EXHIBIT 99.1
------------
NEWS FOR IMMEDIATE RELEASE CONTACT: BRIEN M. CHASE, CFO
AUGUST 4, 2005 (304) 525-1600
PREMIER FINANCIAL BANCORP, INC.
REPORTS SECOND QUARTER 2005 EARNINGS
PREMIER FINANCIAL BANCORP, INC. (PREMIER), HUNTINGTON, WEST VIRGINIA
(NASDAQ/NMS-PFBI), a $537 million community bank holding company with five bank
subsidiaries, announced its sixth consecutive quarter of positive earnings
results. Premier realized net income of $727,000 (14 cents per share) during the
quarter ending June 30, 2005, a 53% increase over the $474,000 of income from
continuing operations reported for the second quarter of 2004. On a per share
basis, Premier earned $0.14 during the second quarter 2005, a 56% increase over
the $0.09 per share earned during the second quarter of 2004. The increased
earnings in 2005 were primarily the result of an increase in net interest
income, a lower provision for loan losses, and lower professional fees which
were only partially offset by higher staff costs and other operating expenses.
Premier reported $449,000 of net income for the second quarter of 2004 which
consisted of $474,000 from continuing operations and a $25,000 loss 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 June 30, 2005 totaled $4.893 million,
compared to $4.398 million of net interest income earned in the second quarter
of 2004 and $4.727 million earned in the first quarter of 2005. When compared to
the second quarter of 2004, net interest income has increased 11.3% largely due
to increases in interest income from investments and $313,000 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
payment of $5.0 million of interest-bearing deferred distributions on the trust
preferred securities in March 2005, and the payoff of $4.5 million of bank debt
at the holding company since June 30, 2004. The 3.5% increase in net interest
income when compared to the first quarter of 2005 is largely due to a 1.2%
increase in interest income on loans and $120,000 of interest expense savings
resulting from the $5.0 million payment of interest-bearing deferred trust
preferred distributions in March 2005. These savings were partially offset by an
increase in interest expense on deposits.
During the quarter ending June 30, 2005, Premier made provisions to the
allowance for loan losses of $191,000 compared to $374,000 during the same
period of 2004 and $243,000 in the first quarter of 2005. 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 ongoing credit risk evaluations. As a result of the
charge-off of previously identified troubled credits and a slight increase in
total loans outstanding, the allowance for loan losses at June 30, 2005 was
2.74% of total loans compared to 2.89% of total loans at year-end 2004 and 2.97%
of total loans at June 30, 2004.
President and CEO Robert W. Walker commented, "We are pleased with our second
quarter results and our continuing trend in quarterly net income. Our net
interest income achieved the highest result since the second quarter of 2003. We
successfully converted to the FiServ system in the second quarter and look
forward to optimizing our ability to utilize the new data systems to improve
customer service, streamline operations and enhance profitability."
Net overhead for the quarter ending June 30, 2005 totaled $3.660 million. This
compares to $3.337 million in the second quarter of 2004, and $3.327 million in
the first quarter of 2005. The increase in net overhead in the quarter ending
June 30, 2005 is largely due to one-time costs associated with converting
Premier's data processing from an in-house operation to an outsourced provider.
These costs also include the expensing of the remaining in-house data processing
equipment. Furthermore, when compared to the second quarter of 2004, lower
professional fees in 2005 were partially offset by higher staff costs in 2005.
Total assets as of June 30, 2005 of $537 million were unchanged from the $537
million of total assets at year-end 2004. 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 by a $9.8 million increase in interest bearing deposits (at a
substantially lower interest cost). Shareholders' equity of $52.3 million
equaled 9.7% of total assets at June 30, 2005 which compares to shareholders'
equity of $51.0 million or 9.5% of total assets at December 31, 2004. The
increase in shareholders' equity was largely due to the $1.5 million of net
income through June 30, 2005 which was partially offset by a decline in the
market value of the securities portfolio. 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
periods ending June 30, 2005.
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
2005 2004 2005 2004
Interest Income $ 7,172 $ 6,926 $ 14,217 $ 13,981
Interest Expense 2,279 2,528 4,597 5,137
Net Interest Income 4,893 4,398 9,620 8,844
Provision for Loan Losses 191 374 434 509
Net Interest Income after Provision 4,702 4,024 9,186 8,335
Non-Interest Income 991 906 1,897 1,752
Securities Transactions - - - 10
Non-Interest Expenses 4,651 4,243 8,884 8,715
Income from Continuing Operations Before Taxes 1,042 687 2,199 1,382
Income Taxes 315 213 669 426
Income from Continuing Operations 727 474 1,530 956
Income (Loss) from Discontinued Operations - (25) - 4
NET INCOME $ 727 $ 449 $ 1,530 $ 960
EARNINGS PER SHARE $ 0.14 $ 0.09 $ 0.29 $ 0.18
FROM CONTINUING OPERATIONS 0.14 0.09 0.29 0.18
PREMIER FINANCIAL BANCORP, INC.
Financial Highlights (continued)
Dollars in Thousands (except per share data)
Balances as of
June 30 December 31
2005 2004
ASSETS
Cash/Due From Banks/Fed Funds $ 32,236 $ 31,816
Securities Available for Sale 151,196 153,892
Loans (net) 317,198 315,543
Other Real Estate Owned 2,345 2,247
Other Assets 18,318 17,941
Goodwill 15,816 15,816
TOTAL ASSETS $ 537,109 $ 537,255
LIABILITIES
Deposits $ 443,968 $ 437,798
Fed Funds/Repurchase Agreements 7,650 9,046
Other Debt 10,260 11,490
Junior Subordinated Debentures 20,876 20,876
Other Liabilities 2,056 7,016
TOTAL LIABILITIES 484,810 486,226
Stockholders' Equity 52,299 51,029
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 537,109 $ 537,255
TOTAL BOOK VALUE PER SHARE $ 10.00 $ 9.75
Non-Accrual Loans $ 6,206 $ 6,847
Loans 90 Days Past Due and Still Accruing 676 739