Exhibit 99.1
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NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
AUGUST 8, 2003 (304) 525-1600
PREMIER FINANCIAL BANCORP, INC.
REPORTS SECOND QUARTER 2003 NET LOSS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $663 million community bank holding company with seven bank
subsidiaries announced its financial results for the second quarter of 2003.
As previously announced on July 31, 2003, Premier recorded a $12.1 million
provision for loan losses at its subsidiary Farmers Deposit Bank (the "Bank") in
the month of June as a result of the findings from the investigation prompted by
conduct of the Bank's former president. As a result, on a consolidated basis
Premier realized a net loss of $7,896,000 for the quarter ending June 30, 2003.
The loss for the second quarter compares to a $1,380,000 loss reported for the
second quarter of 2002 which was also the result of additional loan loss
provisions and OREO writedowns. On a per share basis, Premier's loss for the
second quarter of 2003 was $1.51 per share, compared to a loss of 26 cents per
share for the same quarter last year. In addition to the provision for loan
losses, $558,000 of expense accruals and interest income reversals were recorded
as a result of the investigation. Excluding the transactions related to the Bank
investigation (the "Transactions"), Premier would have realized a net profit for
the quarter ending June 30, 2003 of approximately $458,000.
Premier's year-to-date results were also negatively impacted by the Bank's
investigation findings. Year-to-date results total a net loss of $7,543,000 or
$1.44 per share. Excluding the Transactions, year-to-date net income would have
been $811,000.
Premier's second quarter loss was largely due to its increased provisions for
loan losses. Excluding the $12.1 million provision resulting from the Bank
investigation, Premier's provision for loan losses totaled $1.3 million for the
quarter. While management has not yet exhausted all efforts and means available
to collect these loans, the additional provisions were made in accordance with
Premier's policies regarding the adequacy of the allowance for loan losses which
are in accordance with generally accepted accounting principles. Any collections
on these loans would be presented in future financial statements as recoveries
of the amounts charged against the allowance. As a result, the allowance for
loan losses at June 30, 2003 was 4.36% of total loans compared to 2.61% of total
loans at year-end 2002 and 2.02% of total loans at June 30, 2002.
Net interest income for the quarter ending June 30, 2003 totaled $5.503 million,
an 8.0% decrease from the $5.981 million earned in the first quarter of 2003,
and a 10.5% decrease from the $6.150 million of net interest income earned in
the second quarter of 2002. The decrease was due in part to over $303,000 of
interest income reversals related to the Bank investigation. The remaining
decrease is largely due to a lower volume of loans outstanding at Premier's
other bank subsidiaries. The resulting decline in loan interest income more than
offset the lower interest costs resulting from the decline in market interest
rates over the past year and the repayment of certain borrowed funds.
Net overhead for the quarter ending June 30, 2003 totaled $4.185 million, which
included $255,000 of expenses resulting from the Bank investigation. This
compares to $4.291 million in the first quarter of 2003 and $5.016 million in
the second quarter of 2002. Premier has reduced its overhead expenses by
reducing staff costs and increasing its volume of originating secondary market
mortgages. Net overhead in the second quarter of 2002 also included $932,000 of
writedowns, expenses and sales of OREO compared to $190,000 in the second
quarter of this year.
Total assets as of June 30, 2003 of $663 million were 2.2% less than the $678
million of total assets at year-end, largely due to the impact of the large
provision for loan losses, the planned pay down of $4.7 million of borrowed
funds, the non-renewal of some high rate certificates of deposit and a $3.5
million decline in non-interest bearing deposits. Shareholders' equity of $52.1
million equaled 7.9% of total assets at June 30, 2003. This compares to
shareholders' equity of $59.4 million or 8.8% of total assets at December 31,
2002.
Following is summary information including financial highlights for Premier as
of and for the periods ending June 30, 2003.
For the
Quarter Six Months
Ended Ended
June 30 June 30
Dollars in thousands 2003 2003
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Net Income before Bank investigation transactions 458 811
Impact on net income of transactions related to
Bank investigation
Interest income reversal (303) (303)
Additional provision for loan losses (12,100) (12,100)
Additional non-interest expenses (255) (255)
Income tax benefit 4,304 4,304
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Reported Net Loss (7,896) (7,543)
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PREMIER FINANCIAL BANCORP, INC.
Financial Highlights
Dollars in Thousands (except per share data)
For the For the
Quarter Ended Six Months Ended
June 30 June 30 June 30 June 30
2003 2002 2003 2002
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Interest Income 9,256 11,345 19,249 22,891
Interest Expense 3,753 5,195 7,765 10,767
Net Interest Income 5,503 6,150 11,484 12,124
Provision for Loan Losses 13,386 3,200 14,783 4,186
Net Interest Income
after Provision (7,883) 2,950 (3,299) 7,938
Non-Interest Income 1,067 825 2,192 1,683
Non-Interest Expenses 5,237 5,944 10,464 10,886
Net Income (Loss)
Before Taxes (12,053) (2,169) (11,571) (1,265)
Income Taxes (Benefits) (4,157) (789) (4,028) (529)
NET INCOME (LOSS) (7,896) (1,380) (7,543) (736)
EARNINGS PER SHARE (1.51) (0.26) (1.44) (0.14)
Balances as of
June 30 December 31
2003 2002
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Cash/Due From Banks/Fed Funds 63,915 47,871
Securities Available for Sale 153,846 157,633
Loans (net) 395,591 423,777
Other Real Estate Owned 2,831 3,939
Other Assets 30,574 28,364
Goodwill 16,044 16,044
TOTAL ASSETS 662,801 677,628
LIABILITIES
Deposits 544,105 547,974
Other Debt 36,710 38,486
Trust Preferred Certificates 25,750 28,750
Other Liabilities 4,159 3,052
TOTAL LIABILITIES 610,724 618,262
Stockholders' Equity 52,077 59,366
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 662,801 677,628
TOTAL BOOK VALUE PER SHARE 9.95 11.35
Non-Accrual Loans 8,188 10,588
Loans 90 Days Past Due
and Still Accruing 1,661 1,399