Catalyst Bancorp, Inc. Announces 2021 Third Quarter Results

Rhea-AI Summary

Catalyst Bancorp (CLST) reported a significant increase in net income for Q3 2021, reaching $1.4 million compared to $260,000 in Q2. This boost was primarily due to a $1.8 million grant from the CDFI Rapid Response Program. The company completed its IPO on October 12, 2021, raising $52.9 million by issuing 5.29 million shares. Total deposits surged to $249.5 million, a 40% increase from the previous quarter. Loan receivables decreased by 2.5%, largely from repayments in real estate loans. Net interest income fell by 8.2% to $1.7 million, while non-interest income rose markedly due to the grant.

Positive

• Net income rose to $1.4 million in Q3 2021 from $260,000 in Q2 2021.
• Total deposits increased by $71.9 million, or 40%, to $249.5 million.
• The company completed its IPO, raising $52.9 million.

Negative

• Loans receivable decreased by $3.6 million, or 2.5%, primarily from principal repayments.
• Net interest income dropped by $149,000, or 8.2%, due to reduced PPP loan fee income.

OPELOUSAS, La., Oct. 28, 2021 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for St Landry Homestead Federal Savings Bank, N.A. (the "Bank") (www.stlandryhomestead.com), reported financial results for the Bank for the third quarter of 2021. For the quarter, the Bank reported net income of $1.4 million, compared to $260,000 for the second quarter of 2021. The increase during the third quarter was primarily due to a Community Development Financial Institution ("CDFI") Rapid Response Program grant recognized in non-interest income.

"Upon the successful completion of our IPO, we are now at the starting line for what we expect to be a demanding and highly productive season in our 98+ year history," said Joe Zanco, President and Chief Executive Officer of the Company and the Bank.  "We're focusing our investments on people and technology to build a bank known for fueling business and improving lives."

Completion of Stock Offering

The Company completed its initial public offering of stock in connection with the Bank's conversion from the mutual to the stock form of organization on October 12, 2021. The Company issued a total of 5,290,000 shares of its common stock (the "Common Stock") for an aggregate of $52,900,000 in total offering proceeds, including shares sold to the Company's employee stock ownership plan. Trading in the Common Stock commenced on the Nasdaq Capital Market on October 13, 2021 under the symbol "CLST".

Loans and Credit Quality

Loans receivable totaled $136.7 million at September 30, 2021, down $3.6 million, or 2.5%, from June 30, 2021. The reduction was primarily due to principal repayments and payoffs on one- to four-family residential mortgage loans. Small Business Administration Paycheck Protection Program ("PPP") loans, which are included in commercial and industrial loans, decreased $490,000 during the third quarter.  The remaining balance of PPP loans was $3.4 million at September 30, 2021.

The following table sets forth the composition of the Bank's loan portfolio as of the dates indicated.

		September 30,		June 30,		Increase/Decrease
(Dollars in thousands)		2021		2021		Amount		Percentage
Real estate loans
One- to four-family residential		$            88,595		$          91,778		$     (3,183)		(3)	%
Commercial real estate		28,135		28,217		(82)		(-)
Construction & land		4,417		4,527		(110)		(2)
Multi-family residential		4,648		4,344		304		7
Farmland		26		27		(1)		(4)
Total real estate loans		125,821		128,893		(3,072)		(2)
Other loans
Consumer		4,912		4,667		245		5
Commercial and industrial		5,987		6,728		(741)		(11)
Total other loans		10,899		11,395		(496)		(4)
Total loans		$          136,720		$        140,288		$      (3,568)		(3)	%

Non-performing assets ("NPAs") totaled $1.8 million at September 30, 2021, down $157,000, or 7.9%, compared to $2.0 million at June 30, 2021. The ratio of NPAs to total assets was 0.59% at September 30, 2021, compared to 0.83% at June 30, 2021. Nonperforming loans ("NPLs") totaled $1.4 million at September 30, 2021, up $34,000 or 2.4%, compared to June 30, 2021. The ratio of NPLs to total assets was 0.46% at September 30, 2021, compared to 0.58% at June 30, 2021.

The following table summarizes the Bank's non-performing assets as of the dates indicated.

		September 30,		June 30,		Increase/Decrease
(Dollars in thousands)		2021		2021		Amount		Percentage
Non-accruing loans		$              1,264		$            1,252		$             12		1	%
Accruing loans 90 days or more past due		165		143		22		15
Total non-performing loans		1,429		1,395		34		2
Real estate owned		399		590		(191)		(32)
Total non-performing assets		$              1,828		$            1,985		$        (157)		(8)	%

The Bank recorded net loan charge-offs of $3,000 during the third quarter of 2021, compared to net loan charge-offs of $27,000 for the second quarter of 2021. The Bank recorded no provision for loan losses for the third quarter of 2021, compared to a reversal of provision of $286,000 for the second quarter of 2021.

The ratio of the allowance for loan losses to total loans was 1.94% at September 30, 2021, compared to 1.89% at June 30, 2021.

Deposits

Total deposits were $249.5 million at September 30, 2021, up $71.9 million, or 40%, from June 30, 2021. The increase in total deposits was due to $72.9 million in cash received for subscriptions to purchase shares of the Company's common stock in its initial public offering. The net proceeds of the initial public offering will be reflected in the Company's shareholders' equity at December 31, 2021.  The following table sets forth the composition of the Bank's deposits as of the dates indicated.

		September 30,		June 30,		Increase/Decrease
(Dollars in thousands)		2021		2021		Amount		Percentage
Demand Deposits		$          102,091		$           28,720		$       73,371		255	%
Savings		25,147		24,911		236		1
Money Market		18,578		17,301		1,277		7
NOW		34,796		36,879		(2,083)		(6)
Certificates of Deposit		68,848		69,766		(918)		(1)
Total Deposits		$          249,460		$         177,577		$       71,883		40	%

Net Interest Income

Net interest income for the third quarter of 2021 was $1.7 million, down $149,000, or 8.2%, from the second quarter of 2021 primarily due to a decrease in PPP loan fee income of $104,000. The following table sets forth, for the periods indicated, the Bank's total dollar amount of interest 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. All average balances are based on daily balances.

		Three Months Ended
		September 30, 2021							June 30, 2021
(Dollars in thousands)		Average Balance		Interest		Average Yield/ Rate			Average Balance		Interest		Average Yield/ Rate
Interest-earning assets:
Loans receivable(1)		$     134,370		$     1,671		4.93	%		$    140,210		$     1,865		5.34	%
Investment securities		61,910		172		1.10			49,929		142		1.14
Other interest-earning assets		36,505		13		0.14			30,192		10		0.13
Total interest-earning assets		232,785		1,856		3.17			220,331		2,017		3.67
Non-interest-earning assets		20,361							17,595
Total assets		$     253,146							$    237,926
Interest-bearing liabilities:
Savings, NOW and money market accounts		81,650		26		0.12			78,600		26		0.13
Certificates of deposit		69,076		98		0.56			69,314		109		0.63
Total deposits		150,726		124		0.33			147,914		135		0.37
FHLB advances		8,966		68		3.04			8,898		69		3.07
Total interest-bearing liabilities		159,692		192		0.48			156,812		204		0.52
Non-interest-bearing liabilities		42,534							30,740
Total liabilities		202,226							187,552
Retained earnings		50,920							50,374
Total liabilities and retained earnings		$     253,146							$    237,926
Net interest-earning assets		$       73,093							$      63,519
Net interest income; average interest rate spread				$      1,664		2.69	%				$     1,813		3.15	%
Net interest margin(2)						2.84	%						3.30	%
Average interest-earning assets to average interest-bearing liabilities						145.77	%						140.51	%

(1)	Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in-process and allowance for loan losses.
(2)	Equals net interest income divided by average interest-earning assets.

Non-interest Income

Non-interest income for the third quarter of 2021 was $2.0 million, up $1.8 million, or 966.2%, from the second quarter of 2021 due primarily to the receipt and recognition into income of a CDFI Rapid Response Program grant during the quarter totaling $1.8 million.

Non-interest Expense

Non-interest expense for the third quarter of 2021 totaled $1.9 million, down $84,000, or 4.2%, compared to the second quarter of 2021. The decrease primarily resulted from lower salaries and employee benefits and legal, accounting and consulting expenses, partially offset by higher occupancy and equipment and computer service expenses during the third quarter of 2021. During the second quarter of 2021, the Bank incurred a $50,000 loss, recorded in other non-interest expense, due to a wire transfer fraud.

This press release contains certain forward-looking statements.  Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.  They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may."  Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of Catalyst Bancorp, Inc. and St. Landry Homestead Federal Savings Bank, and changes in the securities markets.  Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in belief, expectations or events.

ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK
STATEMENTS OF FINANCIAL CONDITION
		(Unaudited)		(Unaudited)
		September 30,		June 30,		%		December  31,		%
(Dollars in thousands)		2021		2021		Change		2020		Change
ASSETS
Non-interest-bearing cash		$             5,117		$             6,426		(20)	%	$             5,507		(7)	%
Interest-bearing cash and due from banks		95,287		22,661		320		19,738		383
Total cash and cash equivalents		100,404		29,087		245		25,245		298
Investment securities:
Securities available-for-sale, at fair value		49,682		41,856		19		20,730		140
Securities held-to-maturity		13,504		15,511		(13)		17,523		(23)
Loans receivable, net of unearned income		136,720		140,288		(3)		151,800		(10)
Allowance for loan losses		(2,646)		(2,649)		—		(3,022)		12
Loans receivable, net		134,074		137,639		(3)		148,778		(10)
Accrued interest receivable		511		558		(8)		564		(9)
Foreclosed real estate		399		590		(32)		415		(4)
Premises and equipment, net		6,658		6,545		2		5,489		21
Stock in Federal Home Loan Bank, at cost		1,398		1,398		—		1,394		—
Bank-owned life insurance		3,280		3,258		1		3,213		2
Other assets		1,653		1,887		(12)		1,337		24
TOTAL ASSETS		$         311,563		$         238,329		31	%	$         224,688		39	%
LIABILITIES
Deposits:
Non-interest-bearing		$         102,091		$           28,720		255	%	$           26,169		290	%
Interest-bearing		147,369		148,857		(1)		138,429		6
Total deposits		249,460		177,577		40		164,598		52
Advances from Federal Home Loan Bank		8,973		8,928		1		8,838		2
Other liabilities		1,130		1,092		3		719		57
TOTAL LIABILITIES		259,563		187,597		38		174,155		49
EQUITY
Retained earnings		52,270		50,837		3		50,426		4
Accumulated other comprehensive (loss) income		(270)		(105)		(157)		107		(352)
TOTAL EQUITY		52,000		50,732		3		50,533		3
TOTAL LIABILITIES AND EQUITY		$         311,563		$         238,329		31	%	$         224,688		39	%

 

 

ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK
STATEMENTS OF INCOME
		Three Months Ended						Nine Months Ended
		September 30,				%		September 30,				%
(Dollars in thousands)		2021		2020		Change		2021		2020		Change
INTEREST INCOME
Loans receivable, including fees		$             1,671		$             1,971		(15)	%	$             5,344		$             5,938		(10)	%
Investment securities		172		182		(5)		434		475		(9)
Other		13		16		(19)		37		85		(56)
Total interest income		1,856		2,169		(14)		5,815		6,498		(11)
INTEREST EXPENSE
Deposits		124		231		(46)		414		738		(44)
Advances from Federal Home Loan Bank		68		199		(66)		204		596		(66)
Total interest expense		192		430		(55)		618		1,334		(54)
Net interest income		1,664		1,739		(4)		5,197		5,164		1
Provision for (reversal of) loan losses		—		600		(100)		(286)		665		(143)
Net interest income after provision for (reversal of) loan losses		1,664		1,139		46		5,483		4,499		22
NON-INTEREST INCOME
Service charges on deposit accounts		165		147		12		448		428		5
Gain on sale of fixed assets		—		—		—		24		16		50
Bank-owned life insurance		23		17		35		67		50		34
Federal community development grant		1,826		—		—		1,826		—		—
Other		11		24		(54)		37		51		(27)
Total non-interest income		2,025		188		977		2,402		545		341
NON-INTEREST EXPENSE
Salaries and employee benefits		1,084		945		15		3,331		2,832		18
Occupancy and equipment		215		178		21		598		490		22
Computer services		171		135		27		479		392		22
Legal, accounting and consulting		88		64		38		255		165		55
Foreclosed assets, net		39		220		(82)		74		271		(73)
ATM and debit card		48		38		26		137		111		23
Advertising and marketing		14		19		(26)		35		75		(53)
Directors' fees		70		80		(13)		211		240		(12)
Other		154		158		(3)		456		424		8
Total non-interest expense		1,883		1,837		3		5,576		5,000		12
Income (loss) before income tax expense		1,806		(510)		454		2,309		44		5,148
Income tax expense (benefit)		373		(106)		452		465		33		1,309
NET INCOME (LOSS)		$             1,433		$              (404)		455	%	$             1,844		$                 11		16,664	%

 

 

ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK
SELECTED FINANCIAL DATA
		Three Months Ended
		September 30,				%				%
(Dollars in thousands)		2021		2020		Change		June 30, 2021		Change
Earnings Data
Total interest income		$             1,856		$             2,169		(14)	%	$             2,017		(8)	%
Total interest expense		192		430		(55)		204		(6)
Net interest income		1,664		1,739		(4)		1,813		(8)
Provision for (reversal of) loan losses		—		600		(100)		(286)		100
Total non-interest income		2,025		188		977		190		966
Total non-interest expense		1,883		1,837		3		1,967		(4)
Income tax expense (benefit)		373		(106)		452		62		502
Net income (loss)		$             1,433		$              (404)		455		$               260		451
Average Balance Sheet Data
Total assets		$         253,146		$         239,445		6	%	$         237,926		6	%
Total interest-earning assets		232,785		224,303		4		220,331		6
Total loans		134,370		159,542		(16)		140,210		(4)
Total interest-bearing deposits		150,726		135,284		11		147,914		2
Total interest-bearing liabilities		159,692		160,284		(0)		156,812		2
Total deposits		191,060		161,293		18		177,749		7
Total equity		50,920		51,954		(2)		50,374		1
Selected Ratios
Return on average assets		0.57	%	(0.17)	%			0.11	%
Return on average equity		2.81		(0.78)				0.52
Common equity Tier 1 capital ratio		38.94		39.30				41.92
Efficiency ratio		51.04		95.33				98.20
Average equity to average assets		20.11		21.70				21.17
Tier 1 leverage capital ratio		20.65		21.44				21.34
Total risk-based capital ratio		40.20		40.56				43.18
Net interest margin		2.84		3.08				3.30

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

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SOURCE Catalyst Bancorp, Inc.

FAQ

What were Catalyst Bancorp's net income results for Q3 2021?

Catalyst Bancorp reported a net income of $1.4 million for Q3 2021.

How much money did Catalyst Bancorp raise in its IPO?

Catalyst Bancorp raised $52.9 million in its IPO by issuing 5,290,000 shares.

What happened to Catalyst Bancorp's total deposits in Q3 2021?

Total deposits increased by $71.9 million, or 40%, to $249.5 million in Q3 2021.

What caused the increase in non-interest income for Catalyst Bancorp?

The increase in non-interest income was primarily due to a $1.8 million grant from the CDFI Rapid Response Program.

Did Catalyst Bancorp experience any changes in loan receivables?

Yes, loan receivables decreased by $3.6 million, or 2.5%, from the previous quarter.