Centric Financial Corporation Issues Subordinated Debt; Plans to Payoff Small Business Lending Fund to U.S. Department of the Treasury
On: December 30, 2015 Filed Under: Member News
HARRISBURG (December 30, 2015) – Centric Financial Corporation (CFC), the parent Company of Centric Bank, entered into a subordinated note purchase agreement under which the Company issued a $6.0 million subordinated note to Williamsport, Pennsylvania-based Jersey Shore State Bank, a subsidiary of Penns Woods Bancorp. The note has a maturity date of December 28, 2025. The note will bear interest at a fixed rate of 4.85% per annum for the first five years and then float at the Wall Street Journal Prime Rate plus 1.00%, with a floor of 4%. Centric Financial Corporation may, at its option, beginning with the first interest payment date after December 28, 2020, and on any interest payment date thereafter, redeem the note, in whole or in part, at par plus accrued and unpaid interest to the date of redemption. The note is not subject to repayment at the option of the noteholder and will qualify as Tier 2 Capital for CFC.
Centric Financial Corporation has received approval from the Company’s primary federal regulator, the Board of Governors of the Federal Reserve System, and the U.S. Department of Treasury, to fully redeem 7,492 shares of its noncumulative perpetual preferred stock that had been issued to the U.S. Department of the Treasury in July 2011, in connection with the company’s participation in the Small Business Lending Fund Program. The shares will be redeemed at their liquidation value of $1,000 per share plus accrued dividends for a total redemption price of approximately $7.5 million. CFC plans to fully pay off the SBLF on December 31, 2015. The redemption will be funded from the issuance of the subordinated debt and $1.5 million of the proceeds related to the common stock offering completed in November 2015. CFC will continue to have capital in excess of minimum regulatory requirements and at levels that qualify as “well capitalized” under applicable regulatory guidelines.
“This is an exclamation point to a strong growth year, and we’re very proud of the confidence our shareholders and the market have signaled to us. Recognized as the leader in central Pennsylvania for SBA loans, we take our commitment to ‘powering the GDP’ very seriously. Community banks form the financial fabric of entire regions, and our positive capital growth strategies are helping to create stronger, more prosperous communities,” says Patricia A. Husic, President and CEO of Centric Financial Corporation and Centric Bank.
During the course of the SBLF Program—supported by Senator Bob Casey (D-PA) and the Obama Administration in 2010—Centric Bank used the funds to lend an additional $86 million in loans to small businesses–an increase of approximately 160% in commercial loans.
“The SBLF Program was very successful for Centric Bank and the communities we serve. We were able to provide significant access to capital for our small business owners to help them grow and create jobs. Centric Bank used this program exactly for what it was designed, and it powered small business growth,” says Husic.
About Centric Bank
A two-time Best Places to Work and Top 50 Fastest-Growing Companies for four years, Centric Bank is headquartered in south central Pennsylvania with assets of $360 million and remains the leader in both organic loan growth and provider of SBA Loans in central and Southeastern Pennsylvania. A locally owned, locally loaned community bank, Centric Bank provides highly competitive and pro-growth core financial services to businesses, professionals, individuals, and families. With a Five-Star Bauer Financial Rating, Centric Bank is also ranked as a Top 20 Lender for SBA Loans in the Philadelphia Region.
Founded in February 2007, Pennsylvania-based Centric Bank has financial centers located in Harrisburg, Hershey, Mechanicsburg, and Camp Hill, as well as a commercial lending office in 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 and LinkedIn at Centric Bank.
Centric Financial Corporation is traded over the counter (OTC-Pink) with the ticker symbol CFCX.