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28.01.2020 23:10:00
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Centric Financial Corporation Announces Year End 2019 Net Income and Double-Digit Growth
HARRISBURG, Pa., Jan. 28, 2020 /PRNewswire/ -- Centric Financial Corporation ("Centric" or "the Company") (OTC: CFCX), the parent company of Centric Bank ("the Bank"), today reported net income for the year ended December 31, 2019 of $7,285,000, or $0.84, per common share-basic, and $1,930,000, or $0.22, for the fourth quarter 2019, respectively. Compared to third quarter 2019, net income increased $276,000, or 17%.
Highlights
- Total assets ended at $832 million, an increase of $128 million, or 18%, over December 31, 2018.
- Net growth in loans outstanding of $76 million, or 12%, during the last 12 months.
- Total deposits grew $96 million, or 16%, from December 31, 2018.
- Total revenue grew $6 million, or 17%, over the twelve months.
- 3.75% net interest margin for fourth quarter, an increase of 15 basis points over third quarter 2019.
- Year-to-date Return on Average Assets and Return on Average Equity at 0.95% and 9.87%, respectively.
- Tangible book value per share was $8.79 at December 31, 2019, an increase of $0.84 per share, or 11% over December 31, 2018.
- Opened our newest branch in Devon, Suburban Philadelphia, in December.
Patricia A. Husic, President & CEO of Centric Financial Corporation and Centric Bank stated, "During the fourth quarter 2019, our team continued to focus on smart profitable growth, intentionality on the type of lending mix and quality, and discipline in preserving our net interest margin, despite further interest rate cuts and competitive pressure."
Ms. Husic added, "At the end of December, construction was completed and we opened our first financial center in Chester County, one of the fastest growing counties in the Commonwealth of Pennsylvania. Our sixth financial center is located at 105 Lancaster Avenue in Devon, Pennsylvania, across from the historic Devon Horse Show. This new full service banking office is across the street from our loan production and cash management office; both offices are strategically located on heavily traveled Rt. 30 in the heart of the Main Line community."
Operating Results
Centric's net interest income was $7,147,000 for the three months ended December 31, 2019, an increase of $263,000, or 4%, over the fourth quarter 2018 and an increase of $126,000, or 2%, over the third quarter 2019.
Yield on average earning assets remained consistent with the fourth quarter 2018 at 5.23% with a slight increase over the third quarter 2019. Cost of deposits in the quarter declined 17 basis points to 1.40% due to the bank's intentional strategy around pricing. Competitive deposit pressure throughout the year drove the increase in cost of deposits 13 basis points higher than the fourth quarter 2018. Year over year, Centric experienced a 40 basis point rise in the cost of deposits to 1.48% and experienced a 26 basis point increase in the yield on loans ending at 5.64%. Net interest margin year over year saw a decline of 15 basis points with the fourth quarter 2019 experiencing an increase of 15 basis points over the third quarter. The quarter over quarter increase in margin is due to the focused efforts on reducing the cost of deposits. Year over year net interest income increased $2,946,000, or 12%, to end 2019 at $28,119,000.
Non-interest income totaled $1,132,000 for the fourth quarter 2019, a slight decrease of $54,000 from the same quarter 2018, primarily due to less gain on the sale of SBA loans. Swap referral fee income for the fourth quarter 2019 was $317,000, an increase of $200,000 over the same period 2018 and an increase over the third quarter 2019 of $161,000. For the twelve months ending December 2019, non-interest income declined $339,000 compared to the same period prior year, from the decrease in income on sold loans of $1,033,000 offset by increases in servicing income of $306,000, and swap referral fees of $416,000.
Non-interest expense for the fourth quarter 2019 was $5,301,000, down from the third quarter 2019, and the fourth quarter 2018. Salary and benefit costs rose $140,000, or 5%, from the fourth quarter 2018 due to the increased branch staff for both Devon and Doylestown and the Devon loan production team, while other non-interest expense decreased $223,000 from FDIC Small Bank Assessment Credits of $90,000, and reduced corresponding bank fees. For the year ended December 31, 2019 non-interest expense totaled $20,912,000, an increase of $2,748,000, or 15%, over the same period last year. Salaries and benefits increased $1,594,000, or 15%, from the strategic expansion into the Suburban Philadelphia market as well as additional staff to support the operations and infrastructure for the planned growth. Amortization expense of mortgage servicing rights associated with the SBA portfolio increased year over year by $429,000. Pennsylvania shares tax increased $310,000 year over year due to the increase in capital in 2018.
For the year ended December 31, 2019 net income totaled $7,285,000, a decrease of $719,000, or 9%, from last year.
Balance Sheet
Total assets at December 31, 2019 were $832 million, an increase of $128 million, or 18% over the prior year-end and an increase of $41 million, or 5%, from September 30, 2019.
Total loans ended the year at $702 million, an increase of $76 million, or 12%, over the same period prior year and $28 million, or 4%, over September 30, 2019. The increase in loans year over year are attributed to the growth in commercial and industrial loans of $22 million, or 12%, and commercial real estate loans of $57 million, or 15%. Our further strategic expansion into the Suburban Philadelphia market has experienced growth in loans outstanding of $72 million, or 43%, over the prior year-end.
Total deposits ended the year of 2019 at $682 million with an increase of $96 million, or 16%, over the prior year and increased $32 million from third quarter 2019. Non-interest deposits increased $16 million, or 17%, with interest-bearing demand and money market accounts increasing $52 million, and $47 million respectively, over year-end 2018 while certificates of deposit decreased $19 million as part of the bank's focus on reducing the cost of deposits.
Shareholders' equity ended the period at $77 million, an increase of $8 million, or 11%, from December 31, 2018 and an increase of $2 million, or 3%, from September 30, 2019. Regulatory capital ratios for the bank exceeded "well capitalized" at December 31, 2019 and 2018, and September 30, 2019.
Asset Quality
For the fourth quarter, the provision for loan losses was $544,000, slightly above the third quarter 2019. The increase in the provision for loan losses over last year-end was primarily attributable to an increase in the loan portfolio.
The ratio of allowance for loan and lease losses to total loans was 1.18% at December 31, 2019, consistent with prior quarters. Management believes the allowance for loan and lease losses at December 31, 2019 adequately reflects the risk inherent in the loan portfolio.
Nonperforming assets ratio was 1.45%, up from the 1.14% at the prior quarter end, and up from the fourth quarter 2018 of 0.41%. The largest change over the prior quarter is due to an increase of $3.8 million in "Loans 90+ days past due" in the commercial and industrial portfolio. Of the $3.8 million increase in the commercial and industrial portfolio, $1.0 million is attributable to SBA loans. $2.5 million of the increase are from one lending relationship in the conventional portfolio and are anticipated to return to performing early in the first quarter.
At Period End | |||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
Asset Quality (in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 |
Non-Accrual Loans | 5,171 | 5,551 | 5,429 | 4,537 | 1,073 |
TDRs that are not in NA or PD | 2,785 | 2,945 | 546 | 552 | 611 |
Loans 90+ Days Past Due | 4,078 | 501 | 1,499 | 499 | 1,211 |
OREO | 21 | - | - | 11 | - |
Total Nonperforming Assets | 12,055 | 8,997 | 7,474 | 5,599 | 2,895 |
Total Assets | 832,204 | 791,584 | 786,752 | 734,152 | 704,396 |
Nonperforming assets/total assets | 1.45% | 1.14% | 0.95% | 0.76% | 0.41% |
SBA loans account for $4.4 million, or 36.5%, of nonperforming assets and 11% of SBA loans outstanding. Nonperforming loans in the conventional portfolio are 1.16% of that portfolio at December 31, 2019. Non-accrual loans experienced a net reduction in SBA loans as a component of non-accrual loans by $297,000.
Centric Financial Corporation | |||
Consolidated Balance Sheet (Unaudited) | |||
At Period End | |||
Dec 31, | Sep 30, | Dec 31, | |
(Dollars in thousands) | 2019 | 2019 | 2018 |
Assets | |||
Cash and cash equivalents | $ 66,869 | $ 49,832 | $ 36,308 |
Other investments | 36,621 | 42,040 | 28,544 |
Loans, net of allowance for loan and lease losses | 693,495 | 666,206 | 618,814 |
Premises and equipment | 17,887 | 16,741 | 6,439 |
Accrued interest receivable | 2,304 | 2,256 | 1,993 |
Other assets | 15,028 | 14,509 | 12,298 |
Total Assets | $ 832,204 | $ 791,584 | $ 704,396 |
Liabilities | |||
Noninterest-bearing deposits | 109,799 | 104,200 | 93,685 |
Interest-bearing demand deposits | 172,538 | 125,239 | 120,601 |
Money market and savings | 154,188 | 158,587 | 107,091 |
Certificates of deposit | 245,535 | 261,535 | 264,808 |
Interest-bearing deposits | 572,261 | 545,361 | 492,500 |
Total deposits | 682,060 | 649,561 | 586,185 |
Short-term borrowings | - | 7,500 | 15,500 |
Long-term debt | 70,435 | 57,080 | 30,500 |
Accrued interest payable | 399 | 492 | 511 |
Other liabilities | 1,821 | 1,443 | 1,927 |
Total Liabilities | 754,715 | 716,076 | 634,623 |
Total Shareholders' Equity | 77,489 | 75,508 | 69,773 |
Total Liabilities and Shareholders' Equity | $ 832,204 | $ 791,584 | $ 704,396 |
Centric Financial Corporation | ||||||||
Consolidated Statement of Income (Unaudited) | ||||||||
Three months ended | Twelve months ended | |||||||
Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | Dec 31, | Dec 31, | ||
(Dollars in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |
Interest income | ||||||||
Interest and dividends on securities | $ 290 | $ 285 | $ 251 | $ 269 | $ 231 | $ 1,095 | $ 643 | |
Interest and fees on loans | 9,508 | 9,491 | 9,471 | 8,752 | 8,667 | 37,222 | 31,153 | |
Other | 172 | 388 | 323 | 209 | 291 | 1,092 | 797 | |
Total interest income | 9,970 | 10,164 | 10,045 | 9,230 | 9,189 | 39,409 | 32,593 | |
Interest expense | ||||||||
Interest on deposits | 2,295 | 2,666 | 2,427 | 2,105 | 1,911 | 9,493 | 5,913 | |
Interest on borrowings | 528 | 477 | 420 | 372 | 394 | 1,797 | 1,507 | |
Total interest expense | 2,823 | 3,143 | 2,847 | 2,477 | 2,305 | 11,290 | 7,420 | |
Net interest income | 7,147 | 7,021 | 7,198 | 6,753 | 6,884 | 28,119 | 25,173 | |
Provision for loan losses | 544 | 525 | 525 | 535 | 125 | 2,129 | 1,430 | |
Net interest income after provision | 6,603 | 6,496 | 6,673 | 6,218 | 6,759 | 25,990 | 23,743 | |
Noninterest income | ||||||||
Gain on sale of SBA loans | 75 | 135 | 454 | 72 | 249 | 736 | 1,777 | |
Gain on sale of mortgage loans | 192 | 99 | 98 | 95 | 170 | 484 | 476 | |
Other non-interest income | 865 | 688 | 639 | 683 | 767 | 2,875 | 2,181 | |
Noninterest income | 1,132 | 922 | 1,191 | 850 | 1,186 | 4,095 | 4,434 | |
Noninterest expense | ||||||||
Salaries and benefits | 3,042 | 3,057 | 3,048 | 2,788 | 2,902 | 11,935 | 10,341 | |
Occupancy and equipment | 516 | 552 | 494 | 470 | 506 | 2,032 | 1,956 | |
Professional fees | 184 | 162 | 226 | 169 | 167 | 741 | 529 | |
Data processing | 275 | 297 | 290 | 269 | 265 | 1,131 | 1,012 | |
Advertising and marketing | 128 | 188 | 187 | 188 | 121 | 691 | 565 | |
Other non-interest expense | 1,156 | 1,068 | 1,174 | 984 | 1,379 | 4,382 | 3,761 | |
Noninterest expense | 5,301 | 5,324 | 5,419 | 4,868 | 5,340 | 20,912 | 18,164 | |
Income before taxes | 2,434 | 2,094 | 2,445 | 2,200 | 2,605 | 9,173 | 10,013 | |
Income tax expense | 504 | 440 | 501 | 443 | 517 | 1,888 | 2,009 | |
Net income available to common | $ 1,930 | $ 1,654 | $ 1,944 | $ 1,757 | $ 2,088 | $ 7,285 | $ 8,004 | |
Centric Financial Corporation | ||||||||
Per Share Data & Performance Ratios (Unaudited) | ||||||||
(Dollars in thousands except per share) | 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 | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |
Net income | $ 1,930 | $ 1,654 | $ 1,944 | $ 1,757 | $ 2,088 | $ 7,285 | $ 8,004 | |
Basic earnings per common share | $ 0.22 | $ 0.19 | $ 0.22 | $ 0.21 | $ 0.24 | $ 0.84 | $ 1.03 | |
Book value (at period end) | $ 8.85 | $ 8.62 | $ 8.43 | $ 8.20 | $ 8.01 | |||
Tangible book value (at period end) | $ 8.79 | $ 8.56 | $ 8.37 | $ 8.15 | $ 7.95 | |||
Common shares outstanding | 8,758,646 | 8,758,689 | 8,746,455 | 8,742,290 | 8,714,975 | |||
Average shares outstanding - basic (period | 8,736,927 | 8,731,179 | 8,713,808 | 8,706,540 | 8,696,391 | 8,723,449 | 7,773,912 | |
Performance Ratios (period to date) | ||||||||
Return on average assets | 0.97% | 0.82% | 1.02% | 0.99% | 1.16% | 0.95% | 1.22% | |
Return on average equity | 10.08% | 8.86% | 10.69% | 9.89% | 12.15% | 9.87% | 13.98% | |
Efficiency ratio | 63.27% | 66.81% | 64.97% | 64.00% | 66.04% | 64.90% | 61.16% | |
Yield on Loans | 5.52% | 5.62% | 5.83% | 5.62% | 5.52% | 5.64% | 5.38% | |
Yield on Average Earning Assets | 5.23% | 5.22% | 5.50% | 5.40% | 5.23% | 5.33% | 5.12% | |
Cost of Deposits | 1.40% | 1.57% | 1.53% | 1.42% | 1.27% | 1.48% | 1.08% | |
Cost of Funds | 1.56% | 1.71% | 1.67% | 1.57% | 1.41% | 1.63% | 1.24% | |
Net interest margin | 3.75% | 3.60% | 3.94% | 3.95% | 3.91% | 3.80% | 3.95% | |
Capital Ratios (at period end) | ||||||||
Shareholders' equity/asset ratio | 9.31% | 9.54% | 9.37% | 9.77% | 9.91% | |||
Tangible common equity/tangible assets | 9.26% | 9.48% | 9.32% | 9.71% | 9.84% | |||
Tier I leverage ratio (bank) | 11.41% | 10.95% | 11.39% | 11.86% | 11.48% | |||
Common tier 1 capital/risk-based capital (bank) | 12.47% | 12.67% | 12.53% | 12.87% | 12.86% | |||
Tier 1 risk-based capital (bank) | 12.47% | 12.67% | 12.53% | 12.87% | 12.86% | |||
Total risk-based capital (bank) | 13.63% | 13.83% | 13.68% | 14.00% | 13.96% | |||
Asset Quality Ratios | ||||||||
Net charge-offs/average loans (period to | 0.10% | 0.20% | 0.03% | 0.13% | -0.01% | |||
Nonperforming assets/total assets (at | 1.45% | 1.14% | 0.95% | 0.76% | 0.41% | |||
Allowance for loan & leases losses as a % of | 1.18% | 1.17% | 1.17% | 1.14% | 1.10% | |||
Allowance for loan & leases | 160.37% | 142.63% | 142.24% | 159.73% | 644.11% | |||
About the Company
An American Banker 2019 and 2018 Best Banks to Work For, three-time Best Places to Work, and Top 50 Fastest-Growing Companies for six years, Centric Bank is headquartered in south central Pennsylvania with assets of $832 million and remains a top leader in organic loan growth. A locally owned, locally loaned community bank, Centric Bank provides competitive and pro-growth financial services to businesses, professionals, individuals, families, and the health care industry. Centric Bank was one of the Top 10 SBA Lenders in the Eastern District of PA at December 31, 2019.
Founded in 2007, Pennsylvania-based Centric Bank has financial centers located in Harrisburg, Hershey, Mechanicsburg, Camp Hill, Doylestown and Devon, loan production offices in Lancaster and Devon, and an Operations and Executive Office campus in Hampden Township, Cumberland County. To learn more about Centric Bank, call 717.657.7727, or visit CentricBank.com. Connect with them on Twitter, Facebook, LinkedIn, and Instagram.
Centric Financial Corporation is traded over the counter (OTC-Pink) with the ticker symbol 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
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SOURCE Centric Financial Corporation
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