[10-Q] Catalyst Bancorp, Inc. Quarterly Earnings Report

[10-Q] Catalyst Bancorp, Inc. Quarterly Earnings Report

[10-Q] Catalyst Bancorp, Inc. Quarterly Earnings Report

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Banking sector analyst neutral

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10-Q

Catalyst Bancorp, Inc. reported a modestly lower profit while strengthening liquidity and announcing a planned acquisition. For the three months ended March 31, 2026, net income was $558,000 versus $586,000 a year earlier, with basic earnings per share steady at $0.16.

Total assets rose to $288.5 million, up 2.0% from year-end, as cash and cash equivalents increased to $38.5 million, driven mainly by a $10.1 million rise in deposits to $195.4 million and lower Federal Home Loan Bank borrowings. The loan portfolio declined 3.8% to $163.7 million, led by paydown of a large commercial and industrial relationship, while the allowance for credit losses decreased slightly to $2.3 million with a small reversal.

Credit quality remained generally stable, with non-accrual loans of $2.4 million and total loans past due still a small portion of the portfolio. After quarter-end, the company agreed to acquire Lakeside Bancshares, Inc. for $19.58 per share in cash, or $41.1 million in aggregate, adding a bank with $385.7 million in assets as of December 31, 2025, subject to regulatory and shareholder approvals.

Q1 shows stable earnings, rising liquidity, and a sizeable pending acquisition.

Catalyst Bancorp generated net income of $558,000, essentially flat on a per-share basis at $0.16 basic despite modest loan contraction. Net interest income improved to $2.545 million, helped by higher yields on securities and cash, while funding costs stayed contained.

Total assets increased to $288.5 million as deposits grew $10.1 million to $195.4 million and Federal Home Loan Bank borrowings fell to $9.8 million. Loans declined 3.8% to $163.7 million, largely from payoff of a $5.9 million commercial and industrial relationship, which also contributed to a $70,000 reversal of credit losses.

Credit quality indicators were steady, with non-accrual loans at $2.4 million and the allowance for credit losses at $2.3 million. The announced cash acquisition of Lakeside Bancshares for $41.1 million, adding a bank with $385.7 million in assets as of December 31, 2025, would substantially increase balance-sheet size if it closes in Q3 2026, subject to regulatory and shareholder approvals. Actual impact will depend on final purchase accounting and integration.

10-Q Quarterly Reports: What Changes Quarter to Quarter →

05/15/2026 - 11:52 AM

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Table of Contents

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, 2026

☐	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

CATALYST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Louisiana		86-2411762
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

235 N. Court Street, Opelousas, Louisiana 70570

(Address of principal executive offices; Zip Code)

(337) 948-3033

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		CLST		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 4,051,896 shares of Registrant’s common stock, par value of $0.01 per share, issued and outstanding as of May 12, 2026.

Table of Contents

CATALYST BANCORP, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Financial Condition	2

	Consolidated Statements of Income	3

	Consolidated Statements of Comprehensive Income	4

	Consolidated Statements of Changes in Shareholders' Equity	5

	Consolidated Statements of Cash Flows	6

	Notes to Unaudited Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42

Item 4.	Controls and Procedures	43

PART II	OTHER INFORMATION	44

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5	Other Information	44

Item 6.	Exhibits	45

SIGNATURES		46

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CATALYST BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


		(Unaudited)
		March 31,		December 31,
(Dollars in thousands, except per share and share data)		2026		2025
ASSETS
Non-interest-bearing cash		$	4,898	$	4,132
Interest-bearing cash and due from banks			33,635		21,073
Total cash and cash equivalents			38,533		25,205
Investment securities:
Securities available-for-sale, at fair value (amortized cost of $51,350 and $53,517, respectively)			48,216		50,467
Securities held-to-maturity (fair value of $13,429 and $13,567, respectively)			14,914		14,917
Loans receivable, net of unearned income			163,677		170,210
Allowance for credit losses			(2,295)		(2,367)
Loans receivable, net			161,382		167,843
Accrued interest receivable			849		907
Foreclosed assets			34		34
Premises and equipment, net			5,749		5,850
Stock in correspondent banks, at cost			1,963		1,139
Bank-owned life insurance			15,117		14,983
Other assets			1,751		1,582
TOTAL ASSETS		$	288,508	$	282,927

LIABILITIES
Deposits
Non-interest-bearing		$	34,739	$	29,991
Interest-bearing			160,634		155,283
Total deposits			195,373		185,274
Borrowings			9,759		14,732
Other liabilities			1,167		1,196
TOTAL LIABILITIES			206,299		201,202

Commitments and contingencies (Note 7)

SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value - 5,000,000 shares authorized; none issued or outstanding			-		-
Common stock, $0.01 par value; 30,000,000 shares authorized; 4,058,297 and 4,074,911 issued and outstanding, respectively			41		41
Additional paid-in capital			37,303		37,363
Unallocated common stock held by benefit plans			(5,129)		(5,182)
Retained earnings			52,470		51,912
Accumulated other comprehensive loss			(2,476)		(2,409)
TOTAL SHAREHOLDERS' EQUITY			82,209		81,725
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	288,508	$	282,927

The accompanying Notes are an integral part of these consolidated financial statements.

Table of Contents

CATALYST BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
(Dollars in thousands, except per share data)	2026		2025
INTEREST INCOME
Loans receivable, including fees	$	2,749	$	2,738
Investment securities		522		275
Cash and due from banks		290		341
Other earning assets		9		20
Total interest income		3,570		3,374
INTEREST EXPENSE
Deposits		939		941
Borrowings		86		68
Total interest expense		1,025		1,009
Net interest income		2,545		2,365
Reversal of credit losses		(70)		-
Net interest income after reversal of credit losses		2,615		2,365
NON-INTEREST INCOME
Service charges on deposit accounts		202		197
Bank-owned life insurance		134		118
Other		16		22
Total non-interest income		352		337
NON-INTEREST EXPENSE
Salaries and employee benefits		1,321		1,245
Occupancy and equipment		209		199
Data processing and communication		180		182
Professional fees		185		101
Directors’ fees		121		114
Foreclosed assets, net		-		(127)
Advertising and marketing		33		39
Regulatory fees and assessments		33		36
Other		201		193
Total non-interest expense		2,283		1,982
Income before income tax expense		684		720
Income tax expense		126		134
NET INCOME	$	558	$	586

Earnings per share - basic	$	0.16	$	0.16
Earnings per share - diluted		0.15		0.16

The accompanying Notes are an integral part of these consolidated financial statements.

Table of Contents

CATALYST BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(Dollars in thousands)	2026			2025
Net income	$	558		$	586
Net change in unrealized (losses) gains on available-for-sale securities		(84)			589
Income tax effect		17			(123)
Total other comprehensive (loss) income		(67)			466
Total comprehensive income	$	491		$	1,052

The accompanying Notes are an integral part of these consolidated financial statements.

Table of Contents

CATALYST BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Three Months Ended March 31, 2026 and 2025
	Common Stock					Unallocated Common				Accumulated
(Dollars in thousands. except share data)	Shares	Amount		Additional Paid-in Capital		Stock Held by Benefit Plans		Retained Earnings		Other Comprehensive Income (Loss)		Total
BALANCE, DECEMBER 31, 2025	4,074,911	$	41	$	37,363	$	(5,182)	$	51,912	$	(2,409)	$	81,725
Net income	-		-		-		-		558		-		558
Other comprehensive loss	-		-		-		-		-		(67)		(67)
ESOP shares released for allocation	-		-		32		53		-		-		85
Stock compensation expense	-		-		168		-		-		-		168
Repurchase of common stock	(16,614)		-		(260)		-		-		-		(260)
BALANCE, MARCH 31, 2026	4,058,297	$	41	$	37,303	$	(5,129)	$	52,470	$	(2,476)	$	82,209

BALANCE, DECEMBER 31, 2024	4,278,150	$	43	$	39,561	$	(5,702)	$	49,860	$	(3,558)	$	80,204
Net income	-		-		-		-		586		-		586
Other comprehensive income	-		-		-		-		-		466		466
ESOP shares released for allocation	-		-		9		53		-		-		62
Stock compensation expense			-		139		-		-		-		139
Repurchase of common stock	(72,949)		(1)		(865)		-		-		-		(866)
BALANCE, MARCH 31, 2025	4,205,201	$	42	$	38,844	$	(5,649)	$	50,446	$	(3,092)	$	80,591

The accompanying Notes are an integral part of these consolidated financial statements.

Table of Contents

CATALYST BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(Dollars in thousands)	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	558		$	586
Adjustments to reconcile net income to net cash provided by operating activities:
Investment securities amortization, net		17			19
Stock dividends from correspondent banks		(7)			(19)
Amortization of prepayment penalties on debt restructuring		27			45
Reversal of credit losses		(70)			-
Increase in cash surrender value of bank-owned life insurance		(134)			(118)
Stock-based compensation		253			201
Depreciation of premises and equipment		105			103
Net write-downs and losses on the sale of foreclosed assets		-			88
Deferred income tax		97			71
Increase in other assets		(191)			(161)
Increase (decrease) in other liabilities		6			(388)
Net cash provided by operating activities		661			427
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in available-for-sale securities:
Proceeds from maturities, calls, and paydowns		2,153			710
Purchases		-			(1,266)
Net decrease in loans		6,496			960
Proceeds from sale of foreclosed assets		-			29
Purchases of premises and equipment		(4)			(66)
Purchase of Federal Reserve Bank Stock		(817)			-
Proceeds from redemption of Federal Home Loan Bank Stock		-			1,171
Net cash provided by investing activities		7,828			1,538
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits		10,099			(5,076)
Borrowings from the Federal Home Loan Bank of Dallas		4,000			-
Repayments of borrowings from Federal Home Loan Bank of Dallas		(9,000)			-
Repurchase of common stock		(260)			(866)
Net cash provided by (used in) financing activities		4,839			(5,942)
NET CHANGE IN CASH AND CASH EQUIVALENTS		13,328			(3,977)
CASH AND CASH EQUIVALENTS, beginning of period		25,205			44,295
CASH AND CASH EQUIVALENTS, end of period	$	38,533		$	40,318

SUPPLEMENTAL SCHEDULE OF INTEREST PAID
Cash paid for interest	$	1,034		$	1,013

The accompanying Notes are an integral part of these consolidated financial statements.

Table of Contents

CATALYST BANCORP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Catalyst Bancorp, Inc. (“Catalyst Bancorp” or the “Company”) is the holding company for Catalyst Bank (the “Bank”). The Bank has been in operation in the Acadiana region of south-central Louisiana since 1922 and offers commercial and retail banking products through six full-service locations. The Company was incorporated by the Bank in February 2021 as part of the conversion of the Bank from the mutual to the stock form of organization (the “Conversion”). The Conversion was completed on October 12, 2021. The Company was not engaged in operations and had not issued any shares of stock prior to the completion of the Conversion.

As used in this report, unless the context otherwise requires, the terms “we,” “our,” “us,” or the “Company” refer to Catalyst Bancorp, and the term the “Bank” refers to Catalyst Bank, the wholly owned subsidiary of the Company. In addition, unless the context otherwise requires, references to the operations of the Company include the operations of the Bank.

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the interim periods presented are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K.

Certain amounts reported in prior periods may have been reclassified to conform to the current period presentation. Such reclassifications had no effect on previously reported equity or net income.

Segment Reporting

The Company determined that all of its banking operations serve a similar customer base, offer similar products and services, and are managed through similar processes. Therefore, the Company’s banking operations are aggregated into one reportable segment, which generates income principally from interest on loans and investment securities, as well as from fees charged in connection with various loan and deposit services. The chief operating decision maker (“CODM”) is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the accompanying consolidated statements of income. The level of disaggregation and amounts of significant segment income and expenses, such as interest income, interest expense, provision for credit losses, salaries and employee benefits expense and other items, that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of income. Likewise, the measure of segment assets is reported on the accompanying consolidated statements of financial condition as total assets.

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Use of Estimates

Certain estimates involve significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when developing estimates are included in its Annual Report on Form 10-K for the year ended December 31, 2025. Our accounting policy for the allowance for credit losses is the policy that management believes involves the most significant estimate to aid in fully understanding and evaluating our reported financial results.

There were no material changes from the significant accounting policies or estimates previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

Recently Adopted Accounting Standards

ASU No. 2025-08. In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans. This ASU expands the population of acquired financial assets subject to the gross-up approach in Topic 326. Under the guidance in this ASU, loans acquired without credit deterioration (“non-PCD loans”) and deemed “seasoned” are referred to as “purchased seasoned loans” and accounted for using the gross-up approach at acquisition. All non-PCD loans that are acquired in a business combination are deemed seasoned under the ASU. The gross-up approach results in recognizing loans at their purchase price plus an allowance for credit losses. Under previous guidance, the allowance for credit losses on non-PCD loans was recognized with a corresponding charge to earnings through the provision for credit losses at the acquisition date. ASU 2025-08 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The guidance is required to be applied prospectively to loans that are acquired on or after the initial application date. The Company early adopted ASU 2025-08 beginning January 1, 2026. Since ASU 2025-08 only affects prospective loan acquisitions and the Company has not purchased loans, there was no effect of adoption on the Company’s consolidated financial statements.

Accounting Standards Updates Issued, but Not Adopted

ASU No. 2024-03. In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU require disclosure, in the notes to the financial statements, of specified qualitative and quantitative information about certain costs and expenses, such as employee compensation, depreciation, and intangible asset amortization. Disclosure requirements also include a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, among other items. The Company expects to adopt the amendments in ASU 2024-03 for periods beginning after December 31, 2026. As the update contains only amendments to disclosure requirements, adoption will have no impact on the Company’s consolidated financial condition or results of operations.

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NOTE 2. EARNINGS PER SHARE

Earnings per common share was computed based on the following:


	Three Months Ended March 31,
(In thousands, except per share data)	2026			2025
Numerator
Net income available to common shareholders	$	558		$	586

Denominator
Weighted average common shares outstanding		4,060			4,241
Weighted average unallocated common stock held by benefit plans		(473)			(518)
Weighted average shares - basic		3,587			3,723
Effect of dilutive stock-based awards:
Stock options		29			-
Restricted stock		27			3
Weighted average shares - assuming dilution		3,643			3,726

Basic earnings (loss) per common share	$	0.16		$	0.16
Diluted earnings (loss) per common share		0.15			0.16

Diluted earnings per share was computed using the treasury stock method. The following table presents the weighted average of potentially dilutive common shares attributable to outstanding stock options and restricted stock that were anti-dilutive and excluded from the calculation of diluted earnings per share.

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NOTE 3. INVESTMENT SECURITIES

Investment securities have been classified according to management’s intent. The amortized cost of securities and their approximate fair values are as follows:


		March 31, 2026
(Dollars in thousands)		Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available-for-sale
Mortgage-backed securities		$	49,655		$	87		$	(3,074)		$	46,668
Municipal obligations			1,695			18			(165)			1,548
Total available-for-sale		$	51,350		$	105		$	(3,239)		$	48,216
Securities held-to-maturity
U.S. Government and agency obligations		$	13,000		$	-		$	(1,451)		$	11,549
Municipal obligations			1,914			9			(43)			1,880
Total held-to-maturity		$	14,914		$	9		$	(1,494)		$	13,429


		December 31, 2025
(Dollars in thousands)		Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available-for-sale
Mortgage-backed securities		$	51,820		$	129		$	(3,061)		$	48,888
Municipal obligations			1,697			18			(136)			1,579
Total available-for-sale		$	53,517		$	147		$	(3,197)		$	50,467
Securities held-to-maturity
U.S. Government and agency obligations		$	13,000		$	-		$	(1,423)		$	11,577
Municipal obligations			1,917			83			(10)			1,990
Total held-to-maturity		$	14,917		$	83		$	(1,433)		$	13,567

There were no securities transferred between classifications during the three months ended March 31, 2026 or 2025. There were no sales of investment securities during the three months ended March 31, 2026 or 2025.

Accrued interest receivable on the Company’s investment securities totaled $202,000 and $183,000 at March 31, 2026 and December 31, 2025, respectively.

Investment securities with a carrying amount of $48.8 million and $25.3 million were pledged to secure public deposits as required or permitted by law at March 31, 2026 and December 31, 2025, respectively. The Company also uses a custodial letter of credit granted by the Federal Home Loan Bank of Dallas to collateralize public fund deposits. At March 31, 2026 and December 31, 2025, $5.0 million and $20.0 million, respectively, of the custodial letter of credit was pledged as collateral for public deposits.

At March 31, 2026 and December 31, 2025, other than securities issued by U.S. Government agencies or government-sponsored enterprises, we had no investments in a single issuer which had an aggregate book value in excess of 10% of the Company’s shareholders’ equity.

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The following is a summary of maturities of securities available-for-sale and held-to-maturity at March 31, 2026:


	March 31, 2026
	Available-for-Sale					Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value			Amortized Cost		Fair Value
Amounts maturing in:
One year or less	$	-	$	-		$	-	$	-
After one through five years		635		652			9,434		8,599
After five through ten years		1,060		896			5,480		4,830
After ten years		-		-			-		-
Subtotal		1,695		1,548			14,914		13,429
Mortgage-backed securities		49,655		46,668			-		-
Total	$	51,350	$	48,216		$	14,914	$	13,429

Securities, other than mortgage-backed securities, are classified according to their contractual maturities without consideration of principal amortization, potential prepayments, or call options. The expected maturities may differ from contractual maturities because of the exercise of call options and potential paydowns. Accordingly, actual maturities may differ from contractual maturities.

Information pertaining to securities with gross unrealized losses at March 31, 2026 and December 31, 2025 aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:


		March 31, 2026
		Less than 12 Months				12 Months or Greater				Total
(Dollars in thousands)		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Securities available-for-sale
Mortgage-backed securities		$	12,812	$	(79)	$	16,691	$	(2,995)	$	29,503	$	(3,074)
Municipal obligations			-		-		896		(165)		896		(165)
Total available-for-sale		$	12,812	$	(79)	$	17,587	$	(3,160)	$	30,399	$	(3,239)
Securities held-to-maturity
U.S. Government and agency obligations		$	-	$	-	$	11,549	$	(1,451)	$	11,549	$	(1,451)
Municipal obligations			1,091		(34)		425		(9)		1,516		(43)
Total held-to-maturity		$	1,091	$	(34)	$	11,974	$	(1,460)	$	13,065	$	(1,494)
Total		$	13,903	$	(113)	$	29,561	$	(4,620)	$	43,464	$	(4,733)


		December 31, 2025
		Less than 12 Months				12 Months or Greater				Total
(Dollars in thousands)		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Securities available-for-sale
Mortgage-backed securities		$	18,992	$	(49)	$	19,793	$	(3,012)	$	38,785	$	(3,061)
Municipal obligations			-		-		928		(136)		928		(136)
Total available-for-sale		$	18,992	$	(49)	$	20,721	$	(3,148)	$	39,713	$	(3,197)
Securities held-to-maturity
U.S. Government and agency obligations		$	-	$	-	$	11,577	$	(1,423)	$	11,577	$	(1,423)
Municipal obligations			-		-		427		(10)		427		(10)
Total held-to-maturity		$	-	$	-	$	12,004	$	(1,433)	$	12,004	$	(1,433)
Total		$	18,992	$	(49)	$	32,725	$	(4,581)	$	51,717	$	(4,630)

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At March 31, 2026 and December 31, 2025, the Company held 49 and 47 securities, respectively, with an unrealized loss. The securities with unrealized losses consisted of mortgage-backed securities guaranteed by the government-sponsored enterprises that have a credit rating consistent with the U.S. Government, and debt obligations guaranteed by federal, state and local government entities and are generally considered to be risk-free. These unrealized losses relate principally to noncredit related factors, including changes in current interest rates for similar types of securities. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost basis. Based on management’s evaluation of the securities portfolio, the Company did not establish an allowance for credit losses for its available-for-sale or held-to-maturity securities at March 31, 2026 or December 31, 2025.

NOTE 4. LOANS RECEIVABLE

Loans receivable at March 31, 2026 and December 31, 2025 are summarized as follows:



	March 31,		December 31,
(Dollars in thousands)	2026		2025
Real estate loans
One- to four-family residential	$	78,093	$	80,123
Commercial real estate		33,673		32,872
Construction and land		19,761		18,806
Multi-family residential		4,781		5,309
Total real estate loans		136,308		137,110
Other loans
Commercial and industrial		25,626		31,205
Consumer		1,743		1,895
Total other loans		27,369		33,100
Total loans		163,677		170,210
Less: Allowance for credit losses		(2,295)		(2,367)
Net loans	$	161,382	$	167,843

At March 31, 2026 and December 31, 2025, real estate loans totaling $84.4 million and $87.5 million, respectively, were pledged as collateral to the Federal Home Loan Bank of Dallas for borrowings under a blanket lien agreement.

Accrued interest receivable on the Company’s loans totaled $626,000 and $715,000 at March 31, 2026 and December 31, 2025, respectively. Accrued interest receivable is excluded from the Company’s estimate of the allowance for credit losses.

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The following describes the general risk characteristics of each segment of the loan portfolio disclosed in this note:

One- to four-family residential – This category primarily consists of loans secured by residential real estate located in our market. The performance of these loans may be adversely affected by, among other factors, unemployment rates, local residential real estate market conditions and the interest rate environment. Generally, these loans are for longer terms than commercial and construction loans.

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 estate market for the property type and geographic region where the property or borrower is located.

Construction and land – This category consists of loans to finance the ground-up construction and/or improvement of residential and commercial properties and loans secured by land. The performance of these loans is generally dependent upon the successful completion of improvements and/or land development for the end user, the sale of the property to a third party, or a secondary source of cash flow from the owners. The successful completion of planned improvements and development may be adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays.

Multi-family residential – This category consists of loans secured by apartment or residential buildings with five or more units used to accommodate households on a temporary or permanent basis. The performance of multi-family loans is generally dependent on the receipt of rental income from the tenants who occupy the subject property. The occupancy rate of the subject property and the ability of the tenants to pay rent may be adversely affected by the location of the subject property and local economic conditions.

Commercial and industrial – This category primarily consists of secured and unsecured loans to small and mid-sized businesses to fund operations or purchase non-real estate assets. Secured loans are primarily secured by accounts receivable, inventory, equipment and certain other business assets. The performance of these loans may be adversely affected by, among other factors, conditions specific to the relevant industry, fluctuations in the value of the collateral and individual performance factors related to the borrower.

Consumer – This category consists of loans to individuals for household, family and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, unemployment rates and other factors affecting the borrower’s income available to service the debt.

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The following tables outline the changes in the allowance for credit losses for the three months ended March 31, 2026 and 2025.


	For the Three Months Ended March 31, 2026
(Dollars in thousands)	Beginning Balance		Provision (Reversal)			Charge-offs			Recoveries			Ending Balance
Allowance for credit losses
One- to four-family residential	$	1,323	$	(34)		$	(16)		$	11		$	1,284
Commercial real estate		267		26			-			-			293
Construction and land		295		18			-			-			313
Multi-family residential		80		(8)			-			-			72
Commercial and industrial		371		(42)			(28)			-			301
Consumer		31		5			(5)			1			32
Total for loans	$	2,367	$	(35)		$	(49)		$	12		$	2,295
Unfunded lending commitments⁽¹⁾		211		(35)			-			-			176
Total	$	2,578	$	(70)		$	(49)		$	12		$	2,471

(1)	The allowance for credit losses on unfunded lending commitments is recorded within “other liabilities” on the statement of financial condition. The related provision for credit losses for unfunded lending commitments is recorded with the reversal of credit losses on the income statement.


	For the Three Months Ended March 31, 2025
(Dollars in thousands)	Beginning Balance		Provision (Reversal)			Charge-offs			Recoveries			Ending Balance
Allowance for credit losses
One- to four-family residential	$	1,164	$	60		$	(31)		$	8		$	1,201
Commercial real estate		192		(2)			-			-			190
Construction and land		528		(16)			-			-			512
Multi-family residential		35		-			-			-			35
Commercial and industrial		372		(64)			-			5			313
Consumer		26		21			(22)			1			26
Unallocated		205		18			-			-			223
Total for loans	$	2,522	$	17		$	(53)		$	14		$	2,500
Unfunded lending commitments		121		(17)			-			-			104
Total	$	2,643	$	-		$	(53)		$	14		$	2,604

During the three months ended March 31, 2026, the primary drivers of the change in the allowance for credit losses were declines in outstanding loan balances and loan commitments. During the three months ended March 31, 2025, the changes in the allowance for credit losses were also largely driven by changes in loan balances and commitments.

The allowance for credit losses is established through a provision for credit losses charged to earnings. Loans, or portions of loans, are charged off against the allowance in the period that such loans, or portions thereof, are deemed uncollectible. Subsequent recoveries, if any, are credited to the allowance. The Company groups loans and unfunded lending commitments with similar risk characteristics into pools or segments and collectively evaluates each pool to estimate the allowance for credit losses. For each loan pool, the Company uses the remaining life method to calculate its credit loss estimate. Loans are individually evaluated for credit losses when they do not share similar risk characteristics with our identified loan pools. The allowance for credit losses reflects the Company’s estimate of current expected credit losses (“CECL”) over the full life of the financial assets.

Loans are individually evaluated for credit losses when they do not share similar risk characteristics with our identified loan pools. Generally, management considers loans rated as substandard for individual analysis or when we have identified certain unique characteristics that impact the risk of credit loss. These characteristics include, but are not limited to, the creditworthiness of the borrower, the reliability of the primary source of repayment, the quality of the collateral, the size of the loan or relationship, and the industry of the borrower. The allowance for credit losses on individually evaluated, collateral-dependent loans is based on a comparison of the recorded investment in the loan with the fair value of the underlying collateral. Alternatively, we estimate credit losses on individual loans by comparing the loan’s recorded investment to the loan’s estimated fair value based on discounted cash flows or an observable market price.

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The following tables outline the allowance for credit losses and the balance of loans by method of loss evaluation at March 31, 2026 and December 31, 2025.


	March 31, 2026						December 31, 2025
(Dollars in thousands)	Individually Evaluated		Collectively Evaluated		Total		Individually Evaluated		Collectively Evaluated		Total
Allowance for credit losses
One- to four-family residential	$	41	$	1,243	$	1,284	$	47	$	1,276	$	1,323
Commercial real estate		22		271		293		-		267		267
Construction and land		-		313		313		-		295		295
Multi-family residential		-		72		72		-		80		80
Commercial and industrial		-		301		301		-		371		371
Consumer		-		32		32		-		31		31
Total	$	63	$	2,232	$	2,295	$	47	$	2,320	$	2,367
Loans
One- to four-family residential	$	909	$	77,184	$	78,093	$	969	$	79,154	$	80,123
Commercial real estate		304		33,369		33,673		-		32,872		32,872
Construction and land		324		19,437		19,761		523		18,283		18,806
Multi-family residential		-		4,781		4,781		-		5,309		5,309
Commercial and industrial		1,851		23,775		25,626		1,949		29,256		31,205
Consumer		-		1,743		1,743		-		1,895		1,895
Total	$	3,388	$	160,289	$	163,677	$	3,441	$	166,769	$	170,210

At March 31, 2026 and December 31, 2025, all loans individually evaluated for credit losses, except for a construction and land loan, were considered collateral-dependent financial assets. Loans are considered collateral-dependent and individually evaluated when, based on management’s assessment as of the reporting date, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following describes the types of collateral that secure collateral dependent loans:

●

One- to four-family first mortgages are primarily secured by first liens on residential real estate.

●

Commercial real estate loans are primarily secured by retail and industrial use buildings and other properties used for commercial purposes.

●

Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment.

The construction and land loan balance reported as individually evaluated for credit losses in the tables above represents amounts that will be re-paid by grant proceeds from the Federal Home Loan Bank of Dallas.

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A summary of current and past due loans as of March 31, 2026 and December 31, 2025 follows:


		As of March 31, 2026
(Dollars in thousands)		Past Due 30-59 Days			Past Due 60-89 Days			Past Due 90 Days or Greater			Total Past Due			Current			Total Loans
One- to four-family residential		$	2,345		$	350		$	822		$	3,517		$	74,576		$	78,093
Commercial real estate			383			-			-			383			33,290			33,673
Construction and land			16			-			-			16			19,745			19,761
Multi-family residential			-			-			-			-			4,781			4,781
Commercial and industrial			-			13			150			163			25,463			25,626
Consumer			1			-			-			1			1,742			1,743
Total		$	2,745		$	363		$	972		$	4,080		$	159,597		$	163,677


		As of December 31, 2025
(Dollars in thousands)		Past Due 30-59 Days			Past Due 60-89 Days			Past Due 90 Days or Greater			Total Past Due			Current			Total Loans
One- to four-family residential		$	2,419		$	784		$	1,021		$	4,224		$	75,899		$	80,123
Commercial real estate			-			-			32			32			32,840			32,872
Construction and land			-			-			-			-			18,806			18,806
Multi-family residential			-			-			-			-			5,309			5,309
Commercial and industrial			320			2			91			413			30,792			31,205
Consumer			6			-			-			6			1,889			1,895
Total		$	2,745		$	786		$	1,144		$	4,675		$	165,535		$	170,210

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due based on contractual terms of the loan.

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A summary of total non-accrual loans and accruing loans 90 days or more past due as of March 31, 2026 and December 31, 2025 follows:



	March 31, 2026
	Non-accrual loans
(Dollars in thousands)	With Allowance for Credit Loss		Without Allowance for Credit Loss		Total Non-accrual Loans		Accruing loans 90 days or more past due		Total
One- to four-family residential	$	1,404	$	706	$	2,110	$	96	$	2,206
Commercial real estate		304		-		304		-		304
Construction and land		18		-		18		-		18
Multi-family residential		-		-		-		-		-
Commercial and industrial		-		-		-		150		150
Consumer		-		-		-		-		-
Total	$	1,726	$	706	$	2,432	$	246	$	2,678


	December 31, 2025
	Non-accrual loans
(Dollars in thousands)	With Allowance for Credit Loss		Without Allowance for Credit Loss		Total Non-accrual Loans		Accruing loans 90 days or more past due		Total
One- to four-family residential	$	1,469	$	759	$	2,228	$	272	$	2,500
Commercial real estate		-		-		-		32		32
Construction and land		20		-		20		-		20
Multi-family residential		-		-		-		-		-
Commercial and industrial		-		-		-		91		91
Consumer		-		-		-		-		-
Total	$	1,489	$	759	$	2,248	$	395	$	2,643

The Company was not committed to lend any additional funds on non-accrual loans at March 31, 2026 or December 31, 2025. The Company does not recognize interest income while loans are on non-accrual status. All payments received while on non-accrual status are applied against the principal balance of non-accrual loans.

At March 31, 2026, loans secured by residential real estate for which formal foreclosure proceedings were in process totaled $529,000. At December 31, 2025, the Company had no outstanding loans for which formal foreclosure proceedings were in process.

Occasionally loans are modified to assist borrowers experiencing financial difficulty. We consider modifications such as term extensions, principal forgiveness, payment delays or alternate payment schedules, and alternate interest rate terms. At March 31, 2026 and December 31, 2025, loans with modifications for borrowers experiencing financial difficulty totaled $690,000 and $719,000, respectively. At March 31, 2026 and December 31, 2025, all loans with modifications for borrowers experiencing financial difficulty were one- to four-family residential loans and totaled less than 1.0% of total one- to four-family residential loans at such dates.

During the three months ended March 31, 2026, the Company did not grant any loan modifications to borrowers experiencing financial difficulty that resulted in a more than minor change in the timing or amount of contractual cash flows. During the year ended December 31, 2025, the Company granted two loan modifications to borrowers experiencing financial difficulty that resulted in a more than minor change in the timing or amount of contractual cash flows. The Company consolidated the debt of two related borrowers into a new residential mortgage loan totaling $131,000 to extend the maturity date and lower the monthly payment. The second modification in 2025 involved altering the payment schedule for a $101,000 residential mortgage loan to comply with the borrower’s bankruptcy plan. The loan modified because of bankruptcy was 41 days past due with a balance of $94,000 as of March 31, 2026. The other loan modified in 2025 for borrowers experiencing financial difficulty has performed in accordance with the terms after modification. The Company was not committed to lend any additional funds to borrowers with modified terms and experiencing financial difficulty at March 31, 2026 or December 31, 2025.

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Loans are categorized by credit quality indicators based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. Credit quality classifications follow regulatory guidelines and can generally be described as follows:

Pass – Loans in this category have strong asset quality and liquidity along with a multi-year track record of profitability.

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – Loans classified as loss have been identified as uncollectible and are generally charged-off in the period identified.

The information for each of the credit quality indicators is updated at least quarterly in conjunction with the determination of the adequacy of the allowance for credit losses.

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The following tables present the Company’s loan portfolio by credit quality classification and origination year as of March 31, 2026 and December 31, 2025. The Company uses the latter of origination or renewal date to classify term loans into vintages. The gross charge-offs presented in the tables that follow are for the three months ended March 31, 2026 and year ended December 31, 2025.


	March 31, 2026
															Line-of-credit
															Arrangements
	Term Loans by Origination Year												Line-of-credit		Converted to
(Dollars in thousands)	2026		2025		2024		2023		2022		Prior		Arrangements		Term Loans		Total
One- to four-family residential
Pass	$	839	$	3,523	$	7,977	$	3,598	$	10,904	$	45,928	$	2,475	$	-	$	75,244
Special Mention		-		-		-		-		-		52		244		-		296
Substandard		-		-		19		-		484		2,050		-		-		2,553
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	839	$	3,523	$	7,996	$	3,598	$	11,388	$	48,030	$	2,719	$	-	$	78,093
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	16	$	-	$	-	$	16
Commercial real estate
Pass	$	1,696	$	6,976	$	2,563	$	9,648	$	1,342	$	7,947	$	144	$	-	$	30,316
Special Mention		-		624		1,333		450		94		306		-		-		2,807
Substandard		-		-		217		304		-		29		-		-		550
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,696	$	7,600	$	4,113	$	10,402	$	1,436	$	8,282	$	144	$	-	$	33,673
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Construction and land
Pass	$	546	$	339	$	130	$	-	$	96	$	391	$	17,073	$	1,168	$	19,743
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		18		-		-		18
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	546	$	339	$	130	$	-	$	96	$	409	$	17,073	$	1,168	$	19,761
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Multi-family residential
Pass	$	-	$	-	$	2,927	$	-	$	-	$	1,854	$	-	$	-	$	4,781
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	2,927	$	-	$	-	$	1,854	$	-	$	-	$	4,781
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial and industrial
Pass	$	577	$	7,897	$	3,289	$	1,436	$	151	$	329	$	5,921	$	3,961	$	23,561
Special Mention		88		16		-		-		-		-		110		-		214
Substandard		-		786		344		-		721		-		-		-		1,851
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	665	$	8,699	$	3,633	$	1,436	$	872	$	329	$	6,031	$	3,961	$	25,626
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	28	$	-	$	28
Consumer
Pass	$	260	$	832	$	211	$	190	$	28	$	222	$	-	$	-	$	1,743
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	260	$	832	$	211	$	190	$	28	$	222	$	-	$	-	$	1,743
Gross charge-offs	$	1	$	4	$	-	$	-	$	-	$	-	$	-	$	-	$	5
Total
Pass	$	3,918	$	19,567	$	17,097	$	14,872	$	12,521	$	56,671	$	25,613	$	5,129	$	155,388
Special Mention		88		640		1,333		450		94		358		354		-		3,317
Substandard		-		786		580		304		1,205		2,097		-		-		4,972
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	4,006	$	20,993	$	19,010	$	15,626	$	13,820	$	59,126	$	25,967	$	5,129	$	163,677
Gross charge-offs	$	1	$	4	$	-	$	-	$	-	$	16	$	28	$	-	$	49

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	December 31, 2025
															Line-of-credit
															Arrangements
	Term Loans by Origination Year												Line-of-credit		Converted to
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Arrangements		Term Loans		Total
One- to four-family residential
Pass	$	3,654	$	3,650	$	3,624	$	11,134	$	2,334	$	45,887	$	2,270	$	4,574	$	77,127
Special Mention		-		-		-		-		53		-		244		-		297
Substandard		-		21		9		485		-		2,184		-		-		2,699
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	3,654	$	3,671	$	3,633	$	11,619	$	2,387	$	48,071	$	2,514	$	4,574	$	80,123
Gross charge-offs	$	-	$	-	$	9	$	-	$	-	$	152	$	-	$	-	$	161
Commercial real estate
Pass	$	1,041	$	2,768	$	4,122	$	1,392	$	904	$	7,448	$	148	$	11,672	$	29,495
Special Mention		625		1,338		754		97		309		-		-		-		3,123
Substandard		-		221		-		-		-		33		-		-		254
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,666	$	4,327	$	4,876	$	1,489	$	1,213	$	7,481	$	148	$	11,672	$	32,872
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Construction and land
Pass	$	245	$	132	$	-	$	97	$	47	$	274	$	17,883	$	-	$	18,678
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		109		-		-		-		-		19		-		-		128
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	354	$	132	$	-	$	97	$	47	$	293	$	17,883	$	-	$	18,806
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Multi-family residential
Pass	$	-	$	-	$	-	$	-	$	469	$	1,900	$	-	$	2,940	$	5,309
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	-	$	-	$	-	$	-	$	469	$	1,900	$	-	$	2,940	$	5,309
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial and industrial
Pass	$	5,232	$	8,137	$	1,602	$	164	$	90	$	414	$	10,173	$	3,220	$	29,032
Special Mention		18		-		-		-		-		-		206		-		224
Substandard		821		368		-		760		-		-		-		-		1,949
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	6,071	$	8,505	$	1,602	$	924	$	90	$	414	$	10,379	$	3,220	$	31,205
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Consumer
Pass	$	1,080	$	231	$	249	$	79	$	100	$	156	$	-	$	-	$	1,895
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,080	$	231	$	249	$	79	$	100	$	156	$	-	$	-	$	1,895
Gross charge-offs	$	25	$	21	$	-	$	-	$	-	$	6	$	-	$	-	$	52
Total
Pass	$	11,252	$	14,918	$	9,597	$	12,866	$	3,944	$	56,079	$	30,474	$	22,406	$	161,536
Special Mention		643		1,338		754		97		362		-		450		-		3,644
Substandard		930		610		9		1,245		-		2,236		-		-		5,030
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	12,825	$	16,866	$	10,360	$	14,208	$	4,306	$	58,315	$	30,924	$	22,406	$	170,210
Gross charge-offs	$	25	$	21	$	9	$	-	$	-	$	158	$	-	$	-	$	213

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NOTE 5. BORROWINGS

Borrowings and the weighted-average contractual interest rate at March 31, 2026 and December 31, 2025 are summarized as follows:


		March 31, 2026						December 31, 2025

(Dollars in thousands)		Rate			Amount			Rate			Amount
Advances from Federal Home Loan Bank of Dallas		1.84	%		$	10,000		2.49	%		$	15,000
Debt modification discount on FHLB Advances						(241)						(268)
Total borrowings					$	9,759					$	14,732

In December of 2020, the Bank restructured $10.0 million of its long-term borrowings from the Federal Home Loan Bank (“FHLB”) of Dallas. The debt was restructured to longer maturities at current interest rates and accounted for as modification or exchange of debt. A fee for the restructuring of $1.2 million was deferred and amortized as an adjustment to interest expense using the interest method over the life of the restructured borrowings.

Interest payments are due monthly for FHLB advances. A schedule of maturities for borrowings outstanding at March 31, 2026 are as follows:


(Dollars in thousands)		Amount
Amounts maturing in:
2026		$	3,000
2027			3,000
2028			4,000
2029			-
2030			-
Total		$	10,000

At March 31, 2026 and December 31, 2025, the Company had $57.4 million and $49.7 million, respectively, in available borrowing capacity with the FHLB. Borrowings from the FHLB are secured though a blanket floating lien on real estate loans. Refer to Note 4 for more detail on loans pledged to the FHLB. The Company has a $20.0 million custodial letter of credit outstanding from the FHLB as of March 31, 2026, which is included in the calculation of our available capacity with the FHLB. The Company can allocate portions of this letter of credit to collateralize certain deposit balances in excess of the FDIC’s insurance limit as an alternative to pledging investment securities for the same purpose. At March 31, 2026, the Company used $5.0 million of the FHLB custodial letter of credit to collateralize public fund deposits.

Other available funding includes an Unsecured Federal Funds Master Purchase Agreement with First National Bankers Bank for $17.8 million. At March 31, 2026 and December 31, 2025, this credit facility was unused.

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NOTE 6. FAIR VALUE MEASUREMENTS

In accordance with fair value guidance, the Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 — Valuation is based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 — Valuation is based on inputs other than quoted prices included with Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the asset or liability.

Level 3 — Valuation is based on unobservable income inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

Fair value is an exit price, representing the amount that would be received to sell an asset or to transfer a liability in an orderly transaction between market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy is used that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quotes priced in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Fair values of assets and liabilities measured on a recurring basis at March 31, 2026 and December 31, 2025 follows:


		Fair Value Measurements at Reporting Date Using
(Dollars in thousands)		Fair Value			Level 1			Level 2			Level 3
March 31, 2026
Securities available-for-sale:
Mortgage-backed securities		$	46,668		$	-		$	46,668		$	-
Municipal obligations			1,548			-			1,548			-
Total		$	48,216		$	-		$	48,216		$	-

December 31, 2025
Securities available-for-sale:
Mortgage-backed securities		$	48,888		$	-		$	48,888		$	-
Municipal obligations			1,579			-			1,579			-
Total		$	50,467		$	-		$	50,467		$	-

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Fair values of assets and liabilities measured on a nonrecurring basis at March 31, 2026 and December 31, 2025 follows:


		Fair Value Measurements at Reporting Date Using
(Dollars in thousands)		Fair Value			Level 1			Level 2			Level 3
March 31, 2026
Loans individually evaluated for credit losses		$	382		$	-		$	-		$	382
Foreclosed assets			34			-			-			34
Total		$	416		$	-		$	-		$	416
December 31, 2025
Loans individually evaluated for credit losses		$	100		$	-		$	-		$	100
Foreclosed assets			34			-			-			34
Total		$	134		$	-		$	-		$	134

At March 31, 2026 and December 31, 2025, individually evaluated loans with a recorded investment of $445,000 and $147,000, respectively, have been written down to their fair value by a charge to the allowance for credit losses. Foreclosed assets are adjusted to fair value by recording a related gain or loss through foreclosed asset expense. During the three months ended March 31, 2026, no impairment losses on foreclosed assets were recognized. Foreclosed asset expense for the three months ended March 31, 2025 included net losses of $88,000 on the sales of foreclosed assets. The net losses during the three months ended March 31, 2025 were offset by insurance proceeds of $216,000 for fire and flood damages related to foreclosed properties.

The fair value of foreclosed assets is estimated using third-party appraisals of the asset held less estimated costs to sell and discounts to reflect current conditions. The fair value of collateral-dependent loans individually evaluated for credit losses is estimated using third-party appraisals of the collateral less estimated costs to sell and discounts to reflect current conditions. The fair value of loans individually evaluated for credit losses that are not collateral-dependent is estimated by discounting expected cash flows using discount rates determined with reference to current market rates at which similar loans would be made.

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets. The weighted average presented in the following table was weighted based on the undiscounted result of the valuation technique.


(Dollars in thousands)		Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts			Weighted Average Discount
March 31, 2026
Loans individually evaluated for credit losses		$	382	Third party appraisals	Market discounts and estimated costs to sell	6%	-	30%	29%
Foreclosed assets			34	Third party appraisals and sales contracts	Market discounts and estimated costs to sell	49%	-	100%	66%

December 31, 2025
Loans individually evaluated for credit losses		$	100	Third party appraisals	Market discounts and estimated costs to sell	6%	-	30%	26%
Foreclosed assets			34	Third party appraisals and sales contracts	Market discounts and estimated costs to sell	49%	-	100%	66%

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments of which it is practicable to estimate that value. The derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Certain financial instruments and all nonfinancial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Cash and cash equivalents - The carrying amounts reported in the statements of financial condition for cash and cash equivalents approximate those assets’ fair values and are classified within Level 1 of the fair value hierarchy.

Investment securities - The fair market values of investments securities are based on a combination of observed market prices for identical or similar instruments and various matrix pricing programs. The fair market values of investment securities are classified within Level 2 of the fair value hierarchy.

Loans receivable, net – The fair value of loans are generally determined by discounting scheduled cash flows using discount rates determined with reference to current market rates at which similar loans would be made. Loans receivable are classified within Level 3 of the fair value hierarchy.

Loans individually evaluated for credit losses - The fair value of loans individually evaluated for credit losses is measured by the fair value of the collateral if the loan is collateral dependent. Fair value of the collateral is determined by appraisals or by independent valuation. Loans individually evaluated for credit losses are classified within Level 3 of the fair value hierarchy.

Bank-owned life insurance - The cash surrender value of bank-owned life insurance approximates its fair value and is classified within Level 2 of the fair value hierarchy.

Non-maturity deposit liabilities - The fair value of deposits with no stated maturity, such as non-interest-bearing and interest-bearing demand deposits, NOW, money market, and savings accounts, is equal to the amount payable on demand at the reporting date. These non-maturity deposit liabilities are classified within Level 1 of the fair value hierarchy.

Certificates of deposit – Fair values are estimated by discounting scheduled cash flows using the rates currently offered for deposits of similar remaining maturities. Certificates of deposit are classified within Level 2 of the fair value hierarchy.

Borrowings – The fair value is estimated by discounting the future contractual cash flows using current market rates at which debt with similar terms could be obtained. Borrowings are classified within Level 2 of the fair value hierarchy.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business or the value of assets and liabilities that are not considered financial instruments.

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The estimated fair values of the Company’s financial instruments as of March 31, 2026 and December 31, 2025 are as follows:


		March 31, 2026
(Dollars in thousands)		Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Financial Assets:
Cash and cash equivalents		$	38,533		$	38,533		$	38,533		$	-		$	-
Investment securities:
Available-for-sale			48,216			48,216			-			48,216			-
Held-to-maturity			14,914			13,429			-			13,429			-
Loans receivable, net			161,382			159,993			-			-			159,993
Bank-owned life insurance			15,117			15,117			-			15,117			-
Financial Liabilities:
Deposits			195,373			194,963			137,809			57,154			-
Borrowings			9,759			9,559			-			9,559			-


		December 31, 2025
(Dollars in thousands)		Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Financial Assets:
Cash and cash equivalents		$	25,205		$	25,205		$	25,205		$	-		$	-
Investment securities:
Available-for-sale			50,467			50,467			-			50,467			-
Held-to-maturity			14,917			13,567			-			13,567			-
Loans receivable, net			167,843			168,189			-			-			168,189
Bank-owned life insurance			14,983			14,983			-			14,983			-
Financial Liabilities:
Deposits			185,274			184,972			126,908			58,064			-
Borrowings			14,732			14,566			-			14,566			-

The carrying amounts in the preceding tables are included in the statement of financial condition under the applicable captions. It is not practical to estimate the fair value of stock in correspondent banks because the equity securities are not marketable. The carrying amount of investments without readily determinable fair value are reported in the statements of financial condition at historical cost.

NOTE 7. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the Company has various outstanding commitments and contingent liabilities that are not reflected in the accompanying financial statements. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on our financial statements.

The Company is not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at March 31, 2026, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations.

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist of unfunded commitments to extend credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amounts recognized in the statement of financial position. The contract or notional amounts of these instruments reflect the extent of the Company’s involvement in particular classes of instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

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The following table summarizes the Company’s financial instruments with off-balance-sheet risk as of the dates indicated.


		Contract or Notional Amount at
(Dollars in thousands)		March 31, 2026			December 31, 2025
Financial instruments with off-balance-sheet risk:
Commitments to originate loans		$	3,773		$	1,740
Undisbursed portion of construction loans in process			11,152			13,787
Unused lines of credit			12,690			15,020
Unused overdraft privilege amounts			1,262			1,238
Total		$	28,877		$	31,785

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since some of the commitments may possibly expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral usually consists of a first mortgage on the underlying properties.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements and are secured by passbook accounts or certificates of deposit. All letters of credit are required to be renewed annually, if applicable. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers.

The allowance for credit losses on unfunded lending commitments is recorded within “other liabilities” on the statement of financial condition. The related provision for credit losses for unfunded lending commitments is recorded with the provision for credit losses on the income statement. At March 31, 2026, the allowance for credit losses for unfunded lending commitments totaled $176,000. Refer to Note 4 for more information on changes to the allowance for credit losses for unfunded lending commitments.

NOTE 8. SUBSEQUENT EVENT

As reported on Form 8-K filed on April 8, 2026, Catalyst Bancorp, Inc. (“Catalyst”) and Catalyst Bank entered into an Agreement and Plan of Share Exchange and Merger (the “Merger Agreement”) on April 7, 2026 with Lakeside Bancshares, Inc. ("Lakeside"), a Louisiana corporation, and Lakeside Bank, a Louisiana banking corporation and the wholly-owned subsidiary of Lakeside Bancshares. The Merger Agreement provides that Lakeside will be merged with and into Catalyst, with Catalyst surviving, and that Lakeside Bank will be merged with and into Catalyst Bank, with Catalyst Bank surviving. Once the transaction closes, Catalyst will acquire 100% of the outstanding shares of Lakeside and Lakeside’s shareholders (other than dissenting shares) will receive $19.58 per share in cash, or $41.1 million in aggregate, subject to adjustment under certain circumstances. The Merger Agreement was unanimously approved by the boards of directors of both companies. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, including regulatory approvals and Lakeside shareholder approval.

The Company expects to account for the transaction in accordance with ASC Topic 805, Business Combinations, which generally requires assets and liabilities acquired in business combinations to be recorded at fair value. Our valuations and purchase accounting estimates remain preliminary and will be finalized after the transaction closes. As of December 31, 2025, Lakeside had total assets of $385.7 million and total liabilities of $289.7 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Management’s Discussion and Analysis of Financial Condition and Results of Operations at March 31, 2026 and for the three months ended March 31, 2026 and 2025 is intended to assist in understanding our financial condition and results of operations. The information contained in this section should be read in conjunction with the unaudited consolidated financial statements of the Company and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q as well as the business and financial information included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2025.

Cautionary Note Regarding Forward-Looking Statements

Certain matters in this Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This act provides a safe harbor for such disclosure which protects the companies from unwarranted litigation if actual results are different from management expectations. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of words such as “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” These forward-looking statements include, but are not limited to:

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statements of our goals, intentions and expectations;

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statements regarding our business plans, prospects, growth and operating strategies;

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statements regarding the quality of our loan and investment portfolios; and

●

estimates of our risks and future costs and benefits.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. These forward-looking statements are based on our current beliefs and expectations and, by their nature, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

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Important factors that could cause our actual results to differ materially from the results anticipated or projected, include, but are not limited to, the following:

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general economic conditions, either nationally or in our market areas, that are different than expected;

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conditions relating to infectious disease outbreaks, including the severity and duration of the associated economic slowdown, either nationally or in our market areas, that are worse than expected;

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changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for credit losses;

●

our ability to access cost-effective funding;

●

major catastrophes such as hurricanes, floods or other natural disasters, the related disruption to local, regional and global economic activity and financial markets, and the impact that any of the foregoing may have on us and our customers and other constituencies;

●

technological changes that may be more difficult or expensive than expected;

●

success or consummation of new business initiatives may be more difficult or expensive than expected;

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the inability of third-party service providers to perform;

●

fluctuations in real estate values and both residential and commercial real estate market conditions;

●

demand for loans and deposits in our market area;

●

our ability to continue to implement our business strategies;

●

competition among depository and other financial institutions;

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inflation and changes in the interest rate environment that reduce our margins and yields, reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans;

●

adverse changes in the securities markets;

●

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

●

our ability to manage market risk, credit risk and operational risk in the current economic conditions;

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our ability to enter new markets successfully and capitalize on growth opportunities;

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our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto;

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changes in consumer spending, borrowing and savings habits;

●

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the U. S. Securities and Exchange Commission or the Public Company Accounting Oversight Board;

●

our ability to retain key employees; and our compensation expense associated with equity allocated or awarded to our employees.

●

our ability to fully realize all the benefits we anticipate in connection with any future acquisitions of other institutions or our assumptions made in connection therewith being inaccurate

We undertake no obligation to publicly update or revise any forward-looking statements included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur and you should not put undue reliance on any forward-looking statements.

Overview

Catalyst Bancorp, Inc. (“Catalyst Bancorp” or the “Company”) is the holding company for Catalyst Bank (the “Bank”), formerly known as St. Landry Homestead Federal Savings Bank. The Company was incorporated by the Bank in February 2021 as part of the conversion of the Bank from the mutual to the stock form of organization (the “Conversion”). The Conversion was completed on October 12, 2021, at which time the Company acquired all of the issued and outstanding shares of common stock of the Bank, which became the wholly-owned subsidiary of Catalyst Bancorp. The Bank officially changed its name to Catalyst Bank in June 2022.

Founded in 1922, the Bank is a community-oriented savings bank serving the banking needs of customers in the Acadiana region of south-central Louisiana. We are headquartered in Opelousas, Louisiana and serve our customers through six full-service branches located in Carencro, Eunice, Lafayette, Opelousas, and Port Barre. Our primary business consists of attracting deposits from the general public and using those funds together with funds we borrow from the Federal Home Loan Bank (“FHLB”) of Dallas, Federal Reserve Bank of Atlanta, and other sources to originate loans to our customers and invest in securities.

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Historically, we operated as a traditional thrift relying on long-term, single-family residential mortgage loans secured by properties located primarily in St. Landry Parish and adjoining areas to generate interest income. In 2021, we re-focused our business strategy to a relationship-based community bank model targeting small- to mid-sized businesses and business professionals in our market areas while continuing to serve our traditional customer base. The Conversion and offering were important factors in our efforts to become a more dynamic, profitable and growing institution.

The following is an overview of financial results for the three months ended March 31, 2026:

●

Total assets of $288.5 million at March 31, 2026, up $5.6 million, or 2.0%, from December 31, 2025

●

Loans of $163.7 million at March 31, 2026, down $6.5 million, or 3.8%, from December 31, 2025

●

Non-performing assets of $2.7 million at March 31, 2026, up $35,000, or 1.3%, from December 31, 2025

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Investment securities of $63.1 million at March 31, 2026, down $2.3 million, or 3.4%, from December 31, 2025

●

Deposits of $195.4 million at March 31, 2026, up $10.1 million, or 5.5%, from December 31, 2025

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Borrowings of $9.8 million at March 31, 2026, down $5.0 million, or 33.8%, from December 31, 2025

●

Total shareholders’ equity of $82.2 million at March 31, 2026, up $484,000, or 0.6%, from December 31, 2025

●

Net interest income increased $180,000, or 7.6%, to $2.5 million and net interest margin decreased six basis points (“bps”) to 3.83% for the three months ended March 31, 2026, compared to the same period in 2025

●

A reversal of provision for credit losses of $70,000 for the three months ended March 31, 2026, compared to zero provision for the same period in 2025

●

Non-interest expense of $2.3 million for the three months ended March 31, 2026, up $301,000, or 15.2%, compared to the same period in 2025, largely due to $216,000 in insurance proceeds for damaged foreclosed properties which partially offset non-interest expense in 2025

●

Non-interest expense for the three months ended March 31, 2026 included professional fees of $95,000 (pre-tax) related to our agreement to acquire Lakeside Bancshares, Inc. and its subsidiary, Lakeside Bank (collectively referred to as “Lakeside”).

●

Net income of $558,00, or $0.15 per diluted common share (“diluted EPS”), for the three months ended March 31, 2026, down $28,000, or 4.8%, compared to net income of $586,000, or $0.16 diluted EPS, for the same period in 2025

Our results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on our loan and investment portfolios and interest expense on deposits and borrowings. Our net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. Results of operations are also affected by our provisions for credit losses, fee income and other non-interest income and non-interest expense. Non-interest expense principally consists of compensation, office occupancy and equipment expense, data processing, and other expense. Our results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable law, regulations or government policies may materially impact our financial condition and results of operations.

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Critical Accounting Policies and Estimates

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when applying critical accounting policies and developing critical estimates are included in its Annual Report on Form 10-K for the year ended December 31, 2025. Our accounting policy for the allowance for credit losses is the policy that management believes involves the most critical estimate to aid in fully understanding and evaluating our reported financial results. This policy requires numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods.

There were no changes from the significant accounting policies or the critical accounting estimate previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions.

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Comparison of Financial Condition at March 31, 2026 and December 31, 2025

Total Assets. Total assets increased by $5.6 million, or 2.0%, to $288.5 million at March 31, 2026 from $282.9 million at December 31, 2025. Over the same time period, total cash and cash equivalents were up $13.3 million, or 52.9%, primarily due to deposit growth, partially offset by a decline in borrowings.

Loans. The following table summarizes the changes in the composition of our loan portfolio by type of loan as of the dates indicated.


	March 31, 2026					December 31, 2025
(Dollars in thousands)	Amount			%		Amount			%		Change
Real estate loans
One- to four-family residential	$	78,093		47.7	%	$	80,123		47.1	%	$	(2,030)	(2.5)	%
Commercial real estate		33,673		20.6			32,872		19.3			801	2.4
Construction and land		19,761		12.1			18,806		11.0			955	5.1
Multi-family residential		4,781		2.9			5,309		3.1			(528)	(9.9)
Total real estate loans		136,308		83.3			137,110		80.5			(802)	(0.6)
Other loans
Commercial and industrial		25,626		15.7			31,205		18.3			(5,579)	(17.9)
Consumer		1,743		1.0			1,895		1.2			(152)	(8.0)
Total other loans		27,369		16.7			33,100		19.5			(5,731)	(17.3)
Total loans	$	163,677		100.0	%	$	170,210		100.0	%	$	(6,533)	(3.8)

During the three months ended March 31, 2026, a $5.9 million commercial and industrial loan relationship paid off after the sale of the borrower’s business.

The following table presents certain major segments of our commercial real estate, construction and land, and commercial and industrial loan balances as of the dates indicated.


	March 31,		December 31,
(Dollars in thousands)	2026		2025		Change
Commercial real estate
Retail	$	9,273	$	9,455	$	(182)	(1.9)	%
Hospitality		5,519		5,632		(113)	(2.0)
Health service facilities		4,911		3,300		1,611	48.8
Restaurants		1,047		1,071		(24)	(2.2)
Oilfield services		355		365		(10)	(2.7)
Other non-owner occupied		2,322		2,349		(27)	(1.1)
Other owner occupied		10,246		10,700		(454)	(4.2)
Total commercial real estate	$	33,673	$	32,872	$	801	2.4
Construction and land
Multi-family residential	$	5,783	$	4,749	$	1,034	21.8	%
Health service facilities		9,698		10,547		(849)	(8.0)
Other commercial construction and land		2,436		2,112		324	15.3
Consumer residential construction and land		1,844		1,398		446	31.9
Total construction and land	$	19,761	$	18,806	$	955	5.1
Commercial and industrial
Oilfield services	$	17,959	$	17,295	$	664	3.8	%
Industrial equipment		986		7,064		(6,078)	(86.0)
Professional services		3,250		3,531		(281)	(8.0)
Other commercial and industrial		3,431		3,315		116	3.5
Total commercial and industrial loans	$	25,626	$	31,205	$	(5,579)	(17.9)

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A $1.6 million construction loan, included in the health service facilities category in the table above, converted to a commercial real estate loan during the three months ended March 31, 2026. Multi-family residential construction loan growth was largely driven by new apartment homes in Lafayette Parish.

Allowance for Credit Losses. At March 31, 2026, the allowance for credit losses on loans totaled $2.3 million, or 1.40% of total loans, compared to $2.4 million, or 1.39% of total loans at December 31, 2025. The allowance for credit losses on unfunded commitments totaled $176,000, down $35,000 from December 31, 2025. The Company recorded a $70,000 reversal of provision for credit losses and net loan charge-offs were $37,000 for the three months ended March 31, 2026. The reversal of provision for credit losses was primarily driven by declines in commercial and industrial and residential loan balances and commitments. Net loan charge-offs in 2026 included a $28,000 charge-off of a commercial line of credit.

The following table presents the changes in the allowance for credit losses and other related data for the periods indicated.


	Three Months Ended March 31,							Year Ended December 31,
(Dollars in thousands)	2026			2025			2025
Allowance for credit losses:
Loans:
Balance, beginning of period	$	2,367		$	2,522		$	2,522
Provision for (reversal of) credit losses		(35)			17			(30)
Net loan (charge-offs) recoveries:
One- to four-family residential		(5)			(23)			(112)
Commercial real estate		-			-			-
Construction and land		-			-			-
Multi-family residential		-			-			-
Commercial and industrial		(28)			5			17
Consumer		(4)			(21)			(30)
Total net charge-offs		(37)			(39)			(125)
Balance, end of period	$	2,295		$	2,500		$	2,367

Unfunded lending commitments:
Balance, beginning of period	$	211		$	121		$	121
Provision for (reversal of) credit losses on unfunded lending commitments		(35)			(17)			90
Balance, end of period	$	176		$	104		$	211

Total provision for (reversal of) credit losses	$	(70)		$	-		$	60

Total loans at end of period	$	163,677		$	166,077		$	170,210
Total non-accrual loans at end of period		2,432			1,554			2,248
Total non-performing loans at end of period		2,678			1,645			2,643
Total average loans		168,545			166,145			167,038

Allowance for credit losses on loans as a percent of:
Total loans		1.40	%		1.51	%		1.39	%
Non-accrual loans		94.37			160.88			105.29
Non-performing loans		85.70			151.98			89.56

Net annualized (charge-offs) recoveries as a percent of average loans by portfolio:
One- to four-family residential		(0.03)	%		(0.12)	%		(0.14)	%
Commercial real estate		-			-			-
Construction and land		-			-			-
Multi-family residential		-			-			-
Commercial and industrial		(0.38)			0.08			0.07
Consumer		(0.90)			(4.52)			(1.38)
Total loans		(0.09)			(0.10)			(0.07)

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Substandard Loans and Non-performing Assets. The following table shows the amounts of our substandard loans and non-performing assets, which include non-accruing loans, accruing loans 90 days or more past due and foreclosed assets at the dates indicated. During the three months ended March 31, 2026, a $304,000 commercial real estate loan was placed on non-accrual status and classified as substandard.


		March 31,			December 31,
(Dollars in thousands)		2026			2025
Substandard loans
One- to four-family residential		$	2,553		$	2,699
Commercial real estate			550			254
Construction and land			18			128
Multi-family residential			-			-
Commercial and industrial			1,851			1,949
Consumer			-			-
Total substandard loans		$	4,972		$	5,030

Non-accruing loans
One- to four-family residential		$	2,110		$	2,228
Commercial real estate			304			-
Construction and land			18			20
Multi-family residential			-			-
Commercial and industrial			-			-
Consumer			-			-
Total non-accruing loans			2,432			2,248
Accruing loans 90 days or more past due
One- to four-family residential			96			272
Commercial real estate			-			32
Construction and land			-			-
Multi-family residential			-			-
Commercial and industrial			150			91
Consumer			-			-
Total accruing loans 90 days or more past due			246			395
Total non-performing loans			2,678			2,643
Foreclosed assets			34			34
Total non-performing assets		$	2,712		$	2,677

Total loans		$	163,677		$	170,210
Total assets			288,508			282,927

Total non-accruing loans as a percentage of total loans			1.49	%		1.32	%
Total non-performing loans as a percentage of total loans			1.64			1.55
Total non-performing loans as a percentage of total assets			0.93			0.93
Total non-performing assets as a percentage of total assets			0.94			0.95

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Investment Securities. Total investment securities, available-for-sale and held-to-maturity, amounted to $63.1 million at March 31, 2026, down $2.3 million, or 3.4%, compared to $65.4 million at December 31, 2025. The Company did not purchase investment securities during the three months ended March 31, 2026. During 2025, the Company purchased $20.2 million of variable-rate and $6.3 million of fixed-rate securities. The weighted average yield of the securities purchased during 2025 was 4.45% at March 31, 2026.

Net unrealized losses on securities available-for-sale totaled $3.1 million at March 31, 2026 and December 31, 2025. Unrealized losses on available-for-sale securities relate principally to higher market interest rates for similar securities. Our investment securities portfolio consists primarily of debt obligations issued by the U.S. government and government agencies and government-sponsored mortgage-backed securities.

The following table presents the amortized cost of our total investment securities portfolio that matures during each of the periods indicated and the weighted average yields for each range of maturities at March 31, 2026.


	Contractual Maturity as of March 31, 2026
(Dollars in thousands)	One Year or Less			After One Through Five Years			After Five Through Ten Years			Over Ten Years			Total
Total investment securities
Mortgage-backed securities	$	-		$	5,300		$	321		$	44,034		$	49,655
U.S. Government and agency obligations		-			9,000			4,000			-			13,000
Municipal obligations		-			1,069			2,540			-			3,609
Total	$	-		$	15,369		$	6,861		$	44,034		$	66,264

Weighted average yield
Mortgage-backed securities		-	%		4.44	%		4.50	%		3.30	%		3.43	%
U.S. Government and agency obligations		-			1.24			2.46			-			1.61
Municipal obligations		-			3.37			3.39			-			3.39
Total weighted average yield		-			2.49			2.90			3.30			3.07

Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments, or call options. The expected maturities may differ from contractual maturities because of the exercise of call options and potential paydowns. Accordingly, actual maturities may differ from contractual maturities. Weighted average yields are calculated by dividing the estimated annual income by the average amortized cost of the applicable securities.

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Deposits. The following table presents total deposits by account type for the dates indicated.


	March 31, 2026					December 31, 2025
(Dollars in thousands)	Amount			%		Amount			%		Change
Non-interest-bearing demand deposits	$	34,739		17.8	%	$	29,991		16.2	%	$	4,748	15.8	%
Interest-bearing demand deposits		33,249		17.0			32,851		17.7			398	1.2
Money market		9,296		4.8			10,235		5.5			(939)	(9.2)
Savings		60,525		31.0			53,831		29.1			6,694	12.4
Certificates of deposit		57,564		29.4			58,366		31.5			(802)	(1.4)
Total deposits	$	195,373		100.0	%	$	185,274		100.0	%	$	10,099	5.5

Total deposits averaged $198.2 million during the three months ended March 31, 2026, $177.1 million during the three months ended March 31, 2025, and $179.5 million during the year ended December 31, 2025. The ratio of the Company’s total loans to total deposits was 83.8% and 91.9% at March 31, 2026 and December 31, 2025, respectively.

The increase in total deposits was driven by a mix of public and non-public deposits. Total public fund deposits were $29.8 million, or 15.3% of total deposits, at March 31, 2026, compared to $26.4 million, or 14.3% of total deposits, at December 31, 2025. Total public fund deposits averaged $35.6 million during the three months ended March 31, 2026, $30.7 million during the three months ended March 31, 2025, and $27.6 million during the year ended December 31, 2025. At March 31, 2026 and December 31, 2025, approximately 59% of our total public fund deposits consisted of non-interest-bearing and interest-bearing demand deposits.

The estimated amount of our total uninsured deposits (that is deposits in excess of the FDIC’s insurance limit), inclusive of public funds, was approximately $55.3 million at March 31, 2026 and $50.1 million at December 31, 2025. Total uninsured non-public fund deposits were approximately $30.8 million and $28.8 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, the full amount of our public fund deposits in excess of the FDIC’s insurance limit were secured by either pledged investment securities of $48.8 million or $5.0 million of a custodial letter of credit granted by the Federal Home Loan Bank of Dallas.

Borrowings. Total borrowings at March 31, 2026 were $9.8 million, down $5.0 million, or 33.8%, from $14.7 million at December 31, 2025 due to pay-offs of short-term advances.

Shareholders’ Equity. Shareholders’ equity totaled $82.2 million, or 28.5% of total assets, at March 31, 2026, up $484,000, or 0.6%, from $81.7 million, or 28.9% of total assets, at December 31, 2025. During the three months ended March 31, 2026, shareholders’ equity increased by the Company’s net income of $558,000, which was partially offset by the Company’s repurchases of its common stock.

The Company repurchased 16,614 shares of its common stock at an average cost per share of $15.71 during the three months ended March 31, 2026. The Company paused share repurchases temporarily during the three months ended March 31, 2026 while conducting due diligence and negotiations related to our agreement to acquire Lakeside.

During the fourth quarter of 2025, the Company announced our sixth share repurchase plan (the “November 2025 Repurchase Plan”). Under the November 2025 Repurchase Plan, the Company may purchase up to 205,000 shares, or approximately 5%, of the Company’s outstanding common stock. At March 31, 2026, 172,297 shares of the Company’s common stock were available for repurchase under the November 2025 Repurchase Plan. As of the date of this filing, we have resumed repurchases under the November 2025 Repurchase Plan.

Since the announcement of our first share repurchase plan on January 26, 2023 and through May 12, 2026, the Company has repurchased a total of 1,238,104 shares of its common stock, or approximately 23% of the common shares originally issued, at an average cost per share of $12.13.

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Average Balances, Net Interest Income, and Yields Earned and Rates Paid. The following table shows for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Taxable equivalent (“TE”) yields have been calculated using a marginal tax rate of 21%. All average balances are based on daily balances.


	Three Months Ended March 31,
	2026						2025
(Dollars in thousands)	Average Balance		Interest		Average Yield/Rate^(TE)		Average Balance		Interest		Average Yield/Rate^(TE)
Interest-earning assets:
Loans receivable⁽¹⁾	$	168,545	$	2,749	6.61	%	$	166,145	$	2,738	6.68	%
Investment securities⁽²⁾		67,529		522	3.13			46,960		275	2.35
Other interest-earning assets		33,760		299	3.60			33,585		361	4.36
Total interest-earning assets		269,834		3,570	5.36			246,690		3,374	5.54
Non-interest-earning assets		22,918						21,542
Total assets	$	292,752					$	268,232
Interest-bearing liabilities:
Demand deposits, money market and savings accounts		107,158		494	1.87			94,133		483	2.08
Certificates of deposit		58,086		445	3.10			55,846		458	3.32
Total interest-bearing deposits		165,244		939	2.30			149,979		941	2.54
Borrowings		11,110		86	3.11			9,573		68	2.85
Total interest-bearing liabilities		176,354		1,025	2.35			159,552		1,009	2.56
Non-interest-bearing liabilities		34,257						28,254
Total liabilities		210,611						187,806
Shareholders' equity		82,141						80,426
Total liabilities and shareholders' equity	$	292,752					$	268,232
Net interest-earning assets	$	93,480					$	87,138
Net interest income; average interest rate spread			$	2,545	3.01	%			$	2,365	2.98	%
Net interest margin⁽³⁾					3.83						3.89
Average interest-earning assets to average interest-bearing liabilities					153.01						154.61

(1)	Includes non-accrual loans during the respective periods. Calculated net of deferred fees and discounts and loans in process.

(2)	Average investment securities does not include unrealized holding gains/losses on available-for-sale securities.

(3)	Equals net interest income divided by average interest-earning assets. Taxable equivalent yields are calculated using a marginal tax rate of 21%.

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Rate/Volume Analysis. The following table shows the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities affected our interest income and interest expense during the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in rate, which is the change in rate multiplied by prior year volume, and (2) changes in volume, which is the change in volume multiplied by prior year rate. The combined effect of changes in both rate and volume has been allocated proportionately to the change due to rate and the change due to volume.


		Three Months Ended
		March 31, 2026 vs 2025
		Increase (Decrease) Due to				Total
(Dollars in thousands)		Rate		Volume		Increase (Decrease)
Interest income:
Loans receivable		$	(28)	$	39	$	11
Investment securities			105		142		247
Other interest-earning assets			(64)		2		(62)
Total interest income			13		183		196
Interest expense:
Demand deposits, money market and savings accounts			(52)		63		11
Certificates of deposit			(31)		18		(13)
Total deposits			(83)		81		(2)
Borrowings			6		12		18
Total interest expense			(77)		93		16
Increase in net interest income		$	90	$	90	$	180

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Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025.

General. For the three months ended March 31, 2026, the Company reported net income of $558,000, or $0.15 diluted EPS, compared to net income of $586,000, or $0.16 diluted EPS, for the three months ended March 31, 2025. The following table summarizes the changes in net income for the periods indicated.


	Three Months Ended March 31,
(Dollars in thousands)	2026		2025		Change
Selected Operating Data
Total interest income	$	3,570	$	3,374	$	196	5.8	%
Total interest expense		1,025		1,009		16	1.6
Net interest income		2,545		2,365		180	7.6
Reversal of credit losses		(70)		-		(70)	-
Total non-interest income		352		337		15	4.5
Total non-interest expense		2,283		1,982		301	15.2
Income tax expense		126		134		(8)	(6.0)
Net income	$	558	$	586	$	(28)	(4.8)

Non-interest expense for the three months ended March 31, 2026 included professional fees of $95,000 (pre-tax) related to our agreement to acquire Lakeside. During the three months ended March 31, 2025, insurance proceeds of $216,000 for damaged foreclosed properties partially offset non-interest expense.

Interest Income. The following table summarizes the changes in interest income for the periods indicated.


	Three Months Ended March 31,
(Dollars in thousands)	2026		2025		Change
Interest Income
Loans receivable, including fees	$	2,749	$	2,738	$	11	0.4	%
Investment securities		522		275		247	89.8
Cash and due from banks		290		341		(51)	(15.0)
Other earning assets		9		20		(11)	(55.0)
Total interest income	$	3,570	$	3,374	$	196	5.8

The average yield on loans was 6.61% for the three months ended March 31, 2026, down seven basis points (“bps”) from 6.68% for the same period in 2025. Average loans were $168.5 million for the three months ended March 31, 2026, up $2.4 million, or 1.4%, compared to the same period in 2025.

The increase in interest income on investment securities was due to increases in both the average balance and the average rate earned on our investment securities portfolio for the three months ended March 31, 2026 compared to the same period in 2025. The average balance of our investment securities portfolio, measured at amortized cost, was $67.5 million, up $20.6 million, or 43.8%, compared to the same period in 2025. The average rate earned on our investment securities portfolio also increased to 3.13% for the three months ended March 31, 2026, compared to 2.35% for the same period in 2025. These increases were primarily due to the impact of higher-yielding investment securities purchased during 2025.

Interest income on interest-earning cash and due from banks, included in other interest-earning assets in certain preceding tables, decreased mainly due to a decline in the average rate earned on interest-earning cash and other earning assets. The average rate earned on other interest-earning assets was 3.60% for the three months ended March 31, 2026, down 76 bps, compared to 4.36% for the same period in 2025.

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Interest Expense. The following table summarizes the change in interest expense for the periods indicated.


	Three Months Ended March 31,
(Dollars in thousands)	2026		2025		Change
Interest Expense
Demand deposits, money market and savings accounts	$	494	$	483	$	11	2.3	%
Certificates of deposit		445		458		(13)	(2.8)
Borrowings		86		68		18	26.5
Total interest expense	$	1,025	$	1,009	$	16	1.6

The average rate paid on interest-bearing deposits was 2.30% during the three months ended March 31, 2026, down 24 bps compared to 2.54% for the same period in 2025. The average balance of interest-bearing deposits was $165.2 million for the three months ended March 31, 2026, up $15.3 million, or 10.2%, compared to the same period in 2025, largely due to growth in high-yield savings account balances.

During the three months ended March 31, 2026, borrowings averaged $11.1 million, up $1.5 million, or 16.1%, and the average rate paid on borrowing was 3.11%, up 26 bps compared to the same period in 2025.

Net Interest Income. The increase in net interest income and decline in net interest margin for the three months ended March 31, 2026 compared to the same period in 2025, as presented in the preceding tables, was largely the result of growth in investment securities and a decline in the average rate earned on loans and other interest-earning assets.

Provision for Credit Losses. The Company recorded a reversal of provision for credit losses of $70,000 for the three months ended March 31, 2026, compared to zero provision for the same period in 2025. The reversal of provision for credit losses was primarily driven by declines in commercial and industrial and residential loan balances and related commitments.

Non-interest Income. The following table summarizes the changes in non-interest income for the periods indicated.


	Three Months Ended March 31,
(Dollars in thousands)	2026		2025		Change
Non-interest Income
Service charges on deposit accounts	$	202	$	197	$	5	2.5	%
Bank-owned life insurance		134		118		16	13.6
Other		16		22		(6)	(27.3)
Total non-interest income	$	352	$	337	$	15	4.5

Income from bank-owned life insurance increased largely due to an internal exchange of certain existing policies that became effective during the fourth quarter of 2025.

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Non-interest Expense. The following table summarizes the changes in non-interest expense for the periods indicated.


	Three Months Ended March 31,
(Dollars in thousands)	2026		2025		Change
Non-interest Expense
Salaries and employee benefits	$	1,321	$	1,245	$	76	6.1	%
Occupancy and equipment		209		199		10	5.0
Data processing and communication		180		182		(2)	(1.1)
Professional fees		185		101		84	83.2
Directors’ fees		121		114		7	6.1
Foreclosed assets, net		-		(127)		127	(100.0)
Other		267		268		(1)	(0.4)
Total non-interest expense	$	2,283	$	1,982	$	301	15.2

Salaries and employee benefits expense increased primarily due to annual raises that were made effective during the fourth quarter of 2025, an increase in compensation expense related to the Employee Stock Ownership Plan due to a rise in the Company’s average stock price, and new grants of share-based compensation issued in June 2025.

Professional fees increased mainly due to $95,000 (pre-tax) of expense incurred during the three months ended March 31, 2026 related to our agreement to acquire Lakeside Bancshares, Inc. and its subsidiary, Lakeside Bank, which was entered into on April 7, 2026 and is expected to close in the third quarter of 2026.

Foreclosed assets expenses and losses during the three months ended March 31, 2025 were offset by $216,000 of insurance proceeds received for fire and flood damages related to foreclosed properties.

Income Tax Expense. The effective tax rates for the three months ended March 31, 2026 and 2025 were 18.4% and 18.6%, respectively.

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Liquidity and Capital Resources

The Company maintains levels of liquid assets deemed adequate by management. We adjust our liquidity levels to fund deposit outflows, repay our borrowings, and to fund loan commitments. We also adjust liquidity, as appropriate, to meet asset and liability management objectives.

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities or sales of securities. We also have the ability to borrow from the FHLB, Federal Reserve Bank of Atlanta, and our primary correspondent bank.

At March 31, 2026, our borrowings consisted of FHLB advances with a total net carrying value of $9.8 million. The table below summarizes our unused and available liquidity sources as of March 31, 2026.


(Dollars in thousands)	March 31, 2026
Advances from the Federal Home Loan Bank of Dallas	$	57,397
Line of credit with primary correspondent bank		17,800
Unpledged available-for-sale investment securities, at fair value		8,173
Total unused and available liquidity	$	83,370

The Bank’s available borrowing capacity with the FHLB is secured through a blanket floating lien on real estate loans. The Company also has a $20.0 million custodial letter of credit outstanding from the FHLB as of March 31, 2026, which is included in the calculation of our available capacity with the FHLB indicated above. The Company can allocate portions of this letter of credit to collateralize certain deposit balances in excess of the FDIC’s insurance limit as an alternative to pledging investment securities for the same purpose. At March 31, 2026, the Company used $5.0 million of the FHLB custodial letter of credit to collateralize public fund deposits.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. The details of these cash flow classifications are presented on the statement of cash flows included in Item 1 of this Form 10-Q. The most significant uses and sources of cash flows during the three months ended March 31, 2026 included:

●

$10.1 million in proceeds from the net increase in deposits

●

$6.5 million in proceeds from the net decrease in loans

●

$5.0 million due to net repayments of advances from the FHLB

●

$2.2 million in proceeds from maturities and paydowns of investment securities

We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily and anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that the majority of maturing time deposits will be retained. We also anticipate continued use of our secondary funding sources.

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The following table summarizes our outstanding off-balance sheet commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and undisbursed construction loans at March 31, 2026.


			Amount of Commitment Expiration — Per Period
(Dollars in thousands)	Total Amounts Committed at March 31, 2026		To 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
Commitments to originate loans	$	3,773	$	3,773	$	-	$	-	$	-
Undisbursed portion of construction loans in process		11,152		1,403		222		3,993		5,534
Unused lines of credit		12,690		8,037		2,609		20		2,024
Unused overdraft privilege amounts		1,262		-		-		-		1,262
Letters of credit		-		-		-		-		-
Total commitments	$	28,877	$	13,213	$	2,831	$	4,013	$	8,820

The following table summarizes our contractual cash obligations at March 31, 2026.


			Payments Due By Period
(Dollars in thousands)	Total at March 31, 2026		To 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
Certificates of deposit	$	57,564	$	49,136	$	7,871	$	557	$	-
Borrowings		10,000		3,000		7,000		-		-
Total term debt	$	67,564	$	52,136	$	14,871	$	557	$	-

Management expects that a majority of the maturing certificates of deposit will be retained. However, if a substantial portion of these deposits are not retained, we may utilize borrowings from our secondary funding sources or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

The Bank exceeded all regulatory capital requirements and was categorized as well-capitalized at March 31, 2026 and December 31, 2025. Management is not aware of any conditions or events since the most recent notification that would change our category.

Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements, see Note 1 of the notes to our consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

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ITEM 4. CONTROLS AND PROCEDURES

An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Act”)) as of March 31, 2026, was carried out under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and several other members of our senior management. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports it files or submits under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Act) that occurred during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not involved in any pending legal proceedings as a plaintiff or defendant other than routine legal proceedings occurring in the ordinary course of business, and at March 31, 2026, we were not involved in any legal proceedings, the outcome of which would be material to our financial condition or results of operations.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company’s purchases of its common stock made during the three months ended March 31, 2026 consisted of share repurchases under the Company’s approved plans and are set forth in the following table.


For the Month Ended	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet be Purchased Under Plans or Programs
January 31, 2026		16,614	$	15.50		16,614		172,297
February 28, 2026		-		-		-		172,297
March 31, 2026		-		-		-		172,297
Total		16,614	$	15.50		16,614

On November 20, 2025, the Company announced its sixth share repurchase plan (the “November 2025 Repurchase Plan”). Under the November 2025 Repurchase Plan, the Company may purchase up to 205,000 shares, or approximately 5%, of the Company's outstanding common stock. The Company paused share repurchases temporarily during the three months ended March 31, 2026 while conducting due diligence and negotiations related to our agreement to acquire Lakeside. At March 31, 2026, 172,297 shares of the Company’s common stock were available for repurchase under the November 2025 Repurchase Plan. Since April 1, 2026 through May 12, 2026, the Company repurchased 6,401 shares of its common stock at an average price paid per share of $16.08 under the November 2025 Repurchase Plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Nothing to report.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the fiscal quarter ended March 31, 2026, none of the Company’s directors or executive officers informed the Company of the adoption, modification, or termination of any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

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ITEM 6. EXHIBITS


31.1	Rule 13a-14(a) Certifications (Chief Executive Officer)

31.2	Rule 13a-14(a) Certifications (Chief Financial Officer)

32.0	Section 1350 Certifications

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definitions Linkbase Document

104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CATALYST BANCORP, INC.


Date: May 15, 2026	By:	/s/ Joseph B. Zanco
		Joseph B. Zanco
		President and Chief Executive Officer
		(Duly Authorized Officer)

Date: May 15, 2026	By:	/s/ Jacques L. J. Bourque
		Jacques L. J. Bourque
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Source: View Original Filing on SEC EDGAR

Three Months Ended March 31,

(In thousands)

Weighted average of anti-dilutive stock-based awards:

Stock options

Restricted stock