PR Newswire | Jan 27, 2022 07:31AM EST

01/27 06:30 CST

Catalyst Bancorp, Inc. Announces 2021 Fourth Quarter Results OPELOUSAS, La., Jan. 27, 2022

OPELOUSAS, La., Jan. 27, 2022 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for St Landry Homestead Federal Savings Bank (the "Bank") (www.stlandryhomestead.com), reported financial results for the fourth quarter of 2021. For the quarter, the Company reported net income of $83,000, compared to $1.4 million for the third quarter of 2021. For the year ended December 31, 2021, net income totaled $1.9 million, up $2.6 million, compared to the net loss reported for 2020. During the third quarter of 2021, the Company received and recognized into income a Community Development Financial Institution ("CDFI") Rapid Response Program grant totaling $1.8 million.

"We had tremendous success in 2021, from completing our IPO to the addition of several outstanding bankers who have joined our team," said Joe Zanco, President and Chief Executive Officer of the Company and the Bank. "As we continue to position our company for growth, our investments in 2022 will be focused on our team, advancing our technology and re-branding the bank."

Completion of Stock Offering

The Company completed its initial public offering ("IPO") of stock in connection with the Bank's conversion from the mutual to the stock form of organization on October 12, 2021. The Company issued a total of 5,290,000 shares of its common stock for an aggregate of $52,900,000 in total offering proceeds, including shares sold to the Company's employee stock ownership plan ("ESOP"). The Company made a loan to the ESOP in the amount of $4.2 million, which the ESOP used to purchase 423,200 shares. The net proceeds of the IPO of $50.9 million are reflected in the Company's shareholder's equity at December 31, 2021. The Company's common stock trades on the Nasdaq Capital Market under the symbol "CLST".

Loans and Credit Quality

Loans receivable totaled $131.8 million at December 31, 2021, down $4.9 million, or 4%, from September 30, 2021. The decrease was primarily due to declines in commercial real estate loans (down $5.0 million, or 18%) and one- to four-family residential mortgage loans (down 1.3 million, or 1%), partially offset by an increase in commercial and industrial loans (up $2.4 million, or 40%).

The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.



(Dollars in thousands) 12/31/20219/30/2021Increase (Decrease)

Real estate loans

One- to four-family residential$ 87,303 $88,595 $ (1,292)(1) %

Commercial real estate 23,112 28,135 (5,023)(18)

Construction and land 4,079 4,443 (364) (8)

Multi-family residential 4,589 4,648 (59) (1)

Total real estate loans 119,083 125,821 (6,738)(5)

Other loans

Commercial and industrial 8,374 5,987 2,387 40

Consumer 4,385 4,912 (527) (11)

Total other loans 12,759 10,899 1,860 17

Total loans $ 131,842$136,720$ (4,878)(4) %

Commercial real estate loans were down primarily due to the pay-off of a $4.3 million hotel relationship. Small Business Administration Paycheck Protection Program ("PPP") loans, included in commercial and industrial loans, decreased $605,000, or 19%, from September 30, 2021. At December 31, 2021, PPP loans totaled $2.6 million, net of deferred fees of $186,000.

Non-performing assets ("NPAs") totaled $1.2 million at December 31, 2021, down $86,000, or 7%, compared to $1.3 million at September 30, 2021. The ratio of NPAs to total assets was 0.43% at December 31, 2021, compared to 0.42% at September 30, 2021. Nonperforming loans ("NPLs") totaled $890,000 at December 31, 2021, down $27,000 or 3%, compared to September 30, 2021. The ratio of NPLs to total loans was 0.68% at December 31, 2021, compared to 0.67% at September 30, 2021.

The following table summarizes the Company's non-performing assets as of the dates indicated.



(Dollars in thousands) 12/31/20219/30/2021Increase (Decrease)

Non-accruing loans $ 890 $ 752 $ 138 18 %

Accruing loans 90 days or more past due 1 165 (164) (99)

Total non-performing loans 891 917 (26) (3)

Real estate owned 340 399 (59) (15)

Total non-performing assets $ 1,231 $ 1,316 $ (85) (6) %

The Bank recorded net loan recoveries of $4,000 during the fourth quarter of 2021, compared to net loan charge-offs of $3,000 for the third quarter of 2021.

The ratio of the allowance for loan losses to total loans was 1.73% at December 31, 2021, compared to 1.94% at September 30, 2021.The Company recorded a reversal to the allowance for loan losses of $374,000 during the fourth quarter of 2021 as our assessment of the impact of the COVID-19 pandemic on our borrowers continued to improve. For the year ended December 31, 2021, the reversal to the allowance totaled $660,000.

Investment Securities

Total investment securities were $101.8 million at December 31, 2021, up $38.7 million, or 61%, from September 30, 2021. During the fourth quarter of 2021, the Company deployed $41.9 million of the proceeds from our IPO into the investment securities portfolio. For the fourth quarter of 2021, the average yield on the investment securities portfolio was 1.21%, up 11 basis points from the third quarter of 2021.

The following table sets forth the composition of the Company's investment securities portfolio as of the dates indicated.



(Dollars in thousands) 12/31/20219/30/2021Increase (Decrease)

Available-for-sale, at fair value

Mortgage-backed securities $ 74,663 $ 45,204$ 29,459 65 %

U. S. government and agency obligations 9,237 1,929 7,308 379

Municipal obligations 4,439 2,549 1,890 74

Total available-for-sale, at fair value 88,339 49,682 38,657 78

Held-to-maturity

U. S. government and agency obligations 13,019 13,023 (4) -

Municipal obligations 479 481 (2) -

Total held-to-maturity 13,498 13,504 (6) -

Total investment securities $ 101,837$ 63,186$ 38,651 61 %

Deposits

Total deposits were $176.8 million at December 31, 2021, down $72.7 million, or 29%, from September 30, 2021. During the third quarter of 2021, the Company received $72.9 million in deposits for subscriptions to purchase shares of the Company's common stock in its IPO. On October 12, 2021, the Company completed its IPO and issued a total of 5,290,000 shares for net proceeds of $50.9 million. The net proceeds of the offering are reflected in the Company's shareholder's equity at December 31, 2021. The amount of deposits received for subscriptions to purchase shares in excess of the gross IPO proceeds were returned to the original subscribers.

The following table sets forth the composition of the Bank's deposits as of the dates indicated.



(Dollars in thousands) 12/31/20219/30/2021Increase (Decrease)

Demand deposits $30,299 $102,091$(71,792)(70) %

Savings 26,698 25,147 1,551 6

Money market 18,878 18,578 300 2

NOW 34,357 34,796 (439) (1)

Certificates of deposit 66,563 68,848 (2,285) (3)

Total deposits $176,795 $249,460$(72,665)(29) %

Net Interest Income

Net interest income for the fourth quarter of 2021 was $1.7 million, up $43,000, or 3%, from the third quarter of 2021 primarily due to an increase in interest income from investment securities (up $68,000, or 40%) and a decrease in interest expense on deposits (down $15,000, or 12%). The impact of the change in income from investment securities and interest expense on deposits was partially offset by a decrease in interest income on loans (down $50,000, or 3%).

The following table sets forth, for the periods indicated, the Bank's total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. All average balances are based on daily balances.



Three Months Ended

12/31/2021 9/30/2021

Average AverageAverage Average(Dollars in thousands) Balance InterestYield/ Balance InterestYield/ Rate Rate

INTEREST-EARNING ASSETS

Loans receivable^(1) $137,190$1,621 4.69 %$137,001$1,671 4.84 %

Investment securities 78,455 240 1.21 61,910 172 1.10

Other interest earning assets 58,706 23 0.15 36,505 13 0.14

Total interest-earning assets $274,351$1,884 2.72 %$235,416$1,856 3.13 %

INTEREST-BEARING LIABILITIES

Savings, NOW and money market accounts $78,822 $24 0.12 %$81,650 $26 0.12 %

Certificates of deposit 67,798 85 0.49 69,076 98 0.56

Total interest-bearing deposits 146,620 109 0.29 150,726 124 0.33

FHLB advances 8,989 68 3.03 8,966 68 3.04

Total interest-bearing liabilities $155,609$177 0.45 %$159,692$192 0.48 %

Net interest-earning assets $118,742 $75,724

Net interest income; average interest rate spread $1,707 2.27 % $1,664 2.65 %

Net interest margin^(2) 2.47 % 2.80 %

(1) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and loans in-process.

(2) Equals net interest income divided by average interest-earning assets.

Non-interest Income

Non-interest income for the fourth quarter of 2021 was $224,000, down $1.8 million, or 89%, from the third quarter of 2021. During the third quarter of 2021, the Company received and recognized into non-interest income a CDFI Rapid Response Program grant totaling $1.8 million.

Non-interest Expense

Non-interest expense for the fourth quarter of 2021 totaled $2.2 million, up $317,000, or 17%, compared to the third quarter of 2021.

Salaries and employee benefits expense totaled $1.3 million for the fourth quarter of 2021, up $216,000, or 20%, from the third quarter of 2021. The increase was primarily due to the addition of bankers to our team, severance costs and the commencement of the ESOP.

Data processing and communication expense totaled $234,000 for the fourth quarter of 2021, up $33,000, or 16%, from the third quarter of 2021 primarily due to the cost of additional technology resources for public company reporting and a new Lafayette branch location.

Professional service fees totaled $133,000 for the fourth quarter of 2021, up $45,000, or 51%, from the third quarter of 2021 mainly due to public company audit and legal services.

Other non-interest expense totaled $172,000 for the fourth quarter of 2021, up $48,000, or 39%, from the third quarter of 2021 primarily due to cost increases driven by our IPO, such as Nasdaq listing fees and increased insurance costs.

About St. Landry Homestead Federal Savings Bank

Founded in 1922, St. Landry Homestead Federal Savings Bank, is a federally chartered savings bank that serves the banking needs of customers in the Acadiana region of south-central Louisiana. We serve our customers through six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. Our team is focused on fueling business and improving lives across our region. By working together, we can grow our economy and provide our children with the opportunity to raise their families in Acadiana.

Forward-looking Statements

This press release contains certain forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business of Catalyst Bancorp, Inc. and St. Landry Homestead Federal Savings Bank, and changes in the securities markets. Except as required by law, the Company does not undertake any obligation to update any forward-looking statements to reflect changes in belief, expectations or events.



CATALYST BANCORP, INC. AND SUBSIDIARY

STATEMENTS OF FINANCIAL CONDITION



(Unaudited)(Unaudited)

(Dollars in thousands) 12/31/2021 9/30/2021^(1)12/31/2020^(1)

ASSETS

Non-interest-bearing cash $ 4,933 $ 5,117 $ 5,507

Interest-bearing cash and due from banks 35,951 95,287 19,738

Total cash and cash equivalents 40,884 100,404 25,245

Investment securities:

Securities available-for-sale, at fair value 88,339 49,682 20,730

Securities held-to-maturity 13,498 13,504 17,523

Loans receivable, net of unearned income 131,842 136,720 151,800

Allowance for loan losses (2,276) (2,646) (3,022)

Loans receivable, net 129,566 134,074 148,778

Accrued interest receivable 579 511 564

Foreclosed real estate 340 399 415

Premises and equipment, net 6,577 6,658 5,489

Stock in Federal Home Loan Bank, at cost 1,399 1,398 1,394

Bank-owned life insurance 3,303 3,280 3,213

Other assets 864 1,653 1,337

TOTAL ASSETS $ 285,349 $ 311,563 $ 224,688



LIABILITIES

Deposits:

Non-interest-bearing $ 30,299 $ 102,091 $ 26,169

Interest-bearing 146,496 147,369 138,429

Total deposits 176,795 249,460 164,598

Federal Home Loan Bank advances 9,018 8,973 8,838

Other liabilities 1,190 1,130 719

TOTAL LIABILITIES 187,003 259,563 174,155



SHAREHOLDERS' EQUITY

Common stock 53 - -

Additional paid-in capital 50,801 - -

Unallocated common stock held by Employee Stock Ownership Plan (4,179) - -

Retained earnings 52,354 52,270 50,426

Accumulated other comprehensive (loss) income (683) (270) 107

TOTAL SHAREHOLDERS' EQUITY 98,346 52,000 50,533

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 285,349 $ 311,563 $ 224,688

(1) Data at September 30, 2021 and December 31, 2020 are Bank-only.



CATALYST BANCORP, INC. AND SUBSIDIARY

STATEMENTS OF INCOME

(Unaudited)



Three Months Ended Year Ended

(Dollars in thousands) 12/31/20219/30/2021^(1)12/31/2020^(1)12/31/202112/31/2020^(1)

INTEREST INCOME

Loans receivable, including fees $ 1,621$1,671 $1,889 $ 6,965$7,827

Investment securities 240 172 93 674 568

Other 23 13 10 60 95

Total interest income 1,884 1,856 1,992 7,699 8,490

INTEREST EXPENSE

Deposits 109 124 182 523 920

Advances from Federal Home Loan Bank 68 68 189 272 785

Total interest expense 177 192 371 795 1,705

Net interest income 1,707 1,664 1,621 6,904 6,785

(Reversal of) provision for loan losses (374) - 320 (660) 985

Net interest income after (reversal of) 2,081 1,664 1,301 7,564 5,800 provision for loan losses

NON-INTEREST INCOME

Service charges on deposit accounts 193 165 147 641 575

Gain on sale of fixed assets - - - 24 16

Bank-owned life insurance 23 23 20 90 70

Federal community development grant - 1,826 203 1,826 203

Other 8 11 51 45 102

Total non-interest income 224 2,025 421 2,626 966

NON-INTEREST EXPENSE

Salaries and employee benefits 1,300 1,084 812 4,631 3,644

Occupancy and equipment 220 215 188 818 678

Data processing and communication 234 201 171 790 612

Professional fees 133 88 108 388 273

Directors' fees 68 70 (21) 279 219

ATM and debit card 64 48 40 201 151

Foreclosed assets, net 1 39 16 75 287

Advertising and marketing 8 14 11 43 86

Prepayment penalties on FHLB advances - - 1,510 - 1,510

Other 172 124 108 551 483

Total non-interest expense 2,200 1,883 2,943 7,776 7,943

Income (loss) before income tax expense 105 1,806 (1,221) 2,414 (1,177)

Income tax expense (benefit) 22 373 (507) 487 (474)

NET INCOME (LOSS) $ 83 $1,433 $(714) $ 1,927$(703)



Earnings per share - basic $ 0.02 $N/A $N/A $ 0.40 $N/A

(1) Data for the periods ended September 30, 2021 and December 31, 2020 are Bank-only.



CATALYST BANCORP, INC. AND SUBSIDIARY

SELECTED FINANCIAL DATA



Three Months Ended Year Ended

(Dollars in thousands) 12/31/2021 9/30/2021^(1) 12/31/2020^(1) 12/31/2021 12/31/2020^(1)

EARNINGS DATA

Total interest income $1,884 $ 1,856 $ 1,992 $7,699 $ 8,490

Total interest expense 177 192 371 795 1,705

Net interest income 1,707 1,664 1,621 6,904 6,785

(Reversal of) provision for loan losses (374) - 320 (660) 985

Total non-interest income 224 2,025 421 2,626 966

Total non-interest expense 2,200 1,883 2,943 7,776 7,943

Income tax expense (benefit) 22 373 (507) 487 (474)

Net income (loss) $83 $ 1,433 $ (714) $1,927 $ (703)



ALLOWANCE FOR LOANS LOSSES

Beginning balance $2,646 $ 2,649 $ 2,742 $3,022 $ 2,071

(Reversal of) provision for loan losses (374) - 320 (660) 985

Charge-offs - (18) (58) (150) (140)

Recoveries 4 15 18 64 106

Net recoveries (charge-offs) 4 (3) (40) (86) (34)

Ending balance $2,276 $ 2,646 $ 3,022 $2,276 $ 3,022



AVERAGE BALANCE SHEET DATA

Total assets $288,852 $ 253,146 $ 239,326 $252,571 $ 232,694

Total interest-earning assets 274,351 235,416 227,099 237,331 219,910

Total loans 137,190 137,001 157,132 141,592 161,208

Total interest-bearing deposits 146,620 150,726 137,372 146,968 132,336

Total interest-bearing liabilities 155,609 159,692 159,910 155,895 156,718

Total deposits 185,660 191,060 164,388 181,032 155,697

Total equity 92,942 50,920 51,235 61,323 51,600



SELECTED RATIOS

Return on average assets 0.11 % 2.25 % (1.19) % 0.76 % (0.30) %

Return on average equity 0.35 11.17 (5.54) 3.14 (1.36)

Efficiency ratio 113.93 51.04 144.12 81.59 102.48

Average equity to average assets 32.18 20.11 21.41 24.28 22.18

Common equity Tier 1 capital ratio^(2) 63.51 38.94 40.92 63.51 40.92

Tier 1 leverage capital ratio^(2) 27.38 20.65 21.06 27.38 21.06

Total risk-based capital ratio^(2) 64.77 40.20 42.29 64.77 42.29

Net interest margin 2.47 2.80 2.84 2.91 3.09

(1) Data at and for the periods ended September 30, 2021 and December 31, 2020 are Bank-only.

(2) Capital ratios are preliminary end-of-period ratios for the Bank only and are subject to change.

For more information:Joe Zanco, President and CEO(337) 948-3033

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SOURCE Catalyst Bancorp, Inc.