Third Quarter 2020
Highlights
- Net income of $25.7 million, or $28.6 million excluding
merger-related expenses, compared to $13.2 million, or $13.6
million excluding merger-related expenses, for 2019 third
quarter
- Earnings per share of $0.69, or $0.77 excluding merger-related
expenses, compared to $0.66, or $0.68 excluding merger-related
expenses, for 2019 third quarter
- Allowance to Loans ratio of 1.63%, or 1.77% excluding PPP
loans
- Average loan growth of $166 million, or 3.1% quarterly
growth
- Average deposit growth of $247 million, or 4.5% quarterly
growth
- Pre-tax pre-provision ROAA of 1.99%, or 2.20% excluding
merger-related expenses, compared to 2.10%, or 2.16% excluding
merger-related expenses, for 2019 third quarter
- Efficiency ratio of 56.5%, or 49.9% core, compared to 56.8%, or
55.5% core, for 2019 third quarter
- Issued $50 million of fixed-to-floating rate subordinated notes
at 4.00% initial rate
Premier Financial Corp.
(Nasdaq: PFC) (“Premier” or the “Company”) announced today third
quarter results including solid core profitability. On a GAAP
basis, net income for the third quarter of 2020 was $25.7 million,
or $0.77 per diluted common share, compared to net income of $13.2
million, or $0.66 per diluted common share, for the third quarter
of 2019. Net income for the nine months ended September 30, 2020,
was $32.2 million, or $1.88 per diluted common share, compared to
$36.9 million, or $1.85 per diluted common share, for the nine
months ended September 30, 2019. The year-over-year comparisons are
substantially impacted by the acquisition of United Community
Financial Corp. (“UCFC”) on January 31, 2020. The current year’s
results include the impact of $3.7 million and $17.3 million of
acquisition-related charges for the three and nine months ended
September 30, 2020, respectively, which had after-tax costs of $2.9
million and $14.0 million, respectively, or $0.08 and $0.39 per
diluted common share, respectively. The three and nine months ended
September 30, 2019, included $540,000 of acquisition-related
charges, which had an after-tax cost of $427,000 or $0.02 per
diluted common share. Additionally, the current year’s nine month
provision expense of $49.3 million included $25.9 million related
to acquisition accounting for an after-tax cost of $20.5 million,
or $0.58 per diluted common share. The first nine months of 2019
included a provision expense of $1.8 million, which had an
after-tax cost of $1.4 million, or $0.09 per diluted common share,
and no acquisition impact. Excluding the impact of the
acquisition-related provision and charges, earnings for the three
and nine months ended September 30, 2020, were $28.6 million and
$66.8 million, respectively, or $0.77 and $1.88 per diluted common
share, respectively.
“Efficiency and non-interest
income growth are highlights of our continued strong financial
performance for the third quarter,” said Donald P. Hileman, CEO of
Premier. “We are incredibly pleased with our ability to enhance
capital via excess earnings and a very successful, low-cost
sub-debt issuance.”
Integration update
As previously announced, on January 31, 2020, the Company
completed the strategic merger of equals with UCFC under which UCFC
merged into Premier in a stock-for-stock transaction. The
year-over-year comparison of Company results is substantially
impacted by the UCFC merger, with 2020 third quarter and
year-to-date results including three and eight months of operations
from UCFC, respectively, compared to none for the comparable
periods in 2019. In June, the Company launched its newly designed
logo and brand identity for Premier Financial Corp. and Premier
Bank. The new tagline “Powered by People” honors the longstanding
commitment both organizations have to their customers, communities
and employees. In July, Premier Bank successfully completed its
core systems conversion. The integration of teams, systems and
processes for the combined organization is progressing as
expected.
“The entire Premier
organization from client-facing to behind-the-scenes operational
teams came together to put our clients first during this
transition,” said Gary M. Small, President of Premier. “By living
our core values, we were able to preserve the best of two
organizations under the Premier brand. As the final,
conversion-related tasks conclude, we pivot our energy to
enhancements of the client experience and top-tier
performance.”
Business Client Support Efforts
As a part of the CARES Act, the Small Business Administration
created the Paycheck Protection Program (“PPP”) to provide small
businesses with loans as a direct incentive to keep their workers
on the payroll. Premier Bank actively participated in PPP for
clients and made 2,880 loans for a total of $443.3 million as of
September 30, 2020. Total gross fees for these loans totaled $14.8
million. We recognized $2.7 million and $4.3 million as loan
interest income during the three and nine months ended September
30, 2020, respectively.
Net interest income up compared to third quarter of
2019
Net interest income of $53.3 million in the third quarter of
2020 was up from $28.9 million in the third quarter of 2019. The
increase over the prior year’s third quarter was attributable to
organic growth and three months of income from UCFC compared to
none in 2019. Net interest margin was 3.47% for the third quarter
of 2020, down from 3.51% in the second quarter of 2020, and down
from 3.88% in the third quarter of 2019. Yield on interest earning
assets decreased to 3.91% in the third quarter of 2020, down 13
basis points from 4.04% in the second quarter of 2020. Total cost
of funds decreased eight basis points in the third quarter of 2020
to 0.47% from 0.55% in the second quarter of 2020 while the total
cost of interest-bearing liabilities decreased nine basis points to
0.62% from 0.71%. The 2020 third quarter results include the impact
of acquisition marks and related accretion for the UCFC
acquisition. Interest income includes $1.1 million of accretion and
interest expense includes $0.8 million of accretion, which combined
added 13 basis points of net interest margin. The third quarter
results also include the impact of PPP loans. Interest income
includes $2.7 million on average balances of $440.4 million, which
reduced net interest margin by seven basis points. Excluding the
impact of acquisition marks and PPP loans, net interest margin
would be 3.41% for the third quarter of 2020 compared to 3.34% for
the second quarter of 2020 excluding the impact of acquisition
marks and PPP loans.
“Our ability to manage funding
costs and excess liquidity in the third quarter led to an improved
core net interest margin,” said Hileman. “Our strategies and
teamwork are mitigating the impacts of the current down-rate
environment.”
Non-interest income up from third quarter of 2019
Premier’s non-interest income in the third quarter of 2020 was
$25.0 million compared with $11.8 million in the third quarter of
2019. Results for the third quarter of 2020 included three months
of income from UCFC compared to none in 2019.
Mortgage banking income increased to $12.0 million in the third
quarter of 2020 from $2.8 million in the third quarter of 2019.
Gains from the sale of mortgage loans increased to $13.8 million in
the third quarter of 2020 from $2.6 million in the third quarter of
2019. Mortgage loan servicing revenue increased to $1.9 million in
the third quarter of 2020 from $1.0 million in the third quarter of
2019. Amortization of mortgage servicing rights increased to $2.0
million in the third quarter of 2020 from $0.6 million in the third
quarter of 2019. Premier had a negative change in the valuation
adjustment in mortgage servicing assets of $1.7 million in the
third quarter of 2020 compared with a negative adjustment of $0.2
million in the third quarter of 2019. The year-over-year change for
the third quarter is primarily due to increased prepayment speeds
in the current down rate environment.
For the third quarter of 2020, service fees and other charges
were $4.8 million, up from $4.0 million in the third quarter of
2019. Commissions from the sale of insurance products were $3.7
million, up from $3.3 million in the third quarter of 2019.
Beginning with the second quarter of 2020, Premier began to report
wealth management income, which represents trust income plus income
for brokerage and financial advisory services that were previously
reported in other non-interest income. Prior period amounts have
been restated for consistency. Wealth management income was $1.5
million in the third quarter of 2020, up from $0.7 million in the
third quarter of 2019.
Securities gains were $1.5 million in the third quarter of 2020,
up from $11,000 in the third quarter of 2019. The Company early
extinguished $30 million of fixed rate FHLB advances in the third
quarter that had a weighted average rate of 2.0% and incurred a
prepayment penalty of $1.4 million recognized in other expenses.
The Company sold $55 million of MBS securities yielding
approximately 1.80% at a gain of $1.4 million. The proceeds from
the sales are being reinvested into securities yielding
approximately 1.50% funded by overnight advances with a cost of
approximately 20 basis points. The net effect of the transactions
will increase pretax income approximately $425,000 over the next 12
months and enhance net interest margin by one basis point.
“We are pleased that the rate
compression we are experiencing continues to be offset by our
non-interest income growth,” said Hileman. “While mortgage banking
was again very strong with almost $14 million in gains this
quarter, all business lines contributed to enhanced
revenues.”
Non-interest expenses up from third quarter of 2019
Total non-interest expense was $43.6 million in the third
quarter of 2020, or $39.9 million excluding $3.7 million of
acquisition related charges, up from $23.3 million in the third
quarter of 2019, or $22.7 million excluding $540,000 of acquisition
related charges. Results for the third quarter of 2020 included
three months of expenses from UCFC compared to none in 2019.
Compensation and benefits increased to $20.2 million in the third
quarter of 2020, compared to $14.1 million in the third quarter of
2019. Occupancy expense was $4.0 million in the third quarter of
2020, up from $2.2 million in the third quarter of 2019. Data
processing cost was $4.3 million in the third quarter of 2020, up
from $1.7 million in the third quarter of 2019. Amortization of
intangibles was $1.7 million in the third quarter of 2020, up from
$0.3 million in the third quarter of 2019. Other non-interest
expense was $7.1 million in the third quarter of 2020, or $5.7
million excluding the $1.4 million of FHLB prepayment penalties
discussed above, up from $4.2 million in the third quarter of
2019.
FDIC insurance premiums were a $1.5 million expense in the third
quarter of 2020, up from a $411,000 expense in the second quarter
of 2020 and a $255,000 credit in the third quarter of 2019. The
increase in expense from prior quarter is largely due to the impact
of PPP and includes a year-to-date accrual estimate true-up.
Although PPP loan balances are excludable from the asset-based
component, they are not excludable from the leverage ratio
component because the Company did not borrow from the PPP Liquidity
Facility, and any loan funds that were in deposits would also
increase the asset-based component. FDIC insurance premiums were a
credit of $255,000 in the third quarter of 2019 due to the receipt
of small bank assessment credits.
Credit quality
Non-performing loans totaled $48.3 million at September 30,
2020, an increase from $39.5 million at June 30, 2020, and an
increase from $14.7 million at September 30, 2019, due to the UCFC
merger. In addition, Premier had $0.5 million of OREO at September
30, 2020, compared to none at September 30, 2019. Accruing troubled
debt restructured loans were $8.5 million at September 30, 2020,
compared with $10.3 million at September 30, 2019.
On January 1, 2020, Premier adopted the Current Expected Credit
Loss model of accounting for credit losses. This new GAAP model,
which replaces the former incurred loss model, requires entities to
estimate credit losses over the life of an asset or off-balance
sheet exposure. Beginning with the third quarter of 2020, Premier
began to report total provision for credit losses inclusive of
amounts related to off-balance sheet unfunded commitments, which
were previously reported in other non-interest expenses. Prior
period amounts have been restated for consistency.
The 2020 third quarter results include net loan charge-offs of
$3.3 million and a total provision expense of $3.7 million compared
with net loan charge-offs of $11,000 and a total provision expense
of $1.3 million for the same period in 2019. The allowance for
credit loss on loans as a percentage of total loans was 1.63% at
September 30, 2020, or 1.77% excluding PPP loans, compared with
1.62% at June 30, 2020, or 1.76% excluding PPP loans, and 1.13% at
September 30, 2019. The year-over-year increase in the provision
expense and allowance percentage is primarily attributable to the
impact of the economic deterioration that began in the first
quarter of 2020 as a result of the COVID-19 pandemic. As of
September 30, 2020, Premier Bank had pandemic related deferrals for
$434.6 million of commercial loans, down from $739.6 million at
June 30, and $48.2 million of retail loans, down from $73.3 million
at June 30.
Year-To-Date Results
For the nine-month period
ended September 30, 2020, net income totaled $32.2 million, or
$0.91 per diluted common share, compared to $36.9 million, or $1.85
per diluted common share for the nine months ended September 30,
2019. Results for the first nine months of 2020 included eight
months of income and expenses from UCFC compared to none in 2019.
The year-over-year comparison is also substantially impacted by the
current year’s provision expense of $49.3 million, which included
$25.9 million related to acquisition accounting for an after-tax
cost of $20.5 million, or $0.58 per diluted common share. The first
nine months of 2019 included a total provision expense of $1.8
million, which had an after-tax cost of $1.4 million, or $0.07 per
diluted common share, and no acquisition impact. Additionally, the
current year’s results include the impact of $17.3 million of
acquisition-related charges, which had an after-tax cost of $14.0
million, or $0.39 per diluted common share. The first nine months
of 2019 included $540,000 of acquisition related charges, which had
an after tax cost of $427,000, or $0.02 per diluted common share.
Excluding the impact of acquisition-related provision and charges,
earnings for the first nine months of 2020 were $66.8 million, or
$1.88 per diluted common share compared to $37.3 million or $1.87
per diluted share.
Net interest income was $153.0
million for the first nine months of 2020 compared with $104.8
million in the first nine months of 2019. Average interest-earning
assets increased to $5.8 billion in the first nine months of 2020
compared to $2.92 billion in the first nine months of 2019. Net
interest margin for the first nine months of 2020 was 3.55%, down
43 basis points from the 3.98% margin reported in the nine-month
period ended September 30, 2019. The 2020 results include the
impact of acquisition marks and related accretion for the UCFC
acquisition. Interest income includes $5.5 million of accretion and
interest expense includes $1.9 million of accretion, which combined
added 16 basis points of net interest margin. The 2020 results also
include the impact of PPP loans. Interest income includes $4.3
million on average balances of $246.9 million, which reduced net
interest margin by five basis points. Excluding the impact of
acquisition marks and PPP loans, net interest margin was 3.44% for
the first nine months of 2020.
Non-interest income for the
first nine months of 2020 was $62.0 million compared to $33.1
million during the same period of 2019. Service fees and other
charges were $15.6 million for the first nine months of 2020, up
from $10.3 million during the same period of 2019. Mortgage banking
income was $22.8 million for the first nine months of 2020, up from
$6.8 million during the same period of 2019. Insurance commissions
were $12.9 million for the first nine months of 2020 compared with
$11.0 million for the same period of 2019. Wealth management income
was $4.4 million for the first nine months of 2020, up from $2.1
million during the same period of 2019.
Non-interest expense was
$123.9 million for the first nine months of 2020, or $106.6 million
excluding acquisition-related charges, up from $72.4 million, or
$71.8 million excluding acquisition related charges, for the same
period of 2019. Compensation and benefits expense was $57.3 million
for the first nine months of 2020 compared with $42.5 million
during the same period of 2019. Expenses also included increases in
occupancy of $5.1 million, FDIC premiums of $2.1 million, data
processing of $4.8 million, amortization of intangibles of $3.9
million and other expenses of $2.6 million. Additional detail
regarding certain items impacting FDIC premiums and other expenses
are discussed above.
Total assets at $6.97 billion
Total assets at September 30,
2020, were $6.97 billion compared to $7.01 billion at June 30,
2020, and $3.35 billion at September 30, 2019. Gross loans
receivable (excluding loans held for sale) were $5.47 billion at
September 30, 2020, compared to $5.46 billion at June 30, 2020, and
$2.67 billion at September 30, 2019. At September 30, 2020, gross
loans receivable grew $2.81 billion, or 105% from a year ago,
including $2.30 billion from the UCFC merger and $0.51 billion
organically, including $0.44 billion of PPP loans. Also, at
September 30, 2020, goodwill and other intangible assets totaled
$350.0 million compared to $351.7 million at June 30, 2020, and
$104.1 million at September 30, 2019, with the increase
attributable to the UCFC merger.
Total deposits at September
30, 2020, were $5.80 billion compared with $5.76 billion at June
30, 2020, and $2.76 billion at September 30, 2019. At September 30,
2020, total deposits grew $3.04 billion, or 110% from a year ago,
including $2.08 billion from the UCFC merger and $0.96 billion
organically.
Total stockholders’ equity was
$959.0 million at September 30, 2020, compared to $941.0 million at
June 30, 2020, and $418.0 million at September 30, 2019. The
increase in stockholders’ equity from the prior year was due to net
earnings and the UCFC merger, offset partially by the Company’s
repurchase of 430,000 common shares for $10.1 million during the
first quarter of 2020. At September 30, 2020, 570,000 common shares
remained available for repurchase under the Company’s existing
repurchase program.
Capital Issuance
On September 30, 2020, the
Company completed the issuance of $50 million aggregate principal
amount fixed-to-floating rate subordinated notes due 2030 (the
“Notes”) in a private offering exempt from the registration
requirements under the Securities Act of 1933, as amended. The
Notes carry a fixed rate of 4.00% for five years then a floating
rate equal to the 3-month SOFR rate plus 388.5 basis points. The
Company may, at its option, beginning September 30, 2025, redeem
the Notes, in whole or in part, from time to time, subject to
certain conditions. The net proceeds from the sale of the Notes are
approximately $48.7 million, after deducting the estimated offering
expenses. The Company intends to use the net proceeds from the
offering of the Notes for general corporate purposes.
“We are proud of our
successful capital issuance at the lowest rate this year for a BBB-
Kroll-rated subordinated debt offering by a bank holding company,”
said Paul D. Nungester, CFO of Premier. “This enhancement to total
capital at an efficient cost improves the Company’s ability to
serve as a source of strength for the bank during the current
economic downturn.”
Dividend to be paid November 20
The Board of Directors declared a quarterly cash dividend of
$0.22 per common share payable November 20, 2020, to shareholders
of record at the close of business on November 13, 2020. The
dividend represents an annual dividend of 4.89 percent based on the
Premier common stock closing price on October 19, 2020. Premier has
approximately 37,297,217 common shares outstanding.
Conference call
Premier Financial Corp. will host a conference call at 11:00
a.m. ET on Wednesday, October 21, 2020, to discuss the earnings
results and business trends. The conference call may be accessed by
calling 1-877-444-1726. Internet access to the call is also
available (in listen-only mode) at the following URL:
https://services.choruscall.com/links/pfc201021.html. The replay of
the conference call will be available at www.PremierFinCorp.com until October 20, 2021, at
9:00 a.m. ET.
About Premier Financial Corp.
Premier Financial Corp. (Nasdaq: PFC), headquartered in
Defiance, Ohio, is the holding company for Premier Bank and First
Insurance Group. Premier Bank, headquartered in Youngstown, Ohio,
operates 78 branches, 12 loan offices and 3 wealth offices in Ohio,
Michigan, Indiana, Pennsylvania and West Virginia (West Virginia
office operates as “Home Savings Bank”). First Insurance Group is a
full-service insurance agency with ten offices in Ohio including
James & Sons Insurance in Youngstown, Ohio. For more
information, visit the company’s websites at
PremierFinCorp.com.
Financial Statements and Highlights Follow-
Safe Harbor Statement
This news release may contain certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21 B of the Securities Exchange Act of 1934,
as amended. Those statements may include, but are not limited to,
all statements regarding intent, beliefs, expectations,
projections, forecasts and plans of Premier Financial Corp. and its
management, and specifically include statements regarding: changes
in economic conditions; the nature, extent and timing of
governmental actions and reforms; future movements of interest
rates; the ability to benefit from a changing interest rate
environment; the production levels of mortgage loan generation; the
ability to continue to grow loans and deposits; the ability to
sustain credit quality ratios at current or improved levels;
continued strength in the market area for Premier Bank; the ability
to sell real estate owned properties; and the ability to grow in
existing and adjacent markets. These forward-looking statements
involve numerous risks and uncertainties, including: impacts from
the novel coronavirus (COVID-19) pandemic on our business,
operations, customers and capital position; higher default rates on
loans made to our customers related to COVID-19 and its impact on
our customers’ operations and financial condition; the impact of
COVID-19 on local, national and global economic conditions;
unexpected changes in interest rates or disruptions in the mortgage
market related to COVID-19 or responses to the health crisis; the
effects of various governmental responses to the COVID-19 pandemic;
those inherent in general and local banking, insurance and mortgage
conditions; competitive factors specific to markets in which
Premier Financial Corp. and its subsidiaries operate; future
interest rate levels; legislative and regulatory decisions or
capital market conditions; and other risks and uncertainties
detailed from time to time in our Securities and Exchange
Commission (SEC) filings, including in our Annual Report on Form
10-K for the year ended December 31, 2019 and our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2020. One or more of
these factors have affected or could in the future affect Premier’s
business and financial results in future periods and could cause
actual results to differ materially from plans and projections.
Therefore, there can be no assurances that the forward-looking
statements included in this news release will prove to be accurate.
In light of the significant uncertainties in the forward-looking
statements included herein, the inclusion of such information
should not be regarded as a representation by Premier or any other
persons, that our objectives and plans will be achieved. All
forward-looking statements made in this news release are based on
information presently available to the management of Premier and
speak only as of the date on which they are made. We assume no
obligation to update any forward-looking statements, whether as a
result of new information, future developments or otherwise, except
as may be required by law. As required by U.S. GAAP, Premier will
evaluate the impact of subsequent events through the issuance date
of its September 30, 2020, consolidated financial statements as
part of its Quarterly Report on Form 10-Q to be filed with the SEC.
Accordingly, subsequent events could occur that may cause Premier
to update its critical accounting estimates and to revise its
financial information from that which is contained in this news
release.
Non-GAAP Reporting Measures
We believe that net income, as defined by U.S. GAAP, is the most
appropriate earnings measurement. However, we consider core net
income and core pre-tax pre-provision income to be useful
supplemental measures of our operating performance. We define core
net income as net income excluding the after-tax impact of
acquisition related charges. We define core pre-tax pre-provision
income as pre-tax pre-provision income excluding the pre-tax impact
of acquisition related charges. We believe that these metrics are
useful supplemental measures of operating performance because
investors and equity analysts may use these measures to compare the
operating performance of the Company between periods or as compared
to other financial institutions or other companies on a consistent
basis without having to account for one-time acquisition related
charges. Our supplemental reporting measures and similarly entitled
financial measures are widely used by investors, equity and debt
analysts and ratings agencies in the valuation, comparison, rating
and investment recommendations of companies. Our management uses
these financial measures to facilitate internal and external
comparisons to historical operating results and in making operating
decisions. Additionally, they are utilized by the Board of
Directors to evaluate management. The supplemental reporting
measures do not represent net income or cash flow provided from
operating activities as determined in accordance with U.S. GAAP and
should not be considered as alternative measures of profitability
or liquidity. Finally, the supplemental reporting measures, as
defined by us, may not be comparable to similarly entitled items
reported by other financial institutions or other companies. Please
see the exhibits for reconciliations of our supplemental reporting
measures.
Consolidated Balance Sheets (Unaudited)
Premier Financial Corp.
September 30,
December 31,
(in thousands)
2020
2019
Assets Cash and cash equivalents Cash and amounts due
from depository institutions
$
44,273
$
46,254
Interest-bearing deposits
58,800
85,000
103,073
131,254
Available-for sale, carried at fair value
578,224
283,448
Trading securities, carried at fair value
1,014
-
Securities investments
579,238
283,448
Loans
5,470,548
2,777,564
Allowance for credit losses - loans
(88,917
)
(31,243
)
Loans, net
5,381,631
2,746,321
Loans held for sale
208,054
18,008
Mortgage servicing rights
13,477
10,267
Accrued interest receivable
28,834
10,244
Federal Home Loan Bank stock
23,492
11,915
Bank Owned Life Insurance
143,939
75,544
Office properties and equipment
58,817
39,563
Real estate and other assets held for sale
521
100
Goodwill
317,948
100,069
Core deposit and other intangibles
32,005
3,772
Other assets
83,924
38,487
Total Assets
$
6,974,953
$
3,468,992
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits
$
1,436,807
$
630,359
Interest-bearing deposits
4,358,950
2,239,966
Total deposits
5,795,757
2,870,325
Advances from FHLB and PPPLF
30,000
85,063
Notes payable and other interest-bearing liabilities
-
2,999
Subordinated debentures
84,818
36,083
Advance payments by borrowers for tax and insurance
18,985
5,491
Reserve for credit losses - unfunded commitments
5,955
571
Other liabilities
80,413
42,293
Total Liabilities
6,015,928
3,042,825
Stockholders’ Equity Preferred stock
-
-
Common stock, net
306
127
Additional paid-in-capital
689,736
161,955
Accumulated other comprehensive income (loss)
13,976
4,595
Retained earnings
333,772
329,175
Treasury stock, at cost
(78,765
)
(69,685
)
Total stockholders’ equity
959,025
426,167
Total Liabilities and Stockholders’ Equity
$
6,974,953
$
3,468,992
Consolidated Statements of Income (Unaudited)
Premier Financial Corp.
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in thousands, except per share amounts)
2020
2019
2020
2019
Interest Income: Loans
$
57,134
$
33,284
$
167,390
$
97,158
Investment securities
2,848
1,952
8,489
6,295
Interest-bearing deposits
82
312
391
857
FHLB stock dividends
95
135
861
533
Total interest income
60,159
35,683
177,131
104,843
Interest Expense: Deposits
6,555
6,029
21,761
16,615
FHLB advances and other
168
431
1,690
1,011
Subordinated debentures
158
329
610
1,043
Notes Payable
7
2
32
23
Total interest expense
6,888
6,791
24,093
18,692
Net interest income
53,271
28,892
153,038
86,151
Provision for credit losses - loans
3,658
1,327
49,312
1,821
Provision (benefit) for credit losses - unfunded commitments
(864
)
(62
)
1,702
(60
)
Total provision for credit losses
2,794
1,265
51,014
1,761
Net interest income after provision for loan losses
50,477
27,627
102,024
84,390
Non-interest Income: Service fees and other charges
4,805
4,027
15,601
10,335
Mortgage banking income
12,047
2,822
22,763
6,800
Gain on sale of non-mortgage loans
-
105
234
215
Gain (loss) on sale of available for sale securities
1,466
11
1,464
11
Gain (loss) on trading securities
14
-
14
-
Insurance commissions
3,715
3,263
12,875
10,994
Wealth management income
1,458
705
4,351
2,063
Income from Bank Owned Life Insurance
841
783
2,460
1,702
Other non-interest income
654
126
2,251
1,021
Total Non-interest Income
25,000
11,842
62,013
33,141
Non-interest Expense: Compensation and benefits
20,172
14,061
57,331
42,544
Occupancy
3,989
2,206
11,848
6,751
FDIC insurance premium
1,469
(255
)
2,372
276
Financial institutions tax
1,116
555
3,066
1,667
Data processing
4,289
1,728
11,135
6,292
Amortization of intangibles
1,726
264
4,781
839
Acquisition related charges
3,711
540
17,295
540
Other non-interest expense
7,091
4,166
16,028
13,455
Total Non-interest Expense
43,563
23,265
123,856
72,364
Income before income taxes
31,914
16,204
40,181
45,167
Income tax expense
6,259
3,033
7,951
8,315
Net Income
$
25,655
$
13,171
$
32,230
$
36,852
Earnings per common share: Basic
$
0.69
$
0.67
$
0.91
$
1.86
Diluted
$
0.69
$
0.66
$
0.91
$
1.85
Average Shares Outstanding: Basic
37,297
19,790
35,423
19,862
Diluted
37,334
19,875
35,482
19,943
Financial Summary and Comparison (Unaudited)
Premier Financial Corp.
Three Months Ended
Nine Months Ended
September 30,
September 30,
(dollars in thousands, except per share data)
2020
2019
% change
2020
2019
% change
Summary of Operations Tax-equivalent interest income
(2)
$
60,418
$
35,922
68.2
%
$
177,898
$
105,578
68.5
%
Interest expense
6,888
6,791
1.4
24,093
18,692
28.9
Tax-equivalent net interest income (2)
53,530
29,131
83.8
153,805
86,886
77.0
Provision for credit losses
2,794
1,265
120.9
51,014
1,761
2,796.9
Core provision for credit losses (4)
2,794
1,265
120.9
22,089
1,761
1,154.3
Investment securities gains (losses)
1,480
11
NM
1,478
11
NM
Non-interest income (excluding securities gains/losses)
23,520
11,831
98.8
60,535
33,130
82.7
Non-interest expense
43,563
23,265
87.2
123,856
72,364
71.2
Core non-interest expense (4)
38,445
22,724
69.2
69,269
71,824
(3.6
)
Income tax expense
6,259
3,033
106.4
7,951
8,315
(4.4
)
Net income
25,655
13,171
94.8
32,230
36,852
(12.5
)
Core net income (4)
28,587
13,598
110.2
36,057
37,279
(3.3
)
Tax equivalent adjustment (2)
259
239
8.4
767
735
4.4
At Period End Assets
6,974,953
3,350,724
108.2
Earning assets
6,340,132
3,045,659
108.2
Loans
5,470,548
2,665,300
105.3
Allowance for credit losses - loans
88,917
30,250
193.9
Deposits
5,795,757
2,760,615
109.9
Stockholders’ equity
959,025
418,046
129.4
Average Balances Assets
6,935,783
3,303,013
110.0
6,437,886
3,236,674
98.9
Earning assets
6,211,267
2,985,498
108.0
5,787,134
2,923,809
97.9
Loans
5,555,621
2,624,314
111.7
5,095,167
2,567,646
98.4
Deposits and interest-bearing liabilities
5,901,652
2,843,079
107.6
5,457,179
2,788,974
95.7
Deposits
5,738,006
2,718,632
111.1
5,162,952
2,679,616
92.7
Stockholders’ equity
927,506
411,041
125.6
881,932
401,597
119.6
Stockholders’ equity / assets
13.37
%
12.44
%
7.5
13.70
%
12.41
%
10.4
Per Common Share Data Net Income (Loss) Basic
$
0.69
$
0.67
3.0
$
0.91
$
1.86
(51.1
)
Diluted
0.69
0.66
4.5
0.91
1.85
(50.8
)
Core diluted (4)
0.77
0.68
13.2
$
1.88
1.87
0.5
Dividends
0.22
0.19
15.8
0.66
0.57
15.8
Market Value: High
$
21.24
$
29.44
(27.9
)
$
32.05
$
31.30
2.4
Low
14.74
25.50
(42.2
)
10.98
24.12
(54.5
)
Close
15.58
28.97
(46.2
)
15.58
28.97
(46.2
)
Common Book Value
25.71
21.19
21.3
25.71
21.19
21.3
Tangible Common Book Value (1)
16.33
15.91
2.6
16.33
15.91
2.6
Shares outstanding, end of period (000s)
37,297
19,729
89.0
37,297
19,729
89.0
Performance Ratios (annualized) Tax-equivalent net interest
margin (2)
3.47
%
3.88
%
(10.6
)
3.55
%
3.98
%
(10.8
)
Return on average assets
1.49
%
1.58
%
(5.8
)
0.67
%
1.52
%
(56.0
)
Core return on average assets (4)
1.64
%
1.63
%
0.4
0.75
%
1.54
%
(51.6
)
Return on average equity
11.12
%
12.71
%
(12.5
)
4.88
%
12.27
%
(60.2
)
Core return on average equity (4)
12.26
%
13.12
%
(6.6
)
5.46
%
12.44
%
(56.1
)
Efficiency ratio (3)
56.54
%
56.79
%
(0.4
)
57.78
%
60.30
%
(4.2
)
Core efficiency ratio (4)
49.90
%
55.48
%
(10.1
)
49.06
%
59.85
%
(18.0
)
Effective tax rate
19.61
%
18.72
%
4.8
19.79
%
18.41
%
7.5
Dividend payout ratio (core)
28.57
%
27.94
%
2.3
35.11
%
30.48
%
15.2
Note: 2020 current quarter and year-to-date results include three
and five months of operations from UCFC, respectively, compared to
none for comparable periods in 2019. (1) Tangible common book value
= total stockholders' equity less the sum of goodwill, core deposit
and other intangibles, and preferred stock divided by shares
outstanding at the end of the period. (2) Interest income on
tax-exempt securities and loans has been adjusted to a
tax-equivalent basis using the statutory federal income tax rate of
21%. (3) Efficiency ratio = Non-interest expense divided by sum of
tax-equivalent net interest income plus non-interest income,
excluding securities gains or losses, net. (4) Core items exclude
the impact of acquisition related provision ("CECL double-dip") and
other charges. See non-GAAP reconciliations. NM Percentage change
not meaningful
Premier Financial Corp. (dollars in
thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
Mortgage Banking
2020
2019
2020
2019
Revenue from sales and servicing of mortgage loans: Gain from sale
of mortgage loans
$
13,781
$
2,596
$
30,213
$
5,672
Mortgage loan servicing revenue (expense): Mortgage loan servicing
revenue
1,898
960
5,379
2,842
Amortization of mortgage servicing rights
(1,959
)
(579
)
(5,302
)
(1,256
)
Mortgage servicing rights valuation adjustments
(1,673
)
(155
)
(7,527
)
(458
)
(1,734
)
226
(7,450
)
1,128
Total revenue from sale and servicing of mortgage loans
$
12,047
$
2,822
$
22,763
$
6,800
Mortgage servicing rights: Balance at beginning of period
$
21,034
$
10,458
$
10,801
$
10,419
Loans sold, servicing retained
2,463
738
6,292
1,454
Mortgage servicing rights acquired
-
-
9,747
-
Amortization
(1,959
)
(579
)
(5,302
)
(1,256
)
Carrying value before valuation allowance at end of period
21,538
10,617
21,538
10,617
Valuation allowance: Balance at beginning of period
(6,388
)
(603
)
(534
)
(300
)
Impairment recovery (charges)
(1,673
)
(155
)
(7,527
)
(458
)
Balance at end of period
(8,061
)
(758
)
(8,061
)
(758
)
Net carrying value at end of period
$
13,477
$
9,859
$
13,477
$
9,859
Goodwill and Purchase Price Accounting Deal
Value: Shares issued (000s)
17,926
1/31/20 Price
$
29.39
Stock value
526,850
Fair value of options exchanged
461
Cash in lieu of fractional shares
132
Total value
$
527,443
Allocation: Cash and cash equivalents
$
52,580
Securities available-for sale
262,753
(1)
Net loans, including loans held for sale and allowance
2,340,701
(2)
Federal Home Loan Bank stock
12,753
Office properties and equipment
20,253
(3)
Core deposit and other intangibles
33,014
(4)
Bank Owned Life Insurance
65,934
Mortgage servicing rights
9,747
(5)
Other assets
35,423
Non-interest-bearing deposits
(430,921
)
Interest-bearing deposits
(1,651,669
)
(6)
Advances from Federal Home Loan Bank
(381,000
)
Other liabilities
(60,004
)
Net assets
309,564
Goodwill
217,879
Total value
$
527,443
Note: 2020 current quarter and year-to-date results include
three and eight months of operations from UCFC, respectively,
compared to none for comparable periods in 2019. (1) Includes $13.8
million of accumulated losses to be amortized against interest
income over ~7 years. (2) Includes $27.2 million non-PCD credit
mark down to be accreted into interest income over ~5 years, $8.8
million total rate mark up to be amortized against interest income
over ~5 years, $19.1 million elimination of allowance and $7.7
million PCD credit mark addition to allowance. (3) Includes $2.1
million mark down that reduces future depreciation. (4) Includes
$29.3 million of core deposit intangible to be amortized to expense
using sum-of-the-years digits over 10 years and $3.7 million of
insurance/trust/wealth intangibles to be amortized to expense over
~10 years. (5) Includes $3.0 million mark up to be amortized
against mortgage banking income over ~8.5 years. (6) Includes $7.1
million rate mark up on time-based deposits to be accreted against
interest expense over ~2 years based on maturities.
Yield
Analysis Premier Financial Corp.
Three Months Ended September
30,
(dollars in thousands)
2020
2019
Average
Yield
Average
Yield
Balance
Interest(1)
Rate(2)
Balance
Interest(1)
Rate(2)
Interest-earning assets: Loans receivable
$
5,555,621
$
57,158
4.14
%
$
2,624,314
$
33,306
5.04
%
Securities
552,458
3,083
2.24
%
(3)
293,876
2,169
2.99
%
(3)
Interest Bearing Deposits
65,551
82
0.50
%
55,393
312
2.23
%
FHLB stock
37,637
95
1.02
%
11,915
135
4.50
%
Total interest-earning assets
6,211,267
60,418
3.91
%
2,985,498
35,922
4.78
%
Non-interest-earning assets
724,516
317,515
Total assets
$
6,935,783
$
3,303,013
Deposits and Interest-bearing liabilities: Interest bearing
deposits
$
4,285,287
$
6,555
0.62
%
$
2,129,306
$
6,029
1.12
%
FHLB advances and other
120,417
168
0.56
%
85,339
431
2.00
%
Subordinated debentures
36,613
158
1.74
%
36,083
329
3.62
%
Notes payable
6,616
7
0.43
%
3,025
2
0.26
%
Total interest-bearing liabilities
4,448,933
6,888
0.62
%
2,253,753
6,791
1.20
%
Non-interest bearing deposits
1,452,719
-
-
589,326
-
-
Total including non-interest-bearing deposits
5,901,652
6,888
0.47
%
2,843,079
6,791
0.95
%
Other non-interest-bearing liabilities
106,625
48,893
Total liabilities
6,008,277
2,891,972
Stockholders' equity
927,506
411,041
Total liabilities and stockholders' equity
$
6,935,783
$
3,303,013
Net interest income; interest rate spread
$
53,530
3.29
%
$
29,131
3.58
%
Net interest margin (4)
3.47
%
3.88
%
Average interest-earning assets to average interest bearing
liabilities
140
%
132
%
Nine Months Ended September
30,
2020
2019
Average
Yield
Average
Yield
Balance
Interest(1)
Rate(2)
Balance
Interest(1)
Rate(2)
Interest-earning assets: Loans receivable
$
5,095,167
$
167,463
4.38
%
$
2,567,646
$
97,227
5.06
%
Securities
514,979
9,183
2.38
%
(3)
296,312
6,961
3.14
%
(3)
Interest Bearing Deposits
131,384
391
0.40
%
47,360
857
2.42
%
FHLB stock
45,604
861
2.52
%
12,491
533
5.71
%
Total interest-earning assets
5,787,134
177,898
4.09
%
2,923,809
105,578
4.83
%
Non-interest-earning assets
650,752
312,865
Total assets
$
6,437,886
$
3,236,674
Deposits and Interest-bearing liabilities: Interest bearing
deposits
$
3,929,881
$
21,761
0.74
%
$
2,094,693
$
16,615
1.06
%
FHLB advances and other
249,889
1,690
0.90
%
68,920
1,011
1.96
%
Subordinated debentures
36,261
610
2.24
%
36,083
1,043
3.86
%
Notes payable
8,077
32
0.53
%
4,355
23
0.71
%
Total interest-bearing liabilities
4,224,108
24,093
0.76
%
2,204,051
18,692
1.13
%
Non-interest bearing deposits
1,233,071
-
-
584,923
-
-
Total including non-interest-bearing deposits
5,457,179
24,093
0.59
%
2,788,974
18,692
0.90
%
Other non-interest-bearing liabilities
98,775
46,103
Total liabilities
5,555,954
2,835,077
Stockholders' equity
881,932
401,597
Total liabilities and stockholders' equity
$
6,437,886
$
3,236,674
Net interest income; interest rate spread
$
153,805
3.33
%
$
86,886
3.93
%
Net interest margin (4)
3.55
%
3.98
%
Average interest-earning assets to average interest bearing
liabilities
137
%
133
%
Note: 2020 current quarter and year-to-date results include three
and five months of operations from UCFC, respectively, compared to
none for comparable periods in 2019. (1) Interest on certain tax
exempt loans and securities is not taxable for Federal income tax
purposes. In order to compare the tax-exempt yields on these assets
to taxable yields, the interest earned on these assets is adjusted
to a pre-tax equivalent amount based on the marginal corporate
federal income tax rate of 21%. (2) Annualized. (3) Securities
yield = annualized interest income divided by the average balance
of securities, excluding average unrealized gains/losses. (4) Net
interest margin is tax equivalent net interest income divided by
average interest-earning assets.
Selected Quarterly
Information Premier Financial Corp. (dollars in
thousands, except per share data)
3rd Qtr 2020
2nd Qtr 2020
1st Qtr 2020
4th Qtr 2019
3rd Qtr 2019
Summary of Operations Tax-equivalent interest income (1)
$
60,418
$
62,705
$
54,773
$
36,473
$
35,922
Interest expense
6,888
8,145
9,059
6,743
6,791
Tax-equivalent net interest income (1)
53,530
54,560
45,714
29,730
29,131
Provision for credit losses
2,794
2,975
45,244
1,123
1,266
Core provision for credit losses (3)
2,794
2,975
19,295
1,123
1,266
Investment securities gains (losses)
1,480
(2
)
-
13
11
Non-interest income (excluding securities gains/losses)
23,520
23,017
13,999
11,803
11,831
Non-interest expense
43,563
37,984
42,310
24,721
23,264
Core non-interest expense (3)
38,445
35,885
30,824
23,839
22,724
Income tax expense (benefit)
6,259
7,303
(5,610
)
2,953
3,033
Net income (loss)
25,655
29,057
(22,482
)
12,517
13,171
Core net income (3)
28,587
30,715
7,470
13,214
13,598
Tax equivalent adjustment (1)
259
256
251
232
239
At Period End Total assets
$
6,974,953
$
7,013,811
$
6,538,942
$
3,468,992
$
3,350,724
Earning assets
6,340,132
6,345,655
5,889,186
3,175,935
3,045,659
Loans
5,470,548
5,457,238
5,113,917
2,777,564
2,665,300
Allowance for loan losses
88,917
88,555
85,859
31,243
30,250
Deposits
5,795,757
5,759,843
4,994,148
2,870,325
2,760,615
Stockholders’ equity
959,025
940,968
916,843
426,167
418,046
Stockholders’ equity / assets
13.75
%
13.42
%
14.02
%
12.29
%
12.48
%
Goodwill
317,948
317,948
317,520
100,069
100,069
Average Balances Total assets
$
6,935,783
$
7,005,783
$
5,357,598
$
3,425,097
$
3,303,013
Earning assets
6,211,267
6,247,037
4,862,532
3,107,224
2,985,498
Loans
5,555,621
5,389,805
4,317,857
2,688,519
2,624,314
Deposits and interest-bearing liabilities
5,901,652
5,963,127
4,488,003
2,954,049
2,843,079
Deposits
5,738,006
5,490,986
4,240,053
2,830,043
2,718,632
Stockholders’ equity
927,506
932,793
787,519
420,352
411,041
Stockholders’ equity / assets
13.37
%
13.31
%
14.70
%
12.27
%
12.44
%
Per Common Share Data Net Income (Loss): Basic
$
0.69
$
0.78
$
(0.71
)
$
0.63
$
0.67
Diluted
0.69
0.78
(0.71
)
0.63
0.66
Core diluted (3)
0.77
0.82
0.24
0.66
0.68
Dividends
0.22
0.22
0.22
0.22
0.19
Market Value: High
$
21.24
$
20.11
$
32.05
$
32.39
$
29.44
Low
14.74
12.95
10.98
27.77
25.50
Close
15.58
17.67
14.74
31.32
28.97
Common Book Value
25.71
25.23
24.58
21.60
21.19
Shares outstanding, end of period (000s)
37,297
37,296
37,288
19,730
19,729
Performance Ratios (annualized) Tax-equivalent net interest
margin (1)
3.47
%
3.51
%
3.78
%
3.80
%
3.88
%
Return on average assets
1.49
%
1.67
%
-1.69
%
1.45
%
1.58
%
Core return on average assets (3)
1.64
%
1.76
%
0.56
%
1.53
%
1.63
%
Return on average equity
11.12
%
12.53
%
-11.48
%
11.81
%
12.71
%
Core return on average equity (3)
12.26
%
13.24
%
3.82
%
12.47
%
13.12
%
Efficiency ratio (2)
56.54
%
48.96
%
70.86
%
59.52
%
56.79
%
Core efficiency ratio (3)
49.90
%
46.26
%
51.62
%
57.40
%
55.48
%
Effective tax rate
19.61
%
20.09
%
19.97
%
19.09
%
18.72
%
Common dividend payout ratio (core)
28.57
%
26.83
%
91.67
%
34.92
%
28.36
%
Note: 2020 current quarter and year-to-date results include three
and five months of operations from UCFC, respectively, compared to
none for comparable periods in 2019. (1) Interest income on
tax-exempt securities and loans has been adjusted to a
tax-equivalent basis using the statutory federal income tax rate of
21%. (2) Efficiency ratio = Non-interest expense divided by sum of
tax-equivalent net interest income plus non-interest income,
excluding securities gains or losses, net. (3) Core items exclude
the impact of acquisition related provision ("CECL double-dip") and
other charges. See non-GAAP reconciliations.
Selected
Quarterly Information Premier Financial Corp.
(dollars in thousands, except per share data)
3rd Qtr 2020
2nd Qtr 2020
1st Qtr 2020
4th Qtr 2019
3rd Qtr 2019
Loan Portfolio Composition One to four family residential
real estate
$
1,194,940
$
1,226,106
$
1,265,901
$
324,773
$
330,369
Construction
580,060
509,548
521,442
305,305
308,061
Commercial real estate
2,328,944
2,266,189
2,200,266
1,506,026
1,430,919
Commercial
1,263,565
1,244,549
897,865
578,071
537,806
Consumer finance
128,995
146,139
137,679
37,649
36,644
Home equity and improvement
281,010
290,459
301,146
122,864
123,871
Total loans
5,777,514
5,682,990
5,324,299
2,874,688
2,767,670
Less: Undisbursed loan funds
300,174
221,137
206,236
94,865
100,260
Deferred loan origination fees
6,792
4,615
4,146
2,259
2,110
Allowance for credit losses - loans
88,917
88,555
85,859
31,243
30,250
Net Loans
$
5,381,631
$
5,368,683
$
5,028,058
$
2,746,321
$
2,635,050
Allowance for credit losses - loans Beginning
allowance
$
88,555
$
85,859
$
31,243
$
30,250
$
28,934
CECL adoption
-
-
2,354
-
-
Acquisition related allowance/provision (non PCD)
-
-
25,949
-
-
Acquisition related allowance/goodwill (PCD)
-
-
7,698
-
-
Provision for credit losses - loans
3,658
1,868
17,837
1,084
1,327
Net recoveries (charge-offs)
(3,296
)
828
778
(91
)
(11
)
Ending allowance
$
88,917
$
88,555
$
85,859
$
31,243
$
30,250
Credit Quality Total non-performing loans (1)
$
48,322
$
39,470
$
32,692
$
13,437
$
14,677
Real estate owned (REO)
521
573
548
100
-
Total non-performing assets (2)
$
48,843
$
40,043
$
33,240
$
13,537
$
14,677
Net charge-offs (recoveries)
3,296
(828
)
(778
)
91
11
Restructured loans, accruing (3)
8,499
7,916
7,474
8,427
10,334
Allowance for credit losses - loans / loans
1.63
%
1.62
%
1.68
%
1.12
%
1.13
%
Allowance for credit losses - loans / non-performing assets
182.05
%
221.15
%
259.07
%
230.80
%
206.10
%
Allowance for credit losses - loans / non-performing loans
184.01
%
224.36
%
263.43
%
232.51
%
206.10
%
Non-performing assets / loans plus REO
0.89
%
0.73
%
0.65
%
0.49
%
0.55
%
Non-performing assets / total assets
0.70
%
0.57
%
0.51
%
0.39
%
0.44
%
Net charge-offs / average loans (annualized)
0.24
%
-0.06
%
-0.07
%
0.01
%
0.00
%
Deposit Balances Non-interest-bearing demand deposits
$
1,436,807
$
1,454,842
$
1,041,315
$
630,359
$
604,129
Interest-bearing demand deposits and money market
2,511,263
2,361,486
2,069,723
1,198,012
1,124,208
Savings deposits
674,354
671,650
606,508
303,166
294,594
Retail time deposits less than $250,000
975,658
1,078,758
1,091,038
631,253
634,737
Retail time deposits greater than $250,000
197,675
193,107
185,564
107,535
102,947
Total deposits
$
5,795,757
$
5,759,843
$
4,994,148
$
2,870,325
$
2,760,615
(1) Non-performing loans consist of non-accrual loans. (2)
Non-performing assets are non-performing loans plus real estate and
other assets acquired by foreclosure or deed-in-lieu thereof. (3)
Accruing restructured loans are loans with known credit problems
that are not contractually past due and therefore are not included
in non-performing loans.
Loan Delinquency Information
Premier Financial Corp. (dollars in thousands)
Total Balance
Current
30 to 89 days
past due
% of
Total
Non Accrual
Loans
% of
Total
September 30, 2020 One to four family residential real
estate
$
1,194,940
$
1,173,175
$
10,562
0.9
%
$
11,203
0.9
%
Construction
580,060
578,110
1,587
0.3
%
363
0.1
%
Commercial real estate
2,328,944
2,305,223
703
0.0
%
23,018
1.0
%
Commercial
1,263,565
1,253,474
212
0.0
%
9,879
0.8
%
Consumer finance
128,995
125,260
2,682
2.1
%
1,053
0.8
%
Home equity and improvement
281,010
273,041
5,125
1.8
%
2,844
1.0
%
Total loans
$
5,777,514
$
5,708,283
$
20,871
0.4
%
$
48,360
0.8
%
June 30, 2020 One to four family residential real estate
$
1,226,106
$
1,213,482
$
6,056
0.5
%
$
6,568
0.5
%
Construction
509,548
509,548
-
0.0
%
-
0.0
%
Commercial real estate
2,266,189
2,244,412
1,040
0.0
%
20,737
0.9
%
Commercial
1,244,549
1,233,703
680
0.1
%
10,166
0.8
%
Consumer finance
146,139
144,555
988
0.7
%
596
0.4
%
Home equity and improvement
290,459
285,858
2,237
0.8
%
2,364
0.8
%
Total loans
$
5,682,990
$
5,631,558
$
11,001
0.2
%
$
40,431
0.7
%
September 30, 2019 One to four family residential real
estate
$
330,369
$
325,573
$
1,787
0.5
%
$
3,009
0.9
%
Construction
308,061
308,061
-
0.0
%
-
0.0
%
Commercial real estate
1,430,919
1,414,694
8,012
0.6
%
8,213
0.6
%
Commercial
537,806
534,321
516
0.1
%
2,969
0.6
%
Consumer finance
36,644
36,413
231
0.6
%
-
0.0
%
Home equity and improvement
123,871
122,103
1,282
1.0
%
486
0.4
%
Total loans
$
2,767,670
$
2,741,165
$
11,828
0.4
%
$
14,677
0.5
%
COVID-19 Update Premier Financial Corp.
($ in thousands)
Deferrals Update
9/30/2020
6/30/2020
Commercial loan deferrals
$
434,554
$
739,632
% of commercial loans
11.4
%
19.7
%
% of total loans
7.9
%
13.5
%
Retail loan deferrals
$
48,187
$
73,266
% of retail loans
2.9
%
4.3
%
% of total loans
0.9
%
1.3
%
Total loan deferrals
$
482,741
$
812,898
% of total loans
8.8
%
14.9
%
Commercial High Sensitivity Portfolio Update
As of 9/30/20
As of 6/30/20
Industry
% of Total
Loans
% Balances
Deferred
% Classified
in Subsector
% of Total
Loans
% Balances
Deferred
% Classified
in Subsector
Traveler Accommodation
2.8
%
60.7
%
3.9
%
2.8
%
86.9
%
0.7
%
Food Service
1.0
%
22.4
%
0.6
%
1.1
%
50.0
%
0.6
%
Sub-total
3.7
%
51.0
%
3.1
%
3.8
%
76.7
%
0.6
%
Retail Trade and CRE
9.4
%
17.7
%
1.3
%
9.6
%
34.3
%
2.2
%
Long-term Care
1.9
%
10.8
%
11.0
%
2.0
%
26.0
%
4.1
%
Arts/Entertainment/Recreation
0.4
%
37.8
%
2.5
%
0.4
%
42.1
%
4.6
%
Energy
0.1
%
0.0
%
0.0
%
0.1
%
0.0
%
0.0
%
Total
15.6
%
25.2
%
3.0
%
15.9
%
43.4
%
2.1
%
Commercial Loan Deferral Rollforward
6/30/20
Balance
New
Deferrals
Payoffs/
Changes
Return to
Pay(1)
9/30/20
Balance
3Q20
Extensions
Interest only 1-3 months
$
28,134
$
5,032
$
9,326
$
(30,178
)
$
12,314
$
10,988
Interest only 4-5 months
146,826
3,976
(12,746
)
(111,113
)
26,943
-
Interest only 6 months
55,174
7,182
1,415
(8,575
)
55,196
2,392
Deferred payment 1-90 days
138,966
11,155
(12,844
)
(80,015
)
57,262
12,422
Deferred payment 91-179 days
93,262
328
(3,250
)
(83,843
)
6,497
4,946
Deferred payment 180 days
277,270
6,102
(1,166
)
(5,864
)
276,342
-
Total
$
739,632
$
33,775
$
(19,265
)
$
(319,588
)
$
434,554
$
30,748
Commercial Loan Deferral Expirations Update
9/30/20
Balance
October
$
277,010
November
123,851
December
12,226
January
14,000
February
5,075
March+
2,392
Total
$
434,554
(1) Represents approximately 76.4% of previously disclosed
third quarter 2020 scheduled expirations.
Non-GAAP
Reconciliations Premier Financial Corp.
Nine months ended
(In thousands, except per share and ratio data)
9/30/20
9/30/19
3rd Qtr 2020
2nd Qtr 2020
1st Qtr 2020
4th Qtr 2019
3rd Qtr 2019
Acquisition related charges (pre-tax)
$
17,295
$
540
$
3,711
$
2,099
$
11,486
$
882
$
540
Less: Tax benefit of acquisition related charges
3,254
113
779
441
2,034
185
113
Acquisition related charges (after-tax)
$
14,041
$
427
$
2,932
$
1,658
$
9,452
$
697
$
427
Total non-interest expenses
$
123,856
$
72,364
$
43,563
$
37,984
$
42,310
$
24,721
$
23,264
Less: Acquisition related charges (pre-tax)
17,295
540
3,711
2,099
11,486
882
540
Less: FHLB prepayment charges(1)
1,407
-
1,407
-
-
-
-
Core non-interest expenses
$
105,154
$
71,824
$
38,445
$
35,885
$
30,824
$
23,839
$
22,724
Acquisition related provision (pre-tax)
$
25,949
$
-
$
-
$
-
$
25,949
$
-
$
-
Less: Tax benefit of acquisition related provision
5,449
-
-
-
5,449
-
-
Acquisition related provision (after-tax)
$
20,500
$
-
$
-
$
-
$
20,500
$
-
$
-
Provision for credit losses
$
51,014
$
1,761
$
2,794
$
2,975
$
45,244
$
1,123
$
1,266
Less: Acquisition related provision (pre-tax)
25,949
-
-
-
25,949
-
-
Core provision for credit losses
$
25,065
$
1,761
$
2,794
$
2,975
$
19,295
$
1,123
$
1,266
Non-interest income
$
62,013
$
33,141
$
25,000
$
23,015
$
13,999
$
11,816
$
11,842
Less: Securities gains (losses)
1,478
11
1,480
(2
)
-
13
11
Non-interest income (excluding securities gains/losses)
$
60,535
$
33,130
$
23,520
$
23,017
$
13,999
$
11,803
$
11,831
Tax-equivalent net interest income
$
153,805
$
86,886
$
53,530
$
54,560
$
45,714
$
29,730
$
29,131
Non-interest income (excluding securities gains/losses)
60,549
33,130
23,520
23,017
13,999
11,803
11,831
Total revenues
214,354
120,016
77,050
77,577
59,713
41,533
40,962
Core non-interest expenses
$
105,154
$
71,824
$
38,445
$
35,885
$
30,824
$
23,839
$
22,724
Core efficiency ratio
49.06
%
59.85
%
49.90
%
46.26
%
51.62
%
57.40
%
55.48
%
Income (loss) before income taxes
$
40,181
$
45,167
$
31,914
$
36,360
$
(28,092
)
$
15,470
$
16,204
Add: Provision for credit losses
51,014
1,761
2,794
2,975
45,244
1,123
1,266
Pre-tax pre-provision income
91,195
46,928
34,708
39,335
17,152
16,593
17,470
Add: Acquisition related charges (pre-tax)
17,295
540
3,711
2,099
11,486
882
540
Core pre-tax pre-provision income
$
108,490
$
47,468
$
38,419
$
41,434
$
28,638
$
17,475
$
18,010
Average total assets
$
6,437,886
$
3,236,674
$
6,935,783
$
7,005,783
$
5,357,598
$
3,425,097
$
3,303,013
Core pre-tax pre-provision return on average assets
2.25
%
1.97
%
2.20
%
2.38
%
2.15
%
2.02
%
2.16
%
Net income (loss)
$
32,230
$
36,852
$
25,655
$
29,057
$
(22,482
)
$
12,517
$
13,171
Add: Acquisition related provision (after-tax)
20,500
427
-
-
20,500
-
-
Add: Acquisition related charges (after-tax)
14,041
-
2,932
1,658
9,452
697
427
Core net income
$
66,771
$
37,279
$
28,587
$
30,715
$
7,470
$
13,214
$
13,598
Diluted shares - Reported
35,482
19,943
37,334
37,324
31,642
19,895
19,875
Add: Dilutive shares for core net income
-
-
-
-
121
-
-
Diluted shares - Core
35,482
19,943
37,334
37,324
31,763
19,895
19,875
Core diluted EPS
$
1.88
$
1.87
$
0.77
$
0.82
$
0.24
$
0.66
$
0.68
Average total assets
$
6,437,886
$
3,236,674
$
6,935,783
$
7,005,783
$
5,357,598
$
3,425,097
$
3,303,013
Core return on average assets
1.39
%
1.54
%
1.64
%
1.76
%
0.56
%
1.53
%
1.63
%
Average total equity
$
881,932
$
401,597
$
927,506
$
932,793
$
787,519
$
420,352
$
411,041
Core return on average equity
10.11
%
12.44
%
12.26
%
13.24
%
3.82
%
12.47
%
13.12
%
Note: 2020 current quarter and year-to-date results include
three and eight months of operations from UCFC, respectively,
compared to none for comparable periods in 2019. (1) Represents
prepayment penalties on FHLB early extinguishments funded by gains
on securities sales that are excluded from revenues for efficiency
ratio calculation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201020006164/en/
Paul Nungester EVP and CFO 419.785.8700
PNungester@yourpremierbank.com
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