Financial Position - Total assets increased by $24.4 million, or 9.0%, to $295.3 million at June 30, 2024, from $270.9 million at December 31, 2023[102] - Loans amounted to $153.3 million, or 51.9% of total assets, at June 30, 2024, up $8.3 million or 5.8% from December 31, 2023[96] - Non-performing assets decreased by $347,000, or 16.9%, to $1.7 million at June 30, 2024, from December 31, 2023[96] - Deposits rose by $14.4 million, or 8.7%, to $180.1 million at June 30, 2024, compared to December 31, 2023[96] - Investment securities decreased by $40.8 million, or 48.6%, to $43.2 million at June 30, 2024, from December 31, 2023[96] - Borrowings increased by $10.9 million, or 56.2%, to $30.3 million at June 30, 2024, compared to December 31, 2023[96] - Shareholders' equity decreased by $3.5 million, or 4.2%, to $81.0 million, representing 27.4% of total assets as of June 30, 2024[118] - Total uninsured deposits rose to approximately $52.7 million at June 30, 2024, up from $44.6 million at December 31, 2023[117] Income and Expenses - Net interest income for the three months ended June 30, 2024, was $2.4 million, up $574,000, or 30.6%, compared to the same period in 2023[96] - Non-interest expense for the three months ended June 30, 2024, was $2.1 million, down $123,000, or 5.6%, compared to the same period in 2023[96] - The company reported a net income of $527,000 for the three months ended June 30, 2024, but a net loss of $4.2 million for the six months ended June 30, 2024[96] - Total interest income rose by $1.2 million, or 51.8%, to $3.5 million for the three months ended June 30, 2024[128] - Total interest expense increased by $629,000, or 140.4%, to $1.1 million for the three months ended June 30, 2024[130] - Non-interest income totaled $366,000, up $49,000 or 15.5% compared to the same period in 2023[132] - Non-interest income for the six months ended June 30, 2024, was down $5.4 million compared to $611,000 for the same period in 2023[138] - Non-interest expense totaled $4.9 million for the six months ended June 30, 2024, up $483,000, or 11.0%, compared to the same period in 2023[138] Loan Performance - The allowance for loan losses was $2.2 million, or 1.45% of total loans, a slight decrease from 1.47% at December 31, 2023[105] - Total non-performing loans decreased to $1,600,000 from $1,991,000 at December 31, 2023[109] - The total provision for credit losses on loans was $194,000 for the six months ended June 30, 2024, compared to no provision for the same period in 2023[137] - The provision for credit losses was $99,000 for the three months ended June 30, 2024, compared to no provision in the same period of 2023[131] Revenue Growth - Total commercial real estate revenue increased by $1,593,000, or 7.4%, to $23,071,000 compared to $21,478,000 in December 2023[104] - Multi-family residential revenue surged by $4,282,000, or 304.6%, reaching $5,688,000, up from $1,406,000 in December 2023[104] - Total construction and land revenue rose by $6,570,000, or 47.4%, totaling $20,427,000 compared to $13,857,000 in December 2023[104] - Oilfield services revenue increased by $4,128,000, or 66.0%, to $10,382,000 from $6,254,000 in December 2023[104] Interest Rates and Yields - The average rate paid on interest-bearing deposits was 2.16% during the three months ended June 30, 2024, up 103 basis points compared to the same period in 2023[130] - The average rate paid on interest-bearing deposits was 2.14% during the six months ended June 30, 2024, up 121 basis points compared to the same period in 2023[136] - The average loan yield was 6.38% for the three months ended June 30, 2024, up from 5.09% for the same period in 2023[128] - The weighted average yield on mortgage-backed securities was 4.48% for the period[113] Liquidity and Capital Management - Total unused and available liquidity was $59.3 million as of June 30, 2024[144] - The company expects to retain the majority of maturing certificates of deposit, but may utilize borrowings or raise interest rates if a substantial portion is not retained[147]

Financial Performance - Catalyst Bancorp reported net income of $527,000 for Q2 2024, a significant recovery from a net loss of $4.7 million in Q1 2024[2]. - For Q2 2024, net interest income was $2.4 million, an increase of $355,000 or 17% compared to Q1 2024[39]. - Non-interest income for Q2 2024 totaled $366,000, up $5.5 million from Q1 2024, which included a $5.5 million loss on the sale of investment securities[28]. - Net income for the three months ended June 30, 2024, was $527,000, a turnaround from a loss of $4,689,000 in the previous quarter[47]. - Return on average assets improved to 0.74% for the three months ended June 30, 2024, compared to a negative return of (6.58)% in the previous quarter[47]. - Return on average equity was 2.62% for the three months ended June 30, 2024, compared to (22.81)% in the previous quarter, indicating a positive trend[47]. Loan and Deposit Growth - Total loans increased by $9.8 million, or 7%, to $153.3 million as of June 30, 2024, compared to March 31, 2024[16]. - Total deposits reached $180.1 million, an increase of $10.4 million, or 6%, from March 31, 2024[6]. - Commercial and industrial loans surged by $8.2 million, or 52%, to $23.9 million compared to the previous quarter[3]. - Loans receivable, net of unearned income, increased to $153,266,000 as of June 30, 2024, from $143,491,000 as of March 31, 2024[32]. - Total loans increased to $150,257,000 for the six months ended June 30, 2024, up from $144,428,000 in the previous period[47]. Asset Management - Total assets as of June 30, 2024, were $295,333,000, an increase from $282,049,000 as of March 31, 2024[32]. - Total investment securities amounted to $43.2 million, or 14.6% of total assets, reflecting a $4.2 million increase, or 10.8%, from March 31, 2024[21]. - Total assets slightly decreased to $285,773,000 as of June 30, 2024, from $286,708,000 in the previous quarter[47]. - Catalyst Bancorp, Inc. reported total assets of $295.3 million as of June 30, 2024[50]. Interest Income and Margin - The net interest margin for Q2 2024 was 3.72%, up 60 basis points from the prior quarter[9]. - The average yield on interest-earning assets increased to 5.35%, up 65 basis points from the prior quarter[9]. - Total interest income for the three months ended June 30, 2024, was $3,525,000, an increase of 11.7% from $3,155,000 for the previous quarter[46]. - Total interest income rose by $370,000 or 12%, while total interest expense increased by $15,000 or 1% in Q2 2024 compared to the previous quarter[39]. - The average yield on total interest-earning assets was 5.35% for Q2 2024, up from 4.70% in Q1 2024[1]. Non-Performing Assets - Non-performing assets totaled $1.7 million, with a ratio of NPAs to total assets at 0.58% as of June 30, 2024[19]. - Total non-performing loans amounted to $1,600,000, up from $1,482,000 in the previous quarter[49]. - The total non-performing loans to total loans ratio was 1.04% as of June 30, 2024, compared to 1.03% in the previous quarter[49]. - Total non-performing assets were $1,704,000, slightly down from $1,719,000 in the previous quarter[49]. Expenses and Shareholder Equity - Non-interest expense for Q2 2024 was $2.1 million, down $723,000 or 26% from Q1 2024[41]. - Total non-interest expense decreased to $2,068,000 for the three months ended June 30, 2024, down from $2,791,000 in the previous quarter, representing a 25.8% reduction[47]. - Total shareholders' equity was $80,965,000 as of June 30, 2024, down from $82,667,000 in the previous quarter[47]. - The allowance for loan losses was $2.2 million, representing 1.45% of total loans, slightly up from 1.44% in the previous quarter[4].

Financial Position - As of March 31, 2024, the carrying amount of cash and cash equivalents is $76,011,000, which approximates its fair value[94]. - Loans receivable, net, have a carrying amount of $141,423,000, with a fair value of $135,986,000, classified within Level 3 of the fair value hierarchy[94]. - The total deposits amount to $169,637,000, with a fair value of $168,812,000[94]. - The fair value of bank-owned life insurance is reported at $14,139,000, classified within Level 2 of the fair value hierarchy[94]. - The fair value of available-for-sale investment securities is $25,534,000, while held-to-maturity securities have a fair value of $11,127,000[94]. Corporate Structure - The company completed its conversion from mutual to stock form on October 12, 2021, acquiring all outstanding shares of common stock of the Bank[83]. Legal and Regulatory Matters - The company has no pending legal proceedings that would materially affect its financial condition as of March 31, 2024[184]. Internal Controls and Procedures - The company’s disclosure controls and procedures were deemed effective as of March 31, 2024, with no changes affecting internal control over financial reporting[183]. Forward-Looking Statements - The company emphasizes the importance of not placing undue reliance on forward-looking statements due to inherent uncertainties[99]. - The company’s financial estimates are subjective and based on judgments regarding future expected loss experience and current economic conditions[91].

Financial Performance - Catalyst Bancorp reported a net loss of $4.7 million for Q1 2024, including a $5.5 million loss on the sale of investment securities[1]. - Net income (loss) for the period was $(4,677,000), compared to a profit of $320,000 in the previous quarter and $73,000 in the same period last year[54]. - Non-interest expense increased by 32% to $2.8 million in Q1 2024, primarily due to a $560,000 upgrade to a new core processing system[39]. - Total non-interest income recorded a loss of $(5,163,000), a significant decline from a gain of $672,000 in the previous quarter and $294,000 in the same period last year[54]. - Total non-interest expense rose to $2,791,000, an increase of 31.5% from $2,122,000 in the previous quarter and 27.8% from $2,185,000 year-over-year[54]. - Return on average assets was (6.57)%, down from 0.49% in the previous quarter, indicating a decline in profitability[54]. - The efficiency ratio was reported at (91.37)%, compared to 80.61% in the previous quarter, reflecting increased operational costs[54]. Loan and Asset Management - Total loans amounted to $143.5 million, down $1.4 million, or less than 1%, from December 31, 2023[8]. - Loans receivable net of unearned income were $143.5 million, a slight decrease from $144.9 million at the end of 2023[51]. - Total loans increased to $144,428,000, up 2.4% from $140,757,000 in the previous quarter and 7.9% from $133,781,000 year-over-year[54]. - Non-performing assets decreased by $331,000, or 16.1%, to $1.7 million as of March 31, 2024, with a non-performing loans ratio of 1.03%[3]. - Non-performing loans totaled $1,482,000, a decrease from $1,991,000 in the previous quarter and $1,687,000 year-over-year, indicating improved credit quality[55]. - The allowance for loan losses was $2.1 million, or 1.44% of total loans, slightly down from 1.47% at the end of 2023[11]. - The allowance for credit losses at the end of the period was $2,378,000, slightly down from $2,381,000 in the previous quarter and up from $2,286,000 year-over-year[55]. Income and Interest Metrics - Net interest income for Q1 2024 was $2.1 million, an increase of $148,000, or 8%, compared to the previous quarter[20]. - Net interest income for the first quarter of 2024 was $2.1 million, with a net interest margin of 3.15% compared to 3.14% in the previous quarter[37]. - Net interest income after provision for credit losses was $2,013,000, a 9.9% increase from $1,832,000 in the previous quarter and a 2.4% increase from $1,966,000 year-over-year[52]. - Total interest income increased to $3,155,000 for the three months ended March 31, 2024, up 21.2% from $2,603,000 in the previous quarter and 39.1% from $2,267,000 in the same period last year[52]. - Total interest-earning assets amounted to $269.6 million, with an average yield of 4.71%, up from 4.17% in the previous quarter[37]. - The net interest margin for Q1 2024 was 3.15%, up one basis point from the prior quarter[36]. Deposits and Equity - Total deposits increased by $4.0 million, or 2%, to $169.6 million as of March 31, 2024[31]. - Total deposits increased to $169.6 million, compared to $165.6 million in the previous quarter[51]. - Total shareholders' equity decreased to $81.4 million from $84.7 million at the end of 2023[51]. Securities and Investments - The company sold $48.0 million of available-for-sale securities for a pre-tax loss of $5.5 million, generating $42.6 million in cash for reinvestment[30]. - Total investment securities decreased by $45.0 million, or 53.6%, to $39.0 million, representing 13.8% of total assets[30]. - Total assets of Catalyst Bancorp, Inc. reached $282.0 million as of March 31, 2024, an increase from $270.9 million at the end of 2023[40]. Operational Changes - The company announced a new share repurchase plan allowing the purchase of up to 227,000 shares, approximately 5% of outstanding shares[18]. - The company expects annual savings of over $200,000 from the new core processing system[39]. - Catalyst Bank operates six full-service branches in the Acadiana region, focusing on commercial and retail banking products[40].

Loan Portfolio - As of December 31, 2023, Catalyst Bancorp's total loan portfolio included $83.6 million in single-family residential mortgage loans, representing 57.7% of the total[24] - Total loans for one- to four-family residential properties amounted to $80,795,000 in 2023, a decrease from $83,623,000 in 2022, reflecting a decline of approximately 3.3%[40] - The commercial real estate loans totaled $21,478,000 in 2023, up from $19,984,000 in 2022, indicating an increase of about 7.5%[40] - As of December 31, 2023, commercial real estate and multi-family residential loans represented 17.1% of the total loan portfolio, amounting to $24,900,000[44] - The largest segment of the Company's loan portfolio consists of one- to four-family residential real estate loans, primarily secured by properties in rural Acadiana[180] - The commercial real estate loan portfolio amounted to $21.5 million, or 14.8% of the total loan portfolio, as of December 31, 2023[117] - Construction and land loans amounted to $13.9 million, or 9.6% of total loans outstanding, more than doubling since December 31, 2022[53] - Commercial and industrial loans totaled $20.0 million, representing 13.8% of the total loan portfolio as of December 31, 2023[58] - Consumer loans reached $2.6 million, accounting for 1.8% of the total loan portfolio as of December 31, 2023[63] - Loans classified as "substandard" totaled $3.3 million as of December 31, 2023, with "special mention" loans at $212,000[72] Financial Performance - Net income available to common shareholders for the year ended December 31, 2023, was $602,000, compared to $180,000 for the year ended December 31, 2022, representing a significant increase of 233.3%[52] - Basic and diluted earnings per common share for the year ended December 31, 2023, were both $0.14, up from $0.04 in the previous year, marking a 250% increase[52] - The total charge-offs for the year 2023 were $6,000, compared to $7,000 in 2022, showing a reduction of approximately 14.3%[41] - The company reported recoveries of $119,000 in 2023, slightly down from $123,000 in 2022, reflecting a decrease of about 3.2%[41] - The provision for credit losses for the year ended December 31, 2023, totaled $128,000, compared to a reversal of $375,000 in 2022[77] Capital and Regulatory Compliance - The Bank's Common Equity Tier 1 Capital ratio was 52.34% as of December 31, 2023, significantly above the required minimum of 6.5%[111] - Catalyst Bank's capital exceeded all applicable regulatory requirements as of December 31, 2023, including a common equity Tier 1 capital ratio of 4.5%[143] - Federal regulations require a capital conservation buffer of 2.5% of common equity Tier 1 capital to risk-weighted assets for capital distributions[145] - The company was in compliance with the loans-to-one borrower limitations as of December 31, 2023[148] Deposits and Borrowings - Total deposits as of December 31, 2023, amounted to $165,622,000, a slight increase from $165,094,000 in 2022[93] - Non-interest-bearing demand deposits decreased to $28,183,000 (17.0%) in 2023 from $33,657,000 (20.4%) in 2022[93] - The estimated amount of total uninsured deposits was $44.6 million at December 31, 2023, compared to $43.4 million in 2022[94] - As of December 31, 2023, the Company had total borrowings of $19.4 million, an increase from $9.2 million in 2022[97] - The Company had $48.5 million in available borrowing capacity with the FHLB as of December 31, 2023, compared to $34.2 million in 2022[100] Asset Management - The total assets of the company as of December 31, 2023, amounted to $84,734,000, down from $88,526,000 in 2022, indicating a decrease of about 4.3%[195] - The company's retained earnings increased to $53,045,000 in 2023 from $52,778,000 in 2022, reflecting a growth of approximately 0.5%[195] - The fair value of loans receivable, net, was reported at $132,742,000 as of December 31, 2023, down from $142,796,000 in 2022, a decrease of approximately 7.1%[192] - The total carrying amount of financial assets as of December 31, 2023 is $131,800,000, with a fair value of $121,208,000[213] Staffing and Operations - The company employs only officers of the Bank and may hire additional staff as business expands[18] - At December 31, 2023, the company had 48 full-time equivalent employees, with plans to assess management and staffing needs for future growth[127][128] Regulatory and Compliance Issues - The company is subject to significant anti-money laundering and anti-terrorism laws, which could impact its business activities[132] - Catalyst Bank received an "outstanding" rating under the Community Reinvestment Act in its latest federal examination[153] - The revised CRA regulations will take effect on January 1, 2026, with new data reporting requirements starting January 1, 2027, although the impact on the Bank has not yet been determined[153]

Financial Performance - The company reported net income of $170,000 for the three months ended September 30, 2023, compared to $135,000 for the same period in 2022, representing a 25.9% increase [164]. - For the nine months ended September 30, 2023, net income was $282,000, significantly up from $9,000 in the same period of 2022 [164]. - Total interest income increased by $437,000, or 21.5%, to $2.5 million for the three months ended September 30, 2023, compared to the same period in 2022 [219]. - Net interest income was $2.0 million for the three months ended September 30, 2023, up $102,000, or 5.5%, from the same period in 2022 [223]. - Total interest income for the nine months ended September 30, 2023, increased by $1.1 million, or 19.5%, to $7.1 million compared to the same period in 2022 [232]. - Net interest income was $5.8 million for the nine months ended September 30, 2023, up $410,000, or 7.5%, from the same period in 2022 [236]. - Non-interest income totaled $306,000 for the three months ended September 30, 2023, up $10,000, or 3.4%, compared to $296,000 for the same period in 2022 [226]. - Non-interest income totaled $917,000 for the nine months ended September 30, 2023, up $45,000, or 5.2%, compared to $872,000 for the same period in 2022 [238]. Asset and Loan Management - As of September 30, 2023, total assets were $257.9 million, with total loans of $135.7 million and total deposits of $165.2 million [164]. - Total loans increased by $2.1 million, or 1.5%, to $135.7 million at September 30, 2023, compared to $133.6 million at December 31, 2022 [182]. - Total past due loans amounted to $2,638,000, with $1,473,000 past due 30-89 days and $127,000 past due over 90 days [85]. - Non-performing loans increased to $2.088 million at September 30, 2023, compared to $1.600 million at December 31, 2022 [193]. - Total non-accruing loans increased to $1,961,000 at September 30, 2023, up from $1,494,000 at December 31, 2022, representing a 31.1% increase [199]. - The allowance for loan losses increased to $2.0 million, or 1.50% of total loans, as of September 30, 2023, up from $1.8 million, or 1.35% of total loans, at December 31, 2022 [170]. - The total provision for credit losses on loans and unfunded commitments was zero for the first nine months of 2023 [187]. Deposits and Equity - Total deposits increased slightly by $126, or 0.1%, to $165.220 million at September 30, 2023, from $165.094 million at December 31, 2022 [198]. - Public fund deposits increased to $26.4 million, or 16.0% of total deposits, from $21.0 million, or 12.7% of total deposits, at December 31, 2022 [205]. - Shareholders' equity decreased to $82.2 million, or 31.9% of total assets, down from $88.5 million, or 33.6% of total assets, at December 31, 2022, a decline of 7.1% [208]. - Total uninsured deposits were approximately $45.2 million at September 30, 2023, compared to $43.4 million at December 31, 2022 [206]. Strategic Initiatives - The company’s business strategy has shifted to a relationship-based community bank model targeting small- to mid-sized businesses [163]. - The company aims to continue implementing its business strategies and capitalize on growth opportunities despite economic uncertainties [155]. - The company plans to focus on market expansion and new product development to enhance future performance [102]. Regulatory and Compliance - The Bank exceeded all regulatory capital requirements and was categorized as well-capitalized at September 30, 2023 [256]. - The company adopted ASC 326 on January 1, 2023, which changed the methodology for estimating credit losses on loans [169]. - Future changes in laws, regulations, or government policies may materially impact the company's financial condition and results of operations [165]. Investment and Securities - Net unrealized losses on available-for-sale securities totaled $12.8 million as of September 30, 2023, compared to $11.5 million at December 31, 2022 [174]. - Total investment securities decreased by $7.8 million, or 8.4%, to $85.3 million at September 30, 2023, from $93.1 million at December 31, 2022 [195]. - The fair value of available-for-sale securities decreased to $71,808,000 as of September 30, 2023, from $79,602,000 on December 31, 2022, a decline of about 10% [130].

ITEM 1. FINANCIAL STATEMENTS The accompanying Notes are an integral part of these financial statements. NOTE 1. BASIS OF PRESENTATION NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS Commercial real estate – This category generally consists of loans secured by retail and industrial use buildings, hotels, strip shopping centers and other properties used for commercial purposes. The performance of these loans may be adversely affected by, among other factors, conditions specific to the relevant industry, the real est ...

Title of each class Trading Symbol(s) Name of each exchange on which registered UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40893 (Exact name of registrant as specified in its charter) Louisiana 86 ...

Financial Performance - Net income for the year ended December 31, 2022, was $180,000, a decrease from $1.9 million for the year ended December 31, 2021[171]. - Net income fell significantly from $1.92 million in 2021 to $0.18 million in 2022, representing a decrease of about 90.6%[218]. - Basic earnings per share dropped to $0.04 in 2022 from $0.39 in 2021, a decline of 89.7%[236]. - Non-interest income dropped from $2.63 million in 2021 to $1.17 million in 2022, a decline of about 55.5%[218]. - Non-interest income decreased significantly to $1,173,000 in 2022 from $2,626,000 in 2021, a decline of 55.3%[236]. - The efficiency ratio worsened to 102.55% in 2022 from 81.76% in 2021, indicating increased operational inefficiency[218]. - Net cash provided by operating activities decreased to $772,000 in 2022 from $3,428,000 in 2021, a reduction of 77.5%[240]. - Net income available to common shareholders decreased to $180,000 in 2022 from $1,915,000 in 2021[263]. Asset and Loan Composition - Total assets decreased by $22.3 million, or 7.8%, to $263.3 million as of December 31, 2022, compared to $285.6 million at the end of 2021[78]. - Total loans increased by $1.5 million, or 1.1%, to $133.6 million as of December 31, 2022, compared to $132.1 million in 2021[87]. - The loan portfolio composition shows that single-family residential loans accounted for $87.5 million, or 65.5% of total loans, while commercial and industrial loans increased by 65.3% to $13.8 million[87]. - The Bank's primary income sources are interest from loans and investment securities, with total real estate loans at $116.3 million, representing 87.0% of total loans[87]. - As of December 31, 2022, the total amount of loans due after December 31, 2023 is $125.166 million, with $43.805 million in fixed-rate loans and $81.361 million in floating or adjustable-rate loans[91]. - The allowance for loan losses totaled $1.8 million, or 1.35% of total loans, at December 31, 2022, down from $2.3 million, or 1.72% of total loans, at December 31, 2021[191]. - Non-accrual loans as a percentage of total loans outstanding rose to 1.12% in 2022 from 0.67% in 2021, reflecting a deterioration in asset quality[227]. Investment and Capital Management - The total investment securities portfolio at December 31, 2022, amounted to $93.1 million, representing 35.3% of total assets, with $64.2 million in pass-through mortgage-backed securities[103]. - The company had $79.6 million of investment securities classified as available for sale and $13.5 million classified as held to maturity as of December 31, 2022[115]. - The investment policy aims to manage interest rate sensitivity and maintain liquidity while generating favorable returns[102]. - The company has authority to invest in various securities, including mortgage-backed securities and U.S. Treasury obligations[101]. - Federal regulations require a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, and a total capital to risk-based assets ratio of 8.0%[205]. - Catalyst Bank met the criteria for being considered "well capitalized" as of December 31, 2022[214]. - Common equity Tier 1 capital ratio decreased from 63.51% in 2021 to 56.17% in 2022, indicating a decline in capital strength[227]. Operational Changes and Strategy - Catalyst Bancorp completed its initial public offering, issuing 5,290,000 shares for an aggregate of $52.9 million, with net proceeds of $50.8 million[65]. - The Bank's strategy includes increasing focus on small- to mid-sized businesses and enhancing commercial and multi-family residential real estate loans[72]. - The company aims to grow its loan portfolio with greater diversification, focusing on increasing commercial lending activities to enhance profitability and growth prospects[180]. - Catalyst Bank's business strategy includes expanding its franchise through potential acquisitions of other financial institutions in south Louisiana[180]. - The company has made several key hires, including a new Chief Financial Officer and a Chief Credit Officer, to support its business strategy[137]. - The company plans to repurchase up to 265,000 shares, approximately 5% of its outstanding common stock, under the 2023 Repurchase Plan[159]. Regulatory Compliance and Risk Management - At December 31, 2022, Catalyst Bank's capital exceeded all applicable regulatory requirements, ensuring compliance with capital adequacy guidelines[108]. - The bank received an "outstanding" Community Reinvestment Act rating in its most recent federal examination, reflecting its compliance with community credit needs[183]. - As of December 31, 2022, Catalyst Bank was in compliance with loans-to-one borrower limitations, which restrict loans to a single borrower to 15% of unimpaired capital and surplus[167]. - The bank's strategy for credit risk management emphasizes strong asset quality, experienced credit professionals, and active credit monitoring to reduce non-performing assets[180]. - The evaluation of the allowance for loan losses is sensitive to material variation and is based on estimates that may change as more information becomes available[191]. Market and Economic Conditions - Non-performing assets increased from December 31, 2021, to December 31, 2022, primarily due to a rise in non-accruing one- to four-family residential loans, influenced by reduced government stimulus and persistent inflation[100]. - The FDIC has increased deposit insurance assessment rates effective January 1, 2023, which may adversely affect operating expenses[221]. - The increase in unrealized losses on available-for-sale securities relates principally to increases in market rates of similar types of securities[207]. - The company expects a 10% to 20% increase in the allowance for loan losses due to the adoption of ASU 2016-13[259].

Financial Performance - The company reported a net income of $139,000 for the three months ended September 30, 2022, a decrease of 90% compared to $1.4 million for the same period in 2021[144]. - For the nine months ended September 30, 2022, net income was $26,000, down from $1.8 million in the same period in 2021[144]. - For the three months ended September 30, 2022, the company reported net income of $139,000, a decrease from $1.4 million for the same period in 2021[189]. - Non-interest income totaled $296,000 for the three months ended September 30, 2022, compared to $2.0 million for the same period in 2021[196]. - Non-interest income decreased by $1.5 million, or 63.7%, to $872,000 for the nine months ended September 30, 2022, largely due to the absence of a $1.8 million grant received in 2021[213]. Assets and Liabilities - As of September 30, 2022, total assets were $283.4 million, with total loans of $131.7 million and total deposits of $184.2 million[144]. - Total assets decreased by $1.9 million, or 0.7%, to $283.4 million at September 30, 2022, from $285.3 million at December 31, 2021[160]. - Total liabilities were $195.3 million, with shareholders' equity at $92.8 million as of September 30, 2022[182]. - The company had outstanding advances from the FHLB with a carrying value of $9.2 million and the capacity to borrow an additional $37.6 million as of September 30, 2022[226]. Loan and Deposit Information - Total loans receivable fell by $141,000, or 0.1%, to $131.7 million at September 30, 2022, compared to $131.8 million at December 31, 2021[161]. - Total deposits amounted to $184.2 million at September 30, 2022, an increase of $7.4 million, or 4.2%, compared to December 31, 2021[176]. - The allowance for loan losses totaled $1.8 million, or 1.37% of total loans, as of September 30, 2022, compared to $2.3 million, or 1.73% of total loans, at December 31, 2021[149]. - Total non-performing loans rose to $1.600 million at September 30, 2022, compared to $891,000 at December 31, 2021[170]. Investment Securities - Total investment securities amounted to $92.0 million at September 30, 2022, a decrease of $9.8 million, or 9.6%, from $101.8 million at December 31, 2021[172]. - The average amortized cost balance of the investment securities portfolio increased by $42.5 million, or 68.6%, for the three months ended September 30, 2022[192]. - The company purchased $10.9 million of investment securities during the nine months ended September 30, 2022, exceeding $8.5 million of maturities, calls, and principal repayments[172]. Expenses - Non-interest expense increased by $244,000, or 13.0%, to $2.1 million for the three months ended September 30, 2022[198]. - Non-interest expense increased by $1.1 million, or 20.1%, to $6.7 million for the nine months ended September 30, 2022, including $215,000 of rebranding-related expenses[216]. - The company expects non-interest expenses to continue to increase as operations expand, influenced by new stock benefit plans implemented in 2022[145]. Capital and Equity - Shareholders' equity decreased by $9.0 million, or 9.2%, to $89.3 million at September 30, 2022, primarily due to a $9.3 million increase in accumulated other comprehensive loss[179]. - The ratio of total shareholders' equity to total assets was 31.5% at September 30, 2022, down from 34.5% at December 31, 2021[179]. - As of September 30, 2022, the company exceeded all regulatory capital requirements, with Common Equity Tier 1 Capital at $77.997 million, representing a ratio of 57.84%[231]. Miscellaneous - The company funded 240 SBA PPP loans totaling $8.5 million during the COVID-19 pandemic, with all outstanding loans fully repaid by September 30, 2022[156]. - The company recorded net loan charge-offs of $97,000 during the nine months ended September 30, 2022[165]. - Recent accounting pronouncements may impact financial statements, as discussed in Note 3[237].