8-K: Catalyst Bancorp Appoints HORNE LLP as New Independent Auditor for Fiscal Year 2025

Catalyst Bancorp has engaged HORNE LLP as its new independent registered public accounting firm for the fiscal year ending December 31, 2025, replacing Castaing, Hussey & Lolan, LLC.

Summary

• Catalyst Bancorp has appointed HORNE LLP as their new independent registered public accounting firm for the fiscal year ending December 31, 2025.
• This decision was made by the Board of Directors, following a competitive process overseen by the Audit Committee.
• Castaing, Hussey & Lolan, LLC (CHL) will continue as the company's auditor for the fiscal year ending December 31, 2024.
• CHL's reports for the fiscal years 2022 and 2023 did not contain any adverse opinions, disclaimers, or qualifications.
• There were no disagreements or reportable events between Catalyst Bancorp and CHL during the fiscal years 2022 and 2023, and the subsequent interim period through November 20, 2024.
• Catalyst Bancorp has confirmed that they did not consult with HORNE regarding accounting principles or audit opinions prior to the appointment.

Sentiment

Score: 7

Explanation: The document reflects a routine change in auditors, which is a normal business practice. There are no indications of any negative issues, and the process appears to have been handled professionally.

Positives

• The transition to a new auditor was conducted through a competitive process, suggesting a thorough and considered approach.
• The previous auditor, CHL, had no disagreements or reportable events with the company, indicating a healthy financial reporting relationship.
• The company has been transparent in disclosing the change in auditors and the process followed.

Risks

• The transition to a new auditor could present some initial challenges as HORNE familiarizes itself with Catalyst Bancorp's financial systems and processes.
• There is a risk of unforeseen issues arising during the audit process with the new auditor.

Future Outlook

The company will work with HORNE LLP for the fiscal year ending December 31, 2025, and beyond.

Management Comments

• The Board of Directors of the Company approved the engagement of HORNE LLP as the Company's independent registered public accounting firm for the Company's fiscal year ending December 31, 2025.

Industry Context

Changes in auditors are a normal part of corporate governance, and companies often conduct competitive processes to ensure they have the best fit for their needs. This change is not unusual in the financial services industry.

Comparison to Industry Standards

• The process of selecting a new auditor through a competitive process is a standard practice in the industry.
• The lack of disagreements or reportable events with the previous auditor is a positive sign, aligning with industry expectations for a healthy auditor-client relationship.
• The transition to a new auditor is similar to what other publicly traded companies do when they seek to refresh their audit process.

Stakeholder Impact

• Shareholders can expect continued financial reporting oversight with the new auditor.
• Employees involved in financial reporting will need to work with the new auditor.
• The change in auditor should not have a direct impact on customers or suppliers.

Next Steps

• HORNE LLP will complete their standard client acceptance procedures and execute an engagement letter.
• HORNE LLP will begin the audit process for the fiscal year ending December 31, 2025.

Key Dates

Keywords

auditor, accounting firm, HORNE LLP, Castaing, Hussey & Lolan, audit, financial reporting, Catalyst Bancorp