EXHIBIT 99.1
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NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
MAY 6, 2005 (304) 525-1600
PREMIER FINANCIAL BANCORP, INC.
REPORTS FIRST QUARTER 2005 EARNINGS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $538 million community bank holding company with five bank
subsidiaries announced positive earnings results for the first quarter of 2005.
Premier realized net income of $803,000 (15 cents per share) during the quarter
ending March 31, 2005, all from continuing operations, a 57% increase over the
$511,000 of net income reported for the same quarter of 2004. On a per share
basis, Premier earned $0.15 during the first quarter 2005, a 50% increase over
the $0.10 per share earned during first quarter of 2004. The increased earnings
in 2005 were primarily the result of lower interest expense and lower
professional fees which were only partially offset by a higher provision for
loan losses.
The $511,000 of net income reported for the first quarter of 2004 is divided
into $482,000 from continuing operations and $29,000 from discontinued
operations. The discontinued operation was Premier's wholly-owned subsidiary
Citizens Bank (Kentucky), Inc. ("Citizens Bank") which was sold on July 1, 2004.
The following discussion relates only to continuing operations.
Net interest income for the quarter ending March 31, 2005 totaled $4.727
million, compared to $4.446 million of net interest income earned in the first
quarter of 2004 and $4.802 million earned in the fourth quarter of 2004. When
compared to the first quarter of 2004, net interest income has increased by 6.3%
largely due to $291,000 of interest expense savings from the early retirement of
$5.5 million of Premier's trust preferred securities (NASDAQ/NMS-PFBIP) in the
fourth quarter of 2004, the payoff of $5.8 million of bank debt at the holding
company, and a decrease in interest-bearing deposits. The 1.6% decline in net
interest income when compared to the fourth quarter of 2004 is largely due to a
$188,000 decline in interest income on loans resulting from a continuing decline
in loans outstanding at Premier's subsidiary Farmers Deposit Bank and a slight
increase in non-accrual loans. This decline in interest income was partially
offset by additional interest expense savings in the first quarter of 2005.
During the quarter ending March 31, 2005, Premier made provisions to the
allowance for loan losses of $243,000 compared to $135,000 during the same
period of 2004 and $355,000 in the fourth quarter of 2004. These small
fluctuations in the quarterly provisions for loan losses are the result of
providing for loan growth at Premier's performing banks coupled with provisions
resulting from newly deteriorating loans identified in the normal course of
business by Premier's on-going credit risk evaluations. As a result of the
second quarter 2004 charge-off of $4.7 million of previously identified troubled
credits, the allowance for loan losses at March 31, 2005 was 2.88% of total
loans compared to 2.89% of total loans at year-end 2004 and 4.19% of total loans
at March 31, 2004
President and CEO, Robert W. Walker commented, "We are excited about the
improvement in our earnings for the first quarter of 2005 as we build upon the
momentum we have been creating. Our debt reduction plans are bearing fruit in
the form of lower interest costs. Our credit administration policies are bearing
fruit in the form of consistent and reasonable provisions to the allowance for
loan losses. And our efforts to reduce our operating expenses through
operational synergies are bearing fruit in the form of lower net overhead
expenses. Our plans for additional operating synergies are currently making a
giant leap forward in the second quarter as we convert our data and item
processing systems to a third party provider. While there will be some
short-term costs to convert in the second quarter, we believe the long-term
operating synergies should more than offset these costs as we will be able to
take advantage of emerging technologies in information and item processing, now
and in the years to come."
Net overhead for the quarter ending March 31, 2005 totaled $3.327 million. This
compares to $3.626 million in the first quarter of 2004, and $3.714 million in
the fourth quarter of 2004. When compared to the first quarter of 2004 and the
prior calendar quarter (4th Qtr 2004), lower professional fee expense and taxes
not on income in 2005 were partially offset by higher staff costs, conversion
and training expenses, and a one-time loss on the disposal of a bond servicing
operation in 2005. The fourth quarter of 2004 also included $214,000 of one-time
expenses related to the early redemption of Premier's trust preferred
securities.
Total assets as of March 31, 2005 of $538 million were relatively unchanged from
the $537 million of total assets at year-end. However, the decrease in other
liabilities resulting from the March 31, 2005 payment of the 9.75%
interest-bearing deferred distributions on the trust preferred securities was
replaced with by a $6.6 million increase in interest bearing deposits (at a
substantially lower interest cost). Shareholders' equity of $50.6 million
equaled 9.4% of total assets at March 31, 2005 which compares to shareholders'
equity of $51.0 million or 9.5% of total assets at December 31, 2004. The
decline in shareholders' equity is due to a continuing decline in the market
value of the securities portfolio resulting from the recent increases in the
interest rate environment. Premier invests in high quality debt securities of
U.S. Government agencies and fully expects to receive the face value of these
securities upon their maturity.
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
period ending March 31, 2005.
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights
Dollars in Thousands (except per share data)
For the Quarter Ended
March 31 March 31
2005 2004
Interest Income 7,045 7,055
Interest Expense 2,318 2,609
Net Interest Income 4,727 4,446
Provision for Loan Losses 243 135
Net Interest Income after Provision 4,484 4,311
Non-Interest Income 907 846
Securities Transactions - 10
Non-Interest Expenses 4,234 4,472
Income from Continuing Operations Before Taxes 1,157 695
Income Taxes 354 213
Income from Continuing Operations 803 482
Income from Discontinued Operations - 29
NET INCOME 803 511
EARNINGS PER SHARE 0.15 0.10
FROM CONTINUING OPERATIONS 0.15 0.09
Charge-offs 550 1,067
Recoveries 190 383
Net Charge-offs 360 684
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
March 31 December 31
2005 2004
ASSETS
Cash/Due From Banks/Fed Funds 38,869 31,816
Securities Available for Sale 148,757 153,892
Loans (net) 312,979 315,543
Other Real Estate Owned 2,444 2,247
Other Assets 18,893 17,941
Goodwill 15,816 15,816
TOTAL ASSETS 537,758 537,255
LIABILITIES
Deposits 445,042 437,798
Fed Funds/Repurchase Agreements 7,293 9,046
Other Debt 10,523 11,490
Junior Subordinated Debentures 20,876 20,876
Other Liabilities 3,412 7,016
TOTAL LIABILITIES 487,146 486,226
Stockholders' Equity 50,612 51,029
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 537,758 537,255
TOTAL BOOK VALUE PER SHARE 9.67 9.75
Non-Accrual Loans 7,028 6,847
Loans 90 Days Past Due and Still Accruing 620 739