Catalyst Bancorp, Inc. Announces 2024 Second Quarter Results

Rhea-AI Summary

Catalyst Bancorp (Nasdaq: CLST) reported net income of $527,000 for Q2 2024, compared to a net loss of $4.7 million in Q1 2024. The improvement was largely due to the absence of a $5.5 million loss on investment securities sales and $560,000 in data conversion expenses from Q1. Loans increased by 7% to $153.3 million, with strong growth in commercial and industrial loans. The net interest margin improved to 3.72%, up 60 basis points from Q1. Total deposits grew by 6% to $180.1 million. Credit quality remained stable with non-performing assets at 0.58% of total assets. The company continued its share repurchase program, buying back 79,802 shares at an average cost of $11.88 per share during Q2.

Positive

• Net income of $527,000 in Q2 2024, compared to a net loss in Q1
• Loan growth of 7% to $153.3 million, with 52% increase in commercial and industrial loans
• Net interest margin improved by 60 basis points to 3.72%
• Deposit growth of 6% to $180.1 million
• Stable credit quality with non-performing assets at 0.58% of total assets

Negative

• Slight decrease in shareholders' equity from $81.3 million to $81.0 million

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

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SOURCE Catalyst Bancorp, Inc.

FAQ

What was Catalyst Bancorp's (CLST) net income for Q2 2024?

Catalyst Bancorp (CLST) reported a net income of $527,000 for the second quarter of 2024.

How much did Catalyst Bancorp's (CLST) loans grow in Q2 2024?

Catalyst Bancorp's (CLST) loans grew by $9.8 million, or 7%, to $153.3 million in Q2 2024 compared to Q1 2024.

What was Catalyst Bancorp's (CLST) net interest margin in Q2 2024?

Catalyst Bancorp's (CLST) net interest margin for Q2 2024 was 3.72%, up 60 basis points compared to the previous quarter.

How many shares did Catalyst Bancorp (CLST) repurchase in Q2 2024?

Catalyst Bancorp (CLST) repurchased 79,802 shares of its common stock at an average cost of $11.88 per share during Q2 2024.