Catalyst Bancorp, Inc. Announces 2021 Third Quarter Results

Published: Oct. 28, 2021 at 6:30 AM CDT

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.

(PRNewsfoto/St. Landry Homestead Federal Savings Bank)
(PRNewsfoto/St. Landry Homestead Federal Savings Bank)

"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

St Landry Homestead Logo (PRNewsfoto/St. Landry Homestead Federal Savings Bank)
St Landry Homestead Logo (PRNewsfoto/St. Landry Homestead Federal Savings Bank)

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SOURCE Catalyst Bancorp, Inc.

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