Catalyst Bancorp (CLST) Registration filing summary

Company overview and business model

• Proposed Louisiana holding structure for a mutual-to-stock conversion; after closing, it will own all stock of a community savings bank founded in 1922 and serving Acadiana, south-central Louisiana.

• Banking model: attract retail deposits and use them to originate loans and invest in securities; at Dec. 31, 2020, 5 full-service offices served St. Landry and Lafayette parishes.

• FY 2020 loan portfolio was 65.8% one- to four-family residential; strategy is to diversify toward commercial real estate, commercial and industrial, and multifamily lending while serving existing customers.

• Growth plans include stronger business and professional relationships, enhanced digital services, a Lafayette-area branch by year-end 2021, possible acquisitions after conversion, and eventual rebranding.

Financial performance and metrics

• At Dec. 31, 2020: assets $224.7m, deposits $164.6m, net loans $148.8m and equity $50.6m; assets rose 2.8% YoY while net loans fell 7.9%.

• FY 2020 net loss $684,000 vs. net income $1.338m in FY 2019; key drivers were $1.510m of FHLB prepayment penalties and a $910,000 increase in loan-loss provision.

• FY 2020 net interest income $6.785m, down from $7.061m; net interest margin 3.12% vs. 3.39%, and efficiency ratio 102.10% vs. 78.20%.

• Deposits increased 16.2% YoY to $164.6m; core deposits were 57.9% of deposits. Allowance for loan losses was $3.022m, or 1.99% of loans, at year-end 2020.

• Regulatory capital exceeded well-capitalized thresholds at year-end 2020: Tier 1 leverage 21.09% and total risk-based capital 42.42%; nonperforming assets were 0.93% of assets.

Use of proceeds and capital allocation

• At the midpoint, estimated net proceeds of $37.105m: $18.553m to the bank, $3.080m loan to the ESOP, and $15.473m retained at the holding level.

• At the adjusted maximum, estimated net proceeds of $49.419m: $24.709m to the bank, $4.073m ESOP loan, and $20.636m retained.

• Bank proceeds may support lending, securities investments, branches or acquisitions; initial proceeds are expected to be placed substantially in short-term investment securities.

• Retained funds may support investments, capital management, acquisitions, dividends and general purposes; repurchases are generally restricted during the first year after conversion absent regulatory approval or specified exceptions.