Central 1 announces financial results for the third quarter of 2022

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VANCOUVER, British Columbia, Nov. 24, 2022 (GLOBE NEWSWIRE) — Central 1 Credit Union (“Central 1” or “the Organization”) reported a profit of $1.3 million for the third quarter (Q3) ended Sept. 30, 2022.

“We continue to support our members and customers through the effects of the global economic slowdown and resulting consumer behavior,” said Sheila Fauci, President and CEO of Central 1.

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“While our year-to-date results have been challenged by unrealized losses driven by increased market returns in the Canadian fixed income market, our third quarter shows signs of improvement as interest margin strengthened driving our overall profitability for the quarter. Meanwhile, we continue to Our investments are as planned to enhance and modernize our products and services to enable our clients to provide valuable financial services to Canadians.”

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Combined results for the third quarter 2022 compared to the second quarter 2022:

  • A profit of $1.3 million, compared to a loss of $26.2 million
  • Interest margin was $21.5 million, up $2.2 million from $19.3 million
  • Net financial income of $7.8 million, compared to net financial expenses of $25.3 million

Combined results for the third quarter 2022 compared to the third quarter 2021:

  • Earnings were $1.3 million, down $11.5 million from $12.8 million
  • Interest margin was $21.5 million, up $6.0 million from $15.5 million
  • Net financial income of $7.8 million, down $11.7 million from $19.5 million
  • Assets were $12.6 billion, down 4.8 percent from $13.2 billion

treasury

Treasury profit in the third quarter was $2.5 million, up $20.3 million from a loss of $17.8 million in the second quarter, driven by a slight decrease in the market value of financial instruments during the quarter and including a $2.2 million increase in interest margin. .

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Third-quarter earnings were down $12.0 million from the same quarter last year. Credit spreads widened as we saw for most of 2022 reflecting an expected economic slowdown as a result of higher interest rates, persistent high inflation and geopolitical uncertainty. Market yields continued their upward trend but at a slower pace in the third quarter resulting in an additional $12.0 million decrease in the market value of treasury portfolios.

The interest margin in the third quarter increased by $6.0 million compared to the same period in 2021 as floating rate assets were re-priced along with the increase in interest rates. Strong loan growth by our members has resulted in a continued drawdown of their Central 1 deposits resulting in a gradual decrease of $1.1 billion in Treasury deposits as of December 31, 2021.

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Payments and digital banking platforms and expertise

Digital Payments, Platforms and Banking Experience (DBPX) reported a loss of $3.7 million in the third quarter of 2022. This loss was largely in line with the same quarter last year and $2.8 million less than in the previous quarter. Investments in strategic initiatives that included the payments modernization and Forge 2.0 initiatives continued in the third quarter and are aligned with Central 1’s strategic priorities.

Management’s discussion, analysis and financial statements for Central 1’s third quarter are filed in Central 1’s SEDAR file at www.sedar.com and are also available at www.central1.com/investor-relations.

About Central 1
Central 1 collaboratively empowers credit unions and other financial institutions that offer banking choices to Canadians. With assets of $12.6 billion as of September 30, 2022, Central 1 provides critical services at scale to enable a thriving credit union ecosystem. We do this by collaborating with our customers, developing strategies, products and services to support the financial well-being of more than 5 million diverse customers in communities across Canada. For more information, visit www.central1.com.

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Caution regarding forward-looking statements
This press release contains forward-looking statements that are based on assumptions, uncertainties, and management’s best estimates of future events. These include, but are not limited to, statements regarding our financial performance goals, vision, strategic objectives, economic, market and regulatory review and future outlook for the Canadian economy and the economies of the provinces in which our member credit unions operate and the effects of the COVID-19 pandemic, as well as statements containing the words “may” and “will,” “intend,” “expect,” and other similar words and expressions. Forward-looking statements are based on management’s opinions and estimates at the date the statements are made. Actual results could differ materially from those currently anticipated. Security holders are cautioned that such forward-looking statements involve risks and uncertainties. Some of the important assumptions Central 1 made in issuing forward-looking statements include, but are not limited to, competitive conditions, economic conditions, regulatory considerations, and the effects of the COVID-19 pandemic. Important risk factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include economic risks, regulatory risks (including legislative and regulatory developments), risks and uncertainties from the impact of the COVID-19 pandemic and geopolitics. Uncertainty, Information Technology and Cyber ​​Risks, Environmental and Social Risks (including Climate Change), Digital Disruption and Innovation, Reputational Risks, Competitive Risks, Privacy, Data and Third Party Related Risks, Business and Operational Risks, and Other Risks detailed from time to time in Central 1 periodic reports filed with securities regulators. Given these risks, the reader is cautioned not to place undue reliance on forward-looking statements. Central 1 undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.

Contacts

The media
Julie Brewer
Vice President, Stakeholder Relations and Communications
Central 1
T604.714.6733
Email jbreuer@central1.com

Investors
Brent Claude
Chief investment
Central 1
T 905.282.8588 or 1.800.661.6813 ext. 8588
Email bclode@central1.com

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