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Centric Financial Corporation Reports Record Third Quarter 2018 Net Income of $2.4 Million

Harrisburg, Pennsylvania (October 31, 2018) – Centric Financial Corporation ("Centric" or "the Company") (OTC: CFCX), the parent company of Centric Bank ("the Bank"), today reported record net income of $2,399,000 or $0.28 per common share basic for the third quarter of 2018.  Compared to third quarter 2017, net income increased $1,237,000, or 106%.

For the nine months ended September 30, 2018, Centric's net income was $5,916,000, or $0.79 per common share basic, an increase of $2,748,000, or 87%, over the same period 2017.


  • Total assets increased to $717 million, an increase of $184 million, or 35%, over the same period in 2017.
  • Gross loans outstanding at September 30, 2018 totaled $621 million, an increase of $145 million, or 31%, during the last 12 months.
  • Deposits totaled $594 million, growing by $132 million, or 28%, from September 30, 2017.
  • Total revenue grew $7 million, or 36%, over the nine months ended September 2017.
  • Net income available to common shareholders increased $2.7 million, or 87%, over the nine months ended September 2017.
  • The Company's net interest margin remains consistent at 3.96% compared to the same period one year prior.
  • Year-to-date annualized Return on Average Assets was 1.24%, which is significantly increased from the 0.83% metric for the period ended September 30, 2017.

Patricia A. Husic, President and CEO, commented "Our team continues to deliver with strong organic growth, in both loans and deposits, in the markets that we serve. We are intentional in our efforts and laser focused on executing our strategic plan."

Operating Results

Centric's net interest income was $6,728,000 for the three months ended September 30, 2018, an increase of $1,597,000, or 31%, over the third quarter 2017.  Increased average earning assets and net interest margin were the significant factors contributing to the increase in net interest income for both the quarter and year-to-date results. Net interest margin was impacted in the third 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 held consistent at 3.96%.

Non-interest income totaled $1,198,000 for the third quarter 2018, an increase from the third quarter 2017 of $537,000, or 81%.  The increase was attributable to increased gain on the sale of Small Business Association (SBA) loans of $259,000, or 136%, and a gain on sale of other real estate owned of $175,000.  For the nine months ending September 2018 non-interest income totaled $3,248,000, an increase of $1,018,000, or 46%, over the same period 2017. The 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 $4,258,000, or 22%.  Other fees on loans increased $147,000, or 37%, over year to date 2017.

Non-interest expense for the third quarter 2018 was $4,475,000, an increase of $674,000, or 18%, over the same period prior year.  The increase is due primarily to higher salary and benefit costs of $406,000, or 18%, and increased occupancy expenses up $92,000, or 24%, due largely to the new operations and executive offices in Enola.  Other operating expenses increased by $176,000, or 15%, over the same period last year due to annual licensing fees and other operational expenses.  For the nine months ending September 30, 2018, non-interest expense totaled $12,824,000, an increase of $1,754,000, or 16%.  Salaries and benefits are the most significant change over year-to-date September 2017 and increased $995,000, or 15%, due to increased lending, business development, operational and executive team members.  Occupancy costs increased year over year $335,000 largely due to the Bank's 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 $84,000, or 23%, due to the Bank's increased sponsorships and support of its communities and customers.  Pennsylvania shares tax has increased over the prior year to date $86,000, or 28%, due to increased earnings and equity.

Balance Sheet

Total assets at September 30, 2018 totaled $716,961,000 compared to $532,920,000 at September 30, 2017, an increase of $184,041,000, or 35%.  The increase is due to strong loan growth and an increase in cash and cash equivalents for both year-over-year and quarter-over-quarter results.  Quarter-over-quarter total assets increased $31,158,000, or 5%, from the June 30, 2018 period end of $681,803,000.

Total loans for the period end September 30, 2018 were $620,610,000, an increase of $146,682,000, or 31%, over the same period prior year and $19,731,000, or 3%, over the second 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 $61,464,000, or 51%, and $14,026,000, or 8%, and commercial real estate loans of $79,317,000, or 26%, and $5,228,000, or 1%, respectively.

Total deposits ended September 30, 2018 at $594,281,000 an increase of $131,693,000 or 28% over the same period 2017 and $39,864,000, or 7%, over the second quarter 2018.  The increase in deposits is attributed to growth in non-interest bearing deposits, money market funds and certificates of deposit.  The increase in non-interest bearing deposits was $17,866,000, or 24%, and $10,534,000, or 13%, over prior year and prior quarter. The increase in money market deposits was $28,168,000, or 40%, and $12,995, or 15%, 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 the Bank's branches.  The increase in time deposits of $103,747,000, or 63%, and $21,793,000, or 9%, over prior year and prior quarter has been the combined result of new and increased branch relationships and wholesale funding.

Shareholders equity ended the period at $67,366,000 an increase of $26,355,000, or 64%, from September 30, 2017 and an increase of $2,424,000, or 4%, from June 30, 2018.  Regulatory capital ratios for the bank exceed "well capitalized" at September 30, 2018 and 2017, and June 30, 2018.

Asset Quality

Asset quality continues to be strong.  At September 30, 2018 the net charge-off ratio to average loans was 0.21%, an increase of 0.20% over the second quarter 2018 of 0.01%.  Non-performing assets to total assets was 0.25%, a decrease from the prior quarter and the third quarter 2017 of 0.07% and 0.10%, respectively.  The ratio of allowance for loan and lease losses to total loans was 1.09% for the period ending September 30, 2018.  Management believes the allowance for loan and lease losses at September 30, 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 $717 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 December 31, 2017.

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 Connect with them on Twitter at @CentricBank and Facebook at Centric Bank.

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

Forward Looking Statement

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.

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