Form 8-K - Current report

PREMIER FINANCIAL CORP false 0000946647 0000946647 2024-07-26 2024-07-26

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 26, 2024

 

 

Premier Financial Corp.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Ohio		0-26850		34-1803915
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

601 Clinton Street
Defiance, Ohio		43512
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: 419 785-8700

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, Par Value $0.01 Per Share		PFC		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On July 26, 2024, Premier Financial Corp. (“Premier”) issued a press release regarding its earnings for the quarter ended June 30, 2024. A copy of the press release is attached as Exhibit 99.1.

The information set forth in this Current Report on Form 8-K (including the information in Exhibits 99.1 attached hereto) is being furnished to the Securities and Exchange Commission and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under the Exchange Act. Such information will not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit Number		Description
99.1		Press Release, dated July 26, 2024
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						Premier Financial Corp.
Date: July 26, 2024				By:		/s/ Gary M. Small
						Gary M. Small
						Chief Executive Officer

Exhibit 99.1

Contact:

Paul Nungester

EVP and CFO    419.785.8700    

[e-mail]

FOR IMMEDIATE RELEASE

PREMIER FINANCIAL CORP. ANNOUNCES SECOND QUARTER 2024 RESULTS

AND STRATEGIC MERGER WITH WESBANCO, INC.

DEFIANCE, OHIO (July 26, 2024) – Premier Financial Corp. (Nasdaq: PFC) (“Premier” or the “Company”) announced today 2024 second quarter results and the signing of a definitive merger agreement with Wesbanco, Inc. (Nasdaq: WSBC).

Strategic Merger

On July 26, 2024, PFC and WSBC announced the signing of a definitive merger agreement under which PFC will merge into WSBC in a stock-for-stock transaction. Under the terms of the merger agreement, shareholders of PFC will receive 0.80 shares of WSBC common stock for each share of PFC common stock. Premier Bank, a wholly owned subsidiary of PFC, will merge into Wesbanco Bank, Inc., a wholly owned subsidiary of WSBC. Based upon a closing price for WSBC as of July 25, 2024 of $34.28, the transaction is valued at approximately $987 million, or $27.42 per common share of PFC. Upon closing, PFC shareholders will own approximately 30% of the combined company. The transaction is expected to close in the first quarter of 2025, subject to the approval of shareholders of both PFC and WSBC and regulatory approvals, as well as satisfaction or waiver of other customary closing conditions. Additional information can be found in the press release announcing the merger dated July 26, 2024.

Quarterly results

Net income for the second quarter of 2024 was $16.2 million, or $0.45 per diluted common share, compared to income of $48.4 million, or $1.35 per diluted common share, for the second quarter of 2023. Second quarter 2023 results included the impact of the disposition of the Company’s insurance agency, First Insurance Group (“FIG”), for a net gain on sale after transaction costs of $32.6 million pre-tax or $0.67 per diluted common share after-tax. Excluding the impact of this transaction, second quarter 2023 earnings were $24.2 million or $0.68 per diluted common share.

 

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Net interest income and margin

Net interest income of $49.3 million on a tax equivalent (“TE”) basis in the second quarter of 2024 was down 0.7% from $49.6 million in the first quarter of 2024 and down 8.8% from $54.1 million in the second quarter of 2023. The TE net interest margin of 2.46% in the second quarter of 2024 decreased four basis points from 2.50% in the first quarter of 2024 and 26 basis points from 2.72% in the second quarter of 2023. These results are primarily impacted by changes in deposit balances/costs and loan balances/yields.

Total deposits decreased $4.8 million during the second quarter of 2024 from the first quarter of 2024 due to an $18.7 million decrease in customer deposits offset partly by an increase of $13.9 million in brokered deposits. Total average interest-bearing deposit costs increased nine basis points to 3.10% during the second quarter of 2024 from the first quarter of 2024. This increase was primarily due to new customer acquisitions and the migration of customers from non-interest-bearing deposits into interest-bearing deposits, including higher cost time deposits, as customers continue to seek better yields. Total average customer deposit costs including non-interest bearing and excluding brokered deposits and acquisition marks were 2.33% during the month of June, representing a cumulative beta of 41% compared to the change in the monthly average effective Federal Funds rate that increased 525 basis points to 5.33% since December 2021, as reported by the Federal Reserve Economic Data. Beginning in March 2024 and through June 2024, management implemented rate reductions in certain higher-cost deposit tiers. The benefit of those actions began to be realized in June 2024 as the 2.33% average cost noted above was a decline of two basis points from the prior month.

Total loans including held-for-sale decreased $10.5 million, during the second quarter of 2024, primarily due to a $14.7 million decrease in residential loans including held-for-sale. Total average loan yields increased seven basis points to 5.26% for the second quarter of 2024. This increase was primarily due to origination of higher yielding loans and payoffs of lower yielding loans. Total average loan yields excluding PPP, balance sheet hedges and acquisition marks were 5.36% during the month of June (up seven basis points from 5.29% in March), representing a cumulative beta of 31% compared to the change in the monthly average effective Federal Funds rate for the same period.

Non-interest income

Total non-interest income in the second quarter of 2024 of $12.1 million was down 3.3% from $12.5 million in the first quarter of 2024, and down 6.5% from $12.9 million in the second quarter of 2023, excluding insurance commissions and the gain on sale of insurance agency, primarily due to fluctuations in mortgage banking income. Mortgage banking income decreased $0.3 million on a linked quarter basis and $0.9 million from second quarter 2023, primarily as a result of fluctuations in gain on sale margins and MSR valuation adjustments.

Security losses were $176 thousand in the second quarter of 2024, compared to losses of $37 thousand in the first quarter of 2024 and gains of $64 thousand in the second quarter of 2023, primarily due to valuation changes on equity securities. Service fees in the second quarter of 2024 were $7.0 million, an 8.4% increase from $6.5 million in the first quarter of 2024, but a 2.5% decrease from $7.2 million in the second quarter of 2023. This change was primarily due to fluctuations in loan fees, including commercial customer swap activity. Due to the insurance agency sale on June 30, 2023, there were no insurance commissions in the second quarter of 2024, compared to $4.1 million in the second

 

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quarter of 2023. Wealth management income of $1.8 million in the second quarter of 2024 was up slightly from $1.7 million in the first quarter of 2024 and 19.8% higher than $1.5 million in the second quarter of 2023. BOLI income of $1.2 million in the second quarter of 2024 included no claim gains, compared to $1.7 million in the first quarter of 2024, including $0.5 million of claim gains, and $1.0 million in the second quarter of 2023 with no claim gains.

Non-interest expenses

Non-interest expenses excluding transaction costs in the second quarter of 2024 were $38.2 million, a 4.4% decrease from $39.9 million in the first quarter of 2024, and a 6.6% decrease from $40.8 million in the second quarter of 2023, excluding transaction costs for the insurance agency sale. Compensation and benefits were $21.4 million in the second quarter of 2024, compared to $23.4 million in the first quarter of 2024 and $24.2 million in the second quarter of 2023. The linked quarter decrease was primarily due to lower staffing and items that occur annually in the first quarter. The year-over-year decrease was primarily due to the insurance agency sale, partially offset by costs related to higher staffing levels and higher base compensation, including 2024 annual merit adjustments. Data processing costs were $5.1 million in the second quarter of 2024, compared to $4.7 million in the first quarter of 2024 and $3.6 million in the second quarter of 2023, with the year-over-year increase primarily due to the new digital platform launched in October 2023. All other non-interest expenses decreased a net $0.1 million on a linked quarter basis due to cost saving initiatives and decreased a net $1.3 million from second quarter 2023 due to the insurance agency sale and cost saving initiatives. The core efficiency ratio for the second quarter of 2024 was 62.0% compared to 64.2% in the first quarter of 2024 and 57.5% in the second quarter of 2023. The ratio of core non-interest expenses to average assets improved to 1.78% for the second quarter of 2024 from 1.87% for the first quarter of 2024 and from 1.91% for the second quarter of 2023.

Credit quality

Non-performing assets totaled $64.6 million, or 0.74% of assets, at June 30, 2024, an increase from $39.3 million at March 31, 2024, and from $37.6 million at June 30, 2023. The increase was primarily due to one large commercial credit that was previously reported in classified loans. Loan delinquencies increased to $24.6 million, or 0.36% of loans, at June 30, 2024, from $18.3 million at March 31, 2024, and from $19.0 million at June 30, 2023. Criticized loans totaled $207.8 million, or 3.04% of loans, as of June 30, 2024, an increase from $191.5 million at March 31, 2024, and from $121.2 million at June 30, 2023.

The 2024 second quarter results include net charge-offs of $2.6 million and a total provision expense of $2.9 million, compared with net loan recoveries of $0.2 million and a total provision expense of $0.5 million for the same period in 2023. The change in provision is primarily due to higher charge-offs. The allowance for credit losses as a percentage of total loans was 1.16% at June 30, 2024, compared with 1.15% at March 31, 2024, and 1.13% at June 30, 2023.

Year to date results

Net income for the first half of 2024 was $34.0 million, or $0.95 per diluted common share, compared to income of $66.5 million, or $1.86 per diluted common share for the first half of 2023. First half

 

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2023 results included the impact of the insurance agency sale for a net gain on sale after transaction costs of $32.6 million pre-tax or $0.67 per diluted common share after-tax. Excluding the impact of this item, first half 2023 earnings were income of $42.4 million or $1.19 per diluted common share.

Net interest income of $98.9 million on a TE basis for the first half of 2024 was down 10.4% from $110.4 million in the first half of 2023. The TE net interest margin of 2.48% in the first half of 2024 decreased 33 basis points from 2.81% in the first half of 2023. These results are positively impacted by the combination of loan growth and higher loan yields, which were 5.23% for the first half of 2024 compared to 4.76% in the first half of 2023. These results are negatively impacted by increase in the cost of funds in the first half of 2024 of 2.56%, up 84 basis points from the first half of 2023. The year-over-year increase is largely due to increasing costs of customer deposits and higher utilization of FHLB borrowings.

Total non-interest income in the first half of 2024 of $24.6 million was up 19.0% from $20.7 million in the first half of 2023, excluding insurance commissions and the gain on the sale of the insurance agency. Mortgage banking income increased $1.7 million year-over-year primarily as a result of a $1.3 million increase in gains due to better margins.

Security losses were $0.2 million in the first half of 2024 compared to $1.3 million in the first half of 2023, primarily due to valuations on equity securities. The company also sold $21 million of AFS securities for a $27 thousand gain with average yields less than FHLB borrowing rates during the first half of 2023. Service fees in the first half of 2024 were $13.5 million, a 1.1% decrease from $13.6 million in the first half of 2023, primarily due to fluctuations in loan fees including commercial customer swap activity and consumer activity for interchange and ATM/NSF charges. Due to the insurance agency sale on June 30, 2023, there were no insurance commissions in the first half of 2024, compared to $8.9 million in the first half of 2023. Wealth management income of $3.6 million in the first half of 2024 was up 17.7% from $3.0 million in the first half of 2023. BOLI income of $2.9 million in the first half of 2024 included $0.5 million of claim gains, compared to $2.4 million in the first half of 2023, including $0.4 million of claim gains.

Non-interest expenses excluding transaction costs in the first half of 2024 were $78.1 million, a 6.7% decrease from $83.6 million in the first half of 2023. Compensation and benefits were $44.7 million in the first half of 2024, compared to $49.8 million in the first half of 2023. The year-over-year decrease was primarily due to the insurance agency sale, partially offset by costs related to higher staffing levels and higher base compensation, including 2024 annual merit adjustments. FDIC premiums decreased $0.8 million on a year-over-year basis primarily due to lower rates. Data processing costs were $9.7 million in the first half of 2024, compared to $7.5 million in the first half of 2023, with the year-over-year increase primarily due to the new digital platform launched in October 2023. All other non-interest expenses decreased a net $1.9 million on a year-over-year basis due to the insurance agency sale and cost saving initiatives. The core efficiency ratio for the first half of 2024 of 63.1% increased from 59.2% in the first half of 2023 due to lower revenues partly offset by cost saving initiatives that began during the second quarter of 2023. The ratio of core non-interest expenses to average assets improved to 1.82% for the first half of 2024 from 1.98% for the first half of 2023.

 

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The 2024 first half results include net loan charge-offs of $3.0 million and a total provision expense of $2.8 million, compared with net loan charge-offs of $2.2 million and a total provision expense of $4.2 million for the same period in 2023. The year-over-year change in provision expense is primarily due to a decrease in loans during the first half of 2024 compared to an increase in loans during the first half of 2023.

Total assets at $8.78 billion

Total assets at June 30, 2024, were $8.78 billion, compared to $8.63 billion at March 31, 2024, and $8.62 billion at June 30, 2023. Loans receivable were $6.68 billion at June 30, 2024, compared to $6.69 billion at March 31, 2024, and $6.71 billion at June 30, 2023. Securities at June 30, 2024, were $1.09 billion, compared to $1.02 billion at March 31, 2024, and $0.97 billion at June 30, 2023. All securities are either AFS or trading and are reflected at fair value on the balance sheet. Also, at June 30, 2024, goodwill and other intangible assets totaled $305.9 million compared to $306.8 million at March 31, 2024, and $309.9 million at June 30, 2023, with the decreases due to amortization of intangibles.

Total non-brokered deposits at June 30, 2024, were $6.80 billion, compared with $6.81 billion at March 31, 2024, and $6.58 billion at June 30, 2023. Brokered deposits were $382.7 million at June 30, 2024, compared to $368.8 million at March 31, 2024 and $413.2 million at June 30, 2023. FHLB borrowings increased to $393.0 million at June 30, 2024, from $253.0 million at March 31, 2024, but decreased from $455.0 million at June 30, 2023. On June 28, 2024, $50 million of deposits were received late in the day and used to paydown FHLB borrowings on July 1, 2024.

Total stockholders’ equity was $979.1 million at June 30, 2024, compared to $974.3 million at March 31, 2024, and $937.0 million at June 30, 2023, with the increases primarily due to net earnings in excess of dividends. Excluding goodwill and intangibles, tangible equity was $673.3 million at June 30, 2024, an increase from $667.5 million at March 31, 2024, and from $627.1 million at June 30, 2023.

Regulatory ratios all improved during the second quarter of 2024, including CET1 of 11.91%, Tier 1 of 12.41% and Total Capital of 14.25%. All of these ratios also exceed well-capitalized guidelines pro forma for including accumulated other comprehensive income (“AOCI”), including CET1 of 9.61%, Tier 1 of 10.10% and Total Capital of 11.95%.

Dividend to be paid August 16

The Board of Directors declared a quarterly cash dividend of $0.31 per common share payable August 16, 2024, to shareholders of record at the close of business on August 9, 2024. The dividend represents an annual dividend yield of 4.9% percent based on the Premier common stock closing price on July 25, 2024. Premier has approximately 35,839,000 common shares outstanding.

Conference call canceled

Premier will no longer host its previously planned conference call at 10:00 a.m. ET on Wednesday, July 31, 2024.

 

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About Premier Financial Corp.

Premier Financial Corp. (Nasdaq: PFC), headquartered in Defiance, Ohio, is the holding company for Premier Bank. Premier Bank, headquartered in Youngstown, Ohio, operates 73 branches and 9 loan offices in Ohio, Michigan, Indiana and Pennsylvania and also serves clients through a team of wealth professionals dedicated to each community banking branch. For more information, visit the company’s website at PremierFinCorp.com.

Financial Statements and Highlights Follow-

Safe Harbor Statement

This document may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements may include, but are not limited to, statements regarding projections, forecasts, goals and plans of Premier Financial Corp. (“Premier”) and its management, and include statements related to the expected timing, completion and benefits of the proposed merger with WesBanco, Inc. (“WesBanco”) (the ‘Merger”), future movements of interest rates, loan or deposit production levels, future credit quality ratios, future strength in the market area, and growth projections. These statements do not describe historical or current facts and may be identified by words such as “intend,” “intent,” “believe,” “expect,” “estimate,” “target,” “plan,” “anticipate,” or similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may,” “can,” or similar verbs. There can be no assurances that the forward-looking statements included in this document will prove to be accurate. In light of the significant uncertainties in the forward-looking statements, 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, including with respect to the Merger. Forward-looking statements involve numerous risks and uncertainties, any one or more of which could affect Premier’s business and financial results in future periods and could cause actual results to differ materially from plans and projections. Factors that could cause or contribute to such differences include, but are not limited to, (1) the businesses of Premier and WesBanco may not be integrated successfully or such integration may take longer to accomplish than expected, (2) the expected cost savings and any revenue synergies from the proposed Merger may not be fully realized within the expected timeframes, (3) disruption from the proposed Merger may make it more difficult to maintain relationships with customers, associates, or suppliers, (4) the required governmental approvals of the proposed Merger may not be obtained on the expected terms and schedule, (5) Premier’s shareholders and/or WesBanco’s shareholders may not approve the proposed Merger and the merger agreement, and WesBanco’s shareholders may not approve the issuance of shares of WesBanco common stock in the proposed Merger. Further information regarding additional factors that could affect the forward-looking statements can be found in the cautionary language included under the headings “Cautionary Note Regarding Forward-Looking Statements” (in the case of Premier), “Forward-Looking Statements” (in the case of WesBanco), and “Risk Factors” in Premier’s and WesBanco’s Annual Reports on Form 10-K for the year ended December 31, 2023, and other documents subsequently filed by Premier and WesBanco with the SEC. These risks and uncertainties include other risks and uncertainties detailed from time to time in our Securities and Exchange Commission (SEC) filings, including our Annual Report on Form 10-K for the year ended December 31, 2023 and any further amendments thereto. All forward-looking statements made in this document 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 June 30, 2024, consolidated financial statements as part of its Quarterly Report on Form 10-Q to be filed with the SEC, including with respect to the Merger. 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 interest income, core net income and core pre-tax pre-provision income to be useful supplemental measures of our operating performance. We define core net interest income as net interest income on a tax-equivalent basis excluding income from PPP loans and purchase accounting marks accretion. We define core net income as net income excluding the after-tax impacts of the insurance agency gain on sale and transaction costs. We define core pre-tax pre-provision income as pre-tax pre-provision income excluding the pre-tax impact of the insurance agency gain on sale and transaction costs. 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 income from PPP loans, purchase accounting marks accretion, or the insurance agency sale. 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 non-GAAP reporting measures.

 

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Subsequent Event

As announced and further described in a separate press release jointly issued by Premier and WesBanco, Inc. today, Premier and WesBanco have entered into a merger agreement.

 

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Consolidated Balance Sheets (Unaudited)

Premier Financial Corp.

 

		June 30,				March 31,				December 31,				September 30,				June 30,
(in thousands)		2024				2024				2023				2023				2023
Assets
Cash and cash equivalents
Cash and amounts due from depositories		$	72,053			$	57,956			$	81,973			$	70,642			$	71,096
Interest-bearing deposits			83,598				31,725				32,783				46,855				50,631
			155,651				89,681				114,756				117,497				121,727
Available-for-sale, carried at fair value			1,081,120				1,014,433				946,708				911,184				961,123
Equity securities, carried at fair value			5,559				5,736				5,773				5,860				6,458
Securities investments			1,086,679				1,020,169				952,481				917,044				967,581
Loans (1)			6,682,138				6,693,745				6,739,387				6,696,869				6,708,568
Allowance for credit losses - loans			(77,222	)			(76,679	)			(76,512	)			(76,513	)			(75,921	)
Loans, net			6,604,916				6,617,066				6,662,875				6,620,356				6,632,647
Loans held for sale			138,604				137,523				145,641				135,218				128,079
Mortgage servicing rights			18,140				18,628				18,696				19,642				20,160
Accrued interest receivable			35,334				34,795				33,446				34,648				30,056
Federal Home Loan Bank stock			32,189				26,075				21,760				25,049				39,887
Bank Owned Life Insurance			183,409				182,203				181,544				172,906				171,856
Office properties and equipment			55,073				57,231				56,878				55,679				55,736
Real estate and other assets held for sale			394				255				243				387				561
Goodwill			295,602				295,602				295,602				295,602				295,602
Core deposit and other intangibles			10,250				11,196				12,186				13,220				14,298
Other assets			162,452				140,630				129,841				155,628				138,021
Total Assets		$	8,778,693			$	8,631,054			$	8,625,949			$	8,562,876			$	8,616,211
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits		$	1,438,764			$	1,467,161			$	1,591,979			$	1,545,595			$	1,573,837
Interest-bearing deposits			5,357,112				5,347,444				5,209,123				5,127,863				5,007,358
Brokered deposits			382,678				368,782				341,944				392,181				413,237
Total deposits			7,178,554				7,183,387				7,143,046				7,065,639				6,994,432
Advances from FHLB			393,000				253,000				280,000				339,000				455,000
Subordinated debentures			85,292				85,261				85,229				85,197				85,166
Advance payments by borrowers			13,391				16,861				23,277				22,781				26,045
Reserve for credit losses - unfunded commitments			3,343				3,614				4,307				4,690				5,708
Other liabilities			125,984				114,590				114,463				126,002				112,889
Total Liabilities			7,799,564				7,656,713				7,650,322				7,643,309				7,679,240
Stockholders’ Equity
Preferred stock			—				—				—				—				—
Common stock, net			306				306				306				306				306
Additional paid-in-capital			689,743				689,468				690,585				690,038				689,579
Accumulated other comprehensive income (loss)			(163,038	)			(162,081	)			(153,719	)			(200,282	)			(168,721	)

 

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Retained earnings			581,715				576,648				569,937				560,945				547,336
Treasury stock, at cost			(129,597	)			(130,000	)			(131,482	)			(131,440	)			(131,529	)
Total Stockholders’ Equity			979,129				974,341				975,627				919,567				936,971
Total Liabilities and Stockholders’ Equity		$	8,778,693			$	8,631,054			$	8,625,949			$	8,562,876			$	8,616,211
(1) Includes PPP loans of:		$	369			$	417			$	469			$	526			$	577

 

9

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Consolidated Statements of Income (Unaudited) 

Premier Financial Corp. 

 

		Three Months Ended																				Six Months Ended
(in thousands, except per share amounts)		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23				6/30/24				6/30/23
Interest Income:
Loans		$	88,560			$	87,597			$	87,924			$	86,612			$	81,616			$	176,156			$	157,674
Investment securities			8,666				7,602				7,013				6,943				6,997				16,268				14,257
Interest-bearing deposits			638				609				740				652				641				1,247				1,085
FHLB stock dividends			606				534				621				690				905				1,141				1,299
Total interest income			98,470				96,342				96,298				94,897				90,159				194,812				174,315
Interest Expense:
Deposits			43,927				42,567				39,250				34,874				26,825				86,494				48,283
FHLB advances			4,159				3,039				3,328				4,597				8,217				7,198				13,554
Subordinated debentures			1,159				1,162				1,169				1,162				1,125				2,321				2,199
Notes Payable			—				—				—				—				—				—				—
Total interest expense			49,245				46,768				43,747				40,633				36,167				96,013				64,036
Net interest income			49,225				49,574				52,551				54,264				53,992				98,799				110,279
Provision (benefit) for credit losses - loans			3,173				560				2,143				245				1,410				3,733				5,354
Provision (benefit) for credit losses - unfunded commitments			(271	)			(693	)			(382	)			(1,018	)			(870	)			(964	)			(1,108	)
Total provision (benefit) for credit losses			2,902				(133	)			1,761				(773	)			540				2,769				4,246
Net interest income after provision			46,323				49,707				50,790				55,037				53,452				96,030				106,033
Non-interest Income:
Service fees and other charges			7,008				6,467				6,761				6,947				7,190				13,475				13,618
Mortgage banking income			2,047				2,350				802				3,274				2,940				4,396				2,666
Gain (loss) on sale of non-mortgage loans			—				67				94				—				71				67				71
Gain (loss) on sale of available for sale securities			—				—				10				—				(7	)			—				27
Gain (loss) on equity securities			(176	)			(37	)			665				256				71				(213	)			(1,374	)
Gain on sale of insurance agency			—				—				—				—				36,296				—				36,296
Insurance commissions			—				—				—				—				4,131				—				8,856
Wealth management income			1,842				1,713				1,791				1,509				1,537				3,556				3,022
Income from Bank Owned Life Insurance			1,207				1,697				1,532				1,050				1,015				2,904				2,432
Other non-interest income			150				239				134				217				102				389				194
Total non-interest Income			12,078				12,496				11,789				13,253				53,346				24,574				65,808
Non-interest Expense:
Compensation and benefits			21,353				23,394				20,963				21,813				24,175				44,747				49,833
Occupancy			3,434				3,365				3,318				3,145				3,320				6,799				6,894
FDIC insurance premium			1,150				1,120				1,383				1,346				1,786				2,270				3,074
Financial institutions tax			980				1,035				761				989				961				2,015				1,813
Data processing			5,067				4,670				4,678				4,010				3,640				9,737				7,503
Amortization of intangibles			946				990				1,033				1,078				1,223				1,936				2,493
Other non-interest expense			5,228				5,326				5,757				5,671				5,738				10,554				12,024
Total non-interest operating expenses			38,158				39,900				37,893				38,052				40,843				78,058				83,634
Transaction costs			50				—				—				—				3,652				50				3,652
Total non-interest expenses			38,208				39,900				37,893				38,052				44,495				78,108				87,286
Income (loss) before income taxes			20,193				22,303				24,686				30,238				62,303				42,496				84,555

 

10

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Income tax expense (benefit)			4,017				4,514				4,616				5,551				13,912				8,531				18,015
Net income (loss)		$	16,176			$	17,789			$	20,070			$	24,687			$	48,391			$	33,965			$	66,540
Earnings per common share:
Basic		$	0.45			$	0.50			$	0.56			$	0.69			$	1.35			$	0.95			$	1.86
Diluted		$	0.45			$	0.50			$	0.56			$	0.69			$	1.35			$	0.95			$	1.86
Average Shares Outstanding:
Basic			35,715				35,772				35,655				35,730				35,722				35,696				35,686
Diluted			35,793				35,771				35,772				35,794				35,800				35,789				35,750

 

11

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Premier Financial Corp.

Selected Quarterly Information

 

		Three Months Ended																				Six Months Ended
(dollars in thousands, except per share data)		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23				6/30/24				6/30/23
Summary of Operations
Tax-equivalent interest income (1)		$	98,542			$	96,417			$	96,340			$	94,951			$	90,226			$	194,959			$	174,485
Interest expense			49,245				46,768				43,747				40,633				36,167				96,013				64,036
Tax-equivalent net interest income (1)			49,297				49,649				52,593				54,318				54,059				98,946				110,449
Provision expense for credit losses			2,902				(133	)			1,761				(773	)			540				2,769				4,246
Non-interest income (ex securities gains/losses)			12,254				12,533				11,114				12,997				53,282				24,787				67,155
Core non-interest income (ex securities gains/losses) (2)			12,254				12,533				11,114				12,997				16,986				24,787				30,859
Non-interest expense			38,208				39,900				37,893				38,052				44,495				78,108				87,286
Core non-interest expense (2)			38,158				39,900				37,893				38,052				40,843				78,058				83,634
Income tax expense (benefit)			4,017				4,514				4,616				5,551				13,912				8,531				18,015
Net income (loss)			16,176				17,789				20,070				24,687				48,391				33,965				66,540
Core net income (2)			16,215				17,789				20,070				24,687				24,230				34,004				42,379
Tax equivalent adjustment (1)			72				75				42				54				67				147				170
At Period End
Total assets		$	8,778,693			$	8,631,054			$	8,625,949			$	8,562,876			$	8,616,211
Goodwill and intangibles			305,852				306,798				307,788				308,822				309,900
Tangible assets (3)			8,472,841				8,324,256				8,318,161				8,254,054				8,306,311
Earning assets			7,945,986				7,832,558				7,815,540				7,744,522				7,818,825
Loans			6,682,138				6,693,745				6,739,387				6,696,869				6,708,568
Allowance for loan losses			77,222				76,679				76,512				76,513				75,921
Deposits			7,178,554				7,183,387				7,143,046				7,065,639				6,994,432
Stockholders’ equity			979,129				974,341				975,627				919,567				936,971
Stockholders’ equity / assets			11.15	%			11.29	%			11.31	%			10.74	%			10.87	%
Tangible equity (3)			673,277				667,543				667,839				610,745				627,071
Tangible equity / tangible assets			7.95	%			8.02	%			8.03	%			7.40	%			7.55	%
Average Balances
Total assets		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
Earning assets			8,016,157				7,956,887				7,936,648				7,969,363				7,951,520				7,986,522				7,871,629
Loans			6,730,698				6,745,823				6,754,782				6,763,232				6,714,240				6,738,261				6,625,155
Deposits and interest-bearing liabilities			7,533,717				7,476,431				7,447,324				7,486,595				7,538,674				7,505,073				7,462,732
Deposits			7,119,191				7,144,343				7,098,265				7,045,827				6,799,605				7,131,767				6,816,469
Stockholders’ equity			968,451				974,560				930,835				939,456				921,441				971,505				911,569

 

12

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Goodwill and intangibles			306,303				307,226				308,243				309,330				334,862				306,765				335,636
Tangible equity (3)			662,148				667,334				622,592				630,126				586,579				664,740				575,933
Per Common Share Data
Earnings per share (“EPS”) - Basic		$	0.45			$	0.50			$	0.56			$	0.69			$	1.35			$	0.95			$	1.86
EPS - Diluted			0.45				0.50				0.56				0.69				1.35				0.95				1.86
EPS - Core diluted (2)			0.45				0.50				0.56				0.69				0.68				0.95				1.19
Dividends Paid			0.31				0.31				0.31				0.31				0.31				0.62				0.62
Market Value:
High		$	21.30			$	24.50			$	24.87			$	22.89			$	21.01			$	24.15			$	27.99
Low			18.72				18.68				15.79				15.70				13.60				18.72				13.60
Close			20.46				20.30				24.10				17.06				16.02				20.46				16.02
Common Book Value			27.32				27.20				27.31				25.74				26.23
Tangible Common Book Value (3)			18.79				18.64				18.69				17.09				17.55
Shares outstanding, end of period (000s)			35,840				35,817				35,730				35,731				35,727
Performance Ratios (annualized)
Tax-equivalent net interest margin (1)			2.46	%			2.50	%			2.65	%			2.73	%			2.72	%			2.48	%			2.81	%
Return on average assets			0.75	%			0.83	%			0.93	%			1.14	%			2.26	%			0.79	%			1.58	%
Core return on average assets (2)			0.75	%			0.83	%			0.93	%			1.14	%			1.13	%			0.79	%			1.00	%
Return on average equity			6.72	%			7.34	%			8.55	%			10.43	%			21.06	%			7.03	%			14.72	%
Core return on average equity (2)			6.73	%			7.34	%			8.55	%			10.43	%			10.55	%			7.04	%			9.38	%
Return on average tangible equity			9.83	%			10.72	%			12.79	%			15.54	%			33.09	%			10.28	%			23.30	%
Core return on average tangible equity (2)			9.85	%			10.72	%			12.79	%			15.54	%			16.57	%			10.29	%			14.84	%
Efficiency ratio (4)			62.08	%			64.17	%			59.48	%			56.53	%			41.45	%			63.13	%			49.15	%
Core efficiency ratio (2)			61.99	%			64.17	%			59.48	%			56.53	%			57.49	%			63.09	%			59.19	%
Non-interest expenses / average assets			1.78	%			1.87	%			1.76	%			1.76	%			2.08	%			1.82	%			2.07	%
Core non-interest expenses / average assets			1.78	%			1.87	%			1.76	%			1.76	%			1.91	%			1.82	%			1.98	%
Effective tax rate			19.89	%			20.24	%			18.70	%			18.36	%			22.33	%			20.07	%			21.31	%
Core effective tax rate			19.90	%			20.24	%			18.70	%			18.36	%			22.33	%			20.08	%			18.36	%
Common dividend payout ratio			68.89	%			62.00	%			55.36	%			44.93	%			22.96	%			65.26	%			33.33	%
Core common dividend payout ratio			68.89	%			62.00	%			55.36	%			44.93	%			22.96	%			65.26	%			52.10	%

 

(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)	Core items exclude the impact of strategic merger and insurance agency disposition related items. See non-GAAP reconciliations.

(3)

Tangible assets = total assets less the sum of goodwill and core deposit and other intangibles. Tangible equity = total stockholders’ equity less the sum of goodwill, core deposit and other intangibles, and preferred stock. Tangible common book value = tangible equity divided by shares outstanding at the end of the period.

(4)	Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.

 

13

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Premier Financial Corp.

Yield Analysis

 

(dollars in thousands)		Three Months Ended																				Six Months Ended
		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23				6/30/24				6/30/23
Average Balances
Interest-earning assets:
Loans receivable (1)		$	6,730,698			$	6,745,823			$	6,754,782			$	6,763,232			$	6,714,240			$	6,738,261			$	6,625,155
Securities			1,221,006				1,152,346				1,121,231				1,137,730				1,155,451				1,186,676				1,172,809
Interest Bearing Deposits			37,226				34,924				36,761				38,210				36,730				36,075				35,898
FHLB stock			27,227				23,794				23,874				30,191				45,099				25,510				37,767
Total interest-earning assets			8,016,157				7,956,887				7,936,648				7,969,363				7,951,520				7,986,522				7,871,629
Non-interest-earning assets			629,867				635,060				599,545				612,856				646,266				632,463				644,269
Total assets		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
Deposits and Interest-bearing Liabilities:
Interest bearing deposits		$	5,669,033			$	5,650,823			$	5,541,498			$	5,490,945			$	5,195,727			$	5,659,928			$	5,137,442
FHLB advances and other			329,253				246,846				263,848				355,576				653,923				288,049				561,133
Subordinated debentures			85,273				85,242				85,211				85,179				85,146				85,257				85,130
Notes payable			—				—				—				13				—				—				—
Total interest-bearing liabilities			6,083,559				5,982,911				5,890,557				5,931,713				5,934,796				6,033,234				5,783,705
Non-interest bearing deposits			1,450,158				1,493,520				1,556,767				1,554,882				1,603,878				1,471,839				1,679,027
Total including non-interest-bearing deposits			7,533,717				7,476,431				7,447,324				7,486,595				7,538,674				7,505,073				7,462,732
Other non-interest-bearing liabilities			143,856				140,956				158,034				156,168				137,671				142,407				141,597
Total liabilities			7,677,573				7,617,387				7,605,358				7,642,763				7,676,345				7,647,480				7,604,329
Stockholders’ equity			968,451				974,560				930,835				939,456				921,441				971,505				911,569
Total liabilities and stockholders’ equity		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
IEAs/IBLs			132	%			133	%			135	%			134	%			134	%			132	%			136	%
Interest Income/Expense
Interest-earning assets:
Loans receivable (2)		$	88,567			$	87,603			$	87,929			$	86,618			$	81,622			$	176,169			$	157,684
Securities (2)			8,731				7,671				7,050				6,991				7,058				16,402				14,417
Interest Bearing Deposits			638				609				740				652				641				1,247				1,085
FHLB stock			606				534				621				690				905				1,141				1,299
Total interest-earning assets			98,542				96,417				96,340				94,951				90,226				194,959				174,485

 

14

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Deposits and Interest-bearing Liabilities:
Interest bearing deposits		$	43,927			$	42,567			$	39,250			$	34,874			$	26,825			$	86,494			$	48,283
FHLB advances and other			4,159				3,039				3,328				4,597				8,217				7,198				13,554
Subordinated debentures			1,159				1,162				1,169				1,162				1,125				2,321				2,199
Notes payable			—				—				—				—				—				—				—
Total interest-bearing liabilities			49,245				46,768				43,747				40,633				36,167				96,013				64,036
Non-interest bearing deposits			—				—				—				—				—				—				—
Total including non-interest-bearing deposits			49,245				46,768				43,747				40,633				36,167				96,013				64,036
Net interest income		$	49,297			$	49,649			$	52,593			$	54,318			$	54,059			$	98,946			$	110,449
Annualized Average Rates
Interest-earning assets:
Loans receivable			5.26	%			5.19	%			5.21	%			5.12	%			4.86	%			5.23	%			4.76	%
Securities (3)			2.86	%			2.66	%			2.52	%			2.46	%			2.44	%			2.76	%			2.46	%
Interest Bearing Deposits			6.86	%			6.98	%			8.05	%			6.83	%			6.98	%			6.91	%			6.04	%
FHLB stock			8.90	%			8.98	%			10.40	%			9.14	%			8.03	%			8.95	%			6.88	%
Total interest-earning assets			4.92	%			4.85	%			4.86	%			4.77	%			4.54	%			4.88	%			4.43	%
Deposits and Interest-bearing Liabilities:
Interest bearing deposits			3.10	%			3.01	%			2.83	%			2.54	%			2.07	%			3.06	%			1.88	%
FHLB advances and other			5.05	%			4.92	%			5.05	%			5.17	%			5.03	%			5.00	%			4.83	%
Subordinated debentures			5.44	%			5.45	%			5.49	%			5.46	%			5.29	%			5.44	%			5.17	%
Notes payable			—				—				—				—				—				—				—
Total interest-bearing liabilities			3.24	%			3.13	%			2.97	%			2.74	%			2.44	%			3.18	%			2.21	%
Non-interest bearing deposits			—				—				—				—				—				—				—
Total including non-interest-bearing deposits			2.61	%			2.50	%			2.35	%			2.17	%			1.92	%			2.56	%			1.72	%
Net interest spread			1.68	%			1.72	%			1.89	%			2.03	%			2.10	%			1.70	%			2.22	%
Net interest margin (4)			2.46	%			2.50	%			2.65	%			2.73	%			2.72	%			2.48	%			2.81	%
(1) Includes average PPP loans of:		$	394			$	442			$	495			$	553			$	673			$	418			$	818

 

(2)

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%.

 

15

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(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.

 

16

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Premier Financial Corp.

Deposits and Liquidity 

(dollars in thousands) 

 

		As of and for the Three Months Ended
		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23
Ending Balances
Non-interest-bearing demand deposits		$	1,438,764			$	1,467,161			$	1,591,979			$	1,545,595			$	1,573,837
Savings deposits			632,831				656,122				677,679				709,938				748,392
Interest-bearing demand deposits			530,932				553,331				565,757				580,069				594,325
Money market account deposits			1,437,688				1,426,809				1,374,526				1,279,551				1,282,721
Time deposits			1,052,934				1,051,955				998,002				925,353				904,717
Public funds, ICS and CDARS deposits			1,702,727				1,659,227				1,593,159				1,632,952				1,477,203
Brokered deposits			382,678				368,782				341,944				392,181				413,237
Total deposits		$	7,178,554			$	7,183,387			$	7,143,046			$	7,065,639			$	6,994,432
Average Balances
Non-interest-bearing demand deposits		$	1,450,158			$	1,493,520			$	1,556,767			$	1,554,882			$	1,603,878
Savings deposits			643,523				663,786				691,295				728,545				762,074
Interest-bearing demand deposits			546,496				547,168				557,210				575,744				603,572
Money market account deposits			1,430,619				1,411,075				1,331,623				1,278,381				1,311,177
Time deposits			1,049,566				1,025,946				959,420				912,579				872,991
Public funds, ICS and CDARS deposits			1,636,188				1,618,554				1,614,339				1,573,213				1,399,749
Brokered deposits			362,641				384,294				387,611				422,483				246,164
Total deposits		$	7,119,191			$	7,144,343			$	7,098,265			$	7,045,827			$	6,799,605
Average Rates
Non-interest-bearing demand deposits			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Savings deposits			0.03	%			0.03	%			0.03	%			0.03	%			0.02	%
Interest-bearing demand deposits			0.08	%			0.12	%			0.13	%			0.11	%			0.10	%
Money market account deposits			2.94	%			2.83	%			2.65	%			2.02	%			1.73	%
Time deposits			3.80	%			3.55	%			3.15	%			2.68	%			2.27	%
Public funds, ICS and CDARS deposits			4.52	%			4.48	%			4.30	%			4.18	%			3.71	%
Brokered deposits			5.32	%			5.33	%			5.46	%			5.36	%			4.92	%
Total deposits			2.47	%			2.38	%			2.21	%			1.98	%			1.58	%
Other Deposits Data
Loans/Deposits Ratio			93.1	%			93.2	%			94.3	%			94.8	%			95.9	%
Uninsured deposits %			32.5	%			32.6	%			33.1	%			32.8	%			31.5	%
Adjusted uninsured deposits % (1)			17.0	%			17.6	%			18.9	%			17.7	%			17.3	%
Top 20 depositors %			14.4	%			14.0	%			13.9	%			14.1	%			12.4	%
Public funds %			18.9	%			18.5	%			17.9	%			18.8	%			17.5	%
Average account size (excluding brokered)		$	27.5			$	27.0			$	26.9			$	27.1			$	26.7
Securities Data
Held-to-maturity (HTM) at fair value		$	—			$	—			$	—			$	—			$	—
Available-for-sale (AFS) at fair value (2)			1,081,120				1,014,433				946,708				911,184				961,123
Equity investment at fair value (3)			5,559				5,736				5,773				5,860				6,458
Total securities at fair value		$	1,086,679			$	1,020,169			$	952,481			$	917,044			$	967,581
Cash+Securities/Assets			14.2	%			12.9	%			12.4	%			12.1	%			12.6	%
Projected AFS cash flow in next 12 months		$	115,609			$	89,563			$	69,067			$	66,495			$	64,687
AFS average life (years)			4.9				5.3				6.2				6.5				6.5

 

17

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Liquidity Sources
Cash and cash equivalents		$	155,651			$	89,681			$	114,756			$	117,497			$	121,727
Unpledged securities at fair value			477,776				398,610				314,385				280,916				298,471
FHLB borrowing capacity			1,247,632				1,383,086				1,336,707				1,311,091				1,542,459
Brokered deposits			492,359				491,447				513,767				316,697				288,719
Bank and parent lines of credit			70,000				70,000				70,000				70,000				70,000
Federal Reserve - Discount Window and BTFP (4)			702,712				680,456				620,518				471,395				491,141
Total		$	3,146,130			$	3,113,280			$	2,970,133			$	2,567,596			$	2,812,517
Total liquidity to adjusted uninsured deposits ratio			255.7	%			244.7	%			218.3	%			204.0	%			230.5	%

 

(1)	Adjusted for collateralized deposits, other insured deposits and intra-company accounts.

(2)	Mark-to-market included in accumulated other comprehensive income.

(3)	Mark-to-market included in net income each quarter.

(4)	Includes capacity related to unpledged securities at par value in excess of fair value under Bank Term Funding Program prior to 3/31/24.

 

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Premier Financial Corp. 

Loans and Capital 

(dollars in thousands) 

 

		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23
Loan Portfolio Composition
Residential real estate		$	1,805,984			$	1,816,416			$	1,810,265			$	1,797,676			$	1,711,632
Residential real estate construction			9,649				15,009				28,794				51,637				111,708
Total residential loans			1,815,633				1,831,425				1,839,059				1,849,313				1,823,340
Commercial real estate			2,844,792				2,830,086				2,839,905				2,820,410				2,848,410
Commercial construction			513,652				535,294				528,563				502,502				472,328
Commercial excluding PPP			1,037,718				1,030,620				1,056,334				1,038,939				1,068,795
Core commercial loans (1)			4,396,162				4,396,000				4,424,802				4,361,851				4,389,533
Consumer direct/indirect			187,936				187,664				193,830				203,800				210,390
Home equity and improvement lines			268,699				265,362				267,960				269,053				272,792
Total consumer loans			456,635				453,026				461,790				472,853				483,182
Deferred loan origination fees			13,339				12,877				13,267				12,326				11,936
Core loans (1)			6,681,769				6,693,328				6,738,918				6,696,343				6,707,991
PPP loans			369				417				469				526				577
Total loans		$	6,682,138			$	6,693,745			$	6,739,387			$	6,696,869			$	6,708,568
Loans held for sale		$	138,604			$	137,523			$	145,641			$	135,218			$	128,079
Core residential loans (1)			1,954,237				1,968,948				1,984,700				1,984,531				1,951,419
Total loans including loans held for sale but excluding PPP			6,820,373				6,830,851				6,884,559				6,831,561				6,836,070
Undisbursed construction loan funds - residential		$	52,140			$	57,246			$	72,748			$	82,689			$	102,198
Undisbursed construction loan funds - commercial			123,445				151,677				208,718				284,610				353,455
Undisbursed construction loan funds - total			175,585				208,923				281,466				367,299				455,653
Total construction loans including undisbursed funds		$	698,886			$	759,226			$	838,823			$	921,438			$	1,039,689
Gross loans (2)		$	6,844,384			$	6,889,791			$	7,007,586			$	7,051,842			$	7,152,285
Fixed rate loans %			48.7	%			49.0	%			49.3	%			49.8	%			49.8	%
Floating rate loans %			16.2	%			16.5	%			15.6	%			15.8	%			15.9	%
Adjustable rate loans repricing within 1 year %			5.2	%			3.4	%			3.4	%			2.9	%			1.5	%
Adjustable rate loans repricing over 1 year %			29.9	%			31.1	%			31.7	%			31.5	%			32.8	%
Commercial Real Estate Loans Composition
Non owner occupied excluding office		$	1,047,892			$	1,026,598			$	1,027,801			$	1,023,585			$	1,012,400
Non owner occupied office			186,266				189,436				205,302				207,869				225,046
Owner occupied excluding office			668,327				656,825				653,849				597,303				603,650
Owner occupied office			107,555				112,706				113,679				106,761				107,240
Multifamily			642,469				652,371				642,651				627,602				633,909
Agriculture land			121,597				121,102				121,544				119,710				123,104
Other commercial real estate			70,686				71,048				75,079				137,580				143,061
Total commercial real estate loans		$	2,844,792			$	2,830,086			$	2,839,905			$	2,820,410			$	2,848,410

 

19

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Capital Balances
Total equity		$	979,129			$	974,341			$	975,627			$	919,567			$	936,971
Less: Regulatory goodwill and intangibles			300,770				301,716				302,706				303,740				304,818
Less: Accumulated other comprehensive income/(loss) (“AOCI”)			(163,038	)			(162,081	)			(153,719	)			(200,282	)			(168,721	)
Common equity tier 1 capital (“CET1”)			841,397				834,706				826,640				816,109				800,874
Add: Tier 1 subordinated debt			35,000				35,000				35,000				35,000				35,000
Tier 1 capital			876,397				869,706				861,640				851,109				835,874
Add: Regulatory allowances			80,247				79,827				80,231				80,791				80,812
Add: Tier 2 subordinated debt			50,000				50,000				50,000				50,000				50,000
Total risk-based capital		$	1,006,644			$	999,533			$	991,871			$	981,900			$	966,686
Total risk-weighted assets		$	7,062,328			$	7,013,832			$	7,066,743			$	7,329,471			$	7,381,940
Capital Ratios
CET1 Ratio			11.91	%			11.90	%			11.70	%			11.13	%			10.85	%
CET1 Ratio including AOCI			9.61	%			9.59	%			9.52	%			8.40	%			8.56	%
Tier 1 Capital Ratio			12.41	%			12.40	%			12.19	%			11.61	%			11.32	%
Tier 1 Capital Ratio including AOCI			10.10	%			10.09	%			10.02	%			8.88	%			9.04	%
Total Capital Ratio			14.25	%			14.25	%			14.04	%			13.39	%			13.10	%
Total Capital Ratio including AOCI			11.95	%			11.94	%			11.86	%			10.66	%			10.81	%

 

(1)

Core loans represents total loans excluding undisbursed loan funds, deferred loan origination fees and PPP loans. Core commercial loans represents total commercial real estate, commercial and commercial construction excluding commercial undisbursed loan funds, deferred loan origination fees and PPP loans. Core residential loans represents total loans held for sale, one to four family residential real estate and residential construction excluding residential undisbursed loan funds and deferred loan origination fees.

(2)	Gross loans represent total loans including undisbursed construction funds but excluding deferred loan origination fees.

 

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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
June 30, 2024
One to four family residential real estate		$	1,805,984			$	1,781,241			$	8,960				0.50	%		$	15,783				0.87	%
Construction			698,886				698,886				—				0.00	%			—				0.00	%
Commercial real estate			2,844,792				2,832,095				8,581				0.30	%			4,116				0.14	%
Commercial			1,038,087				998,954				328				0.03	%			38,805				3.74	%
Home equity and improvement			268,699				264,563				2,478				0.92	%			1,658				0.62	%
Consumer finance			187,936				179,842				4,298				2.29	%			3,796				2.02	%
Gross loans		$	6,844,384			$	6,755,581			$	24,645				0.36	%		$	64,158				0.94	%
March 31, 2024
One to four family residential real estate		$	1,816,416			$	1,797,169			$	5,834				0.32	%		$	13,413				0.74	%
Construction			759,226				759,226				—				0.00	%			—				0.00	%
Commercial real estate			2,830,086				2,821,750				1,083				0.04	%			7,253				0.26	%
Commercial			1,031,037				1,013,857				4,440				0.43	%			12,740				1.24	%
Home equity and improvement			265,362				260,683				2,613				0.98	%			2,066				0.78	%
Consumer finance			187,664				179,741				4,364				2.33	%			3,559				1.90	%
Gross loans		$	6,889,791			$	6,832,426			$	18,334				0.27	%		$	39,031				0.57	%
June 30, 2023
One to four family residential real estate		$	1,711,632			$	1,694,024			$	7,320				0.43	%		$	10,288				0.60	%
Construction			1,039,689				1,039,404				285				0.03	%			—				0.00	%
Commercial real estate			2,848,410				2,833,765				596				0.02	%			14,049				0.49	%
Commercial			1,069,372				1,057,057				4,290				0.40	%			8,025				0.75	%
Home equity and improvement			272,792				267,617				2,945				1.08	%			2,230				0.82	%
Consumer finance			210,390				204,404				3,587				1.70	%			2,399				1.14	%
Gross loans		$	7,152,285			$	7,096,271			$	19,023				0.27	%		$	36,991				0.52	%

Loan Risk Ratings Information

 

(dollars in thousands)		Total Balance				Pass Rated				Special Mention				% of Total				Classified				% of Total
June 30, 2024
One to four family residential real estate		$	1,796,799			$	1,781,780			$	470				0.03	%		$	14,549				0.81	%
Construction			698,886				691,386				7,500				1.07	%			—				0.00	%
Commercial real estate			2,842,924				2,747,835				48,238				1.70	%			46,851				1.65	%
Commercial			1,034,491				952,016				37,107				3.59	%			45,368				4.39	%
Home equity and improvement			267,300				265,847				—				0.00	%			1,453				0.54	%
Consumer finance			187,816				184,242				—				0.00	%			3,574				1.90	%
PCD loans			16,168				13,480				164				1.01	%			2,524				15.61	%
Gross loans		$	6,844,384			$	6,636,586			$	93,479				1.37	%		$	114,319				1.67	%

 

21

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March 31, 2024
One to four family residential real estate		$	1,806,724			$	1,794,030			$	487				0.03	%		$	12,207				0.68	%
Construction			759,226				751,726				7,500				0.99	%			—				0.00	%
Commercial real estate			2,828,138				2,749,206				53,456				1.89	%			25,476				0.90	%
Commercial			1,027,101				945,049				32,487				3.16	%			49,565				4.83	%
Home equity and improvement			263,897				262,046				—				0.00	%			1,851				0.70	%
Consumer finance			187,501				184,214				—				0.00	%			3,287				1.75	%
PCD loans			17,204				12,006				2,485				14.44	%			2,713				15.77	%
Gross loans		$	6,889,791			$	6,698,277			$	96,415				1.40	%		$	95,099				1.38	%
June 30, 2023
One to four family residential real estate		$	1,700,468			$	1,689,666			$	484				0.03	%		$	10,318				0.61	%
Construction			1,039,689				1,031,356				8,333				0.80	%			—				0.00	%
Commercial real estate			2,847,035				2,797,688				20,751				0.73	%			28,596				1.00	%
Commercial			1,063,744				1,021,403				27,376				2.57	%			14,965				1.41	%
Home equity and improvement			270,722				269,038				—				0.00	%			1,684				0.62	%
Consumer finance			210,158				207,963				—				0.00	%			2,195				1.04	%
PCD loans			20,469				13,981				3,786				18.50	%			2,702				13.20	%
Gross loans		$	7,152,285			$	7,031,095			$	60,730				0.85	%		$	60,460				0.85	%

 

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Premier Financial Corp. 

Mortgage and Credit Information 

(dollars in thousands) 

 

		As of and for the Three Months Ended																				Six Months Ended
Mortgage Banking Summary		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23				6/30/24				6/30/23
Revenue from sales and servicing of mortgage loans:
Mortgage banking gains, net		$	1,378			$	1,283			$	439			$	2,584			$	2,242			$	2,661			$	1,405
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue			1,835				1,842				1,844				1,850				1,845				3,676				3,733
Amortization of mortgage servicing rights			(1,313	)			(1,238	)			(1,257	)			(1,291	)			(1,277	)			(2,551	)			(2,496	)
Mortgage servicing rights valuation adjustments			147				463				(224	)			131				130				610				24
			669				1,067				363				690				698				1,735				1,261
Total revenue from sale/servicing of mortgage loans		$	2,047			$	2,350			$	802			$	3,274			$	2,940			$	4,396			$	2,666
Mortgage servicing rights:
Balance at beginning of period		$	18,921			$	19,452			$	20,174			$	20,823			$	21,447			$	19,452			$	21,858
Loans sold, servicing retained			678				707				535				642				653				1,385				1,461
Amortization			(1,313	)			(1,238	)			(1,257	)			(1,291	)			(1,277	)			(2,551	)			(2,496	)
Balance at end of period			18,286				18,921				19,452				20,174				20,823				18,286				20,823
Valuation allowance:
Balance at beginning of period			(293	)			(756	)			(532	)			(663	)			(793	)			(756	)			(687	)
Impairment recovery (charges)			147				463				(224	)			131				130				610				24
Balance at end of period			(146	)			(293	)			(756	)			(532	)			(663	)			(146	)			(663	)
Net carrying value at end of period		$	18,140			$	18,628			$	18,696			$	19,642			$	20,160			$	18,140			$	20,160
Allowance for credit losses - loans
Beginning allowance		$	76,679			$	76,512			$	76,513			$	75,921			$	74,273			$	76,512			$	72,816
Provision (benefit) for credit losses - loans			3,173				560				2,143				245				1,410				3,733				5,354
Net recoveries (charge-offs)			(2,630	)			(393	)			(2,144	)			347				238				(3,023	)			(2,249	)
Ending allowance		$	77,222			$	76,679			$	76,512			$	76,513			$	75,921			$	77,222			$	75,921
Total loans		$	6,682,138			$	6,693,745			$	6,739,387			$	6,696,869			$	6,708,568
Less: PPP loans			(369	)			(417	)			(469	)			(526	)			(577	)
Total loans ex PPP		$	6,681,769			$	6,693,328			$	6,738,918			$	6,696,343			$	6,707,991
Allowance for credit losses (ACL)		$	77,222			$	76,679			$	76,512			$	76,513			$	75,921
Add: Unaccreted purchase accounting marks			575				889				1,160				1,526				1,901
Adjusted ACL		$	77,797			$	77,568			$	77,672			$	78,039			$	77,822
ACL/Loans			1.16	%			1.15	%			1.14	%			1.14	%			1.13	%
Adjusted ACL/Loans ex PPP			1.16	%			1.16	%			1.15	%			1.17	%			1.16	%

 

23

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Credit Quality
Total non-performing loans (1)		$	64,158			$	39,031			$	35,491			$	39,463			$	36,991
Real estate owned (REO)			394				255				243				387				561
Total non-performing assets (2)		$	64,552			$	39,286			$	35,734			$	39,850			$	37,552
Net charge-offs (recoveries)			2,630				393				2,144				(347	)			(238	)
Allowance for credit losses / non-performing assets			119.63	%			195.18	%			214.12	%			192.00	%			202.18	%
Allowance for credit losses / non-performing loans			120.36	%			196.46	%			215.58	%			193.89	%			205.24	%
Non-performing assets / loans plus REO			0.97	%			0.59	%			0.53	%			0.60	%			0.56	%
Non-performing assets / total assets			0.74	%			0.46	%			0.41	%			0.47	%			0.44	%
Net charge-offs (recoveries) / average loans			0.16	%			0.02	%			0.13	%			-0.02	%			-0.01	%
Net charge-offs (recoveries) / average loans LTM			0.07	%			0.03	%			0.06	%			0.04	%			0.14	%

 

(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.

 

24

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Premier Financial Corp.

Non-GAAP Reconciliations

 

		Three Months Ended																				Six Months Ended
(In thousands, except per share and ratio data)		6/30/24				3/31/24				12/31/23				9/30/23				6/30/23				6/30/24				6/30/23
Total non-interest expenses		$	38,208			$	39,900			$	37,893			$	38,052			$	44,495			$	78,108			$	87,286
Less: Transaction costs (pre-tax)(1)			50				—				—				—				3,652				50				3,652
Core non-interest expenses		$	38,158			$	39,900			$	37,893			$	38,052			$	40,843			$	78,058			$	83,634
Average total assets		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
Core non-interest expenses / average assets			1.78	%			1.87	%			1.76	%			1.76	%			1.91	%			1.82	%			1.98	%
Core non-interest expenses		$	38,158			$	39,900			$	37,893			$	38,052			$	40,843			$	78,058			$	83,634
Less: Insurance agency expenses			—				—				—				—				3,432				—				6,425
Core non-interest expenses excluding insurance agency		$	38,158			$	39,900			$	37,893			$	38,052			$	37,411			-$	78,058			$	77,209
Non-interest income		$	12,078			$	12,496			$	11,789			$	13,253			$	53,346			$	24,574			$	65,808
Less: Gain on sale of insurance agency (pre-tax)			—				—				—				—				36,296				—				36,296
Core non-interest income		$	12,078			$	12,496			$	11,789			$	13,253			$	17,050			$	24,574			$	29,512
Less: Securities gains (losses)			(176	)			(37	)			675				256				64				(213	)			(1,347	)
Core non-interest income (ex securities gains/losses)		$	12,254			$	12,533			$	11,114			$	12,997			$	16,986			$	24,787			$	30,859
Tax-equivalent net interest income		$	49,297			$	49,649			$	52,593			$	54,318			$	54,059			$	98,946			$	110,449
Core non-interest income (ex securities gains/losses)			12,254				12,533				11,114				12,997				16,986				24,787				30,859
Total core revenues			61,551				62,182				63,707				67,315				71,045				123,733				141,308
Core non-interest expenses		$	38,158			$	39,900			$	37,893			$	38,052			$	40,843			$	78,058			$	83,634
Core efficiency ratio			61.99	%			64.17	%			59.48	%			56.53	%			57.49	%			63.09	%			59.19	%
Income (loss) before income taxes		$	20,193			$	22,303			$	24,686			$	30,238			$	62,303			$	42,496			$	84,555
Add: Provision (benefit) for credit losses			2,902				(133	)			1,761				(773	)			540				2,769				4,246

 

25

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Pre-tax pre-provision income			23,095				22,170				26,447				29,465				62,843				45,265				88,801
Add: Transaction costs (pre-tax)			50				—				—				—				3,652				50				3,652
Less: Gain on sale of insurance agency (pre-tax)			—				—				—				—				36,296				—				36,296
Core pre-tax pre-provision income		$	23,145			$	22,170			$	26,447			$	29,465			$	30,199			$	45,315			$	56,157
Average total assets		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
Core pre-tax pre-provision return on average assets			1.08	%			1.04	%			1.23	%			1.36	%			1.41	%			1.06	%			1.33	%
Net income (loss)		$	16,176			$	17,789			$	20,070			$	24,687			$	48,391			$	33,965			$	66,540
Less: Gain on sale of insurance agency (pre-tax)			—				—				—				—				36,296				—				36,296
Add: Transaction costs (pre-tax)			50				—				—				—				3,652				50				3,652
Add: Tax impact of above items			(11	)			—				—				—				8,483				(11	)			8,483
Core net income		$	16,215			$	17,789			$	20,070			$	24,687			$	24,230			$	34,004			$	42,379
Diluted shares - Reported			35,793				35,771				35,772				35,794				35,800				35,789				35,750
Core diluted EPS		$	0.45			$	0.50			$	0.56			$	0.69			$	0.68			$	0.95			$	1.19
Average total assets		$	8,646,024			$	8,591,947			$	8,536,193			$	8,582,219			$	8,597,786			$	8,618,985			$	8,515,898
Core return on average assets			0.75	%			0.83	%			0.93	%			1.14	%			1.13	%			0.79	%			1.00	%
Average total equity		$	968,451			$	974,560			$	930,835			$	939,456			$	921,441			$	971,505			$	911,569
Core return on average equity			6.73	%			7.34	%			8.55	%			10.43	%			10.55	%			7.04	%			9.38	%
Average total tangible equity		$	662,148			$	667,334			$	622,592			$	630,126			$	586,579			$	664,740			$	575,933
Core return on average tangible equity			9.85	%			10.72	%			12.79	%			15.54	%			16.57	%			10.29	%			14.84	%

 

(1)	Transaction costs for 2024 relate to the strategic merger transaction. Transaction costs for 2023 relate to the insurance agency sale.

 

26

Document and Entity Information	Jul. 26, 2024
Cover [Abstract]
Entity Registrant Name	PREMIER FINANCIAL CORP
Amendment Flag	false
Entity Central Index Key	0000946647
Document Type	8-K
Document Period End Date	Jul. 26, 2024
Entity Incorporation State Country Code	OH
Entity File Number	0-26850
Entity Tax Identification Number	34-1803915
Entity Address, Address Line One	601 Clinton Street
Entity Address, City or Town	Defiance
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43512
City Area Code	419
Local Phone Number	785-8700
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, Par Value $0.01 Per Share
Trading Symbol	PFC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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