Catalyst Bancorp, Inc. Announces 2021 Third Quarter Results
OPELOUSAS, La., Oct. 28, 2021 /PRNewswire/ -- Catalyst Bancorp, Inc. (Nasdaq: "CLST") (the "Company"), the parent company for St Landry Homestead Federal Savings Bank, N.A. (the "Bank") (www.stlandryhomestead.com), reported financial results for the Bank for the third quarter of 2021. For the quarter, the Bank reported net income of $1.4 million, compared to $260,000 for the second quarter of 2021. The increase during the third quarter was primarily due to a Community Development Financial Institution ("CDFI") Rapid Response Program grant recognized in non-interest income.
"Upon the successful completion of our IPO, we are now at the starting line for what we expect to be a demanding and highly productive season in our 98+ year history," said Joe Zanco, President and Chief Executive Officer of the Company and the Bank. "We're focusing our investments on people and technology to build a bank known for fueling business and improving lives."
Completion of Stock Offering
The Company completed its initial public offering 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 (the "Common Stock") for an aggregate of $52,900,000 in total offering proceeds, including shares sold to the Company's employee stock ownership plan. Trading in the Common Stock commenced on the Nasdaq Capital Market on October 13, 2021 under the symbol "CLST".
Loans and Credit Quality
Loans receivable totaled $136.7 million at September 30, 2021, down $3.6 million, or 2.5%, from June 30, 2021. The reduction was primarily due to principal repayments and payoffs on one- to four-family residential mortgage loans. Small Business Administration Paycheck Protection Program ("PPP") loans, which are included in commercial and industrial loans, decreased $490,000 during the third quarter. The remaining balance of PPP loans was $3.4 million at September 30, 2021.
The following table sets forth the composition of the Bank's loan portfolio as of the dates indicated.
September 30, | June 30, | Increase/Decrease | |||||||
(Dollars in thousands) | 2021 | 2021 | Amount | Percentage | |||||
Real estate loans | |||||||||
One- to four-family residential | $ 88,595 | $ 91,778 | $ (3,183) | (3) | % | ||||
Commercial real estate | 28,135 | 28,217 | (82) | (-) | |||||
Construction & land | 4,417 | 4,527 | (110) | (2) | |||||
Multi-family residential | 4,648 | 4,344 | 304 | 7 | |||||
Farmland | 26 | 27 | (1) | (4) | |||||
Total real estate loans | 125,821 | 128,893 | (3,072) | (2) | |||||
Other loans | |||||||||
Consumer | 4,912 | 4,667 | 245 | 5 | |||||
Commercial and industrial | 5,987 | 6,728 | (741) | (11) | |||||
Total other loans | 10,899 | 11,395 | (496) | (4) | |||||
Total loans | $ 136,720 | $ 140,288 | $ (3,568) | (3) | % | ||||
Non-performing assets ("NPAs") totaled $1.8 million at September 30, 2021, down $157,000, or 7.9%, compared to $2.0 million at June 30, 2021. The ratio of NPAs to total assets was 0.59% at September 30, 2021, compared to 0.83% at June 30, 2021. Nonperforming loans ("NPLs") totaled $1.4 million at September 30, 2021, up $34,000 or 2.4%, compared to June 30, 2021. The ratio of NPLs to total assets was 0.46% at September 30, 2021, compared to 0.58% at June 30, 2021.
The following table summarizes the Bank's non-performing assets as of the dates indicated.
September 30, | June 30, | Increase/Decrease | |||||||
(Dollars in thousands) | 2021 | 2021 | Amount | Percentage | |||||
Non-accruing loans | $ 1,264 | $ 1,252 | $ 12 | 1 | % | ||||
Accruing loans 90 days or more past due | 165 | 143 | 22 | 15 | |||||
Total non-performing loans | 1,429 | 1,395 | 34 | 2 | |||||
Real estate owned | 399 | 590 | (191) | (32) | |||||
Total non-performing assets | $ 1,828 | $ 1,985 | $ (157) | (8) | % | ||||
The Bank recorded net loan charge-offs of $3,000 during the third quarter of 2021, compared to net loan charge-offs of $27,000 for the second quarter of 2021. The Bank recorded no provision for loan losses for the third quarter of 2021, compared to a reversal of provision of $286,000 for the second quarter of 2021.
The ratio of the allowance for loan losses to total loans was 1.94% at September 30, 2021, compared to 1.89% at June 30, 2021.
Deposits
Total deposits were $249.5 million at September 30, 2021, up $71.9 million, or 40%, from June 30, 2021. The increase in total deposits was due to $72.9 million in cash received for subscriptions to purchase shares of the Company's common stock in its initial public offering. The net proceeds of the initial public offering will be reflected in the Company's shareholders' equity at December 31, 2021. The following table sets forth the composition of the Bank's deposits as of the dates indicated.
September 30, | June 30, | Increase/Decrease | |||||||
(Dollars in thousands) | 2021 | 2021 | Amount | Percentage | |||||
Demand Deposits | $ 102,091 | $ 28,720 | $ 73,371 | 255 | % | ||||
Savings | 25,147 | 24,911 | 236 | 1 | |||||
Money Market | 18,578 | 17,301 | 1,277 | 7 | |||||
NOW | 34,796 | 36,879 | (2,083) | (6) | |||||
Certificates of Deposit | 68,848 | 69,766 | (918) | (1) | |||||
Total Deposits | $ 249,460 | $ 177,577 | $ 71,883 | 40 | % | ||||
Net Interest Income
Net interest income for the third quarter of 2021 was $1.7 million, down $149,000, or 8.2%, from the second quarter of 2021 primarily due to a decrease in PPP loan fee income of $104,000. The following table sets forth, for the periods indicated, the Bank's total dollar amount of interest 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 | ||||||||||||||
September 30, 2021 | June 30, 2021 | |||||||||||||
(Dollars in thousands) | Average | Interest | Average | Average | Interest | Average | ||||||||
Interest-earning assets: | ||||||||||||||
Loans receivable(1) | $ 134,370 | $ 1,671 | 4.93 | % | $ 140,210 | $ 1,865 | 5.34 | % | ||||||
Investment securities | 61,910 | 172 | 1.10 | 49,929 | 142 | 1.14 | ||||||||
Other interest-earning assets | 36,505 | 13 | 0.14 | 30,192 | 10 | 0.13 | ||||||||
Total interest-earning assets | 232,785 | 1,856 | 3.17 | 220,331 | 2,017 | 3.67 | ||||||||
Non-interest-earning assets | 20,361 | 17,595 | ||||||||||||
Total assets | $ 253,146 | $ 237,926 | ||||||||||||
Interest-bearing liabilities: | ||||||||||||||
Savings, NOW and money market accounts | 81,650 | 26 | 0.12 | 78,600 | 26 | 0.13 | ||||||||
Certificates of deposit | 69,076 | 98 | 0.56 | 69,314 | 109 | 0.63 | ||||||||
Total deposits | 150,726 | 124 | 0.33 | 147,914 | 135 | 0.37 | ||||||||
FHLB advances | 8,966 | 68 | 3.04 | 8,898 | 69 | 3.07 | ||||||||
Total interest-bearing liabilities | 159,692 | 192 | 0.48 | 156,812 | 204 | 0.52 | ||||||||
Non-interest-bearing liabilities | 42,534 | 30,740 | ||||||||||||
Total liabilities | 202,226 | 187,552 | ||||||||||||
Retained earnings | 50,920 | 50,374 | ||||||||||||
Total liabilities and retained earnings | $ 253,146 | $ 237,926 | ||||||||||||
Net interest-earning assets | $ 73,093 | $ 63,519 | ||||||||||||
Net interest income; average interest rate spread | $ 1,664 | 2.69 | % | $ 1,813 | 3.15 | % | ||||||||
Net interest margin(2) | 2.84 | % | 3.30 | % | ||||||||||
Average interest-earning assets to average interest-bearing liabilities | 145.77 | % | 140.51 | % | ||||||||||
(1) | Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts, loans in-process and allowance for loan losses. |
(2) | Equals net interest income divided by average interest-earning assets. |
Non-interest Income
Non-interest income for the third quarter of 2021 was $2.0 million, up $1.8 million, or 966.2%, from the second quarter of 2021 due primarily to the receipt and recognition into income of a CDFI Rapid Response Program grant during the quarter totaling $1.8 million.
Non-interest Expense
Non-interest expense for the third quarter of 2021 totaled $1.9 million, down $84,000, or 4.2%, compared to the second quarter of 2021. The decrease primarily resulted from lower salaries and employee benefits and legal, accounting and consulting expenses, partially offset by higher occupancy and equipment and computer service expenses during the third quarter of 2021. During the second quarter of 2021, the Bank incurred a $50,000 loss, recorded in other non-interest expense, due to a wire transfer fraud.
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.
ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK | |||||||||||
STATEMENTS OF FINANCIAL CONDITION | |||||||||||
(Unaudited) | (Unaudited) | ||||||||||
September 30, | June 30, | % | December 31, | % | |||||||
(Dollars in thousands) | 2021 | 2021 | Change | 2020 | Change | ||||||
ASSETS | |||||||||||
Non-interest-bearing cash | $ 5,117 | $ 6,426 | (20) | % | $ 5,507 | (7) | % | ||||
Interest-bearing cash and due from banks | 95,287 | 22,661 | 320 | 19,738 | 383 | ||||||
Total cash and cash equivalents | 100,404 | 29,087 | 245 | 25,245 | 298 | ||||||
Investment securities: | |||||||||||
Securities available-for-sale, at fair value | 49,682 | 41,856 | 19 | 20,730 | 140 | ||||||
Securities held-to-maturity | 13,504 | 15,511 | (13) | 17,523 | (23) | ||||||
Loans receivable, net of unearned income | 136,720 | 140,288 | (3) | 151,800 | (10) | ||||||
Allowance for loan losses | (2,646) | (2,649) | — | (3,022) | 12 | ||||||
Loans receivable, net | 134,074 | 137,639 | (3) | 148,778 | (10) | ||||||
Accrued interest receivable | 511 | 558 | (8) | 564 | (9) | ||||||
Foreclosed real estate | 399 | 590 | (32) | 415 | (4) | ||||||
Premises and equipment, net | 6,658 | 6,545 | 2 | 5,489 | 21 | ||||||
Stock in Federal Home Loan Bank, at cost | 1,398 | 1,398 | — | 1,394 | — | ||||||
Bank-owned life insurance | 3,280 | 3,258 | 1 | 3,213 | 2 | ||||||
Other assets | 1,653 | 1,887 | (12) | 1,337 | 24 | ||||||
TOTAL ASSETS | $ 311,563 | $ 238,329 | 31 | % | $ 224,688 | 39 | % | ||||
LIABILITIES | |||||||||||
Deposits: | |||||||||||
Non-interest-bearing | $ 102,091 | $ 28,720 | 255 | % | $ 26,169 | 290 | % | ||||
Interest-bearing | 147,369 | 148,857 | (1) | 138,429 | 6 | ||||||
Total deposits | 249,460 | 177,577 | 40 | 164,598 | 52 | ||||||
Advances from Federal Home Loan Bank | 8,973 | 8,928 | 1 | 8,838 | 2 | ||||||
Other liabilities | 1,130 | 1,092 | 3 | 719 | 57 | ||||||
TOTAL LIABILITIES | 259,563 | 187,597 | 38 | 174,155 | 49 | ||||||
EQUITY | |||||||||||
Retained earnings | 52,270 | 50,837 | 3 | 50,426 | 4 | ||||||
Accumulated other comprehensive (loss) income | (270) | (105) | (157) | 107 | (352) | ||||||
TOTAL EQUITY | 52,000 | 50,732 | 3 | 50,533 | 3 | ||||||
TOTAL LIABILITIES AND EQUITY | $ 311,563 | $ 238,329 | 31 | % | $ 224,688 | 39 | % | ||||
ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK | |||||||||||||
STATEMENTS OF INCOME | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | % | September 30, | % | ||||||||||
(Dollars in thousands) | 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||
INTEREST INCOME | |||||||||||||
Loans receivable, including fees | $ 1,671 | $ 1,971 | (15) | % | $ 5,344 | $ 5,938 | (10) | % | |||||
Investment securities | 172 | 182 | (5) | 434 | 475 | (9) | |||||||
Other | 13 | 16 | (19) | 37 | 85 | (56) | |||||||
Total interest income | 1,856 | 2,169 | (14) | 5,815 | 6,498 | (11) | |||||||
INTEREST EXPENSE | |||||||||||||
Deposits | 124 | 231 | (46) | 414 | 738 | (44) | |||||||
Advances from Federal Home Loan Bank | 68 | 199 | (66) | 204 | 596 | (66) | |||||||
Total interest expense | 192 | 430 | (55) | 618 | 1,334 | (54) | |||||||
Net interest income | 1,664 | 1,739 | (4) | 5,197 | 5,164 | 1 | |||||||
Provision for (reversal of) loan losses | — | 600 | (100) | (286) | 665 | (143) | |||||||
Net interest income after provision for (reversal of) loan losses | 1,664 | 1,139 | 46 | 5,483 | 4,499 | 22 | |||||||
NON-INTEREST INCOME | |||||||||||||
Service charges on deposit accounts | 165 | 147 | 12 | 448 | 428 | 5 | |||||||
Gain on sale of fixed assets | — | — | — | 24 | 16 | 50 | |||||||
Bank-owned life insurance | 23 | 17 | 35 | 67 | 50 | 34 | |||||||
Federal community development grant | 1,826 | — | — | 1,826 | — | — | |||||||
Other | 11 | 24 | (54) | 37 | 51 | (27) | |||||||
Total non-interest income | 2,025 | 188 | 977 | 2,402 | 545 | 341 | |||||||
NON-INTEREST EXPENSE | |||||||||||||
Salaries and employee benefits | 1,084 | 945 | 15 | 3,331 | 2,832 | 18 | |||||||
Occupancy and equipment | 215 | 178 | 21 | 598 | 490 | 22 | |||||||
Computer services | 171 | 135 | 27 | 479 | 392 | 22 | |||||||
Legal, accounting and consulting | 88 | 64 | 38 | 255 | 165 | 55 | |||||||
Foreclosed assets, net | 39 | 220 | (82) | 74 | 271 | (73) | |||||||
ATM and debit card | 48 | 38 | 26 | 137 | 111 | 23 | |||||||
Advertising and marketing | 14 | 19 | (26) | 35 | 75 | (53) | |||||||
Directors' fees | 70 | 80 | (13) | 211 | 240 | (12) | |||||||
Other | 154 | 158 | (3) | 456 | 424 | 8 | |||||||
Total non-interest expense | 1,883 | 1,837 | 3 | 5,576 | 5,000 | 12 | |||||||
Income (loss) before income tax expense | 1,806 | (510) | 454 | 2,309 | 44 | 5,148 | |||||||
Income tax expense (benefit) | 373 | (106) | 452 | 465 | 33 | 1,309 | |||||||
NET INCOME (LOSS) | $ 1,433 | $ (404) | 455 | % | $ 1,844 | $ 11 | 16,664 | % | |||||
ST LANDRY HOMESTEAD FEDERAL SAVINGS BANK | |||||||||||
SELECTED FINANCIAL DATA | |||||||||||
Three Months Ended | |||||||||||
September 30, | % | % | |||||||||
(Dollars in thousands) | 2021 | 2020 | Change | June 30, 2021 | Change | ||||||
Earnings Data | |||||||||||
Total interest income | $ 1,856 | $ 2,169 | (14) | % | $ 2,017 | (8) | % | ||||
Total interest expense | 192 | 430 | (55) | 204 | (6) | ||||||
Net interest income | 1,664 | 1,739 | (4) | 1,813 | (8) | ||||||
Provision for (reversal of) loan losses | — | 600 | (100) | (286) | 100 | ||||||
Total non-interest income | 2,025 | 188 | 977 | 190 | 966 | ||||||
Total non-interest expense | 1,883 | 1,837 | 3 | 1,967 | (4) | ||||||
Income tax expense (benefit) | 373 | (106) | 452 | 62 | 502 | ||||||
Net income (loss) | $ 1,433 | $ (404) | 455 | $ 260 | 451 | ||||||
Average Balance Sheet Data | |||||||||||
Total assets | $ 253,146 | $ 239,445 | 6 | % | $ 237,926 | 6 | % | ||||
Total interest-earning assets | 232,785 | 224,303 | 4 | 220,331 | 6 | ||||||
Total loans | 134,370 | 159,542 | (16) | 140,210 | (4) | ||||||
Total interest-bearing deposits | 150,726 | 135,284 | 11 | 147,914 | 2 | ||||||
Total interest-bearing liabilities | 159,692 | 160,284 | (0) | 156,812 | 2 | ||||||
Total deposits | 191,060 | 161,293 | 18 | 177,749 | 7 | ||||||
Total equity | 50,920 | 51,954 | (2) | 50,374 | 1 | ||||||
Selected Ratios | |||||||||||
Return on average assets | 0.57 | % | (0.17) | % | 0.11 | % | |||||
Return on average equity | 2.81 | (0.78) | 0.52 | ||||||||
Common equity Tier 1 capital ratio | 38.94 | 39.30 | 41.92 | ||||||||
Efficiency ratio | 51.04 | 95.33 | 98.20 | ||||||||
Average equity to average assets | 20.11 | 21.70 | 21.17 | ||||||||
Tier 1 leverage capital ratio | 20.65 | 21.44 | 21.34 | ||||||||
Total risk-based capital ratio | 40.20 | 40.56 | 43.18 | ||||||||
Net interest margin | 2.84 | 3.08 | 3.30 | ||||||||
For further information contact:
Joe Zanco, President and CEO
(337) 948-3033
SOURCE Catalyst Bancorp, Inc.
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