Catalyst Bancorp Reports 25.9% Increase in Net Income for Q3 2023

Catalyst Bancorp, Inc. reported its financial results for the third quarter of 2023, revealing a net income of $170,000, a 25.9% increase from $135,000 in the same period last year. For the nine months ending September 30, 2023, the company achieved a net income of $282,000, significantly up from just $9,000 during the same timeframe in 2022. Total interest income rose to $2.5 million for the quarter, a 21.5% increase compared to the previous year, driven by higher yields on loans and investment securities. The average loan yield improved to 5.45%, up from 4.41% a year earlier, while net interest income for the quarter reached $1.97 million, reflecting a 5.5% increase.

In terms of asset management, total assets decreased by 2.1% to $257.9 million as of September 30, 2023, down from $263.3 million at the end of 2022. The decline was primarily attributed to the amortization of the investment securities portfolio, which totaled $85.3 million, down from $93.1 million at year-end 2022. Loans receivable increased by 1.5% to $135.7 million, with notable growth in commercial and industrial loans, which surged by 41.8% year-over-year. However, one- to four-family residential loans saw a decrease of 4.0%.

The company also reported a total allowance for loan losses of $2.0 million, representing 1.50% of total loans, consistent with the previous quarter. The allowance reflects the adoption of the Current Expected Credit Loss (CECL) model under ASC 326, which resulted in a $209,000 increase in the allowance for loan losses. The provision for credit losses was zero for the quarter, contrasting with a reversal of $115,000 in the same period last year. Non-performing loans increased to $2.1 million, or 1.54% of total loans, up from 1.26% at the end of 2022.

On the operational front, Catalyst Bancorp has been actively managing its capital structure, with total deposits slightly increasing to $165.2 million, up from $165.1 million at the end of 2022. The company has also engaged in share repurchase activities, completing its first repurchase plan in April 2023 and initiating a second plan in the same month. As of September 30, 2023, the company had repurchased 441,710 shares at an average cost of $12.08 per share.

Looking ahead, Catalyst Bancorp remains focused on its strategic initiatives to enhance profitability and growth. The company anticipates continued improvements in net interest income driven by rising interest rates and a favorable loan mix. However, management acknowledges potential challenges, including economic conditions and competitive pressures, which could impact future performance. The company is committed to maintaining a strong liquidity position and meeting regulatory capital requirements, having been categorized as well-capitalized as of September 30, 2023.