Catalyst Bancorp Reports $527,000 Net Income for Q2 2024, Total Assets Increase to $295.3 Million

Catalyst Bancorp, Inc. reported a net income of $527,000 for the three months ended June 30, 2024, a significant increase from the $16,000 recorded in the same period last year. However, the company experienced a net loss of $4.2 million for the six months ended June 30, 2024, compared to a net income of $68,000 for the same period in 2023. Total interest income rose to $3.5 million for the second quarter, up 51.8% year-over-year, driven by increased loan and other interest-earning asset yields. The net interest margin improved to 3.72%, up from 2.97% in the prior year, reflecting a favorable shift in interest rates.

In terms of financial position, Catalyst Bancorp's total assets increased by 9.0% to $295.3 million as of June 30, 2024, compared to $270.9 million at the end of 2023. The growth was primarily attributed to a rise in cash and cash equivalents, which reached $75.5 million, up from $19.0 million at year-end. Loans receivable also saw an increase, totaling $153.3 million, a 5.8% rise from December 31, 2023. Conversely, total investment securities decreased significantly by 48.6% to $43.2 million, largely due to the sale of securities resulting in a loss of $5.5 million.

The company’s deposit base grew by 8.7% to $180.1 million, with non-interest-bearing demand deposits increasing to $30.2 million. Borrowings surged by 56.2% to $30.3 million, reflecting the company's strategy to leverage additional funding sources. The total shareholders' equity decreased by 4.2% to $81.0 million, influenced by share repurchases totaling 282,799 shares at an average cost of $12.05 during the first half of 2024.

Operationally, Catalyst Bancorp has shifted its focus towards a community banking model, targeting small to mid-sized businesses while continuing to serve its traditional customer base. The company has also upgraded its core processing system, which contributed to a reduction in non-interest expenses by 5.6% in the second quarter. However, total non-interest expenses for the first half of 2024 increased by 11.0% compared to the previous year, primarily due to costs associated with the system upgrade.

Looking ahead, Catalyst Bancorp anticipates continued growth in its loan portfolio and deposit base, supported by its strategic focus on community banking. The company remains committed to maintaining a strong liquidity position and managing its capital effectively to navigate potential market fluctuations and economic conditions.