Catalyst Bancorp, Inc. reported net income of $586,000 for the first quarter of 2025, marking a significant turnaround from a $4.7 million net loss in the same period of 2024. This improvement highlights the impact of the company's strategic re-focus and operational adjustments.
Net interest income increased by $272,000, or 13.0%, to $2.40 million for the three months ended March 31, 2025. The net interest margin expanded substantially to 3.89%, up from 3.12% in the prior year period, benefiting from a 15.0% increase in average loans outstanding to $166.1 million and an improved average loan yield of 6.68%.
Non-interest income rebounded dramatically, totaling $553,000 in Q1 2025 compared to a $5.20 million net loss in Q1 2024, primarily due to the absence of a large securities loss from the prior year. The current quarter also included $216,000 in insurance proceeds related to foreclosed properties.
Non-interest expense decreased substantially by $593,000, or 21.2%, to $2.20 million, largely attributable to lower data processing and communication costs following a core system upgrade completed in 2024. This operational efficiency improvement contributed directly to the company's return to profitability.
Asset quality metrics remained manageable, with the allowance for credit losses on loans at $2.50 million, representing 1.51% of total loans. The provision for credit losses was zero in Q1 2025, compared to $95,000 in Q1 2024, and non-performing assets decreased slightly to $1.72 million from $1.83 million at year-end 2024.
The company continued its share repurchase program, buying back 72,949 shares during the quarter. Total deposits declined by $5.10 million, primarily due to fluctuations in public fund balances, though Catalyst Bancorp maintains available liquidity sources totaling $79.97 million.
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