Catalyst Bancorp, Inc. Announces 2024 Second Quarter Results

OPELOUSAS, La., July 31, 2024 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for Catalyst Bank (the "Bank") (www.catalystbank.com), reported net income of $527,000 for the second quarter of 2024, compared to a net loss of $4.7 million for the first quarter of 2024. The first quarter of 2024 included a $5.5 million loss on the sale of investment securities and $560,000 of data conversion and other expenses associated with the Bank's upgrade to a new core processing system. 

"We posted our strongest quarter of loan growth since becoming a public company," said Joe Zanco, President and Chief Executive Officer of the Company and Bank. "That growth was focused on living our mission – serving as catalysts for economic growth in our communities. We do that most effectively by helping local businesses expand and add jobs."

Loans

Loans totaled $153.3 million at June 30, 2024, up $9.8 million, or 7%, from March 31, 2024. The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.














(Dollars in thousands)


6/30/2024


3/31/2024


Increase (Decrease)

Real estate loans













One- to four-family residential


$

80,572


$

81,686


$

(1,114)


(1)

%

Commercial real estate



23,071



21,130



1,941


9


Construction and land



20,427



19,369



1,058


5


Multi-family residential



3,025



3,061



(36)


(1)


 Total real estate loans



127,095



125,246



1,849


1


Other loans













Commercial and industrial



23,915



15,711



8,204


52


Consumer



2,256



2,534



(278)


(11)


 Total other loans



26,171



18,245



7,926


43


 Total loans


$

153,266


$

143,491


$

9,775


7

%

The following table presents certain major segments of our commercial real estate, construction and land, and commercial and industrial loan balances as of the dates indicated.














(Dollars in thousands)


6/30/2024


3/31/2024


Increase (Decrease)

Commercial real estate













Retail


$

3,891


$

4,071


$

(180)


(4)

%

Hospitality



3,736



3,873



(137)


(4)


Office buildings



2,263



2,285



(22)


(1)


Restaurants



623



632



(9)


(1)


Oilfield services



419



428



(9)


(2)


Other commercial real estate



12,139



9,841



2,298


23


 Total commercial real estate


$

23,071


$

21,130


$

1,941


9

%

Construction and land













Multi-family residential


$

5,688


$

4,782


$

906


19

%

Health service facilities



2,749



2,749



-


-


Hospitality



2,716



2,716



-


-


Retail



2,033



711



1,322


186


Other commercial construction and land



2,830



4,900



(2,070)


(42)


Consumer residential construction and land



4,411



3,511



900


26


 Total construction and land


$

20,427


$

19,369


$

1,058


5

%

Commercial and industrial













Oilfield services



10,382



4,821



5,561


115


Industrial equipment



4,540



3,626



914


25


Professional services



2,839



2,713



126


5


Other commercial and industrial



6,154



4,551



1,603


35


 Total commercial and industrial loans


$

23,915


$

15,711


$

8,204


52

%

Credit Quality and Allowance for Credit Losses

At both June 30, 2024 and March 31, 2024, non-performing assets ("NPAs") totaled $1.7 million. The ratio of NPAs to total assets was 0.58% and 0.61% at June 30, 2024 and March 31, 2024, respectively. Non-performing loans ("NPLs") comprised 1.04% and 1.03% of total loans at June 30 and March 31, 2024, respectively. At June 30 and March 31, 2024, 98% of total NPLs, were one- to four-family residential mortgage loans.

At June 30, 2024, the allowance for loan losses totaled $2.2 million, or 1.45% of total loans, compared to 1.44% of total loans at March 31, 2024. The allowance for credit losses on unfunded lending commitments totaled $224,000 and $310,000 at June 30 and March 31, 2024, respectively. The provision for credit losses, inclusive of the provision for unfunded commitments, for the second quarter of 2024 totaled $99,000 and was largely attributable to commercial loan growth and an increase in the allowance for credit losses on individually evaluated residential loans. Net loan charge-offs totaled $38,000 during the second quarter of 2024, compared to net charge-offs of $98,000 for the first quarter of 2024.

Investment Securities

Total investment securities were $43.2 million, or 14.6% of total assets, at June 30, 2024, up $4.2 million, or 10.8%, compared to March 31, 2024. During the first quarter of 2024, the Company sold $48.0 million of available-for-sale securities (quoted at book value) for a pre-tax loss of $5.5 million. Cash proceeds from the sales totaled $42.6 million. The Company re-deployed $4.9 million of the first quarter sales proceeds into investment securities during the second quarter of 2024.

At June 30, 2024 the amortized cost and fair value of pledged investment securities totaled $25.1 million and $21.0 million, respectively. The amortized cost and fair value of investment securities pledged as collateral for borrowings through the Bank Term Funding Program ("BTFP") totaled $21.3 million and $17.7 million, respectively, at June 30, 2024. The remainder of the pledged investment securities at June 30, 2024 served as collateral for public fund deposits.

Deposits

Total deposits were $180.1 million at June 30, 2024, up $10.4 million, or 6%, from March 31, 2024. The following table sets forth the composition of the Company's deposits as of the dates indicated. The ratio of the Company's total loans to total deposits was 85% as of June 30 and March 31, 2024, respectively.














(Dollars in thousands)


6/30/2024


3/31/2024


Increase (Decrease)

Non-interest-bearing demand deposits


$

30,177


$

28,836


$

1,341


5

%

Interest-bearing demand deposits



44,038



35,374



8,664


24


Money market



13,685



14,712



(1,027)


(7)


Savings



36,746



33,675



3,071


9


Certificates of deposit



55,419



57,040



(1,621)


(3)


 Total deposits


$

180,065


$

169,637


$

10,428


6

%

Total public fund deposits amounted to $31.2 million, or 17% of total deposits, at June 30, 2024, compared to $22.7 million, or 13% of total deposits, at March 31, 2024. At June 30, 2024, approximately 84% of our total public fund deposits consisted of non-interest-bearing and interest-bearing demand deposits from municipalities within our market. The full amount of our public fund deposits in excess of the FDIC's insurance limit are secured by pledging investment securities and portions of a custodial letter of credit from the Federal Home Loan Bank of Dallas.

Capital and Share Repurchases

At June 30 and March 31, 2024, consolidated shareholders' equity totaled $81.0 million, or 27.4% of total assets, and $81.3 million, or 28.8% of total assets, respectively.

The Company repurchased 79,802 shares of its common stock at an average cost per share of $11.88 during the second quarter of 2024, compared to 202,997 shares at an average cost per share of $12.12 during the first quarter of 2023. At June 30, 2024, the Company had common shares outstanding of 4,478,527. Under our current repurchase plan, 172,527 shares of the Company's common stock were available for repurchase at June 30, 2024. Since the announcement of our first share repurchase plan on January 26, 2023 and through June 30, 2024, the Company has repurchased a total of 811,473 shares of its common stock, or approximately 15% of the common shares originally issued, at an average cost per share of $11.98.

Net Interest Income

The net interest margin for the second quarter of 2024 was 3.72%, up 60 basis points compared to the prior quarter. For the second quarter of 2024, the average yield on interest-earning assets was 5.35%, up 65 basis points from the prior quarter, while the average rate paid on interest-bearing liabilities was 2.50%, up five basis points from the first quarter of 2024.

Net interest income for the second quarter of 2024 was $2.4 million, up $355,000, or 17%, compared to the first quarter of 2024. Total interest income was up $370,000, or 12%, while total interest expense increased $15,000, or 1%, in the second quarter of 2024 compared to the prior quarter. Interest income increased during the second quarter of 2024 mainly due to the re-investment of the investment securities sales proceeds from the previous quarter.

The following table sets forth, for the periods indicated, the Company's total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Taxable equivalent ("TE") yields have been calculated using a marginal tax rate of 21%. All average balances are based on daily balances.

 






















Three Months Ended



6/30/2024


3/31/2024

(Dollars in thousands)


Average
Balance


Interest


Average
Yield/
Rate(TE)


Average
Balance


Interest


Average
Yield/
Rate(TE)

INTEREST-EARNING ASSETS



















Loans receivable(1)


$

150,257


$

2,383


6.38

%


$

144,428


$

2,214


6.17

%

Investment securities(2)



44,165



210


1.91




76,628



325


1.71


Other interest earning assets



70,354



932


5.33




48,779



616


5.08


 Total interest-earning assets


$

264,776


$

3,525


5.35

%


$

269,835


$

3,155


4.70

%

INTEREST-BEARING LIABILITIES



















Demand deposits, money market, and savings accounts


$

87,651


$

327


1.50

%


$

89,109


$

332


1.50

%

Certificates of deposit



55,960



444


3.19




57,092



437


3.08


 Total interest-bearing deposits



143,611



771


2.16




146,201



769


2.12


Borrowings



29,468



306


4.17




27,991



293


4.21


 Total interest-bearing liabilities


$

173,079


$

1,077


2.50

%


$

174,192


$

1,062


2.45

%

Net interest-earning assets


$

91,697








$

95,643







Net interest income; average interest rate spread





$

2,448


2.85

%





$

2,093


2.25

%

Net interest margin(3)








3.72

%








3.12

%



(1)

Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and loans in-process.

(2)

Average investment securities does not include unrealized holding gains/losses on available-for-sale securities.

(3)

Equals net interest income divided by average interest-earning assets. Taxable equivalent yields are calculated using a marginal tax rate of 21%.

 

Non-interest Income

For the second quarter of 2024, non-interest income totaled $366,000, up $5.5 million compared to the first quarter of 2024. Non-interest income for the first quarter of 2024 includes the $5.5 million loss on the sale of investment securities discussed previously.

Non-interest Expense

Non-interest expense for the second quarter of 2024 totaled $2.1 million, down $723,000, or 26%, compared to the first quarter of 2024. During the first quarter of 2024, the Company upgraded to a new core processing system and incurred $560,000 of data conversion and other associated expenses related to that change. Most of these costs are included in data processing and communication expense for the first quarter of 2024. Data processing and communication expense totaled $133,000 for the second quarter of 2024, down $87,000, or 40%, compared to the second quarter of 2023.

About Catalyst Bancorp, Inc.

Catalyst Bancorp, Inc. (Nasdaq: CLST) is a Louisiana corporation and registered bank holding company for Catalyst Bank, its wholly-owned subsidiary, with $295.3 million in assets at June 30, 2024. Catalyst Bank, formerly St. Landry Homestead Federal Savings Bank, has been in operation in the Acadiana region of south-central Louisiana for over 100 years. With a focus on fueling business and improving lives throughout the region, Catalyst Bank offers commercial and retail banking products through our six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. To learn more about Catalyst Bancorp and Catalyst Bank, visit www.catalystbank.com, or the website of the Securities and Exchange Commission, www.sec.gov.

Forward-looking Statements

This news release reflects industry conditions, Company performance and financial results and contains "forward-looking statements,' which may include forecasts of our financial results and condition, expectations for our operations and businesses, and our assumptions for those forecasts and expectations. Do not place undue reliance on forward-looking statements. These forward-looking statements are subject to a number of risk factors and uncertainties which could cause the Company's actual results and experience to differ materially from the anticipated results and expectation expressed in such forward-looking statements.

Factors that could cause our actual results to differ materially from our forward-looking statements are described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Supervision and Regulation" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in other documents subsequently filed by the Company with the Securities and Exchange Commission, available at the SEC's website and the Company's website, each of which are referenced above. To the extent that statements in this news release relate to future plans, objectives, financial results or performance by the Company, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are generally identified by use of words such as "may," "believe," "expect," "anticipate," "intend," "will," "should," "plan," "estimate," "predict," "continue" and "potential" or the negative of these terms or other comparable terminology. 

Forward-looking statements represent management's beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. All information is as of the date of this news release. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

 














CATALYST BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
















(Unaudited)


(Unaudited)





(Unaudited)

(Dollars in thousands)


6/30/2024


3/31/2024


12/31/2023


6/30/2023

ASSETS













Non-interest-bearing cash


$

4,952


$

3,118


$

3,654


$

4,769

Interest-bearing cash and due from banks



70,503



72,893



15,357



15,022

 Total cash and cash equivalents



75,455



76,011



19,011



19,791

Investment securities:













 Securities available-for-sale, at fair value



29,748



25,534



70,540



75,876

 Securities held-to-maturity



13,454



13,457



13,461



13,468

Loans receivable, net of unearned income



153,266



143,491



144,920



133,493

Allowance for loan losses



(2,215)



(2,068)



(2,124)



(2,081)

 Loans receivable, net



151,051



141,423



142,796



131,412

Accrued interest receivable



737



733



906



707

Foreclosed assets



104



237



60



296

Premises and equipment, net



6,114



5,995



6,072



6,111

Stock in correspondent banks, at cost



1,919



1,898



1,878



1,839

Bank-owned life insurance



14,252



14,139



14,026



13,813

Other assets



2,499



2,622



2,182



2,701

TOTAL ASSETS


$

295,333


$

282,049


$

270,932


$

266,014














LIABILITIES













Deposits:













 Non-interest-bearing


$

30,177


$

28,836


$

28,183


$

41,482

 Interest-bearing



149,888



140,801



137,439



129,891

 Total deposits



180,065



169,637



165,622



171,373

Borrowings



30,261



29,423



19,378



9,288

Other liabilities



3,994



1,736



1,373



1,042

TOTAL LIABILITIES



214,320



200,796



186,373



181,703














SHAREHOLDERS' EQUITY













Common stock



45



46



48



49

Additional paid-in capital



41,914



42,711



45,020



47,032

Unallocated common stock held by benefit plans



(6,116)



(6,169)



(6,221)



(6,616)

Retained earnings



48,787



48,260



52,949



52,491

Accumulated other comprehensive income (loss)



(3,617)



(3,595)



(7,237)



(8,645)

TOTAL SHAREHOLDERS' EQUITY



81,013



81,253



84,559



84,311

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

295,333


$

282,049


$

270,932


$

266,014

 

















CATALYST BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



















Three Months Ended


Six Months Ended

(Dollars in thousands)


6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

INTEREST INCOME
















Loans receivable, including fees


$

2,383


$

2,214


$

1,691


$

4,597


$

3,320

Investment securities



210



325



413



535



840

Other



932



616



218



1,548



429

 Total interest income



3,525



3,155



2,322



6,680



4,589

INTEREST EXPENSE
















Deposits



771



769



380



1,540



640

Borrowings



306



293



68



599



136

 Total interest expense



1,077



1,062



448



2,139



776

 Net interest income



2,448



2,093



1,874



4,541



3,813

Provision for credit losses



99



95



-



194



-

Net interest income after provision for credit losses



2,349



1,998



1,874



4,347



3,813

NON-INTEREST INCOME
















Service charges on deposit accounts



194



203



200



397



383

Bank-owned life insurance



113



113



99



226



196

Loss on sales of investment securities



-



(5,507)



-



(5,507)



-

Gain (loss) on disposals and sales of fixed assets



(5)



11



-



6



-

Other



64



17



18



81



32

 Total non-interest income (loss)



366



(5,163)



317



(4,797)



611

NON-INTEREST EXPENSE
















Salaries and employee benefits



1,143



1,260



1,178



2,403



2,381

Occupancy and equipment



183



196



198



379



411

Data processing and communication



133



794



220



927



447

Professional fees



117



107



117



224



246

Directors' fees



114



115



114



229



229

ATM and debit card



36



69



61



105



119

Foreclosed assets, net



26



8



63



34



65

Advertising and marketing



43



38



22



81



52

Franchise and shares tax



15



16



25



31



52

Other



258



188



193



446



374

 Total non-interest expense



2,068



2,791



2,191



4,859



4,376

Income (loss) before income tax expense (benefit)



647



(5,956)



-



(5,309)



48

Income tax expense (benefit)



120



(1,267)



(16)



(1,147)



(20)

NET INCOME (LOSS)


$

527


$

(4,689)


$

16


$

(4,162)


$

68

















Earnings (loss) per share:
















Basic


$

0.13


$

(1.15)


$

-


$

(1.03)


$

0.02

Diluted



0.13



(1.15)



-



(1.03)



0.02

 






















CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA
























Three Months Ended


Six Months Ended

(Dollars in thousands)


6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

EARNINGS DATA





















Total interest income


$

3,525



$

3,155



$

2,322



$

6,680



$

4,589


Total interest expense



1,077




1,062




448




2,139




776


 Net interest income



2,448




2,093




1,874




4,541




3,813


Provision for credit losses



99




95




-




194




-


Total non-interest income (loss)



366




(5,163)




317




(4,797)




611


Total non-interest expense



2,068




2,791




2,191




4,859




4,376


Income tax expense (benefit)



120




(1,267)




(16)




(1,147)




(20)


 Net income (loss)


$

527



$

(4,689)



$

16



$

(4,162)



$

68























AVERAGE BALANCE SHEET DATA





















Total loans


$

150,257



$

144,428



$

133,394



$

147,342



$

133,586


Total interest-earning assets



264,776




269,835




253,427




267,306




255,373


Total assets



285,773




286,708




268,133




286,240




270,045


Total interest-bearing deposits



143,611




146,201




135,147




144,906




138,803


Total interest-bearing liabilities



173,079




174,192




144,411




173,636




148,043


Total deposits



173,326




174,656




172,526




173,990




173,555


Total shareholders' equity



80,965




82,667




85,459




81,816




86,418























SELECTED RATIOS





















Return on average assets



0.74

%



(6.58)

%



0.02

%



(2.92)

%



0.05

%

Return on average equity



2.62




(22.81)




0.08




(10.23)




0.16


Efficiency ratio



73.47




(90.93)




100.00




(1,901.18)




98.91


Net interest margin(TE)



3.72




3.12




2.97




3.42




3.01


Average equity to average assets



28.33




28.83




31.87




28.58




32.00


Common equity Tier 1 capital ratio



49.09




52.09




56.02










Tier 1 leverage capital ratio



26.88




26.84




30.64










Total risk-based capital ratio



50.34




53.34




57.27































NON-FINANCIAL DATA





















Total employees (full-time equivalent)



47




47




50










Common shares issued and outstanding, end of period



4,478,527




4,558,329




4,929,542










 






















CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA

(continued)
























Three Months Ended


Six Months Ended

(Dollars in thousands)


6/30/2024


3/31/2024


6/30/2023


6/30/2024


6/30/2023

ALLOWANCE FOR CREDIT LOSSES





















Allowance for loan losses:





















Beginning balance


$

2,068



$

2,124



$

2,070



$

2,124



$

1,807


CECL adoption impact



-




-




-




-




209


Provision for loan losses



185




42




(2)




227




(2)


Charge-offs



(57)




(123)




(10)




(180)




(17)


Recoveries



19




25




23




44




84


Net (charge-offs) recoveries



(38)




(98)




13




(136)




67


Ending balance


$

2,215



$

2,068



$

2,081



$

2,215



$

2,081























Allowance for unfunded commitments:





















Beginning balance



310




257




216




257




-


CECL adoption impact



-




-




-




-




216


Provision for (reversal of) losses on unfunded commitments



(86)




53




2




(33)




2


Ending balance


$

224



$

310



$

218



$

224



$

218























Total allowance for credit losses, end of period


$

2,439



$

2,378



$

2,299



$

2,439



$

2,299


Total provision for credit losses



99




95




-




194




-























CREDIT QUALITY(1)





















Non-accruing loans


$

1,560



$

1,453



$

1,629










Accruing loans 90 days or more past due



40




29




260










Total non-performing loans



1,600




1,482




1,889










Foreclosed assets



104




237




296










Total non-performing assets


$

1,704



$

1,719



$

2,185































Total non-performing loans to total loans



1.04

%



1.03

%



1.42

%









Total non-performing assets to total assets



0.58




0.61




0.82












(1)

Credit quality data and ratios are as of the end of each period presented.

 

For more information: 
Joe Zanco, President and CEO
(337) 948-3033

SOURCE Catalyst Bancorp, Inc.