Catalyst Bancorp, Inc. Announces 2025 Second Quarter Results

Catalyst Bancorp, Inc. (Nasdaq: “CLST”) (the “Company”), the parent company for Catalyst Bank (the “Bank”) (www.catalystbank.com), reported net income of $521,000 for the second quarter of 2025, compared to net income of $586,000 for the first quarter of 2025.

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“We're pleased to see both loan and deposit growth during the quarter,” said Joe Zanco, President and Chief Executive Officer of the Company and Bank. “When given the opportunity to earn new business, our success rate remains strong. Our team continues to build momentum across our markets.”

Loans

Loans totaled $167.6 million at June 30, 2025, up $1.5 million, or less than 1%, from March 31, 2025. The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.

(Dollars in thousands) 6/30/2025 3/31/2025 ChangeReal estate loansOne- to four-family residential $ 80,195 $ 82,025 $ (1,830) (2) %Commercial real estate 33,976 22,103 11,873 54Construction and land 20,650 32,038 (11,388) (36)Multi-family residential 5,432 2,530 2,902 115Total real estate loans 140,253 138,696 1,557 1Other loansCommercial and industrial 25,035 25,447 (412) (2) %Consumer 2,281 1,934 347 18Total other loans 27,316 27,381 (65) -Total loans $ 167,569 $ 166,077 $ 1,492 1

In the second quarter of 2025, four construction loans totaling $14.5 million were converted to amortizing real estate loans following the completion of their respective construction projects. Of these, one loan totaling $2.9 million was classified as multi-family, while the remaining loans were designated as commercial real estate.

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) 6/30/2025 3/31/2025 ChangeCommercial real estateRetail $ 9,739 $ 3,723 $ 6,016 162 %Hospitality 5,849 3,342 2,507 75Health service facilities 3,345 389 2,956 760Restaurants 1,049 1,070 (21) (2)Oilfield services 384 393 (9) (2)Other non-owner occupied 2,648 2,479 169 7Other owner occupied 10,962 10,707 255 2Total commercial real estate $ 33,976 $ 22,103 $ 11,873 54Construction and landMulti-family residential $ 8,997 $ 11,297 $ (2,300) (20) %Health service facilities 7,649 8,626 (977) (11)Hospitality – 2,716 (2,716) (100)Retail – 6,077 (6,077) (100)Other commercial construction and land 1,782 1,791 (9) (1)Consumer residential construction and land 2,222 1,531 691 45Total construction and land $ 20,650 $ 32,038 $ (11,388) (36)Commercial and industrialOilfield services $ 8,081 $ 8,474 $ (393) (5) %Industrial equipment 8,453 8,285 168 2Professional services 3,146 3,119 27 1Other commercial and industrial 5,355 5,569 (214) (4)Total commercial and industrial loans $ 25,035 $ 25,447 $ (412) (2)

Credit Quality and Allowance for Credit Losses

At June 30, 2025, non-performing assets (“NPAs”) totaled $1.8 million, compared to $1.7 million at March 31, 2025. The ratio of NPAs to total assets was 0.64% and 0.63% at June 30, 2025 and March 31, 2025, respectively. Non-performing loans (“NPLs”) comprised 1.00% and 0.99% of total loans at June 30, 2025 and March 31, 2025, respectively. At June 30, 2025 and March 31, 2025, 99% and 98% of total NPLs, respectively, were one- to four-family residential mortgage loans.

At June 30, 2025, the allowance for credit losses on loans totaled $2.4 million, or 1.45% of total loans, compared to $2.5 million, or 1.51% of total loans, at March 31, 2025. The provision for credit losses was zero for the first and second quarters of 2025. Net loan charge-offs totaled $42,000 during the second quarter of 2025, compared to net charge-offs of $39,000 for the first quarter of 2025. Net loan charge-offs during the first and second quarters of 2025 were primarily related to residential mortgage loans and overdrawn deposit accounts.

Deposits

Total deposits were $182.2 million at June 30, 2025, up $1.6 million, or 1%, from March 31, 2025. Total deposits averaged $179.4 million during the second quarter of 2025, compared to $177.1 million during the first quarter of 2025. The change in deposits was mainly due to fluctuations in public funds and inflows from commercial customers. The following table sets forth the composition of the Company's deposits as of the dates indicated.

(Dollars in thousands) 6/30/2025 3/31/2025 ChangeNon-interest-bearing demand deposits $ 31,155 $ 26,093 $ 5,062 19 %Interest-bearing demand deposits 35,307 42,737 (7,430) (17)Money market 9,437 9,737 (300) (3)Savings 51,001 42,542 8,459 20Certificates of deposit 55,311 59,489 (4,178) (7)Total deposits $ 182,211 $ 180,598 $ 1,613 1

The ratio of the Company's total loans to total deposits was 92% at both June 30 and March 31, 2025.

Total public fund deposits amounted to $29.0 million, or 16% of total deposits, at June 30, 2025, compared to $29.8 million, or 17% of total deposits, at March 31, 2025. At June 30, 2025, approximately 64% of our total public fund deposits consisted of non-interest-bearing and interest-bearing demand deposits, compared to 80% at March 31, 2025. At June 30, 2025, a larger portion of public funds were held in savings accounts.

Capital and Share Repurchases

At June 30, 2025 and March 31, 2025, consolidated shareholders' equity totaled $80.8 million, or 29.5% of total assets, and $80.6 million, or 29.7% of total assets, respectively.

The Company repurchased 62,385 shares of its common stock at an average cost per share of $11.91 during the second quarter of 2025, compared to 72,949 shares at an average cost per share of $11.86 during the first quarter of 2025. Under the Company's November 2024 Repurchase Plan, 51,816 shares of the Company's common stock were available for repurchase at June 30, 2025. Since the announcement of our first share repurchase plan on January 26, 2023 and through June 30, 2025, the Company has repurchased a total of 1,147,184 shares of its common stock, or approximately 22% of the common shares originally issued, at an average cost per share of $11.92. At June 30, 2025, the Company had common shares outstanding of 4,142,816.

Net Interest Income

The net interest margin for the second quarter of 2025 was 3.98%, up nine basis points compared to the prior quarter. For the second quarter of 2025, the average yield on interest-earning assets was 5.58%, up four basis points from the prior quarter, and the average rate paid on interest-bearing liabilities was 2.51%, down five basis points from the first quarter of 2025.

Net interest income for the second quarter of 2025 was $2.5 million, up $103,000, or 4%, compared to the first quarter of 2025. Total interest income was up $87,000, or 3%, in the second quarter of 2025 compared to the prior quarter largely due to an increase in income on loans. Total interest expense decreased $16,000, or 2%, in the second quarter of 2025 compared to the prior quarter due to a decline in the cost of deposits.

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 6/30/2025 3/31/2025(Dollars in thousands) Average Interest Average Average Interest Average Balance Yield/ Balance Yield/ Rate(TE) Rate(TE)INTEREST-EARNING ASSETSLoans receivable(1) $ 167,627 $ 2,792 6.68 % $ 166,145 $ 2,738 6.68 %Investment securities(2) 48,285 294 2.49 46,960 275 2.35Other interest earning assets 33,225 375 4.53 33,585 361 4.36Total interest-earning assets $ 249,137 $ 3,461 5.58 $ 246,690 $ 3,374 5.54INTEREST-BEARING LIABILITIESDemand deposits, money market, and savings accounts $ 92,088 $ 466 2.03 % $ 94,133 $ 483 2.08 %Certificates of deposit 57,018 459 3.23 55,846 458 3.32Total interest-bearing deposits 149,106 925 2.49 149,979 941 2.54Borrowings 9,619 68 2.84 9,573 68 2.85Total interest-bearing liabilities $ 158,725 $ 993 2.51 $ 159,552 $ 1,009 2.56Net interest-earning assets $ 90,412 $ 87,138Net interest income; average interest rate spread $ 2,468 3.07 % $ 2,365 2.98 %Net interest margin(3) 3.98 3.89(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

Non-interest income for the second quarter of 2025 totaled $344,000, down $209,000, or 38%, compared to the first quarter of 2025. Non-interest income for the first quarter of 2025 included insurance proceeds of $216,000 for fire and flood damages related to foreclosed properties.

Non-interest Expense

Non-interest expense for the second quarter of 2025 totaled $2.2 million, down $20,000, or 1%, compared to the first quarter of 2025.

Foreclosed assets expense for the second quarter of 2025 included a write-down on foreclosed assets of $14,000. In the first quarter of 2025, the Company incurred net losses of $88,000 on the sale of foreclosed assets.

Other non-interest expense totaled $234,000 for the second quarter of 2025, up $27,000, or 13%, from the prior quarter primarily due to an increase in loan collection related expenses.

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 $273.8 million in assets at June 30, 2025. 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, 2024, 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) (Unaudited)(Dollars in thousands) 6/30/2025 3/31/2025 12/31/2024 6/30/2024ASSETSNon-interest-bearing cash $ 4,024 $ 4,128 $ 4,076 $ 4,952Interest-bearing cash and due from banks 36,032 36,190 40,219 70,503Total cash and cash equivalents 40,056 40,318 44,295 75,455Investment securities:Securities available-for-sale, at fair value 29,294 29,840 28,712 29,748Securities held-to-maturity 14,948 13,445 13,447 13,454Loans receivable, net of unearned income 167,569 166,077 167,076 153,266Allowance for credit losses (2,431) (2,500) (2,522) (2,215)Loans receivable, net 165,138 163,577 164,554 151,051Accrued interest receivable 883 866 851 737Foreclosed assets 80 77 194 104Premises and equipment, net 5,977 6,049 6,085 6,114Stock in correspondent banks, at cost 825 809 1,961 1,919Bank-owned life insurance 14,726 14,607 14,489 14,252Other assets 1,858 2,060 2,109 2,499TOTAL ASSETS $ 273,785 $ 271,648 $ 276,697 $ 295,333LIABILITIESDeposits:Non-interest-bearing $ 31,155 $ 26,093 $ 28,281 $ 30,177Interest-bearing 151,056 154,505 157,393 149,888Totaldeposits 182,211 180,598 185,674 180,065Borrowings 9,647 9,603 9,558 30,261Other liabilities 1,128 856 1,261 3,994TOTAL LIABILITIES 192,986 191,057 196,493 214,320SHAREHOLDERS' EQUITYCommon stock 41 42 43 45Additional paid-in capital 38,259 38,844 39,561 41,914Unallocated common stock held by benefit plans (5,596) (5,649) (5,702) (6,116)Retained earnings 50,967 50,446 49,860 48,787Accumulated other comprehensive loss (2,872) (3,092) (3,558) (3,617)TOTAL SHAREHOLDERS' EQUITY 80,799 80,591 80,204 81,013TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 273,785 $ 271,648 $ 276,697 $ 295,333CATALYST BANCORP, INC. AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME(Unaudited) Three Months Ended Six Months Ended(Dollars in thousands) 6/30/2025 3/31/2025 6/30/2024 6/30/2025 6/30/2024INTEREST INCOMELoans receivable, including fees $ 2,792 $ 2,738 $ 2,383 $ 5,530 $ 4,597Investment securities 294 275 210 569 535Cash and due from banks 353 341 912 694 1,506Other 22 20 20 42 42Total interest income 3,461 3,374 3,525 6,835 6,680INTEREST EXPENSEDeposits 925 941 771 1,866 1,540Borrowings 68 68 306 136 599Total interest expense 993 1,009 1,077 2,002 2,139Net interest income 2,468 2,365 2,448 4,833 4,541Provision for credit losses – – 99 – 194Net interest income after provision for credit losses 2,468 2,365 2,349 4,833 4,347NON-INTEREST INCOME (LOSS)Service charges on deposit accounts 202 197 194 399 397Bank-owned life insurance 119 118 113 237 226Loss on sales of investment securities – – – – (5,507)Other income on foreclosed assets – 216 – 216 -(Loss) gain on sale of fixed assets – – (5) – 6Other 23 22 64 45 81Total non-interest income (loss) 344 553 366 897 (4,797)NON-INTEREST EXPENSESalaries and employee benefits 1,262 1,245 1,143 2,507 2,403Occupancy and equipment 208 199 183 407 379Data processing and communication 176 182 138 358 932Professional fees 114 101 117 215 224Directors' fees 117 114 114 231 229ATM and debit card 29 22 31 51 100Foreclosed assets, net 18 89 26 107 34Advertising and marketing 20 39 43 59 81Other 234 207 273 441 477Total non-interest expense 2,178 2,198 2,068 4,376 4,859Income (loss) before income tax expense (benefit) 634 720 647 1,354 (5,309)Income tax expense (benefit) 113 134 120 247 (1,147)NET INCOME (LOSS) $ 521 $ 586 $ 527 $ 1,107 $ (4,162)Earnings (loss) per share:Basic $ 0.14 $ 0.16 $ 0.13 $ 0.30 $ (1.03)Diluted 0.14 0.16 0.13 0.30 (1.03)CATALYST BANCORP, INC. AND SUBSIDIARYSELECTED FINANCIAL DATA Three Months Ended Six Months Ended(Dollars in thousands) 6/30/2025 3/31/2025 6/30/2024 6/30/2025 6/30/2024EARNINGS DATATotal interest income $ 3,461 $ 3,374 $ 3,525 $ 6,835 $ 6,680Total interest expense 993 1,009 1,077 2,002 2,139Net interest income 2,468 2,365 2,448 4,833 4,541Provision for credit losses – – 99 – 194Total non-interest income (loss) 344 553 366 897 (4,797)Total non-interest expense 2,178 2,198 2,068 4,376 4,859Income tax expense (benefit) 113 134 120 247 (1,147)Net income (loss) $ 521 $ 586 $ 527 $ 1,107 $ (4,162)AVERAGE BALANCE SHEET DATATotal loans $ 167,627 $ 166,145 $ 150,257 $ 166,891 $ 147,342Total interest-earning assets 249,137 246,690 264,776 247,920 267,306Total assets 270,788 268,232 285,773 269,517 286,240Total interest-bearing deposits 149,106 149,979 143,611 149,540 144,906Total interest-bearing liabilities 158,725 159,552 173,079 159,136 173,636Total deposits 179,426 177,106 173,326 178,272 173,990Total shareholders' equity 80,611 80,426 80,965 80,519 81,816SELECTED RATIOSReturn on average assets 0.77 % 0.89 % 0.74 % 0.83 % (2.92) %Return on average equity 2.59 2.96 2.62 2.77 (10.23)Efficiency ratio 77.46 75.31 73.47 76.37 (1,901.18)Net interest margin(TE) 3.98 3.89 3.72 3.93 3.42Average equity to average assets 29.77 29.98 28.33 29.88 28.58Common equity Tier 1 capital ratio(1) 43.72 46.95 49.09Tier 1 leverage capital ratio(1) 27.56 29.45 26.88Total risk-based capital ratio(1) 44.98 48.20 50.34NON-FINANCIAL DATATotal employees (full-time equivalent) 49 49 47Common shares issued and outstanding, end of period 4,142,816 4,205,201 4,478,527(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 Six Months Ended(Dollars in thousands) 6/30/2025 3/31/2025 6/30/2024 6/30/2025 6/30/2024ALLOWANCE FOR CREDIT LOSSESLoans:Beginning balance $ 2,500 $ 2,522 $ 2,068 $ 2,522 $ 2,124Provision for credit losses (27) 17 185 (10) 227Charge-offs (63) (53) (57) (116) (180)Recoveries 21 14 19 35 44Net (charge-offs) recoveries (42) (39) (38) (81) (136)Ending balance $ 2,431 $ 2,500 $ 2,215 $ 2,431 $ 2,215Unfunded commitments:Beginning balance $ 104 $ 121 $ 310 121 257Provision for (reversal of) credit losses on unfunded commitments 27 (17) (86) 10 (33)Ending balance $ 131 $ 104 $ 224 $ 131 $ 224Total provision for credit losses $ – $ – $ 99 $ – $ 194CREDIT QUALITY(1)Non-accruing loans $ 1,455 $ 1,554 $ 1,560Accruing loans 90 days or more past due 215 91 40Total non-performing loans 1,670 1,645 1,600Foreclosed assets 80 77 104Total non-performing assets $ 1,750 $ 1,722 $ 1,704Total non-performing loans to total loans 1.00 % 0.99 % 1.04 %Total non-performing assets to total assets 0.64 0.63 0.58(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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