Centric Financial Corporation (“Centric” or “the Company”) (OTC: CFCX), the parent company of Centric Bank (“the Bank”), announced earnings and financial results for the first quarter 2022. Net income for the quarter ending March 31, 2022, totaled $2.8 million, or $0.33, per basic and diluted share.
Highlights of Performance:
Core net income of Centric Financial increased $340 thousand, or 17%, from the fourth quarter 2021.Tangible book value per share growth of 2% over the prior quarter and 10%, or $1.05 per share over the first quarter 2021.Organic loan growth, excluding Paycheck Protection Program loans, increased $29 million from prior quarter.Core deposits increased $62 million from prior quarter with noninterest bearing deposits at 28% of total deposits.Return on Average Assets of 1.09% for first quarter 2022 compared to 1.50% for the fourth quarter 2021. The change is reflective of the decreased in PPP revenue from forgiveness processing and sale of PPP loans at year-end 2021.
Patricia A. Husic, President & CEO of Centric Financial Corporation and Centric Bank stated, “We are pleased to deliver the first quarter financial results which represent solid earnings, growth in our balance sheet and non-interest income and a reduction in our adversely classified loans. Organic loan growth of $29 million, net of PPP, is great momentum to begin 2022. The 14% annualized growth was driven equally by commercial real estate and commercial lending (C&I). Our growth trajectory in the Philadelphia region continues, and as of the end of March, loans from this region represent 53% of our total portfolio. Driven largely by the C&I lending increase in the first quarter, noninterest bearing deposits grew by $17 million, or 7.4%.
We have also been focused on reducing our adversely classified loans, and at March 31, 2022, we delivered tangible results to decrease those loans by $7.7 million.
We surpassed our internal projections for the first quarter and our team is laser focused on executing our strategic initiatives and delivering smart profitable growth for our shareholders.”
Results of Operations – First Quarter
First quarter 2022 net income of Centric Financial is $2.8 million, or $0.33 per share, basic and diluted, down from net income of $3.8 million from the fourth quarter 2021. The change to the quarterly results is due to the reduction of PPP revenue which has been impacted by the $18 million decline in PPP balances from forgiveness processing and $16.6 million sale of those loans at year-end 2021. PPP revenue was $0.5 million and $2.3 million respectively. Net income excluding PPP was $2.4 million in the current quarter, increasing $339 thousand, or 17%, from the prior quarter. Net income decreased from the first quarter 2021 due to the reduction of $1.4 million in PPP revenue from significant PPP forgiveness. Net income Centric Financial exclusive of PPP revenue increased 12% over the first quarter of 2021.
The yield on the loan portfolio was 4.66% on March 31, 2022, which declined 61 basis points from the prior quarter due to reduction in PPP revenue which was elevated in the fourth quarter of 2021 by the recognition of $1.7 million from the sale of PPP loans. Cost of deposits reduced minimally from prior quarter and was reduced 7 basis points from the first quarter 2021. Current quarter’s net interest margin was 3.90% versus 4.47% at fourth quarter 2021 and 3.98% at first quarter 2021 of Centric Financial.
Noninterest income totaled $927 thousand for the first quarter 2022, an increase of 16% over prior quarter with swap referral fees increasing $214 thousand. Noninterest income saw a decrease of 8% from the same quarter last year due to a reduction of mortgage related income as a result of the increased mortgage rates.
Noninterest expense for the first quarter was $6.2 million, an improvement of $245 thousand from last quarter. Changes from the fourth quarter of 2021 included an increase of $146 thousand in salaries and benefits and a reduction of $293 thousand in loan and collection expense.
Compared to the first quarter of 2021 noninterest expenses decreased $135 thousand due to a decline in salary and benefits expense of $174 thousand from the staffing realignment, reduced incentive compensation and health insurance expense. Advertising and marketing expense declined $69 thousand while data processing increased due to the mobile banking application which significantly improved the customer experience and the increase in core relationships year over year.
Centric Financial Asset Quality
Provision expense was reduced by 34% to $400 thousand in the first quarter 2022 from the prior quarter as the coverage ratio increased to 1.45%. The allowance for loan and lease losses was $12.8 million on March 31, 2022. The provision expense saw a reduction of 11% from the first quarter 2021. Management believes the allowance for loan and lease losses adequately reflects the inherent risk in the loan portfolio.
This article was shared with Prittle Prattle News as a Press Release.
