Catalyst Bancorp Reports Significant Decline in Net Income for Fiscal Year 2022

Catalyst Bancorp, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2022, with net income falling to $180,000 compared to $1.9 million in the previous year. This decrease was attributed to a notable drop in non-interest income, which fell by 55.3% to $1.2 million, primarily due to the absence of a substantial grant received in 2021. Total interest income increased by 4.1% to $8 million, driven by higher earnings from investment securities, although interest income from loans decreased by $838,000. The company's net interest income rose to $7.3 million, reflecting a 6.2% increase from the prior year.

In terms of asset management, total assets decreased by 7.8% to $263.3 million, largely due to a $27.4 million decline in cash and cash equivalents. The loan portfolio saw a modest increase of 1.1%, reaching $133.6 million, with growth in commercial and industrial loans offsetting declines in other segments. The allowance for loan losses was reduced to $1.8 million, or 1.35% of total loans, down from 1.72% the previous year, reflecting a reversal of provisions made during the pandemic.

Strategically, Catalyst Bancorp has shifted its focus from traditional residential lending to a more diversified community banking model, targeting small- to mid-sized businesses. The company has also undergone a rebranding, changing its name from St. Landry Homestead Federal Savings Bank to Catalyst Bank in June 2022. The bank operates six full-service branches in Louisiana and has plans to enhance its product offerings and expand its market presence.

Operationally, the bank's total deposits decreased by 6.6% to $165.1 million, with a significant drop in certificates of deposit. The bank's employee headcount was reduced to 50 full-time equivalent employees, down from 56 in the previous year. Despite these challenges, Catalyst Bancorp remains well-capitalized, exceeding all regulatory capital requirements, with a common equity Tier 1 capital ratio of 56.17% as of December 31, 2022.

Looking ahead, Catalyst Bancorp aims to continue its growth trajectory by enhancing its banking products and services, recruiting top talent, and potentially pursuing acquisitions to expand its footprint in Louisiana. The company is also preparing for the implementation of new accounting standards related to credit losses, which may impact its financial statements in the future.