Exhibit 99.1
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NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
MARCH 3, 2005 (304) 525-1600
PREMIER FINANCIAL BANCORP, INC.
ANNOUNCES 2004 ANNUAL EARNINGS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $537 million community bank holding company with five bank
subsidiaries, announced positive earnings results for the fourth quarter and
full year of 2004. Premier realized net income from continuing operations of
$559,000 (11 cents per share) during the quarter ending December 31, 2004. This
compares to $448,000 (9 cents per share) of net income from continuing
operations in the third quarter of 2004 and a net loss from continuing
operations of ($596,000) or ($0.11 per share) reported for the fourth quarter of
2003. Included in the $559,000 of fourth quarter 2004 net income from continuing
operations was $83,000 of after tax income from the collection settlement on a
customer loan and $141,000 of after tax expenses related to the accelerated
amortization of trust preferred issuance costs. For the year ended December 31,
2004, Premier realized net income of $6,697,000 which includes $4,730,000 of
gain on the sale of discontinued operations and $1,963,000 of net income from
continuing operations. [Net income from continuing operations excludes the
operations of Citizens Bank (Kentucky), Inc., the subsidiary that was sold on
July 1, 2004. The following discussion relates only to continuing operations.]
Net interest income for the quarter ending December 31, 2004 totaled $4.802
million, compared to $4.480 million of net interest income earned in the fourth
quarter of 2003 and $4.418 million earned in the third quarter of 2004. When
compared to the third quarter of 2004, net interest income increased by 8.7% due
to a $238,000 increase in interest income ($60,000 from the loan settlement
described above) and a $146,000 decrease in interest expense largely due to
outstanding debt reductions. The increase in 2004 net interest income when
compared to the fourth quarter of 2003 is the result of interest expense savings
on lower outstanding debt and lower rates paid on interest bearing deposits
partially offset by lower interest income from loans outstanding and the
significant volume ($6.1 million at December 31, 2004) of loans on non-accrual
at Premier's subsidiary Farmers Deposit Bank.
During the quarter ending December 31, 2004, Premier made provisions for loan
losses of $355,000 compared to $2,125,000 during the same period of 2003 and
$162,000 in the third 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 increase in the provision
in the fourth quarter of 2004 versus the third quarter of 2004 was the result of
providing for loan growth and additional risk of probable losses identified in
the loan portfolio during the fourth quarter. As a result of charge-offs of
loans already identified as having significant loss potential, the allowance for
loan losses at December 31, 2004 was 2.89% of total loans compared to 4.31% of
total loans at year-end 2003.
President and CEO Robert W. Walker commented, "We are pleased to report our
fourth consecutive quarter of net income from continuing operations. The gain on
the sale of our subsidiary has restored the capital ratios of the company and
provided significant liquidity at the parent company. In the fourth quarter, we
used a portion of the proceeds from the sale to redeem $5.5 million of
outstanding trust preferred securities in an effort to reduce our interest
expense. While total loans at Farmers Deposit Bank have declined due to on-going
loan collection efforts, our other affiliate banks increased their total loans
outstanding by $4.9 million or 1.8% during the fourth quarter of 2004.
Furthermore, the level of non-performing assets and non-accrual loans continues
to improve. We are looking forward to our plans to continue these trends in
2005."
Net overhead (non-interest expenses less non-interest income excluding
securities transactions) for the quarter ending December 31, 2004 totaled $3.714
million. This compares to $3.717 million in the fourth quarter of 2003, and
$3.599 million in the third quarter of 2004. Net overhead for the fourth quarter
of 2004 includes $214,000 of accelerated amortization of trust preferred
issuance costs due to the early redemptions and is also reduced by $65,000 of
reimbursed collections costs related to the loan settlement discussed above. Net
overhead in the third quarter of 2004 includes a $165,000 writedown of premises
owned by Premier and leased to Premier's former subsidiary. This building was
marketed during the third quarter and a sale was completed in October 2004. When
compared to the fourth quarter of 2003, increased professional fee expense and
staff costs in 2004 were more than offset by gains on the liquidation of OREO
properties, lower OREO expenses and lower bad check losses. These expense
savings were equally offset by lower other non-interest income. When compared to
the prior calendar quarter (third quarter of 2004), higher professional fees and
occupancy expenses were only partially offset by lower staff costs, lower other
operating expenses and gains on the liquidation of OREO properties.
Total assets of continuing operations as of December 31, 2004 of $537 million
were $6.0 million or 1.1% less than the $543 million of total assets of
continuing operations at year-end 2003, largely due to using the proceeds from
the sale of the bank subsidiary to reduce outstanding debt and using loan
repayment proceeds to satisfy deposit withdrawals at Farmers Deposit Bank.
Shareholders' equity of $51.0 million equaled 9.5 % of total assets at December
31, 2004. This compares to shareholders' equity of $45.5 million which was 7.3%
of total assets and 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 December 31, 2004.
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights
Dollars in Thousands (except per share data)
For the For the
Quarter Ended Year Ended
Dec 31 Dec 31 Dec 31 Dec 31
2004 2003 2004 2003
-------- -------- -------- --------
Interest Income $7,189 $7,280 $28,121 $31,729
Interest Expense 2,387 2,800 10,057 12,547
Net Interest Income 4,802 4,480 18,064 19,182
Provision for Loan Losses 355 2,125 1,026 20,513
Net Interest Income
after Provision 4,447 2,355 17,038 (1,331)
Non-Interest Income 870 975 3,506 3,448
Securities Transactions 90 410 100 616
Non-Interest Expenses 4,584 4,692 17,782 17,632
Income (Loss) from Continuing
Operations Before Taxes 823 (952) 2,862 (14,899)
Income Taxes (Benefit) 264 (356) 899 (5,282)
Income (Loss) from
Continuing Operations 559 (596) 1,963 (9,617)
Income (Loss) from
Discontinued Operation - 2 4,734 (80)
NET INCOME (LOSS) 559 (594) 6,697 (9,697)
EARNINGS (LOSS) PER SHARE 0.11 (0.11) 1.28 (1.85)
FROM CONTINUING OPERATIONS 0.11 (0.11) 0.38 (1.84)
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
December 31 December 31
2004 2003
ASSETS
Cash/Due From Banks/Fed Funds 31,816 33,473
Securities Available for Sale 153,892 147,646
Loans (net) 315,543 317,494
Other Real Estate Owned (OREO) 2,611 3,187
Other Assets 17,577 25,613
Goodwill 15,816 15,816
Assets of Discontinued Operation - 79,163
TOTAL ASSETS 537,255 622,392
LIABILITIES
Deposits 437,798 455,474
Fed Funds/Repurchase Agreements 9,046 0
Other Debt 11,490 18,307
Junior Subordinated Debentures 20,876 26,546
Other Liabilities 7,016 5,129
Liabilities of Discontinued Operations - 71,396
TOTAL LIABILITIES 486,226 576,852
Stockholders' Equity 51,029 45,540
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 537,255 622,392
TOTAL BOOK VALUE PER SHARE 9.75 8.70
Non-Accrual Loans 6,847 11,958
Loans 90 Days Past Due and Still Accruing 739 4,137