EX-99.1 2 clst-20240502xex99d1.htm EX-99.1 For Immediate Release

Exhibit 99.1

For more information:

Joe Zanco, President and CEO

(337) 948-3033

For Immediate Release

Release Date: May 2, 2024

Catalyst Bancorp, Inc. Announces 2024 First Quarter Results and Approval of New Share Repurchase Plan

Opelousas, Louisiana – Catalyst Bancorp, Inc. (Nasdaq: “CLST”) (the “Company”), the parent company for Catalyst Bank (the “Bank”) (www.catalystbank.com), reported a net loss of $4.7 million for the first quarter of 2024, which includes 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.  

“Our net loss resulted from two strategic moves that significantly enhance our growth prospects,” said Joe Zanco. “First, we completed a full upgrade of our banking systems and now offer among the very best technology in banking.  We’re incredibly proud of our team for executing such a successful systems upgrade.”

“Second, we repositioned our balance sheet by selling lower-yielding investment securities. The sales generated $42.6 million in cash which we plan to invest in new loans, higher-yielding investment securities, share repurchases and debt repayments,” continued Zanco.  

1


Loans

Loans totaled $143.5 million at March 31, 2024, down $1.4 million, or less than 1%, from December 31, 2023. The following table sets forth the composition of the Company’s loan portfolio as of the dates indicated.

(Dollars in thousands)

3/31/2024

12/31/2023

Increase (Decrease)

Real estate loans

One- to four-family residential

$

81,686

$

83,623

$

(1,937)

(2)

%

Commercial real estate

21,130

21,478

(348)

(2)

Construction and land

19,369

13,857

5,512

40

Multi-family residential

3,061

3,373

(312)

(9)

Total real estate loans

125,246

122,331

2,915

2

Other loans

Commercial and industrial

15,711

19,984

(4,273)

(21)

Consumer

2,534

2,605

(71)

(3)

Total other loans

18,245

22,589

(4,344)

(19)

Total loans

$

143,491

$

144,920

$

(1,429)

(1)

%

In the first quarter of 2024, strong construction loan growth was offset primarily by net declines in our commercial and industrial and residential loan portfolios. Construction loan growth was largely driven by multi-family residential development and additional fundings on several existing construction loans.

The following table summarizes the composition of our construction and land loan balances and commitments, including the related undisbursed amounts for construction projects in process as of March 31, 2024.

(Dollars in thousands)

Loan Balance

Undisbursed

Total Commitment

Commercial construction and land loans

Multi-family residential

$

4,782

$

3,218

$

8,000

Retail

711

4,769

5,480

Health service facilities

2,749

2,663

5,412

Hospitality

2,716

700

3,416

Residential subdivision development

813

9

822

Commercial land

297

-

297

Other commercial construction and development

3,790

289

4,079

Total commercial construction and land

$

15,858

$

11,648

$

27,506

Consumer construction and land loans

Residential construction

2,851

1,241

4,092

Consumer land

660

-

660

Total consumer construction and land

3,511

1,241

4,752

Total construction and land

$

19,369

$

12,889

$

32,258

Based on total commitment and contractual maturity date, the weighted average term to maturity of our construction and land loan portfolio is approximately 11 months as of March 31, 2024.

2


Credit Quality and Allowance for Credit Losses

At March 31, 2024, non-performing assets (“NPAs”) totaled $1.7 million, down $331,000, or 16.1%, compared to $2.1 million at December 31, 2023. Non-performing loans totaling $275,000 as of December 31, 2023 were paid-off or returned to accrual status during the first quarter of 2024. The ratio of NPAs to total assets was 0.61% and 0.76% at March 31, 2024 and December 31, 2023, respectively. Non-performing loans (“NPLs”) comprised 1.03% of total loans at March 31, 2024, and 1.37% of total loans at December 31, 2023. At March 31, 2024 and December 31, 2023, 98% and 95% of total NPLs, respectively, were one- to four-family residential mortgage loans.

At March 31, 2024, the allowance for loan losses totaled $2.1 million, or 1.44% of total loans, compared to 1.47% of total loans at December 31, 2023. The allowance for credit losses on unfunded lending commitments totaled $310,000 and $257,000 at March 31, 2024 and December 31, 2023, respectively. The provision for credit losses, inclusive of the provision for unfunded commitments, for the first quarter of 2024 totaled $95,000 and was largely attributable to growth in total construction loan commitments.

Net loan charge-offs totaled $98,000 during the first quarter of 2024, compared to net charge-offs of $63,000 for the fourth quarter of 2023. Net loan charge-offs in both periods were primarily attributable to one- to four-family residential loans.

3


Investment Securities

Total investment securities were $39.0 million, or 13.8% of total assets, at March 31, 2024, down $45.0 million, or 53.6%, compared to December 31, 2023. 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 sale totaled $42.6 million. The Company expects to re-deploy the sales proceeds into a mix of loans, higher-yielding investment securities, share repurchases, and debt repayments.

At March 31, 2024 the amortized cost and fair value of pledged investment securities totaled $25.4 million and $21.3 million, respectively. The amortized cost and fair value of investment securities pledged as collateral for borrowings through the Bank Term Funding Program (“BTFP”) totaled $21.6 million and $18.0 million, respectively at March 31, 2024. The remainder of the pledged investment securities at March 31, 2024 served as collateral for public fund deposits.

Deposits

Total deposits were $169.6 million at March 31, 2024, up $4.0 million, or 2%, from December 31, 2023. The following table sets forth the composition of the Bank’s deposits as of the dates indicated. The ratio of the Company’s total loans to total deposits was 85% and 88% as of March 31, 2024, and December 31, 2023, respectively.

(Dollars in thousands)

3/31/2024

12/31/2023

Increase (Decrease)

Non-interest-bearing demand deposits

$

28,836

$

28,183

$

653

2

%

Interest-bearing demand deposits

35,374

36,867

(1,493)

(4)

Money market

14,712

15,126

(414)

(3)

Savings

33,675

31,518

2,157

7

Certificates of deposit

57,040

53,928

3,112

6

Total deposits

$

169,637

$

165,622

$

4,015

2

%

Total public fund deposits amounted to $22.7 million, or 13% of total deposits, at March 31, 2024, compared to $23.3 million, or 14% of total deposits, at December 31, 2023. At March 31, 2024, approximately 78% of our total public fund deposits consisted of non-interest-bearing and interest-bearing demand deposits from municipalities within our market.

Our total uninsured deposits (that is deposits in excess of the FDIC’s insurance limit), inclusive of public funds, were approximately $41.7 million at March 31, 2024 and $44.6 million at December 31, 2023. Total uninsured non-public funds deposits were approximately $23.9 million and $26.3 million at March 31, 2024 and December 31, 2023, respectively. 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.

Borrowings

Total borrowings at March 31, 2024 were $29.4 million, up $10.0 million from December 31, 2023. During the first quarter of 2024, the Bank increased its borrowings from the Federal Reserve Bank of Atlanta through the BTFP. At March 31, 2024, the Bank had one $20.0 million BTFP advance outstanding with a contractual interest rate of 4.76% and a maturity date of January 15, 2025.

4


Capital and Share Repurchases

The Company announced that its Board of Directors approved the Company’s fourth share repurchase plan (the “May 2024 Repurchase Plan”). Under the May 2024 Repurchase Plan, the Company may purchase up to 227,000 shares, or approximately 5%, of the Company’s outstanding shares of common stock.

The Company repurchased 202,997 shares of its common stock at an average cost per share of $12.12 during the first quarter of 2024 under its November 2023 Repurchase Plan. At March 31, 2024, the Company had common shares outstanding of 4,558,329 and 25,329 of those shares were available for repurchase under the November 2023 Repurchase Plan. The Company completed the November 2023 Repurchase Plan in April 2024.  

At March 31, 2024 and December 31, 2023, consolidated shareholders’ equity totaled $81.4 million, or 28.8% of total assets, and $84.7 million, or 31.2% of total assets, respectively.

Net Interest Income

The net interest margin for the first quarter of 2024 was 3.15%, up one basis point compared to the prior quarter. For the first quarter of 2024, the average yield on interest-earning assets was 4.71%, up 54 basis points from the prior quarter, while the average rate paid on interest-bearing liabilities was 2.42%, up 69 basis points from the fourth quarter of 2023.

Net interest income for the first quarter of 2024 was $2.1 million, up $148,000, or 8%, compared to the fourth quarter of 2023. Total interest income was up $552,000, or 21%, while total interest expense increased $404,000, or 63%, in the first quarter of 2024 compared to the prior quarter. Interest expense increased largely due to an increase in the average rate paid for deposits and an increase in the volume of BTFP borrowings during the first quarter of 2024.

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

3/31/2024

12/31/2023

(Dollars in thousands)

Average Balance

 

Interest

Average Yield/ Rate

    

Average Balance

 

Interest

Average Yield/ Rate

INTEREST-EARNING ASSETS

 

  

 

 

  

 

  

 

 

 

  

 

 

  

 

  

Loans receivable(1)

$

144,428

$

2,214

6.17

%

$

140,757

$

2,066

5.82

%

Investment securities(TE)(2)

76,432

325

1.72

96,640

400

1.67

Other interest earning assets

48,779

616

5.08

11,276

137

4.83

Total interest-earning assets(TE)

$

269,639

$

3,155

4.71

%

$

248,673

$

2,603

4.17

%

INTEREST-BEARING LIABILITIES

  

  

  

  

Demand deposits, money market, and savings accounts

$

89,109

$

317

1.43

%

$

82,474

$

185

0.89

%

Certificates of deposit

57,092

437

3.08

51,707

344

2.64

Total interest-bearing deposits

146,201

754

2.07

134,181

529

1.56

Borrowings

27,991

293

4.21

13,016

114

3.50

Total interest-bearing liabilities

$

174,192

$

1,047

2.42

%

$

147,197

$

643

1.73

%

Net interest-earning assets

$

95,447

$

101,476

Net interest income; average interest rate spread(TE)

$

2,108

2.29

%

$

1,960

2.44

%

Net interest margin(TE)(3)

3.15

%

3.14

%

(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%.

5



Non-interest Income

For the first quarter of 2024, non-interest income was down $5.8 million compared to $672,000 for the fourth quarter of 2023. 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 first quarter of 2024 totaled $2.8 million, up $669,000, or 32%, compared to the fourth quarter of 2023. 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. Most of these costs are included in data processing and communication expense. The Company estimates annual savings of greater than $200,000 due to the change in our core processing system.

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 $282.0 million in assets at March 31, 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.

6


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.

7


CATALYST BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(Unaudited)

(Dollars in thousands)

 

3/31/2024

    

12/31/2023

3/31/2023

ASSETS

 

 

  

 

 

  

 

 

  

Non-interest-bearing cash

$

3,118

$

3,654

$

3,531

Interest-bearing cash and due from banks

72,893

15,357

23,996

Total cash and cash equivalents

76,011

19,011

27,527

Investment securities:

  

  

  

Securities available-for-sale, at fair value

25,534

70,540

78,937

Securities held-to-maturity

13,457

13,461

13,471

Loans receivable, net of unearned income

143,491

144,920

132,690

Allowance for loan losses

(2,068)

(2,124)

(2,070)

Loans receivable, net

141,423

142,796

130,620

Accrued interest receivable

733

906

675

Foreclosed assets

237

60

320

Premises and equipment, net

5,995

6,072

6,202

Stock in correspondent banks, at cost

1,898

1,878

1,823

Bank-owned life insurance

14,139

14,026

13,714

Other assets

2,622

2,182

2,577

TOTAL ASSETS

$

282,049

$

270,932

$

275,866

  

  

  

LIABILITIES

  

  

  

Deposits:

  

  

  

Non-interest-bearing

$

28,836

$

28,183

$

35,483

Interest-bearing

140,801

137,439

144,229

Total deposits

169,637

165,622

179,712

Borrowings

29,423

19,378

9,243

Other liabilities

1,628

1,277

747

TOTAL LIABILITIES

200,688

186,277

189,702

  

  

  

SHAREHOLDERS' EQUITY

  

  

  

Common stock

46

48

51

Additional paid-in capital

42,711

45,020

48,259

Unallocated common stock held by benefit plans

(6,169)

(6,221)

(6,664)

Retained earnings

48,368

53,045

52,516

Accumulated other comprehensive income (loss)

(3,595)

(7,237)

(7,998)

TOTAL SHAREHOLDERS' EQUITY

81,361

84,655

86,164

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

282,049

$

270,932

$

275,866

8


CATALYST BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

(Dollars in thousands)

3/31/2024

 

12/31/2023

 

3/31/2023

INTEREST INCOME

 

  

 

 

  

 

 

  

Loans receivable, including fees

$

2,214

$

2,066

$

1,629

Investment securities

325

400

427

Other

616

137

211

Total interest income

3,155

2,603

2,267

INTEREST EXPENSE

  

  

  

Deposits

754

529

233

Borrowings

293

114

68

Total interest expense

1,047

643

301

Net interest income

2,108

1,960

1,966

Provision for credit losses

95

128

-

Net interest income after provision for credit losses

2,013

1,832

1,966

NON-INTEREST INCOME

  

  

  

Service charges on deposit accounts

197

201

183

Bank-owned life insurance

113

109

97

Loss on sales of investment securities

(5,507)

(92)

-

Gain (loss) on disposals and sales of fixed assets

11

-

-

Federal community development grant

-

437

-

Other

23

17

14

Total non-interest income (loss)

(5,163)

672

294

NON-INTEREST EXPENSE

  

  

  

Salaries and employee benefits

1,260

1,149

1,203

Occupancy and equipment

196

193

213

Data processing and communication

794

236

227

Professional fees

107

140

129

Directors’ fees

115

118

115

ATM and debit card

69

63

58

Foreclosed assets, net

8

5

2

Advertising and marketing

38

23

30

Franchise and shares tax

16

10

27

Other

188

185

181

Total non-interest expense

2,791

2,122

2,185

Income before income tax expense (benefit)

(5,941)

382

75

Income tax expense (benefit)

(1,264)

62

2

NET INCOME (LOSS)

$

(4,677)

$

320

$

73

Earnings (loss) per share:

Basic

$

(1.14)

$

0.08

$

0.02

Diluted

(1.14)

0.08

0.02

9


CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA

Three Months Ended

(Dollars in thousands)

3/31/2024

    

12/31/2023

    

3/31/2023

EARNINGS DATA

Total interest income

$

3,155

$

2,603

$

2,267

Total interest expense

1,047

643

301

Net interest income

2,108

1,960

1,966

Provision for credit losses

95

128

-

Total non-interest income (loss)

(5,163)

672

294

Total non-interest expense

2,791

2,122

2,185

Income tax expense (benefit)

(1,264)

62

2

Net income (loss)

$

(4,677)

$

320

$

73

AVERAGE BALANCE SHEET DATA

Total loans

$

144,428

$

140,757

$

133,781

Total interest-earning assets

269,639

248,673

257,340

Total assets

286,431

261,657

271,976

Total interest-bearing deposits

146,201

134,181

142,500

Total interest-bearing liabilities

174,192

147,197

151,716

Total deposits

174,656

165,102

174,597

Total shareholders' equity

82,395

82,227

87,388

SELECTED RATIOS

Return on average assets

(6.57)

%

0.49

%

0.11

%

Return on average equity

(22.83)

1.54

0.34

Efficiency ratio

(91.37)

80.61

96.68

Net interest margin(TE)

3.15

3.14

3.10

Average equity to average assets

28.77

31.43

32.13

Common equity Tier 1 capital ratio

52.09

52.34

56.43

Tier 1 leverage capital ratio

26.84

31.67

30.11

Total risk-based capital ratio

53.34

53.60

57.69

NON-FINANCIAL DATA

Total employees (full-time equivalent)

47

48

51

Common shares issued and outstanding, end of period

4,558,329

4,761,326

5,058,612

10


CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA

(continued)

Three Months Ended

(Dollars in thousands)

3/31/2024

    

12/31/2023

    

3/31/2023

ALLOWANCE FOR CREDIT LOSSES

Allowance for loan losses:

Beginning balance

$

2,124

$

2,036

$

1,807

CECL adoption impact

-

-

209

Provision for loan losses

42

151

-

Charge-offs

(123)

(76)

(7)

Recoveries

25

13

61

Net (charge-offs) recoveries

(98)

(63)

54

Ending balance

$

2,068

$

2,124

$

2,070

Allowance for unfunded commitments:

Beginning balance

257

280

-

CECL adoption impact

-

-

216

Provision for (reversal of) losses on unfunded commitments

53

(23)

-

Ending balance

$

310

$

257

$

216

Total allowance for credit losses, end of period

$

2,378

$

2,381

$

2,286

Total provision for credit losses

95

128

-

CREDIT QUALITY(1)

Non-accruing loans

$

1,453

$

1,967

$

1,618

Accruing loans 90 days or more past due

29

24

69

Total non-performing loans

1,482

1,991

1,687

Foreclosed assets

237

60

320

Total non-performing assets

$

1,719

$

2,051

$

2,007

Total non-performing loans to total loans

1.03

%

1.37

%

1.27

%

Total non-performing assets to total assets

0.61

0.76

0.73

(1)Credit quality data and ratios are as of the end of each period presented.

11