NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
OCTOBER 29, 2004 (304) 525-1600
PREMIER FINANCIAL BANCORP, INC.
REPORTS THIRD QUARTER 2004 EARNINGS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $551 million community bank holding company with six bank
subsidiaries, announced positive earnings results for the third quarter of 2004.
Premier realized net income of $5,178,000 (99 cents per share) during the
quarter ending September 30, 2004. Included in the $5,178,000 of third quarter
net income is a $4,730,000 after tax gain on the sale of a subsidiary bank. The
$448,000 (9 cents per share) of net income from continuing operations in the
third quarter of 2004 compares to a ($1,877,000) ($0.36 per share) net loss from
continuing operations reported for the third quarter of 2003 and a $474,000 (9
cents per share) net income from continuing operations reported for the second
quarter of 2004. Included in the $448,000 of third quarter 2004 net income from
continuing operations is a $109,000 after tax writedown on property leased to
the former subsidiary. [Net income from continuing operations excludes the
operations of the subsidiary that was sold on July 1, 2004, Citizens Bank
(Kentucky), Inc. The following discussion relates only to continuing
operations.]
Net interest income for the quarter ending September 30, 2004 totaled $4.418
million, compared to $4.671million of net interest income earned in the third
quarter of 2003 and $4.398 million earned in the second quarter of 2004. When
compared to the second quarter of 2004, net interest income has increased
slightly and 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 and other debt. The decline in 2004 net interest income when
compared to the third quarter of 2003 is the result of lower loans outstanding
and the significant volume ($6.6 million at September 30, 2004) of loans on
non-accrual at Premier's subsidiary Farmers Deposit Bank.
During the quarter ending September 30, 2004, Premier made provisions for loan
losses of $162,000 compared to $4,343,000 during the same period of 2003 and
$374,000 in the second quarter of 2004. The significant provision in the prior
year was primarily the result of loan problems identified at Farmers Deposit
Bank as more fully discussed in previous filings. The decrease in the provision
in the third quarter of 2004 versus the second quarter of 2004 was the result of
providing for additional risk of probable losses identified in the loan
portfolio during the second quarter. As a result of charge-offs of loans already
identified as having significant loss potential, the allowance for loan losses
at September 30, 2004 was 2.83% of total loans compared to 4.31% of total loans
at year-end 2003 and 3.98% of total loans at September 30, 2003.
President and CEO Robert W. Walker commented, "We are pleased to report our
third consecutive quarter of net income from continuing operations. The gain on
the sale of our subsidiary has restored the capital ratios of the company. We
are using the proceeds from the sale to reduce our outstanding debt and thus
improve future profitability. In September, we reduced our bank debt by $3.0
million and on October 15th, we redeemed $4.5 million of our junior subordinated
debentures. We believe both of these transactions will improve our future net
interest margin. Also during the third quarter, our investment portfolio
increased by approximately $8.0 million while total loans outstanding increased
by approximately $2.8 million."
Net overhead (non-interest expenses less non-interest income) for the quarter
ending September 30, 2004 totaled $3.599 million. This compares to $3.315
million in the third quarter of 2003, and $3.337 million in the second quarter
of 2004. Net overhead for the third quarter of 2004 includes a $165,000
writedown of premises owned by the parent and leased to Premier's former
subsidiary. This building was marketed during the third quarter and a sale was
completed in October. When compared to the third quarter of 2003, increased
professional fee expense and staff costs in 2004 were partially offset by lower
occupancy expenses, OREO writedowns and bad check losses. When compared to the
prior calendar quarter (second quarter of 2004), lower non-interest income,
higher staff costs, higher occupancy expenses and higher other operating
expenses were only partially offset by gains on the liquidation of OREO
properties, and slightly lower professional fees and other taxes.
Total assets of continuing operations as of September 30, 2004 of $551 million
were $8.2 million or 1.5% greater than the $543 million of total assets of
continuing operations at year-end, largely due to the proceeds from the sale of
the bank subsidiary. The increase due to the sale proceeds has been partially
offset by loan collections at Farmers Deposit exceeding loan growth at Premier's
other subsidiary banks and the reduction in other debt. Shareholders' equity of
$51.2 million equaled 9.3% of total assets at September 30, 2004. This compares
to shareholders' equity of $45.5 million or 7.3% of total assets or 8.4% of
assets of continuing operations 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 September 30, 2004.
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights
Dollars in Thousands (except per share data)
For the For the
Quarter Ended Nine Months Ended
Sept 30 Sept 30 Sept 30 Sept 30
2004 2003 2004 2003
-------- -------- -------- --------
(Restated) (Restated)
Interest Income $6,951 $7,665 $20,932 $24,449
Interest Expense 2,533 2,994 7,670 9,747
Net Interest Income 4,418 4,671 13,262 14,702
Provision for Loan Losses 162 4,343 671 18,388
Net Interest Income
after Provision 4,256 328 12,591 (3,686)
Non-Interest Income 884 923 2,646 2,473
Securities Transactions - 2 10 206
Non-Interest Expenses 4,483 4,238 13,198 12,940
Income (Loss) from Continuing
Operations Before Taxes 657 (2,985) 2,039 (13,941)
Income Taxes (Benefit) 209 (1,108) 636 (4,926)
Income (Loss) from
Continuing Operations 448 (1,877) 1,404 (9,021)
Income (Loss) from
Discontinued Operation 4,730 21 4,734 (82)
NET INCOME (LOSS) 5,178 (1,856) 6,138 (9,103)
EARNINGS (LOSS) PER SHARE 0.99 (0.36) 1.17 (1.39)
FROM CONTINUING OPERATIONS 0.09 (0.35) 0.27 (1.37)
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
September 30 December 31
2004 2003
-------- --------
ASSETS
Cash/Due From Banks/Fed Funds 44,640 33,473
Securities Available for Sale 155,035 147,646
Loans (net) 315,278 317,494
Other Real Estate Owned 1,431 3,187
Other Assets 19,260 25,613
Goodwill 15,816 15,816
Assets of Discontinued Operation - 79,163
TOTAL ASSETS 551,460 622,392
LIABILITIES
Deposits 446,543 455,474
Fed Funds/Repurchase Agreements 7,187 -
Other Debt 11,847 18,307
Junior Subordinated Debentures 26,546 26,546
Other Liabilities 8,184 5,129
Liabilities of Discontinued Operation - 71,396
TOTAL LIABILITIES 500,307 576,852
Stockholders' Equity 51,153 45,540
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 551,460 622,392
TOTAL BOOK VALUE PER SHARE 9.78 8.70
Non-Accrual Loans 9,467 11,958
Loans 90 Days Past Due and Still Accruing 1,020 4,137