Catalyst's Q3 Earnings Surge Y/Y on Loan and Deposit Growth

Shares of Catalyst Bancorp, Inc. CLST have gained 3.1% since the company reported earnings for the quarter ended Sept. 30, 2026, outperforming the S&P 500 index, which declined 2.7% over the same period. Over the past month, the stock has advanced 6.2% against the broader index's 3.4% decline.

Catalyst reported third-quarter 2026 earnings per share of 27 cents, which more than doubled year over year from 13 cents a year earlier.

Net interest income surged 110.3% year over year to $5.2 million from $2.5 million, while non-interest income increased 108.9% to $0.7 million from $0.3 million. The improved results primarily reflected the acquisition of Lakeside Bancshares, which significantly expanded Catalyst's banking operations.

Net income of $1 million denoted a jump from $0.5 million in the year-ago quarter.

Catalyst Bancorp, Inc. price-consensus-eps-surprise-chart | Catalyst Bancorp, Inc. Quote

Total interest income increased 120.1% year over year to $7.7 million from $3.5 million, supported by a larger earning-asset base following the Lakeside acquisition. However, interest expense climbed 142.7% to $2.6 million from $1.1 million, reflecting increased funding requirements.

The net interest margin contracted to 3.73% from 3.88% in the year-ago quarter.

Non-interest expenses increased 116.7% year over year to $4.8 million from $2.2 million, largely reflecting expanded operations and merger-related costs.

Total loans reached $383.5 million as of Sept. 30, 2026, increasing 136% from $162.8 million at June 30, 2026. The acquisition contributed $226.8 million in loans at closing.

Originated loans increased 3% sequentially to $168.1 million, supported by commercial real estate and commercial and industrial lending.

Non-performing loans increased 91% sequentially to $4.4 million from $2.3 million, primarily reflecting an acquired commercial real estate loan with credit deterioration.

The allowance for credit losses increased to $5.6 million, representing 1.47% of total loans compared with $2.2 million, or 1.34%, in the preceding quarter.

Catalyst recorded a $0.3 million reversal of credit-loss provisions compared with a $0.1 million reversal in the second quarter, primarily reflecting declining originated construction and land loan balances.

As of Sept. 30, 2026, Catalyst's cash and cash equivalents totaled $75.7 million, increasing from $37 million as of June 30, 2026.

Total deposits increased 142% sequentially to $475.5 million, primarily reflecting the Lakeside acquisition. The loan-to-deposit ratio improved to 81% from 83%.

Total assets reached $631.2 million at Sept. 30, 2026, compared with $290 million at June 30, 2026. Shareholders' equity declined slightly to $82 million from $82.5 million, while borrowings increased to $70 million from $9.8 million.

During the quarter, Catalyst repurchased 5,640 common shares at an average price of $17.96 per share. Approximately 142,451 shares remained available under its existing repurchase authorization.

President and CEO Joe Zanco highlighted stronger profitability following the Lakeside acquisition and encouraging integration progress.

Management emphasized expanding economic opportunities across Louisiana, particularly in the Acadiana and Southwest Louisiana markets, as potential catalysts for commercial lending growth.

The company reported non-GAAP net income of $1.9 million, excluding $0.9 million in after-tax merger-related expenses.

Management anticipates additional operating cost savings following the planned November systems conversion and consolidation of back-office operations.

On July 14, 2026, Catalyst completed its acquisition of Lakeside Bancshares and Lakeside Bank for approximately $41.1 million in cash.

At acquisition, Lakeside held $379.5 million in assets, including $226.8 million in loans and $284.2 million in deposits.

The transaction expanded Catalyst's presence in Southwest Louisiana, although integration expenses and execution risks remain important considerations for future profitability.

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