Catalyst Bancorp Reports Strong Third-Quarter Results After Lakeside Acquisition
News related to:Catalyst Bancorp, Inc · 3 min read
OPELOUSAS, La., Oct. 29, 2026 /CourierPR/ -- Catalyst Bancorp, Inc., the parent company for Catalyst Bank, announced its third-quarter 2026 financial results, marking a significant improvement in its performance. The company reported a net income of $978,000, or $0.27 per diluted common share, up $454,000, or 87%, from the second quarter of 2026, when it reported net income of $524,000, or $0.14 diluted EPS.
The third quarter saw the completion of the acquisition of Lakeside Bancshares, Inc. and its subsidiary, Lakeside Bank, on July 14, 2026. At the time of acquisition, Lakeside had total assets of $379.5 million, including loans of $226.8 million, and deposits of $284.2 million. Shareholders of Lakeside received $19.58 per share in cash, or $41.1 million in aggregate.
The integration of Lakeside has already shown positive results, with Catalyst Bancorp's third-quarter performance reflecting a substantial increase in profitability. However, the company noted certain expenses related to the merger, which it termed "merger-related expenses," totaling $883,000, after-tax, for the third quarter of 2026, compared to $101,000, after-tax, for the second quarter of 2026.
Excluding these merger-related expenses, non-GAAP net income for the third quarter of 2026 was $1.9 million, or $0.51 non-GAAP diluted EPS. This resulted in a non-GAAP return on average assets of 1.24% and a non-GAAP return on average tangible common equity of 11.05%.
The company also reported a $261,000 reversal of the provision for credit losses for the third quarter of 2026, compared to a $104,000 reversal for the second quarter of 2026. The reversals were primarily related to a decline in construction and land loans during both periods and improvements in originated classified commercial real estate loans during the second quarter of 2026.
The company's loan portfolio saw a significant increase, with loans totaling $383.5 million at September 30, 2026, up $220.7 million, or 136%, from June 30, 2026. Since the acquisition, acquired loan balances declined primarily due to pay-downs on commercial real estate and one- to four-family residential loans. Excluding the impact of the hospital construction loan conversion, growth in originated commercial real estate loans during the third quarter of 2026 was driven primarily by $2.7 million of loan production from the company's new lending team in Southwest Louisiana and $2.2 million of net loan growth from its Acadiana market.
The credit quality of the loan portfolio also saw improvements, with non-performing loans totaling $4.4 million, up $2.1 million, or 91%, compared to $2.3 million at June 30, 2026. The increase in non-performing loans was primarily driven by a purchased credit deteriorated commercial real estate loan acquired through the Lakeside acquisition. At September 30, 2026, the loan's net amortized cost totaled $2.0 million, and the specific allowance for credit losses totaled $969,000.
Investment securities also saw an increase, with total investment securities amounting to $123.9 million, or 19.6% of total assets, at September 30, 2026, up $56.9 million, or 84.8%, compared to June 30, 2026. The company acquired investment securities with an estimated fair value of $115.9 million as a result of the Lakeside acquisition and subsequently sold $56.0 million of the acquired portfolio on the acquisition date. A portion of the sales proceeds was redeployed into fixed-rate mortgage-backed securities.
Total deposits were $475.5 million at September 30, 2026, up $279.2 million, or 142%, from June 30, 2026, primarily due to the impact of the Lakeside acquisition. The ratio of the company's total loans to total deposits was 81% and 83% at September 30 and June 30, 2026, respectively.
Catalyst Bancorp remains committed to maintaining open and transparent communication with its shareholders. The company is taking a proactive approach to shareholder engagement, creating opportunities for ongoing dialogue beyond the annual meeting and proxy season.