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Catalyst Bancorp, Inc. Financial Summary for Q3 2025

Catalyst Bancorp, Inc., the parent company of Catalyst Bank, has recently announced its financial results for the third quarter of 2025. The bank reported a net income of $489,000, which shows a slight decline when compared to the second quarter's income of $521,000. Despite this dip, the bank's leadership remains optimistic about future growth potentials.

Growth in Deposits

As stated by Joe Zanco, the President and CEO, the team has successfully attracted new deposit customers throughout the year. In fact, total deposits for the quarter reached $186.4 million, reflecting an increase of $4.2 million, or 2%, from the previous quarter. This spike in deposits can be attributed to the bank's competitive high-yield account offerings, which have proven effective in both drawing in new clients and strengthening existing relationships.

Loan Portfolio Overview

For the quarter ending September 30, 2025, the total loans amounted to $164.8 million, which is a decrease of $2.8 million, or 2%, from the end of the previous quarter. The bank's loan portfolio comprises various segments, notably real estate and commercial loans. Here are some specifics:

• - Real Estate Loans: Totaling $136.3 million, which is a drop from $140.3 million in the previous quarter.

- One- to four-family residential loans decreased by $1.8 million.
- Commercial real estate loans saw a minor decrease of $297,000.
- However, construction and land loans experienced a more significant decline of $1.8 million.

• - Other Loans: The commercial and industrial loans increased by $630,000, while consumer loans surged by 24%.

Overall, the growth in some loan sectors balances the slowdown in real estate lending, with the bank expressing hope that increased economic activity will rekindle demand for loans in the coming months.

Credit Quality and Performance Insights

Catalyst Bancorp maintains a focus on its credit quality, reporting non-performing assets (NPAs) of $1.9 million, slightly higher than $1.8 million from the previous quarter. The institution continues to prioritize the management of potential credit losses, with a reserve for credit losses amounting to $2.4 million as of the end of September.

In a strategic move, the bank recorded a reversal of provision for credit losses of $36,000, largely influenced by a decrease in anticipated credit losses on evaluated loans. During this quarter, the net loan charge-offs were $2,000, a significant improvement from $42,000 in the second quarter.

Investment Securities and Interest Income

Investment securities have seen a notable increase, rising to $59.8 million, which constitutes 21% of total assets by the end of Q3 2025. This reflects a sharp 35% rise since June. The bank strategically purchased $15.1 million in variable-rate and $1.1 million in fixed-rate government-backed securities, pushing its portfolio's average yield to 5.17%.

In terms of income, net interest income for Q3 totaled $2.5 million, slightly down by $18,000 from the prior quarter. While total interest income increased, the total interest expense reflected an uptick due to the full quarter impact from the growth in high-yield savings account balances.

Overall, the net interest margin for Q3 2025 was reported at 3.88%, a slight decline from the previous quarter.

Looking Ahead

As Catalyst Bancorp concludes this financial quarter, the executive team remains cautiously optimistic about the future. With indications of increased economic activity, there is hope that this may lead to enhanced loan growth opportunities in the upcoming quarters. The bank will continue to monitor market conditions and adjust its strategies accordingly to ensure sustained growth and profitability.

To learn more about Catalyst Bancorp and its offerings, visit Catalyst Bank.