Catalyst Bancorp, Inc. Announces 2022 Fourth Quarter Results and Approval of Share Repurchase Plan

Rhea-AI Summary

Catalyst Bancorp, Inc. (Nasdaq: CLST) reported a net income of $171,000 for Q4 2022, marking a 27% increase from Q3 2022. The company announced a new share repurchase plan allowing for the buyback of up to 265,000 shares. Total loans reached $133.6 million, a 1% rise over the previous quarter, driven by growth in commercial and industrial loans. However, total deposits fell by 10%, down to $165.1 million. The net interest margin improved to 2.96%. Non-performing assets increased to $2.0 million, with the allowance for loan losses stable at $1.8 million. Non-interest income and expenses showed slight improvements.

Positive

• Net income increased by 27% from Q3 2022.
• Share repurchase plan approved for up to 265,000 shares.
• Loan growth of 1% driven by commercial and industrial loans.
• Net interest margin improved to 2.96%.
• Non-interest expenses decreased by 6% compared to Q3 2022.

Negative

• Total deposits decreased by 10% or $19.1 million from Q3 2022.
• Non-performing assets increased by 4% compared to the previous quarter.

OPELOUSAS, La., Jan. 26, 2023 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for Catalyst Bank (the "Bank") (www.catalystbank.com), reported financial results for the fourth quarter of 2022. For the quarter, the Company reported net income of $171,000, up $36,000, or 27%, from the third quarter of 2022.

"2022 was transformational for our company embodied by the new Catalyst Bank name," said Joe Zanco, President and Chief Executive Officer of the Company and the Bank. "Our mission is to serve as catalysts for economic growth in our communities by helping locally-owned businesses grow. Our team is fully committed to fueling local business and improving the lives of our neighbors."

Share Repurchase Plan

The Company announced that its Board of Directors approved the Company's first share repurchase plan (the "2023 Repurchase Plan"). Under the 2023 Repurchase Plan, the Company may purchase up to 265,000 shares, or approximately 5% of the Company's outstanding common stock. Share repurchases under the 2023 Repurchase Plan are expected to commence during the first quarter of 2023 upon the completion of share repurchases to fund the 2022 Recognition and Retention Plan and Trust Agreement.

Loans and Credit Quality

Loans totaled $133.6 million at December 31, 2022, up $1.7 million, or 1%, from September 30, 2022. During the fourth quarter of 2022, loan growth was primarily driven by new originations of commercial and industrial loans and fundings on existing construction loans, which were partially offset by paydowns across other segments of the portfolio.

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

(Dollars in thousands)		12/31/2022			9/30/2022			Increase (Decrease)
Real estate loans
One- to four-family residential		$	87,508		$	88,568		$	(1,060)		(1)	%
Commercial real estate			19,437			21,073			(1,636)		(8)
Construction and land			6,172			4,450			1,722		39
Multi-family residential			3,200			3,252			(52)		(2)
Total real estate loans			116,317			117,343			(1,026)		(1)
Other loans
Commercial and industrial			13,843			11,087			2,756		25
Consumer			3,447			3,512			(65)		(2)
Total other loans			17,290			14,599			2,691		18
Total loans		$	133,607		$	131,942		$	1,665		1	%

 

Non-performing assets ("NPAs") totaled $2.0 million at December 31, 2022, up $85,000, or 4%, compared to September 30, 2022. The ratio of NPAs to total assets was 0.76% at December 31, 2022, compared to 0.68% at September 30, 2022. Non-performing loans ("NPLs") totaled $1.7 million, or 1.26% of total loans, at December 31, 2022 and $1.6 million, or 1.21% of total loans, at September 30, 2022. At December 31, 2022, approximately 94% of total NPLs were one- to four-family residential mortgage loans, compared to 88% at September 30, 2022.

The allowance for loan losses totaled $1.8 million, or 1.35% of total loans, at December 31, 2022 and $1.8 million, or 1.37% of total loans, at September 30, 2022. The Company did not record a provision for or a reversal of loan losses during the fourth quarter of 2022.

Net loan recoveries totaled $3,000 during the fourth quarter of 2022, compared to net loan charge-offs of $61,000 for the third quarter of 2022. The third quarter charge-offs were primarily related to two residential mortgage loans.

Investment Securities

Total investment securities were $93.1 million at December 31, 2022, up $1.0 million, or 1%, from September 30, 2022. At December 31 and September 30, 2022, 87% of total investment securities, based on amortized cost, were classified as available-for-sale. Net unrealized losses on securities available-for-sale totaled $11.5 million at December 31, 2022, compared to $12.6 million at September 30, 2022. For the fourth quarter of 2022, the average yield on the investment securities portfolio was 1.61%, up 13 basis points from the third quarter of 2022.

Deposits

Total deposits were $165.1 million at December 31, 2022, down $19.1 million, or 10%, from September 30, 2022. The decrease in deposits was primarily due to net outflows from NOW accounts and a decrease in certificates of deposit.

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

(Dollars in thousands)		12/31/2022			9/30/2022			Increase (Decrease)
Non-interest-bearing demand deposits		$	33,657		$	31,988		$	1,669		5	%
NOW			36,991			50,547			(13,556)		(27)
Money market			15,734			17,129			(1,395)		(8)
Savings			26,209			26,874			(665)		(2)
Certificates of deposit			52,503			57,689			(5,186)		(9)
Total deposits		$	165,094		$	184,227		$	(19,133)		(10)	%

 

Net Interest Income

Net interest margin for the fourth quarter of 2022 was 2.96%, up 21 basis points compared to the prior quarter. The average yield on interest-earning assets increased by 29 basis points to 3.28% for the fourth quarter of 2022, while the average rate on interest-bearing liabilities increased by 15 basis points to 0.55%, compared to the third quarter of 2022.

Net interest income for the fourth quarter of 2022 was $1.9 million, up $30,000, or 2%, from the third quarter of 2022 primarily due to an increase in interest income from loans (up $77,000, or 5%) and investment securities (up $37,000, or 10%). These increases were partially offset by a decline in other interest income and an increase in interest expense on deposits. Lower average balances of cash and cash equivalents led to the decline in other interest income and the increase in interest expense on deposits was primarily the result of accounts re-pricing to higher rates during the fourth quarter of 2022.

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
		12/31/2022									9/30/2022
(Dollars in thousands)		Average Balance			Interest			Average Yield/ Rate			Average Balance			Interest			Average Yield/ Rate
INTEREST-EARNING ASSETS
Loans receivable(1)		$	133,102		$	1,543		4.60	%		$	131,827		$	1,466		4.41	%
Investment securities(TE)(2)			105,488			418		1.61				104,403			381		1.48
Other interest earning assets			17,443			145		3.28				34,547			185		2.12
Total interest-earning assets(TE)		$	256,033		$	2,106		3.28	%		$	270,777		$	2,032		2.99	%
INTEREST-BEARING LIABILITIES
NOW, money market and savings accounts		$	84,157		$	37		0.18	%		$	91,738		$	29		0.13	%
Certificates of deposit			54,977			93		0.67				59,833			64		0.43
Total interest-bearing deposits			139,134			130		0.37				151,571			93		0.24
FHLB advances			9,930			76		3.07				9,126			69		2.99
Total interest-bearing liabilities		$	149,064		$	206		0.55	%		$	160,697		$	162		0.40	%
Net interest-earning assets		$	106,969								$	110,080
Net interest income; average interest rate spread(TE)					$	1,900		2.73	%					$	1,870		2.59	%
Net interest margin(TE)(3)								2.96	%								2.75	%

(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

Non-interest income for the fourth quarter of 2022 was $301,000, up $5,000, or 2%, from the third quarter of 2022 primarily due to an increase in fee income recorded in other non-interest income.

Non-interest Expense

Non-interest expense for the fourth quarter of 2022 totaled $2.0 million, down $131,000, or 6%, compared to the third quarter of 2022.

Data processing and communication expense totaled $175,000 for the fourth quarter of 2022, down $41,000, or 19%, from the prior quarter primarily due to a credit received from our core system provider during the fourth quarter of 2022.

Professional fees totaled $66,000 for the fourth quarter of 2022, down $91,000, or 58%, from the prior quarter mainly due to continued improvement in the cost of legal and auditing services during the second half of 2022.

The Company recorded a reversal of franchise and shares tax expense of $16,000 during the fourth quarter of 2022, compared to $15,000 in expense for the prior quarter. Shares tax due for 2022 was received during the fourth quarter of 2022 and the actual expense was less than our initial estimate.

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 $263.3 million in assets at December 31, 2022. 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 Bank, visit www.catalystbank.com.

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 Catalyst 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)
(Dollars in thousands)		12/31/2022			9/30/2022				12/31/2021
ASSETS
Non-interest-bearing cash		$	5,092		$	4,558			$	4,933
Interest-bearing cash and due from banks			8,380			31,639				35,951
Total cash and cash equivalents			13,472			36,197				40,884
Investment securities:
Securities available-for-sale, at fair value			79,602			78,563				88,339
Securities held-to-maturity			13,475			13,480				13,498
Loans receivable, net of unearned income			133,607			131,942				132,103
Allowance for loan losses			(1,807)			(1,804)				(2,276)
Loans receivable, net			131,800			130,138				129,827
Accrued interest receivable			673			566				579
Foreclosed assets			320			320				340
Premises and equipment, net			6,303			6,392				6,577
Stock in correspondent banks, at cost			1,808			1,799				1,793
Bank-owned life insurance			13,617			13,519				3,303
Other assets			2,254			2,630				470
TOTAL ASSETS		$	263,324		$	283,604			$	285,610
LIABILITIES
Deposits:
Non-interest-bearing		$	33,657		$	31,988			$	30,299
Interest-bearing			131,437			152,239				146,496
Total deposits			165,094			184,227				176,795
Federal Home Loan Bank advances			9,198			9,153				9,018
Other liabilities			558			706				1,245
TOTAL LIABILITIES			174,850			194,086				187,058
SHAREHOLDERS' EQUITY
Common stock			53			53				53
Additional paid-in capital			51,062			50,902				50,802
Unallocated common stock held by benefit plans			(6,307)			(4,020)				(4,179)
Retained earnings			52,740			52,569				52,559
Accumulated other comprehensive income (loss)			(9,074)			(9,986)				(683)
TOTAL SHAREHOLDERS' EQUITY			88,474			89,518				98,552
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	263,324		$	283,604			$	285,610

 

CATALYST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		Three Months Ended									Year Ended
(Dollars in thousands)		12/31/2022			9/30/2022			12/31/2021			12/31/2022			12/31/2021
INTEREST INCOME
Loans receivable, including fees		$	1,543		$	1,466		$	1,621		$	6,127		$	6,965
Investment securities			418			381			240			1,480			674
Other			145			185			23			407			60
Total interest income			2,106			2,032			1,884			8,014			7,699
INTEREST EXPENSE
Deposits			130			93			109			402			523
Advances from Federal Home Loan Bank			76			69			68			281			272
Total interest expense			206			162			177			683			795
Net interest income			1,900			1,870			1,707			7,331			6,904
Provision for (reversal of) loan losses			-			(115)			(374)			(375)			(660)
Net interest income after provision for (reversal of) loan losses			1,900			1,985			2,081			7,706			7,564
NON-INTEREST INCOME
Service charges on deposit accounts			189			192			193			731			641
Gain (loss) on disposals and sales of fixed assets			-			-			-			(77)			25
Bank-owned life insurance			98			97			23			314			90
Federal community development grant			-			-			-			171			1,826
Other			14			7			8			34			44
Total non-interest income			301			296			224			1,173			2,626
NON-INTEREST EXPENSE
Salaries and employee benefits			1,175			1,168			1,300			4,822			4,631
Occupancy and equipment			193			203			220			833			774
Data processing and communication			175			216			221			841			777
Professional fees			66			157			133			538			388
Directors' fees			117			75			68			302			279
ATM and debit card			61			76			64			245			201
Foreclosed assets, net			5			3			8			5			90
Advertising and marketing			53			36			8			240			43
Franchise and shares tax			(16)			15			-			115			-
Other			173			184			185			779			608
Total non-interest expense			2,002			2,133			2,207			8,720			7,791
Income (loss) before income tax expense			199			148			98			159			2,399
Income tax expense (benefit)			28			13			20			(21)			484
NET INCOME		$	171		$	135		$	78		$	180		$	1,915
Earnings per share:
Basic		$	0.04		$	0.03		$	0.02		$	0.04		$	0.39
Diluted			0.04			0.03			N/A			0.04			N/A

 

CATALYST BANCORP, INC. AND SUBSIDIARY
SELECTED FINANCIAL DATA
		Three Months Ended												Year Ended
(Dollars in thousands)		12/31/2022				9/30/2022				12/31/2021				12/31/2022				12/31/2021
EARNINGS DATA
Total interest income		$	2,106			$	2,032			$	1,884			$	8,014			$	7,699
Total interest expense			206				162				177				683				795
Net interest income			1,900				1,870				1,707				7,331				6,904
Provision for (reversal of) loan losses			-				(115)				(374)				(375)				(660)
Total non-interest income			301				296				224				1,173				2,626
Total non-interest expense			2,002				2,133				2,207				8,720				7,791
Income tax expense (benefit)			28				13				20				(21)				484
Net income		$	171			$	135			$	78			$	180			$	1,915
AVERAGE BALANCE SHEET DATA
Total assets		$	270,121			$	288,244			$	289,118			$	282,931			$	252,840
Total interest-earning assets			256,033				270,777				275,117				267,300				237,739
Total loans			133,102				131,827				137,456				132,503				141,860
Total interest-bearing deposits			139,134				151,571				146,620				147,266				146,968
Total interest-bearing liabilities			149,064				160,697				155,609				156,560				155,895
Total deposits			170,952				185,453				185,660				179,826				181,024
Total shareholders' equity			88,558				92,956				93,151				93,074				61,542
SELECTED RATIOS
Return on average assets			0.25	%			0.19	%			0.11	%			0.06	%			0.76	%
Return on average equity			0.76				0.58				0.33				0.19				3.11
Efficiency ratio			90.99				98.44				114.34				102.55				81.76
Net interest margin(TE)			2.96				2.75				2.47				2.75				2.91
Average equity to average assets			32.78				32.25				32.22				32.90				24.34
Common equity Tier 1 capital ratio(1)			56.25				57.84				63.51
Tier 1 leverage capital ratio(1)			30.37				28.29				27.38
Total risk-based capital ratio(1)			57.50				59.09				64.77
ALLOWANCE FOR LOANS LOSSES
Beginning balance		$	1,804			$	1,980			$	2,646			$	2,276			$	3,022
Provision for (reversal of) loan losses			-				(115)				(374)				(375)				(660)
Charge-offs			(19)				(90)				-				(210)				(150)
Recoveries			22				29				4				116				64
Net (charge-offs) recoveries			3				(61)				4				(94)				(86)
Ending balance		$	1,807			$	1,804			$	2,276			$	1,807			$	2,276
CREDIT QUALITY
Non-accruing loans		$	1,494			$	1,221			$	890
Accruing loans 90 days or more past due			191				379				1
Total non-performing loans			1,685				1,600				891
Foreclosed assets			320				320				340
Total non-performing assets		$	2,005			$	1,920			$	1,231
Total non-performing loans to total loans			1.26	%			1.21	%			0.67	%
Total non-performing assets to total assets			0.76				0.68				0.43
(1)  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 the financial results for CLST in Q4 2022?

Catalyst Bancorp reported a net income of $171,000 for Q4 2022, up 27% from Q3 2022.

Did CLST announce any share buyback plans?

Yes, CLST approved a share repurchase plan to buy back up to 265,000 shares.

What is the loan growth percentage for CLST in Q4 2022?

CLST reported a 1% increase in total loans, reaching $133.6 million.

How did CLST's net interest margin change in Q4 2022?

The net interest margin improved to 2.96% in Q4 2022.

What was the trend in deposits for CLST in Q4 2022?

Total deposits decreased by 10% or $19.1 million from Q3 2022.