Catalyst Bancorp Reports $4.7 Million Net Loss in Q1 2024 Amid Increased Interest Income

Catalyst Bancorp, Inc. reported a net loss of $4.7 million for the first quarter of 2024, a significant decline from a net income of $73,000 in the same period of 2023. The company's total interest income increased by 39.2% to $3.2 million, driven by higher yields on loans and other interest-earning assets. However, this was offset by a $5.5 million loss on the sale of investment securities, which contributed to a decrease in non-interest income from $294,000 in the prior year to a loss of $5.2 million. The net interest margin improved slightly to 3.15%, up from 3.10% a year earlier, reflecting a rise in interest rates.

Total assets for Catalyst Bancorp increased by 4.1% to $282.0 million as of March 31, 2024, compared to $270.9 million at the end of 2023. This growth was primarily attributed to a $10 million increase in borrowings, which rose to $29.4 million. Total loans decreased by 1.0% to $143.5 million, with notable growth in construction loans, which increased by 39.8%. Conversely, commercial and industrial loans saw a decline of 21.4%. The allowance for loan losses was $2.1 million, representing 1.44% of total loans, slightly down from 1.47% at the end of the previous year.

In terms of operational metrics, total deposits rose by 2.4% to $169.6 million, with a notable increase in certificates of deposit, which grew by 5.8%. The company’s non-performing assets decreased by 16.2% to $1.7 million, indicating improved asset quality. Catalyst Bancorp's total shareholders' equity stood at $81.4 million, down 3.9% from the previous quarter, largely due to share repurchases totaling 202,997 shares at an average cost of $12.12 each.

Strategically, Catalyst Bancorp has been focusing on enhancing its operational efficiency, as evidenced by its recent upgrade to a new core processing system, which incurred significant costs but is expected to yield annual savings exceeding $200,000. The company has also announced a new share repurchase plan, allowing for the purchase of up to 227,000 shares, further indicating its commitment to returning value to shareholders.

Looking ahead, Catalyst Bancorp anticipates continued challenges in the current economic environment, including rising interest rates and competitive pressures. The company remains focused on maintaining its liquidity and capital adequacy while navigating these market conditions. Management expects to leverage its community-oriented banking model to drive growth and profitability in the coming quarters.