Centric Financial Corporation Announces 2018 Results; a Record Breaking Year with 114% Increase in Earnings and Double-Digit Growth in Loans, Deposits, and Assets

HARRISBURG, Pa., Jan. 25, 2019 /PRNewswire/ --  Centric Financial Corporation ("Centric" or "the Company") CFCX, the parent company of Centric Bank ("the Bank"), today reported record net income of $2,088,000 or $0.24 per common share basic for the fourth quarter of 2018.  Compared to fourth quarter 2017, net income increased $1.51 million or 263%. 

Centric Financial Corporation (PRNewsfoto/Centric Financial Corp, Inc.)

For the year ended December 31, 2018, Centric's net income was $8,004,000 or $1.03 earnings per basic shares, an increase of $4,260,000, or 114% over the same period 2017.

Highlights

  • Total assets increased $149 million or 27% over December 31, 2017.
  • Net growth in loans outstanding of $128 million or 26% during the last 12 months.
  • Total deposits grew $101 million or 21% from December 31, 2017.
  • Total revenue grew $10 million or 37% over the twelve months ended December 2017.
  • Net income available to common shareholders increased $4.3 million or 114% over the twelve months ended December 2017.
  • The Company's year-to-date net interest margin experienced a five basis point decline to 3.95% compared to the same period one year prior.
  • Year-to-date Return on Average Assets was 1.22%, which was a significant increase from 0.72% for the year ended December 31, 2017.

"The continuation of our double-digit loan growth, specifically commercial loans to small business and commercial real estate, is the result of our team's efforts in the markets we serve and a strong indication of small business optimism," says Patricia (Patti) A. Husic, President & CEO of Centric Financial Corporation and Centric Bank. "By nearly every measure, we are shattering expectations with record-breaking organic loan growth, funded by community deposits, and delivering performance returns to our shareholders."

"Our team is intentional in their efforts and disciplined to focus on smart, profitable growth. Our growth story is filled with contagious optimism and anchored in strong financial performance," says Husic. 

Operating Results

Centric's net interest income was $6,884,000 for the three months ended December 31, 2018, an increase of $1,529,000 or 29% over the fourth quarter 2017.  Increased average earning assets and net interest margin were the significant factors to the increase in net interest income for both the quarter and year-to-date results. Net interest margin was impacted in the fourth quarter by the increasing cost of deposits and the positive impact of the prime rate increase on the loan portfolio.  Year over year net interest margin has experienced a five basis point decline to 3.95%.

Non-interest income totaled $1,186,000 for the fourth quarter 2018, an increase from the fourth quarter 2017 of $237,000 or 25%.  The increase was attributable to other fees on loans of $99,000 or 96%, and miscellaneous income of $118,000, offset by a decrease in the gain on the sale of Small Business Association (SBA) loans of $239,000 or 49%.  For the year ending December 2018 non-interest income totaled $4,434,000, an increase of $1,255,000 or 39% over the same period 2017. The year-to-date growth in non-interest income is largely attributable to the gain on sale of SBA and other government guaranteed loans, and is impacted by the increased dollar volume sold over prior year of $8,234,000 or 42%.  Gain on the sale of other real estate owned increased $184,000 or 313% over the prior year-end, other fees on loans increased $120,000 or 32% over year-end 2017, and miscellaneous income increased $123,000 over the year-end 2017.

Non-interest expense for the fourth quarter 2018 was $5,340,000, an increase of $1,407,000 or 36% over the same period prior year.  The increase is due primarily to higher salary and benefit costs of $683,000 or 31%, increased occupancy expenses up $138,000 or 37% due largely to the new operations and executive offices in Enola and other expenses up $586,000 or 74%.  Regulatory assessments increased $52,000 or 77% due to balance sheet growth.  Licensing and software expense increased $45,000 or 47% due to increased staffing and new technology initiatives.  For the year ending December 31, non-interest expense totaled $18,164,000, an increase of $3,161,000 or 21%.  Salaries and benefits are the most significant change over year-to-date December 2017 and increased $1,678,000 or 19% due to increased lending, business development, operational and executive team members.  Occupancy costs increased year over year $473,000 largely due to our new operations and executive offices which opened in the middle of the fourth quarter of 2017.  Advertising and marketing has increased over the prior year-to-date by $49,000 or 9% due to our increased sponsorships and support of our communities and customers.  Pennsylvania shares tax has increased over the prior year to date $114,000 or 28% due to increased earnings and equity.  Other expenses increased $809,000 or 27%.

Balance Sheet

Total assets at December 31, 2018 were $704,396,000 compared to $555,786,000 at December 31, 2017, an increase of $148,610,000 or 27%.  The increase is due to strong loan growth and an increase in investment securities for both quarter over quarter and year over year results.  Quarter over quarter total assets decreased $12,565,000 or 2% from the September 30, 2018 period end of $716,961,000

Total loans for the period end December 31, 2018 were $625,727,000, an increase of $129,133,000 or 26% over prior year end and $5,117,000 or 1% over the third quarter of 2018.  The increase in loans for both prior year and prior quarter are attributed to the growth in commercial and industrial loans of $53,953,000 or 41% and $2,487,000 or 1% respectively, and commercial real estate loans of $70,750,000 or 23% and $2,368,000 or 1% respectively.

Total deposits ended December 31, 2018 at $586,185,000 an increase of $101,351,000 or 21% over the same period 2017 and decreased $8,096,000 or 1% from the third quarter 2018.  The growth in deposits is attributed to non-interest bearing deposits, money market funds and certificates of deposit.  The increase in non-interest bearing deposits was $22,447,000 or 32% and $2,141,000 or 2% over prior year and prior quarter respectively. The increase in money market deposits was $38,014,000 or 62% and $6,673,000 or 7% over prior year and prior quarter, respectively. The increase in both portfolios has been generated by growth in new, and the expansion of, relationships at our branches.  The increase in time deposits of $60,866,000 or 30% year over year and the decrease of $4,718,000 or 2% from the prior quarter has been the combined result of new and increased branch relationships and wholesale funding.

Shareholders equity ended the period at $69,773,000 an increase of $28,208,000 or 68% from December 31, 2017 and an increase of $2,407,000 or 4% from September 30, 2018.  Regulatory capital ratios for the bank exceed "well capitalized" at December 31, 2018, 2017 and September 30, 2018.

Asset Quality

Asset quality continues to be strong.  The fourth quarter 2018 net charge-off ratio to average loans was -0.01%, a decrease of 0.22% over the third quarter 2018 of 0.21%.  Non-performing assets to total assets was 0.41% an increase from the prior quarter of 0.16% and a decrease from the fourth quarter 2017 of 0.05%.  The increase quarter over quarter in non-performing assets is due to loans past due greater than 90 days increasing $1,109,000.  The ratio of allowance for loan and lease losses to total loans was 1.10% at December 31, 2018.  Management believes the allowance for loan and leases losses at December 31, 2018 adequately reflects the risk inherent in the loan portfolio.

About the Company

An American Banker Best Banks to Work For in 2018, a three-time Best Places to Work and Top 50 Fastest-Growing Companies for six years, Centric Financial Corporation is headquartered in south central Pennsylvania with assets of $704 million and remains the leader in organic loan growth in central Pennsylvania. A locally owned, locally loaned community bank, Centric Bank provides highly competitive and pro-growth financial services to businesses, professionals, individuals, families and the health care industry. With a Five-Star Bauer Financial Rating, Centric Bank, named a Top SBA Lender in the United States, also ranked #1 in approved SBA 7(a) loans in the Commonwealth for banks under $1 billion in assets as of September 30, 2018. 

Founded in 2007, Pennsylvania-based Centric Bank has financial centers located in Harrisburg, Hershey, Mechanicsburg, and Camp Hill, and loan production offices in Lancaster and suburban Philadelphia. To learn more about Centric Bank, call 717.657.7727 or visit CentricBank.com. Connect with them on Twitter at @CentricBank and Facebook at Centric Bank.

Centric Financial Corporation is traded over the counter (OTC-Pink) - CFCX.

Cautionary Note Regarding Forward-looking Statements:

This news release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts.  Actual results and trends could differ materially from those set forth in such statements and there can be no assurances that we will be able to continue to successfully execute on our strategic plan.  Factors that could cause actual results to differ from those expressed or implied by the forward looking statements include, but are not limited to, the following:  changes in current or future market conditions; the effects of competition, development of competing financial products and services; changes in laws and regulations, interest rate movements; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatilities in the securities markets;  deteriorating economic conditions; and other risks and uncertainties.

Contact:

Patricia A. Husic



President & CEO



717.909.8309

 



















(Dollars in thousands except per share) (Unaudited)

Three months ended



Twelve months ended



Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,



Dec 31,

Dec 31,

Earnings and Per Share Data

2018

2018

2018

2018

2017



2018

2017

Net income

$        2,088

$        2,399

$        1,898

$        1,619

$            576



$        8,004

$        3,744

Basic earnings per common share

$          0.24

$          0.28

$          0.26

$          0.25

$          0.09



$          1.03

$          0.59

Book value  (at period end)

$          8.01

$          7.74

$          7.48

$          6.76

$          6.51







Tangible book value(at period end)

$          7.95

$          7.69

$          7.42

$          6.68

$          6.44







Common shares outstanding

8,714,975

8,698,318

8,686,988

6,397,161

6,380,653







Average shares outstanding - basic (period to date)

8,696,391

8,675,765

7,309,401

6,376,017

6,362,955



7,773,912

6,354,664



















Performance Ratios (period to date)

















Return on average assets 

1.16%

1.35%

1.21%

1.14%

0.43%



1.22%

0.72%

Return on average equity 

12.15%

14.48%

14.77%

15.28%

5.55%



13.98%

9.44%

Efficiency ratio

66.04%

56.33%

60.44%

62.07%

60.97%



61.16%

63.76%

Net interest margin

3.91%

3.87%

4.00%

4.03%

4.09%



3.95%

4.00%



















Capital Ratios (at period end)

















Shareholders' equity/asset ratio

9.91%

9.40%

9.53%

7.08%

7.48%







Tangible common equity/tangible assets

9.84%

9.33%

9.46%

7.01%

7.40%







Tier I leverage ratio (bank)

11.48%

11.26%

12.29%

10.18%

10.38%







Common tier 1 capital/risk-based capital (bank)

12.86%

12.68%

12.61%

10.51%

10.88%







Tier 1 risk-based capital (bank)

12.86%

12.68%

12.61%

10.51%

10.88%







Total risk-based capital (bank)

13.96%

13.79%

13.73%

11.68%

12.05%

























Asset Quality Ratios 

















Net charge-offs/average loans (period to date)

-0.01%

0.21%

0.01%

0.06%

0.01%







Nonperforming assets/total assets (at period end)

0.41%

0.25%

0.32%

0.41%

0.46%







Allowance for loan & leases losses as a % of loans

1.10%

1.09%

1.11%

1.14%

1.19%







Allowance for loan & leases losses/nonaccrual loans

644.11%

616.52%

491.62%

444.54%

430.73%







 

Consolidated Statement of Income (Unaudited)













Three months ended



Twelve months ended



Dec 31,

Sep 30,

Dec 31,



Dec 31,

Dec 31,

(Dollars in thousands)

2018

2018

2017



2018

2017

Interest income













Interest and dividends on securities

$          231

$          145

$          127



$           643

$          524

Interest and fees on loans

8,667

8,387

6,288



31,153

23,042

Other

291

320

62



797

232

   Total interest income

9,189

8,852

6,477



32,593

23,798

Interest expense













Interest on deposits

1,911

1,687

878



5,913

3,014

Interest on borrowings

394

437

244



1,507

825

   Total interest expense

2,305

2,124

1,122



7,420

3,839

Net interest income

6,884

6,728

5,355



25,173

19,959

Provision for loan losses

125

435

320



1,430

1,396

Net interest income after provision expense

6,759

6,293

5,035



23,743

18,563

Noninterest income













Gain on sale of SBA loans

249

449

488



1,777

1,398

Gain on sale of mortgage loans

170

93

168



476

533

Other non-interest income

767

656

293



2,181

1,248

   Noninterest income

1,186

1,198

949



4,434

3,179

Noninterest expense













Salaries and benefits

2,902

2,624

2,219



10,341

8,663

Occupancy and equipment

506

471

368



1,956

1,483

Professional fees

167

120

157



529

494

Data processing

265

270

240



1,012

895

Advertising and marketing

121

150

156



565

516

Other non-interest expense

1,379

840

793



3,761

2,952

   Noninterest expense

5,340

4,475

3,933



18,164

15,003

Income before taxes

2,605

3,016

2,051



10,013

6,739

Income tax expense

517

617

1,475



2,009

2,995

Net income available to common shareholders

$2,088

$2,399

$576



$8,004

$3,744

 

Consolidated Balance Sheet (Unaudited)







At Period End



Dec 31,

Sep 30,

Dec 31,

(Dollars in thousands)

2018

2018

2017

Assets







Cash and cash equivalents

$          36,308

$          67,147

$          31,323

Other investments

28,544

14,203

15,203

Loans, net of allowance for loan and lease losses

618,814

613,838

490,706

Premises and equipment

6,439

6,519

6,738

Accrued interest receivable

1,993

1,960

1,506

Other assets

12,298

13,294

10,310

Total Assets

$        704,396

$        716,961

$        555,786









Liabilities







   Noninterest-bearing deposits

93,685

91,544

71,238

   Interest-bearing demand deposits

120,601

133,788

140,320

   Money market and savings

107,091

99,423

69,334

   Certificates of deposit

264,808

269,526

203,942

      Total deposits

586,185

594,281

484,834

Short-term borrowings

15,500

22,500

5,500

Long-term debt

30,500

30,500

21,670

Accrued interest payable

511

629

233

Other liabilities

1,927

1,685

1,984

Total Liabilities

634,623

649,595

514,221

Total Shareholders' Equity

69,773

67,366

41,565

Total Liabilities and Shareholders' Equity

$        704,396

$        716,961

$        555,786

 

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SOURCE Centric Financial Corporation

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