PFS Bancorp, Inc. Liquidation Value

PFS Bancorp (PFSB) is a micro-cap mutual savings bank holding company (Peru Federal Savings Bank, Illinois) with total assets of $210.7M at March 31, 2026, up from $206.9M at December 31, 2025. Under a liquidation lens, the recovery posture is marginally positive to book value, though the haircut math compresses equity meaningfully versus reported GAAP equity of $39.0M.

Asset-side recovery estimate: Cash and due from banks of $22.1M recovers at 100% ($22.1M). Net loans of $109.1M (gross $109.8M, ACL $840K, 0.76% coverage) represent the largest asset. Applying a 90-95% recovery haircut to the gross loan balance yields approximately $98-104M — the portfolio is predominantly 1-4 family residential ($68.7M, 62.5% of gross) and commercial real estate ($30.3M, 27.6%), with modest construction ($1.9M), commercial ($5.6M), and consumer ($3.4M) exposure. Non-accrual loans total $311K (0.28% of gross), immaterial. AFS securities of $64.9M carry a net unrealized loss of $2.4M (amortized cost $67.2M); at liquidation these would likely recover at or near fair value given the predominantly agency MBS/CMO composition, so no additional haircut beyond current marks. HTM securities of $5.2M at amortized cost have a fair value of $5.2M (unrealized net loss $49K). PP&E gross $4.9M, net $2.0M — applying a 50-60% haircut to gross yields $2.5-3.0M, or roughly at net book. BOLI of $4.1M is a surrender-value asset; recovery depends on carrier and surrender charges, conservatively 85-90% or ~$3.5M. FHLB stock $354K redeemable at par. Deferred tax asset of $1.2M carries zero valuation allowance; liquidation value is typically zero.

Liability-side: Deposits total $170.1M at face — the dominant claim. No FHLB advances outstanding ($0 balance, $51.1M capacity). Deferred compensation liability $714K at face. Other accrued liabilities of approximately $1.6M at face. Total liabilities $171.7M.

Rough liquidation recovery to equity: Haircutted assets (~$205-210M gross haircut to ~$195-200M) less $171.7M in face-value liabilities yields an estimated recovery to equity in the range of $23-28M, compared to GAAP book of $39.0M and MFFAIS CLV/LLV/OLV of $22.1M. The MFFAIS figure appears to reflect only cash and liquid equivalents, not the full loan and securities portfolio, which is conservative but directionally reflects that the ACL at 0.76% likely understates loss content in a forced-liquidation scenario.

From the prior filing (10-K, December 31, 2025): Total assets were $206.9M, equity $39.1M — essentially flat. The $3.6M deposit increase (to $170.1M) marginally increases the liability stack. Treasury stock repurchases of $201K in Q1 2026 (12,926 shares at $15.65 average) modestly reduced equity. AOCI worsened $259K due to rising rates affecting the AFS portfolio. No FHLB advances drawn in either period — clean borrowing stack. Allowance for credit losses increased modestly; coverage ratio remains thin at 0.76%. Capital ratios remain substantially above well-capitalized minimums (Tier 1 leverage 16.1%, total risk-based capital 33.5%), providing substantial buffer but not affecting liquidation math. Off-balance sheet commitments of $5.8M in loan origination commitments are contingent and immaterial relative to total balance sheet. $63.1M of time deposits mature within 12 months, which is the primary liquidity pressure point but does not alter face-value liability treatment under the liquidation lens.