Catalyst Bancorp, Inc. Announces 2021 Fourth Quarter Results
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) | 12/31/2021 | 9/30/2021 | Increase (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) | 12/31/2021 | 9/30/2021 | Increase (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) | 12/31/2021 | 9/30/2021 | Increase (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) | 12/31/2021 | 9/30/2021 | Increase (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 | |||||||||||||||||
(Dollars in thousands) | Average Balance | Interest | Average Yield/ Rate | Average Balance | Interest | Average Yield/ 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) | 12/31/2021 | 9/30/2021(1) | 12/31/2020(1) | 12/31/2021 | 12/31/2020(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) provision for loan losses | 2,081 | 1,664 | 1,301 | 7,564 | 5,800 | ||||||||||
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
SOURCE Catalyst Bancorp, Inc.
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