Premier Financial Corp. Announces Strong Quarterly and Annual Earnings and Dividend Increase

Date Set for CEO Transition
Buybacks Authorization Increased

Fourth Quarter 2020 Highlights

  • Increased common stock dividend 9.1% to $0.24 per share
  • Net income of $30.8 million, or $32.6 million excluding merger-related expenses, compared to $12.5 million, or $13.2 million excluding merger-related expenses, for 2019 fourth quarter
  • Earnings per share of $0.82, or $0.87 excluding merger-related expenses, compared to $0.63, or $0.66 excluding merger-related expenses, for 2019 fourth quarter
  • Allowance to Loans ratio of 1.49%, or 1.61% excluding PPP loans
  • Average loan growth of $53.5 million, or 4% annualized growth
  • Average deposit growth of $218.5 million, or 15% annualized growth
  • Pre-tax pre-provision ROAA of 1.81%, or 1.94% excluding merger-related expenses, compared to 1.92%, or 2.02% excluding merger-related expenses, for 2019 fourth quarter
  • Efficiency ratio of 56.0%, or 53.0% core, compared to 59.5%, or 57.4% core, for 2019 fourth quarter

Full Year 2020 Highlights

  • Net income of $63.1 million, or $99.3 million excluding merger-related provision and expenses, compared to $49.4 million, or $50.7 million excluding merger-related expenses, for 2019
  • Earnings per share of $1.75, or $2.76 excluding merger-related provision and expenses, compared to $2.48, or $2.54 excluding merger-related expenses, for 2019
  • Total loan growth of $2.7 billion, including $2.3 billion from UCFC merger and $0.4 billion organically, or 15% growth
  • Total deposit growth of $3.2 billion, including $2.1 billion from UCFC merger and $1.1 billion organically, or 38% growth
  • Pre-tax pre-provision ROAA of 1.87%, or 2.17% excluding merger-related expenses, compared to 1.93%, or 1.98% excluding merger-related expenses, for 2019
  • Efficiency ratio of 57.3%, or 50.1% core, compared to 60.1%, or 59.2% core, for 2019
  • ROAA of 0.96%, or 1.51% excluding merger-related provision and expenses
  • ROAE of 7.02%, or 11.06% excluding merger-related provision and expenses

DEFIANCE, Ohio--()--Premier Financial Corp. (Nasdaq: PFC) (“Premier” or the “Company”) announced today 2020 fourth quarter and year-end results including solid core profitability. On a GAAP basis, net income for the fourth quarter of 2020 was $30.8 million, or $0.82 per diluted common share, compared to net income of $12.5 million, or $0.63 per diluted common share, for the fourth quarter of 2019. Net income for the year ended December 31, 2020, was $63.1 million, or $1.75 per diluted common share, compared to $49.4 million, or $2.48 per diluted common share, for the year ended December 31, 2019. The year-over-year comparisons are substantially impacted by the acquisition of United Community Financial Corp. (“UCFC”) on January 31, 2020. The current year’s results include the impact of $2.2 million and $19.5 million of acquisition-related charges for the three and twelve months ended December 31, 2020, respectively, which had after-tax costs of $1.7 million and $15.8 million, respectively, or $0.05 and $0.44 per diluted common share, respectively. The three and twelve months ended December 31, 2019, included $0.9 million and $1.4 million of acquisition-related charges, respectively, which had after-tax costs of $0.7 million and $1.1 million, respectively, or $0.03 and $0.06 per diluted common share, respectively. Additionally, the current year’s twelve month provision expense of $44.3 million included $25.9 million related to acquisition accounting for an after-tax cost of $20.5 million, or $0.57 per diluted common share. The full year of 2019 included a provision expense of $2.9 million and no acquisition impact. Excluding the impact of the acquisition-related provision and charges, earnings for the three and twelve months ended December 31, 2020, were $32.6 million and $99.3 million, respectively, or $0.87 and $2.76 per diluted common share, respectively.

“With core earnings per share up almost 9% from last year, we are proud to announce our eighth consecutive year of record core earnings performance,” said Donald P. Hileman, CEO of Premier. “Improving credit conditions and the successful completion of integration efforts in the fourth quarter paved the way to the strong finish for the year.”

CEO transition

The Boards of Directors and Donald P. Hileman set the date for his transition from CEO of Premier Financial Corp. and Premier Bank to Executive Chairman of both Boards of Directors at March 31, 2021, consistent with plans outlined in the Agreement and Plan of Merger between the Company and UCFC, dated September 9, 2019. On April 1, 2021, Gary M. Small will become CEO and President of both Premier Financial Corp. and Premier Bank and remain a member of the Boards of Directors.

“Don’s strong leadership as CEO over the past seven years and through the UCFC merger has been instrumental in creating a strong foundation for the continued success of the company,” said Gary M. Small, President of Premier. “We’ve worked closely over the past 16 months, preparing to ensure this is a smooth transition.”

Integration update

As previously announced, on January 31, 2020, the Company completed the strategic merger of equals with UCFC under which UCFC merged into Premier in a stock-for-stock transaction. The year-over-year comparison of Company results is substantially impacted by the UCFC merger, with 2020 fourth quarter and full year results including three and eleven months of operations from UCFC, respectively, compared to none for the comparable periods in 2019. In June, the Company launched its newly designed logo and brand identity for Premier Financial Corp. and Premier Bank. The new tagline “Powered by People” honors the longstanding commitment both organizations have to their customers, communities and employees. In July, Premier Bank successfully completed its core systems conversion. The integration of teams, systems and processes for the combined organization was completed as expected.

“The fourth quarter and full-year performance reflected the benefits of our combined organization and the ability of our team to produce top-tier results in a very challenging environment,” said Small. “We are very pleased with our position as we enter 2021 and continue to implement enhancements designed to deliver a top-quality customer experience and exceptional performance.”

Business client support efforts

As a part of the CARES Act, the Small Business Administration created the Paycheck Protection Program (“PPP”) to provide small businesses with loans as a direct incentive to keep their workers on the payroll. Premier Bank actively participated in PPP for clients and made 2,880 loans for a total of $443.3 million for the year ended December 31, 2020. Total gross fees for these loans totaled $14.8 million. Premier Bank recognized $3.6 million and $8.0 million as loan interest income during the three and twelve months ended December 31, 2020, respectively. During the three months ended December 31, 2020, a total of $56.4 million in loans were extinguished; and Premier Bank recognized approximately $0.8 million of accelerated fees in loan interest income.

Net interest income up compared to fourth quarter of 2019

Net interest income of $55.0 million in the fourth quarter of 2020 was up from $29.5 million in the fourth quarter of 2019. The increase over the prior year’s fourth quarter was attributable to organic growth and three months of income from UCFC compared to none in 2019. Net interest margin was 3.47% for the fourth quarter of 2020, consistent with 3.47% in the third quarter of 2020, and down from 3.80% in the fourth quarter of 2019. Yield on interest earning assets decreased to 3.84% in the fourth quarter of 2020, down seven basis points from 3.91% in the third quarter of 2020. Total cost of funds decreased eight basis points in the fourth quarter of 2020 to 0.39% from 0.47% in the third quarter of 2020 while the total cost of interest-bearing liabilities decreased 15 basis points to 0.47% from 0.62%. The 2020 fourth quarter results include the impact of acquisition marks and related accretion for the UCFC acquisition. Interest income includes $0.7 million of accretion and interest expense includes $0.6 million of accretion, which combined added 10 basis points of net interest margin. The fourth quarter results also include the impact of PPP loans. Interest income includes $3.6 million on average balances of $426.5 million, which increased net interest margin by one basis point. Excluding the impact of acquisition marks and PPP loans, net interest margin would be 3.36% for the fourth quarter of 2020 compared to 3.41% for the third quarter of 2020.

“The beginning of PPP loan forbearances and accelerated fees in the fourth quarter allowed us to stabilize net interest margin,” said Hileman. “We continue to focus our strategies on managing funding costs and excess liquidity to help mitigate the impacts to core net interest margin.”

Non-interest income up from fourth quarter of 2019

Premier’s non-interest income in the fourth quarter of 2020 was $18.7 million compared with $11.8 million in the fourth quarter of 2019. Results for the fourth quarter of 2020 included three months of income from UCFC compared to none in 2019.

Mortgage banking income increased to $5.4 million in the fourth quarter of 2020 from $2.7 million in the fourth quarter of 2019. Gains from the sale of mortgage loans increased to $6.1 million in the fourth quarter of 2020 from $2.0 million in the fourth quarter of 2019. Mortgage loan servicing revenue increased to $1.9 million in the fourth quarter of 2020 from $1.0 million in the fourth quarter of 2019. Amortization of mortgage servicing rights increased to $2.2 million in the fourth quarter of 2020 from $0.6 million in the fourth quarter of 2019. Premier had a negative change in the valuation adjustment in mortgage servicing assets of $0.5 million in the fourth quarter of 2020 compared with a positive adjustment of $0.2 million in the fourth quarter of 2019. The year-over-year change for the fourth quarter is primarily due to increased prepayment speeds in the current down rate environment.

For the fourth quarter of 2020, service fees and other charges were $5.8 million, up from $3.7 million in the fourth quarter of 2019. Commissions from the sale of insurance products were $3.9 million, up from $3.1 million in the fourth quarter of 2019. Beginning with the second quarter of 2020, Premier began to report wealth management income, which represents trust income plus income for brokerage and financial advisory services that were previously reported in other non-interest income. Prior period amounts have been restated for consistency. Wealth management income was $1.8 million in the fourth quarter of 2020, up from $1.0 million in the fourth quarter of 2019.

“We remain pleased with the strength of our performance in non-interest income,” said Hileman. “While down seasonally from third quarter, mortgage banking was a significant contributor to our growth with $6.1 million in gains this quarter, up from $2.0 million last year, driven by continued exceptional residential loan origination activity and excellent gain on sale margins.”

Non-interest expenses up from fourth quarter of 2019

Total non-interest expense was $41.3 million in the fourth quarter of 2020, or $39.1 million excluding $2.2 million of acquisition related charges, up from $24.7 million in the fourth quarter of 2019, or $23.8 million excluding $0.9 million of acquisition related charges. Results for the fourth quarter of 2020 included three months of expenses from UCFC compared to none in 2019. Compensation and benefits increased to $19.9 million in the fourth quarter of 2020, compared to $14.6 million in the fourth quarter of 2019. Occupancy expense was $4.5 million in the fourth quarter of 2020, up from $2.3 million in the fourth quarter of 2019. Data processing cost was $3.8 million in the fourth quarter of 2020, up from $1.8 million in the fourth quarter of 2019. Amortization of intangibles was $1.7 million in the fourth quarter of 2020, up from $0.3 million in the fourth quarter of 2019. Other non-interest expense was $7.3 million in the fourth quarter of 2020, up from $4.2 million in the fourth quarter of 2019.

FDIC insurance premiums were a $1.0 million expense in the fourth quarter of 2020, up from a $0.2 million expense in the fourth quarter of 2019. The increase in expense from prior year is largely due to the increased size of Premier Bank post-merger and the impact of PPP. Although PPP loan balances are excludable from the asset-based component, they are not excludable from the leverage ratio component because the Company did not borrow from the PPP Liquidity Facility; and any loan funds that were in deposits would also increase the asset-based component.

Credit quality

Non-performing loans totaled $52.9 million at December 31, 2020, an increase from $48.3 million at September 30, 2020, and an increase from $13.5 million at December 31, 2019, due to the UCFC merger. In addition, Premier had $0.3 million of OREO at December 31, 2020, compared to $0.1 million at December 31, 2019. Accruing troubled debt restructured loans were $6.8 million at December 31, 2020, compared with $8.4 million at December 31, 2019.

On January 1, 2020, Premier adopted the Current Expected Credit Loss model of accounting for credit losses. This new GAAP model, which replaces the former incurred loss model, requires entities to estimate credit losses over the life of an asset or off-balance sheet exposure. Beginning with the second quarter of 2020, Premier began to report total provision for credit losses inclusive of amounts related to off-balance sheet unfunded commitments, which were previously reported in other non-interest expenses. Prior period amounts have been restated for consistency.

The 2020 fourth quarter results include net loan charge-offs of $0.7 million and a total provision credit of $6.8 million compared with net loan charge-offs of $91,000 and a total provision expense of $1.1 million for the same period in 2019. The allowance for credit loss on loans as a percentage of total loans was 1.49% at December 31, 2020, or 1.61% excluding PPP loans, compared with 1.63% at September 30, 2020, or 1.77% excluding PPP loans, and 1.12% at December 31, 2019. The year-over-year increase in the provision expense and allowance percentage is primarily attributable to the impact of the economic deterioration that began in the first quarter of 2020 as a result of the COVID-19 pandemic. As of December 31, 2020, Premier Bank had pandemic-related deferrals for $46.0 million of commercial loans, down from $434.6 million at September 30, and $7.4 million of retail loans, down from $48.2 million at September 30.

“The volatility of CECL was on display this quarter as we were able to release some reserves due to improving economic forecasts,” said Paul D. Nungester, CFO of Premier. “While we continue to experience some risk migration, the pace has slowed and begun to stabilize with criticized loans down to 4.3% at year-end from 4.5% last quarter.”

Annual results

For the year ended December 31, 2020, net income totaled $63.1 million, or $1.75 per diluted common share, compared to $49.4 million, or $2.48 per diluted common share for the year ended December 31, 2019. Results for the full year 2020 included eleven months of income and expenses from UCFC compared to none in 2019. The year-over-year comparison is also substantially impacted by the current year’s provision expense of $44.3 million, which included $25.9 million related to acquisition accounting for an after-tax cost of $20.5 million, or $0.57 per diluted common share. The full year 2019 included a total provision expense of $2.9 million and no acquisition impact. Additionally, the current year’s results include the impact of $19.5 million of acquisition-related charges, which had an after-tax cost of $15.8 million, or $0.44 per diluted common share. The full year 2019 included $1.4 million of acquisition-related charges, which had an after tax cost of $1.3 million, or $0.06 per diluted common share. Excluding the impact of acquisition-related provision and charges, earnings for the full year 2020 were $99.3 million, or $2.76 per diluted common share compared to $50.7 million or $2.54 per diluted share for 2019.

Net interest income was $208.0 million for 2020 compared with $115.6 million for 2019. Average interest-earning assets increased to $5.93 billion in 2020 compared to $2.97 billion for 2019. Net interest margin for 2020 was 3.52%, down 41 basis points from the 3.93% margin reported for 2019. The 2020 results include the impact of acquisition marks and related accretion for the UCFC acquisition. Interest income includes $4.4 million of accretion and interest expense includes $3.9 million of accretion, which combined added 14 basis points of net interest margin. The 2020 results also include the impact of PPP loans. Interest income includes $8.0 million on average balances of $291.3 million, which reduced net interest margin by four basis points. Excluding the impact of acquisition marks and PPP loans, net interest margin was 3.42% for 2020.

Non-interest income for 2020 was $80.7 million compared to $45.0 million for 2019. Service fees and other charges were $21.4 million for 2020, up from $14.0 million for 2019. Mortgage banking income was $28.2 million for 2020, up from $9.5 million for 2019. Insurance commissions were $16.8 million for 2020 compared with $14.1 million for 2019. Wealth management income was $6.2 million for 2020, up from $3.1 million for 2019.

Securities gains were $1.6 million in 2020, up from $24,000 in 2019. The Company early extinguished $30.0 million of fixed rate FHLB advances in the third quarter of 2020 that had a weighted average rate of 2.0% and incurred a prepayment penalty of $1.4 million recognized in other expenses. The Company sold $55.0 million of mortgage-backed securities yielding approximately 1.80% at a gain of $1.4 million. The proceeds from the sales were reinvested into securities yielding approximately 1.50% funded by overnight advances with a cost of approximately 20 basis points. The net effect of the transactions is expected to increase pretax income approximately $425,000 over the subsequent 12 months and enhance net interest margin by one basis point.

Non-interest expense was $165.2 million for 2020, or $145.7 million excluding acquisition-related charges, up from $97.1 million, or $95.7 million excluding acquisition-related charges, for the same period of 2019. Compensation and benefits expense was $77.2 million for 2020 compared with $57.2 million for 2019. Expenses also included increases in occupancy of $7.3 million, FDIC premiums of $2.9 million, data processing of $6.8 million, amortization of intangibles of $5.3 million and other expenses of $5.7 million. Additional detail regarding certain items impacting FDIC premiums and other expenses are discussed above.

Total assets at $7.21 billion

Total assets at December 31, 2020, were $7.21 billion compared to $6.97 billion at September 30, 2020, and $3.47 billion at December 31, 2019. Gross loans receivable (excluding loans held for sale) were $5.49 billion at December 31, 2020, compared to $5.47 billion at September 30, 2020, and $2.75 billion at December 31, 2019. At December 31, 2020, gross loans receivable grew $2.74 billion, or 100% from a year ago, including $2.30 billion from the UCFC merger and $0.44 billion organically, including $0.39 billion of PPP loans. Also, at December 31, 2020, goodwill and other intangible assets totaled $348.3 million compared to $350.0 million at September 30, 2020, and $103.8 million at December 31, 2019, with the increase attributable to the UCFC merger.

Total deposits at December 31, 2020, were $6.05 billion compared with $5.80 billion at September 30, 2020, and $2.87 billion at December 31, 2019. At December 31, 2020, total deposits grew $3.18 billion, or 111% from a year ago, including $2.08 billion from the UCFC merger and $1.10 billion organically.

Total stockholders’ equity was $982.3 million at December 31, 2020, compared to $959.0 million at September 30, 2020, and $426.2 million at December 31, 2019. The increase in stockholders’ equity from the prior year was due to net earnings and the UCFC merger, offset partially by the Company’s repurchase of 430,000 common shares for $10.1 million during the first quarter of 2020.

Buybacks authorization

At December 31, 2020, 570,000 common shares remained available for repurchase under the Company’s existing repurchase program. On January 26, 2020, the Company’s Board of Directors approved an increase in the Company’s repurchase authorization to up to 2,000,000 shares of common stock, or approximately 5% of current outstanding shares.

Dividend to be paid February 19

The Board of Directors declared a quarterly cash dividend of $0.24 per common share payable February 19, 2021, to shareholders of record at the close of business on February 12, 2021. The dividend represents an annual dividend of 3.6 percent based on the Premier common stock closing price on January 25, 2021. Premier has approximately 37,299,000 common shares outstanding.

Conference call

Premier will host a conference call at 11:00 a.m. ET on Wednesday, January 27, 2021, to discuss the earnings results and business trends. The conference call may be accessed by calling 1-877-444-1726. Internet access to the call is also available (in listen-only mode) at the following URL: https://services.choruscall.com/links/pfc210127.html. The replay of the conference call will be available at www.PremierFinCorp.com until January 26, 2022, at 9:00 a.m. ET.

About Premier Financial Corp.

Premier Financial Corp. (Nasdaq: PFC), headquartered in Defiance, Ohio, is the holding company for Premier Bank and First Insurance Group. Premier Bank, headquartered in Youngstown, Ohio, operates 75 branches and 12 loan offices in Ohio, Michigan, Indiana, Pennsylvania and West Virginia (West Virginia office operates as Home Savings Bank) and serves clients through a team of wealth professionals dedicated to each community banking branch. First Insurance Group is a full-service insurance agency with ten offices in Ohio including James & Sons Insurance in Youngstown, Ohio. For more information, visit the company’s website at PremierFinCorp.com.

Financial Statements and Highlights Follow-

Safe Harbor Statement

This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Exchange Act of 1934, as amended. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of Premier Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions; the nature, extent and timing of governmental actions and reforms; future movements of interest rates; the ability to benefit from a changing interest rate environment; the production levels of mortgage loan generation; the ability to continue to grow loans and deposits; the ability to sustain credit quality ratios at current or improved levels; continued strength in the market area for Premier Bank; the ability to sell real estate owned properties; and the ability to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including: impacts from the novel coronavirus (COVID-19) pandemic on our business, operations, customers and capital position; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; the impact of COVID-19 on local, national and global economic conditions; unexpected changes in interest rates or disruptions in the mortgage market related to COVID-19 or responses to the health crisis; the effects of various governmental responses to the COVID-19 pandemic; those inherent in general and local banking, insurance and mortgage conditions; competitive factors specific to markets in which Premier Financial Corp. and its subsidiaries operate; future interest rate levels; legislative and regulatory decisions or capital market conditions; and other risks and uncertainties detailed from time to time in our Securities and Exchange Commission (SEC) filings, including in our Annual Report on Form 10-K for the year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. One or more of these factors have affected or could in the future affect Premier’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Premier or any other persons, that our objectives and plans will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of Premier and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law. As required by U.S. GAAP, Premier will evaluate the impact of subsequent events through the issuance date of its December 31, 2020, consolidated financial statements as part of its Annual Report on Form 10-K to be filed with the SEC. Accordingly, subsequent events could occur that may cause Premier to update its critical accounting estimates and to revise its financial information from that which is contained in this news release.

Non-GAAP Reporting Measures

We believe that net income, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider core net income and core pre-tax pre-provision income to be useful supplemental measures of our operating performance. We define core net income as net income excluding the after-tax impact of acquisition related charges. We define core pre-tax pre-provision income as pre-tax pre-provision income excluding the pre-tax impact of acquisition related charges. We believe that these metrics are useful supplemental measures of operating performance because investors and equity analysts may use these measures to compare the operating performance of the Company between periods or as compared to other financial institutions or other companies on a consistent basis without having to account for one-time acquisition related charges. Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other financial institutions or other companies. Please see the exhibits for reconciliations of our supplemental reporting measures.

Consolidated Balance Sheets (Unaudited)
Premier Financial Corp.
 
December 31, December 31,
(in thousands)

 

2020

 

 

2019

 

 
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions

$

79,593

 

$

46,254

 

Interest-bearing deposits

 

79,673

 

 

85,000

 

 

159,266

 

 

131,254

 

 
Available-for sale, carried at fair value

 

736,654

 

 

283,448

 

Trading securities, carried at fair value

 

1,090

 

 

-

 

Securities investments

 

737,744

 

 

283,448

 

 
Loans

 

5,491,240

 

 

2,777,564

 

Allowance for credit losses - loans

 

(82,079

)

 

(31,243

)

Loans, net

 

5,409,161

 

 

2,746,321

 

Loans held for sale

 

221,616

 

 

18,008

 

Mortgage servicing rights

 

13,153

 

 

10,267

 

Accrued interest receivable

 

25,434

 

 

10,244

 

Federal Home Loan Bank stock

 

16,026

 

 

11,915

 

Bank Owned Life Insurance

 

144,784

 

 

75,544

 

Office properties and equipment

 

58,665

 

 

39,563

 

Real estate and other assets held for sale

 

343

 

 

100

 

Goodwill

 

317,948

 

 

100,069

 

Core deposit and other intangibles

 

30,337

 

 

3,772

 

Other assets

 

77,257

 

 

38,487

 

Total Assets

$

7,211,734

 

$

3,468,992

 

 
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits

$

1,597,262

 

$

630,359

 

Interest-bearing deposits

 

4,450,579

 

 

2,239,966

 

Total deposits

 

6,047,841

 

 

2,870,325

 

Advances from FHLB and PPPLF

 

-

 

 

85,063

 

Notes payable and other interest-bearing liabilities

 

-

 

 

2,999

 

Subordinated debentures

 

84,860

 

 

36,083

 

Advance payments by borrowers for tax and insurance

 

21,748

 

 

5,491

 

Reserve for credit losses - unfunded commitments

 

5,350

 

 

571

 

Other liabilities

 

69,659

 

 

42,293

 

Total Liabilities

 

6,229,458

 

 

3,042,825

 

Stockholders’ Equity
Preferred stock

 

-

 

 

-

 

Common stock, net

 

306

 

 

127

 

Additional paid-in-capital

 

689,390

 

 

161,955

 

Accumulated other comprehensive income (loss)

 

15,004

 

 

4,595

 

Retained earnings

 

356,414

 

 

329,175

 

Treasury stock, at cost

 

(78,838

)

 

(69,685

)

Total stockholders’ equity

 

982,276

 

 

426,167

 

Total Liabilities and Stockholders’ Equity

$

7,211,734

 

$

3,468,992

 

Consolidated Statements of Income (Unaudited)
Premier Financial Corp.
Three Months Ended Twelve Months Ended
December 31, December 31,
(in thousands, except per share amounts)

 

2020

 

 

2019

 

2020

 

2019

 

Interest Income:
Loans

$

57,694

 

$

33,695

$

225,084

$

130,853

 

Investment securities

 

2,980

 

 

1,889

 

11,469

 

8,183

 

Interest-bearing deposits

 

44

 

 

537

 

435

 

1,395

 

FHLB stock dividends

 

98

 

 

120

 

958

 

653

 

Total interest income

 

60,816

 

 

36,241

 

237,946

 

141,084

 

Interest Expense:
Deposits

 

5,158

 

 

5,999

 

26,918

 

22,613

 

FHLB advances and other

 

1

 

 

431

 

1,691

 

1,443

 

Subordinated debentures

 

690

 

 

311

 

1,300

 

1,354

 

Notes Payable

 

-

 

 

2

 

32

 

25

 

Total interest expense

 

5,849

 

 

6,743

 

29,941

 

25,435

 

Net interest income

 

54,967

 

 

29,498

 

208,005

 

115,649

 

Provision for credit losses - loans

 

(6,158

)

 

1,084

 

43,154

 

2,905

 

Provision (benefit) for credit losses - unfunded commitments

 

(606

)

 

39

 

1,096

 

(21

)

Total provision for credit losses

 

(6,764

)

 

1,123

 

44,250

 

2,884

 

Net interest income after provision for loan losses

 

61,731

 

 

28,375

 

163,755

 

112,765

 

Non-interest Income:
Service fees and other charges

 

5,767

 

 

3,693

 

21,369

 

14,028

 

Mortgage banking income

 

5,436

 

 

2,683

 

28,199

 

9,483

 

Gain on sale of non-mortgage loans

 

90

 

 

11

 

324

 

226

 

Gain (loss) on sale of available for sale securities

 

-

 

 

13

 

1,464

 

24

 

Gain (loss) on trading securities

 

76

 

 

-

 

90

 

-

 

Insurance commissions

 

3,913

 

 

3,123

 

16,788

 

14,118

 

Wealth management income

 

1,808

 

 

964

 

6,159

 

3,127

 

Income from Bank Owned Life Insurance

 

845

 

 

456

 

3,306

 

2,158

 

Other non-interest income

 

734

 

 

873

 

2,985

 

1,792

 

Total Non-interest Income

 

18,669

 

 

11,816

 

80,684

 

44,956

 

Non-interest Expense:
Compensation and benefits

 

19,882

 

 

14,631

 

77,213

 

57,175

 

Occupancy

 

4,471

 

 

2,277

 

16,320

 

9,027

 

FDIC insurance premium

 

983

 

 

208

 

3,355

 

484

 

Financial institutions tax

 

1,106

 

 

526

 

4,173

 

2,193

 

Data processing

 

3,752

 

 

1,763

 

14,886

 

8,055

 

Amortization of intangibles

 

1,668

 

 

281

 

6,449

 

1,120

 

Acquisition related charges

 

2,190

 

 

882

 

19,485

 

1,422

 

Other non-interest expense

 

7,261

 

 

4,153

 

23,289

 

17,608

 

Total Non-interest Expense

 

41,313

 

 

24,721

 

165,170

 

97,084

 

Income before income taxes

 

39,087

 

 

15,470

 

79,269

 

60,637

 

Income tax expense

 

8,240

 

 

2,953

 

16,192

 

11,267

 

Net Income

$

30,847

 

$

12,517

$

63,077

$

49,370

 

 
 
Earnings per common share:
Basic

$

0.83

 

$

0.63

$

1.75

$

2.49

 

Diluted

$

0.82

 

$

0.63

$

1.75

$

2.48

 

 
Average Shares Outstanding:
Basic

 

37,311

 

 

19,792

 

35,902

 

19,844

 

Diluted

 

37,350

 

 

19,895

 

35,949

 

19,931

 

Financial Summary and Comparison (Unaudited)
Premier Financial Corp.
Three Months Ended Twelve Months Ended
December 31, December 31,
(dollars in thousands, except per share data)

 

2020

 

 

2019

 

% change

 

2020

 

 

2019

 

% change

Summary of Operations
 
Tax-equivalent interest income (2)

$

61,067

 

$

36,473

 

67.4

%

$

238,964

 

$

142,051

 

68.2

%

Interest expense

 

5,849

 

 

6,743

 

(13.3

)

 

29,941

 

 

25,435

 

17.7

 

Tax-equivalent net interest income (2)

 

55,218

 

 

29,730

 

85.7

 

 

209,023

 

 

116,616

 

79.2

 

Provision for credit losses

 

(6,764

)

 

1,123

 

(702.3

)

 

44,250

 

 

2,884

 

1,434.3

 

Core provision for credit losses (4)

 

(6,764

)

 

1,123

 

(702.3

)

 

18,301

 

 

2,884

 

534.6

 

Investment securities gains (losses)

 

76

 

 

13

 

NM

 

 

1,554

 

 

24

 

NM

 

Non-interest income (excluding securities gains/losses)

 

18,593

 

 

11,803

 

57.5

 

 

79,130

 

 

44,932

 

76.1

 

Non-interest expense

 

41,313

 

 

24,721

 

67.1

 

 

165,170

 

 

97,084

 

70.1

 

Core non-interest expense (4)

 

39,123

 

 

23,839

 

64.1

 

 

144,278

 

 

95,662

 

50.8

 

Income tax expense

 

8,240

 

 

2,953

 

179.0

 

 

16,192

 

 

11,267

 

43.7

 

Net income

 

30,847

 

 

12,517

 

146.4

 

 

63,077

 

 

49,370

 

27.8

 

Core net income (4)

 

32,577

 

 

13,214

 

146.5

 

 

99,348

 

 

50,679

 

96.0

 

Tax equivalent adjustment (2)

 

251

 

 

232

 

8.2

 

 

1,018

 

 

967

 

5.3

 

At Period End
Assets

 

7,211,734

 

 

3,468,992

 

107.9

 

Earning assets

 

6,546,299

 

 

3,175,564

 

106.1

 

Loans

 

5,491,240

 

 

2,777,564

 

97.7

 

Allowance for credit losses - loans

 

82,079

 

 

31,243

 

162.7

 

Deposits

 

6,047,841

 

 

2,870,325

 

110.7

 

Stockholders’ equity

 

982,276

 

 

426,167

 

130.5

 

Average Balances
Assets

 

7,089,060

 

 

3,425,097

 

107.0

 

 

6,592,633

 

 

3,283,780

 

100.8

 

Earning assets

 

6,363,306

 

 

3,107,224

 

104.8

 

 

5,931,965

 

 

2,969,662

 

99.8

 

Loans

 

5,609,116

 

 

2,688,519

 

108.6

 

 

5,224,357

 

 

2,597,864

 

101.1

 

Deposits and interest-bearing liabilities

 

6,044,049

 

 

2,954,049

 

104.6

 

 

5,604,699

 

 

2,830,244

 

98.0

 

Deposits

 

5,956,550

 

 

2,830,043

 

110.5

 

 

5,362,436

 

 

2,717,224

 

97.3

 

Stockholders’ equity

 

946,223

 

 

420,352

 

125.1

 

 

898,092

 

 

406,286

 

121.0

 

Stockholders’ equity / assets

 

13.35

%

 

12.27

%

8.8

 

 

13.62

%

 

12.37

%

10.1

 

Per Common Share Data
Net Income (Loss)
Basic

$

0.83

 

$

0.63

 

31.1

 

$

1.75

 

$

2.49

 

(29.5

)

Diluted

 

0.82

 

 

0.63

 

30.9

 

 

1.75

 

 

2.48

 

(29.3

)

Core diluted (4)

 

0.87

 

 

0.66

 

31.8

 

$

2.76

 

 

2.54

 

8.7

 

Dividends

 

0.22

 

 

0.22

 

-

 

 

0.88

 

 

0.79

 

11.4

 

Market Value:
High

$

23.49

 

$

32.39

 

(27.5

)

$

32.05

 

$

32.39

 

(1.0

)

Low

 

14.90

 

 

27.77

 

(46.3

)

 

10.98

 

 

24.12

 

(54.5

)

Close

 

23.00

 

 

31.32

 

(26.6

)

 

23.00

 

 

31.32

 

(26.6

)

Common Book Value

 

26.34

 

 

21.60

 

21.9

 

 

26.34

 

 

21.60

 

21.9

 

Tangible Common Book Value (1)

 

17.00

 

 

16.34

 

4.0

 

 

17.00

 

 

16.34

 

4.0

 

Shares outstanding, end of period (000s)

 

37,291

 

 

19,730

 

89.0

 

 

37,291

 

 

19,730

 

89.0

 

Performance Ratios (annualized)
Tax-equivalent net interest margin (2)

 

3.47

%

 

3.80

%

(8.7

)

 

3.52

%

 

3.93

%

(10.4

)

Return on average assets

 

1.73

%

 

1.45

%

19.4

 

 

0.96

%

 

1.50

%

(36.2

)

Core return on average assets (4)

 

1.83

%

 

1.53

%

19.4

 

 

1.51

%

 

1.54

%

(2.4

)

Return on average equity

 

12.97

%

 

11.81

%

9.8

 

 

7.02

%

 

12.15

%

(42.2

)

Core return on average equity (4)

 

13.70

%

 

12.47

%

9.8

 

 

11.06

%

 

12.47

%

(11.3

)

Efficiency ratio (3)

 

55.97

%

 

59.52

%

(6.0

)

 

57.32

%

 

60.10

%

(4.6

)

Core efficiency ratio (4)

 

53.00

%

 

57.40

%

(7.7

)

 

50.07

%

 

59.22

%

(15.4

)

Effective tax rate

 

21.08

%

 

19.09

%

10.4

 

 

20.43

%

 

18.58

%

9.9

 

Dividend payout ratio (core)

 

25.29

%

 

33.33

%

(24.1

)

 

31.88

%

 

31.10

%

2.5

 

Note: 2020 current quarter and year-to-date results include three and eleven months of operations from UCFC, respectively, compared to none for comparable periods in 2019.
(1) Tangible common book value = total stockholders' equity less the sum of goodwill, core deposit and other intangibles, and preferred stock divided by shares outstanding at the end of the period.
(2) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 21%.
(3) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.
(4) Core items exclude the impact of acquisition related provision ("CECL double-dip") and other charges. See non-GAAP reconciliations.
NM Percentage change not meaningful
Premier Financial Corp.
(dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
Mortgage Banking

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenue from sales and servicing of mortgage loans:
Gain from sale of mortgage loans

$

6,146

 

$

2,035

 

$

36,359

 

$

7,706

 

Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue

 

1,916

 

 

978

 

 

7,296

 

 

3,820

 

Amortization of mortgage servicing rights

 

(2,174

)

 

(553

)

 

(7,477

)

 

(1,809

)

Mortgage servicing rights valuation adjustments

 

(452

)

 

223

 

 

(7,979

)

 

(234

)

 

(710

)

 

648

 

 

(8,160

)

 

1,777

 

Total revenue from sale and servicing of mortgage loans

$

5,436

 

$

2,683

 

$

28,199

 

$

9,483

 

 
Mortgage servicing rights:
Balance at beginning of period

$

21,538

 

$

10,617

 

$

10,801

 

$

10,419

 

Loans sold, servicing retained

 

2,302

 

 

737

 

 

8,595

 

 

2,191

 

Mortgage servicing rights acquired

 

-

 

 

-

 

 

9,747

 

 

-

 

Amortization

 

(2,174

)

 

(553

)

 

(7,477

)

 

(1,809

)

Carrying value before valuation allowance at end of period

 

21,666

 

 

10,801

 

 

21,666

 

 

10,801

 

Valuation allowance:
Balance at beginning of period

 

(8,061

)

 

(758

)

 

(534

)

 

(300

)

Impairment recovery (charges)

 

(452

)

 

224

 

 

(7,979

)

 

(234

)

Balance at end of period

 

(8,513

)

 

(534

)

 

(8,513

)

 

(534

)

Net carrying value at end of period

$

13,153

 

$

10,267

 

$

13,153

 

$

10,267

 

 
 
Goodwill and Purchase Price Accounting
Deal Value:
Shares issued (000s)

 

17,926

 

1/31/20 Price

$

29.39

 

Stock value

 

526,850

 

Fair value of options exchanged

 

461

 

Cash in lieu of fractional shares

 

132

 

Total value

$

527,443

 

 
Allocation:
Cash and cash equivalents

$

52,580

 

Securities available-for sale

 

262,753

 

(1)

Net loans, including loans held for sale and allowance

 

2,340,701

 

(2)

Federal Home Loan Bank stock

 

12,753

 

Office properties and equipment

 

20,253

 

(3)

Core deposit and other intangibles

 

33,014

 

(4)

Bank Owned Life Insurance

 

65,934

 

Mortgage servicing rights

 

9,747

 

(5)

Other assets

 

35,943

 

Non-interest-bearing deposits

 

(430,921

)

Interest-bearing deposits

 

(1,651,669

)

(6)

Advances from Federal Home Loan Bank

 

(381,000

)

Other liabilities

 

(60,524

)

Net assets

 

309,564

 

Goodwill

 

217,879

 

Total value

$

527,443

 

 
 
Note: 2020 current quarter and year-to-date results include three and eleven months of operations from UCFC, respectively, compared to none for comparable periods in 2019.
(1) Includes $13.8 million of accumulated losses to be amortized against interest income over ~7 years.
(2) Includes $27.2 million non-PCD credit mark down to be accreted into interest income over ~5 years, $8.8 million total rate mark up to be amortized against interest income over ~5 years, $19.1 million elimination of allowance and $7.7 million PCD credit mark addition to allowance.
(3) Includes $2.1 million mark down that reduces future depreciation.
(4) Includes $29.3 million of core deposit intangible to be amortized to expense using sum-of-the-years digits over 10 years and $3.7 million of insurance/trust/wealth intangibles to be amortized to expense over ~10 years.
(5) Includes $3.0 million mark up to be amortized against mortgage banking income over ~8.5 years.
(6) Includes $7.1 million rate mark up on time-based deposits to be accreted against interest expense over ~2 years based on maturities.
Yield Analysis
Premier Financial Corp.
Three Months Ended December 31,
(dollars in thousands)

2020

2019

Average Yield Average Yield
Balance Interest(1) Rate(2) Balance Interest(1) Rate(2)
Interest-earning assets:
Loans receivable

$

5,609,116

$

57,715

4.12

%

$

2,688,519

$

33,716

4.98

%

Securities

 

632,989

 

3,210

2.03

%

 

287,172

 

2,100

2.96

%

(3

)

Interest Bearing Deposits

 

102,053

 

44

0.17

%

 

119,618

 

537

1.78

%

FHLB stock

 

19,148

 

98

2.05

%

 

11,915

 

120

4.00

%

Total interest-earning assets

 

6,363,306

 

61,067

3.84

%

 

3,107,224

 

36,473

4.67

%

Non-interest-earning assets

 

725,754

 

317,873

Total assets

$

7,089,060

$

3,425,097

Deposits and Interest-bearing liabilities:
Interest bearing deposits

$

4,411,557

$

5,158

0.47

%

$

2,205,673

$

5,999

1.08

%

FHLB advances and other

 

2,663

 

1

0.15

%

 

85,291

 

431

2.00

%

Subordinated debentures

 

84,836

 

690

3.25

%

 

36,083

 

311

3.42

%

Notes payable

 

-

 

-

-

 

 

2,632

 

2

0.30

%

Total interest-bearing liabilities

 

4,499,056

 

5,849

0.52

%

 

2,329,679

 

6,743

1.15

%

Non-interest bearing deposits

 

1,544,993

 

-

-

 

 

624,370

 

-

-

 

Total including non-interest-bearing deposits

 

6,044,049

 

5,849

0.39

%

 

2,954,049

 

6,743

0.91

%

Other non-interest-bearing liabilities

 

98,788

 

50,696

Total liabilities

 

6,142,837

 

3,004,745

Stockholders' equity

 

946,223

 

420,352

Total liabilities and stockholders' equity

$

7,089,060

$

3,425,097

Net interest income; interest rate spread

$

55,218

3.32

%

$

29,730

3.52

%

Net interest margin (4)

3.47

%

3.80

%

Average interest-earning assets to average interest bearing liabilities

141

%

133

%

 
Twelve Months Ended December 31,

2020

2019

Average Yield Average Yield
Balance Interest(1) Rate(2) Balance Interest(1) Rate(2)
Interest-earning assets:
Loans receivable

$

5,224,357

$

225,179

4.31

%

$

2,597,864

$

130,943

5.04

%

Securities

 

544,643

 

12,393

2.28

%

 

294,027

 

9,060

3.08

%

(3

)

Interest Bearing Deposits

 

124,011

 

435

0.35

%

 

65,424

 

1,395

2.13

%

FHLB stock

 

38,954

 

958

2.46

%

 

12,347

 

653

5.29

%

Total interest-earning assets

 

5,931,965

 

238,965

4.03

%

 

2,969,662

 

142,051

4.78

%

Non-interest-earning assets

 

660,668

 

314,118

Total assets

$

6,592,633

$

3,283,780

Deposits and Interest-bearing liabilities:
Interest bearing deposits

$

4,050,958

$

26,918

0.66

%

$

2,122,439

$

22,613

1.07

%

FHLB advances and other

 

187,745

 

1,692

0.90

%

 

73,013

 

1,443

1.98

%

Subordinated debentures

 

48,471

 

1,300

2.68

%

 

36,083

 

1,354

3.75

%

Notes payable

 

6,047

 

32

0.53

%

 

3,924

 

25

0.64

%

Total interest-bearing liabilities

 

4,293,221

 

29,942

0.70

%

 

2,235,459

 

25,435

1.14

%

Non-interest bearing deposits

 

1,311,478

 

-

-

 

 

594,785

 

-

-

 

Total including non-interest-bearing deposits

 

5,604,699

 

29,942

0.53

%

 

2,830,244

 

25,435

0.90

%

Other non-interest-bearing liabilities

 

89,842

 

47,250

Total liabilities

 

5,694,541

 

2,877,494

Stockholders' equity

 

898,092

 

406,286

Total liabilities and stockholders' equity

$

6,592,633

$

3,283,780

Net interest income; interest rate spread

$

209,023

3.33

%

$

116,616

3.64

%

Net interest margin (4)

3.52

%

3.93

%

Average interest-earning assets to average interest bearing liabilities

138

%

133

%

Note: 2020 current quarter and year-to-date results include three and eleven months of operations from UCFC, respectively, compared to none for comparable periods in 2019.
(1) Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 21%.
(2) Annualized.
(3) Securities yield = annualized interest income divided by the average balance of securities, excluding average unrealized gains/losses.
(4) Net interest margin is tax equivalent net interest income divided by average interest-earning assets.
Selected Quarterly Information
Premier Financial Corp.
 
(dollars in thousands, except per share data) 4th Qtr 2020 3rd Qtr 2020 2nd Qtr 2020 1st Qtr 2020 4th Qtr 2019
Summary of Operations
Tax-equivalent interest income (1)

$

61,067

 

$

60,418

 

$

62,705

 

$

54,773

 

$

36,473

 

Interest expense

 

5,849

 

 

6,888

 

 

8,145

 

 

9,059

 

 

6,743

 

Tax-equivalent net interest income (1)

 

55,218

 

 

53,530

 

 

54,560

 

 

45,714

 

 

29,730

 

Provision for credit losses

 

(6,764

)

 

2,794

 

 

2,975

 

 

45,244

 

 

1,123

 

Core provision for credit losses (3)

 

(6,764

)

 

2,794

 

 

2,975

 

 

19,295

 

 

1,123

 

Investment securities gains (losses)

 

76

 

 

1,480

 

 

(2

)

 

-

 

 

13

 

Non-interest income (excluding securities gains/losses)

 

18,593

 

 

23,520

 

 

23,017

 

 

13,999

 

 

11,803

 

Non-interest expense

 

41,313

 

 

43,563

 

 

37,984

 

 

42,310

 

 

24,721

 

Core non-interest expense (3)

 

39,123

 

 

38,445

 

 

35,885

 

 

30,824

 

 

23,839

 

Income tax expense (benefit)

 

8,240

 

 

6,259

 

 

7,303

 

 

(5,610

)

 

2,953

 

Net income (loss)

 

30,847

 

 

25,655

 

 

29,057

 

 

(22,482

)

 

12,517

 

Core net income (3)

 

32,577

 

 

28,587

 

 

30,715

 

 

7,470

 

 

13,214

 

Tax equivalent adjustment (1)

 

251

 

 

259

 

 

256

 

 

251

 

 

232

 

At Period End
Total assets

$

7,211,734

 

$

6,974,953

 

$

7,013,811

 

$

6,538,942

 

$

3,468,992

 

Earning assets

 

6,546,299

 

 

6,340,132

 

 

6,345,655

 

 

5,889,186

 

 

3,175,935

 

Loans

 

5,491,240

 

 

5,470,548

 

 

5,457,238

 

 

5,113,917

 

 

2,777,564

 

Allowance for loan losses

 

82,079

 

 

88,917

 

 

88,555

 

 

85,859

 

 

31,243

 

Deposits

 

6,047,841

 

 

5,795,757

 

 

5,759,843

 

 

4,994,148

 

 

2,870,325

 

Stockholders’ equity

 

982,276

 

 

959,025

 

 

940,968

 

 

916,843

 

 

426,167

 

Stockholders’ equity / assets

 

13.62

%

 

13.75

%

 

13.42

%

 

14.02

%

 

12.29

%

Goodwill

 

317,948

 

 

317,948

 

 

317,948

 

 

317,520

 

 

100,069

 

Average Balances
Total assets

$

7,089,060

 

$

6,935,783

 

$

7,005,783

 

$

5,357,598

 

$

3,425,097

 

Earning assets

 

6,363,306

 

 

6,211,267

 

 

6,247,037

 

 

4,862,532

 

 

3,107,224

 

Loans

 

5,609,116

 

 

5,555,621

 

 

5,389,805

 

 

4,317,857

 

 

2,688,519

 

Deposits and interest-bearing liabilities

 

6,044,049

 

 

5,901,652

 

 

5,963,127

 

 

4,488,003

 

 

2,954,049

 

Deposits

 

5,956,550

 

 

5,738,006

 

 

5,490,986

 

 

4,240,053

 

 

2,830,043

 

Stockholders’ equity

 

946,223

 

 

927,506

 

 

932,793

 

 

787,519

 

 

420,352

 

Stockholders’ equity / assets

 

13.35

%

 

13.37

%

 

13.31

%

 

14.70

%

 

12.27

%

Per Common Share Data
Net Income (Loss):
Basic

$

0.83

 

$

0.69

 

$

0.78

 

$

(0.71

)

$

0.63

 

Diluted

 

0.82

 

 

0.69

 

 

0.78

 

 

(0.71

)

 

0.63

 

Core diluted (3)

 

0.87

 

 

0.77

 

 

0.82

 

 

0.24

 

 

0.66

 

Dividends

 

0.22

 

 

0.22

 

 

0.22

 

 

0.22

 

 

0.22

 

Market Value:
High

$

23.49

 

$

21.24

 

$

20.11

 

$

32.05

 

$

32.39

 

Low

 

14.90

 

 

14.74

 

 

12.95

 

 

10.98

 

 

27.77

 

Close

 

23.00

 

 

15.58

 

 

17.67

 

 

14.74

 

 

31.32

 

Common Book Value

 

26.34

 

 

25.71

 

 

25.23

 

 

24.58

 

 

21.60

 

Shares outstanding, end of period (000s)

 

37,291

 

 

37,297

 

 

37,296

 

 

37,288

 

 

19,730

 

Performance Ratios (annualized)
Tax-equivalent net interest margin (1)

 

3.47

%

 

3.47

%

 

3.51

%

 

3.78

%

 

3.80

%

Return on average assets

 

1.73

%

 

1.49

%

 

1.67

%

 

-1.69

%

 

1.45

%

Core return on average assets (3)

 

1.83

%

 

1.64

%

 

1.76

%

 

0.56

%

 

1.53

%

Return on average equity

 

12.97

%

 

11.12

%

 

12.53

%

 

-11.48

%

 

11.81

%

Core return on average equity (3)

 

13.70

%

 

12.26

%

 

13.24

%

 

3.82

%

 

12.47

%

Efficiency ratio (2)

 

55.97

%

 

56.54

%

 

48.96

%

 

70.86

%

 

59.52

%

Core efficiency ratio (3)

 

53.00

%

 

49.90

%

 

46.26

%

 

51.62

%

 

57.40

%

Effective tax rate

 

21.08

%

 

19.61

%

 

20.09

%

 

19.97

%

 

19.09

%

Common dividend payout ratio (core)

 

25.29

%

 

28.57

%

 

26.83

%

 

91.67

%

 

34.92

%

Note: 2020 current quarter and year-to-date results include three and eleven months of operations from UCFC, respectively, compared to none for comparable periods in 2019.
(1) Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 21%.
(2) Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.
(3) Core items exclude the impact of acquisition related provision ("CECL double-dip") and other charges. See non-GAAP reconciliations.
Selected Quarterly Information
Premier Financial Corp.
 
(dollars in thousands, except per share data) 4th Qtr 2020 3rd Qtr 2020 2nd Qtr 2020 1st Qtr 2020 4th Qtr 2019
Loan Portfolio Composition
One to four family residential real estate

$

1,201,051

 

$

1,194,940

 

$

1,226,106

 

$

1,265,901

 

$

324,773

 

Construction

 

667,649

 

 

580,060

 

 

509,548

 

 

521,442

 

 

305,305

 

Commercial real estate

 

2,383,001

 

 

2,328,944

 

 

2,266,189

 

 

2,200,266

 

 

1,506,026

 

Commercial

 

1,202,353

 

 

1,263,565

 

 

1,244,549

 

 

897,865

 

 

578,071

 

Consumer finance

 

120,729

 

 

128,995

 

 

146,139

 

 

137,679

 

 

37,649

 

Home equity and improvement

 

272,701

 

 

281,010

 

 

290,459

 

 

301,146

 

 

122,864

 

Total loans

 

5,847,484

 

 

5,777,514

 

 

5,682,990

 

 

5,324,299

 

 

2,874,688

 

Less:
Undisbursed loan funds

 

355,065

 

 

300,174

 

 

221,137

 

 

206,236

 

 

94,865

 

Deferred loan origination fees

 

1,179

 

 

6,792

 

 

4,615

 

 

4,146

 

 

2,259

 

Allowance for credit losses - loans

 

82,079

 

 

88,917

 

 

88,555

 

 

85,859

 

 

31,243

 

Net Loans

$

5,409,161

 

$

5,381,631

 

$

5,368,683

 

$

5,028,058

 

$

2,746,321

 

 
Allowance for credit losses - loans
Beginning allowance

$

88,917

 

$

88,555

 

$

85,859

 

$

31,243

 

$

30,250

 

CECL adoption

 

-

 

 

-

 

 

-

 

 

2,354

 

 

-

 

Acquisition related allowance/provision (non PCD)

 

-

 

 

-

 

 

-

 

 

25,949

 

 

-

 

Acquisition related allowance/goodwill (PCD)

 

-

 

 

-

 

 

-

 

 

7,698

 

 

-

 

Provision for credit losses - loans

 

(6,158

)

 

3,658

 

 

1,868

 

 

17,837

 

 

1,084

 

Net recoveries (charge-offs)

 

(680

)

 

(3,296

)

 

828

 

 

778

 

 

(91

)

Ending allowance

$

82,079

 

$

88,917

 

$

88,555

 

$

85,859

 

$

31,243

 

 
Credit Quality
Total non-performing loans (1)

$

51,983

 

$

48,322

 

$

39,470

 

$

32,692

 

$

13,437

 

Real estate owned (REO)

 

343

 

 

521

 

 

573

 

 

548

 

 

100

 

Total non-performing assets (2)

$

52,326

 

$

48,843

 

$

40,043

 

$

33,240

 

$

13,537

 

Net charge-offs (recoveries)

 

680

 

 

3,296

 

 

(828

)

 

(778

)

 

91

 

 
Restructured loans, accruing (3)

 

7,173

 

 

8,499

 

 

7,916

 

 

7,474

 

 

8,427

 

 
Allowance for credit losses - loans / loans

 

1.49

%

 

1.63

%

 

1.62

%

 

1.68

%

 

1.12

%

Allowance for credit losses - loans / non-performing assets

 

156.86

%

 

182.05

%

 

221.15

%

 

259.07

%

 

230.80

%

Allowance for credit losses - loans / non-performing loans

 

157.90

%

 

184.01

%

 

224.36

%

 

263.43

%

 

232.51

%

Non-performing assets / loans plus REO

 

0.95

%

 

0.89

%

 

0.73

%

 

0.65

%

 

0.49

%

Non-performing assets / total assets

 

0.73

%

 

0.70

%

 

0.57

%

 

0.51

%

 

0.39

%

Net charge-offs / average loans (annualized)

 

0.05

%

 

0.24

%

 

-0.06

%

 

-0.07

%

 

0.01

%

 
Deposit Balances
Non-interest-bearing demand deposits

$

1,597,262

 

$

1,436,807

 

$

1,454,842

 

$

1,041,315

 

$

630,359

 

Interest-bearing demand deposits and money market

 

2,627,669

 

 

2,511,263

 

 

2,361,486

 

 

2,069,723

 

 

1,198,012

 

Savings deposits

 

700,480

 

 

674,354

 

 

671,650

 

 

606,508

 

 

303,166

 

Retail time deposits less than $250,000

 

912,006

 

 

975,658

 

 

1,078,758

 

 

1,091,038

 

 

631,253

 

Retail time deposits greater than $250,000

 

210,424

 

 

197,675

 

 

193,107

 

 

185,564

 

 

107,535

 

Total deposits

$

6,047,841

 

$

5,795,757

 

$

5,759,843

 

$

4,994,148

 

$

2,870,325

 

 
(1) Non-performing loans consist of non-accrual loans.
(2) Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.
(3) Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans.
Premier Financial Corp.
 
Loan Delinquency Information
(dollars in thousands) Total Balance Current 30 to 89 days
past due
% of
Total
Non Accrual
Loans
% of
Total
 
December 31, 2020
One to four family residential real estate

$

1,201,051

$

1,178,876

$

8,318

0.7

%

$

13,857

1.2

%

Construction

 

667,649

 

664,248

 

2,294

0.3

%

 

1,107

0.2

%

Commercial real estate

 

2,383,001

 

2,359,299

 

993

0.0

%

 

22,709

1.0

%

Commercial

 

1,202,353

 

1,192,949

 

9

0.0

%

 

9,395

0.8

%

Consumer finance

 

120,729

 

116,632

 

2,248

1.9

%

 

1,849

1.5

%

Home equity and improvement

 

272,701

 

265,023

 

4,612

1.7

%

 

3,066

1.1

%

Total loans

$

5,847,484

$

5,777,027

$

18,474

0.3

%

$

51,983

0.9

%

 
September 30, 2020
One to four family residential real estate

$

1,194,940

$

1,173,175

$

10,562

0.9

%

$

11,203

0.9

%

Construction

 

580,060

 

578,110

 

1,587

0.3

%

 

363

0.1

%

Commercial real estate

 

2,328,944

 

2,305,223

 

703

0.0

%

 

23,018

1.0

%

Commercial

 

1,263,565

 

1,253,474

 

212

0.0

%

 

9,879

0.8

%

Consumer finance

 

128,995

 

125,260

 

2,682

2.1

%

 

1,053

0.8

%

Home equity and improvement

 

281,010

 

273,041

 

5,125

1.8

%

 

2,844

1.0

%

Total loans

$

5,777,514

$

5,708,283

$

20,871

0.4

%

$

48,360

0.8

%

 
December 31, 2019
One to four family residential real estate

$

324,773

$

321,058

$

1,298

0.4

%

$

2,417

0.7

%

Construction

 

305,305

 

305,305

 

-

0.0

%

 

-

0.0

%

Commercial real estate

 

1,506,026

 

1,497,845

 

546

0.0

%

 

7,635

0.5

%

Commercial

 

578,071

 

574,593

 

519

0.1

%

 

2,959

0.5

%

Consumer finance

 

37,649

 

37,444

 

205

0.5

%

 

-

0.0

%

Home equity and improvement

 

122,864

 

121,211

 

1,205

1.0

%

 

448

0.4

%

Total loans

$

2,874,688

$

2,857,456

$

3,773

0.1

%

$

13,459

0.5

%

 
Loan Risk Ratings Information
(dollars in thousands) Total Balance Pass Rated Special Mention % of
Total
Classified % of
Total
 
December 31, 2020
One to four family residential real estate

$

1,186,262

$

1,183,104

$

796

0.1

%

$

2,362

0.2

%

Construction

 

667,649

 

647,906

 

19,743

3.0

%

 

-

0.0

%

Commercial real estate

 

2,359,713

 

2,202,167

 

111,213

4.7

%

 

46,333

2.0

%

Commercial

 

1,174,545

 

1,143,715

 

23,713

2.0

%

 

7,117

0.6

%

Consumer finance

 

119,841

 

119,736

 

-

0.0

%

 

105

0.1

%

Home equity and improvement

 

268,311

 

267,872

 

-

0.0

%

 

439

0.2

%

PCD loans

 

71,163

 

33,311

 

3,832

5.4

%

 

34,020

47.8

%

Total loans

$

5,847,484

$

5,597,811

$

159,297

2.7

%

$

90,376

1.5

%

 
September 30, 2020
One to four family residential real estate

$

1,182,709

$

1,179,490

$

268

0.0

%

$

2,951

0.2

%

Construction

 

279,886

 

256,743

 

23,143

8.3

%

 

-

0.0

%

Commercial real estate

 

2,305,320

 

2,165,668

 

108,011

4.7

%

 

31,641

1.4

%

Commercial

 

1,222,180

 

1,188,604

 

24,618

2.0

%

 

8,958

0.7

%

Consumer finance

 

129,144

 

129,025

 

-

0.0

%

 

119

0.1

%

Home equity and improvement

 

276,246

 

275,831

 

-

0.0

%

 

415

0.2

%

PCD loans

 

75,063

 

28,867

 

11,442

15.2

%

 

34,754

46.3

%

Total loans

$

5,470,548

$

5,224,228

$

167,482

3.1

%

$

78,838

1.4

%

 
December 31, 2019
One to four family residential real estate

$

326,144

$

322,250

$

415

0.1

%

$

3,479

1.1

%

Construction

 

206,721

 

205,076

 

1,645

0.8

%

 

-

0.0

%

Commercial real estate

 

1,512,359

 

1,462,065

 

27,197

1.8

%

 

23,097

1.5

%

Commercial

 

579,911

 

548,012

 

24,162

4.2

%

 

7,737

1.3

%

Consumer finance

 

37,836

 

37,816

 

-

0.0

%

 

20

0.1

%

Home equity and improvement

 

123,722

 

123,407

 

-

0.0

%

 

315

0.3

%

Total loans

$

2,786,693

$

2,698,626

$

53,419

1.9

%

$

34,648

1.2

%

 
COVID-19 Update
Premier Financial Corp.
($ in thousands)
 
Deferrals Update 12/31/2020 9/30/2020
Commercial loan deferrals

$

46,038

 

$

434,554

 

% of commercial loans

 

1.2

%

 

11.4

%

% of total loans

 

0.8

%

 

7.9

%

Retail loan deferrals

$

7,412

 

$

48,187

 

% of retail loans

 

0.4

%

 

2.9

%

% of total loans

 

0.1

%

 

0.9

%

Total loan deferrals

$

53,450

 

$

482,741

 

% of total loans

 

1.0

%

 

8.8

%

 
Commercial High Sensitivity Portfolio Update As of 12/31/20 As of 9/30/20
Industry % of Total
Loans
% Balances
Deferred
% Classified
in Subsector
% of Total
Loans
% Balances
Deferred
% Classified
in Subsector
Traveler Accommodation

 

2.8

%

 

15.0

%

 

11.6

%

 

2.8

%

 

60.7

%

 

3.9

%

Food Service

 

1.0

%

 

0.0

%

 

0.5

%

 

1.0

%

 

22.4

%

 

0.6

%

Sub-total

 

3.8

%

 

11.0

%

 

8.6

%

 

3.7

%

 

51.0

%

 

3.1

%

Retail Trade and CRE

 

9.3

%

 

0.2

%

 

1.7

%

 

9.4

%

 

17.7

%

 

1.3

%

Long-term Care

 

2.0

%

 

2.2

%

 

12.4

%

 

1.9

%

 

10.8

%

 

11.0

%

Arts/Entertainment/Recreation

 

0.4

%

 

0.0

%

 

1.9

%

 

0.4

%

 

37.8

%

 

2.5

%

Energy

 

0.1

%

 

0.0

%

 

0.0

%

 

0.1

%

 

0.0

%

 

0.0

%

Total

 

15.6

%

 

3.1

%

 

4.7

%

 

15.6

%

 

25.2

%

 

3.0

%

 
Commercial Loan Deferral Rollforward 9/30/20
Balance
New
Deferrals
Payoffs/
Changes
Return to
Pay(1)
12/31/20
Balance
4Q20
Extensions
Interest only 1-3 months

$

12,314

 

$

-

 

$

(23

)

$

(6,854

)

$

5,437

 

$

5,437

 

Interest only 4-5 months

 

26,943

 

 

-

 

 

(60

)

 

(26,883

)

 

-

 

 

-

 

Interest only 6 months

 

55,196

 

 

-

 

 

17,060

 

 

(45,568

)

 

26,688

 

 

17,472

 

Deferred payment 1-90 days

 

57,262

 

 

824

 

 

(16,603

)

 

(31,079

)

 

10,404

 

 

-

 

Deferred payment 91-179 days

 

6,497

 

 

-

 

 

(1

)

 

(6,496

)

 

-

 

 

-

 

Deferred payment 180 days

 

276,342

 

 

-

 

 

(726

)

 

(272,107

)

 

3,509

 

 

-

 

Total

$

434,554

 

$

824

 

$

(353

)

$

(388,987

)

$

46,038

 

$

22,909

 

 
Commercial Loan Deferral Expirations Update 12/31/20
Balance
January

$

15,698

 

February

 

5,075

 

March

 

-

 

April

 

25,265

 

May

 

-

 

June

 

-

 

Total

$

46,038

 

 
 
(1) Represents approximately 94.2% of previously disclosed fourth quarter 2020 scheduled expirations.
Non-GAAP Reconciliations
Premier Financial Corp.
Twelve months ended
(In thousands, except per share and ratio data) 12/31/20 12/31/19 4th Qtr 2020 3rd Qtr 2020 2nd Qtr 2020 1st Qtr 2020 4th Qtr 2019
Acquisition related charges (pre-tax)

$

19,485

 

$

1,422

 

$

2,190

 

$

3,711

 

$

2,099

 

$

11,486

 

$

882

 

Less: Tax benefit of acquisition related charges

 

3,714

 

 

113

 

 

460

 

 

779

 

 

441

 

 

2,034

 

 

185

 

Acquisition related charges (after-tax)

$

15,771

 

$

1,309

 

$

1,730

 

$

2,932

 

$

1,658

 

$

9,452

 

$

697

 

 
Total non-interest expenses

$

165,170

 

$

97,084

 

$

41,313

 

$

43,563

 

$

37,984

 

$

42,310

 

$

24,721

 

Less: Acquisition related charges (pre-tax)

 

19,485

 

 

1,422

 

 

2,190

 

 

3,711

 

 

2,099

 

 

11,486

 

 

882

 

Less: FHLB prepayment charges(1)

 

1,407

 

 

-

 

 

-

 

 

1,407

 

 

-

 

 

-

 

 

-

 

Core non-interest expenses

$

144,278

 

$

95,662

 

$

39,123

 

$

38,445

 

$

35,885

 

$

30,824

 

$

23,839

 

 
Acquisition related provision (pre-tax)

$

25,949

 

$

-

 

$

-

 

$

-

 

$

-

 

$

25,949

 

$

-

 

Less: Tax benefit of acquisition related provision

 

5,449

 

 

-

 

 

-

 

 

-

 

 

-

 

 

5,449

 

 

-

 

Acquisition related provision (after-tax)

$

20,500

 

$

-

 

$

-

 

$

-

 

$

-

 

$

20,500

 

$

-

 

 
Provision for credit losses

$

44,250

 

$

2,884

 

$

(6,764

)

$

2,794

 

$

2,975

 

$

45,244

 

$

1,123

 

Less: Acquisition related provision (pre-tax)

 

25,949

 

 

-

 

 

-

 

 

-

 

 

-

 

 

25,949

 

 

-

 

Core provision for credit losses

$

18,301

 

$

2,884

 

$

(6,764

)

$

2,794

 

$

2,975

 

$

19,295

 

$

1,123

 

 
Non-interest income

$

80,684

 

$

44,956

 

$

18,669

 

$

25,000

 

$

23,015

 

$

13,999

 

$

11,816

 

Less: Securities gains (losses)

 

1,554

 

 

24

 

 

76

 

 

1,480

 

 

(2

)

 

-

 

 

13

 

Non-interest income (excluding securities gains/losses)

$

79,130

 

$

44,932

 

$

18,593

 

$

23,520

 

$

23,017

 

$

13,999

 

$

11,803

 

 
Tax-equivalent net interest income

$

209,023

 

$

116,616

 

$

55,218

 

$

53,530

 

$

54,560

 

$

45,714

 

$

29,730

 

Non-interest income (excluding securities gains/losses)

 

79,130

 

 

44,932

 

 

18,593

 

 

23,520

 

 

23,017

 

 

13,999

 

 

11,803

 

Total revenues

 

288,153

 

 

161,548

 

 

73,811

 

 

77,050

 

 

77,577

 

 

59,713

 

 

41,533

 

Core non-interest expenses

$

144,278

 

$

95,662

 

$

39,123

 

$

38,445

 

$

35,885

 

$

30,824

 

$

23,839

 

Core efficiency ratio

 

50.07

%

 

59.22

%

 

53.00

%

 

49.90

%

 

46.26

%

 

51.62

%

 

57.40

%

 
Income (loss) before income taxes

$

79,269

 

$

60,637

 

$

39,087

 

$

31,914

 

$

36,360

 

$

(28,092

)

$

15,470

 

Add: Provision for credit losses

 

44,250

 

 

2,884

 

 

(6,764

)

 

2,794

 

 

2,975

 

 

45,244

 

 

1,123

 

Pre-tax pre-provision income

 

123,519

 

 

63,521

 

 

32,323

 

 

34,708

 

 

39,335

 

 

17,152

 

 

16,593

 

Add: Acquisition related charges (pre-tax)

 

19,485

 

 

1,422

 

 

2,190

 

 

3,711

 

 

2,099

 

 

11,486

 

 

882

 

Core pre-tax pre-provision income

$

143,004

 

$

64,943

 

$

34,513

 

$

38,419

 

$

41,434

 

$

28,638

 

$

17,475

 

Average total assets

$

6,592,633

 

$

3,283,780

 

$

7,089,060

 

$

6,935,783

 

$

7,005,783

 

$

5,357,598

 

$

3,425,097

 

Core pre-tax pre-provision return on average assets

 

2.17

%

 

1.98

%

 

1.94

%

 

2.20

%

 

2.38

%

 

2.15

%

 

2.02

%

 
Net income (loss)

$

63,077

 

$

49,370

 

$

30,847

 

$

25,655

 

$

29,057

 

$

(22,482

)

$

12,517

 

Add: Acquisition related provision (after-tax)

 

20,500

 

 

1,309

 

 

-

 

 

-

 

 

-

 

 

20,500

 

 

-

 

Add: Acquisition related charges (after-tax)

 

15,771

 

 

-

 

 

1,730

 

 

2,932

 

 

1,658

 

 

9,452

 

 

697

 

Core net income

$

99,348

 

$

50,679

 

$

32,577

 

$

28,587

 

$

30,715

 

$

7,470

 

$

13,214

 

 
Diluted shares - Reported

 

35,949

 

 

19,931

 

 

37,350

 

 

37,334

 

 

37,324

 

 

31,642

 

 

19,895

 

Add: Dilutive shares for core net income

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

121

 

 

-

 

Diluted shares - Core

 

35,949

 

 

19,931

 

 

37,350

 

 

37,334

 

 

37,324

 

 

31,763

 

 

19,895

 

Core diluted EPS

$

2.76

 

$

2.54

 

$

0.87

 

$

0.77

 

$

0.82

 

$

0.24

 

$

0.66

 

 
Average total assets

$

6,592,633

 

$

3,283,780

 

$

7,089,060

 

$

6,935,783

 

$

7,005,783

 

$

5,357,598

 

$

3,425,097

 

Core return on average assets

 

1.51

%

 

1.54

%

 

1.83

%

 

1.64

%

 

1.76

%

 

0.56

%

 

1.53

%

 
Average total equity

$

898,092

 

$

406,286

 

$

946,223

 

$

927,506

 

$

932,793

 

$

787,519

 

$

420,352

 

Core return on average equity

 

11.06

%

 

12.47

%

 

13.70

%

 

12.26

%

 

13.24

%

 

3.82

%

 

12.47

%

 
Note: 2020 current quarter and year-to-date results include three and eleven months of operations from UCFC, respectively, compared to none for comparable periods in 2019.
(1) Represents prepayment penalties on FHLB early extinguishments funded by gains on securities sales that are excluded from revenues for efficiency ratio calculation.

 

Contacts

Paul Nungester
EVP and CFO
419.785.8700
PNungester@yourpremierbank.com

Release Summary

PREMIER FINANCIAL CORP. ANNOUNCES STRONG QUARTERLY AND ANNUAL EARNINGS AND DIVIDEND INCREASE

Contacts

Paul Nungester
EVP and CFO
419.785.8700
PNungester@yourpremierbank.com