Premier Financial Corp. Announces First Quarter 2022 Results Including Strong Loan Growth

First Quarter 2022 Highlights

  • Loan growth of $132.4 million excluding PPP (up 10.1% annualized) including $97.4 million for commercial loans (up 11.0% annualized)
  • Deposit growth of $35.2 million (up 2.2% annualized)
  • Net interest income (tax equivalent) of $58.1 million or $53.7 million excluding PPP and marks, up 2.4% and 7.5%, respectively, from 2021 first quarter
  • Asset quality improved with non-performing assets down to 0.63% of assets, classifieds down to 1.0% of loans and delinquencies down to 0.1% of loans
  • Service fee income of $6.0 million, up $0.5 million or 9.7% from 2021 first quarter
  • Completed 0.8 million shares of buybacks for $24.2 million
  • Declared dividend of $0.30 per share, up 15.4% from prior year comparable period

 

Premier Financial Corp. (Nasdaq: PFC) (“Premier” or the “Company”) announced today 2022 first quarter results. Net income for the first quarter of 2022 was $26.4 million, or $0.73 per diluted common share, compared to $41.0 million, or $1.10 per diluted common share, for the first quarter of 2021. The year-over-year comparison is primarily impacted by fluctuations in the provision for credit losses, mortgage banking income and securities gains/losses, which is summarized as follows and discussed further below.

 

First quarter 2022

First quarter 2021

Item

Pre-tax

 

After-tax

 

EPS

 

Pre-tax

 

After-tax

 

EPS

Provision benefit (expense)

($935,000)

 

($739,000)

 

($0.02)

 

$6,963,000

 

$5,500,000

 

$0.15

Mortgage banking income

$4,252,000

 

$3,359,000

 

$0.09

 

$10,533,000

 

$8,321,000

 

$0.22

Security gains (losses)

($643,000)

 

($508,000)

 

($0.01)

 

$2,126,000

 

$1,680,000

 

$0.05

“A very solid start for 2022 with excellent new business activity resulting in double digit core loan growth on an annualized basis,” said Gary Small, President and CEO of Premier. “Core commercial growth totaled 11% for the quarter and was the second consecutive quarter of core commercial growth in excess of 10%. Consumer lending was also on the move growing over 18% annualized for the quarter. We were pleased to see meaningful growth contributions from each of our nine markets.”

Quarterly results

Strong loan growth

Gross loans receivable were $5.39 billion at March 31, 2022, compared to $5.30 billion at December 31, 2021. Loans related to the Paycheck Protection Program (“PPP”) were $18.7 million at March 31, 2022, compared to $58.9 million at December 31, 2021. Gross loans receivable increased $92.2 million on a linked quarter basis despite a $40.2 million decrease in PPP loans. Excluding PPP, loans grew $132.4 million organically, or 10.1% annualized. Commercial loans excluding PPP increased $97.4 million from December 31, 2021, or 11.0% annualized.

Net interest income up compared to first quarter of 2021

Net interest income of $57.9 million in the first quarter of 2022 was up from $56.5 million in the first quarter of 2021. The increase over the prior year’s first quarter was attributable to higher securities, non-PPP loan growth and a 13 basis point decrease in average cost of funds. Net interest margin was 3.44% for the first quarter of 2022, up from 3.41% in the fourth quarter of 2021, and up from 3.43% in the first quarter of 2021. Yield on interest-earning assets was 3.62% in the first quarter of 2022, up from 3.61% in the fourth quarter of 2021. Loan yields of 4.11% in the first quarter of 2022 were consistent with 4.11% in the fourth quarter of 2021. Total cost of funds decreased three basis points in the first quarter of 2022 to 0.18% from the fourth quarter of 2021, while the total cost of interest-bearing liabilities decreased three basis points to 0.25%. The 2022 first quarter results include the impact of acquisition marks and related accretion for the UCFC acquisition. Interest income includes $491,000 of accretion and interest expense includes $246,000 of accretion. Interest income for the first quarter also includes $3.6 million on average balances of $32.9 million for PPP and only $0.2 million of fees remain unrecognized as of March 31, 2022. Excluding the impact of acquisition marks accretion and PPP loans, net interest income would be $53.7 million, up 7.5% from $50.0 million in the first quarter of 2021 and up 1.1% from $53.2 million in the fourth quarter of 2021. Additionally, net interest margin would be 3.20% for the first quarter of 2022 compared to 3.25% for the first quarter of 2021 and 3.21% for the fourth quarter of 2021.

Non-interest income down from first quarter of 2021

Premier’s non-interest income in the first quarter of 2022 was $16.9 million, compared with $26.3 million in the first quarter of 2021. Total mortgage banking income was $4.3 million in the first quarter of 2022, compared with $10.5 million in the first quarter of 2021. Mortgage gains were $2.5 million in the first quarter of 2022, compared with $5.6 million in the first quarter of 2021 with the change due to lower production, compressed margins, lower saleable mix and less favorable marks on the in-process portfolio. Mortgage loan servicing revenue of $1.9 million in the first quarter of 2022 was consistent with $1.9 million in the first quarter of 2021. Amortization of mortgage servicing rights was $1.4 million in the first quarter of 2022 compared with $2.3 million in the first quarter of 2021. Premier also had a positive change in the valuation adjustment for mortgage servicing assets of $1.2 million in the first quarter of 2022 compared with a positive adjustment of $5.3 million in the first quarter of 2021.

For the first quarter of 2022, service fees and other charges were $6.0 million, up 9.7% from $5.5 million in the first quarter of 2021 primarily due to higher consumer account and interchange related fees. This was mostly offset by a combined $0.5 million decrease in wealth management and insurance commissions. Insurance revenues included $1.1 million of contingent commissions in the first quarter of 2022, consistent with $1.1 million in the first quarter of 2021. BOLI income decreased $0.2 million from the first quarter of 2021, primarily due to $0.3 million of claim gains in the first quarter of 2021. Securities losses were $0.6 million in the first quarter of 2022 from decreased valuations in our trading securities portfolio compared to $2.1 million of gains in the first quarter of 2021, comprised of $0.5 million from securities sales and $1.6 million due to increased valuations in our trading securities portfolio.

“Residential mortgage results for the quarter were stronger than anticipated given the volatile rate environment,” said Small. “Application activity remained robust in Q1 and gain on sale was under pressure as anticipated, but offset by additional contributions coming from the expansion of our residential lending team. We added 14 new lenders during the quarter including an expansion into the Ann Arbor market. We are well positioned to make the most of the opportunities for 2022 and beyond.”

Non-interest expenses up from first quarter of 2021

Total non-interest expense was $41.3 million in the first quarter of 2022 compared with $38.8 million in the first quarter of 2021. Compensation and benefits were $25.5 million in the first quarter of 2022, compared to $22.0 million in the first quarter of 2021. The year-over-year increase was due to the combination of higher costs related to higher staffing levels for our growth initiatives, continued higher healthcare benefit costs and lower deferred costs related to lower residential mortgage production. All other expenses including occupancy, deposit insurance premiums, financial institution taxes, data processing, intangibles amortization and other costs decreased by $1.0 million compared to the first quarter of 2021.

“Quarterly expense growth was anticipated versus first quarter 2021,” said Small. “We invested in revenue producing initiatives and certainly feel the positive effect in our production. Our efficiency ratio was on track with internal expectations for the quarter, running higher than the full year expectation as is generally the case in Q1.”

Credit quality

Non-performing assets totaled $47.6 million, or 0.63% of assets, at March 31, 2022, a decrease from $48.2 million at December 31, 2021, and from $49.4 million at March 31, 2021. Loan delinquencies decreased to $7.6 million, or 0.1% of loans, at March 31, 2022, from $12.3 million at December 31, 2021, and from $9.5 million at March 31, 2021. Classified loans totaled $60.3 million, or 1.0% of loans, as of March 31, 2022, a decrease from $69.5 million at December 31, 2021, and from $114.6 million at March 31, 2021.

The 2022 first quarter results include net loan recoveries of $0.1 million and a total provision expense of $0.9 million, compared with net loan recoveries of $0.2 million and a total provision credit of $7.0 million for the same period in 2021. The current year provision is primarily due to loan growth whereas the prior year provision was primarily due to the improving economic environment following the COVID-19 pandemic-induced economic recession and reserve increase in 2020. The allowance for credit losses as a percentage of total loans excluding PPP and including unaccreted acquisition marks was 1.34% at March 31, 2022, compared with 1.37% at December 31, 2021, and 1.69% at March 31, 2021. The continued economic improvement after the 2020 pandemic-related downturn has led to the year-over-year decrease in the allowance percentages.

“We again experienced improving asset quality with decreases in delinquencies, non-performing assets and classified loans again this quarter,” said Paul Nungester, CFO of Premier. “Our enhanced asset quality helped support a lower coverage level with the overall expense level being driven by our strong core loan production.”

Total assets at $7.59 billion

Total assets at March 31, 2022, were $7.59 billion, compared to $7.48 billion at December 31, 2021, and $7.53 billion at March 31, 2021. Gross loans receivable were $5.39 billion at March 31, 2022, compared to $5.30 billion at December 31, 2021, and $5.46 billion at March 31, 2021. At March 31, 2022, gross loans receivable decreased $71.4 million from a year ago due to a $425.1 million decrease in PPP loans. Excluding PPP, loans grew $353.8 million organically, or 7.1% from a year ago. Commercial loans excluding PPP increased $259.1 million from March 31, 2021, to 2022, or 7.6%. Securities at March 31, 2022, were $1.23 billion, compared to $1.22 billion at December 31, 2021, and $0.93 billion at March 31, 2021. Also, at March 31, 2022, goodwill and other intangible assets totaled $340.6 million compared to $342.1 million at December 31, 2021, and $346.7 million at March 31, 2021, with the decrease attributable to intangibles amortization.

Total deposits at March 31, 2021, were $6.32 billion, compared with $6.28 billion at December 31, 2021, and $6.35 billion at March 31, 2021. At March 31, 2022, total deposits grew $35.2 million organically, or 2.2% annualized from the prior quarter.

Total stockholders’ equity was $0.94 billion at March 31, 2022, compared to $1.02 billion at December 31, 2021, and $1.00 billion at March 31, 2021. The quarterly decrease in stockholders’ equity was primarily due to a decrease in accumulated other comprehensive income (“AOCI”) and buybacks. The decrease in AOCI is primarily related to a $58.9 million negative valuation adjustment on the available-for-sale securities portfolio. The Company also completed the repurchase of 793,166 common shares for $24.2 million during the quarter. At March 31, 2022, 1,291,000 common shares remained available for repurchase under the Company’s existing repurchase program.

Dividend to be paid May 13

The Board of Directors declared a quarterly cash dividend of $0.30 per common share payable May 13, 2022, to shareholders of record at the close of business on May 6, 2022. The dividend represents an annual dividend of 4.2 percent based on the Premier common stock closing price on April 25, 2022. Premier has approximately 35,552,000 common shares outstanding.

Conference call

Premier will host a conference call at 11:00 a.m. ET on Wednesday, April 27, 2022, to discuss the earnings results and business trends. The conference call may be accessed by calling 1-844-200-6205 and using access code 737994. Internet access to the call is also available (in listen-only mode) at the following URL: https://events.q4inc.com/attendee/811820392. The webcast replay of the conference call will be available at www.PremierFinCorp.com for one year.

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 75 branches and 12 loan offices in Ohio, Michigan, Indiana, Pennsylvania and West Virginia (West Virginia office operates as Home Savings Bank) and serves clients through a team of wealth professionals dedicated to each community banking branch. First Insurance Group is a full-service insurance agency with ten offices in Ohio. For more information, visit the company’s website at PremierFinCorp.com.

Financial Statements and Highlights Follow

Safe Harbor Statement

This document may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements may include, but are not limited to, statements regarding projections, forecasts, goals and plans of Premier Financial Corp. and its management, future movements of interests, loan or deposit production levels, future credit quality ratios, future strength in the market area, and growth projections. These statements do not describe historical or current facts and may be identified by words such as “intend,” “intent,” “believe,” “expect,” “estimate,” “target,” “plan,” “anticipate,” or similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may,” “can,” or similar verbs. There can be no assurances that the forward-looking statements included in this presentation will prove to be accurate. In light of the significant uncertainties in the forward-looking statements, 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. Forward-looking statements involve numerous risks and uncertainties, any one or more of which could affect Premier’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. These risks and uncertainties include, but not limited to: impacts from the novel coronavirus (COVID-19) pandemic on the economy, financial markets, our customers, and our business and results of operation; changes in interest rates; disruptions in the mortgage market; risks and uncertainties inherent in general and local banking, insurance and mortgage conditions; political uncertainty; uncertainty in U.S. fiscal or monetary policy; uncertainty concerning or disruptions relating to tensions surrounding the current socioeconomic landscape; competitive factors specific to markets in which Premier operates; increasing competition for financial products from other financial institutions and nonbank financial technology companies; legislative or regulatory rulemaking or actions; capital market conditions; security breaches or unauthorized disclosure of confidential customer or Company information; interruptions in the effective operation of information and transaction processing systems of Premier or Premier’s vendors and service providers; failures or delays in integrating or adopting new technology; the impact of the cessation of LIBOR interest rates and implementation of a replacement rate; and other risks and uncertainties detailed from time to time in our Securities and Exchange Commission (SEC) filings, including our Annual Report on Form 10-K for the year ended December 31, 2021 and any further amendments thereto. All forward-looking statements made in this presentation 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 March 31, 2022, 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 interest income to be a useful supplemental measure of our operating performance. We define core net interest income as net interest income on a tax-equivalent basis excluding income from PPP loans and purchase accounting marks accretion. We believe that this metric is a useful supplemental measure of operating performance because investors and equity analysts may use this measure 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 income from PPP loans and purchase accounting marks accretion. 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.
 

March 31,

 

December 31,

(in thousands)

2022

 

2021

 
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions

$

62,083

 

$

54,858

 

Interest-bearing deposits

 

91,683

 

 

106,708

 

 

153,766

 

 

161,566

 

 
Available-for sale, carried at fair value

 

1,219,365

 

 

1,206,260

 

Trading securities, carried at fair value

 

13,454

 

 

14,097

 

Securities investments

 

1,232,819

 

 

1,220,357

 

 
Loans

 

5,388,331

 

 

5,296,168

 

Allowance for credit losses - loans

 

(67,195

)

 

(66,468

)

Loans, net

 

5,321,136

 

 

5,229,700

 

Loans held for sale

 

153,498

 

 

162,947

 

Mortgage servicing rights

 

20,715

 

 

19,538

 

Accrued interest receivable

 

21,765

 

 

20,767

 

Federal Home Loan Bank stock

 

15,332

 

 

11,585

 

Bank Owned Life Insurance

 

167,763

 

 

166,767

 

Office properties and equipment

 

54,684

 

 

55,602

 

Real estate and other assets held for sale

 

253

 

 

171

 

Goodwill

 

317,948

 

 

317,948

 

Core deposit and other intangibles

 

22,691

 

 

24,129

 

Other assets

 

108,510

 

 

90,325

 

Total Assets

$

7,590,880

 

$

7,481,402

 

 
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits

$

1,733,157

 

$

1,724,772

 

Interest-bearing deposits

 

4,584,078

 

 

4,557,279

 

Total deposits

 

6,317,235

 

 

6,282,051

 

Advances from FHLB

 

150,000

 

 

-

 

Subordinated debentures

 

85,008

 

 

84,976

 

Advance payments by borrowers for tax and insurance

 

20,332

 

 

24,716

 

Reserve for credit losses - unfunded commitments

 

5,340

 

 

5,031

 

Other liabilities

 

69,669

 

 

61,132

 

Total Liabilities

 

6,647,584

 

 

6,457,906

 

Stockholders’ Equity
Preferred stock

 

-

 

 

-

 

Common stock, net

 

306

 

 

306

 

Additional paid-in-capital

 

691,350

 

 

691,132

 

Accumulated other comprehensive income (loss)

 

(75,497

)

 

(3,428

)

Retained earnings

 

459,087

 

 

443,517

 

Treasury stock, at cost

 

(131,950

)

 

(108,031

)

Total Stockholders’ Equity

 

943,296

 

 

1,023,496

 

Total Liabilities and Stockholders’ Equity

$

7,590,880

 

$

7,481,402

 

 
Consolidated Statements of Income (Unaudited)
Premier Financial Corp.

Three Months Ended

March 31,

(in thousands, except per share amounts)

2022

 

2021

Interest Income:
Loans

$

55,241

 

$

57,565

 

Investment securities

 

5,479

 

 

3,682

 

Interest-bearing deposits

 

46

 

 

66

 

FHLB stock dividends

 

59

 

 

59

 

Total interest income

 

60,825

 

 

61,372

 

Interest Expense:
Deposits

 

2,222

 

 

4,164

 

FHLB advances and other

 

13

 

 

-

 

Subordinated debentures

 

696

 

 

695

 

Total interest expense

 

2,931

 

 

4,859

 

Net interest income

 

57,894

 

 

56,513

 

Provision (benefit) for credit losses - loans

 

626

 

 

(7,514

)

Provision (benefit) for credit losses - unfunded commitments

 

309

 

 

551

 

Total provision (benefit) for credit losses

 

935

 

 

(6,963

)

Net interest income after provision

 

56,959

 

 

63,476

 

Non-interest Income:
Service fees and other charges

 

6,000

 

 

5,469

 

Mortgage banking income

 

4,252

 

 

10,533

 

Gain (loss) on sale of available for sale securities

 

-

 

 

516

 

Gain (loss) on trading securities

 

(643

)

 

1,610

 

Insurance commissions

 

4,639

 

 

4,882

 

Wealth management income

 

1,477

 

 

1,757

 

Income from Bank Owned Life Insurance

 

996

 

 

1,168

 

Other non-interest income

 

150

 

 

340

 

Total Non-interest Income

 

16,871

 

 

26,275

 

Non-interest Expense:
Compensation and benefits

 

25,541

 

 

21,997

 

Occupancy

 

3,700

 

 

4,112

 

FDIC insurance premium

 

593

 

 

898

 

Financial institutions tax

 

1,191

 

 

1,190

 

Data processing

 

3,335

 

 

3,382

 

Amortization of intangibles

 

1,438

 

 

1,623

 

Other non-interest expense

 

5,505

 

 

5,601

 

Total Non-interest Expense

 

41,303

 

 

38,803

 

Income before income taxes

 

32,527

 

 

50,948

 

Income tax expense

 

6,170

 

 

9,952

 

Net Income

$

26,357

 

$

40,996

 

 
 
Earnings per common share:
Basic

$

0.73

 

$

1.10

 

Diluted

$

0.73

 

$

1.10

 

 
Average Shares Outstanding:
Basic

 

35,978

 

 

37,293

 

Diluted

 

36,090

 

 

37,357

 

 
Premier Financial Corp.
Financial Summary and Comparison (Unaudited)

Three Months Ended

March 31,

(dollars in thousands, except per share data)

2022

 

2021

 

% change

Summary of Operations
Tax-equivalent interest income (2)

$

61,054

 

$

61,609

 

(0.9

)

Interest expense

 

2,931

 

 

4,859

 

(39.7

)

Tax-equivalent net interest income (2)

 

58,123

 

 

56,750

 

2.4

 

Provision (benefit) for credit losses

 

935

 

 

(6,963

)

(113.4

)

Investment securities gains (losses)

 

(643

)

 

2,126

 

NM

 

Non-interest income (excluding securities gains/losses)

 

17,514

 

 

24,149

 

(27.5

)

Non-interest expense

 

41,303

 

 

38,803

 

6.4

 

Income tax expense (benefit)

 

6,170

 

 

9,952

 

(38.0

)

Net income (loss)

 

26,357

 

 

40,996

 

(35.7

)

Tax equivalent adjustment (2)

 

229

 

 

237

 

(3.4

)

At Period End
Assets

 

7,590,880

 

 

7,530,462

 

0.8

 

Earning assets

 

6,881,663

 

 

6,852,357

 

0.4

 

Loans

 

5,388,331

 

 

5,459,683

 

(1.3

)

Allowance for credit losses - loans

 

67,195

 

 

74,754

 

(10.1

)

Deposits

 

6,317,235

 

 

6,351,919

 

(0.5

)

Stockholders’ equity

 

943,296

 

 

998,186

 

(5.5

)

Goodwill and intangibles

 

340,639

 

 

346,662

 

(1.7

)

Tangible equity (1)

 

602,657

 

 

651,524

 

(7.5

)

Average Balances
Assets

 

7,541,414

 

 

7,338,886

 

2.8

 

Earning assets

 

6,754,862

 

 

6,611,343

 

2.2

 

Loans

 

5,382,825

 

 

5,629,715

 

(4.4

)

Deposits and interest-bearing liabilities

 

6,415,483

 

 

6,275,160

 

2.2

 

Deposits

 

6,314,217

 

 

6,190,292

 

2.0

 

Stockholders’ equity

 

1,033,816

 

 

972,653

 

6.3

 

Stockholders’ equity / assets

 

13.71

%

 

13.25

%

3.5

 

Per Common Share Data
Net Income (Loss)
Basic

$

0.73

 

$

1.10

 

(33.6

)

Diluted

 

0.73

 

 

1.10

 

(33.6

)

Dividends Paid

 

0.30

 

 

0.24

 

25.0

 

Market Value:
High

$

32.52

 

$

35.90

 

(9.4

)

Low

 

28.58

 

 

22.23

 

28.6

 

Close

 

30.33

 

 

33.26

 

(8.8

)

Common Book Value

 

26.48

 

 

26.78

 

(1.1

)

Tangible Common Book Value (1)

 

16.92

 

 

17.48

 

(3.2

)

Shares outstanding, end of period (000s)

 

35,621

 

 

37,275

 

(4.4

)

Performance Ratios (annualized)
Tax-equivalent net interest margin (2)

 

3.44

%

 

3.43

%

0.3

 

Return on average assets

 

1.42

%

 

2.27

%

(37.4

)

Return on average equity

 

10.34

%

 

17.09

%

(39.5

)

Return on average tangible equity

 

15.44

%

 

26.60

%

(42.0

)

Efficiency ratio (3)

 

54.61

%

 

47.96

%

13.8

 

Effective tax rate

 

18.97

%

 

19.53

%

(2.9

)

Dividend payout ratio

 

41.10

%

 

21.82

%

88.4

 

 
(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.
NM Percentage change not meaningful
 
Premier Financial Corp.
Yield Analysis

Three Months Ended March 31,

(dollars in thousands)

2022

 

2021

Average

 

 

 

Yield

 

Average

 

 

 

Yield

Balance

 

Interest(1)

 

Rate(2)

 

Balance

 

Interest(1)

 

Rate(2)

Interest-earning assets:
Loans receivable

$

5,382,825

 

$

55,248

 

4.11

%

$

5,629,715

$

57,579

 

4.09

%

Securities

 

1,250,321

 

 

5,701

 

1.82

%

 

823,986

 

 

3,905

 

1.90

%

(3)

Interest Bearing Deposits

 

109,757

 

 

46

 

0.17

%

 

145,658

 

 

66

 

0.18

%

FHLB stock

 

11,959

 

 

59

 

1.97

%

 

11,984

 

 

59

 

1.97

%

Total interest-earning assets

 

6,754,862

 

 

61,054

 

3.62

%

 

6,611,343

 

 

61,609

 

3.73

%

Non-interest-earning assets

 

786,552

 

 

727,543

 

Total assets

$

7,541,414

 

$

7,338,886

 

Deposits and Interest-bearing liabilities:
Interest bearing deposits

$

4,600,801

 

$

2,222

 

0.19

%

$

4,546,272

 

$

4,164

 

0.37

%

FHLB advances and other

 

16,278

 

 

13

 

0.32

%

 

-

 

 

-

 

0.00

%

Subordinated debentures

 

84,988

 

 

696

 

3.28

%

 

84,868

 

 

695

 

3.28

%

Notes payable

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

Total interest-bearing liabilities

 

4,702,067

 

 

2,931

 

0.25

%

 

4,631,140

 

 

4,859

 

0.42

%

Non-interest bearing deposits

 

1,713,416

 

 

-

 

-

 

 

1,644,020

 

 

-

 

-

 

Total including non-interest-bearing deposits

 

6,415,483

 

 

2,931

 

0.18

%

 

6,275,160

 

 

4,859

 

0.31

%

Other non-interest-bearing liabilities

 

92,115

 

 

91,073

 

Total liabilities

 

6,507,598

 

 

6,366,233

 

Stockholders' equity

 

1,033,816

 

 

972,653

 

Total liabilities and stockholders' equity

$

7,541,414

 

$

7,338,886

 

Net interest income; interest rate spread

$

58,123

 

3.37

%

$

56,750

 

3.31

%

Net interest margin (4)

3.44

%

3.43

%

Average interest-earning assets to average interest-bearing liabilities

144

%

143

%

% increase

Net interest income (1)

 

2.4

%

$

58,123

 

$

56,750

 

Less: PPP income

 

(3,641

)

 

(5,021

)

Less: Purchase accounting marks accretion

 

(737

)

 

(1,753

)

Core net interest income

 

7.5

%

$

53,745

 

$

49,976

 

 
Three Months Ended March 31,
(dollars in thousands)

2022

 

2021

Mortgage Banking Summary
Revenue from sales and servicing of mortgage loans:
Mortgage banking gains, net

$

2,543

 

$

5,640

 

Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue

 

1,879

 

 

1,917

 

Amortization of mortgage servicing rights

 

(1,403

)

 

(2,344

)

Mortgage servicing rights valuation adjustments

 

1,233

 

 

5,320

 

 

1,709

 

 

4,893

 

Total revenue from sale and servicing of mortgage loans

$

4,252

 

$

10,533

 

 
Mortgage servicing rights:
Balance at beginning of period

$

22,244

 

$

21,666

 

Loans sold, servicing retained

 

1,348

 

 

2,374

 

Amortization

 

(1,403

)

 

(2,344

)

Carrying value before valuation allowance at end of period

 

22,189

 

 

21,696

 

Valuation allowance:
Balance at beginning of period

 

(2,707

)

 

(8,513

)

Impairment recovery (charges)

 

1,233

 

 

5,320

 

Balance at end of period

 

(1,474

)

 

(3,193

)

Net carrying value at end of period

$

20,715

 

$

18,503

 

 
(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.
 
Premier Financial Corp.
Selected Quarterly Information
 
(dollars in thousands, except per share data)

1st Qtr 2022

 

4th Qtr 2021

 

3rd Qtr 2021

 

2nd Qtr 2021

 

1st Qtr 2021

Summary of Operations
Tax-equivalent interest income (1)

$

61,054

 

$

60,740

 

$

61,117

 

$

61,134

 

$

61,609

 

Interest expense

 

2,931

 

 

3,288

 

 

3,826

 

 

4,245

 

 

4,859

 

Tax-equivalent net interest income (1)

 

58,123

 

 

57,452

 

 

57,291

 

 

56,889

 

 

56,750

 

Provision (benefit) for credit losses

 

935

 

 

2,009

 

 

1,820

 

 

(3,919

)

 

(6,963

)

Investment securities gains (losses)

 

(643

)

 

1,132

 

 

253

 

 

661

 

 

2,126

 

Non-interest income (excluding securities gains/losses)

 

17,514

 

 

16,692

 

 

18,061

 

 

16,884

 

 

24,149

 

Non-interest expense

 

41,303

 

 

41,733

 

 

39,045

 

 

38,375

 

 

38,803

 

Income tax expense (benefit)

 

6,170

 

 

5,974

 

 

6,124

 

 

8,323

 

 

9,952

 

Net income (loss)

 

26,357

 

 

25,310

 

 

28,360

 

 

31,385

 

 

40,996

 

Tax equivalent adjustment (1)

 

229

 

 

250

 

 

256

 

 

270

 

 

237

 

At Period End
Total assets

$

7,590,880

 

$

7,481,402

 

$

7,468,318

 

$

7,593,720

 

$

7,530,462

 

Earning assets

 

6,881,663

 

 

6,797,765

 

 

6,774,307

 

 

6,920,008

 

 

6,852,357

 

Loans

 

5,388,331

 

 

5,296,168

 

 

5,269,566

 

 

5,348,400

 

 

5,459,683

 

Allowance for loan losses

 

67,195

 

 

66,468

 

 

73,217

 

 

71,367

 

 

74,754

 

Deposits

 

6,317,235

 

 

6,282,051

 

 

6,248,658

 

 

6,291,459

 

 

6,351,919

 

Stockholders’ equity

 

943,296

 

 

1,023,496

 

 

1,031,869

 

 

1,027,703

 

 

998,186

 

Stockholders’ equity / assets

 

12.43

%

 

13.68

%

 

13.82

%

 

13.53

%

 

13.26

%

Goodwill

 

317,948

 

 

317,948

 

 

317,948

 

 

317,948

 

 

317,948

 

Average Balances
Total assets

$

7,541,414

 

$

7,510,397

 

$

7,529,100

 

$

7,549,531

 

$

7,338,886

 

Earning assets

 

6,754,862

 

 

6,736,250

 

 

6,773,021

 

 

6,806,275

 

 

6,611,343

 

Loans

 

5,382,825

 

 

5,356,113

 

 

5,416,696

 

 

5,495,782

 

 

5,629,715

 

Deposits and interest-bearing liabilities

 

6,415,483

 

 

6,386,341

 

 

6,422,455

 

 

6,454,731

 

 

6,275,160

 

Deposits

 

6,314,217

 

 

6,301,384

 

 

6,317,229

 

 

6,339,673

 

 

6,190,292

 

Stockholders’ equity

 

1,033,816

 

 

1,035,717

 

 

1,020,206

 

 

1,006,757

 

 

972,653

 

Stockholders’ equity / assets

 

13.71

%

 

13.79

%

 

13.55

%

 

13.34

%

 

13.25

%

Per Common Share Data
Net Income (Loss):
Basic

$

0.73

 

$

0.69

 

$

0.76

 

$

0.84

 

$

1.10

 

Diluted

 

0.73

 

 

0.69

 

 

0.76

 

 

0.84

 

 

1.10

 

Dividends Paid

 

0.30

 

 

0.28

 

 

0.27

 

 

0.26

 

 

0.24

 

Market Value:
High

$

32.52

 

$

34.00

 

$

32.72

 

$

33.97

 

$

35.90

 

Low

 

28.58

 

 

28.75

 

 

25.80

 

 

27.76

 

 

22.23

 

Close

 

30.33

 

 

30.91

 

 

31.84

 

 

28.41

 

 

33.26

 

Common Book Value

 

26.48

 

 

28.13

 

 

27.90

 

 

27.64

 

 

26.78

 

Shares outstanding, end of period (000s)

 

35,621

 

 

36,384

 

 

36,978

 

 

37,178

 

 

37,275

 

Performance Ratios (annualized)
Tax-equivalent net interest margin (1)

 

3.44

%

 

3.41

%

 

3.38

%

 

3.34

%

 

3.43

%

Return on average assets

 

1.42

%

 

1.34

%

 

1.49

%

 

1.67

%

 

2.27

%

Return on average equity

 

10.34

%

 

9.70

%

 

11.03

%

 

12.50

%

 

17.09

%

Return on average tangible equity

 

15.44

%

 

14.49

%

 

16.65

%

 

19.05

%

 

26.60

%

Efficiency ratio (2)

 

54.61

%

 

56.29

%

 

51.82

%

 

52.02

%

 

47.96

%

Effective tax rate

 

18.97

%

 

19.10

%

 

17.76

%

 

20.96

%

 

19.53

%

Common dividend payout ratio

 

41.10

%

 

40.58

%

 

35.53

%

 

30.95

%

 

21.82

%

 
(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.
 
Premier Financial Corp.
Selected Quarterly Information
 
(dollars in thousands, except per share data)

1st Qtr 2022

 

4th Qtr 2021

 

3rd Qtr 2021

 

2nd Qtr 2021

 

1st Qtr 2021

Loan Portfolio Composition
One to four family residential real estate

$

1,222,057

 

$

1,167,466

 

$

1,129,877

 

$

1,138,433

 

$

1,168,559

 

Construction

 

883,712

 

 

862,815

 

 

885,586

 

 

830,822

 

 

749,190

 

Commercial real estate

 

2,495,469

 

 

2,450,349

 

 

2,389,759

 

 

2,405,653

 

 

2,402,067

 

Commercial

 

910,553

 

 

895,638

 

 

952,729

 

 

1,051,972

 

 

1,172,910

 

Consumer finance

 

132,294

 

 

126,417

 

 

125,163

 

 

118,526

 

 

117,539

 

Home equity and improvement

 

261,176

 

 

264,354

 

 

264,140

 

 

261,842

 

 

257,764

 

Total loans

 

5,905,261

 

 

5,767,039

 

 

5,747,254

 

 

5,807,248

 

 

5,868,029

 

Less:
Undisbursed loan funds

 

525,545

 

 

477,890

 

 

481,434

 

 

458,156

 

 

405,983

 

Deferred loan origination fees

 

(8,615

)

 

(7,019

)

 

(3,746

)

 

692

 

 

2,363

 

Allowance for credit losses - loans

 

67,195

 

 

66,468

 

 

73,217

 

 

71,367

 

 

74,754

 

Net Loans

$

5,321,136

 

$

5,229,700

 

$

5,196,349

 

$

5,277,033

 

$

5,384,929

 

 
PPP loans

$

18,660

 

$

58,906

 

$

143,949

 

$

287,229

 

$

443,782

 

Core commercial loans (1)

 

3,647,783

 

 

3,550,385

 

 

3,461,893

 

 

3,424,698

 

 

3,388,666

 

Core loans (1)

 

5,369,671

 

 

5,237,262

 

 

5,125,617

 

 

5,061,171

 

 

5,015,901

 

 
Allowance for credit losses - loans
Beginning allowance

$

66,468

 

$

73,217

 

$

71,367

 

$

74,754

 

$

82,079

 

Provision (benefit) for credit losses - loans

 

626

 

 

2,816

 

 

1,594

 

 

(3,631

)

 

(7,514

)

Net recoveries (charge-offs)

 

101

 

 

(9,565

)

 

256

 

 

244

 

 

189

 

Ending allowance

$

67,195

 

$

66,468

 

$

73,217

 

$

71,367

 

$

74,754

 

 
Credit Quality
Total non-performing loans (2)

$

47,298

 

$

48,014

 

$

59,865

 

$

41,296

 

$

49,298

 

Real estate owned (REO)

 

253

 

 

171

 

 

261

 

 

45

 

 

53

 

Total non-performing assets (3)

$

47,551

 

$

48,185

 

$

60,126

 

$

41,341

 

$

49,351

 

Net charge-offs (recoveries)

 

(101

)

 

9,565

 

 

(256

)

 

(244

)

 

(189

)

 
Restructured loans, accruing (4)

 

6,287

 

 

7,768

 

 

6,503

 

 

5,939

 

 

6,068

 

 
Allowance for credit losses - loans / loans

 

1.25

%

 

1.26

%

 

1.39

%

 

1.33

%

 

1.37

%

Allowance for credit losses - loans / non-performing assets

 

141.31

%

 

137.94

%

 

121.77

%

 

172.63

%

 

151.47

%

Allowance for credit losses - loans / non-performing loans

 

142.07

%

 

138.43

%

 

122.30

%

 

172.82

%

 

151.64

%

Non-performing assets / loans plus REO

 

0.88

%

 

0.91

%

 

1.14

%

 

0.77

%

 

0.90

%

Non-performing assets / total assets

 

0.63

%

 

0.64

%

 

0.81

%

 

0.54

%

 

0.66

%

Net charge-offs / average loans (annualized)

 

-0.01

%

 

0.71

%

 

-0.02

%

 

-0.02

%

 

-0.01

%

Net charge-offs / average loans LTM

 

0.17

%

 

0.16

%

 

0.00

%

 

0.06

%

 

0.05

%

 
Deposit Balances
Non-interest-bearing demand deposits

$

1,733,157

 

$

1,724,772

 

$

1,618,769

 

$

1,649,664

 

$

1,728,895

 

Interest-bearing demand deposits and money market

 

3,029,260

 

 

2,952,705

 

 

2,962,032

 

 

2,890,769

 

 

2,806,271

 

Savings deposits

 

830,143

 

 

804,451

 

 

786,929

 

 

777,862

 

 

761,899

 

Retail time deposits less than $250

 

586,967

 

 

636,477

 

 

692,224

 

 

720,317

 

 

842,624

 

Retail time deposits greater than $250

 

137,708

 

 

163,646

 

 

188,704

 

 

252,847

 

 

212,230

 

Total deposits

$

6,317,235

 

$

6,282,051

 

$

6,248,658

 

$

6,291,459

 

$

6,351,919

 

 
(1) Core loans represents total loans excluding undisbursed loan funds, deferred loan origination fees and PPP loans. Core commercial loans represents total commercial real estate, commercial and commercial construction excluding commercial undisbursed loan funds, deferred loan origination fees and PPP loans.
(2) Non-performing loans consist of non-accrual loans.
(3) Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.
(4) Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans.
 
Premier Financial Corp.
 
Loan Delinquency Information
(dollars in thousands) Total Balance Current 30 to 89 days

past due
% of

Total
Non Accrual

Loans
% of

Total
 
March 31, 2022
One to four family residential real estate

$

1,222,057

$

1,206,560

$

3,843

0.3

%

$

11,654

1.0

%

Construction

 

883,712

 

 

883,712

 

 

-

 

0.0

%

 

-

 

0.0

%

Commercial real estate

 

2,495,469

 

 

2,480,656

 

 

181

 

0.0

%

 

14,632

 

0.6

%

Commercial

 

910,553

 

 

894,923

 

 

18

 

0.0

%

 

15,612

 

1.7

%

Consumer finance

 

132,294

 

 

127,856

 

 

2,214

 

1.7

%

 

2,224

 

1.7

%

Home equity and improvement

 

261,176

 

 

256,667

 

 

1,333

 

0.5

%

 

3,176

 

1.2

%

Total loans

$

5,905,261

 

$

5,850,374

 

$

7,589

 

0.1

%

$

47,298

 

0.8

%

 
December 31, 2021
One to four family residential real estate

$

1,167,466

 

$

1,149,333

 

$

6,212

 

0.5

%

$

11,921

 

1.0

%

Construction

 

862,815

 

 

861,326

 

 

1,489

 

0.2

%

 

-

 

0.0

%

Commercial real estate

 

2,450,349

 

 

2,435,491

 

 

15

 

0.0

%

 

14,843

 

0.6

%

Commercial

 

895,638

 

 

879,521

 

 

76

 

0.0

%

 

16,041

 

1.8

%

Consumer finance

 

126,417

 

 

122,361

 

 

2,023

 

1.6

%

 

2,033

 

1.6

%

Home equity and improvement

 

264,354

 

 

258,661

 

 

2,517

 

1.0

%

 

3,176

 

1.2

%

Total loans

$

5,767,039

 

$

5,706,693

 

$

12,332

 

0.2

%

$

48,014

 

0.8

%

 
March 31, 2021
One to four family residential real estate

$

1,168,559

 

$

1,150,194

 

$

5,622

 

0.5

%

$

12,743

 

1.1

%

Construction

 

749,190

 

 

748,362

 

 

584

 

0.1

%

 

244

 

0.0

%

Commercial real estate

 

2,402,067

 

 

2,379,138

 

 

222

 

0.0

%

 

22,707

 

0.9

%

Commercial

 

1,172,910

 

 

1,164,587

 

 

298

 

0.0

%

 

8,025

 

0.7

%

Consumer finance

 

117,539

 

 

114,214

 

 

1,424

 

1.2

%

 

1,901

 

1.6

%

Home equity and improvement

 

257,764

 

 

252,732

 

 

1,354

 

0.5

%

 

3,678

 

1.4

%

Total loans

$

5,868,029

 

$

5,809,227

 

$

9,504

 

0.2

%

$

49,298

 

0.8

%

 
Loan Risk Ratings Information
(dollars in thousands) Total Balance Pass Rated Special Mention % of

Total
Classified % of

Total
 
March 31, 2022
One to four family residential real estate

$

1,209,537

 

$

1,198,311

 

$

1,295

 

0.1

%

$

9,931

 

0.8

%

Construction

 

883,712

 

 

883,712

 

 

-

 

0.0

%

 

-

 

0.0

%

Commercial real estate

 

2,492,324

 

 

2,373,111

 

 

93,550

 

3.8

%

 

25,663

 

1.0

%

Commercial

 

901,957

 

 

869,615

 

 

20,558

 

2.3

%

 

11,784

 

1.3

%

Consumer finance

 

131,846

 

 

129,747

 

 

-

 

0.0

%

 

2,099

 

1.6

%

Home equity and improvement

 

258,041

 

 

255,883

 

 

-

 

0.0

%

 

2,158

 

0.8

%

PCD loans

 

27,844

 

 

19,110

 

 

98

 

0.4

%

 

8,636

 

31.0

%

Total loans

$

5,905,261

 

$

5,729,489

 

$

115,501

 

2.0

%

$

60,271

 

1.0

%

 
December 31, 2021
One to four family residential real estate

$

1,154,070

 

$

1,142,688

 

$

1,316

 

0.1

%

$

10,066

 

0.9

%

Construction

 

862,815

 

 

843,293

 

 

19,522

 

2.3

%

 

-

 

0.0

%

Commercial real estate

 

2,444,471

 

 

2,321,654

 

 

93,676

 

3.8

%

 

29,141

 

1.2

%

Commercial

 

886,472

 

 

857,905

 

 

14,815

 

1.7

%

 

13,752

 

1.6

%

Consumer finance

 

125,926

 

 

124,073

 

 

-

 

0.0

%

 

1,853

 

1.5

%

Home equity and improvement

 

260,948

 

 

258,914

 

 

-

 

0.0

%

 

2,034

 

0.8

%

PCD loans

 

32,337

 

 

19,547

 

 

101

 

0.3

%

 

12,689

 

39.2

%

Total loans

$

5,767,039

 

$

5,568,074

 

$

129,430

 

2.2

%

$

69,535

 

1.2

%

 
March 31, 2021
One to four family residential real estate

$

1,154,141

 

$

1,145,356

 

$

1,173

 

0.1

%

$

7,612

 

0.7

%

Construction

 

749,190

 

 

727,821

 

 

21,126

 

2.8

%

 

243

 

0.0

%

Commercial real estate

 

2,380,688

 

 

2,216,699

 

 

115,758

 

4.9

%

 

48,231

 

2.0

%

Commercial

 

1,156,948

 

 

1,108,381

 

 

25,400

 

2.2

%

 

23,167

 

2.0

%

Consumer finance

 

116,723

 

 

115,044

 

 

-

 

0.0

%

 

1,679

 

1.4

%

Home equity and improvement

 

253,049

 

 

250,944

 

 

-

 

0.0

%

 

2,105

 

0.8

%

PCD loans

 

57,290

 

 

23,956

 

 

1,748

 

3.1

%

 

31,586

 

55.1

%

Total loans

$

5,868,029

 

$

5,588,201

 

$

165,205

 

2.8

%

$

114,623

 

2.0

%

 

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