Catalyst Bancorp, Inc. Announces 2024 Fourth Quarter Results

Catalyst Bancorp, Inc. (Nasdaq: “CLST”) (the “Company”), the parent company for Catalyst Bank (the “Bank”) (www.catalystbank.com), reported net income of $626,000 for the fourth quarter of 2024, up $179,000, or 40%, compared to net income of $447,000 for the third quarter of 2024.

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“Our loan growth momentum continued during the fourth quarter,” said JoeZanco, President and Chief Executive Officer of the Company and Bank. “For the year, the loan portfolio increased a record $22.2 million, or 15%. I'm incredibly proud of how effectively our team worked together to fuel the expansion of local businesses.”

“Given our incredibly strong capital base,” continued Zanco, “we are well positioned to continue our growth as the South Louisiana economy gains momentum.”

Loans

Loans totaled $167.1 million at December 31, 2024, up $1.2 million, or less than 1%, from September 30, 2024. The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.

(Dollars in thousands) 12/31/2024 9/30/2024 ChangeReal estate loansOne- to four-family residential $ 81,097 $ 81,433 $ (336) – %Commercial real estate 22,108 22,704 (596) (3)Construction and land 32,941 30,310 2,631 9Multi-family residential 2,570 2,622 (52) (2)Total real estate loans 138,716 137,069 1,647 1Other loansCommercial and industrial 26,439 26,507 (68) – %Consumer 1,921 2,306 (385) (17)Total other loans 28,360 28,813 (453) (2)Total loans $ 167,076 $ 165,882 $ 1,194 1

The following table presents certain major segments of our commercial real estate, construction and land, and commercial and industrial loan balances as of the dates indicated.

(Dollars in thousands) 12/31/2024 9/30/2024 ChangeCommercial real estateRetail $ 4,005 $ 4,154 $ (149) (3.6) %Hospitality 3,460 3,594 (134) (3.7)Restaurants 1,091 1,112 (21) (1.9)Oilfield services 402 411 (9) (2.2)Other non-owner occupied 2,658 2,780 (122) (4.4)Other owner occupied 10,492 10,653 (161) (1.5)Total commercial real estate $ 22,108 $ 22,704 $ (596) (2.6)Construction and landMulti-family residential $ 10,031 $ 8,353 $ 1,678 20.1 %Health service facilities 7,139 7,073 66 0.9Hospitality 2,716 2,716 – -Retail 5,106 3,339 1,767 52.9Other commercial construction and land 4,364 4,846 (482) (9.9)Consumer residential construction and land 3,585 3,983 (398) (10.0)Total construction and land $ 32,941 $ 30,310 $ 2,631 8.7Commercial and industrialOilfield services $ 14,823 $ 14,010 $ 813 5.8 %Industrial equipment 2,831 3,882 (1,051) (27.1)Professional services 3,127 2,910 217 7.5Other commercial and industrial 5,658 5,705 (47) (0.8)Total commercial and industrial loans $ 26,439 $ 26,507 $ (68) (0.3)

Credit Quality and Allowance for Credit Losses

At December 31, 2024, non-performing assets (“NPAs”) totaled $1.8 million, up $214,000, or 13%, from $1.6 million at September 30, 2024 primarily due to an increase in non-accruing residential loans. The ratio of NPAs to total assets was 0.66% and 0.57% at December 31 and September 30, 2024, respectively. Non-performing loans (“NPLs”) comprised 0.98% and 0.87% of total loans at December 31 and September 30, 2024, respectively. At December 31 and September 30, 2024, 98% of total NPLs were one- to four-family residential mortgage loans.

At December 31, 2024, the allowance for loan losses totaled $2.5 million, or 1.51% of total loans, compared to $2.4 million, or 1.46% of total loans, at September 30, 2024. A portion of the allowance for credit losses on unfunded lending commitments was transferred to the allowance for loan losses during the fourth quarter of 2024. The allowance for credit losses on unfunded lending commitments totaled $121,000 at December 31, 2024, down $110,000 from September 30, 2024. The provision for credit losses, inclusive of the provision for unfunded commitments, for the fourth quarter of 2024 was zero, compared to $337,000 for the third quarter of 2024. Net loan charge-offs totaled $2,000 during the fourth quarter of 2024, compared to net charge-offs of $131,000 for the third quarter of 2024. Net loan charge-offs during the third quarter of 2024 were primarily related to three commercial lines of credit.

Investment Securities

Total investment securities were $42.2 million, or 15% of total assets, at December 31, 2024, down $3.5 million, or 8%, compared to September 30, 2024, primarily due to pay-downs and maturities. Net unrealized losses on available-for-sale securities totaled $4.5 million at December 31, 2024, compared to net unrealized losses of $3.4 million at September 30, 2024.

At December 31, 2024 the amortized cost and fair value of pledged investment securities totaled $15.2 million and $14.2 million, respectively. These securities are pledged as collateral for public fund deposits. At September 30, 2024, the amortized cost and fair value of pledged investment securities totaled $35.3 million and $31.7 million, respectively. During the fourth quarter of 2024, the Bank's $20.0 million Bank Term Funding Program (“BTFP”) advance was paid off, which released the pledges on securities with total amortized cost and fair value of $21.0 million and $18.0 million, respectively, at September 30, 2024.

Deposits

Total deposits were $185.7 million at December 31, 2024, up $18.2 million, or 11%, from September 30, 2024, largely due to a seasonal increase in public funds. The following table sets forth the composition of the Company's deposits as of the dates indicated. The ratio of the Company's total loans to total deposits was 90% at December 31, 2024, compared to 99% at September 30, 2024.

(Dollars in thousands) 12/31/2024 9/30/2024 ChangeNon-interest-bearing demand deposits $ 28,281 $ 27,904 $ 377 1 %Interest-bearing demand deposits 48,334 33,751 14,583 43Money market 10,729 13,372 (2,643) (20)Savings 37,639 36,798 841 2Certificates of deposit 60,691 55,611 5,080 9Total deposits $ 185,674 $ 167,436 $ 18,238 11

Total public fund deposits amounted to $35.6 million, or 19% of total deposits, at December 31, 2024, compared to $21.0 million, or 13% of total deposits, at September 30, 2024. At December 31, 2024, approximately 83% of our total public fund deposits consisted of non-interest-bearing and interest-bearing demand deposits from municipalities within our market. The full amount of our public fund deposits in excess of the FDIC's insurance limit are secured by pledging investment securities and portions of a custodial letter of credit from the Federal Home Loan Bank of Dallas.

Capital and Share Repurchases

At December 31 and September 30, 2024, consolidated shareholders' equity totaled $80.2 million, or 29.0% of total assets, and $81.7 million, or 29.1% of total assets, respectively.

The Company repurchased 120,977 shares of its common stock at an average cost per share of $11.70 during the fourth quarter of 2024, compared to 79,400 shares at an average cost per share of $11.75 during the third quarter of 2024. Under the Company's November 2024 Repurchase Plan, 187,150 shares of the Company's common stock were available for repurchase at December 31, 2024. Since the announcement of our first share repurchase plan on January 26, 2023 and through December 31, 2024, the Company has repurchased a total of 1,011,850 shares of its common stock, or approximately 19% of the common shares originally issued, at an average cost per share of $11.93. At December 31, 2024, the Company had common shares outstanding of 4,278,150.

Net Interest Income

The net interest margin for the fourth quarter of 2024 was 3.92%, up six basis points compared to the prior quarter. For the fourth quarter of 2024, the average yield on interest-earning assets was 5.57%, down three basis points from the prior quarter, while the average rate paid on interest-bearing liabilities was 2.57%, down nine basis points from the third quarter of 2024.

Net interest income for the fourth quarter of 2024 was $2.5 million, down $60,000, or 2%, compared to the third quarter of 2024. Total interest income was down $160,000, or 4%, while total interest expense decreased $100,000, or 9%, in the fourth quarter of 2024 compared to the prior quarter. The changes in interest income and interest expense were largely due to the use of interest-earning cash to pay-off of the Bank's $20.0 million BTFP advance during the fourth quarter of 2024.

The following table sets forth, for the periods indicated, the Company'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. Taxable equivalent (“TE”) yields have been calculated using a marginal tax rate of 21%. All average balances are based on daily balances.

Three Months Ended 12/31/2024 9/30/2024(Dollars in thousands) Average Interest Average Average Interest Average Balance Yield/ Balance Yield/ Rate(TE) Rate(TE)INTEREST-EARNING ASSETSLoans receivable(1) $ 167,187 $ 2,814 6.70 % $ 161,410 $ 2,717 6.70 %Investment securities(2) 47,764 273 2.30 48,517 255 2.11Other interest earning assets 36,107 424 4.66 51,142 699 5.45Total interest-earning assets $ 251,058 $ 3,511 5.57 $ 261,069 $ 3,671 5.60INTEREST-BEARING LIABILITIESDemand deposits, money market, and $ 85,118 $ 394 1.84 % $ 85,164 $ 382 1.78 %savings accountsCertificates of deposit 57,031 465 3.24 55,910 448 3.19Total interest-bearing deposits 142,149 859 2.40 141,074 830 2.34Borrowings 18,663 180 3.85 29,502 309 4.17Total interest-bearing liabilities $ 160,812 $ 1,039 2.57 $ 170,576 $ 1,139 2.66Net interest-earning assets $ 90,246 $ 90,493Net interest income; average interest rate $ 2,472 3.00 % $ 2,532 2.94 %spreadNet interest margin(3) 3.92 3.86(1) Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and loans in-process.(2) Average investment securities does not include unrealized holding gains/losses on available-for-sale securities.(3) Equals net interest income divided by average interest-earning assets. Taxable equivalent yields are calculated using a marginal tax rate of 21%.

Non-interest Income

For the fourth quarter of 2024, non-interest income totaled $337,000, down $283,000 from $620,000 for the third quarter of 2024. During the third quarter of 2024, the Company recognized as income a $280,000 Bank Enterprise Award (“BEA”) Program grant from theCommunity Development Financial Institution (“CDFI”) Fund.

Non-interest Expense

Non-interest expense for the fourth quarter of 2024 totaled $2.0 million, down $222,000, or 10%, compared to the third quarter of 2024.

Data processing and communication expense totaled $179,000 for the fourth quarter of 2024, down $59,000, or 25%, compared to the third quarter of 2024. The decline in this expense was primarily driven by our transition to a new internet provider and a new contract for our loan document management solution.

Professional fees totaled $94,000 for the fourth quarter of 2024, down $57,000, or 38%, from the prior quarter. During the third quarter of 2024, professional fees associated with obtaining the BEA Program grant totaled $42,000.

Other noninterest expense totaled $167,000 for the fourth quarter of 2024, down $92,000, or 36%, from the prior quarter primarily due to declines in loan collection related expenses and lower fraud losses.

About Catalyst Bancorp, Inc.

Catalyst Bancorp, Inc. (Nasdaq: CLST) is a Louisiana corporation and registered bank holding company for Catalyst Bank, its wholly-owned subsidiary, with $276.7 million in assets at December 31, 2024. Catalyst Bank, formerly St. Landry Homestead Federal Savings Bank, has been in operation in the Acadiana region of south-central Louisiana for over 100 years. With a focus on fueling business and improving lives throughout the region, Catalyst Bank offers commercial and retail banking products through our six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. To learn more about Catalyst Bancorp and Catalyst Bank, visit www.catalystbank.com, or the website of the Securities and Exchange Commission, www.sec.gov.

Forward-looking Statements

This news release reflects industry conditions, Company performance and financial results and contains “forward-looking statements,' which may include forecasts of our financial results and condition, expectations for our operations and businesses, and our assumptions for those forecasts and expectations. Do not place undue reliance on forward-looking statements. These forward-looking statements are subject to a number of risk factors and uncertainties which could cause the Company's actual results and experience to differ materially from the anticipated results and expectation expressed in such forward-looking statements.

Factors that could cause our actual results to differ materially from our forward-looking statements are described under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Supervision and Regulation” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in other documents subsequently filed by the Company with the Securities and Exchange Commission, available at the SEC's website and the Company's website, each of which are referenced above. To the extent that statements in this news release relate to future plans, objectives, financial results or performance by the Company, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are generally identified by use of words such as “may,” “believe,” “expect,” “anticipate,” “intend,” “will,” “should,” “plan,” “estimate,” “predict,” “continue” and “potential” or the negative of these terms or other comparable terminology.

Forward-looking statements represent management's beliefs, based upon information available at the time the statements are made, with regard to the matters addressed; they are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed in or implied by such statements. All information is as of the date of this news release. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason.

CATALYST BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Unaudited)(Dollars in thousands) 12/31/2024 9/30/2024 12/31/2023ASSETSNon-interest-bearing cash $ 4,076 $ 3,625 $ 3,654Interest-bearing cash and due from banks 40,219 42,128 15,357Total cash and cash equivalents 44,295 45,753 19,011Investment securities:Securities available-for-sale, at fair value 28,712 32,196 70,540Securities held-to-maturity 13,447 13,450 13,461Loans receivable, net of unearned income 167,076 165,882 144,920Allowance for loan losses (2,522) (2,414) (2,124)Loans receivable, net 164,554 163,468 142,796Accrued interest receivable 851 815 906Foreclosed assets 194 173 60Premises and equipment, net 6,085 6,135 6,072Stock in correspondent banks, at cost 1,961 1,939 1,878Bank-owned life insurance 14,489 14,370 14,026Other assets 2,109 2,318 2,182TOTAL ASSETS $ 276,697 $ 280,617 $ 270,932LIABILITIESDeposits:Non-interest-bearing $ 28,281 $ 27,904 $ 28,183Interest-bearing 157,393 139,532 137,439Totaldeposits 185,674 167,436 165,622Borrowings 9,558 29,513 19,378Other liabilities 1,261 2,001 1,373TOTAL LIABILITIES 196,493 198,950 186,373SHAREHOLDERS' EQUITYCommon stock 43 44 48Additional paid-in capital 39,561 40,847 45,020Unallocated common stock held by benefit plans (5,702) (5,777) (6,221)Retained earnings 49,860 49,234 52,949Accumulated other comprehensive income (loss) (3,558) (2,681) (7,237)TOTAL SHAREHOLDERS' EQUITY 80,204 81,667 84,559TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 276,697 $ 280,617 $ 270,932CATALYST BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME(Unaudited) Three Months Ended Year Ended(Dollars in thousands) 12/31/2024 9/30/2024 12/31/2023 12/31/2024 12/31/2023INTEREST INCOMELoans receivable, including fees $ 2,814 $ 2,717 $ 2,066 $ 10,128 $ 7,238Investment securities 273 255 400 1,063 1,643Other 424 699 137 2,671 780Total interest income 3,511 3,671 2,603 13,862 9,661INTEREST EXPENSEDeposits 859 830 545 3,229 1,637Borrowings 180 309 114 1,088 319Total interest expense 1,039 1,139 659 4,317 1,956Net interest income 2,472 2,532 1,944 9,545 7,705Provision for credit losses – 337 128 531 128Net interest income after provision for 2,472 2,195 1,816 9,014 7,577credit lossesNON-INTEREST INCOMEService charges on deposit accounts 201 200 201 798 774Bank-owned life insurance 119 118 109 463 409Loss on sales of investment securities – – (92) (5,507) (92)Gain (loss) on disposals and sales of – – – 6 -fixed assetsFederal community development grant – 280 437 280 437Other 17 22 17 120 61Total non-interest income (loss) 337 620 672 (3,840) 1,589NON-INTEREST EXPENSESalaries and employee benefits 1,227 1,200 1,149 4,830 4,671Occupancy and equipment 193 193 193 765 802Data processing and communication 179 238 236 1,349 911Professional fees 94 151 140 469 486Directors' fees 116 116 118 461 463ATM and debit card 17 24 63 141 250Foreclosed assets, net 7 33 5 74 72Advertising and marketing 17 31 23 129 100Franchise and shares tax 21 15 10 67 81Other 167 259 185 872 743Total non-interest expense 2,038 2,260 2,122 9,157 8,579Income (loss) before income tax 771 555 366 (3,983) 587expense (benefit)Income tax expense (benefit) 145 108 59 (894) 61NET INCOME (LOSS) $ 626 $ 447 $ 307 $ (3,089) $ 526Earnings (loss) per share:Basic $ 0.16 $ 0.11 $ 0.08 $ (0.78) $ 0.12Diluted 0.16 0.11 0.08 (0.78) 0.12CATALYST BANCORP, INC. AND SUBSIDIARYSELECTED FINANCIAL DATA Three Months Ended Year Ended(Dollars in thousands) 12/31/2024 9/30/2024 12/31/2023 12/31/2024 12/31/2023EARNINGS DATATotal interest income $ 3,511 $ 3,671 $ 2,603 $ 13,862 $ 9,661Total interest expense 1,039 1,139 659 4,317 1,956Net interest income 2,472 2,532 1,944 9,545 7,705Provision for credit losses – 337 128 531 128Total non-interest income (loss) 337 620 672 (3,840) 1,589Total non-interest expense 2,038 2,260 2,122 9,157 8,579Income tax expense (benefit) 145 108 59 (894) 61Net income (loss) $ 626 $ 447 $ 307 $ (3,089) $ 526AVERAGE BALANCE SHEET DATATotal loans $ 167,187 $ 161,410 $ 140,757 $ 155,867 $ 135,713Total interest-earning assets 251,058 261,069 248,673 261,654 252,616Total assets 272,443 282,440 261,695 281,817 266,693Total interest-bearing deposits 142,149 141,074 134,181 143,250 136,321Total interest-bearing liabilities 160,812 170,576 147,197 169,643 146,529Total deposits 170,991 169,437 165,102 172,092 170,677Total shareholders' equity 80,988 81,307 82,265 81,480 84,777SELECTED RATIOSReturn on average assets 0.91 % 0.63 % 0.47 % (1.10) % 0.20 %Return on average equity 3.08 2.18 1.49 (3.79) 0.62Efficiency ratio 72.54 71.72 81.07 160.51 92.29Net interest margin(TE) 3.92 3.86 3.12 3.65 3.06Average equity to average assets 29.73 28.79 31.44 28.91 31.79Common equity Tier 1 capital ratio(1) 45.81 45.71 52.34Tier 1 leverage capital ratio(1) 28.73 27.43 31.67Total risk-based capital ratio(1) 47.07 46.97 53.59NON-FINANCIAL DATATotal employees (full-time equivalent) 49 48 48Common shares issued and outstanding, 4,278,150 4,399,127 4,761,326end of period(1) Capital ratios are preliminary end-of-period ratios for the Bank only and are subject to change.CATALYST BANCORP, INC. AND SUBSIDIARYSELECTED FINANCIAL DATA(continued) Three Months Ended Year Ended(Dollars in thousands) 12/31/2024 9/30/2024 12/31/2023 12/31/2024 12/31/2023ALLOWANCE FOR CREDIT LOSSESAllowance for loan losses:Beginning balance $ 2,414 $ 2,215 $ 2,036 $ 2,124 $ 1,807CECL adoption impact – – – – 209Provision for (reversal of) loan losses 110 330 151 667 87Charge-offs (28) (184) (76) (392) (102)Recoveries 26 53 13 123 123Net (charge-offs) recoveries (2) (131) (63) (269) 21Ending balance $ 2,522 $ 2,414 $ 2,124 $ 2,522 $ 2,124Allowance for unfundedcommitments:Beginning balance 231 224 280 257 -CECL adoption impact – – – – 216Provision for (reversal of) losses on (110) 7 (23) (136) 41unfunded commitmentsEnding balance $ 121 $ 231 $ 257 $ 121 $ 257Total allowance for credit losses, end of $ 2,643 $ 2,645 $ 2,381 $ 2,643 $ 2,381periodTotal provision for credit losses – 337 128 531 128CREDIT QUALITY(1)Non-accruing loans $ 1,567 $ 1,423 $ 1,967Accruing loans 90 days or more past due 64 15 24Total non-performing loans 1,631 1,438 1,991Foreclosed assets 194 173 60Total non-performing assets $ 1,825 $ 1,611 $ 2,051Total non-performing loans to total loans 0.98 % 0.87 % 1.37 %Total non-performing assets to total assets 0.66 0.57 0.76(1) Credit quality data and ratios are as of the end of each period presented.

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

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