Catalyst Bancorp Reports Increased Net Income and Asset Growth in Q2 2023

Catalyst Bancorp, Inc. reported a modest financial performance for the second quarter of 2023, with net income reaching $39,000, a significant increase from $15,000 in the same period last year. For the first half of 2023, the company recorded a net income of $112,000, compared to a net loss of $126,000 for the first half of 2022. Total interest income rose by 18.2% to $2.3 million for the three months ended June 30, 2023, driven by higher yields on loans and investment securities. The average loan yield increased to 5.09%, up from 4.65% a year earlier, while total interest expense surged by 170.3% to $419,000, primarily due to rising rates on deposits.

In terms of asset management, Catalyst Bancorp's total assets increased by 1.0% to $266 million as of June 30, 2023, compared to $263.3 million at the end of 2022. The growth was largely attributed to a $6.3 million increase in cash and cash equivalents, which was offset by a slight decline in total loans, which decreased by $114,000 to $133.5 million. The company’s loan portfolio remains heavily weighted towards real estate, with one- to four-family residential loans accounting for 64.2% of total loans. The allowance for loan losses increased to $2.1 million, or 1.56% of total loans, reflecting the adoption of the new credit loss accounting standard, ASC 326.

Strategically, Catalyst Bancorp has been focusing on enhancing its capital structure and shareholder value. The company completed its first share repurchase plan in April 2023, buying back 360,458 shares at an average cost of $12.03 per share. This was followed by a second repurchase plan announced in April 2023, allowing for the purchase of an additional 252,000 shares. As of June 30, 2023, the company had $84.3 million in total shareholders' equity, down from $88.5 million at the end of 2022, primarily due to the stock repurchases.

Operationally, Catalyst Bancorp has seen a 3.8% increase in total deposits, which reached $171.4 million as of June 30, 2023. This growth was driven by an increase in public funds and commercial money market accounts. The company’s non-interest income for the first half of 2023 totaled $611,000, a slight increase from $576,000 in the same period last year, with notable growth in income from bank-owned life insurance. However, non-interest expenses decreased by 4.6% to $4.4 million, reflecting cost management efforts.

Looking ahead, Catalyst Bancorp remains focused on maintaining its capital adequacy and liquidity while navigating the challenges posed by rising interest rates and economic conditions. The company is well-capitalized, exceeding all regulatory requirements, and anticipates continued growth in its loan and deposit base, supported by its strategic initiatives and community-oriented banking model.