Executive Summary

Q3 2025 was stable but mixed: net income of $0.49M and diluted EPS of $0.13, down slightly QoQ from $0.14 but up YoY from $0.11, as higher deposit costs compressed NIM 10 bps QoQ to 3.88% despite modest interest income growth .
Deposits rose $4.2M QoQ (+2%) to $186.4M on high‑yield specials, while loans fell $2.8M (-2%) as a $4.6M construction payoff and ~$1.0M C&I paydowns outweighed new lending; management sees improving economic activity and future loan opportunities .
Non‑interest income declined 8% QoQ due to customer refunds from a corrected foreign ATM fee error; credit costs were benign with a $36k reserve release and $2k in net charge‑offs .
Capital remains very strong (Bank CET1 43.95%) and buybacks continued (13,212 shares at $12.93 avg.); investment securities grew $15.6M QoQ with new MBS purchases at a 5.17% average yield, supporting asset yields going forward .

What Went Well and What Went Wrong

What Went Well

New deposit customer acquisition remained strong in 2025; management noted building momentum and expects economic activity to spur loan opportunities in coming quarters (“Our team has done a good job attracting new deposit customers… we expect… loan growth opportunities”) .
Securities deployment: investment securities increased to $59.8M (+35% QoQ) with $16.2M of purchases at a 5.17% average yield, enhancing asset yield mix while maintaining liquidity .
Credit remained sound: allowance release of $36k reflecting lower expected losses; net charge‑offs were just $2k, with NPLs still concentrated in 1–4 family mortgages .

What Went Wrong

Net interest margin compressed 10 bps QoQ to 3.88% as the average rate on interest‑bearing liabilities rose 11 bps, reflecting the full‑quarter impact of high‑yield savings .
Loan balances contracted 2% QoQ (-$2.8M) due to a large construction payoff and C&I paydowns on a relationship downgraded earlier in the year .
Non‑interest income declined 8% QoQ after refunding fees tied to a corrected foreign ATM fee error, pressuring total revenue generation .

Financial Results

Core P&L and Profitability

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Interest Income ($M)	2.53	2.37	2.47	2.45
Non‑interest Income ($M)	0.62	0.55	0.34	0.32
Net Income ($M)	0.45	0.59	0.52	0.49
Diluted EPS ($)	0.11	0.16	0.14	0.13
Net Interest Margin (TE)	3.86%	3.89%	3.98%	3.88%
Efficiency Ratio (%)	71.72	75.31	77.46	79.67
ROAA (%)	0.63	0.89	0.77	0.71

S&P Global “Revenue” (NII + Non‑interest Income)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	2.92*	2.81*	2.80*

Values retrieved from S&P Global. Consensus was not available for CLST; only actuals were returned. [Values retrieved from S&P Global]*

Balance Sheet and Capital

Metric	Q2 2025	Q3 2025
Loans ($M, end)	167.57	164.77
Deposits ($M, end)	182.21	186.37
Loans/Deposits (%)	92	88
Total Assets ($M)	273.79	283.83
Shareholders’ Equity ($M)	80.80	81.59
Bank CET1 (%)	43.72	43.95

Loan Composition (End of Period)

Category ($000)	6/30/2025	9/30/2025	QoQ Chg ($)	QoQ Chg (%)
1–4 Family Residential	80,195	78,373	(1,822)	(2%)
Commercial Real Estate	33,976	33,679	(297)	(1%)
Construction & Land	20,650	18,850	(1,800)	(9%)
Multi‑family Residential	5,432	5,367	(65)	(1%)
Commercial & Industrial	25,035	25,665	630	3%
Consumer	2,281	2,833	552	24%
Total Loans	167,569	164,767	(2,802)	(2%)

Key drivers: $4.6M construction payoff and $1.0M in C&I paydowns on a previously downgraded relationship; offsets from health services and oilfield services growth .

Deposit Composition (End of Period)

Category ($000)	6/30/2025	9/30/2025	QoQ Chg ($)	QoQ Chg (%)
Non‑interest DDA	31,155	27,617	(3,538)	(11%)
Interest‑bearing DDA	35,307	35,748	441	1%
Money Market	9,437	11,783	2,346	25%
Savings	51,001	52,152	1,151	2%
Certificates of Deposit	55,311	59,072	3,761	7%
Total Deposits	182,211	186,372	4,161	2%

Notes: Deposit growth was primarily driven by high‑yield specials; average deposits also edged up QoQ .

Credit Quality

Metric	Q2 2025	Q3 2025
ACL on Loans ($M)	2.431	2.397
Provision (Release) ($000)	0	(36)
Net Charge‑offs ($000)	42	2
NPLs/Total Loans (%)	1.00	1.11
NPAs/Assets (%)	0.64	0.67

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	N/A	None disclosed	None disclosed	Maintained (no formal guidance provided in the Q3 press release)

Note: The Q3 press release contains no formal quantitative guidance; management qualitatively expects loan growth opportunities as economic activity improves .

Earnings Call Themes & Trends

Note: No earnings call transcript was found in the document catalog, and the Q3 press release did not reference a conference call; themes below reflect press‑release narratives across quarters .

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Loan Growth	Q1: “Loan growth was muted… market turbulence caused customers to delay projects” . Q2: “We’re pleased to see both loan and deposit growth” .	Loan balances decreased due to a large payoff and paydowns; management sees signs of increased activity and future loan opportunities .	Improving activity signaled; near‑term balances softer.
Deposit Strategy	Q1: Deposit mix shifts tied to public funds; YoY deposit growth . Q2: Growth from public funds fluctuations and commercial inflows .	Growth driven by high‑yield specials; average deposits ticked up QoQ .	Specials supporting growth; mix tilting to interest‑bearing.
Net Interest Margin	Q1 NIM 3.89% (down 3 bps QoQ) . Q2 NIM improved to 3.98% (+9 bps QoQ) .	NIM declined 10 bps QoQ to 3.88% as deposit costs rose 11 bps .	Pressure from funding costs after Q2 rebound.
Credit Quality	Q1/Q2: NCOs of $39k/$42k; NPLs ~1.0% of loans .	NCOs minimal ($2k); small reserve release; NPLs 1.11% .	Stable/benign losses; NPLs slightly higher.
Capital & Buybacks	Q1/Q2: Buybacks continued; equity ~29.7% assets .	Continued buybacks (13,212 shares at $12.93); CET1 43.95% .	Ongoing capital return with very strong ratios.
Securities Repositioning	Q1/Q2: Stable book size/yields .	Added $16.2M MBS at 5.17% avg. yield; securities now 21% of assets .	Incremental yield support and liquidity.

Management Commentary

“Our team has done a good job attracting new deposit customers in 2025… we are beginning to see signs of increased economic activity, which we expect will spur loan growth opportunities in the coming quarters.” — Joe Zanco, President & CEO .
Q2 tone highlighted commercial success rates and momentum across markets as both loans and deposits grew in the quarter .
Q1 acknowledged muted loan growth amid market turbulence but reinforced culture and operational execution (ICBA recognition) .

Q&A Highlights

No conference call or Q&A transcript was referenced in the Q3 2025 press release; therefore, no Q&A themes to report from this period .

Estimates Context

S&P Global consensus estimates for EPS and revenue were not available for CLST; the S&P feed returned actual “Revenue” only (defined as net interest income + non‑interest income) for Q1–Q3 2025 without consensus or estimate counts [Values retrieved from S&P Global]*.
With no published Street coverage, post‑print estimate revisions are unlikely to be a stock driver; investor focus should remain on NIM trajectory, deposit costs, and loan growth outlook .

Key Takeaways for Investors

NIM compression is the key swing factor: +$52k QoQ increase in interest income was more than offset by +$70k QoQ in interest expense; expect continued sensitivity to deposit pricing until specials normalize .
Funding momentum is real: deposits +$4.2M QoQ with mix shifting toward interest‑bearing (MM, CDs, savings), lowering the L/D ratio to 88% and improving liquidity .
Loan balances dipped on idiosyncratic payoffs/paydowns, but management signaled improving activity; monitor Q4/Q1 originations to confirm the turn .
Credit costs are de minimis with small reserve release and minimal NCOs; watch NPLs (up to 1.11% of loans) but risk remains centered in residential mortgages .
Capital and buybacks support per‑share value: CET1 ~44% (Bank) and continued repurchases at ~$13/share provide a supportive backdrop .
Securities deployment at 5.17% average yield should help stabilize asset yields and partially offset funding cost pressure into 2026 .

Appendix: Additional Data

Average Earning Assets and NIM detail: TE NIM 3.88% (Q3) vs. 3.98% (Q2); average interest‑bearing liability rate rose to 2.62% (+11 bps QoQ) while average earning asset yield dipped to 5.56% (‑2 bps QoQ) .
Share repurchases: 13,212 shares in Q3 at $12.93; cumulative 1,160,396 shares repurchased (~22% of originally issued) since Jan‑2023 .
Public funds: $30.5M (16% of deposits) with ~64% in demand deposits (NIB and IB) as of quarter‑end .
External event: Auditor change on Oct 31/Nov 6 (HORNE to BDO) without disagreements reported .

Footnote: Values retrieved from S&P Global.

Catalyst Bancorp, Inc. (CLST)·Q3 2025 Earnings Summary