HUNTINGTON, W.Va., Feb. 9, 2021 /PRNewswire/ — PREMIER FINANCIAL BANCORP, INC. (PREMIER), (NASDAQ/GMS: PFBI), a $1.9 billion monetary holding firm with two group financial institution subsidiaries, introduced its monetary outcomes for the fourth quarter of 2020, in addition to the 2020 calendar 12 months.  Premier realized internet revenue of $22,438,000 ($1.52 per diluted share) throughout the 12 months ending December 31, 2020, a $1.76 million, or 7.3%, lower from the $24,196,000 ($1.64 per diluted share) reported for the 12 months ending December 31, 2019.  The lower in internet revenue in 2020 is basically as a consequence of decreases in curiosity revenue and non-interest revenue, coupled with a rise within the provision for mortgage losses and a slight enhance in non-interest expense.  These adjustments that negatively affected internet revenue greater than offset decreases in curiosity expense and revenue tax expense.  A majority of those adjustments had been largely in response to adjustments within the financial system associated to the novel corona virus of 2019 (“COVID-19”), whether or not because of governmental stimulus to depositors and debtors, Federal Reserve Board of Governors’ adjustments in rate of interest coverage to stimulate the financial system and/or buyer habits in response to authorities pointers aimed to reduce the unfold of COVID-19, as extra totally defined all through this evaluation beneath.

President and CEO Robert W. Walker commented, “We are pleased with our results for the year 2020, especially as we continue to navigate all of the societal and economic changes related to curbing the spread of the COVID-19 virus.  In spite of significant changes in the interest rate environment during 2020, our net interest income for the year ended $757,000, or 1.1% higher than the net interest income we reported in 2019.  We also held the line on non-interest expenses, which increased by only $141,000, or 0.3%, in 2020 even as our balance sheet grew by 9.3%, or $164.8 million.  Nevertheless, net income results are down in 2020, primarily due to a $2,200,000 million, or 176%, increase in loan loss provision expense largely attributed to potential COVID-19 related loan losses, as well as a $1.1 million, or 23.4%, decrease in non-interest income from service charges and fees on deposit accounts.  We believe we have been prudent by adding approximately $2,500,000 to our qualitative credit risk analysis of the loan portfolio for potential COVID-19 related loan losses during the calendar year 2020, even as our other loan credit risk measurements are improving.  The path ahead is still uncertain for most businesses, including ours.  As lenders, we are carefully monitoring our borrowers’ performance and will respond accordingly as we learn about their ability to continue to meet their debt obligations.  Our non-interest income was down as deposit customers kept close tabs on their personal finances and were less likely to overdraft their deposit accounts with us.  As an essential business, we took steps to modify our normal business operations to include keeping branches open with appropriate ‘social distancing’ measures; utilizing permitted guidance provided by federal and state banking supervisory regulators to assist borrowers to avoid defaulting on their loans; and robustly participating in the U.S. Treasury’s and Small Business Administration’s Payroll Protection Program (“PPP”).  In 2020, Premier generated $116 million of new loans to small and medium sized businesses via the PPP program and has been assisting our borrowers with their applications for PPP loan forgiveness.  Through the end of the year, nearly half of our PPP loan balances have been forgiven by the Small Business Administration.”

For the quarter ended December 31, 2020, Premier realized internet revenue of $5,940,000 (40 cents per diluted share), a 0.8% enhance over the $5,894,000 (40 cents per diluted share) of internet revenue reported for the fourth quarter of 2019.  The $46,000, or 0.8%, enhance in internet revenue throughout the fourth quarter of 2020 is basically as a consequence of a $900,000, or 5.4%, enhance in internet curiosity revenue, a $446,000, or 3.9%, lower in non-interest expense and a $90,000 lower in revenue tax expense.  These enhancements in internet revenue had been considerably offset by a $1,160,000 enhance within the provision for mortgage losses and a $230,000, or 9.8%, lower in non-interest revenue when in comparison with the fourth quarter of 2019. 

Net curiosity revenue for the quarter ended December 31, 2020 totaled $17.533 million, up $900,000, or 5.4%, from the $16.633 million of internet curiosity revenue earned within the fourth quarter of 2019, as curiosity expense financial savings exceeded a lower in curiosity revenue.  Interest revenue decreased by $402,000, or 2.1%, within the fourth quarter of 2020 when in comparison with the fourth quarter of 2019, largely as a consequence of a $425,000, or 17.5% lower in curiosity revenue on funding securities and a $362,000, or 92.8%, lower in curiosity revenue on interest-bearing financial institution balances and federal funds bought.  Partially offsetting these decreases, curiosity revenue on loans elevated by $385,000, or 2.4%, as extra totally defined beneath.  Interest revenue on interest-bearing financial institution balances and federal funds bought decreased within the fourth quarter of 2020 when in comparison with the identical quarter of 2019 because of the vital decreases within the incomes yields on these balances.  Although the mixed common balances  for the quarter elevated from $97.7 million throughout the fourth quarter of 2019 to $113.4 million throughout the fourth quarter of 2020, the incomes yields dropped considerably in response to the Federal Reserve Board of Governors’ coverage determination to drop the focused federal funds price to a spread of 0.00% to 0.25% on March 16, 2020.  The actions taken by the Federal Reserve Board of Governors to scale back short-term rates of interest diminished Premier’s incomes yield on these extremely liquid funds to a median of 0.10% throughout the fourth quarter of 2020 in comparison with a median yield of 1.58% throughout the identical quarter of 2019.  Similarly, curiosity revenue on funding securities within the fourth quarter of 2020 decreased by $425,000, or 17.5%, when in comparison with the fourth quarter of 2019.  While the common steadiness of investments elevated by $57.3 million within the fourth quarter of 2020 when in comparison with the identical quarter of 2019, the common yield earned decreased to 1.88% in 2020 from 2.59% in 2019.

Interest revenue on loans elevated by $385,000, or 2.4%, within the fourth quarter of 2020 when in comparison with the fourth quarter of 2019.  Included within the comparability is roughly $165,000 of curiosity revenue that was realized from deferred curiosity and reductions acknowledged on loans that paid-off or paid-down throughout the fourth quarter of 2020 in comparison with $208,000 of curiosity revenue of this type acknowledged throughout the fourth quarter of 2019.  The mortgage funds in 2019 and 2020 included each non-accrual loans and performing loans that had been as soon as on non-accrual standing.  Excluding the $43,000 increased degree of recognition in 2019, curiosity revenue on loans would have in any other case elevated by $428,000 within the fourth quarter of 2020 when in comparison with the identical quarter of 2019.  The enhance is a results of $1,942,000 of curiosity revenue and costs on loans acknowledged throughout the fourth quarter of 2020 from Premier’s SBA PPP mortgage portfolio.  Fees paid to the lender by the SBA are acknowledged in curiosity revenue over the lifetime of the PPP mortgage.  Any the rest of the charge is acknowledged instantly when the PPP mortgage is forgiven and the SBA offers the funds to repay the mortgage.  Without Premier’s participation within the PPP mortgage program, curiosity revenue on loans would have decreased by roughly $1,514,000, largely as a consequence of a lower within the common yield on the remaining mortgage portfolio from 5.51% within the fourth quarter of 2019 to five.09% within the fourth quarter of 2020, on a decrease common steadiness of loans excellent throughout the quarter.  Premier’s participation within the SBA’s PPP mortgage program resulted in $115,990,000 of latest loans throughout the second and third quarters of 2020.  Primarily because of forgiveness funds, these loans elevated the fourth quarter common loans excellent by roughly $89,468,000 and elevated curiosity revenue on loans throughout the fourth quarter of 2020 by roughly $1,942,000, which resulted in a median yield on these loans of 8.62%.  Without Premier’s participation within the SBA PPP mortgage program, common loans excellent throughout the fourth quarter of 2020 would have decreased by $20,621,000, or 1.8%, when in comparison with the common loans excellent throughout the fourth quarter of 2019. 

More than offsetting the lower in curiosity revenue within the fourth quarter of 2020 was a $1,302,000, or 52.8%, lower in curiosity expense, pushed by a lower in curiosity expense on deposits.  Interest expense on deposits decreased by $1,217,000, or 52.8% within the fourth quarter of 2020, largely as a consequence of decreases within the common price paid on certificates of deposit, financial savings deposits, and NOW and cash market deposits throughout the fourth quarter of 2020 in comparison with the identical quarter in 2019.  Further curiosity expense financial savings had been realized as a consequence of decreases within the common steadiness of higher-costing certificates of deposit throughout the fourth quarter of 2020 in comparison with the identical quarter in 2019.  Nevertheless, common interest-bearing deposit balances elevated by $34.4 million, or 3.1%, within the fourth quarter of 2020 in comparison with the identical quarter of 2019.  The common rate of interest paid on interest-bearing deposits decreased by 45 foundation factors from 0.83% throughout the fourth quarter of 2019 to 0.38% throughout the fourth quarter of 2020.  Decreases in short-term charges ensuing from actions by the Federal Reserve Board of Governors to scale back the focused federal funds price, plus an influx of funds from direct stimulus funds from the U.S. Treasury to deposit account holders throughout 2020, have resulted in a lower within the competitors for financial institution deposit charges.  As a end result, the common rate of interest paid on extremely liquid NOW and cash market deposits decreased by 17 foundation factors and the common price paid on financial savings deposits decreased by 11 foundation factors within the fourth quarter of 2020 when in comparison with the fourth quarter of 2019.  Even with these ensuing decreases within the common price paid on transaction primarily based deposits, the common excellent steadiness of transaction primarily based deposits elevated, with lower than 10% of the rise coming from the acquisition of the First National Bank of Jackson (“Jackson“) on October 25, 2019.  NOW and cash market deposit account balances averaged $509.203 million within the fourth quarter of 2020, a $78.278 million enhance over the common excellent balances throughout the fourth quarter of 2019.  Similarly, financial savings deposit account balances averaged $297.590 million within the fourth quarter of 2020, a $42.995 million enhance over the common excellent balances throughout the fourth quarter of 2019.  Even with the will increase of their common balances, curiosity expense financial savings on interest-bearing transaction deposit accounts equaled $232,000 of the $1,217,000 lower in curiosity expense on interest-bearing deposits, largely because of price reductions on NOW, cash market and financial savings deposit accounts. 

The remaining $985,000 lower in curiosity expense on deposit accounts got here from a lower in common excellent certificates of deposits and a lower within the common charges paid throughout the fourth quarter of 2020 when in comparison with the fourth quarter of 2019.  Certificates of deposit decreased on common by roughly $86.825 million, or 20.6%.  As certificates mature, depositors are both looking for increased deposit charges from different aggressive depository establishments or are transferring their balances to extra liquid interest-bearing deposit accounts corresponding to NOW, cash market and financial savings deposits as a method to maintain speedy entry to their funds throughout the uncertainty of employment or financial situations.  Interest expense financial savings are additionally the results of a lower within the common price paid on certificates of deposit, from a 1.77% common price paid throughout the fourth quarter of 2019 to 1.06% paid throughout the fourth quarter of 2020.

Additional curiosity expense financial savings had been realized within the fourth quarter of 2020 from the discount in excellent Federal Home Loan Bank (“FHLB”) borrowings.  Interest expense on FHLB borrowings decreased by $47,000 within the fourth quarter of 2020 when in comparison with the identical quarter of 2019, because of the fee upon maturity of roughly $8.8 million of FHLB borrowings for the reason that finish of December 2018.  The last $3.0 million excellent FHLB borrowings had been repaid upon maturity within the third quarter of 2020.  Average FHLB borrowings decreased from $6.4 million within the fourth quarter of 2019 to zero within the fourth quarter of 2020.  The common price paid on FHLB borrowings in 2019 was 2.93%.  Also contributing to the lower in curiosity expense throughout the fourth quarter of 2020 was a $27,000, or 30.7%, lower in curiosity expense on Premier’s subordinated debt as a consequence of a lower within the variable rate of interest paid in 2020 in comparison with the fourth quarter of 2019.  The variable rate of interest is listed to the short-term three-month London Interbank Offered Rate (“LIBOR”), rate of interest, which was decrease within the fourth quarter of 2020 at the side of decreases in short-term rate of interest coverage by the Federal Reserve Board of Governors.  Interest expense on short-term borrowings, primarily buyer repurchase agreements, decreased by $11,000, or 44.0%, in 2020 when in comparison with 2019.  The lower in curiosity expense was largely as a consequence of a lower within the common price paid from 0.47% within the fourth quarter of 2019 to 0.17% within the fourth quarter of 2020, though on a $10.849 million increased common steadiness.

During the quarter ended December 31, 2020, Premier recorded $1,095,000 of provision for mortgage losses in comparison with a $65,000 destructive provision for mortgage losses recorded throughout the identical quarter of 2019.  The provision for mortgage losses recorded throughout the fourth quarter of 2020 included an estimate of extra recognized credit score threat within the mortgage portfolio as a consequence of uncertainty associated to future financial situations ensuing from authorities actions designed to curb the unfold of the COVID-19 virus (“Potential COVID-19 Losses”).  In the fourth quarter, Premier added roughly $389,000 to its qualitative credit score threat evaluation of the mortgage portfolio associated to Potential COVID-19 Losses associated to loans originated to varied industries believed to be extra inclined to future credit score threat ensuing from an financial slowdown, corresponding to lodging, eating places, amusement, private providers and retail shops, in addition to loans to non-owner occupied rental actual property debtors and non secular and civic organizations.  Management additionally elevated the estimate of Potential COVID-19 Losses on loans the place the borrower stays on both an interest-only fee deferral interval or a full principal and curiosity fee deferral interval.  Due to authorities intervention efforts to stimulate the financial system and preserve private and enterprise liquidity, the extent, if any, of the influence of the financial slowdown on such industries is probably not identified for fairly a while sooner or later.  The remaining extra provision expense not associated to Potential COVID-19 Losses within the fourth quarter of 2020 was a results of Premier’s regular analyses of the credit score threat recognized throughout the mortgage portfolio.  This contains roughly $250,000 of extra threat allotted to impaired loans.  The degree of provision expense is decided beneath Premier’s inner analyses of evaluating credit score threat. The quantity of future provisions for mortgage losses will rely upon any future enchancment or additional deterioration within the estimated credit score threat within the mortgage portfolio in addition to whether or not extra funds are acquired on loans beforehand recognized as having vital credit score threat.

Gross charge-offs of loans elevated by $162,000 within the fourth quarter of 2020 when in comparison with the identical quarter of 2019, whereas recoveries on loans beforehand charged-off elevated by $14,000 in the identical comparability.  However, complete non-performing loans have decreased by $7,959,000, or 40.4%, since year-end 2019, largely as a consequence of a $5,441,000 lower in non-accrual loans and a $2,622,000 lower in accruing restructured loans.  The lower in accruing restructured loans was largely as a consequence of a full payoff acquired on a $1,800,000 performing mortgage.  The lower in non-accrual loans is basically as a consequence of shifting loans to foreclosures and receiving funds on current non-accrual loans.  These decreases had been partially offset by a $104,000, or 4.7%, enhance in accruing loans overdue 90 days or extra.  Total non-performing loans had been roughly 0.97% of complete excellent loans at year-end 2020 in comparison with 1.65% of excellent loans at year-end 2019.

Net overhead prices (non-interest bills much less non-interest revenue) for the quarter ended December 31, 2020 totaled $8.824 million in comparison with $9.040 million within the fourth quarter of 2019.  Net overhead prices decreased by $216,000, or 2.4%, within the fourth quarter of 2020 when in comparison with the fourth quarter of 2019, largely as a consequence of a $446,000, or 3.9%, lower in non-interest expense partially offset by a $230,000, or 9.8%, lower in non-interest revenue.  Total non-interest revenue decreased by $230,000 within the fourth quarter of 2020 when in comparison with the fourth quarter of 2019, largely as a consequence of a $316,000, or 25.7%, lower in income from service fees and costs on deposit accounts.  Service fees on deposit accounts decreased largely as a consequence of a $279,000, or 29.8%, lower in buyer overdraft charges.  Transaction primarily based deposit account balances have elevated considerably throughout the fourth quarter of 2020 in comparison with the identical quarter of 2019.  As sure sectors of the financial system have been recovering slowly after they had been required to shut in an effort to assist curb the unfold of the COVID-19 virus, deposit prospects have diminished transaction exercise and their propensity to overdraft their accounts.  Other sources of non-interest revenue decreased by $56,000, or 27.6%, within the fourth quarter of 2020, which embody decreases in checkbook gross sales, commissions on insurance coverage premiums, and brokerage and annuity fee revenue.  Partially offsetting these decreases in non-interest revenue, digital banking revenue elevated by $94,000, or 11.1% and secondary market mortgage revenue elevated by $48,000, or 80.0%.  Electronic banking revenue elevated largely as a consequence of a $79,000, or 11.0%, enhance in revenue from debit card transaction exercise ensuing from a rise in digital fee transactions to facilitate buyer purchases throughout the fourth quarter of 2020.  Secondary market mortgage revenue elevated, partially because of the decrease long-term rate of interest setting, leading to a rise in dwelling mortgage refinances as prospects are making the most of decreasing their long-term mounted dwelling mortgage rate of interest.

Non-interest expense decreased by $446,000, or 3.9% within the fourth quarter of 2020 in comparison with the fourth quarter of 2019.  Increases in working prices embody a $215,000, or 14.4%, enhance in exterior information processing prices, a $216,000, or 90%, enhance in taxes not on revenue, a $133,000 enhance in FDIC insurance coverage premiums, a $49,000, or 52.1%, enhance in mortgage assortment bills and a $28,000, or 16.1%, enhance in skilled charges.  The $215,000 enhance in exterior information processing prices features a $72,000, or 21.5%, enhance in web and cell banking fees, as banking by digital means turns into an increasing number of well-liked amongst Premier’s buyer base, and a $122,000 enhance in information line prices as Premier is migrating to a extra sturdy information line community throughout its department community.  The $133,000 enhance in FDIC insurance coverage premiums is basically a results of using FDIC primarily based group financial institution evaluation credit to get rid of the fourth quarter 2019 premium.  Such credit had been totally utilized within the first half of 2020 and no credit had been accessible to offset the fourth quarter 2020 premium.  The enhance in taxes not on revenue is basically as a consequence of a rise within the Kentucky Franchise Tax evaluation base in 2020.  This tax is about to get replaced in 2021 by a Kentucky internet revenue tax newly relevant to the banking trade.

These will increase in non-interest bills had been greater than offset by a $334,000, or 6.1%, lower in employees prices, a $220,000, or 13.2%, lower in occupancy and gear bills, a $378,000, or 44.0%, lower in OREO bills and writedowns, and a $163,000 lower in different working bills when in comparison with the fourth quarter of 2019.  The lower in employees prices is partially as a consequence of diminished staffing hours at a few of Premier’s department places, employees financial savings from the closure of two branches throughout the fourth quarter of 2020 and $183,000 of financial savings in medical insurance coverage premiums from a one month fee furlough within the fourth quarter of 2020.  Occupancy and gear expense decreased, partially, as a consequence of a $265,000 lower in facility prices, largely from a $300,000 enhance within the achieve on the sale of a department facility within the fourth quarter of 2020 in comparison with the fourth quarter of 2019.  The lower in OREO bills and writedowns contains $802,000 of property writedowns, internet of $71,000 in realized positive factors on the sale of OREO, within the fourth quarter of 2019 in comparison with solely $321,000 of property writedowns and losses on the sale of OREO within the fourth quarter of 2020.  The $163,000 lower in different working bills contains $92,000 of conversion associated bills incurred within the fourth quarter of 2019 to transform the Jackson branches to Premier’s working system.   

Net curiosity revenue for the 12 months ended December 31, 2020 totaled $67.658 million, a rise of $757,000, or 1.1%, from the $66.901 million of internet curiosity revenue earned throughout 2019, as curiosity expense financial savings exceeded a lower in curiosity revenue.  Total curiosity revenue in 2020 decreased by $2,107,000, or 2.8%, largely as a consequence of decreases in curiosity revenue on interest-bearing financial institution balances and federal funds bought and curiosity revenue on investments.  Interest revenue from interest-bearing financial institution balances and federal funds bought decreased by $1,396,000, or 80.6%, largely because of the vital decreases within the incomes yields on these balances.  Although the common steadiness for the 12 months elevated from $81.2 million throughout 2019 to $96.8 million throughout 2020, the incomes yields dropped considerably in response to the Federal Reserve Board of Governors’ coverage determination to drop the focused federal funds price to a spread of 0.00% to 0.25% on March 16, 2020.  The actions taken by the Federal Reserve Board of Governors to scale back short-term rates of interest diminished Premier’s incomes yield on these extremely liquid funds to a median of 0.35% throughout 2020 in comparison with a median yield of two.13% throughout 2019.  Similarly, curiosity revenue on funding securities in 2020 decreased by $608,000, or 6.3%, when in comparison with 2019.  While the common steadiness of investments elevated by $47.4 million in 2020 when in comparison with 2019, the common yield earned decreased to 2.21% in 2020 from 2.64% in 2019.

Interest revenue on loans decreased by $103,000, or 1.6%, in 2020.  Included within the comparability is roughly $1,060,000 of curiosity revenue that was realized from deferred curiosity and reductions acknowledged on loans that paid-off or paid-down throughout 2020 in comparison with $1,828,000 of curiosity revenue of this type acknowledged throughout 2019.  The mortgage funds in 2019 and 2020 included each non-accrual loans and performing loans that had been as soon as on non-accrual standing.  As a results of the $768,000 increased degree of recognition in 2019, curiosity revenue on loans would have in any other case elevated by $665,000 in 2020 when in comparison with 2019.  This enhance contains roughly $1,415,000 of curiosity revenue on loans acquired from the acquisition of Jackson on October 25, 2019.  Interest revenue on these loans is included in Premier’s mortgage curiosity revenue solely from the date of acquisition in October 2019 and due to this fact no curiosity revenue from these loans is included within the first three quarters of 2019.  Excluding the mortgage curiosity revenue earned on the Jackson loans and the lower in deferred curiosity and reductions acknowledged on loans, curiosity revenue on loans decreased by $750,000, or 1.2%, in 2020 when in comparison with 2019.  The lower is basically as a consequence of a lower within the common yield on the remaining mortgage portfolio from 5.65% in 2019 to five.27% in 2020.  As said above, Premier’s participation within the SBA’s PPP mortgage program resulted in $115,990,000 of latest loans throughout the second and third quarters of 2020.  These loans elevated the common loans excellent in 2020 by roughly $72,424,000 and elevated curiosity revenue on loans throughout 2020 by roughly $3,922,000, which resulted in a median yield on these loans of 5.42%.  Without Premier’s participation within the SBA PPP mortgage program, and excluding the common loans from the Jackson acquisition, common loans excellent throughout 2020 would have decreased by $19,828,000, or 1.7%, when in comparison with the common loans excellent throughout 2019. 

More than offsetting the lower in curiosity revenue in 2020 was a $2,864,000, or 29.6%, lower in curiosity expense, pushed by a lower in curiosity expense on deposits.  Interest expense on deposits decreased by $2,618,000, or 29.1% in 2020, largely as a consequence of decreases within the common price paid on certificates of deposit, financial savings deposits, and NOW and cash market deposits throughout 2020 in comparison with 2019.  Further curiosity expense financial savings had been realized as a consequence of decreases within the common steadiness of higher-costing certificates of deposit throughout 2020 in comparison with 2019.  Nevertheless, common interest-bearing deposit balances elevated by $62.9 million, or 5.9%, in 2020 in comparison with 2019, largely because of the acquisition of Jackson within the fourth quarter of 2019.  The common rate of interest paid on interest-bearing deposits decreased by 27 foundation factors from 0.84% throughout 2019 to 0.57% throughout 2020.  Decreases in short-term charges ensuing from actions by the Federal Reserve Board of Governors to scale back the focused federal funds price, plus an influx of funds from direct stimulus funds from the U.S. Treasury to deposit account holders throughout 2020, have resulted in a lower within the competitors for financial institution deposit charges.  As a end result, the common rate of interest paid on extremely liquid NOW and cash market deposits decreased by 15 foundation factors, the common price paid on financial savings deposits decreased by 12 foundation factors and the common price paid on certificates of deposit decreased by 32 foundation factors in 2020 when in comparison with 2019.  Even with these ensuing decreases within the common price paid on deposits, the common excellent steadiness of deposits elevated by $62.9 million, with solely roughly $56.1 million of the rise coming from the acquisition of Jackson.  Approximately $1,851,000 of the lower in curiosity expense on deposit accounts got here from a lower in common excellent certificates of deposits and a lower within the common charges paid throughout 2020 when in comparison with 2019.  Certificates of deposit decreased on common by roughly $38.230 million, or 9.4%.  Yet, even when factoring within the roughly $28.931 million enhance in common certificates of deposit balances from the 2 Jackson branches within the full 12 months of 2020 however solely within the fourth quarter of 2019, common certificates of deposit balances in Premier’s different department places decreased by $67.161 million or 16.4% in 2020, when in comparison with 2019. 

Additional curiosity expense financial savings had been realized in 2020 from the discount in excellent Federal Home Loan Bank (“FHLB”) borrowings.  Interest expense on FHLB borrowings decreased by $134,000 in 2020 when in comparison with 2019, because of the fee upon maturity of roughly $8.8 million of FHLB borrowings for the reason that finish of December 2018.  The last $3.0 million excellent FHLB borrowings had been repaid upon maturity within the third quarter of 2020.  Also contributing to the lower in curiosity expense throughout 2020 was an $85,000, or 23.0%, lower in curiosity expense on Premier’s subordinated debt as a consequence of a lower within the variable rate of interest paid in 2020 in comparison with 2019.  Interest expense on different borrowings by the guardian firm decreased by $31,000 because of the full compensation of guardian solely borrowing previous to the top of June 2019 leading to no curiosity expense on these borrowings in 2020.  Interest expense on short-term borrowings, primarily buyer repurchase agreements, elevated by $4,000, or 5.7%, in 2020 when in comparison with 2019, largely as a consequence of the next common steadiness excellent, partially offset by a decrease common price paid throughout 2020. 

Reducing Premier’s enhance in internet curiosity revenue in 2020 was a rise within the annual provision for mortgage losses.  During 2020, Premier recorded $3,450,000 of provision for mortgage losses in comparison with $1,250,000 of provision for mortgage losses recorded in 2019.  The provision for mortgage losses recorded throughout 2020 was largely to supply for an estimate of extra recognized credit score threat within the mortgage portfolio as a consequence of uncertainty associated to Potential COVID-19 Losses.  In 2020, Premier added roughly $2,500,000 to its qualitative credit score threat evaluation of the mortgage portfolio associated to Potential COVID-19 Losses associated to loans originated to varied industries believed to be extra inclined to future credit score threat ensuing from an financial slowdown corresponding to lodging, eating places, amusement, private providers and retail shops, in addition to loans to non-owner occupied rental actual property debtors and non secular and civic organizations.  Management additionally elevated the estimate of Potential COVID-19 Losses on loans the place the borrower stays on both an interest-only fee deferral interval or a full principal and curiosity fee deferral interval.  Due to authorities intervention efforts to stimulate the financial system and preserve private and enterprise liquidity, the extent, if any, of the influence of the financial slowdown on such industries is probably not identified for fairly a while sooner or later.  The remaining provision not associated to Potential COVID-19 Losses in 2020 was a results of Premier’s regular analyses of the credit score threat recognized throughout the mortgage portfolio.  This contains extra threat associated to will increase in non-owner occupied loans and different loans excellent throughout the 12 months, which had been offset by reductions in estimated credit score threat throughout the mortgage portfolio ensuing from decreases in increased threat loans, corresponding to business and industrial loans, building and land improvement loans and client loans.  Other indications of bettering portfolio credit score threat that occurred throughout 2020 embody decreases in loans categorized as Special Mention and Substandard, and enhancements in overdue ratios.  Specific reserves on impaired loans decreased from $3,102,000 on the finish of 2019, internet of $2,322,000 of particular reserves on impaired loans charged-off in 2020, to $999,000 on the finish of 2020.  Total individually impaired loans decreased from $12.2 million on the finish of 2019 to $5.1 million on the finish of 2020.The degree of provision expense is decided beneath Premier’s inner analyses of evaluating credit score threat. The quantity of future provisions for mortgage losses will rely upon any future enchancment or additional deterioration within the estimated credit score threat within the mortgage portfolio in addition to whether or not extra funds are acquired on loans beforehand recognized as having vital credit score threat.  Gross charge-offs of loans elevated by $2,066,000 in 2020 when in comparison with 12 months 2019, whereas recoveries on loans beforehand charged-off elevated by $36,000 in 2020.  

Net overhead prices (non-interest bills much less non-interest revenue) for the calendar 12 months ended December 31, 2020 totaled $35.459 million in comparison with $34.430 million within the 12 months 2019.  Net overhead prices elevated by $1.029 million, or 3.0%, in 2020 when in comparison with 2019, largely as a consequence of an $888,000, or 9.5%, lower in non-interest revenue mixed with a minimal $141,000, or 0.3%, enhance in non-interest expense.  Total non-interest revenue decreased by $888,000 within the calendar 12 months 2020 when in comparison with 2019, largely as a consequence of a $1,090,000, or 23.4%, lower in income from service fees and costs on deposit accounts.  Service fees on deposit accounts decreased largely as a consequence of a $981,000, or 27.7%, lower in buyer overdraft charges.  Transaction primarily based deposit account balances have elevated considerably throughout 2020 in comparison with 2019.  As sure sectors of the financial system have been recovering slowly after they had been required to shut in an effort to assist curb the unfold of the COVID-19 virus, deposit prospects have diminished transaction exercise and their propensity to overdraft their accounts.  Other sources of non-interest revenue decreased by $181,000, or 18.6%, in 2020, which embody decreases in checkbook gross sales, commissions on insurance coverage premiums, revenue from Premier’s partial possession of an insurance coverage company in addition to brokerage and annuity fee revenue.  These will increase had been partially offset by a $184,000, or 5.3%, enhance in digital banking revenue and a $199,000, or 93.0%, enhance in secondary market mortgage revenue.  Electronic banking revenue elevated largely as a consequence of a $192,000, or 6.6%, enhance in revenue from debit card transaction exercise ensuing from a rise in digital fee transactions to facilitate buyer purchases throughout 2020.  Secondary market mortgage revenue elevated, partially, because of the decrease long-term rate of interest setting leading to a rise in dwelling mortgage refinances as prospects are making the most of decreasing their long-term mounted dwelling mortgage rate of interest. 

Non-interest expense elevated by $141,000, or 0.3% in 2020 in comparison with 2019, largely because of the full 12 months of operations of the 2 new Jackson places, acquired on October 25, 2019 which elevated direct non-interest bills by roughly $956,000 in 2020.  Overall will increase in working prices embody a $938,000, or 16.2% enhance in exterior information processing prices, a $260,000, or 26.7%, enhance in taxes not on revenue, a $78,000, or 35.0%, enhance in FDIC insurance coverage and a $67,000, or 7.6%, enhance within the amortization of intangible belongings.  The $938,000 enhance in exterior information processing prices features a $258,000 enhance in web and cell banking fees, as banking by digital means turns into an increasing number of well-liked amongst Premier’s buyer base, a $94,000 enhance in ATM processing fees, as prospects elevated ATM exercise in response to COVID-19, and a $410,000 enhance in information line prices, as Premier migrated to a extra sturdy information line community throughout its department community.  The enhance in FDIC insurance coverage premiums is partially the results of using extra FDIC primarily based group financial institution evaluation credit in 2019 than in 2020 to get rid of FDIC insurance coverage premiums plus a rise within the FDIC insurance coverage evaluation base in 2020, largely because of the development in deposits.  Such group financial institution evaluation credit had been totally utilized within the first half of 2020 and no credit had been accessible to offset the third and fourth quarter 2020 premiums. 

These will increase had been considerably offset by a $306,000, or 1.4%, lower in employees prices, an $82,000, or 1.2%, lower in occupancy and gear bills, a $228,000, or 20.2%, lower in skilled charges, a $497,000, or 32.1%, lower in OREO bills and writedowns, and an $89,000 lower in different working bills when in comparison with 2019.  The lower in employees prices is basically as a consequence of diminished staffing hours at a few of Premier’s department places, a rise in deferred mortgage prices associated to the quantity of PPP loans booked, and financial savings in medical insurance coverage premiums from a one month fee furlough within the fourth quarter of 2020.   These financial savings greater than offset $439,000 of extra employees prices associated to the 2 newly acquired Jackson branches.  Occupancy and gear expense decreased, largely because of the achieve on the sale of a department constructing in 2020, which greater than offset the $123,000 enhance in occupancy and gear prices from the Jackson branches and a $109,000 enhance in info know-how prices.  Professional charges decreased by $228,000, largely as a consequence of a lower in authorized charges and consulting bills, partially offset by will increase in accounting and audit charges.  The lower in OREO bills and writedowns contains $1,169,000 of property writedowns, internet of $191,000 in realized positive factors on the sale of OREO, in 2019 in comparison with $677,000 of property writedowns, internet of $88,000 in realized positive factors on the sale of OREO, in 2020. 

Total belongings as of December 31, 2020 had been up $164.8 million, or 9.3%, to $1.946 billion from the $1.781 billion of complete belongings at year-end 2019.  The enhance in complete belongings since year-end is basically as a consequence of a $115.4 million enhance in liquid belongings, corresponding to money and due from banks, curiosity bearing financial institution balances and federal funds bought, funded by a $138.0 million, or 9.2%, enhance in complete deposits and a $13.4 million, or 65.6%, enhance in buyer repurchase agreements.  Other will increase in incomes belongings embody a $30.4 million enhance in securities accessible on the market and a $19.1 million enhance in complete loans excellent.  Investment securities elevated by $30.4 million, or 7.8%, since year-end 2019, as $184.3 million of latest funding purchases from accessible funds and a $7.2 million enhance out there worth of the securities accessible on the market greater than offset $158.4 million of proceeds from maturing investments, principal paydowns on mortgage backed securities, and securities that had been referred to as throughout 2020.  Total loans excellent elevated by $19.1 million, or 1.6%, largely as a consequence of Premier’s sturdy participation within the SBA’s PPP mortgage program within the second and third quarters of 2020, which generated $116.0 million of latest loans.  During the fourth quarter of 2020, roughly $54.0 million of those PPP loans had been forgiven by the SBA or had been paid off by the borrower leaving roughly $62.0 million of PPP loans excellent at December 31, 2020.  Without these loans, Premier’s mortgage portfolio would have decreased by roughly $42.9 million, or 3.6%, throughout 2020, largely as a consequence of common principal funds, mortgage payoffs, and transfers of loans to OREO upon foreclosures, partially offset by inner mortgage development.  Higher threat classes of loans corresponding to building and land loans decreased by roughly $43.5 million, or 32.0%; client loans decreased by $5.0 million, or 17.3%; and business and industrial loans decreased by $15.0 million, or 14.3%.  Residential actual property secured loans additionally decreased by $11.3 million or 2.9% throughout 2020.  These decreases greater than offset a $24.7 million, or 8.1%, enhance in non-owner occupied business actual property loans and a $6.3 million, or 21.0%, enhance in different loans.  Other actual property owned (“OREO”) elevated by $973,000, or 7.9%, largely because of the foreclosures on one business actual property property throughout the first quarter of 2020 that elevated OREO by $600,000 and one other foreclosures on an impaired multifamily actual property mortgage within the third quarter of 2020 that resulted in a $3,708,000 discount in non-accrual loans and a $1,500,000 enhance in OREO.  These and different will increase had been practically offset by $1,416,000 of gross sales of OREO and $589,000 of worth write-downs on different OREO properties. 

Total deposits elevated by $138.0 million, or 9.2%, since year-end 2019.  The general enhance in deposits is basically as a consequence of a $119.8 million, or 32.6%, enhance in non-interest bearing deposits, a $79.6 million, or 20.1%, enhance in financial savings and cash market deposits, and a $38.2 million, or 11.9%, enhance in curiosity bearing transaction deposits.  Partially offsetting these will increase, certificates of deposit (“CD”) balances decreased by $99.6 million, or 23.4%.  The lower in certificates of deposit balances isn’t solely primarily the results of discontinuing CD price specials, but additionally a major lower in conventional CD charges, as administration lowered providing charges in response to decreases in market short-term and long-term rates of interest.  Much of the SBA’s PPP mortgage program proceeds had been initially deposited with Premier’s subsidiary banks, giving rise to a rise in business primarily based deposit balances.  Furthermore, authorities primarily based financial stimulus checks to people have resulted in will increase in retail primarily based deposit balances.  Customer repurchase agreements elevated by $13.4 million, or 65.6% since year-end 2019.  FHLB borrowings decreased by $6.4 million to zero at December 31, 2020, as a consequence of funds at maturity on the entire remaining FHLB advances assumed by Premier as a part of its acquisition of First Bank of Charleston.  Premier’s subordinated debentures elevated by $39,000 since year-end 2019 because of the accretion of buy accounting honest worth changes utilized to the $6.186 million face worth of the subordinated debentures. 

Stockholders’ fairness of $259.9 million equaled 13.4% of complete belongings at December 31, 2020, which compares to stockholders’ fairness of $240.2 million, or 13.5% of complete belongings, at December 31, 2019.  The enhance in stockholders’ fairness was largely because of the $22.4 million of internet revenue within the 12 months 2020 and a $5.7 million, internet of tax, enhance out there worth of the funding portfolio accessible on the market.  These will increase in stockholders’ fairness had been partially offset by the $0.60 per share of money dividends declared and paid throughout the 4 quarters of 2020. 

Certain Statements contained on this information launch, together with with out limitation statements together with the phrase “believes,” “anticipates,” “intends,” “expects” or phrases of comparable import, represent “forward-looking statements” throughout the which means of part 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements contain identified and unknown dangers, uncertainties and different components that will trigger the precise outcomes, efficiency or achievements of Premier to be materially totally different from any future outcomes, efficiency or achievements of Premier expressed or implied by such forward-looking statements. Furthermore, uncertainty associated to future financial situations ensuing from authorities actions designed to curb the unfold of the COVID-19 virus might have an effect on Premier’s operations kind of than presently estimated.  Such components embody, amongst others, normal financial and enterprise situations, adjustments in enterprise technique or improvement plans and different components referenced on this press launch. Given these uncertainties, potential buyers are cautioned to not place undue reliance on such forward-looking statements. Premier disclaims any obligation to replace any such components or to publicly announce the outcomes of any revisions to any of the forward-looking statements contained herein to mirror future occasions or developments. 

Following is a abstract of the monetary highlights for Premier as of and for the durations ended December 31, 2020

PREMIER FINANCIAL BANCORP, INC.

Financial Highlights

Dollars in Thousands (besides per share information)



For the
Quarter Ended


For the
Year Ended


Dec 31


Dec 31


Dec 31


Dec 31


2020


2019


2020


2019

Interest Income








   Loans, together with charges

16,668


16,283


65,134


65,237

   Investments and different

2,030


2,817


9,337


11,341

      Total curiosity revenue

18,698


19,100


74,471


76,578

Interest Expense








   Deposits

1,090


2,307


6,391


9,009

   Borrowings and different

75


160


422


668

      Total curiosity expense

1,165


2,467


6,813


9,677

   Net curiosity revenue

17,533


16,633


67,658


66,901

Provision for mortgage losses

1,095


(65)


3,450


1,250

   Net curiosity revenue after provision

16,438


16,698


64,208


65,651

Non-interest Income








   Service fees on deposit accounts

913


1,229


3,571


4,661

   Electronic banking revenue

942


848


3,672


3,488

   Other non-interest revenue

255


263


1,203


1,185

      Total non-interest revenue

2,110


2,340


8,446


9,334

Non-Interest Expense








   Salaries and worker advantages

5,103


5,437


21,179


21,485

   Net occupancy and gear

1,448


1,668


6,827


6,909

   Outside information processing

1,709


1,494


6,720


5,782

   OREO bills and writedowns, internet

482


860


1,053


1,550

   Amortization of intangibles

228


212


952


885

   Other non-interest bills

1,964


1,709


7,174


7,153

      Total non-interest expense

10,934


11,380


43,905


43,764

   Income Before Taxes

7,614


7,658


28,749


31,221

Income Taxes

1,674


1,764


6,311


7,025

   NET INCOME

5,940


5,894


22,438


24,196









   EARNINGS PER SHARE

0.40


0.40


1.53


1.65

   DILUTED EARNINGS PER SHARE

0.40


0.40


1.52


1.64

   DIVIDENDS PER SHARE

0.15


0.15


0.60


0.60









Charge-offs

413


251


3,782


1,716

Recoveries

61


47


306


270

   Net charge-offs (recoveries)

352


204


3,476


1,446









PREMIER FINANCIAL BANCORP, INC.

Financial Highlights (continued)

Dollars in Thousands (besides per share information)



Balances as of


December 31


December 31


2020


2019

ASSETS




Cash and due from banks

24,961


23,091

Interest-bearing financial institution balances

174,209


66,063

Federal funds bought

11,306


5,902

Securities accessible on the market

421,190


390,754

Loans (internet)

1,200,862


1,181,753

Other actual property owned

13,215


12,242

Other belongings

48,015


48,189

Goodwill and different intangible belongings

52,064


53,016

   TOTAL ASSETS

1,945,822


1,781,010





LIABILITIES & EQUITY




Deposits

1,633,740


1,495,753

Fed funds/repurchase agreements

33,827


20,428

FHLB borrowings


6,375

Subordinated debentures

5,475


5,436

Other liabilities

12,873


12,777

   TOTAL LIABILITIES

1,685,915


1,540,769

Common Stockholders’ Equity

259,907


240,241

   TOTAL LIABILITIES &

      STOCKHOLDERS’ EQUITY

1,945,822


1,781,010





TOTAL BOOK VALUE PER COMMON SHARE

17.71


16.39

Tangible Book Value per Common Share

14.16


12.77





Non-Accrual Loans

8,996


14,437

Loans 90 Days Past Due and Still Accruing

2,332


2,228

Accruing Troubled Debt Restructured Loans

398


3,020

SOURCE Premier Financial Bancorp, Inc.

HUNTINGTON, W.Va., Feb. 9, 2021 /PRNewswire/ -- PREMIER FINANCIAL BANCORP, INC. (PREMIER), (NASDAQ/GMS: PFBI), a $1.9 billion monetary holding firm with two group financial institution subsidiaries, introduced its monetary outcomes for the fourth quarter of 2020, in addition to the 2020 calendar 12 months.  Premier realized internet revenue of $22,438,000 ($1.52 per diluted share) throughout the 12 months ending December 31, 2020, a $1.76 million, or 7.3%, lower from the $24,196,000 ($1.64 per diluted share) reported for the 12 months ending December 31, 2019.  The lower in internet revenue in 2020 is basically as a consequence of decreases in curiosity revenue and non-interest revenue, coupled with a rise within the provision for mortgage losses and a slight enhance in non-interest expense.  These adjustments that negatively affected internet revenue greater than offset decreases in curiosity expense and revenue tax expense.  A majority of those adjustments had been largely in response to adjustments within the financial system associated to the novel corona virus of 2019 ("COVID-19"), whether or not because of governmental stimulus to depositors and debtors, Federal Reserve Board of Governors' adjustments in rate of interest coverage to stimulate the financial system and/or buyer habits in response to authorities pointers aimed to reduce the unfold of COVID-19, as extra totally defined all through this evaluation beneath.