Catalyst Bancorp Reports Net Loss of $131,000 for Q1 2022

Catalyst Bancorp, Inc. reported a net loss of $131,000 for the three months ended March 31, 2022, a decline from a net income of $151,000 during the same period in 2021. The company's total assets increased to $287.3 million, up from $285.3 million at the end of 2021, primarily driven by a $5.5 million rise in bank-owned life insurance. However, this was partially offset by a $3.7 million decrease in available-for-sale securities. The increase in non-interest expenses, which rose by 26.8% to $2.2 million, was a significant factor contributing to the net loss.

In terms of revenue, total interest income decreased by 1.6% to $1.9 million, largely due to a $245,000 drop in interest income from loans, which was partially mitigated by a $208,000 increase in income from investment securities. The average balance of loans receivable fell by 12.4% to $130.8 million, while the average balance of investment securities surged by 149.9% to $101.3 million, reflecting the deployment of proceeds from the company's initial public offering. The net interest income increased slightly by 1.8% to $1.8 million, although the interest rate spread and net interest margin both declined compared to the previous year.

Operationally, Catalyst Bancorp's total loans receivable increased marginally by $161,000 to $132 million, with a notable shift in the composition of the loan portfolio. The company saw a decrease in its real estate loan portfolio, particularly in multi-family residential loans, while commercial and industrial loans rose by $1.7 million. The allowance for loan losses decreased to $2.2 million, or 1.65% of total loans, reflecting an improved assessment of the impact of the COVID-19 pandemic on borrowers.

The company continues to focus on expanding its operations and enhancing its service offerings. Catalyst Bancorp is transitioning to a community bank model, targeting small- to mid-sized businesses while maintaining its traditional customer base. As of March 31, 2022, total deposits increased by 3.6% to $183.1 million, driven by growth in NOW and demand deposit accounts. The company also reported a significant increase in its accumulated other comprehensive loss position due to unrealized losses on available-for-sale securities, which totaled $5.7 million.

Looking ahead, Catalyst Bancorp anticipates continued growth in its operations, although it acknowledges potential challenges from economic conditions, interest rate fluctuations, and the ongoing effects of the COVID-19 pandemic. The company remains committed to maintaining a strong liquidity position and meeting its regulatory capital requirements, having been categorized as well-capitalized as of March 31, 2022.