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Catalyst Bancorp, Inc. Reports Financial Outcomes for Q2 2025

In a recent announcement, Catalyst Bancorp, Inc. (Nasdaq: "CLST"), which acts as the parent company of Catalyst Bank, disclosed its financial performance for the second quarter of 2025. The company reported a net income of approximately $521,000, a slight decline from the $586,000 recorded in the previous quarter, yet it highlighted significant developments that point towards a thriving business model.

Key Financial Metrics

During the second quarter, Catalyst Bancorp demonstrated notable growth in loan and deposit volumes. As of June 30, 2025, total loans amounted to $167.6 million, reflecting an increase of $1.5 million, or less than 1%, since the end of the first quarter. The loan portfolio largely included real estate loans, which totaled $140.3 million, and encompassed a mixture of one- to four-family residential loans, commercial real estate loans, and multi-family residential lending segments.

Loan Portfolio Breakdown

• - One- to Four-Family Residential Loans: $80.2 million
• - Commercial Real Estate Loans: $34.0 million
• - Multi-Family Residential Loans: $5.4 million
• - Construction and Land Loans: $20.7 million

One significant development during the quarter was the conversion of four construction loans, totaling $14.5 million, to amortizing real estate loans post-construction completion, bolstering the overall real estate loan category.

Strong Deposit Performance

Total deposits stood at $182.2 million at the close of Q2, marking a $1.6 million increase, or 1%, from the previous quarter. This growth was primarily driven by inflows from commercial customers, supplemented by a notable increase in non-interest-bearing demand deposits, which rose by 19% to $31.2 million. The composition of deposits included:

• - Non-Interest-Bearing Demand Deposits: $31.2 million
• - Interest-Bearing Demand Deposits: $35.3 million
• - Money Market Accounts: $9.4 million
• - Savings Accounts: $51.0 million
• - Certificates of Deposit: $55.3 million

Credit Quality and Loan Growth

Regarding credit quality, as of June 30, 2025, the institution recorded non-performing assets totaling $1.8 million, a slight increase compared to $1.7 million in the preceding quarter. Non-performing loans represented 1.00% of total loans, reflecting an uptick in residential mortgage loan issues. Conversely, the company reported no provisions for credit losses in both first and second quarters, evidencing its solid credit assessment framework.

Additionally, net loan charge-offs were reported at $42,000 during Q2, slightly higher than $39,000 in Q1. This positive trajectory in loan quality illustrates a stabilized environment.

Capital Management and Share Buybacks

Catalyst Bancorp maintained a robust capital structure, with consolidated shareholders' equity amounting to $80.8 million at June 30, 2025. The ratio of equity to total assets was a robust 29.5%. In alignment with its capital management strategy, the company repurchased a total of 62,385 shares during Q2 at an average price of $11.91, continuing a proactive approach signaled by the board via its ongoing share repurchase program, active since January 2023.

Operational Insights and Future Outlook

Joe Zanco, President and CEO, expressed optimism regarding the bank's trajectory, stating, "We are seeing growth in both our loans and deposits, which reinforces our operational momentum. Our ability to successfully attract new business remains strong, affirming stakeholder confidence in our strategies."

The net interest margin for Q2 stood at 3.98%, which was an improvement from 3.89% in the previous quarter. Catalyst also achieved a net interest income of $2.5 million, a 4% increase from Q1, underpinning the efficiency of its interest-earning assets despite wider economic challenges.

Catalyst Bancorp continues to solidify its commitment to driving growth while remaining vigilant in credit quality management and capital allocation, setting a focused path towards sustainable profitability for the remainder of 2025 and beyond.

For further information on Catalyst Bancorp, visit www.catalystbank.com or access the SEC filings for a deeper understanding of the company’s financial position.