Catalyst Bancorp, Inc. Announces 2024 Third Quarter Results

OPELOUSAS, La., Oct. 24, 2024 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for Catalyst Bank (the "Bank") (www.catalystbank.com), reported net income of $447,000 for the third quarter of 2024, down $80,000 compared to net income of $527,000 for the second quarter of 2024. Net income for the third quarter of 2024 included a net pre-tax benefit of $238,000 due to a Bank Enterprise Award ("BEA") Program grant from the Community Development Financial Institution ("CDFI") Fund.

"Our loan portfolio grew a record $12.6 million during the quarter," said Joe Zanco, President and Chief Executive Officer of the Company and Bank. "This marks our second consecutive quarter of outstanding loan growth."

Loans

Loans totaled $165.9 million at September 30, 2024, up $12.6 million, or 8%, from June 30, 2024. The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.

(Dollars in thousands)


9/30/2024


6/30/2024


Change

Real estate loans













One- to four-family residential


$

81,433


$

80,572


$

861


1

%

Commercial real estate



22,704



23,071



(367)


(2)


Construction and land



30,310



20,427



9,883


48


Multi-family residential



2,622



3,025



(403)


(13)


Total real estate loans



137,069



127,095



9,974


8


Other loans













Commercial and industrial



26,507



23,915



2,592


11

%

Consumer



2,306



2,256



50


2


Total other loans



28,813



26,171



2,642


10


Total loans


$

165,882


$

153,266


$

12,616


8


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)


9/30/2024


6/30/2024


Change

Commercial real estate













Retail


$

4,154


$

4,481


$

(327)


(7)

%

Hospitality



3,594



3,736



(142)


(4)


Restaurants



1,112



973



139


14


Oilfield services



411



419



(8)


(2)


Other non-owner occupied



2,780



2,820



(40)


(1)


Other owner occupied



10,653



10,642



11


0


Total commercial real estate


$

22,704


$

23,071


$

(367)


(2)


Construction and land













Multi-family residential


$

8,353


$

5,688


$

2,665


47

%

Health service facilities



7,073



2,749



4,324


157


Hospitality



2,716



2,716



-


-


Retail



3,339



2,033



1,306


64


Other commercial construction and land



4,846



2,830



2,016


71


Consumer residential construction and land



3,983



4,411



(428)


(10)


Total construction and land


$

30,310


$

20,427


$

9,883


48


Commercial and industrial













Oilfield services


$

14,010


$

10,382


$

3,628


35

%

Industrial equipment



3,882



4,540



(658)


(15)


Professional services



2,910



2,839



71


3


Other commercial and industrial



5,705



6,154



(449)


(7)


Total commercial and industrial loans


$

26,507


$

23,915


$

2,592


11


Credit Quality and Allowance for Credit Losses

At September 30, 2024, non-performing assets ("NPAs") totaled $1.6 million, down from $1.7 million at June 30, 2024. The ratio of NPAs to total assets was 0.57% and 0.58% at September 30 and June 30, 2024, respectively. Non-performing loans ("NPLs") comprised 0.87% and 1.04% of total loans at September 30 and June 30, 2024, respectively. At September 30 and June 30, 2024, 98% of total NPLs, were one- to four-family residential mortgage loans.

At September 30, 2024, the allowance for loan losses totaled $2.4 million, or 1.46% of total loans, compared to 1.45% of total loans at June 30, 2024. The allowance for credit losses on unfunded lending commitments totaled $231,000 and $224,000 at September 30 and June 30, 2024, respectively. The provision for credit losses, inclusive of the provision for unfunded commitments, for the third quarter of 2024 totaled $337,000 and was mainly attributable to commercial loan growth. Net loan charge-offs totaled $131,000 during the third quarter of 2024, compared to net charge-offs of $38,000 for the second quarter of 2024. Net loan charge-offs during the third quarter of 2024 were primarily related to three commercial lines of credit.

Investment Securities

Total investment securities were $45.6 million, or 16% of total assets, at September 30, 2024, up $2.4 million, or 6%, compared to June 30, 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. During the second and third quarters of 2024, the Company re-deployed a portion of those sales proceeds into fixed-rate mortgage back securities. Investment securities purchases totaled $3.0 million for the third quarter of 2024 and $4.9 million for the second quarter of 2024.

At September 30, 2024 the amortized cost and fair value of pledged investment securities totaled $35.3 million and $31.7 million, respectively. The amortized cost and fair value of investment securities pledged as collateral for borrowings through the Bank Term Funding Program ("BTFP") totaled $21.0 million and $18.0 million, respectively, at September 30, 2024. The remainder of the pledged investment securities at September 30, 2024 served as collateral for public fund deposits.

Deposits

Total deposits were $167.4 million at September 30, 2024, down $12.6 million, or 7%, from June 30, 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 99% at September 30, 2024, compared to 85% at June 30, 2024.

(Dollars in thousands)


9/30/2024


6/30/2024


Change

Non-interest-bearing demand deposits


$

27,904


$

30,177


$

(2,273)


(8)

%

Interest-bearing demand deposits



33,751



44,038



(10,287)


(23)


Money market



13,372



13,685



(313)


(2)


Savings



36,798



36,746



52


-


Certificates of deposit



55,611



55,419



192


-


Total deposits


$

167,436


$

180,065


$

(12,629)


(7)


Total public fund deposits amounted to $21.0 million, or 13% of total deposits, at September 30, 2024, compared to $31.2 million, or 17% of total deposits, at June 30, 2024. The decline in public fund deposits was primarily due to seasonal fluctuations. At September 30, 2024, approximately 74% 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 September 30 and June 30, 2024, consolidated shareholders' equity totaled $81.7 million, or 29.1% of total assets, and $81.0 million, or 27.4% of total assets, respectively.

The Company repurchased 79,400 shares of its common stock at an average cost per share of $11.75 during the third quarter of 2024, compared to 79,802 shares at an average cost per share of $11.88 during the second quarter of 2024. The shares repurchased during the third quarter were acquired under the Company's fourth share repurchase program announced in May of this year ("May 2024 Repurchase Plan"). At September 30, 2024, the Company had common shares outstanding of 4,399,127. Under the May 2024 Repurchase Plan, 93,127 shares of the Company's common stock were available for repurchase at September 30, 2024. Since the announcement of our first share repurchase plan on January 26, 2023 and through September 30, 2024, the Company has repurchased a total of 890,873 shares of its common stock, or approximately 17% of the common shares originally issued, at an average cost per share of $11.96.

Net Interest Income

The net interest margin for the third quarter of 2024 was 3.86%, up 14 basis points compared to the prior quarter. For the third quarter of 2024, the average yield on interest-earning assets was 5.60%, up 25 basis points from the prior quarter, while the average rate paid on interest-bearing liabilities was 2.66%, up 16 basis points from the second quarter of 2024.

Net interest income for the third quarter of 2024 was $2.5 million, up $84,000, or 3%, compared to the second quarter of 2024. Total interest income was up $146,000, or 4%, while total interest expense increased $62,000, or 6%, in the third quarter of 2024 compared to the prior quarter. The increase in interest income during the third quarter of 2024 was largely due to loan growth.

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



9/30/2024


6/30/2024

(Dollars in thousands)


Average Balance


Interest


Average Yield/ Rate(TE)


Average Balance


Interest


Average Yield/ Rate(TE)

INTEREST-EARNING ASSETS



















Loans receivable(1)


$

161,410


$

2,717


6.70

%


$

150,257


$

2,383


6.38

%

Investment securities(2)



48,517



255


2.11




44,165



210


1.91


Other interest earning assets



51,142



699


5.45




70,354



932


5.33


Total interest-earning assets


$

261,069


$

3,671


5.60



$

264,776


$

3,525


5.35


INTEREST-BEARING LIABILITIES



















Demand deposits, money market, and savings accounts


$

85,164


$

382


1.78

%


$

87,651


$

327


1.50

%

Certificates of deposit



55,910



448


3.19




55,960



444


3.19


Total interest-bearing deposits



141,074



830


2.34




143,611



771


2.16


Borrowings



29,502



309


4.17




29,468



306


4.17


Total interest-bearing liabilities


$

170,576


$

1,139


2.66



$

173,079


$

1,077


2.50


Net interest-earning assets


$

90,493








$

91,697







Net interest income; average interest rate spread





$

2,532


2.94

%





$

2,448


2.85

%

Net interest margin(3)








3.86









3.72




(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 third quarter of 2024, non-interest income totaled $620,000, up $254,000 from $366,000 for the second quarter of 2024. The Company recognized as income a $280,000 Bank Enterprise Award ("BEA") Program grant from the CDFI Fund during the third quarter of 2024.

Non-interest Expense

Non-interest expense for the third quarter of 2024 totaled $2.3 million, up $192,000, or 9%, compared to the second quarter of 2024.

Salaries and employee benefits expense totaled $1.2 million for the third quarter of 2024, up $57,000, or 5%, compared to the previous quarter primarily due to raises that became effective at the start of the third quarter.

Data processing and communication expense totaled $238,000 for the third quarter of 2024, up $100,000, or 72%, compared to the second quarter of 2024. The Company upgraded to a new core processing system in the first quarter of 2024, and we settled our initial billings from the new service provider during the third quarter of 2024.

Professional fees totaled $151,000 for the third quarter of 2024, up $34,000, or 29%, from the prior quarter. Professional fees associated with obtaining the BEA Program grant totaled $42,000 and were expensed in the third quarter of 2024.

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 $280.6 million in assets at September 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)


9/30/2024


6/30/2024


12/31/2023


9/30/2023

ASSETS













Non-interest-bearing cash


$

3,625


$

4,952


$

3,654


$

3,497

Interest-bearing cash and due from banks



42,128



70,503



15,357



9,769

Total cash and cash equivalents



45,753



75,455



19,011



13,266

Investment securities:













Securities available-for-sale, at fair value



32,196



29,748



70,540



71,808

Securities held-to-maturity



13,450



13,454



13,461



13,464

Loans receivable, net of unearned income



165,882



153,266



144,920



135,672

Allowance for loan losses



(2,414)



(2,215)



(2,124)



(2,036)

Loans receivable, net



163,468



151,051



142,796



133,636

Accrued interest receivable



815



737



906



806

Foreclosed assets



173



104



60



37

Premises and equipment, net



6,135



6,114



6,072



6,160

Stock in correspondent banks, at cost



1,939



1,919



1,878



1,858

Bank-owned life insurance



14,370



14,252



14,026



13,917

Other assets



2,318



2,499



2,182



2,995

TOTAL ASSETS


$

280,617


$

295,333


$

270,932


$

257,947














LIABILITIES













Deposits:













Non-interest-bearing


$

27,904


$

30,177


$

28,183


$

33,222

Interest-bearing



139,532



149,888



137,439



131,998

Total deposits



167,436



180,065



165,622



165,220

Borrowings



29,513



30,261



19,378



9,333

Other liabilities



2,001



3,994



1,373



1,231

TOTAL LIABILITIES



198,950



214,320



186,373



175,784














SHAREHOLDERS' EQUITY













Common stock



44



45



48



48

Additional paid-in capital



40,847



41,914



45,020



45,855

Unallocated common stock held by benefit plans



(5,777)



(6,116)



(6,221)



(6,274)

Retained earnings



49,234



48,787



52,949



52,642

Accumulated other comprehensive income (loss)



(2,681)



(3,617)



(7,237)



(10,108)

TOTAL SHAREHOLDERS' EQUITY



81,667



81,013



84,559



82,163

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

280,617


$

295,333


$

270,932


$

257,947

 

CATALYST BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



















Three Months Ended


Nine Months Ended

(Dollars in thousands)


9/30/2024


6/30/2024


9/30/2023


9/30/2024


9/30/2023

INTEREST INCOME
















Loans receivable, including fees


$

2,717


$

2,383


$

1,852


$

7,314


$

5,172

Investment securities



255



210



403



790



1,243

Other



699



932



214



2,247



643

Total interest income



3,671



3,525



2,469



10,351



7,058

INTEREST EXPENSE
















Deposits



830



771



452



2,370



1,092

Borrowings



309



306



69



908



205

Total interest expense



1,139



1,077



521



3,278



1,297

Net interest income



2,532



2,448



1,948



7,073



5,761

Provision for credit losses



337



99



-



531



-

Net interest income after provision for credit losses



2,195



2,349



1,948



6,542



5,761

NON-INTEREST INCOME
















Service charges on deposit accounts



200



194



190



597



573

Bank-owned life insurance



118



113



104



344



300

Loss on sales of investment securities



-



-



-



(5,507)



-

Gain (loss) on disposals and sales of fixed assets



-



(5)



-



6



-

Federal community development grant



280



-



-



280



-

Other



22



64



12



103



44

Total non-interest income (loss)



620



366



306



(4,177)



917

NON-INTEREST EXPENSE
















Salaries and employee benefits



1,200



1,143



1,141



3,603



3,522

Occupancy and equipment



193



183



198



572



609

Data processing and communication



238



138



228



1,170



675

Professional fees



151



117



100



375



346

Directors' fees



116



114



116



345



345

ATM and debit card



24



31



68



124



187

Foreclosed assets, net



33



26



2



67



67

Advertising and marketing



31



43



25



112



77

Franchise and shares tax



15



15



19



46



71

Other



259



258



184



705



558

Total non-interest expense



2,260



2,068



2,081



7,119



6,457

Income (loss) before income tax expense (benefit)



555



647



173



(4,754)



221

Income tax expense (benefit)



108



120



22



(1,039)



2

NET INCOME (LOSS)


$

447


$

527


$

151


$

(3,715)


$

219

















Earnings (loss) per share:
















Basic


$

0.11


$

0.13


$

0.03


$

(0.93)


$

0.05

Diluted



0.11



0.13



0.03



(0.93)



0.05

 

CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA
























Three Months Ended


Nine Months Ended

(Dollars in thousands)


9/30/2024


6/30/2024


9/30/2023


9/30/2024


9/30/2023

EARNINGS DATA





















Total interest income


$

3,671



$

3,525



$

2,469



$

10,351



$

7,058


Total interest expense



1,139




1,077




521




3,278




1,297


Net interest income



2,532




2,448




1,948




7,073




5,761


Provision for credit losses



337




99




-




531




-


Total non-interest income (loss)



620




366




306




(4,177)




917


Total non-interest expense



2,260




2,068




2,081




7,119




6,457


Income tax expense (benefit)



108




120




22




(1,039)




2


Net income (loss)


$

447



$

527



$

151



$

(3,715)



$

219























AVERAGE BALANCE SHEET DATA





















Total loans


$

161,410



$

150,257



$

134,851



$

152,066



$

134,013


Total interest-earning assets



261,069




264,776




251,139




265,212




253,946


Total assets



282,440




285,773




265,095




284,964




268,377


Total interest-bearing deposits



141,074




143,611




133,577




143,619




137,042


Total interest-bearing liabilities



170,576




173,079




142,883




172,608




146,304


Total deposits



169,437




173,326




170,589




172,461




172,556


Total shareholders' equity



81,307




80,965




84,059




81,645




85,623























SELECTED RATIOS





















Return on average assets



0.63

%



0.74

%



0.23

%



(1.74)

%



0.11

%

Return on average equity



2.18




2.62




0.71




(6.08)




0.34


Efficiency ratio



71.72




73.47




92.32




245.83




96.69


Net interest margin(TE)



3.86




3.72




3.13




3.56




3.08


Average equity to average assets



28.79




28.33




31.71




28.65




31.90


Common equity Tier 1 capital ratio



45.74




49.09




54.97










Tier 1 leverage capital ratio



27.43




26.88




31.08










Total risk-based capital ratio



46.99




50.34




56.23































NON-FINANCIAL DATA





















Total employees (full-time equivalent)



48




47




47










Common shares issued and outstanding, end of period



4,399,127




4,478,527




4,848,290










 

CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA

(continued)
























Three Months Ended


Nine Months Ended

(Dollars in thousands)


9/30/2024


6/30/2024


9/30/2023


9/30/2024


9/30/2023

ALLOWANCE FOR CREDIT LOSSES





















Allowance for loan losses:





















Beginning balance


$

2,215



$

2,068



$

2,081



$

2,124



$

1,807


CECL adoption impact



-




-




-




-




209


Provision for (reversal of) loan losses



330




185




(62)




557




(64)


Charge-offs



(184)




(57)




(9)




(364)




(26)


Recoveries



53




19




26




97




110


Net (charge-offs) recoveries



(131)




(38)




17




(267)




84


Ending balance


$

2,414



$

2,215



$

2,036



$

2,414



$

2,036























Allowance for unfunded commitments:





















Beginning balance



224




310




218




257




-


CECL adoption impact



-




-




-




-




216


Provision for (reversal of) losses on unfunded commitments



7




(86)




62




(26)




64


Ending balance


$

231



$

224



$

280



$

231



$

280























Total allowance for credit losses, end of period


$

2,645



$

2,439



$

2,316



$

2,645



$

2,316


Total provision for credit losses



337




99




-




531




-























CREDIT QUALITY(1)





















Non-accruing loans


$

1,423



$

1,560



$

1,961










Accruing loans 90 days or more past due



15




40




127










Total non-performing loans



1,438




1,600




2,088










Foreclosed assets



173




104




37










Total non-performing assets


$

1,611



$

1,704



$

2,125































Total non-performing loans to total loans



0.87

%



1.04

%



1.54

%









Total non-performing assets to total assets



0.57




0.58




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.