Published:
Premier Financial Bancorp, Inc. Reports First Quarter 2008 Earnings
HUNTINGTON, W.Va., April 29 /PRNewswire-FirstCall/ -- PREMIER FINANCIAL
BANCORP, INC. (PREMIER),HUNTINGTON, WEST VIRGINIA (Nasdaq: PFBI), a $564
million community bank holding company with five bank subsidiaries, announced
its financial results for the first quarter of 2008.Premier realized income
of $1,774,000 (34 cents per share) during the quarter ending March 31, 2008, a
0.7% decrease from the $1,786,000 of net income reported for the first quarter
of 2007. On a per share basis,Premier earned $0.34 during the first quarter
2008, unchanged from the $0.34 per share earned during the first quarter of
2007. The slight decrease in net income in 2008 was primarily the result of a
$212,000 decrease in non-recurring non-interest income, substantially offset
by a 3.1% increase in other types of non-interest income, a 1.5% increase in
net interest income and a $135,000 negative provision for loan losses.
Net interest income for the quarter ending March 31, 2008 totaled $5.594
million, compared to $5.511 million of net interest income earned in the first
quarter of 2007 and $5.644 million earned in the fourth quarter of 2007. When
compared to the first quarter of 2007, net interest income has improved 1.5%
due to greater decreases in interest expense than decreases in total interest
income. Total interest income in the first quarter of 2008 decreased by
$185,000 or 2.1% when compared to the first quarter of 2007, as a $231,000 or
17.3% increase in interest income on investments was more than offset by
decreases in interest income from loans, down $211,000 or 3.1%, and federal
funds sold, down $210,000 or 41.5%. Total interest expense in the first
quarter of 2008 decreased by $268,000 or 8.6% when compared to the first
quarter of 2007, as interest on deposits decreased by $82,000 or 3.1%,
interest on repurchase agreements decreased by $26,000 or 32.9%, interest on
FHLB advances decreased by $46,000 or 38.3% and interest on other borrowings
decreased by $114,000 or 49.1%. The 0.9% decrease in net interest income,
when compared to the fourth quarter of 2007, is largely due to the decrease in
interest income exceeding the decrease in total interest expense. Total
interest income decreased by $263,000 or 3.0% when compared to the fourth
quarter of 2007, largely due to a $305,000 decrease in interest income on
loans and a $65,000 decrease in interest on federal funds sold, which were
only partially offset by a $111,000 increase in interest income from
investments. Total interest expense in the first quarter of 2008 decreased by
$213,000 when compared to the fourth quarter of 2007 as interest on deposits
decreased by $158,000, interest on repurchase agreements decreased by $20,000
and interest on other borrowings decreased by $34,000.
President and CEO Robert W. Walker commented, "The decreases in all
sources of interest income and expense are largely the result of the rapid
decrease in market interest rates following the Federal Reserve Bank Board of
Governors' monetary policy changes in the first quarter.Premier also
received several million dollars of commercial loan payoffs in the first
quarter, further reducing loan income, which we combined with the funds
received from our 3.4% growth in deposits and invested in high quality bonds
and mortgage-backed securities. This accounts for our 17.3% increase in
investment income. Nevertheless, our net interest margin remained strong in
the first quarter of 2008 at 4.38% compared to 4.41% in the same quarter of
2007.
"We are pleased that our level of non-accrual loans continues to decrease,
now below $3.0 million, and that we realized $45,000 of net recoveries on
previously charged-off loans during the first quarter. These events led us to
record a $135,000 negative provision for loan losses. We believe our
allowance for loan losses remains strong at 1.91% of outstanding loans. In
the coming months, we will continue to monitor the impact that national
housing market price declines may have on our local markets and collateral
valuations as we maintain the adequacy of our allowance for loan losses. We
do not anticipate our markets to be impacted as severely as other areas of the
country due to our markets' historically modest increases in real estate
values."
During the quarter ending March 31, 2008,Premier recorded $135,000 in
negative provisions to the allowance for loan losses compared to $36,000 of
additional provisions made during the same period of 2007 and $25,000 of
additional provisions in the fourth quarter of 2007.Premier began recording
negative provisions to the allowance for loan losses in the third quarter of
2005 as a result of improvements in the estimated credit risk at banks
formerly subject to regulatory agreements and payments on loans previously
identified as having significant credit risk atPremier's subsidiary, Farmers
Deposit Bank. Future provisions to the allowance for loan losses, positive or
negative, will depend on any future improvement or deterioration in estimated
credit risk in the loan portfolio as well as whether additional payments are
received on loans previously identified as having significant credit risk. As
a result of the net recoveries of charge-offs recorded in the first quarter
and the decline in total loans outstanding, the allowance for loan losses at
March 31, 2008 increased slightly to 1.91% of total loans compared to 1.87% of
total loans at year-end 2007.
Net overhead for the quarter ending March 31, 2008 totaled $3.056 million.
This compares to $2.902 million in the first quarter of 2007, and $3.014
million in the fourth quarter of 2007. First quarter 2007 net overhead was
lower than the first quarter 2008 net overhead largely due to $212,000 in
death benefits from an insurance policy on the life of former officer of a
subsidiary realized in 2007. Otherwise, electronic banking income was up
19.0% and secondary market mortgage income was up 19.3% in 2008, while
professional fees were higher in 2008 due to work on the announced
acquisitions of Traders Bank and Citizens First Bank. When compared to the
fourth quarter of 2007, net overhead was slightly higher largely due to
seasonally lower service charge and fee income, lower secondary market
mortgage income, and higher staff costs due to normal salary and benefit
increases at the beginning of the year. These higher net overhead items were
substantially offset by recoveries of collection expenses in the first quarter
of 2008 and a $70,000 write-down of a branch building in the fourth quarter of
2007.
Total assets as of March 31, 2008 of $564 million were up 2.6% from the
$549 million of total assets at year-end 2007. The $14.5 million increase in
total assets is largely due to a $15.2 million increase in total deposits and
a $2.4 million increase in shareholders' equity since year-end. These funds,
combined with $10.6 million received from net loan payments, have been used to
purchase high quality investment securities, up $20.3 million since year-end,
and held in federal funds sold for the purposes of funding future loan demand.
Shareholders' equity of $69.8 million equaled 12.4% of total assets at March
31, 2008 which compares to shareholders' equity of $67.4 million or 12.3% of
total assets at December 31, 2007. The increase in shareholders' equity was
due to the $1.8 million of first quarter net income and a $1.1 million
improvement in the net unrealized gain of the investment portfolio during the
first quarter of 2008.Premier invests in high quality debt securities of the
U.S. Government and its agencies and fully expects to receive the face value
of these securities upon their maturity. These increases more than offset the
$524,000 in cash dividends paid to shareholders.
Certain Statements contained in this news release, including without
limitation statements including the word "believes," "anticipates," "intends,"
"expects" or words of similar import, constitute "forward-looking statements"
within the meaning of section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements ofPremier to be materially different
from any future results, performance or achievements ofPremier expressed or
implied by such forward-looking statements. Such factors include, among
others, general economic and business conditions, changes in business strategy
or development plans and other factors referenced in this press release. Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements.Premier disclaims any obligation
to update any such factors or to publicly announce the results of any
revisions to any of the forward-looking statements contained herein to reflect
future events or developments.
Following is a summary of the financial highlights forPremier as of and
for the period ending March 31, 2008.
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights
Dollars in Thousands (except per share data)
For the
Quarter Ended
March 31 March 31
2008 2007
Interest Income 8,427 8,612
Interest Expense 2,833 3,101
Net Interest Income 5,594 5,511
Provision for Loan Losses (135) 36
Net Interest Income after Provision 5,729 5,475
Non-Interest Income 1,066 1,246
Securities Transactions - -
Non-Interest Expenses 4,122 4,148
Income Before Taxes 2,673 2,573
Income Taxes 899 787
NET INCOME 1,774 1,786
EARNINGS PER SHARE 0.34 0.34
Charge-offs 79 260
Recoveries 124 139
Net charge-offs (recoveries) (45) 121
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
March 31 December 31
2008 2007
ASSETS
Cash and Due From Banks 19,755 22,365
Federal Funds Sold 37,305 32,035
Securities Available for Sale 144,541 124,242
Loans Held for Sale 3,418 1,891
Loans (net) 329,540 340,073
Other Real Estate Owned 354 174
Other Assets 13,039 12,659
Goodwill 15,816 15,816
TOTAL ASSETS 563,768 549,255
LIABILITIES & EQUITY
Deposits 464,279 449,033
Fed Funds/Repurchase Agreements 12,726 12,869
FHLB Advances 4,798 4,843
Other Borrowings 8,041 8,412
Other Liabilities 4,135 6,709
TOTAL LIABILITIES 493,979 481,866
Stockholders' Equity 69,789 67,389
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 563,768 549,255
TOTAL BOOK VALUE PER SHARE 13.32 12.87
Non-Accrual Loans 2,882 3,157
Loans 90 Days Past Due and Still Accruing 871 987
SOURCE Premier Financial Bancorp, Inc.
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