Catalyst Bancorp (CLST) 13D Filing Analysis: Activist Investor Activity and Investment Implications

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Catalyst Bancorp, Inc. (NASDAQ: CLST), a Louisiana-based regional bank holding company, has experienced notable activist investor activity in late 2025, with two significant Schedule 13D filings revealing substantial shareholder engagement. These developments carry meaningful implications for current and prospective investors in CLST.

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The most significant recent development is the Schedule 13D filing by Joseph Stilwell, a well-known activist investor, on October 30, 2025, with an event date of October 23, 2025 [1][2].

Attribute	Details
Reporting Person	Joseph Stilwell
Total Ownership	5.2% of outstanding shares
Related Entities	Stilwell Activist Fund, Stilwell Activist Investments, Stilwell Partners, Stilwell Value LLC
Filing Date	October 30, 2025
Event Date	October 23, 2025

Stilwell filed through his investment vehicles where he serves as managing member and owner of Stilwell Value LLC, which is the general partner of the activist funds [1]. Stilwell’s investment strategy typically involves acquiring significant stakes in undervalued companies and actively engaging with management to unlock shareholder value—often through measures such as share buybacks, dividend increases, strategic alternatives, or board representation.

Murchinson Ltd, a Toronto-based investment firm, has maintained a substantial position in Catalyst Bancorp:

Attribute	Details
Shareholder	Murchinson Ltd
Shares Owned	259,067 shares
Ownership Percentage	6.2%
Location	145 Adelaide Street West, Toronto, Ontario

Murchinson’s position was disclosed in Catalyst Bancorp’s proxy statement (Schedule 14A) dated April 15, 2025, referencing a Schedule 13F-HR filed as of December 31, 2024 [3]. Based on the search results, Murchinson appears to have filed its original Schedule 13D on October 30, 2025, indicating an activist approach to its investment [4].

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Catalyst Bancorp’s Board of Directors responded to shareholder pressure by announcing its

on November 20, 2025 [5]:

• Authorization:
  Up to 205,000 shares (~5% of outstanding common stock)
• Average Cost of Previous Repurchases:
  $11.97 per share
• Total Shares Repurchased (since January 2023):
  1,180,817 shares (~22% of originally issued shares)

This aggressive capital return program appears to be a direct response to activist pressure, demonstrating the Board’s responsiveness to shareholder concerns. The company’s strong capital position (Tier 1 leverage ratio of 27.58% and total risk-based capital ratio of 45.20% as of Q3 2025) provides ample capacity for continued buybacks [6].

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Period	Performance
1 Year	+34.10%
6 Months	+24.12%
3 Months	+16.65%
YTD	-1.49%
Current Price	$15.52

The stock has demonstrated strong performance over the trailing 12 months, with the 13D filing in late October 2025 not appearing to negatively impact share price [7].

Metric	Value	Industry Comparison
P/E Ratio	26.44x	Moderate
P/B Ratio	0.72x	Below industry average (potentially undervalued)
ROE	2.75%	Lower than peers
Net Profit Margin	14.49%	Reasonable
Net Interest Margin	3.88% (Q3 2025)	Solid
Efficiency Ratio	79.67%	Elevated

The bank maintains

:

• Common Equity Tier 1 Ratio: 43.95%
• Tier 1 Leverage Capital Ratio: 27.58%
• Total Risk-Based Capital Ratio: 45.20%

These ratios significantly exceed regulatory requirements and peer medians, indicating substantial capacity for continued shareholder returns [6].

Metric	Q3 2025	Q2 2025	Change
Net Income	$489,000	$521,000	-6.1%
EPS	$0.13	$0.14	-7.1%
Total Loans	$164.8M	$167.6M	-1.7%
Total Deposits	$186.4M	$182.2M	+2.3%
NPA Ratio	0.67%	0.64%	+3 bps

Management noted “slow loan growth” but expressed optimism about increasing economic activity in the Acadiana region that could spur future loan opportunities [6].

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1. Activist Validation:
   The involvement of two prominent activist investors (Stilwell and Murchinson) suggests the shares may be undervalued. These investors typically conduct extensive due diligence before taking public positions.

2. Shareholder-Friendly Capital Management:
   The company’s aggressive share repurchase program (22% of shares retired since 2023) demonstrates commitment to returning capital to shareholders. The latest 5% authorization provides continuation of this strategy.

3. Strong Capital Position:
   With Tier 1 capital ratios exceeding 27%, the bank has substantial flexibility for dividends, buybacks, or acquisitions—elements activists typically advocate for.

4. Valuation Attractiveness:
   The P/B ratio of 0.72x suggests the market may be discounting the bank’s franchise value, presenting a potential value opportunity.

5. Regional Growth Potential:
   Management’s commentary on improving economic activity in Louisiana could translate to loan growth acceleration.

1. Activist Pressure Could Escalate:
   If the Board doesn’t sufficiently address activist demands, Stilwell may escalate efforts (e.g., proxy contest, board nomination), potentially creating short-term uncertainty.

2. Slow Loan Growth:
   The bank has experienced declining loan balances for two consecutive quarters, which could pressure net interest income if this trend continues.

3. Regional Economic Concentration:
   As a Louisiana-focused institution, CLST carries geographic concentration risk tied to the Acadiana region’s economic health.

4. Interest Rate Sensitivity:
   With a net interest margin of 3.88% that has compressed 10 basis points sequentially, the bank remains vulnerable to rate movements.

5. Efficiency Ratio Concerns:
   At 79.67%, the efficiency ratio is elevated compared to industry peers and may pressure profitability.

Catalyst	Expected Timing	Impact
Q4 2025 Earnings Report	January 22, 2026	High
Continued Share Repurchase Execution	Ongoing	Medium
Potential Activist Engagement Updates	Near-term	High
Loan Growth Trajectory	Q1-Q2 2026	Medium

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The Catalyst Bancorp 13D filings represent a

for shareholders. The entry of experienced activist investors—particularly Joseph Stilwell, who has a track record of unlocking shareholder value at small-cap financial institutions—validates the potential undervaluation thesis while applying pressure on management to optimize capital allocation.

The company’s

through an expanded share repurchase program demonstrates alignment with shareholder interests. Combined with an (0.72x P/B) and , CLST appears positioned to benefit from continued shareholder-focused policies.

The stock’s 34% annual return and ongoing buyback program suggest maintaining positions while monitoring activist engagement.

The combination of activist validation, shareholder-friendly capital management, and reasonable valuation may present a compelling entry point, with the caveat that continued loan growth will be essential to sustaining momentum.

The key risk is that activist campaigns can introduce short-term volatility, particularly if negotiations between the activists and the Board become contentious. Investors should monitor upcoming SEC filings and earnings releases for developments regarding potential board changes or strategic initiatives advocated by Stilwell and Murchinson.

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[1] WhaleWisdom - Stilwell Joseph Schedule 13D Filing Concerning CLST (https://whalewisdom.com/filing/stilwell-joseph-sc-13d-2025-10-30-clst)

[2] Catalyst Bank Investor Relations - SEC Filings (https://catalystbank.investorroom.com/SEC-filings)

[3] SEC EDGAR - Catalyst Bancorp 2025 Proxy Statement (https://www.sec.gov/Archives/edgar/data/1849867/000184986725000007/clst-20250415xdef14a.htm)

[4] DCF Modeling - Catalyst Bancorp Aroff Matrix Analysis (https://dcfmodeling.com/cdn/shop/files/clst-ansoff-matrix.png)

[5] PR Newswire - Catalyst Bancorp Announces New Share Repurchase Plan (https://www.prnewswire.com/news-releases/catalyst-bancorp-inc-announces-new-share-repurchase-plan-302622352.html)

[6] SEC EDGAR - Catalyst Bancorp Q3 2025 8-K Filing (https://www.sec.gov/Archives/edgar/data/1849867/000184986725000020/clst-20251023x8k.htm)

[7] Yahoo Finance - Catalyst Bancorp Stock Major Holders (https://ca.finance.yahoo.com/quote/CLST/holders/)