NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
AUGUST 10, 2004 (304) 525-1600
(
PREMIER FINANCIAL BANCORP, INC.
REPORTS SECOND QUARTER 2004 EARNINGS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $613 million community bank holding company with six bank
subsidiaries, announced positive earnings results for the second quarter of
2004. Premier realized net income of $449,000 (9 cents per share) during the
quarter ending June 30, 2004, $474,000 from continuing operations and a loss of
$25,000 from discontinued operations. [The discontinued operation is Premier's
former subsidiary Citizens Bank (Kentucky), Inc. ("Citizens Bank") which was
sold on July 1, 2004. The following discussion relates only to continuing
operations.] The $474,000 of income from continuing operations in the second
quarter of 2004 compares to a ($6,779,000) ($1.31 per share) net loss reported
for the second quarter of 2003 and a $482,000 (10 cents per share) net income
reported for the first quarter of 2004.
Net interest income for the quarter ending June 30, 2004 totaled $4.398 million,
compared to $4.930 million of net interest income earned in the second quarter
of 2003 and $4.446 million earned in the first quarter of 2004. When compared to
the first quarter of 2004, net interest income has remained relatively stable
from quarter to quarter as declines in loan interest income have been
substantially offset by declines in interest expense on deposits. The decline in
2004 net interest income when compared to the second quarter of 2003 is the
result of lower loans outstanding and the significant volume ($6.2 million at
June 30, 2004) of loans on non-accrual at Premier's subsidiary Farmers Deposit
Bank.
During the quarter ending June 30, 2004, Premier made provisions to the
allowance for loan losses of $374,000 compared to $11,778,000 during the same
period of 2003 and $135,000 in the first quarter of 2004. The significant
provision in the prior year was primarily the result of loan problems identified
at Farmers Deposit Bank after the former president of the bank resigned. The
increase in the provision in the second quarter of 2004 versus the first quarter
of 2004 was the result of loan growth and providing for additional risk of
probable losses identified in the loan portfolio. As a result, the allowance for
loan losses at June 30, 2004 was 3.10% of total loans compared to 4.31% of total
loans at year-end 2003 and 4.60% of total loans at June 30, 2003.
President and CEO Robert W. Walker commented, "We are pleased to report our
second quarter results and our trend in net income from continuing operations.
We have continued to work diligently on reducing our non-performing assets. At
the same time, we have reduced our overall net overhead costs and generated loan
growth in our West Virginia and Ohio markets. On July 1, 2004, Premier completed
the sale of its subsidiary Citizens Bank (Kentucky), Inc. in Georgetown,
Kentucky. In addition to the profit from the sale, we believe the increased
liquidity will expand our opportunities to increase revenue and reduce our
operating costs."
Net overhead for the quarter ending June 30, 2004 totaled $3.337 million. This
compares to $3.524 million in the second quarter of 2003, and $3.626 million in
the first quarter of 2004. When compared to the second quarter of 2003,
increased professional fee expense in 2004 was more than offset by lower staff
costs, occupancy expenses, OREO writedowns and bad check losses plus an increase
in non-interest income, primarily service charges on deposit accounts. When
compared to the prior calendar quarter (first quarter of 2004), increases in
non-interest income, primarily service charges on deposit accounts, and a gain
on the liquidation of OREO properties were complemented by lower staff costs,
professional fees, and other operating expenses.
Total assets from continuing operations as of June 30, 2004 of $538 million were
1.0% less than the $543 million of total assets of continuing operations at
year-end, largely due to loan collections at Farmers Deposit exceeding loan
growth at Premier's other subsidiary banks. Shareholders' equity of $44.6
million equaled 7.3% of total assets at June 30, 2004 and 8.3% of total assets
of continuing operations. This compares to shareholders' equity of $45.5 million
or 7.3% of total assets at December 31, 2003.
Certain Statements contained in this news release, including without limitation
statements including the word "believes," "anticipates," "intends," "expects" or
words of similar import, constitute "forward-looking statements" within the
meaning of section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of Premier to be materially different from any
future results, performance or achievements of Premier expressed or implied by
such forward-looking statements. Such factors include, among others, general
economic and business conditions, changes in business strategy or development
plans and other factors referenced in this press release. Given these
uncertainties, prospective investors are cautioned not to place undue reliance
on such forward-looking statements. Premier disclaims any obligation to update
any such factors or to publicly announce the results of any revisions to any of
the forward-looking statements contained herein to reflect future events or
developments.
Following is a summary of the financial highlights for Premier as of and for the
periods ending June 30, 2004.
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
2004 2003 2004 2003
-------- -------- -------- --------
(Restated) (Restated)
Interest Income 6,926 8,178 13,981 16,784
Interest Expense 2,528 3,248 5,137 6,753
Net Interest Income 4,398 4,930 8,844 10,031
Provision for Loan Losses 374 11,778 509 14,045
Net Interest Income
after Provision 4,024 (6,848) 8,335 (4,014)
Non-Interest Income 906 826 1,752 1,550
Securities Transactions - 15 10 204
Non-Interest Expenses 4,243 4,350 8,715 8,702
Income (Loss) from Continuing
Operations Before Taxes 687 (10,357) 1,382 (10,956)
Income Taxes (Benefit) 213 (3,578) 426 (3,818)
Income (Loss) from
Continuing Operations 474 (6,779) 956 (7,144)
Income (Loss) from
Discontinued Operations (25) (76) 4 (103)
NET INCOME (LOSS) 449 (6,855) 960 (7,247)
EARNINGS (LOSS) PER SHARE 0.09 (1.31) 0.18 (1.39)
FROM CONTINUING OPERATIONS 0.09 (1.30) 0.18 (1.37)
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
June 30 December 31
2004 2003
-------- -------
ASSETS
Cash/Due From Banks/Fed Funds 34,480 33,473
Securities Available for Sale 147,172 147,646
Loans (net) 312,078 317,494
Other Real Estate Owned 2,431 3,187
Other Assets 25,695 25,613
Goodwill 15,816 15,816
Assets of Discontinued Operation 75,873 79,163
TOTAL ASSETS 613,545 622,392
LIABILITIES
Deposits 441,932 455,474
Fed Funds/Repurchase Agreements 7,214 0
Other Debt 18,256 18,307
Junior Subordinated Debentures 26,546 26,546
Other Liabilities 6,761 5,129
Liabilities of Discontinued Operations 68,225 71,396
TOTAL LIABILITIES 568,934 576,852
Stockholders' Equity 44,611 45,540
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 613,545 622,392
TOTAL BOOK VALUE PER SHARE 8.53 8.70
Non-Accrual Loans 8,216 11,958
Loans 90 Days Past Due and Still Accruing 1,156 4,137