Catalyst Bancorp Reports Decrease in Net Income and Total Assets for Q2 2022

Catalyst Bancorp, Inc. reported a net income of $18,000 for the three months ended June 30, 2022, a decrease from $260,000 in the same period of the previous year. For the six months ended June 30, 2022, the company experienced a net loss of $113,000, compared to a net income of $411,000 for the same period in 2021. The decline in profitability was attributed to a significant increase in non-interest expenses, which rose by 21.1% to $2.4 million for the quarter, and a decrease in the reversal of the allowance for loan losses. Total interest income decreased slightly to $1.965 million, down from $2.016 million year-over-year, primarily due to a reduction in interest income from loans.

In terms of financial position, total assets decreased by 1.5% to $281.0 million as of June 30, 2022, from $285.3 million at the end of 2021. This decline was mainly driven by a $11.7 million drop in cash and cash equivalents and a $6.1 million decrease in available-for-sale investment securities. However, total loans increased by $1.8 million, or 1.4%, to $133.6 million, with growth in commercial and industrial loans offsetting declines in commercial real estate and multifamily loans. The allowance for loan losses decreased to $2.0 million, representing 1.48% of total loans, down from 1.73% at the end of 2021.

Strategically, Catalyst Bancorp underwent a rebranding, officially changing its name to Catalyst Bank on June 23, 2022. The rebranding incurred pre-tax costs of $208,000 for the quarter and $242,000 for the six months. Additionally, the company received a $171,000 grant from the Bank Enterprise Award Program, which contributed to the increase in non-interest income. The bank continues to focus on expanding its community banking model, targeting small to mid-sized businesses while maintaining its traditional customer base.

Operationally, the bank's total deposits increased by $1.9 million, or 1.1%, to $178.7 million, with notable growth in NOW, money market, and savings accounts. However, certificates of deposit saw a decline. The bank's capital ratios remained strong, with a Common Equity Tier 1 Capital ratio of 58.51%, well above the regulatory minimum. The company also reported a total of 5,290,000 shares of common stock outstanding as of August 10, 2022.

Looking ahead, Catalyst Bancorp anticipates continued growth in its loan portfolio and non-interest income, although it expects non-interest expenses to rise as it expands operations and integrates new employee stock benefit plans. The company remains committed to maintaining a strong liquidity position and meeting its regulatory capital requirements, positioning itself for future growth in the competitive banking landscape.