Catalyst Bancorp, Inc. Announces 2021 Third Quarter Results

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October 28, 2021 7:30 AM EDT

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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/catalyst-bancorp-inc-announces-2021-third-quarter-results-301410642.html

SOURCE Catalyst Bancorp, Inc.


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