Centric Financial : 2021 Annual Consolidated Financial Statements

2021 ANNUAL CONSOLIDATED

FINANCIAL STATEMENTS

CENTRIC FINANCIAL CORPORATION

2021 ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

CONSOLIDATED FINANCIAL STATEMENTS:

PAGE NO.
Independent Auditor's Report	3
Consolidated Balance Sheet	5
Consolidated Statement of Income	6
Consolidated Statement of Comprehensive Income	7
Consolidated Statement of Changes in Stockholders' Equity	8
Consolidated Statement of Cash Flows	9
Notes to Consolidated Financial Statements	11-41

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders

Centric Financial Corporation Harrisburg, Pennsylvania

Opinion

We have audited the accompanying consolidated financial statements of Centric Financial Corporation and its subsidiary (the "Company"), which comprise the consolidated balance sheet as of December 31, 2021 and 2020; the related consolidated statement of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended; and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

•  Exercise professional judgment and maintain professional skepticism throughout the audit.

•  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

•  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

•  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

•  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Cranberry Township, Pennsylvania

March 24, 2022

CENTRIC FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

December 31,2021

2020

ASSETS

Cash and due from banks Interest-bearing deposits in other banks Federal funds sold

Cash and cash equivalents

Securities available for sale

Securities held to maturity, fair value of $29,964 and $28,685

$

5,581 $ 51,464

869 579

38,627 30,057

45,077 82,100

11,373 12,599

29,902 28,282

Equity securities - 2,118

Loans held for sale - 2,166

Loans

Less: allowance for loan losses Net loans

Premises and equipment, net Accrued interest receivable Regulatory stock

Cash surrender value life insurance Mortgage servicing rights

Other assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES

Deposits - noninterest-bearing Deposits - interest-bearing Total deposits

Operating lease liability Finance lease liability Short-term borrowings Long-term debt

Total borrowed funds

Other liabilities

Total Liabilities STOCKHOLDERS' EQUITY

Common stock, $1.00 par; 12,000,000 shares authorized; 8,788,716 shares issued and 8,481,197 outstanding at December 31, 2021; 8,790,907 shares issued and 8,448,903 outstanding at December 31, 2020

Additional paid-in capital Retained earnings

Accumulated other comprehensive (loss) income

Treasury stock - 307,519 and 342,004 shares, at cost, at December 31, 2021 and 2020, respectively

Total Stockholders' Equity

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

See notes to consolidated financial statements.

875,026 964,214

12,407 10,487

862,619 953,727

13,036 13,880

4,152 6,016

2,569 3,653

4,395 4,296

959 1,124

9,124 8,051

$

983,206

$

1,118,012

$

229,863 $ 196,367

585,286 730,108

815,149 926,475

2,607 3,224

5,493 5,519

- 20,000

62,151 74,678

70,251 103,421

2,591 3,613

887,991

1,033,509

8,789 8,791

46,766 46,505

41,910 31,561

(69)

(2,181) 95,215

$

983,206

71

(2,425) 84,503

$

1,118,012

5