Catalyst Bancorp, Inc. Announces 2022 First Quarter Results

Rhea-AI Summary

Catalyst Bancorp (CLST) reported a net loss of $131,000 for Q1 2022, down from a net income of $83,000 in Q4 2021. Loans receivable increased slightly to $132 million, while non-performing assets rose by 29% to $1.6 million. Despite a 4% increase in total deposits to $183.1 million, the firm faced a 12% decline in non-interest income, totaling $197,000. Net interest income grew 3% to $1.8 million due to improved interest from investment securities. The Company is investing in talent and technology to drive future growth.

Positive

• Total deposits rose by 4% to $183.1 million.
• Net interest income increased by 3% to $1.8 million.
• Loans receivable grew slightly by $161,000.

Negative

• Net loss of $131,000 for Q1 2022 compared to net income in previous quarter.
• Non-performing assets increased by 29% to $1.6 million.
• Non-interest income decreased by 12%, totaling $197,000.

OPELOUSAS, La., April 28, 2022 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for St Landry Homestead Federal Savings Bank (the "Bank") (www.stlandryhomestead.com), reported financial results for the first quarter of 2022. For the quarter, the Company reported a net loss of $131,000, compared to net income of $83,000 for the fourth quarter of 2021.

"We've assembled a skilled and passionate team of bankers to transform our business plan to focus on serving as key catalysts for economic growth in our communities," said Joe Zanco, President and Chief Executive Officer of the Company and the Bank. "We are deeply committed to helping local businesses grow so that, together, we can add jobs across our region. While our investments in our team, technology and re-branding weigh on our current financial performance, those investments will propel our growth in the coming years." 

"If you want to grow your business and desire exceptional service, come see us," Zanco continued.  "We have the technology you need, and pride ourselves on going above and beyond for you. We'd love to earn your trust."

Loans and Credit Quality

Loans receivable totaled $132.0 million at March 31, 2022, up $161,000 from December 31, 2021. Small Business Administration Paycheck Protection Program ("PPP") loan pay-offs totaled $1.9 million during the first quarter of 2022. At March 31, 2022, the total unpaid principal balance of PPP loans, included in commercial and industrial loans, totaled $841,000, compared to $2.8 million at December 31, 2021.

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

(Dollars in thousands)		3/31/2022			12/31/2021			Increase (Decrease)
Real estate loans
One- to four-family residential		$	87,144		$	87,303		$	(159)		-	%
Commercial real estate			22,611			23,112			(501)		(2)
Construction and land			4,739			4,079			660		16
Multi-family residential			3,367			4,589			(1,222)		(27)
Total real estate loans			117,861			119,083			(1,222)		(1)
Other loans
Commercial and industrial			10,119			8,374			1,745		21
Consumer			4,023			4,385			(362)		(8)
Total other loans			14,142			12,759			1,383		11
Total loans		$	132,003		$	131,842		$	161		-	%

Non-performing assets ("NPAs") totaled $1.6 million at March 31, 2022, up $358,000, or 29%, compared to $1.2 million at December 31, 2021. The ratio of NPAs to total assets was 0.55% at March 31, 2022, compared to 0.43% at December 31, 2021. Nonperforming loans ("NPLs") totaled $1.3 million at March 31, 2022, up $378,000 or 42%, compared to December 31, 2021. The ratio of NPLs to total loans was 0.96% at March 31, 2022, compared to 0.68% at December 31, 2021. The increase in NPAs and NPLs was primarily due to an increase in non-accruing one- to four-family residential mortgage loans. The Company recorded net loan charge-offs of $32,000 during the first quarter of 2022, compared to net loan recoveries of $4,000 for the fourth quarter of 2021.

The ratio of the allowance for loan losses to total loans was 1.65% at March 31, 2022, compared to 1.73% at December 31, 2021. The decline in the ratio of the allowance for loan losses to total loans primarily reflects continued improvement in our assessment of the impact of the COVID-19 pandemic on our borrowers.  The Company recorded a reversal to the allowance for loan losses of $71,000 during the first quarter of 2022.

Investment Securities

Total investment securities were $98.1 million at March 31, 2022, down $3.7 million, or 4%, from December 31, 2021. Net unrealized losses on securities available-for-sale totaled $5.7 million at March 31, 2022, compared to $864,000 at December 31, 2021. The increase in unrealized losses on available-for-sale securities related principally to increases in market interest rates for similar securities. For the first quarter of 2022, the average yield on the investment securities portfolio was 1.31%, up 7 basis points from the fourth quarter of 2021.

The following table sets forth the composition of the Company's investment securities portfolio as of the dates indicated.

(Dollars in thousands)		3/31/2022			12/31/2021			Increase (Decrease)
Available-for-sale, at fair value
Mortgage-backed securities		$	70,149		$	74,663		$	(4,514)		(6)	%
U. S. government and agency obligations			10,380			9,237			1,143		12
Municipal obligations			4,120			4,439			(319)		(7)
Total available-for-sale, at fair value			84,649			88,339			(3,690)		(4)
Held-to-maturity
U. S. government and agency obligations			13,016			13,019			(3)		-
Municipal obligations			476			479			(3)		(1)
Total held-to-maturity			13,492			13,498			(6)		-
Total investment securities		$	98,141		$	101,837		$	(3,696)		(4)	%

Deposits

Total deposits were $183.1 million at March 31, 2022, up $6.3 million, or 4%, from December 31, 2021, primarily due to increases in NOW accounts (up $3.6 million, or 10%) and demand deposits (up $2.8 million, or 9%).

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

(Dollars in thousands)		3/31/2022			12/31/2021			Increase (Decrease)
Demand deposits		$	33,056		$	30,299		$	2,757		9	%
NOW			37,916			34,357			3,559		10
Money market			19,358			18,878			480		3
Savings			27,215			26,698			517		2
Certificates of deposit			65,539			66,563			(1,024)		(2)
Total deposits		$	183,084		$	176,795		$	6,289		4	%

Net Interest Income

Net interest income for the first quarter of 2022 was $1.8 million, up $44,000, or 3%, from the fourth quarter of 2021 primarily due to an increase in interest income from investment securities (up $89,000, or 37%) and a decrease in interest expense on deposits (down $17,000, or 16%). The impact of the change in income from investment securities and interest expense on deposits was partially offset by a decrease in interest income on loans (down $58,000, or 4%).

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
		3/31/2022									12/31/2021
(Dollars in thousands)		Average Balance			Interest			Average Yield/ Rate			Average Balance			Interest			Average Yield/ Rate
INTEREST-EARNING ASSETS
Loans receivable(1)		$	130,755		$	1,563		4.85	%		$	137,190		$	1,621		4.69	%
Investment securities(TE)			101,348			329		1.31				78,455			240		1.24
Other interest earning assets			39,605			19		0.20				58,706			23		0.15
Total interest-earning assets(TE)		$	271,708		$	1,911		2.85	%		$	274,351		$	1,884		2.73	%
INTEREST-BEARING LIABILITIES
NOW, money market and savings      accounts		$	81,885		$	24		0.12	%		$	78,822		$	24		0.12	%
Certificates of deposit			65,939			68		0.42				67,798			85		0.49
Total interest-bearing deposits			147,824			92		0.25				146,620			109		0.29
FHLB advances			9,034			68		3.02				8,989			68		3.03
Total interest-bearing liabilities		$	156,858		$	160		0.41	%		$	155,609		$	177		0.45	%
Net interest-earning assets		$	114,850								$	118,742
Net interest income; average interest rate spread(TE)					$	1,751		2.44	%					$	1,707		2.28	%
Net interest margin(TE)(2)								2.61	%								2.48	%

(1)	Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and loans in-process.
(2)	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

Non-interest income for the first quarter of 2022 was $197,000, down $27,000, or 12%, from the fourth quarter of 2021 primarily due to a decline in income from service charges on deposits accounts.

Non-interest Expense

Non-interest expense for the first quarter of 2022 totaled $2.2 million, down $12,000, or 1%, compared to the fourth quarter of 2021. Declines across most non-interest expense items were largely offset by increases in franchise and shares tax expense and advertising and marketing expense.

Salaries and employee benefits expense totaled $1.3 million for the first quarter of 2022, down $39,000 from the fourth quarter of 2021 primarily due to the absence of severance costs and fewer working days in the first quarter of 2022, partially offset by additional expenses related to our benefit plans.

Advertising and marketing expense totaled $42,000 for the first quarter of 2022, up $34,000 from the fourth quarter of 2021 primarily due to the costs incurred for the planned re-branding of the Bank.

Franchise and shares tax expense totaled $58,000 for the first quarter of 2022. During the fourth quarter of 2021, the Bank converted from the mutual to the stock-form of ownership and established Catalyst Bancorp, Inc. as its holding company. As a result, the Company became subject to franchise tax and the Bank became subject to shares tax for 2022.

About St. Landry Homestead Federal Savings Bank

Founded in 1922, St. Landry Homestead Federal Savings Bank, is a federally chartered savings bank that serves the banking needs of customers in the Acadiana region of south-central Louisiana. We serve our customers through six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. Our team is focused on fueling business and improving lives across our region. By working together, we can grow our economy and provide our children with the opportunity to raise their families in Acadiana.

Forward-looking Statements

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.

CATALYST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
		(Unaudited)							(Unaudited)
(Dollars in thousands)		3/31/2022			12/31/2021				3/31/2021(1)
ASSETS
Non-interest-bearing cash		$	511		$	4,933			$	5,790
Interest-bearing cash and due from banks			39,585			35,951				31,281
Total cash and cash equivalents			40,096			40,884				37,071
Investment securities:
Securities available-for-sale, at fair value			84,649			88,339				26,493
Securities held-to-maturity			13,492			13,498				17,517
Loans receivable, net of unearned income			132,003			131,842				145,638
Allowance for loan losses			(2,173)			(2,276)				(2,962)
Loans receivable, net			129,830			129,566				142,676
Accrued interest receivable			536			579				532
Foreclosed assets			320			340				535
Premises and equipment, net			6,475			6,577				5,452
Stock in correspondent banks, at cost			1,794			1,793				1,791
Bank-owned life insurance			8,824			3,303				3,235
Other assets			1,256			470				1,187
TOTAL ASSETS		$	287,272		$	285,349			$	236,489
LIABILITIES
Deposits:
Non-interest-bearing		$	33,056		$	30,299			$	30,024
Interest-bearing			150,028			146,496				146,392
Total deposits			183,084			176,795				176,416
Federal Home Loan Bank advances			9,063			9,018				8,883
Other liabilities			663			1,190				833
TOTAL LIABILITIES			192,810			187,003				186,132
SHAREHOLDERS' EQUITY
Common stock			53			53				-
Additional paid-in capital			50,821			50,802				-
Unallocated common stock held by Employee Stock Ownership Plan			(4,126)			(4,179)				-
Retained earnings			52,222			52,353				50,577
Accumulated other comprehensive income (loss)			(4,508)			(683)				(220)
TOTAL SHAREHOLDERS' EQUITY			94,462			98,346				50,357
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	287,272		$	285,349			$	236,489

(1)	Data at March 31, 2021 is Bank-only.

 

CATALYST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		Three Months Ended
(Dollars in thousands)		3/31/2022			12/31/2021			3/31/2021(1)
INTEREST INCOME
Loans receivable, including fees		$	1,563		$	1,621		$	1,808
Investment securities			329			240			121
Other			19			23			14
Total interest income			1,911			1,884			1,943
INTEREST EXPENSE
Deposits			92			109			155
Advances from Federal Home Loan Bank			68			68			68
Total interest expense			160			177			223
Net interest income			1,751			1,707			1,720
Provision for (reversal of) loan losses			(71)			(374)			-
Net interest income after provision for (reversal of) loan losses			1,822			2,081			1,720
NON-INTEREST INCOME
Service charges on deposit accounts			168			193			123
Gain on sale of fixed assets			-			-			25
Bank-owned life insurance			21			23			22
Other			8			8			17
Total non-interest income			197			224			187
NON-INTEREST EXPENSE
Salaries and employee benefits			1,261			1,300			1,067
Occupancy and equipment			210			220			182
Data processing and communication			208			221			174
Professional fees			140			133			73
Directors' fees			55			68			71
ATM and debit card			49			64			43
Foreclosed assets, net			(17)			1			(7)
Advertising and marketing			42			8			9
Franchise and shares tax			58			-			-
Other			182			185			114
Total non-interest expense			2,188			2,200			1,726
Income (loss) before income tax expense			(169)			105			181
Income tax expense (benefit)			(38)			22			30
NET INCOME (LOSS)		$	(131)		$	83		$	151
Earnings (loss) per share - basic		$	(0.03)		$	0.02		$	N/A

(1)	Data for the period ended March 31, 2021 is Bank-only.

 

CATALYST BANCORP, INC. AND SUBSIDIARY
SELECTED FINANCIAL DATA
		Three Months Ended
(Dollars in thousands)		3/31/2022				12/31/2021				3/31/2021(1)
EARNINGS DATA
Total interest income		$	1,911			$	1,884			$	1,943
Total interest expense			160				177				223
Net interest income			1,751				1,707				1,720
Provision for (reversal of) loan losses			(71)				(374)				-
Total non-interest income			197				224				187
Total non-interest expense			2,188				2,200				1,726
Income tax expense (benefit)			(38)				22				30
Net income (loss)		$	(131)			$	83			$	151
AVERAGE BALANCE SHEET DATA
Total assets		$	286,646			$	288,852			$	229,674
Total interest-earning assets			271,708				274,351				215,635
Total loans			130,755				137,190				149,183
Total interest-bearing deposits			147,824				146,620				142,526
Total interest-bearing liabilities			156,858				155,609				151,380
Total deposits			179,615				185,660				169,339
Total equity			97,165				92,942				50,704
SELECTED RATIOS
Return on average assets			(0.19)	%			0.11	%			0.27	%
Return on average equity			(0.55)				0.35				1.21
Efficiency ratio			112.32				113.93				90.51
Average equity to average assets			33.90				32.18				22.08
Common equity Tier 1 capital ratio(2)			57.98				63.51				41.09
Tier 1 leverage capital ratio(2)			28.39				27.38				22.01
Total risk-based capital ratio(2)			59.23				64.77				42.36
Net interest margin(TE)			2.61				2.48				3.24
ALLOWANCE FOR LOANS LOSSES
Beginning balance		$	2,276			$	2,646			$	3,022
Provision for (reversal of) loan losses			(71)				(374)				-
Charge-offs			(63)				-				(89)
Recoveries			31				4				29
Net (charge-offs) recoveries			(32)				4				(60)
Ending balance		$	2,173			$	2,276			$	2,962
CREDIT QUALITY
Non-accruing loans		$	1,269			$	890			$	954
Accruing loans 90 days or more past due			-				1				261
Total non-performing loans			1,269				891				1,215
Foreclosed assets			320				340				535
Total non-performing assets		$	1,589			$	1,231			$	1,750
Total non-performing loans to total loans			0.96	%			0.68	%			0.83	%
Total non-performing assets to total assets			0.55				0.43				0.74

(1)	Data at and for the period ended March 31, 2021 is Bank-only.
(2)	Capital ratios are preliminary end-of-period ratios for the Bank only and are subject to change.

 

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

 

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SOURCE Catalyst Bancorp, Inc.

FAQ

What were Catalyst Bancorp's financial results for Q1 2022?

Catalyst Bancorp reported a net loss of $131,000 for Q1 2022.

How much did total deposits increase for Catalyst Bancorp in Q1 2022?

Total deposits increased by 4% to $183.1 million.

What was the net interest income for Catalyst Bancorp in Q1 2022?

Net interest income for Q1 2022 was $1.8 million, up 3% from Q4 2021.

How did non-performing assets change for Catalyst Bancorp?

Non-performing assets rose by 29% to $1.6 million in Q1 2022.

What is the current status of loans receivable for Catalyst Bancorp?

Loans receivable totaled $132 million at March 31, 2022.