The $1,000,000 of additional provision expense related to Potential COVID-19 Losses in the second quarter of 2020 was partially offset by reductions in estimated credit risk within the loan portfolio resulting from decreases in loans outstanding, such as owner-occupied commercial real estate and multifamily real estate loans, as well as higher risk loans, such as commercial and industrial loans, construction and land development loans and consumer loans.Other indications of improving portfolio credit risk that occurred during the second quarter of 2020 include decreases in loans classified as Special Mention and Substandard, improvements in past due ratios and decreases in historical loss ratios.The level of provision expense is determined under Premier's internal analyses of evaluating credit risk. The amount of future provisions for loan losses will depend on any future improvement or further deterioration in the estimated credit risk in the loan portfolio, as well as whether additional payments are received on loans previously identified as having significant credit risk.Gross charge-offs of loans totaled $1,320,000 in the second quarter of 2021 compared to $109,000 of gross charge-off of loans in the second quarter of 2020.Recoveries on loans previously charged-off was relatively the same in 2021 at $47,000 compared to $51,000 in the second quarter of 2020.During the first six months of 2021, net charge-offs increased by $587,000 to $1,331,000, compared to the same six months of 2020.Also during the first six months of 2021, non-accrual loans increased by $2,968,000 since year-end 2020, while accruing loans over 90 days past due decreased by $1,423,000.
Net overhead costs (non-interest expenses less non-interest income) for the quarter endedJune 30, 2021 totaled $9.697 million compared to $9.189 million in the second quarter of 2020.Net overhead increased by $508,000, or 5.5%, in the second quarter of 2021 when compared to the second quarter of 2020, largely due to a $740,000, or 6.7%, increase in non-interest expense partially offset by a $232,000, or 12.3%, increase in non-interest income.Total non-interest income increased by $232,000 in the second quarter of 2021 when compared to the second quarter of 2020, largely due to a $164,000, or 17.5%, increase in electronic banking income and a $35,000, or 41.2%, increase in secondary market mortgage income.Electronic banking income increased, largely due to a $163,000, or 20.9%, increase in income from debit card transaction activity.Secondary market mortgage income increased, in part, due to the lower long-term interest rate environment, resulting in an increase in housing purchases in Premier's markets and home loan refinances as customers are taking advantage of lowering their long-term fixed home loan interest rate.Other increases in non-interest income include a $15,000, or 2.2%, increase in service charges on deposit accounts, largely due to an increase in customer overdraft activity, and an $18,000, or 10.2%, increase in other sources of non-interest income, including check cashing fees, checkbook sales, and income from Premier's partial ownership of an insurance agency.
Non-interest expense increased by $740,000, or 6.7% in the second quarter of 2021 compared to the second quarter of 2020, largely due to a $641,000, or 181%, increase in expenses and writedowns on OREO properties and a $217,000, or 88.2%, increase in professional fees.During the second quarter of 2021, Premier recorded $859,000 of writedowns on OREO property values and another $14,000 of net losses on the completed sale of OREO properties compared to $277,000 of such writedowns of OREO property values and the realization of $28,000 of net gains upon the sale of OREO properties in the second quarter of 2020. Professional fees increased largely due to a $171,000 increase in legal fees and a $25,000 increase in consulting fees related to the pending acquisition of Premier by Peoples Bancorp Inc.Other increases in non-interest expense include a $52,000, or 72.2%, increase in FDIC insurance costs, largely due to the prior utilization of FDIC based community bank assessment credits to partially offset the second quarter 2020 FDIC insurance premiums, a $30,000, or 1.8%, increase in outside data processing costs and a $13,000, or 0.7%, increase in occupancy and equipment expenses.These increases more than offset decreases in non-interest expense in the second quarter of 2021 when compared to the second quarter of 2020.Decreases in non-interest expense include an $80,000, or 31.7%, decrease in taxes not on income, a $74,000, or 73.3%, decrease in loan collection expenses, a $21,000, or 18.4%, decrease in supplies expense, an $18,000, or 7.5%, decrease in the amortization of intangible assets and a $20,000, or 0.4%, decrease in staff costs.The decrease in taxes not on income is due to a change in the taxation of banks in the Commonwealth of Kentucky, from an equity based franchise tax to a state imposed income tax.
For the Quarter Ended
|
For the Six Months Ended
| |||||||||||||||
June 30
|
June 30
|
June 30
|
June 30
| |||||||||||||
2021
|
2020
|
2021
|
2020
| |||||||||||||
Interest Income
| ||||||||||||||||
Loans, including fees
|
16,024
|
16,416
|
31,472
|
32,170
| ||||||||||||
Investments and other
|
1,579
|
2,222
|
3,118
|
5,112
| ||||||||||||
Total interest income
|
17,603
|
18,638
|
34,590
|
37,282
| ||||||||||||
Interest Expense
| ||||||||||||||||
Deposits
|
586
|
1,715
|
1,351
|
3,880
| ||||||||||||
Borrowings and other
|
71
|
114
|
143
|
251
| ||||||||||||
Total interest expense
|
657
|
1,829
|
1,494
|
4,131
| ||||||||||||
Net interest income
|
16,946
|
16,809
|
33,096
|
33,151
| ||||||||||||
Provision for loan losses
|
428
|
590
|
1,076
|
1,590
| ||||||||||||
Net interest income after provision
|
16,518
|
16,219
|
32,020
|
31,561
| ||||||||||||
Non-interest Income
| ||||||||||||||||
Service charges on deposit accounts
|
707
|
692
|
1,440
|
1,798
| ||||||||||||
Electronic banking income
|
1,101
|
937
|
2,108
|
1,755
| ||||||||||||
Gain on the sale of securities
|
-
|
-
|
1,096
|
-
| ||||||||||||
Other non-interest income
|
314
|
261
|
622
|
586
| ||||||||||||
Total non-interest income
|
2,122
|
1,890
|
5,266
|
4,139
| ||||||||||||
Non-Interest Expense
| ||||||||||||||||
Salaries and employee benefits
|
5,247
|
5,267
|
9,862
|
10,675
| ||||||||||||
Net occupancy and equipment
|
1,811
|
1,798
|
3,600
|
3,523
| ||||||||||||
Outside data processing
|
1,732
|
1,702
|
3,449
|
3,233
| ||||||||||||
OREO expenses and writedowns, net
|
995
|
354
|
1,159
|
422
| ||||||||||||
Amortization of intangibles
|
223
|
241
|
445
|
483
| ||||||||||||
Other non-interest expenses
|
1,811
|
1,717
|
3,494
|
3,480
| ||||||||||||
Total non-interest expense
|
11,819
|
11,079
|
22,009
|
21,816
| ||||||||||||
Income Before Taxes
|
6,821
|
7,030
|
15,277
|
13,884
| ||||||||||||
Income Taxes
|
1,647
|
1,524
|
3,553
|
3,010
| ||||||||||||
NET INCOME
|
5,174
|
5,506
|
11,724
|
10,874
| ||||||||||||
EARNINGS PER SHARE
|
0.35
|
0.38
|
0.80
|
0.74
| ||||||||||||
DILUTED EARNINGS PER SHARE
|
0.35
|
0.37
|
0.79
|
0.74
| ||||||||||||
DIVIDENDS PER SHARE
|
0.15
|
0.15
|
1.30
|
0.30
| ||||||||||||
Charge-offs
|
1,320
|
109
|
1,429
|
935
| ||||||||||||
Recoveries
|
47
|
51
|
98
|
191
| ||||||||||||
Net charge-offs
|
1,273
|
58
|
1,331
|
744
|
Balances as of
| ||||||||
June 30
|
December 31
| |||||||
2021
|
2020
| |||||||
ASSETS
| ||||||||
Cash and due from banks
|
24,265
|
24,961
| ||||||
Interest-bearing bank balances
|
124,523
|
174,209
| ||||||
Federal funds sold
|
16,047
|
11,306
| ||||||
Securities available for sale
|
572,785
|
421,190
| ||||||
Loans (net)
|
1,232,701
|
1,200,862
| ||||||
Other real estate owned
|
12,042
|
13,215
| ||||||
Other assets
|
45,917
|
48,015
| ||||||
Goodwill and other intangible assets
|
51,619
|
52,064
| ||||||
TOTAL ASSETS
|
2,079,899
|
1,945,822
| ||||||
LIABILITIES & EQUITY
| ||||||||
Deposits
|
1,726,782
|
1,633,740
| ||||||
Fed funds/repurchase agreements
|
62,256
|
33,827
| ||||||
Subordinated debentures
|
5,495
|
5,475
| ||||||
Other liabilities
|
36,181
|
12,873
| ||||||
TOTAL LIABILITIES
|
1,830,714
|
1,685,915
| ||||||
Common Stockholders' Equity
|
249,185
|
259,907
| ||||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|
2,079,899
|
1,945,822
| ||||||
TOTAL BOOK VALUE PER COMMON SHARE
|
16.84
|
17.71
| ||||||
Tangible Book Value per Common Share
|
13.35
|
14.16
| ||||||
Non-Accrual Loans
|
11,964
|
8,996
| ||||||
Loans 90 Days Past Due and Still Accruing
|
909
|
2,332
|
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Disclaimer
Premier Financial Bancorp Inc. published this content on 04 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2021 21:47:06 UTC.