related to the business or the financial markets generally as compared to remaining an independent, standalone company;

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the merger consideration offered by Hometown Financial equaled or exceeded the consideration that was presented by other parties throughout the process and that could reasonably be expected from other potential acquirers with the apparent ability to consummate the acquisition of Colonial, taking into consideration all factors;

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pricing and other considerations for other recent financial institution acquisition transactions;

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the understanding of the Company’s board of directors of the strategic options available to Colonial and the board of directors’ assessment of those options with respect to the prospects and estimated results of the execution by the Company of its business plan as an independent entity under various scenarios and the determination that none of those options or the execution of the business plan were more likely to create greater present value for the Company’s shareholders than the value to be paid by Hometown Financial;

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the current and prospective environment in the financial services industry, including economic conditions and the interest rate and regulatory environments, the accelerating pace of technological change in the financial services industry, operating costs resulting from regulatory and compliance mandates, scale and marketing expenses, increasing competition from both banks and non-bank financial and financial technology firms, current financial market conditions, current employment market conditions and the likely effects of these factors on Colonial Federal’s potential growth, development, productivity and strategic options;

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the historical stock market performance for the Company’s common stock and the common stock performance of other publicly-traded issuers in the banking industry;

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the Company board of directors’ views with respect to other potential strategic alternatives, including remaining independent, making acquisitions, pursuing other similarly-sized merger partners, pursuing larger merger partners and undertaking a second-step conversion transaction whereby 15 Beach, MHC would convert from a mutual holding company form of structure to a stock holding company form of structure;

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the ability of Hometown Financial to execute a merger transaction from a financial and regulatory perspective, especially in light of the fact that Hometown Financial was a seasoned acquiror;

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that Hometown Financial has integration experience through various acquisitions, which could be beneficial to the integration process;

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the geographic fit and increased customer convenience of the expanded branch network of Hometown Financial;

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the benefits to Colonial Federal and its customers of operating as a significantly larger organization, the wider array of financial products and services that would be available to customers of Colonial Federal and the communities served by Colonial Federal, including enhancements in technology investments, products and services, the ability to grow its lending portfolio, higher lending limits that would enable Colonial Federal to serve customers whose lending relationships were approaching Colonial Federal’s legal lending limit, and greater financial resources;

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Hometown Financial’s current form of organization, including that Hometown Financial is in the mutual holding company form of corporate organization and that the members/customers of Colonial Federal will have the benefit of mutual interests, and membership rights, in Hometown Financial’s mutual holding company following the transaction;

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Hometown Financial’s business, operations, financial condition, asset quality, earnings and prospects, taking into account the results of the Company’s due diligence review of Hometown Financial, and information provided by the Company’s financial advisor;

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the complementary nature of the cultures and operational philosophies of the two companies, including with respect to their community banking business model, strategic focus, target markets, client service, credit cultures, risk profiles and community commitment, and the Company’s board of director’s belief that the complementary cultures will facilitate the successful integration and implementation of the transaction;

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the financial presentation, dated May 20, 2025, of Piper Sandler to the Company’s board of directors and the opinion, dated May 20, 2025, of Piper Sandler to the Company’s board of directors as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration to be received by the holders of the Company’s common stock (other than 15 Beach, MHC) in the Merger to such holders, as more fully described below under “ — Opinion of the Company’s Financial Advisor”;

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the terms of the Merger Agreement, including the representations and warranties of the parties, the covenants, the consideration, the circumstances under which the Company’s board of directors may consider a superior proposal and the circumstances upon which the Company’s board of directors may terminate the Merger Agreement;

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the review by the Company’s board of directors, with legal counsel, of the material terms of the Merger Agreement, including (1) the Board’s ability, under certain circumstances, to consider an unsolicited acquisition proposal, (2) the Board’s ability to terminate the Merger Agreement to enter into a definitive agreement with respect to a superior proposal (subject to payment of a $1,550,000 termination fee), (3) the Board’s ability to terminate the Merger Agreement if a regulatory approval

necessary to consummate the Merger was not received solely as result of Hometown Financial’s regulatory condition, and (4) the nature of the covenants, representations and warranties and other termination provisions in the Merger Agreement;

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the effects of the Merger on Colonial Federal employees, including the prospects for continued employment in a larger organization, and Hometown Financial’s commitment to provide Colonial Federal employees with aggregate annual base salary or wages at least equal to their aggregate salary or wages prior to the effective time;

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that Colonial Federal employees would receive severance benefits if they are separated from Hometown Financial, other than for cause, at any time up to and for a period of nine months following the consummation of the Merger;

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the ability of Colonial Federal employees to participate in the employee benefit plans of Hometown Financial following the consummation of the transaction;

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the likelihood of expeditiously obtaining the regulatory approvals necessary to complete the transaction without unusual or burdensome conditions;

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the uncertainty surrounding potential legal, regulatory and policy changes that may directly affect financial institutions and the global economy; and

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the increasing importance of operational scale and financial resources in maintaining efficiency and remaining competitive over the long term and in being able to capitalize on technological developments that significantly impact industry competitive conditions.

The Company’s board of directors also considered a number of potential risks and uncertainties associated with the Merger during its deliberation of the proposed transaction, including, without limitation, the following:

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the potential risk of diverting management and employee attention and resources from the operation of Colonial Federal’s business and towards the completion of the Merger;

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that the Merger Agreement restricts the conduct of Colonial Federal’s business before the completion of the Merger that, subject to specific exceptions, could delay or prevent Colonial Federal from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of Colonial absent the pending Merger;

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that, while Colonial expects that the Merger will be consummated, there can be no assurance that all conditions to the parties’ obligations to complete the Merger Agreement will be satisfied, including the risk that necessary regulatory approvals or the Company’s shareholder approval (or member approval, if required) might not be obtained and, as a result, the Merger may not be consummated;

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the risk of potential employee attrition and/or adverse effects on business and customer relationships as a result of the pending Merger;

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certain anticipated Merger-related costs;

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that: (1) the Company would be prohibited from affirmatively soliciting acquisition proposals after execution of the Merger Agreement; and (2) the Company would be obligated to pay to Hometown Financial a termination fee of $1,550,000 if the Merger Agreement is terminated under certain circumstances, which may discourage other parties potentially interested in a business combination with Colonial from pursuing such a transaction;

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that the board of directors is required to submit the Merger to the vote of the Company’s shareholders at the special meeting even if the Board has made a change of recommendation, unless the amended Merger Agreement is terminated;

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the possibility of litigation in connection with the transaction; and

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that the gain likely to be realized by the Company’s shareholders as a result of the Merger generally will be taxable to such shareholders for U.S. federal income tax purposes if they are not otherwise exempt from the payment of such taxes.

The Company’s board of directors unanimously recommends that the Company’s shareholders vote “FOR” the adoption of the Merger proposal, and “FOR” the Adjournment Proposal.

The Company’s shareholders should be aware that some members of Colonial’s board of directors and executive officers may have interests in the Merger that are different from, or in addition to, those of other Company shareholders. The Company’s board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement, and in recommending that the Merger proposal be approved by the shareholders of the Company. See “Interests of Directors and Officers in the Merger that are Different From Your Interests.”

This summary of the reasoning of the Company’s board of directors and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Note Regarding Forward-Looking Statements.”

Opinion of the Company’s Financial Advisor

The Company retained Piper Sandler to act as financial advisor to the Company’s board of directors in connection with the Company’s consideration of a possible business combination. The Company selected Piper Sandler to act as its financial advisor because Piper Sandler is a nationally recognized investment banking firm that specializes in the representation of financial institutions. In the ordinary course of its investment banking business, Piper Sandler is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

Piper Sandler acted as financial advisor to the Company’s board of directors in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the Merger Agreement. At the May 20, 2025 meeting at which the Company’s board of directors considered the Merger and the Merger Agreement, Piper Sandler delivered to the board of directors its oral opinion, which was subsequently confirmed in writing on May 20, 2025, to the effect that, as of such date, the merger consideration was fair, from a financial point of view, to the holders of the Company’s common stock (other than 15 Beach, MHC). The full text of Piper Sandler’s opinion is attached as Annex B to this proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of the Company’s common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Piper Sandler’s opinion was directed to the board of directors of the Company in connection with its consideration of the Merger Agreement and the Merger and does not constitute a recommendation to any shareholder of the Company as to how any such shareholder should vote at any meeting of shareholders called to consider and vote on the approval of the Merger Agreement and the Merger. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the merger consideration to the holders of the Company’s common stock (other than 15 Beach, MHC) and did not address the underlying business decision of the Company to engage in the Merger, the form or structure of the Merger or any other transactions contemplated in the Merger Agreement, the relative merits of the Merger as compared to any other alternative transactions or business strategies that might exist for the Company, or the effect of any other transaction in which the Company might engage. Piper Sandler also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the Merger by any officer, director or employee of the Company or Hometown MHC, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder. Piper Sandler’s opinion was approved by Piper Sandler’s fairness opinion committee.

In connection with its opinion, Piper Sandler reviewed and considered, among other things:

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a draft of the Merger Agreement dated May 14, 2025;

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certain publicly available financial statements and other historical financial information of the Company that Piper Sandler deemed relevant;

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certain publicly available financial statements and other historical financial information of Hometown MHC and Hometown Financial that Piper Sandler deemed relevant;

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certain internal financial projections for the Company for the fiscal years ending June 30, 2025 through June 30, 2029, as provided by the senior management of the Company;

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the pro forma financial impact of the merger on Hometown MHC’s regulatory capital ratios following the closing date given certain assumptions relating to purchase accounting adjustments and estimated transaction costs, as provided by the senior management of Hometown MHC;

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a comparison of certain financial and market information for the Company with similar banks and thrifts for which information was publicly available;

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the current market environment generally and the banking environment in particular; and

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such other information, financial studies, analyses and investigations and financial, economic and market criteria as Piper Sandler considered relevant.

Piper Sandler also discussed with certain members of the senior management of the Company the business, financial condition, results of operations and prospects of the Company and held similar discussions with certain members of the senior management of Hometown MHC and its representatives regarding the business, financial condition, results of operations and prospects of Hometown MHC.

In performing its review, Piper Sandler relied upon the accuracy and completeness of all the financial and other information that was available to and reviewed by Piper Sandler from public sources, that was provided to Piper Sandler by the Company or Hometown MHC or their respective representatives, or that was otherwise reviewed by Piper Sandler, and Piper Sandler assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Piper Sandler relied on the assurances of the respective managements of the Company and Hometown MHC that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading. Piper Sandler was not asked to and did not undertake an independent verification of any of such information and Piper Sandler did not assume any responsibility or liability for the accuracy or completeness thereof. Piper Sandler did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of the Company or Hometown MHC, nor was Piper Sandler furnished with any such evaluations or appraisals. Piper Sandler rendered no opinion or evaluation on the collectability of any assets or the future performance of any loans of the Company or Hometown MHC. Piper Sandler did not make an independent evaluation of the adequacy of the allowance for credit losses of the Company or Hometown MHC, or of the combined entity after the merger, and Piper Sandler did not review any individual credit files relating to the Company or Hometown MHC or any of their respective subsidiaries. Piper Sandler assumed, with the Company’s consent, that the respective allowances for credit losses for both the Company and Hometown MHC were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Piper Sandler used certain internal financial projections and estimates for the Company for the fiscal years ending June 30, 2025 through June 30, 2029, as provided by the senior management of the Company. Piper Sandler also received and used in its pro forma analyses certain assumptions relating to purchase accounting adjustments and estimated transaction costs, as provided by the senior management of Hometown MHC. With respect to the foregoing information, the senior management of the Company confirmed to Piper Sandler that such information reflected the best currently available projections and estimates of senior management as to the future financial performance of the Company, and the senior management of Hometown

MHC confirmed to Piper Sandler that such assumptions reflected the best currently available estimates of senior management with respect to the pro forma impact of the Merger on Hometown MHC’s regulatory capital ratios following the Merger, and Piper Sandler assumed, in each case, that such performance would be achieved. Piper Sandler expressed no opinion as to such information, or the assumptions on which such information was based. Piper Sandler also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of the Company or Hometown MHC since the date of the most recent financial statements made available to Piper Sandler. Piper Sandler assumed in all respects material to its analyses that the Company and Hometown MHC would remain as going concerns for all periods relevant to its analyses.

Piper Sandler also assumed, with the Company’s consent, that (1) each of the parties to the Merger Agreement would comply in all material respects with all material terms and conditions of the Merger Agreement and all related agreements, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of the parties to such agreements would perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements were not and would not be waived, (2) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on the Company, Hometown MHC, the Merger or any related transactions, and (3) the Merger and any related transactions would be consummated in accordance with the terms of the Merger Agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Finally, with the Company’s consent, Piper Sandler relied upon the advice that the Company received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the Merger Agreement. Piper Sandler expressed no opinion as to any such matters.

Piper Sandler’s opinion was necessarily based on financial, economic, regulatory, market and other conditions as in effect on, and the information made available to Piper Sandler as of, the date thereof. Events occurring after the date thereof could materially affect Piper Sandler’s opinion. Piper Sandler has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof. Piper Sandler did not express any opinion as to the trading value of the Company common stock at any time.

In rendering its opinion, Piper Sandler performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Piper Sandler’s opinion or the presentation made by Piper Sandler to the Company’s board of directors, but is a summary of the material analyses performed and presented by Piper Sandler. The summary includes information presented in tabular format. To fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Piper Sandler believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Piper Sandler’s comparative company analyses described below is identical to the Company or Hometown MHC and no transaction is identical to the Merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or transaction values, as the case may be, of the Company and Hometown MHC and the companies to which they were compared. In arriving at its opinion, Piper Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Piper Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. Piper

Sandler did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Piper Sandler made its determination as to the fairness of the merger consideration to the holders of the Company’s common stock (other than 15 Beach, MHC) on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

In performing its analyses, Piper Sandler also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of the Company, Hometown MHC, and Piper Sandler. The analyses performed by Piper Sandler are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Piper Sandler prepared its analyses solely to render its opinion and provided such analyses to the Company’s board of directors at its May 20, 2025 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Piper Sandler’s analyses do not necessarily reflect the value of the Company common stock or the prices at which the Company common stock may be sold at any time. The analyses of Piper Sandler and its opinion were among a number of factors taken into consideration by the Company’s board of directors in making its determination to approve the Merger Agreement and the analyses described below should not be viewed as determinative of the decision of the Company’s board of directors with respect to the fairness of the merger consideration to the to the holders of Company common stock (other than 15 Beach, MHC).

Summary of Proposed Merger Consideration and Implied Transaction Metrics.

Piper Sandler reviewed the financial terms of the proposed Merger. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger each share of the Company’s common stock issued and outstanding immediately prior to the effective time of the transaction, except for certain shares as set forth in the Merger Agreement, shall be converted into the right to receive $14.25 in cash, without interest. Piper Sandler calculated an aggregate implied transaction value of approximately $43.8 million. Based upon financial information for the Company as of or for the last twelve months (“LTM”) ended March 31, 2025, and the closing price of the Company’s common stock on May 16, 2025, Piper Sandler calculated the following implied transaction metrics:


Transaction Price Per Share / Stated Book Value Per Share	123	%
Transaction Price Per Share / Stated Tangible Book Value Per Share	123	%
Tangible Book Premium / Core Deposits (CDs > 100k)⁽¹⁾	1.2	%
Tangible Book Premium / Core Deposits (CDs > 250k)⁽²⁾	1.1	%
Premium to the Company’s Stock price as of May 16, 2025	82	%

(1)	Core deposits equal to total deposits less CDs greater than $100,000

(2)	Core deposits equal to total deposits less CDs greater than $250,000

Source: S&P Capital IQ Pro, the Company documents

Stock Trading History.

Piper Sandler reviewed the publicly available historical reported trading price of the Company’s common stock for the one- and three-year periods ended May 16, 2025. Piper Sandler then compared the relationship between the movement in the price of the Company’s common stock to movements in the CFSB Bancorp Peer Group (as described below) as well as the NASDAQ Bank and S&P 500 indices.

CFSB Bancorp’s One-Year Stock Performance


	Beginning Value May 16, 2024			Ending Value May 16, 2025
CFSB Bancorp		100	%		118.2	%
CFSB Bancorp Peer Group		100	%		102.7	%
S&P 500 Index		100	%		112.5	%
NASDAQ Bank Index		100	%		113.0	%

CFSB Bancorp’s Three-Year Stock Performance


	Beginning Value May 16, 2022			Ending Value May 16, 2025
CFSB Bancorp		100	%		82.7	%
CFSB Bancorp Peer Group		100	%		64.3	%
S&P 500 Index		100	%		148.7	%
NASDAQ Bank Index		100	%		105.0	%

Comparable Company Analysis.

Piper Sandler used publicly available information to compare selected financial information for the Company with a group of financial institutions selected by Piper Sandler. The CFSB Bancorp peer group included banks and thrifts with publicly traded securities, with total assets between $100 million and $1 billion and LTM ROAA between (0.20%) and 0.20%, but excluded targets of announced merger transactions and institutions not pro forma for pending/recently completed acquisitions or capital raises that occurred after period end (the “CFSB Bancorp Peer Group”). The CFSB Bancorp Peer Group consisted of the following companies:


Auburn Bancorp, Inc.		Heritage NOLA Bancorp, Inc.
Bogota Financial Corp.		Liberty Northwest Bancorp, Inc.⁽¹⁾
CCCB Bancorp, Inc.⁽¹⁾		Marathon Bancorp, Inc.
First Community Financial Corporation⁽¹⁾		Mauch Chunk Trust Financial Corp.
First Seacoast Bancorp, Inc.		Pacific West Bancorp
Glen Burnie Bancorp		UNB Corp.
Grand River Commerce, Inc.		WCF Bancorp, Inc.

(1)	Period end is December 31. The period end for the other institutions is March 31.

The analysis compared publicly available financial information for the Company with corresponding data for the CFSB Bancorp Peer Group as of or for the last twelve months ended March 31, 2025 (unless otherwise noted) with pricing data as of May 16, 2025. The table below sets forth the data for the Company and the median, mean, low and high data for the CFSB Bancorp Peer Group.

CFSB Bancorp Comparable Company Analysis


	CFSB Bancorp			CFSB Bancorp Peer Group Median		CFSB Bancorp Peer Group Mean			CFSB Bancorp Peer Group Low			CFSB Bancorp Peer Group High
Total assets ($mm)		366			290		384			101			930
Loans / Deposits (%)		63.8			97.2		89.3			46.1			112.2
Non-performing assets / Total assets (%)		—	⁽¹⁾		0.31		0.54			—			2.68
Tangible common equity/Tangible assets (%)		20.68			6.86		8.01			(0.87	)		14.85
Leverage Ratio (%)		17.66	⁽¹⁾		9.54		9.83			7.42			13.55
Total RBC Ratio (%)		34.24	⁽¹⁾		14.55		14.11			10.09			16.60
CRE / Total RBC Ratio (%)		39.6	⁽¹⁾		142.2		166.6			35.2			389.1
LTM Return on average assets (%)		—			0.04		0.05			(0.10	)		0.21
LTM Return on average equity (%)		—			0.1		(1.1	)		(22.7	)		2.8
LTM Net interest margin (%)		1.97			2.40		2.43			1.27			2.99
LTM Efficiency ratio (%)		101.1			98.2		100.3			86.4			117.5
Stock Price		7.81			7.85		12.94			3.50			77.00
Price/Tangible book value (%)		68	⁽²⁾		66		66			48			91
Price/LTM Earnings per share (x)		NM			24.4		23.7			22.3			24.4
Dividend Yield (%)		—			—		—			—			3.9
Market Cap ($mm)		51	⁽³⁾		19		23			4			88

(1)	Bank level data shown as of March 31, 2025

(2)	Stated tangible book value

(3)	Based on 6,548,575 shares outstanding

Note: “NM” represents “Not Meaningful” for price / EPS multiples less than 0.0x

Analysis of Precedent Transactions.

Piper Sandler reviewed a nationwide group of recent merger and acquisition transactions. The nationwide group consisted of bank and thrift merger and acquisition transactions announced between January 1, 2023 and May 16, 2025 with target total assets between $100 million and $950 million and LTM ROAA less than 0.35% (the “Nationwide Precedent Transactions”).

The Nationwide Precedent Transactions group was composed of the following transactions:


Acquiror		Target
Plumas Bancorp		Cornerstone Community Bancorp
Mid Penn Bancorp Inc.		William Penn Bancorp
Mifflinburg Bancorp Inc.		Northumberland Bancorp
TowneBank		Village Bank and Trust Financial Corp.
ESL FCU		Generations Bancorp NY, Inc.
First National Corp.		Touchstone Bankshares
National Bankshares Inc.		Frontier Community Bank
Princeton Bancorp		First National B&TC
LCNB Corp.		Eagle Financial Bancorp Inc
NexTier Inc.		Mars Bancorp Inc.

Using the latest publicly available information prior to the announcement of the relevant transaction, Piper Sandler reviewed the following transaction metrics: transaction price to LTM earnings per share, transaction price to tangible book value per share, core deposit premium, and one-day market premium. Piper Sandler compared

the indicated transaction metrics for the Merger to the median, mean, low and high metrics of the Nationwide Precedent Transactions group.


				Nationwide Precedent Transactions
	Hometown MHC/ CFSB Bancorp			Median		Mean		Low			High
Transaction Price / LTM Earnings Per Share (x)		NM			24.6		25.0		17.3			33.4
Transaction Price / Tangible Book Value Per Share (%)		123	⁽¹⁾		103		108		71			171
Tangible Book Value Premium to Core Deposits (%)		1.2			0.7		0.8		(3.3	)		8.8
One-Day Market Premium (%)		82.5			35.1		29.1		(10.8	)		53.3

(1)	Stated tangible book value

Note: Excludes transactions with undisclosed deal values and buyers classified as investor groups; Core Deposit Premium defines core deposits as total deposits less time deposits with balances greater than $100,000; “NM” represents “Not Meaningful” for price / EPS multiples less than 0.0x

Net Present Value Analyses.

Piper Sandler performed an analysis that estimated the net present value of a share of the Company’s common stock assuming the Company performed in accordance with internal financial projections and estimates for the Company for the fiscal years ending June 30, 2025 through June 30, 2029, as provided by the senior management of the Company. To approximate the terminal value of a share of the Company’s common stock at May 20, 2025, Piper Sandler applied price to 2029 earnings multiples ranging from 14.0x to 24.0x and multiples of 2029 tangible book value ranging from 60% to 110%. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 14.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of the Company’s common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of the Company common stock of $2.00 to $4.00 when applying multiples of earnings and $4.26 to $9.09 when applying multiples of tangible book value.

Earnings Per Share Multiples


Discount Rate	14.0x	16.0x	18.0x	20.0x	22.0x	24.0x
10.0%	$2.33	$2.66	$3.00	$3.33	$3.66	$4.00
11.0%	$2.24	$2.56	$2.88	$3.20	$3.53	$3.85
12.0%	$2.16	$2.47	$2.78	$3.09	$3.39	$3.70
13.0%	$2.08	$2.38	$2.67	$2.97	$3.27	$3.56
14.0%	$2.00	$2.29	$2.58	$2.86	$3.15	$3.43

Tangible Book Value Per Share Multiples


Discount Rate	60%	70%	80%	90%	100%	110%
10.0%	$4.96	$5.78	$6.61	$7.44	$8.26	$9.09
11.0%	$4.77	$5.57	$6.36	$7.16	$7.95	$8.75
12.0%	$4.59	$5.36	$6.12	$6.89	$7.65	$8.42
13.0%	$4.42	$5.16	$5.90	$6.63	$7.37	$8.11
14.0%	$4.26	$4.97	$5.68	$6.39	$7.10	$7.81

Piper Sandler also considered and discussed with the Company’s board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to earnings. To illustrate this impact, Piper Sandler performed a similar analysis, assuming the Company’s earnings varied from 20.0% above projections to 20% below projections. This analysis resulted in the following range of per share values for the Company’s common stock, applying the price to 2029 earnings multiples range of 14.0x to 24.0x referred to above and a discount rate of 11.58%.

Earnings Per Share Multiples


Annual Estimate Variance	14.0x	16.0x	18.0x	20.0x	22.0x	24.0x
(20%)	$1.76	$2.01	$2.26	$2.51	$2.76	$3.01
(10%)	$1.97	$2.26	$2.54	$2.82	$3.10	$3.39
0.0%	$2.19	$2.51	$2.82	$3.13	$3.45	$3.76
10%	$2.41	$2.76	$3.10	$3.45	$3.79	$4.14
20%	$2.63	$3.01	$3.39	$3.76	$4.14	$4.51

Piper Sandler noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Pro Forma Results and Capital Ratios.

Piper Sandler analyzed certain potential pro forma effects of the Merger on Hometown MHC’s capital ratios given certain assumptions relating to purchase accounting adjustments and estimated transaction costs. The analysis indicated that as of May 20, 2025, Hometown MHC would maintain its regulatory capital ratios in excess of the regulatory guidelines for “well-capitalized” status following the merger. In connection with its pro forma analysis, Piper Sandler considered and discussed with the Company’s board of directors how the results thereof are not necessarily indicative of actual values or future results. The actual results achieved by the combined company may vary from projected results and the variations may be material.

Piper Sandler’s Relationship.

Piper Sandler is acting as the Company’s financial advisor in connection with the Merger and will receive a fee for such services, which fee is contingent upon consummation of the Merger. At the time of announcement of the transaction Piper Sandler’s fee was approximately $1.2 million. Piper Sandler also received a $100,000 fee from the Company upon rendering its opinion, which opinion fee will be credited in full towards the advisory fee which will become payable to Piper Sandler upon closing of the Merger. The Company has also agreed to indemnify Piper Sandler against certain claims and liabilities arising out of Piper Sandler’s engagement and to reimburse Piper Sandler for certain of its out-of-pocket expenses incurred in connection with Piper Sandler’s engagement.

Piper Sandler did not provide any other investment banking services to the Company in the two years preceding the date of its opinion. In the two years preceding the date thereof, Piper Sandler provided certain investment banking services to Hometown MHC and Hometown Financial. In summary, Piper Sandler acted as placement agent in connection with the offer and sale of Hometown Financial Senior Notes, which closed in March 2024 and for which Piper Sandler received approximately $2.3 million in compensation. In addition, in the ordinary course of Piper Sandler’s business as a broker-dealer, Piper Sandler may purchase securities from and sell securities to the Company and Hometown MHC.

Interests of Directors and Officers in the Merger that are Different From Your Interests

Some members of the Company’s management and board of directors may have interests in the Merger that are different from or in addition to the interests of shareholders. The Company’s board of directors were aware of these interests and considered them in approving the Merger Agreement. Included below is a summary of those interests.

Employment and Settlement Agreements. Colonial Federal is a party to employment agreements with change in control provisions with Mr. McFarland and Ms. Shea, which provide that if within two years after a change in control (as defined therein), the executive is involuntarily terminated, the executive will be entitled to a payment equal to three times the average of the amount reported in Box 5 of the executive’s Form W-2 plus (1) the executive’s share of non-taxable premiums paid for medical and dental insurance and (2) deductions taken from the executive’s compensation to fund the executive’s flexible spending account, for the five calendar years preceding the year of the executive’s termination of employment or preceding the year in which the change in control occurs, whichever is greater. In addition, the executive will continue to participate in benefit plans that provide medical, dental and life insurance until the earlier of (1) the executive’s death, (2) the executive’s employment by another employer or (3) 36 months after the executive’s termination of employment.

Simultaneously with the signing of the Merger Agreement, each of Mr. McFarland and Ms. Shea entered into settlement agreements with Colonial, which will provide for cash payments to be made to the executives at the closing of the Merger in exchange for the termination of their employment agreements with Colonial. The cash payments to be paid under the settlement agreements are $886,190 for Mr. McFarland and $690,000 for Ms. Shea, and are conditioned on the Merger becoming effective.

Restrictive Covenant Agreement with Michael E. McFarland. Simultaneously with the signing of the Merger Agreement, Hometown Financial, North Shore Bank and Mr. McFarland entered into a Restrictive Covenant Agreement, which is conditioned on the Merger becoming effective, that provides for a cash payment of $165,000 to Mr. McFarland. Under this Restrictive Covenant Agreement, for the twelve-month period following the closing of the Merger, Mr. McFarland will be subject to certain non-solicitation and non-compete restrictions. Mr. McFarland will also be subject to confidentiality and non-disparagement obligations.

Consulting Agreement with Susan J. Shea. Simultaneously with the signing of the Merger Agreement, Hometown Financial, North Shore Bank and Ms. Shea entered into a consulting agreement, which is conditioned on the Merger becoming effective. The consulting agreement provides for a consulting fee of $20,000 per month for eight months following the closing of the Merger unless Ms. Shea provides 30 days written notice to terminate the agreement.

Board Seat with North Shore Bank. North Shore Bank will consider increasing the size of its board of directors and appointing one or more interested members of the Company’s board of directors, but North Share Bank is under no obligation to do so. The remaining directors of Hometown Financial and North Shore Bank will be persons who served as directors of Hometown Financial and North Shore Bank prior to the completion of the Merger.

Protection of Company Directors and Officers Against Claims. Hometown MHC, Hometown Financial and North Shore Bank agreed to indemnify and hold harmless each current and former director, officer or employee of Colonial for six years after the Merger’s effective time for claims arising from their position with Colonial or their service to Colonial, to the fullest extent set forth in the Company’s charter and bylaws on the date of the Merger Agreement and to the fullest extent permitted under applicable law. Hometown Financial will also maintain a policy of directors’ and officers’ liability insurance coverage for the benefit of the Company’s directors and officers for six years following consummation of the Merger, subject to certain limitations on the amount of premiums to be paid.

Stock Options. Under the terms of the Merger Agreement, outstanding stock options to purchase shares of Company common stock, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment equal to the excess of $14.25 over the exercise price per option multiplied by the number of stock options held, less applicable taxes required to be withheld. Set forth below is the number of outstanding stock options held by each director and named executive officer of the Company as of August 8, 2025 and the cash-out value (pre-tax) of the stock options as determined under the terms of the Merger Agreement.


Name	Exercise Price		Stock Options		Cash-Out Value (pre-tax)
Paul N. Baharian	$	9.09		14,000	$	72,240
Kemal Denizkurt	$	7.99		14,000	$	87,640
Robert Guarnieri	$	9.09		14,000	$	72,240
Edward J. Keohane	$	9.09		14,000	$	72,240
Stephen D. Marini	$	9.09		14,000	$	72,240
Michael E. McFarland	$	7.99		64,000	$	400,640
James M. O’Leary, Jr.	$	9.09		14,000	$	72,240
Susan J. Shea	$	7.99		48,000	$	300,480
Tracy Wilson	$	9.09		14,000	$	72,240

Restricted Stock Awards. Under the terms of the Merger Agreement, any vesting restrictions on the Company’s restricted stock awards that have not yet vested will lapse and such awards will be exchanged for the merger consideration, less applicable taxes required to be withheld. The number of unvested restricted stock awards as of August 8, 2025 that will become vested as a result of the Merger held by the named executive officers and directors of the Company, are as follows:


Name	Unvested Restricted Stock		Cash-Out Value (pre-tax)
Paul N. Baharian		3,600	$	51,300
Kemal Denizkurt		3,600	$	51,300
Robert Guarnieri		3,600	$	51,300
Edward J. Keohane		3,600	$	51,300
Stephen D. Marini		3,600	$	51,300
Michael E. McFarland		14,400	$	205,200
James M. O’Leary, Jr.		3,600	$	51,300
Susan J. Shea		10,800	$	153,900
Tracy Wilson		3,600	$	51,300

Change in Control Agreements. Colonial Federal is a party to change in control agreements with certain executives, including Kemal A. Denizkurt, the Vice President of Financial Markets, which provides that if, within 24 months after the effective date of a change in control (as defined in the change in control agreements) of the Company or Colonial Federal, the executive’s employment is involuntarily terminated, the executive will be entitled to a payment equal to two times the amount reported in Box 5 of the executive’s Form W-2 plus (1) the executive’s share of non-taxable premiums paid for medical and dental insurance and (2) deductions taken from the executive’s compensation to fund the executive’s flexible spending account, each for the calendar year preceding the year of the executive’s termination of employment or preceding the year in which the change in control occurs, whichever is higher. In addition, the executive will continue to participate in benefit plans that provide medical and life insurance for 24 months. If Colonial Federal or its successor cannot provide those benefits, it will either provide the coverage under a comparable individual policy or make a cash equivalent payment to the executive.

Assuming the Merger is completed and Mr. Denizkurt’s employment is terminated, the estimated amount of cash severance and benefits payable under his change in control agreement is estimated to be $465,018, less tax witholdings and reductions necessary to avoid penalties under Sections 280G and 4999 of the Code.

Deferred Compensation Plans. The Company has entered into individual Deferred Compensation Agreements with certain executives, including Mr. McFarland, Ms. Shea, and Mr. Denizkurt, that entitle them to a normal retirement benefit of $25,000 paid in annual installments for ten years, provided however, that following a change in control, such as the Merger, the executive will receive a payment subject to a predetermined election of either a cash lump sum (equal to the present value of the annual installments) or installment payments, if they have a qualifying termination of employment.

Colonial Federal Savings Bank Employee Stock Ownership Plan. The Colonial Federal Savings Bank Employee Stock Ownership Plan (the “ESOP”) is a tax-qualified plan that covers substantially all of the employees of Colonial Federal who have at least one year of service and have attained age 21. The ESOP received a loan from the Company, the proceeds of which were used to acquire shares of Company common stock for the benefit of plan participants. The ESOP has pledged the shares acquired with the loan as collateral for the loan and holds them in a suspense account, releasing them to participants’ accounts as the loan is repaid, with contributions received from Colonial Federal. Effective as of the fifth business day before the closing of the Merger, the ESOP will be terminated. Colonial Federal will repay any outstanding ESOP debt in full by directing the ESOP trustee to first use any cash remaining in the suspense account to repay such ESOP debt and then, if and as necessary, to remit a sufficient number of shares of Company common stock back to the Company to repay any remaining ESOP debt in full, with each remitted share to be valued at $14.25. At the effective time of the Merger, any remaining shares of Company common stock held by the ESOP that are unallocated (or the proceeds from the sale thereof, if applicable) will be allocated among the accounts of the ESOP participants with undistributed account balances who are employed by Colonial Federal at the effective time of the Merger, and in proportion to their balances under the ESOP as of the end of the immediately previous plan year.

As a result of the foregoing, Colonial Federal’s executive officers and other active employee participants in the ESOP would receive a benefit in connection with the ESOP’s termination to the extent that the stock price of Company common stock multiplied by the number of shares held in the suspense account exceeds the outstanding loan used to acquire those shares.

Approvals Needed to Complete the Merger

In addition to the approval of the Merger Agreement by the shareholders of the Company, the members of 15 Beach, MHC (if required) and Hometown MHC’s corporators, completion of the Merger and the transactions contemplated by the Merger Agreement are subject to the prior approval of the Board of Governors of the Federal Reserve System (the “FRB”) and the Massachusetts Division of Banks.

Federal Reserve. The MHC Merger, the Merger and the Bank Merger are subject to the approval of the FRB (1) pursuant to Section 4 of the Bank Holding Company Act of 1956, as amended (the “BHC Act”), with respect to the MHC Merger and the Merger, and (2) pursuant to Section 18(c)(2)(B) of the Federal Deposit Insurance Act (the “Bank Merger Act”) with respect to the Bank Merger. The FRB takes into consideration a number of factors when acting on applications under Section 4 of the BHC Act and the Bank Merger Act. These factors include the effect of the applicable transaction on competitiveness in affected banking markets, the financial and managerial resources (including consideration of the capital adequacy, liquidity and earnings performance, as well as the competence, experience and integrity of the officers, directors and principal shareholders, and the records of compliance with applicable laws and regulations) and the combined organization’s future prospects. The FRB also considers the effectiveness of the combined organization in combatting money laundering, the convenience and needs of the communities to be served, as well as the extent to which the proposal would result in greater or more concentrated risks to the stability of the U.S. banking or financial system. The FRB may not approve a proposal that would have significant adverse effects on competition or on the concentration of resources in any banking market.

In considering an application under Section 4 of the BHC Act and the Bank Merger Act, the FRB also reviews the records of performance of the relevant insured depository institutions under the Community Reinvestment Act (the “CRA”), pursuant to which the FRB must also take into account the record of performance of each of Colonial Federal and North Shore Bank in meeting the credit needs of the entire community, including low- and moderate-income neighborhoods. As part of the review process in merger transactions, the FRB may receive protests from community groups and others. In their most recent CRA performance evaluations, each of Colonial Federal and North Shore Bank received a “satisfactory” regulatory rating.

Furthermore, the BHC Act and the Bank Merger Act require published notice of, and the opportunity for public comment on, the respective applications. The FRB takes into account the views of third-party commenters, particularly on the subject of the merging parties’ CRA performance and record of service to their communities.

Hometown MHC and Hometown Financial have filed the required application with the FRB related to the MHC Merger and the Merger. North Shore Bank has filed the required application with the FRB relating to the Bank Merger.

Massachusetts Commissioner of Banks. Certain transactions contemplated by the Merger Agreement are subject to approval by the Massachusetts Commissioner of Banks, such as the approval of the Bank Merger pursuant to Massachusetts General Laws Chapter 167I, Section 3. In evaluating a merger application under this section, the Commissioner of Banks will review a proposed merger to determine whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage will be promoted. In making such determination, the Commissioner will consider, at a minimum, a showing of net new benefits. Net new benefits may include, for example, initial capital investments, job creation plans, consumer and business services, and commitments to maintain and open branch offices within the continuing institution’s CRA assessment area.

Department of Justice. Pursuant to federal law, a period of 15 to 30 days must expire following approval by the FRB within which period the United States Department of Justice may file objections to the Merger under the federal anti-trust laws. While the parties to the Merger Agreement believe that the likelihood of such action by the Department of Justice is remote in this case, there can be no assurance that the Department of Justice will not initiate proceedings to block the Merger. If such a challenge is made, the parties to the Merger Agreement cannot ensure a favorable result.

The Merger cannot proceed in the absence of the requisite regulatory approvals. See “The Merger Agreement—Conditions to Completing the Merger” and “The Merger Agreement—Other Provisions of the Merger Agreement—Terminating the Merger Agreement.” There can be no assurance as to if and when the requisite regulatory approvals will be obtained. There can also be no assurance that any regulatory approvals will not contain a condition or requirement that causes the approvals to fail to satisfy the conditions set forth in the Merger Agreement and described under “The Merger Agreement—Conditions to Completing the Merger.”

The approval of any application merely implies the satisfaction of regulatory criteria for approval that does not include review of the Merger from the standpoint of the adequacy of the consideration to be received by shareholders. Furthermore, regulatory approvals do not constitute an endorsement or recommendation of the Merger.

Financing the Merger

The total amount of funds required to consummate the Merger is estimated to be approximately $43.8 million. The funds Hometown Financial will use to satisfy its obligations will be obtained from cash and cash equivalents on hand as of the effective time of the Merger. The Merger is not conditioned on any financing arrangements.

THE MERGER AGREEMENT

The following is a summary of the material terms of the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and incorporated in this proxy statement by reference. This summary may not contain all of the information about the Merger Agreement that is important to you. You should read the entire Merger Agreement carefully. It is the legal document that governs the Merger.

Except for the Merger Agreement’s status as a contractual document that establishes and governs the legal relations of the parties thereto with respect to the Merger and the other transactions contemplated thereby, we do not intend for its text to be a source of factual, business or operational information about the parties to the Merger Agreement. The representations, warranties and covenants made by the parties in the Merger Agreement are qualified and limited, including by information in the disclosure schedules referenced in the Merger Agreement that were delivered in connection with the execution of the Merger Agreement. Representations and warranties may be used as a tool to allocate risks between the respective parties to the Merger Agreement, including where the parties do not have complete knowledge of all facts, instead of establishing such matters as facts. Furthermore, the representations and warranties may be subject to different standards of materiality applicable to the contracting parties, which may differ from what may be viewed as material by our shareholders. These representations and warranties may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement. Accordingly, the representations and warranties should not be relied upon as statements of factual information. Company shareholders are not third-party beneficiaries under the Merger Agreement and, therefore, may not directly enforce or rely on its terms and conditions and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company.

Structure of the Merger

The Merger Agreement provides that 15 Beach, MHC will merge with Hometown MHC, with Hometown MHC as the surviving corporation (the “MHC Merger”). Following the MHC Merger, the Company will merge with Merger Sub, with the Company as the surviving entity (the “Merger”). Following the Merger, the Company will merge with and into Hometown Financial, with Hometown Financial as the surviving corporation (the “Second Step Merger”), and following the Second Step Merger, Colonial Federal will merge with and into North Shore Bank (the “Bank Merger”), with North Shore Bank as the surviving entity.

Closing of the Merger

The closing of the Merger will occur on a date no later than five business days following satisfaction or waiver (subject to applicable law) of all the conditions described in the Merger Agreement, or such other date to be specified by Hometown and the Company. The Merger will become effective upon the filing of articles of merger with the Secretary of the Commonwealth of the Commonwealth of Massachusetts.

The Company and Hometown Financial expect to complete the Merger in the fourth calendar quarter of 2025. However, neither the Company nor Hometown Financial can guarantee when or if the required regulatory approvals will be obtained. See “The Merger—Approvals Needed to Complete the Merger.”

Conditions to Completing the Merger

Among other conditions, the respective obligations of the Company and Hometown Financial to effect the Merger are subject to the satisfaction or waiver of the following conditions specified in the Merger Agreement:

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approval of the Merger Agreement by the requisite vote of the Company’s shareholders, Hometown MHC’s corporators, and, if required, by 15 Beach, MHC’s members;

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all approvals, consents or waivers of any governmental entity required to permit consummation of the transactions contemplated by the Merger Agreement being obtained and remaining in full force and effect, and all statutory waiting periods having expired or been terminated;

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no party to the Merger Agreement being subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins or prohibits the consummation of the Merger and no governmental entity having instituted any proceeding to enjoin or prohibit the consummation of the Merger or any transactions contemplated by the Merger Agreement and no statute, rule or regulation being enacted, entered, promulgated or enforced by any governmental entity that prohibits or makes illegal consummation of the Merger;

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each party to the Merger Agreement obtaining the consent or approval of each person (other than the governmental approvals or consents referenced above) whose consent or approval will be required;

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except those for which failure to obtain such consents and approvals would not, individually or in the aggregate, have a material adverse effect on Hometown MHC or Hometown Financial (after giving effect to the consummation of the transactions contemplated by the Merger Agreement), the other party having performed in all material respects its obligations under the Merger Agreement and the other party’s representations and warranties being true and correct as of the date of the Merger Agreement and as of the closing date, subject to receipt of a certificate signed by the other party’s chief executive officer and chief financial officer to that effect; and

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Colonial Federal having entered into the bank merger agreement.

In addition, the obligation of Hometown MHC, Hometown and Merger Sub to complete the Merger is subject to the fulfillment or written waiver, where permissible, of the following conditions:

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since the date of the Merger Agreement, there will not have occurred any material adverse effect with respect to 15 Beach, MHC or the Company; and

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none of the approvals, consents or waivers of any governmental entity required to permit consummation of the transactions contemplated by the agreement will contain any condition or requirement that would (1) prohibit or materially limit the ownership or operation by Hometown MHC or any of its subsidiaries of all or any material portion of the business or assets of the Company or its subsidiaries or Hometown MHC or its subsidiaries, (2) compel the Company or its subsidiaries or Hometown MHC or its subsidiaries to dispose of or hold separate all or any material portion of the business or assets of the Company or its subsidiaries or Hometown MHC or its subsidiaries, or (3) compel Hometown MHC or its subsidiaries to take any action, or commit to take any action, or agree to any condition or request, if the prohibition, limitation, condition or other requirement described in clauses (1)-(3) above could reasonably be expected to have a material adverse effect on the future operations by Hometown MHC and Hometown Financial of the combined businesses and operations of Hometown Financial’s subsidiaries and Colonial Federal, taken as a whole.

The obligation of the Company to complete the Merger is also conditioned on Hometown Financial having deposited the aggregate merger consideration with the paying agent at least one business day before closing and having caused North Shore Bank to execute and deliver the bank merger agreement.

Under the Merger Agreement, a material adverse effect for 15 Beach, MHC or Hometown Financial, together with their subsidiaries, respectively, means any fact, development, effect, circumstance, occurrence or

change that individually or in the aggregate (1) is material and adverse to the business, properties, assets, liabilities, financial condition, results of operations or business of the Company or Hometown MHC, as the context may dictate, and its subsidiaries taken as a whole, or (2) does or would materially prevent, impair or threaten the ability of any of Hometown MHC, Hometown Financial, 15 Beach, MHC or the Company, as the context may dictate, to perform its obligations under the Merger Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by the Merger Agreement; provided, however, that the following (or the impact thereof) will be excluded when determining the existence of a material adverse effect:

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changes in laws and regulations affecting banks or their holding companies generally, or interpretations thereof by governmental entities;

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changes in economic conditions affecting financial institutions generally, including but not limited to, changes in the general level of market interest rates;

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changes in generally accepted accounting principles or regulatory accounting principles generally applicable to financial institutions and their holding companies;

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natural disasters or other force majeure events or any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic);

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changes in national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States;

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the imposition of tariffs or other domestic or international governmental policies, including, but not limited to, changes in government spending, the freezing of government funding or grants, or the shrinking of government workforce, except, with respect to clauses above, unless it uniquely affects any of the parties or their subsidiaries;

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the announcement of the Merger Agreement and the transactions contemplated hereby, and the effects of complying with the Merger Agreement on the business, financial condition or results of operations of the parties and their respective subsidiaries, including the expenses incurred by the parties in consummating the transactions contemplated by the Merger Agreement; or

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actions and omissions of a party (or any of a party’s subsidiaries) permitted or required to be taken under the Merger Agreement or taken with the prior written consent of the other party.

You can find the details of the conditions to the Merger in Article VI of the Merger Agreement and the definition of “Material Adverse Effect” located in Annex A. Neither party to the Merger Agreement can guarantee that all of these conditions will be satisfied or waived.

Other Provisions of the Merger Agreement

Although the completion of the Merger requires shareholder approval, many provisions of the Merger Agreement became effective immediately upon its signing. Your vote was not required to make these provisions binding obligations of the Company.

Representations and Warranties. 15 Beach, MHC and its subsidiaries and Hometown MHC, Hometown Financial and its subsidiaries have made certain customary representations and warranties to each other in the Merger Agreement relating to each party’s business. The representations and warranties contained in the Merger Agreement were made only for the purposes of such agreement and are made as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed to by the contracting parties, including being qualified by confidential disclosure schedules shared between the parties. These representations

and warranties may have been made to allocate risk between the parties to the agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors as statements of factual information.

Each of the Company and Hometown Financial has made representations and warranties to the other regarding, among other things:

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corporate matters, including due organization and qualification;

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authority to execute and deliver the Merger Agreement and the absence of conflicts with, violations of, or a default under organizational documents or other obligations as a result of the Merger;

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governmental filings and consents necessary to complete the Merger;

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financial statements;

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legal proceedings;

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compliance with applicable laws;

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the absence of regulatory actions; and

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the accuracy of statements to be included in this proxy statement.

In addition, among other things, the Company has made other representations and warranties about itself to Hometown Financial as to the following, among other things:

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subsidiaries;

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capitalization;

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the absence of undisclosed liabilities;

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the absence of any event or action that would, or reasonably be expected to, constitute a material adverse effect since January 1, 2022;

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tax matters;

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material contracts and commitments;

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intellectual property;

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labor and employee benefit and director matters;

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real and personal property;

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receipt by the Company’s board of directors of an opinion from the Company’s financial advisor;

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broker or financial advisor fees;

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environmental matters;

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loan portfolio matters;

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anti-takeover provisions;

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material interests of certain persons;

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bank owned life insurance;

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insurance;

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investment securities and derivatives;

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corporate documents and records;

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compliance with the Community Reinvestment Act, orders issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control and applicable federal and state privacy laws and regulations;

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internal controls;

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allowance for loan losses matters;

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information technology;

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transactions with related parties; and

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stock transfer records.

Hometown Financial also makes representations regarding the availability of funds to complete the Merger, employee benefit plans and regulatory capitalization. However, because the Merger is an all-cash transaction, the scope of Hometown Financial’s representations and warranties as the buyer are not as broad as that of the Company as the seller.

Cooperation and Conduct of Business.

Under the Merger Agreement, the Company has agreed that, other than as expressly contemplated or permitted by the Merger Agreement or required by law, regulation or any governmental entity during the period from the date of the Merger Agreement to the effective time of the Merger, the Company will not, nor will the Company permit any of its subsidiaries to, without the prior written consent of Hometown Financial, which consent will not be unreasonably withheld, delayed or conditioned:

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conduct its business other than in the regular, ordinary and usual course consistent with past practice; fail to use reasonable best efforts to maintain and preserve intact its business organization, properties, leases, employees and advantageous business relationships and retain the services of its officers and key employees;

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take any action that would adversely affect or delay its ability to perform its obligations under the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement;

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except for (A) the creation of deposit liabilities in the ordinary course of business consistent with past practice and (B) advances from the Federal Home Loan Bank of Boston with a maturity of not more than one year, incur, modify, extend, prepay or renegotiate any indebtedness for borrowed money, or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person;

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take any action to incur any prepayment penalty in the course of prepaying any indebtedness or other similar arrangements;

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other than in the regular, ordinary and usual course consistent with past practice, enter into any brokered certificates of deposit;

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adjust, split, combine or reclassify any of the Company’s capital stock;

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make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock (except the acceptance of shares of Company common stock as payment for the exercise price of stock options or for withholding taxes incurred in connection with the exercise of stock options or the vesting or settlement of restricted stock), in each case, in accordance with past practice and the terms of the applicable award agreements;

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grant any equity awards or any other stock options, stock appreciation rights, performance shares, restricted stock units, restricted shares or other equity-based awards or interests, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock;

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issue any additional shares of capital stock or any securities or obligations convertible or exercisable for any shares of its capital stock, except pursuant to the exercise of outstanding stock options;

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except in the ordinary course of business consistent with past practice or pursuant to contracts or agreements in force at the date of the Merger Agreement: (1) sell, transfer, mortgage, encumber or otherwise dispose of any of its real property or other assets to any person other than a subsidiary, or (2) cancel, release or assign any indebtedness to any such person or any claims held by any such person;

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other than in the ordinary course of business consistent with past practice, make any equity investment (other than mandatory purchases of Federal Home Loan Bank stock), either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any other person, or form any new subsidiary;

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except with respect to any existing employment or change in control agreement, enter into, renew, amend or terminate any contract or agreement, or make any change in any of its leases or contracts, other than with respect to those involving aggregate payments of less than, or the provision of goods or services with a market value of less than, $50,000 per annum;

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make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any loan, or make any commitment in respect of any of the foregoing, except (1) in conformity with existing lending practices in amounts not to exceed $75,000 if such loan is not fully secured or $2,000,000 if such loan is fully secured or (2) loans as to which the Company has a binding obligation to make as of the date of the Merger Agreement; provided, however, that neither the Company nor any of its subsidiaries will make, renegotiate, renew, increase the amount of, extend the term of, modify or purchase any loan, or make any commitment in respect of any of the foregoing, to any person if when aggregated with all outstanding loans and commitments for loans made to such person and such person’s family members and affiliates, the loans would exceed $5,000,000; provided, further, that the Company may, and may permit any of its subsidiaries to, take those actions set forth in the Merger Agreement, if (a) the Company has delivered to Hometown Financial (i) a written notice of its intention to take such action and (ii) such additional information, if any, as Hometown will request in writing within three business days of Hometown having received the Company’s written notice, and (b) Hometown Financial will not have objected to such action within three business days following the delivery to Hometown Financial of (i) the written notice of intention and (ii) the information, if any, provided in writing in response to Hometown Financial’s request;

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make or increase any loan, or commit to make or increase any such loan or extension of credit, to any director or executive officer of the Company or Colonial Federal, or any entity controlled, directly or indirectly, by any of the foregoing, except in accordance with lines of credit in effect on the date of the Merger Agreement that comply with the requirements of Regulation O of the FRB;

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increase in any manner the compensation, bonuses or other fringe benefits of any of its employees or directors other than in the ordinary course of business consistent with past practice and current accrual practices pursuant to policies currently in effect, except: (1) as may be required by law or pursuant to commitments existing on the date of the Merger Agreement under the Company employee plans; (2) increases in the ordinary course of business consistent with past practice, but in no event will any such pay increase exceed 5% in the aggregate for non-executive officer employee’s salary or hourly pay for fiscal year 2026; (3) for bonuses for fiscal 2025 performance in the ordinary course of business consistent with past practice and policies currently in effect; (4) all vacation, sick leave or personal leave accrued consistent with past practice that remains unused immediately prior to the effective time of the Merger; and (5) accrued earned time off;

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become a party to, amend, modify or commit itself to any pension, retirement, profit-sharing or welfare benefit plan or agreement or employment agreement with or for the benefit of any employee or director, except for amendments to any plan or agreement that are required by law;

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elect to any executive office any person who is not a member of its executive officer team as of the date of the Merger Agreement or elect to its board of directors any person who is not a member of its board of directors as of the date of the Merger Agreement;

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commence any action or proceeding, other than to enforce any obligation owed to the Company or any of its subsidiaries and in accordance with past practice, or settle any claim, action or proceeding (1) involving payment by it of money damages in excess of $50,000 or (2) that would impose any material restriction on its operations or the operations of any of its subsidiaries;

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amend its or its subsidiaries’ charter or bylaws, or similar governing documents;

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increase or decrease the rate of interest paid on certificates of deposit, except in a manner and pursuant to policies consistent with past practice;

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other than U.S. government and U.S. government agency securities with final maturities less than one year and mortgage-backed securities with final maturities less than fifteen years, purchase any debt security;

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make any capital expenditures other than pursuant to binding commitments existing on the date of the Merger Agreement, in amounts not to exceed $25,000 each and $100,000 in the aggregate and expenditures necessary to maintain existing assets in good repair;

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establish or commit to the establishment of, or file any application with respect to the establishment of, any new branch or other office facilities or automated teller machine or file any application to relocate or terminate the operation of any banking office or automated teller machine;

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except in the ordinary course of business consistent with past practice, enter into any futures contract, option, interest rate cap, interest rate floor, interest rate exchange agreement, or take any other action for purposes of hedging the exposure of its interest-earning assets or interest-bearing liabilities to changes in market rates of interest; provided, however, that the Company is permitted to enter forward loan sale commitments for the delivery of mortgage loans to third party investors, including “To Be Announced” securities, designed to hedge the financial impact of changes in interest rates on the value of derivative mortgage loan commitments;

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make any changes in policies in existence on the date of the Merger Agreement with regard to the extension of credit, or the establishment of reserves with respect to possible loss thereon or the charge off of losses incurred thereon, investments, asset/liability management, or other material banking policies, except as may be required by changes in applicable law or regulations, GAAP, or per the direction of a governmental entity;

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except as required by law or for communications in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby (1) issue any communication of a general nature to employees (including general communications relating to benefits and compensation) without prior consultation with Hometown Financial and, to the extent relating to post-closing employment, benefit or compensation information, without the prior consent of Hometown Financial (which will not be unreasonably withheld, conditioned or delayed) or (2) issue any communication of a general nature to customers without the prior approval of Hometown Financial (which will not be unreasonably withheld, conditioned or delayed);

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foreclose upon or take a deed or title to any commercial real estate (1) without conducting a Phase I environmental assessment of the property, and (2) if the Phase I environmental assessment referred to in the prior clause identifies any “recognized environmental condition” (as such term is defined in Phase I environmental assessments);

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change or rescind any material election concerning taxes or tax returns, file any amended tax return, enter into any closing agreement with respect to taxes, settle or compromise any material tax claim or assessment, or surrender any right to claim a refund of taxes or obtain any tax ruling;

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take any action that is intended or expected to result in any of its representations and warranties set forth in the Merger Agreement being or becoming untrue in any material respect at any time before the effective time, or in any of the conditions to the Merger set forth in Article VI of the Merger Agreement not being satisfied or in a violation of any provision of the Merger Agreement;

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implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines; and

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agree to take, make any commitment to take, or adopt any resolutions of its board of directors in support of, any of the actions prohibited above.

Agreement Not to Solicit Other Proposals. Between the signing of the Merger Agreement and the completion of the Merger, the Company has agreed not to, and the Company will use its reasonable best efforts to, cause its subsidiaries’ officers, directors or employees or any investment banker, financial advisor, attorney, accountant, consultant or other representative retained by the Company or any of its subsidiaries not to, directly or indirectly:

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solicit, initiate, induce or encourage, or take any other action to facilitate, any inquiries, offers, discussions or the making of any proposal that constitutes or could reasonably be expected to lead to an acquisition proposal;

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furnish any information or data regarding the Company or any of its subsidiaries to any person in connection with or in response to an acquisition proposal or an inquiry or indication of interest that would reasonably be expected to lead to an acquisition proposal;

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continue or otherwise participate in any discussions or negotiations, or otherwise communicate in any way with any person (other than Hometown Financial) other than to inform such person of the terms of its non-solicitation obligations, regarding an acquisition proposal;

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approve, endorse or recommend any acquisition proposal; or

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enter into or consummate any agreement, agreement in principle arrangement, letter of intent or understanding contemplating any acquisition proposal or requiring it to abandon, terminate or fail to consummate the transactions contemplated by the Merger Agreement.

Despite the agreement of the Company not to solicit other acquisition proposals, the Company may, at any time before shareholder approval of the Merger, participate in discussions or negotiations regarding an acquisition proposal or furnish, or otherwise afford access to non-public information with respect to the Company or otherwise relating to an acquisition proposal with a third party who makes an unsolicited proposal, provided that, among other things:

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our board of directors determines, in good faith, after consultation with and considering the advice of the Company’s legal counsel and, with respect to financial matters, its financial advisor, the acquisition proposal constitutes or could reasonably be likely to result in a superior proposal, as set forth in the Merger Agreement;

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the Company has not otherwise breached its covenants not to solicit acquisition proposals as set forth in the Merger Agreement;

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our board of directors concludes, in good faith, after considering the advice of our outside counsel, that taking such action would be required in order for the Company’s directors to comply with their fiduciary duties to the Company’s shareholders under applicable law;

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provides written notice of the identity of such person to Hometown Financial; and

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the Company has first obtained a confidentiality agreement from the soliciting party on terms no more favorable in the aggregate to such soliciting party than those in the confidentiality agreement between the Company and Hometown Financial.

Under the Merger Agreement, a “superior proposal” means an unsolicited, bona fide written offer or proposal made by a third party (on its most recently amended or modified terms) to consummate an acquisition proposal that the Company’s board of directors determines in good faith, after consultation with and having considered the advice of outside legal counsel and, with respect to financial matters, its financial advisor, would, if consummated, result in a transaction that (1) involves consideration to the Company shareholders that is more favorable, from a financial point of view, than the consideration to be paid to the Company shareholders pursuant to the Merger Agreement, considering, among other things, the nature of the consideration being offered and any material regulatory approvals or other risks associated with the timing of the proposed transaction beyond, or in addition to, those specifically contemplated by the Merger Agreement, and which proposal is not conditioned on obtaining financing, and (2) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of such acquisition proposal.

Employee Matters. Hometown Financial will offer employment to all employees of Colonial Federal who remain employed at the effective time of the Merger. After the Merger, Hometown Financial agrees to provide continuing Colonial Federal employees with base compensation and bonus opportunities that are substantially comparable to the base compensation and bonus opportunities that are generally made available to similarly situated employees of Hometown.

An employee of Colonial (other than an employee who is party to an employment agreement, a severance agreement or a special termination agreement) who is not hired by Hometown Financial or whose employment is involuntarily terminated by Hometown Financial within nine months following the Merger, for a reason other than for “cause” as determined by Hometown Financial, will, subject to the execution and non-revocation of a release agreement in a form reasonably determined by Hometown Financial, be entitled to receive a lump sum cash severance payment equal to two weeks’ severance for each year of continuous service, subject to a minimum of eight weeks and a maximum of 52 weeks of severance.

North Shore Bank will provide to Colonial Federal employees benefits no less favorable than those afforded to other employees of North Shore Bank in similar positions and participation in each North Shore Bank plan of general applicability to the same extent as similarly situated employees. North Shore Bank will cause its benefit plans to recognize, for purposes of determining eligibility and vesting of benefits (but not for benefit accrual or amount of benefits), the services of Colonial Federal employees to the same extent as such service was credited by Colonial Federal. Hometown Financial has sole discretion on whether to terminate, merge or continue any benefit plans or programs of 15 Beach, MHC or its subsidiaries.

With respect to any employee benefit plans of Hometown Financial or its subsidiaries in which any continuing employee becomes eligible to participate on or after the effective time of the Merger (the “new plans”), Hometown Financial has agreed to use commercially reasonable efforts to:

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cause to be waived all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents under the new plans, except to the extent such pre-existing conditions, exclusions or waiting period would apply under the analogous Company employee plan;

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provide each such employee and their eligible dependents with credit for any eligible expenses incurred by such employee or dependent before the effective time of the Merger under a Company employee plan (to the same extent that such credit was given under the analogous Company employee plan before the effective time of the Merger) in satisfying any applicable deductible, co-payment or out-of-pocket requirements under any new plan; and

•

provide each continuing employee with service credit for eligibility and vesting purposes under any new plan in which continuing employees are eligible to participate for all periods of employment with the Company or any of its subsidiaries prior to the effective time of the Merger, provided that such service recognition will not apply to the extent it would result in duplication of benefits for the same period of service.

Retention Bonus Pool. Under the Merger Agreement, Hometown Financial and the Company may establish a retention pool to induce retention of employees of the Company and Colonial Federal. Allocation of any retention bonuses will be jointly determined by the chief executive officers of Hometown and the Company. Neither party shall communicate the amounts considered for individual retention bonuses with the affected employees until such amounts are finally determined.

Indemnification and Insurance. Hometown Financial has agreed to indemnify and hold harmless each current and former director, officer or employee of 15 Beach, MHC or its subsidiaries for six years after the effective time of the Merger for claims arising from their position with 15 Beach, MHC or its subsidiaries or their service to 15 Beach, MHC and its subsidiaries, to the fullest extent set forth in the Company’s charter and bylaws on the date of the Merger Agreement or under applicable law. Hometown Financial will also maintain a policy of directors’ and officers’ liability insurance coverage for the benefit of the Company’s directors and officers for six years following consummation of the Merger, subject to certain limitations on the amount of premiums to be paid.

Terminating the Merger Agreement. The Company and Hometown Financial may mutually agree at any time to terminate the Merger Agreement, even if our shareholders have approved the Merger Agreement. In addition, either we or Hometown Financial may decide, without the consent of the other, to terminate the Merger Agreement if:

•

the Company’s shareholders, 15 Beach, MHC’s members (if required), or Hometown Financial’s corporators fail to approve the Merger Agreement, provided that each party can only terminate under this section it has fulfilled its obligations related to calling and holding the special meetings of shareholders, members or corporators;

•

if either a required regulatory approval (A) is denied and such denial is final and non-appealable, or (B) contains a condition or requirement that materially reduce the benefits to either Hometown Financial or the Company from consummating the Merger;

•

if the Merger is not consummated by March 31, 2026 (unless the failure to consummate is due to the action or failure to act by the party seeking to terminate the Merger Agreement); or

•

there is a breach by the other party of any representation, warranty, covenant or agreement contained in the Merger Agreement such that certain conditions to closing of the Merger cannot be met, which breach cannot be cured, or has not been cured within 30 days after giving written notice to such party of the breach; provided that the party seeking termination is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement.

We may also terminate the Merger Agreement to enter into an agreement with respect to a superior acquisition proposal, but only if, among other things, we have complied with our obligation not to solicit competing proposals and have paid to Hometown Financial the required fee of $1,550,000. See “—Termination Fee” below.

Hometown Financial may also terminate the Merger Agreement if the Company does not comply with its non-solicitation requirements, does not recommend approval of the Merger Agreement, or changes its recommendation to the Company shareholders regarding the Merger, or it or 15 Beach, MHC breach their obligations to call meetings of their shareholders or members, as required.

Termination Fee. Under certain circumstances, we may be required to pay Hometown Financial a termination fee of $1,550,000. Specifically, the Company must pay the termination fee to Hometown Financial if the Merger Agreement is terminated by Hometown Financial under the following circumstances:

•

the Company terminates the Merger Agreement to enter into an agreement with respect to a superior proposal;

•

Hometown Financial terminates the Merger Agreement because (1) the Company has breached its non-solicitation obligations with respect to third-party proposals or holding the Company’s shareholder meeting or 15 Beach, MHC’s member meeting, or (2) the Company’s board of directors does not recommend approval of the Merger Agreement to its shareholders at the Company’s shareholder meeting or 15 Beach, MHC’s member meeting, or withdraws, modifies or amends its recommendation to approve the Merger Agreement; or

•

Hometown Financial or the Company terminates the Merger Agreement because (a) the Company’s shareholders or 15 Beach, MHC’s members do not approve the Merger Agreement or (b) Colonial is in material breach of its representations, warranties, covenants or agreements and the breach has not been cured within 30 days, and the breach giving rise to such termination was knowing or intentional and

•

at the time of termination, Hometown Financial is not in material breach of any representation, warranty or material covenant;

•

a third-party acquisition proposal is publicly announced, disclosed or communicated and not withdrawn at least two business days before the Company’s shareholder meeting; and

•

within 12 months of such termination the Company consummates or enters into any acquisition proposal.

Expenses. Except as otherwise provided in the Merger Agreement, the Company and Hometown Financial will pay their own costs and expenses incurred in connection with the Merger, whether or not the Merger is completed.

Changing the Terms of the Merger Agreement. Before the effective time of the Merger, the Company and Hometown Financial may agree to waive any provision of the Merger Agreement to the extent the provisions being waived are in the waiving party’s benefit. The Merger Agreement may be amended by written agreement signed by each of the parties.

PROPOSAL 2:

ADJOURNMENT OF THE SPECIAL MEETING

We are submitting a proposal for consideration at the special meeting to approve one or more adjournments of the special meeting if there are not sufficient votes to approve the Merger Agreement and the Merger at the time of the special meeting. Even though a quorum may be present at the special meeting, it is possible that we may not have received sufficient votes to approve the Merger Agreement and the Merger by the time of the special meeting. In that event, we would need to adjourn the special meeting to solicit additional proxies. The Adjournment Proposal relates only to an adjournment of the special meeting to solicit additional proxies to obtain the requisite shareholder approval to approve the Merger Agreement and the Merger. Any other adjournment of the special meeting (e.g., an adjournment required because of the absence of a quorum) would be voted upon pursuant to the discretionary authority granted by the proxy.

The Company’s board of directors recommends that you vote “FOR” the Adjournment Proposal so that proxies may be used for the purpose described above, should it become necessary.

Properly executed proxies will be voted “FOR” the Adjournment Proposal, unless otherwise indicated on the proxies. If the special meeting is adjourned to solicit additional proxies to approve the Merger Agreement and the Merger, we are not required to give notice of the time and place of the adjourned meeting (other than announcement at the special meeting) unless the meeting is adjourned for more than thirty days.

The Adjournment Proposal relates only to an adjournment of the special meeting occurring to solicit additional proxies for the proposal to approve of the Merger Agreement and the Merger if there are insufficient votes to approve that proposal. The Company’s board of directors retains full authority to the extent set forth in our bylaws to postpone the special meeting before it is convened, without the consent of any of our shareholders.

STOCK OWNERSHIP

The following table provides information as of August 8, 2025 about the beneficial owners known to the Company that own more than 5% of our outstanding common stock and the shares of common stock beneficially owned by each director, by certain named executive officers and by all directors and executive officers as a group. A person may be considered to beneficially own any shares of common stock over which he or she has, directly or indirectly, sole or shared voting or investment power. Unless otherwise indicated, each of the named individuals has sole voting power and sole investment power with respect to the shares shown and none of the named individuals has pledged his or her shares.


	Number of Shares Owned⁽¹⁾⁽²⁾			Percent of Common Stock Outstanding⁽³⁾
15 Beach, MHC		3,586,903			54.2	%
15 Beach Street
Quincy, MA 02170
*Directors:*
Paul N. Baharian		30,600				*
Robert Guarnieri		24,100	⁽⁴⁾			*
Edward J. Keohane		26,600	⁽⁵⁾			*
Stephen D. Marini		26,600	⁽⁶⁾			*
Michael E. McFarland		76,814	⁽⁷⁾			*
James M. O’Leary, Jr.		26,600	⁽⁸⁾			*
Tracy L. Wilson		16,800	⁽⁹⁾			*
*Named Executive Officers Who Are Not Directors:*
Kemal A. Denizkurt		23,291	⁽¹⁰⁾			*
Susan J. Shea		53,770	⁽¹¹⁾			*
All directors and executive officers as a group (12 persons)		381,868			5.8	%

*	Less than 1%.

(1)	Includes unvested shares of restricted stock as follows: Messrs. Baharian, Guarnieri, Keohane, Marini, O’Leary and Denizkurt and Ms. Wilson – 3,600 shares; Mr. McFarland –14,400 shares; and Ms. Shea – 10,800 shares.

(2)	Includes shares subject to stock options exercisable within 60 days of August 8, 2025 as follows: Messrs. Baharian, Guarnieri, Keohane, Marini, O’Leary and Denizkurt and Ms. Wilson – 5,600 shares each; Mr. McFarland – 25,600 shares; and Ms. Shea – 19,200 shares.

(3)	Based on 6,548,575 shares outstanding as of August 8, 2025 and the number of stock options exercisable within 60 days of August 8, 2025.

(4)	Includes 2,500 shares held by his spouse.

(5)	Includes 5,000 shares held by his spouse’s trust.

(6)	Includes 5,000 shares held by his spouse.

(7)	Includes 5,000 shares held by his spouse and 4,215 shares held through the ESOP.

(8)	Includes 5,000 shares held by his spouse.

(9)	Includes 100 shares held by her child and 100 shares held by her spouse for the benefit of a child.

(10)	Includes 2,390 shares held through the ESOP.

(11)	Includes 2,500 shares held by her spouse and 3,147 shares held through the ESOP.

THE VOTING AGREEMENTS

In connection with the Merger Agreement, 15 Beach, MHC and each of the Company’s directors and executive officers entered into voting agreements with Hometown Financial. As of the record date, there were 281,068 shares of Company common stock subject to the voting agreements (excluding the shares of common stock held by 15 Beach, MHC), which represents approximately 4.3% of the outstanding Company common stock and 9.5% of the outstanding shares of Company common stock held by persons other than 15 Beach, MHC.

Under the voting agreements, each of these shareholders has agreed to vote all of his or her shares of Company common stock (including any shares acquired after the date of the voting agreement, whether by the purchase in the open market, privately or otherwise):

•

in favor of the approval of the Merger Agreement and the approval of the transactions contemplated in the Merger Agreement, including the Merger;

•

in favor of any proposal to adjourn or postpone the Company shareholder meeting to a later date if there are not sufficient votes to approve the Merger Agreement;

•

against any action or proposal in favor of any acquisition proposal;

•

against any action or agreement that would reasonably be likely to result in a breach of any covenant, representation or warranty, or any other obligation or agreement of the Company contained in the Merger Agreement or of the shareholder contained in the voting agreement, or that would prevent, impede, interfere with, delay, postpone, discourage or frustrate the purposes of or adversely affect the consummation of the transactions contemplated by the Merger Agreement, including the Merger; and

Additionally, each of the shareholders also agreed not to:

•

enter into any other voting agreement or voting trust while the voting agreement is in effect with respect to the voting securities;

•

grant a proxy, consent or power of attorney with respect to the voting securities except by reason of the voting agreement or for ordinary course proposals at an annual meeting; or

•

enter into any agreement or commitment with any person the effect of which would be inconsistent with or otherwise violate the provisions and agreements in the voting agreement.

Furthermore, except under limited circumstances, these shareholders also agreed not to sell, assign, transfer or otherwise dispose of or encumber their shares of Company common stock while the voting agreement is in effect. The voting agreements terminate immediately upon the earlier of the termination of the Merger Agreement, or the approval of the Merger Agreement at the Company shareholder meeting.

SHAREHOLDER PROPOSALS

The Company held its 2024 annual meeting of shareholders on November 21, 2024. The Company does not intend to hold a 2025 annual meeting of shareholders if the Merger is completed as currently expected. If the Merger is not completed within the expected timeframe or at all, the Company may hold an annual meeting of shareholders in 2025 (the “2025 Annual Meeting”).

The Company must receive proposals that shareholders seek to include in the proxy statement for the 2025 Annual Meeting no later than June 17, 2025. If the 2025 Annual Meeting is held on a date that is more than 30 calendar days from November 21, 2025, a shareholder proposal must be received by a reasonable time before the Company begins to print and mail its proxy solicitation materials for such annual meeting. Any shareholder proposals will be subject to the requirements of the proxy rules adopted by the Securities and Exchange Commission.

Under Securities and Exchange Commission Rule 14a-19, a shareholder intending to engage in a director election contest with respect to the 2025 Annual Meeting must give the Company notice of its intent to solicit proxies by providing the names of its nominees and certain other information at least 60 calendar days before the anniversary of the previous year’s annual meeting. This deadline is September 22, 2025.

Our bylaws provide that, for a shareholder to make nominations for the election of directors or proposals for business to be brought before the annual meeting, a shareholder must deliver notice to the Corporate Secretary not less than five days before the date of the annual meeting.

ANNEX A

AGREEMENT AND PLAN OF MERGER

DATED AS OF MAY 20, 2025

BY AND AMONG

HOMETOWN FINANCIAL GROUP, MHC,

HOMETOWN FINANCIAL GROUP, INC.,

HOMETOWN FINANCIAL ACQUISITION CORP. II,

15 BEACH, MHC

AND

CFSB BANCORP, INC.

TABLE OF CONTENTS


		Page Nos.
Introductory Statement			A-1

ARTICLE I - DEFINITIONS			A-1

ARTICLE II - THE MERGER			A-6
2.1	The MHC Merger		A-6
2.2	The Merger		A-6
2.3	Closing		A-7
2.4	Effective Time		A-7
2.5	Effects of the Mergers		A-7
2.6	Effect on Outstanding Shares of Company Common Stock and Treatment of Company Equity Awards		A-7
2.7	Payment Procedures		A-8
2.8	Effect on Outstanding Shares of Merger Sub Common Stock		A-10
2.9	Charter and Bylaws of Surviving Corporation		A-10
2.10	Directors and Officers of Surviving Corporation		A-10
2.11	The Second Step Merger		A-10
2.12	The Bank Merger		A-10
2.13	Alternative Structure		A-10
2.14	Absence of Control		A-10

ARTICLE III - REPRESENTATIONS AND WARRANTIES			A-11
3.1	Disclosure Letters; Standard		A-11
3.2	Representations and Warranties of 15 Beach and the Company		A-11
3.3	Representations and Warranties of MHC, Parent and Merger Sub		A-28

ARTICLE IV - CONDUCT PENDING THE MERGER			A-32
4.1	Forbearances by the Company		A-32
4.2	Forbearances by MHC and Parent		A-35

ARTICLE V - COVENANTS			A-36
5.1	Acquisition Proposals		A-36
5.2	Advise of Changes		A-37
5.3	Access and Information		A-37
5.4	Applications; Consents		A-38
5.5	Anti-takeover Provisions		A-39
5.6	Additional Agreements		A-39
5.7	Publicity		A-39
5.8	Shareholder Meeting		A-39
5.9	Proxy Statement		A-40
5.10	Corporator Meeting		A-41
5.11	Member Meeting		A-41
5.12	Notification of Certain Matters		A-41
5.13	Employee Benefit Matters		A-42
5.14	Indemnification		A-44
5.15	Director Appointments		A-45
5.16	Charitable Foundation		A-45
5.17	Rule 16b-3		A-45
5.18	Exchange Act Deregistration		A-45
5.19	ESOP Matters		A-46
5.20	Disclosure Supplements		A-46
5.21	Shareholder Litigation		A-46

A-i


ARTICLE VI - CONDITIONS TO CONSUMMATION		A-46
6.1	Conditions to Each Party’s Obligations	A-46
6.2	Conditions to the Obligations of MHC, Parent and Merger Sub	A-47
6.3	Conditions to the Obligations of 15 Beach and the Company	A-48

ARTICLE VII - TERMINATION		A-48
7.1	Termination	A-48
7.2	Termination Fee	A-49
7.3	Effect of Termination	A-50

ARTICLE VIII - CERTAIN OTHER MATTERS		A-50
8.1	Interpretation	A-50
8.2	Survival	A-50
8.3	Waiver; Amendment	A-50
8.4	Counterparts	A-50
8.5	Governing Law; Consent to Jurisdiction	A-50
8.6	Expenses	A-51
8.7	Notices	A-51
8.8	Entire Agreement; No Third Party Beneficiaries	A-52
8.9	Successors and Assigns; Assignment	A-52
8.10	Severability	A-52
8.11	Specific Performance	A-52
8.12	Confidentiality	A-52

EXHIBITS


Exhibit A		Form of Voting Agreement

Exhibit B		Form of Bank Merger Agreement

Exhibit C		Form of Restrictive Covenant Agreement with President and Chief Executive Officer

Exhibit D		Form of Consulting Agreement with Chief Operating Officer and Treasurer

Exhibit E		Form of Settlement Agreement

A-ii

Agreement and Plan of Merger

This is an Agreement and Plan of Merger, dated as of the 20^th day of May, 2025 (this “Agreement”), by and among Hometown Financial Group, MHC, a Massachusetts mutual holding company (“MHC”), Hometown Financial Group, Inc., a Massachusetts corporation (“Parent”), Hometown Financial Acquisition Corp. II, a Massachusetts corporation (the “Merger Sub”) and wholly-owned subsidiary of Parent, 15 Beach, MHC, a federal mutual holding company (“15 Beach”), and CFSB Bancorp, Inc., a federal corporation (the “Company”). Each of MHC, Parent, Merger Sub, 15 Beach and the Company is sometimes individually referred to herein as a “Party,” and MHC, Parent, Merger Sub, 15 Beach and the Company are collectively sometimes referred to as the “Parties.”

Introductory Statement

The board of trustees of MHC and the respective boards of directors of Parent, Merger Sub, 15 Beach and the Company each has unanimously determined that this Agreement and the business combination and related transactions contemplated hereby are advisable and in the best interests of their respective corporations, constituencies, communities, corporators, shareholders and members, as the case may be.

MHC, Parent, Merger Sub, 15 Beach and the Company each desire to make certain representations, warranties and agreements in connection with the business combination and related transactions provided for herein and to prescribe various conditions to such transactions.

As a condition and inducement to MHC’s, Parent’s and Merger Sub’s willingness to enter into this Agreement, each director and executive officer of the Company has entered into an agreement dated as of the date hereof in the form of Exhibit A pursuant to which he or she will vote his or her shares of Company Common Stock subject to such agreement in favor of this Agreement and the transactions contemplated hereby.

In consideration of their mutual promises and obligations hereunder, the parties hereto adopt and make this Agreement and prescribe the terms and conditions hereof and the manner and basis of carrying it into effect, which shall be as follows:

ARTICLE I

DEFINITIONS

For purposes of this Agreement:

“Acquisition Proposal” means any inquiry or offer (other than the transactions contemplated hereunder), whether or not in writing, contemplating, relating to, or that could reasonably be expected to lead to: (a) any transaction or series of transactions involving any merger, consolidation, recapitalization, share exchange, business combination, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 25% or more of the Company’s consolidated assets in a single transaction or series of transactions; (c) any tender offer or exchange offer for 25% or more of the outstanding shares of the Company’s capital stock or the filing of a registration statement under the Securities Act of 1933, as amended, in connection therewith; (d) any issuance, sale or other disposition (including by way of merger, consolidation, share exchange or any similar transaction) of securities (or options, rights or warrants to purchase or securities convertible into, such securities) representing 25% or more of any class of outstanding securities of the Company or any of its Subsidiaries; (e) any transaction that is similar in form, substance or purpose to any of the foregoing transactions, or any combination of the foregoing; or

A-1

(f) any public announcement, notice or regulatory filing of a proposal, plan or intention to do any of the foregoing or any agreement to engage in any of the foregoing.

“Agreement” means this Agreement and the exhibits and schedules hereto, as amended, modified or amended and restated from time to time in accordance with its terms.

“Articles of Merger” shall have the meaning given to that term in Section 2.4(b).

“BOLI” shall have the meaning given to that term in Section 3.2(z).

“Burdensome Condition” shall have the meaning given to that term in Section 6.2(e).

“Business Day” means any day other than a Saturday, Sunday, federal holiday or any day on which banking institutions in the Commonwealth of Massachusetts are authorized or obligated to close.

“Certificate(s)” means certificates or book entry shares evidencing shares of Company Common Stock held by its shareholders.

“Change of Recommendation” shall have the meaning given to that term in Section 5.8(d).

“Closing” shall have the meaning given to that term in Section 2.3.

“Closing Date” shall have the meaning given to that term in Section 2.3.

“Commissioner” means the Commissioner of Banks of the Commonwealth of Massachusetts.

“Company” shall have the meaning given to that term in the preamble.

“Company Common Stock” means the common stock, par value $0.01 per share, of the Company.

“Company Contract” shall have the meaning given to that term in Section 3.2(o)(i).

“Company Employee Plans” shall have the meaning given to that term in Section 3.2(r)(i).

“Company Equity Awards” shall collectively mean the Company Stock Options and the Company RSAs.

“Company Pension Plan” shall have the meaning given to the term in Section 3.2(r)(v).

“Company Qualified Plan” shall have the meaning given to that term in Section 3.2(r)(vi).

“Company Recommendation” shall have the meaning given to that term in Section 5.8(a).

“Company’s Reports” shall have the meaning given to that term in Section 3.2(g)(i).

“Company RSA” shall have the meaning given to that term in Section 2.6(d).

“Company Stock Option” shall have the meaning given to that term in Section 2.6(c).

“Company Stock Plan” shall have the meaning given to that term in Section 2.6(c).

“Confidentiality Agreement” shall have the meaning given to that term in Section 8.12.

“Continuing Employee” shall have the meaning given to that term in Section 5.13(a).

A-2

“Corporator” means a corporator of MHC or the Surviving MHC, as the case may be.

“CRA” means the Community Reinvestment Act.

“Disclosure Letter” shall have the meaning given to that term in Section 3.1(a).

“Effective Time” shall have the meaning given to that term in Section 2.4(b).

“Environmental Law” means any applicable federal, state or local law, regulation, order, decree, permit, authorization, or common law or agency requirement relating to: (a) the protection, investigation or restoration of the environment, health and safety (as such relate to exposure to Hazardous Material), or natural resources, (b) the handling, use, presence, disposal, release or threatened release of any Hazardous Material or (c) noise, odor, wetlands, employee exposure to Hazardous Material, pollution, contamination or any injury to persons or property in connection with any exposure to Hazardous Material.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity that is considered one employer with the Company under Section 4001(b)(1) of ERISA or Section 414 of the IRC.

“ESOP” shall mean the Colonial Federal Savings Bank Employee Stock Ownership Plan.

“ESOP Loan” shall have the meaning given to that term in Section 3.2(r)(xi).

“ESOP Termination Date” shall have the meaning given to that term in Section 5.19.

“Exchange Act” shall have the meaning given to that term in Section 3.2(g)(ii).

“FDIC” means the Federal Deposit Insurance Corporation.

“FRB” means the Board of Governors of the Federal Reserve System.

“GAAP” means generally accepted accounting principles.

“Governmental Entity” means the FDIC, FRB, MDOB, OCC, SEC and any court, regulatory or administrative agency, authority or commission or other governmental authority or instrumentality, or any self-regulatory authority.

“Hazardous Material” means any substance (whether solid, liquid or gas) that is detrimental to human health and safety or to the environment, currently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law, whether by type or by quantity, including any substance containing any such substance as a component. Hazardous Material includes any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, oil or petroleum, or any derivative or by-product thereof, radon, radioactive material, asbestos, asbestos-containing material, urea formaldehyde foam insulation, lead and polychlorinated biphenyl.

“Indemnified Party” shall have the meaning given to that term in Section 5.14(a).

“Insurance Amount” shall have the meaning given to that term in Section 5.14(c).

“Intellectual Property” shall have the meaning given to that term in Section 3.2(p).

“IRC” means the Internal Revenue Code of 1986, as amended.

A-3

“IRS” means the Internal Revenue Service.

“Knowledge” means the actual knowledge of one or more of (i) in the case of 15 Beach or Company, the individuals listed in Section 1 of the Company Disclosure Letter or (ii) in the case of MHC or Parent, the individuals listed in Section 1 of the Parent Disclosure Letter.

“Letter of Transmittal” shall have the meaning given to that term in Section 2.7(a).

“Lien” means any charge, mortgage, pledge, security interest, claim, lien or encumbrance.

“Loan” means a loan, lease, advance, credit enhancement, guarantee or other extension of credit.

“Loan Property” means any property in which the applicable party (or a subsidiary of it) holds a security interest and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

“Massachusetts Articles of Merger” shall have the meaning given to that term in Section 2.11.

“Material Adverse Effect” means any fact, development, effect, circumstance, occurrence or change that individually or in the aggregate (a) is material and adverse to the business, properties, assets, liabilities, financial condition, results of operations or business of 15 Beach or MHC, as the context may dictate, and its Subsidiaries taken as a whole, or (b) does or would materially prevent, impair or threaten the ability of any of MHC, Parent, 15 Beach or the Company, as the context may dictate, to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the transactions contemplated by this Agreement; provided, however, that the following (or the impact thereof) shall be excluded when determining the existence of a Material Adverse Effect: (i) changes in laws and regulations affecting banks or their holding companies generally, or interpretations thereof by Governmental Entities; (ii) changes, after the date hereof, in economic conditions affecting financial institutions generally, including but not limited to, changes in the general level of market interest rates; (iii) changes in GAAP or regulatory accounting principles generally applicable to financial institutions and their holding companies; (iv) actions and omissions of a Party hereto (or any of a Party’s Subsidiaries) permitted or required to be taken under this Agreement or taken with the prior written consent of the other Party; (v) the announcement of this Agreement and the transactions contemplated hereby, and the effects of complying with this Agreement on the business, financial condition or results of operations of the Parties and their respective Subsidiaries, including the expenses incurred by the Parties hereto in consummating the transactions contemplated by this Agreement; (vi) natural disasters or other force majeure events or any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic); (vii) changes in national or international political or social conditions including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon or within the United States, or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States; or (viii) the imposition of tariffs or other domestic or international governmental policies, including, but not limited to, changes in government spending, the freezing of government funding or grants, or the shrinking of government workforce, except, with respect to clauses (i), (ii), (iii), (vi), (vii) or (viii), unless it uniquely affects any of the Parties or their Subsidiaries.

“MBCA” means the Massachusetts Business Corporation Act.

“MDOB” means the Massachusetts Division of Banks.

“Merger” shall have the meaning given to that term in Section 2.2.

“Merger Consideration” shall have the meaning given to that term in Section 2.6(a).

“Merger Sub” shall have the meaning given to that term in the preamble.

A-4

“Merger Sub Common Stock” means the common stock, par value $0.01 per share, of Merger Sub.

“MHC” shall have the meaning given to that term in the preamble.

“MHC Articles of Merger” shall have the meaning given to that term in Section 2.4(a).

“MHC Effective Time” shall have the meaning given to that term in Section 2.4(a).

“MHC Merger” shall have the meaning given to that term in Section 2.1.

“MHPF” means the Massachusetts Housing Partnership Fund.

“New Plans” shall have the meaning given to that term in Section 5.13(e).

“Notice of Superior Proposal” shall have the meaning given to that term in Section 5.8(d).

“OCC” means the Office of the Comptroller of the Currency.

“Parent” shall have the meaning given to that term in the preamble.

“Parent Banks” shall mean bankESB, bankHometown and North Shore Bank, the wholly owned depository institution subsidiaries of Parent.

“Participation Facility” means any facility in which the applicable Party (or a Subsidiary of it) participates in the management (including all property held as trustee or in any other fiduciary capacity) and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

“Party” and “Parties” have the meanings given to those terms in the preamble.

“Paying Agent” shall have the meaning given to that term in Section 2.7(c).

“Permitted Liens” shall have the meaning given to that term in Section 3.2(s).

“Person” means an individual, corporation, limited liability company, partnership, association, trust, unincorporated organization or other entity.

“Proxy Statement” shall have the meaning given to that term in Section 5.9(a).

“Sarbanes-Oxley Act” shall have the meaning given to that term in Section 3.2(g)(ii).

“SEC” shall have the meaning given to that term in Section 3.2(f).

“Second Effective Time” shall have the meaning given to that term in Section 2.11.

“Second Step Merger” shall have the meaning given to that term in Section 2.11.

“SEC Reports” shall have the meaning given to that term in Section 3.2(g)(ii).

“Securities Act” shall have the meaning given to that term in Section 3.2(g)(ii).

“Shareholder Meeting” shall have the meaning given to that term in Section 5.8(a).

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“Subsidiary” means a corporation, partnership, joint venture or other entity in which 15 Beach, the Company, MHC or Parent, as the case may be, has, directly or indirectly, an equity interest representing 50% or more of any class of the capital stock thereof or other equity interests therein.

“Superior Proposal” means an unsolicited, bona fide written offer or proposal made by a third party (on its most recently amended or modified terms, if amended or modified) to consummate an Acquisition Proposal (with all of the percentages included in the Acquisition Proposal increased to 50%) that the Company’s board of directors determines in good faith, after consultation with and having considered the advice of outside legal counsel and, with respect to financial matters, its financial advisor, would, if consummated, result in a transaction that (A) involves consideration to the Company shareholders that is more favorable, from a financial point of view, than the consideration to be paid to the Company shareholders pursuant to this Agreement, considering, among other things, the nature of the consideration being offered and any material regulatory approvals or other risks associated with the timing of the proposed transaction beyond, or in addition to, those specifically contemplated hereby, and which proposal is not conditioned upon obtaining financing, and (B) is reasonably likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal.

“Suspense Shares” shall mean shares of Company Common Stock allocated to the suspense account pursuant to the ESOP.

“Surviving Corporation” shall have the meaning given to that term in Section 2.2.

“Surviving MHC” shall have the meaning given to that term in Section 2.1.

“Taxes” shall mean any federal, state, local, foreign or provincial income, gross receipts, real and personal property, sales, service, use, license, lease, excise, franchise, employment, payroll, withholding, unemployment insurance, workers’ compensation, social security, alternative or added minimum, ad valorem, value added, stamp, business license, environmental, windfall profit, estimated, real property transfer and gains, or any other tax, governmental fee or other assessment or charge of any kind whatsoever, together with any interest, penalty or additional tax imposed by any Governmental Entity.

“Termination Fee” shall mean $1,550,000.

“Trust” shall have the meaning given to that term in Section 3.2(r)(xi).

“Trustee” shall have the meaning given to that term in Section 3.2(r)(xi).

ARTICLE II

THE MERGER

2.1 The MHC Merger. Upon the terms and subject to the conditions set forth in this Agreement, in accordance with the MBCA and federal law, 15 Beach shall merge with and into MHC (the “MHC Merger”) at the MHC Effective Time. At the MHC Effective Time, the separate corporate existence of 15 Beach shall cease and MHC shall be the surviving corporation in the MHC Merger (hereinafter sometimes referred to in such capacity as the “Surviving MHC”) and shall continue to be governed by the MBCA and its name and separate corporate existence, with all of its rights, privileges, immunities, powers and franchises, shall continue unaffected by the MHC Merger.

2.2 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, in accordance with the MBCA and federal law, Merger Sub shall merge with and into the Company (the “Merger”) at the Effective Time. At the Effective Time, the separate corporate existence of Merger Sub shall cease and the

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Company shall be the surviving corporation in the Merger (hereinafter sometimes referred to in such capacity as the “Surviving Corporation”) and shall continue to be governed by federal law and its name and separate corporate existence, with all of its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Merger.

2.3 Closing. The transactions contemplated by this Agreement shall be consummated at a closing (the “Closing”) that shall take place by the electronic (PDF), facsimile or overnight courier exchange of executed documents, or, at the option of Parent, at the offices of Luse Gorman, PC, 5335 Wisconsin Avenue, N.W., Washington, D.C. 20015, on a date to be specified by the parties, which shall be no later than five (5) Business Days following satisfaction or waiver (subject to applicable law) of all the conditions to the Closing set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing) (such date being referred to herein as the “Closing Date”). Notwithstanding the foregoing, the Closing may take place at such other place, time or date as may be mutually agreed upon in writing by the Parties hereto.

2.4 Effective Time.

(a) MHC Merger. On the Closing Date, as promptly as practicable after all of the conditions set forth in Article VI shall have been satisfied or, if permissible, waived by the Party entitled to the benefit of the same, MHC and 15 Beach shall duly execute and deliver articles of merger relating to the MHC Merger (the “MHC Articles of Merger”) with the Commissioner for filing pursuant to the MBCA. The MHC Merger shall become effective at such time as the MHC Articles of Merger are duly filed with Commissioner or at such later date or time as Parent and the Company agree and specify in the MHC Articles of Merger (the date and time the Merger becomes effective being the “MHC Effective Time”).

(b) Merger. On the Closing Date, as promptly as practicable after all of the conditions set forth in Article VI shall have been satisfied or, if permissible, waived by the Party entitled to the benefit of the same, Merger Sub and the Company shall duly execute and deliver articles of merger relating to the Merger (the “Articles of Merger”) to the Secretary of State of the Commonwealth of Massachusetts for filing pursuant to the MBCA. The Merger shall become effective at such time as the Articles of Merger are duly filed with Secretary of State of the Commonwealth of Massachusetts or at such later date or time as Parent and the Company agree and specify in the Articles of Merger (the date and time the Merger becomes effective being the “Effective Time”).

2.5 Effects of the Mergers.

(a) MHC Merger. At and after the MHC Effective Time, the MHC Merger shall have the effects set forth in the applicable provisions of the MBCA and other applicable law. Without limiting the generality of the foregoing, and subject thereto, from and after the MHC Effective Time, MHC shall possess all of the properties, rights, privileges, powers and franchises of 15 Beach and be subject to all of the debts, liabilities and obligations of 15 Beach.

(b) Merger. At and after the Effective Time, the Merger shall have the effects set forth in the applicable provisions of the MBCA and other applicable law. Without limiting the generality of the foregoing, and subject thereto, from and after the Effective Time, the Company shall possess all of the properties, rights, privileges, powers and franchises of Merger Sub and be subject to all of the debts, liabilities and obligations of Merger Sub.

2.6 Effect on Outstanding Shares of Company Common Stock and Treatment of Company Equity Awards.

(a) By virtue of the Merger, automatically and without any action on the part of MHC, Parent, Merger Sub, 15 Beach, the Company or any shareholder of the Company, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time, other than shares of Company Common Stock to be cancelled pursuant to Section 2.6(b), shall become and be converted into the right to receive $14.25 in cash, without interest (the “Merger Consideration”).

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(b) As of the Effective Time, each share of Company Common Stock, if any, held, directly or indirectly, by MHC, Parent, 15 Beach or the Company (other than shares held in a fiduciary capacity or in satisfaction of a debt previously contracted), and any Suspense Shares remitted to the Company prior to the Effective Time for purposes of repayment of the ESOP Loan as contemplated by Section 5.19, shall be canceled and retired and shall cease to exist, and no payment shall be made with respect thereto.

(c) At the Effective Time, each option to purchase shares of Company Common Stock under the CFSB Bancorp, Inc. 2023 Equity Incentive Plan (the “Company Stock Plan”) that is outstanding and unexercised immediately prior to the Effective Time (a “Company Stock Option”), whether vested or unvested, shall, automatically be cancelled and converted into the right to receive from Parent (or the Company, as directed by Parent) an amount in cash, without interest, equal to the product of the number of shares of Company Common Stock subject to such Company Stock Option, multiplied by the excess, if any, of the Merger Consideration over the exercise price per share of such Company Stock Option; provided, however, that there shall be withheld from such cash payment any applicable Taxes required to be withheld by applicable law with respect to such payment. For the avoidance of doubt, Company Stock Options for which the applicable per-share exercise price exceeds the Merger Consideration shall be cancelled as of the Effective Time for no consideration.

(d) At the Effective Time, any vesting restrictions on each outstanding restricted stock award (a “Company RSA”) under the Company Stock Plan shall automatically lapse and such awards shall be treated as issued and outstanding shares of Company Common Stock for the purposes of this Agreement, including but not limited to, the provisions of this Section 2.6. The Company shall withhold any Taxes required to be withheld by applicable law as a result of this Section 2.6(d).

2.7 Payment Procedures.

(a) Customary transmittal materials (“Letter of Transmittal”) in a form satisfactory to Parent and the Company shall be mailed as soon as practicable after the Effective Time, but in no event later than five (5) Business Days thereafter, to each holder of record of Company Common Stock as of the Effective Time. A Letter of Transmittal will be deemed properly completed only if, in the case of holders of certificated shares of Company Common Stock, the completed Letter of Transmittal is accompanied by one or more Certificates (or customary affidavits and, if required pursuant to Section 2.7(h), indemnification regarding the loss or destruction of such Certificates or the guaranteed delivery of such Certificates) representing all shares of Company Common Stock to be converted thereby.

(b) At and after the Effective Time, each Certificate shall represent only the right to receive the Merger Consideration (it being understood that any reference herein to “Certificate” shall be deemed to include reference to book-entry account statements relating to the ownership of shares of Company Common Stock) and any dividends or distributions with respect thereto or any dividends or distributions with a record date prior to the Effective Time that were declared or made by the Company on such shares of Company Common Stock in accordance with the terms of this Agreement on or prior to the Effective Time and that remain unpaid at the Effective Time.

(c) Prior to the Closing, Parent shall deposit, or cause to be deposited, with a bank, trust company, transfer agent and registrar or other similar entity selected by Parent and consented to by the Company, whose consent shall not unreasonably be withheld, which shall act as paying agent (the “Paying Agent”) for the benefit of the holders of shares of Company Common Stock, for exchange in accordance with this Section 2.7 an amount of cash sufficient to pay the aggregate Merger Consideration.

(d) The Letter of Transmittal shall (i) specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent, (ii) be in a form and contain any other provisions as Parent may reasonably determine and (iii) include instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration. Upon the proper surrender of the

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Certificates to the Paying Agent, together with a properly completed and duly executed Letter of Transmittal, the holder of such Certificates shall be entitled to receive in exchange therefore a check in the amount equal to the cash that such holder has the right to receive pursuant to Section 2.6. Certificates so surrendered shall forthwith be canceled. As soon as practicable following receipt of the properly completed Letter of Transmittal and any necessary accompanying documentation, the Paying Agent shall distribute the Merger Consideration as provided herein. If there is a transfer of ownership of any shares of Company Common Stock not registered in the transfer records of the Company, the Merger Consideration shall be issued to the transferee thereof if the Certificates representing such Company Common Stock are presented to the Paying Agent, accompanied by all documents required, in the reasonable judgment of Parent and the Paying Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid.

(e) The stock transfer books of the Company shall be closed immediately upon the Effective Time and from and after the Effective Time there shall be no transfers on the stock transfer records of the Company of any shares of Company Common Stock. If, after the Effective Time, Certificates are presented to Parent, they shall be canceled and exchanged for the Merger Consideration deliverable in respect thereof pursuant to this Agreement in accordance with the procedures set forth in this Section 2.7.

(f) Any portion of the aggregate amount of cash to be paid pursuant to Section 2.6 or any proceeds from any investments thereof that remains unclaimed by the shareholders of the Company for six (6) months after the Effective Time shall be repaid by the Paying Agent to Parent upon the written request of Parent. After such request is made, any shareholders of the Company who have not theretofore complied with this Section 2.7 shall look only to Parent for the Merger Consideration deliverable in respect of each share of Company Common Stock such shareholder holds, as determined pursuant to Section 2.6, without any interest thereon. If outstanding Certificates are not surrendered prior to the date on which such payments would otherwise escheat to or become the property of any governmental unit or agency, the unclaimed items shall, to the extent permitted by any abandoned property, escheat or other applicable laws, become the property of Parent (and, to the extent not in its possession, shall be paid over to it), free and clear of all claims or interest of any person previously entitled to such claims. Notwithstanding the foregoing, neither the Paying Agent nor any party to this Agreement (or any affiliate thereof) shall be liable to any former holder of Company Common Stock for any amount delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

(g) Parent and the Paying Agent shall be entitled to rely upon the Company’s stock transfer books to establish the identity of those persons entitled to receive the Merger Consideration, which books shall be conclusive with respect thereto. In the event of a dispute with respect to ownership of stock represented by any Certificate, Parent and the Paying Agent shall be entitled to deposit any Merger Consideration represented thereby in escrow with an independent third party and thereafter be relieved with respect to any claims thereto.

(h) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Paying Agent or Parent, the posting by such person of a bond in such amount as the Paying Agent may reasonably direct as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to Section 2.6.

(i) The Paying Agent or Parent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement or the transactions contemplated hereby to any holder of Company Common Stock such amounts as the Paying Agent is required to deduct and withhold with respect to the making of such payment under the IRC, or any applicable provision of U.S. federal, state, local or non-U.S. tax law. To the extent that such amounts are properly withheld by the Paying Agent or Parent, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of Company Common Stock in respect of whom such deduction and withholding were made by the Paying Agent or Parent.

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2.8 Effect on Outstanding Shares of Merger Sub Common Stock. At the Effective Time, each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.01, of the Surviving Corporation.

2.9 Charter and Bylaws of Surviving Corporation and the Surviving MHC. The Charter of the Company, as in effect immediately prior to the Effective Time, shall be the Charter of the Surviving Corporation, until thereafter amended as provided therein and in accordance with applicable law. The Bylaws of the Company, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation, until thereafter amended as provided therein and in accordance with applicable law. The Articles of Organization of the MHC, as in effect immediately prior to the MHC Effective Time, shall be the Articles of Organization of the Surviving MHC, until thereafter amended as provided therein and in accordance with applicable law. The Bylaws of the MHC, as in effect immediately prior to the MHC Effective Time, shall be the Bylaws of the Surviving MHC, until thereafter amended as provided therein and in accordance with applicable law.

2.10 Directors and Officers of Surviving Corporation and the Surviving MHC. The directors and officers of Merger Sub immediately prior to the Effective Time shall be all of the directors and officers of the Surviving Corporation, each of whom shall serve in accordance with the Charter and Bylaws of the Surviving Corporation. The trustees, corporators and officers of MHC immediately prior to the MHC Merger Effective Time shall be all of the trustees, corporators and officers of the Surviving MHC, each of whom shall serve in accordance with the Articles of Organization and Bylaws of the Surviving MHC.

2.11 The Second Step Merger. Immediately following the Effective Time, in accordance with the MBCA and federal law, Parent shall cause the Surviving Corporation to be merged with and into Parent (the “Second Step Merger”), with Parent surviving the Second Step Merger and continuing its corporate existence under its Articles of Organization, Bylaws and the laws of the Commonwealth of Massachusetts and its name and separate corporate existence, with all of its rights, privileges, immunities, powers and franchises, shall continue unaffected by the Second Step Merger, and the separate corporate existence of the Surviving Corporation shall cease as of the Second Effective Time. In furtherance of the foregoing, Parent shall cause to be filed with the Secretary of State of the Commonwealth of Massachusetts, in accordance with the MBCA, articles of merger (the “Massachusetts Articles of Merger”) relating to the Second Step Merger. The Second Step Merger shall become effective as of the date and time specified in the Massachusetts Articles of Merger (such date and time, the “Second Effective Time”). At and after the Second Effective Time, the Second Step Merger shall have the effects set forth in the applicable provisions of the MBCA.

2.12 The Bank Merger. Immediately following the Second Step Merger, Colonial Federal Savings Bank shall merge with and into North Shore Bank, with North Shore Bank as the surviving entity pursuant to the Bank Merger Agreement substantially in the form of Exhibit B hereto. Subject to Section 5.15 herein, the directors and officers of North Shore Bank immediately prior to the Effective Date shall be the directors and officers of the surviving entity.

2.13 Alternative Structure. Notwithstanding anything to the contrary contained in this Agreement, prior to the Effective Time, Parent may specify that the structure of the transactions contemplated by this Agreement be revised and the Parties shall enter into such alternative transactions as Parent may reasonably determine to effect the purposes of this Agreement; provided, however, that such revised structure shall not (a) alter or change the amount or kind of the Merger Consideration, (b) materially impede or delay consummation of the transactions contemplated by this Agreement, or (c) require submission to the Company’s shareholders or 15 Beach’s members after receipt of the requisite approval. If Parent elects to make such a revision, the Parties agree to execute appropriate documents to reflect the revised structure.

2.14 Absence of Control. It is the intent of the Parties hereto that MHC, Parent and Merger Sub by reason of this Agreement shall not be deemed (until consummation of the transactions contemplated hereby) to control,

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directly or indirectly, 15 Beach or any of its Subsidiaries or to exercise, directly or indirectly, a controlling influence over the management or policies of the Company or any of its Subsidiaries.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Disclosure Letters; Standard.

(a) Prior to the execution and delivery of this Agreement, Parent and the Company have each delivered to the other a letter (each, its “Disclosure Letter”) setting forth, among other things, facts, circumstances and events the disclosure of which is required or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of their respective representations and warranties contained in Section 3.2 or Section 3.3, as applicable, or to one or more of its covenants contained in Articles IV or V (and making specific reference to the Section of this Agreement to which they relate). Disclosure in any paragraph of the Disclosure Letter shall apply only to the indicated Section of this Agreement except to the extent that it is reasonably clear on the face of such disclosure that it is relevant to another paragraph of the Disclosure Letter or another Section of this Agreement.

(b) No representation or warranty of 15 Beach, the Company or MHC and Parent contained in Sections 3.2 or 3.3, as applicable (other than (i) the representations and warranties contained in Sections 3.2(c), 3.2(j)(i), 3.2(u) and 3.3(i), which shall be true in all respects, and (ii) the representations and warranties contained in Sections 3.2(a), 3.2(d), 3.2(e)(i) and (ii), 3.2(x), 3.3(a), 3.3(b), and 3.3(c)(i) and (ii), which shall be true in all material respects) will be deemed untrue or incorrect, and no Party will be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, event or circumstance, unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representation or warranty contained in Sections 3.2 or 3.3, has had or is reasonably likely to have a Material Adverse Effect with respect to the Company, MHC or Parent, as the case may be (it being understood that for purposes of determining the accuracy of such representations and warranties, all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties shall be disregarded).

3.2 Representations and Warranties of 15 Beach and the Company. Each of 15 Beach and the Company represents and warrants to MHC and Parent that, except as disclosed in the Company’s Disclosure Letter:

(a) Organization and Qualification. Each of 15 Beach and the Company is a corporation duly organized, validly existing and in good standing under the laws of the United States of America and is registered with the FRB as a savings and holding company. Each of 15 Beach and the Company has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it. Each of 15 Beach and the Company is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on the Company. Each of 15 Beach and the Company engages only in activities (and holds properties only of the types) permitted for savings and holding companies under the Home Owners’ Loan Act of 1933, as amended, and the rules and regulations of the FRB promulgated thereunder.

(b) Subsidiaries.

(i) Section 3.2(b) of the Company’s Disclosure Letter sets forth each of the Company’s direct and indirect Subsidiaries’ name, its jurisdiction of incorporation, the Company’s percentage ownership, the number of shares of stock or other equity interests owned or controlled by the Company and the name and number of shares

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held by any other person who owns any stock of the Subsidiary. Except as set forth in Section 3.2(b) of the Company’s Disclosure Letter, the Company owns of record and beneficially all the capital stock of each of its Subsidiaries free and clear of any Liens. There are no contracts, commitments, agreements or understandings relating to the Company’s right to vote or dispose of any equity securities of its Subsidiaries. The Company’s ownership interest in each of its Subsidiaries is in compliance in all material respects with all applicable laws, rules and regulations relating to equity investments by savings and loan holding companies.

(ii) Each of the Company’s Subsidiaries is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, has all requisite corporate power and authority to own, lease and operate its properties and to conduct the business currently being conducted by it and is duly qualified or licensed as a foreign corporation to transact business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on such Subsidiary.

(iii) The outstanding shares of capital stock of each Subsidiary have been duly authorized and are validly issued, fully paid and nonassessable. No shares of capital stock of any Subsidiary of the Company are or may be required to be issued by virtue of any options, warrants or other rights, no securities exist that are convertible into or exchangeable for shares of such capital stock or any other debt or equity security of any Subsidiary, and there are no contracts, commitments, agreements or understandings of any kind for the issuance of additional shares of capital stock or other debt or equity security of any Subsidiary or options, warrants or other rights with respect to such securities.

(iv) Colonial Federal Savings Bank is a federally-chartered savings bank. No Subsidiary of the Company other than Colonial Federal Savings Bank is an “insured depository institution” as defined in the Federal Deposit Insurance Act, as amended, and the applicable regulations thereunder. Colonial Federal Savings Bank’s deposits are insured by the FDIC to the fullest extent permitted by law. Colonial Federal Savings Bank has paid all premiums and assessments and filed all reports required by the Federal Deposit Insurance Act. Colonial Federal Savings Bank is a member in good standing of the Federal Home Loan Bank of Boston and owns the requisite amount of stock therein.

(i) 15 Beach is a mutual holding company that is not authorized to issue capital stock and that has no shares of capital stock outstanding. 15 Beach does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments, rights agreements or other agreements of any character calling for it to issue, deliver or sell, or cause to be issued, delivered or sold any shares of common stock, preferred stock or any other equity security of 15 Beach or of any Subsidiary of 15 Beach or any securities convertible into, exchangeable for or representing the right to subscribe to, purchase or otherwise receive any shares of common stock, preferred stock or any other equity security of 15 Beach or of any Subsidiary of 15 Beach or obligating 15 Beach to grant, extend or enter into any such subscriptions, options, warrants, calls, commitments, rights agreements or other agreements at any time now or in the future.

(ii) The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock, and 10,000,000 shares of preferred stock, no par value per share. As of the date hereof, there are (A) 6,548,575 shares of Company Common Stock issued and outstanding, which include 3,586,903 shares held by 15 Beach and 66,600 unvested shares of Company RSAs, (B) no shares of preferred stock issued and outstanding, and (C) 273,000 outstanding Company Stock Options. All of the issued and outstanding shares of Company Common Stock have been duly authorized and are validly issued, fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which shareholders of the Company may vote. No trust preferred or subordinated debt securities of the Company or any Company Subsidiary are issued or

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outstanding. Except as set forth in Section 3.2(c) of the Company’s Disclosure Letter, there are no outstanding subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements obligating the Company or any Company Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire, any such securities. Except with respect to the ESOP and the Colonial Federal Savings Bank Foundation, Inc., the Company and its Subsidiaries ar

SEC Form DEFM14A filed by CFSB Bancorp Inc.