Premier Financial Bancorp reports 3Q
Premier Financial Bancorp Huntington, West Virginia, a $1.1 billion bank holding company with two bank subsidiaries, announced its financial results for the third quarter of 2012.
Premier realized income of $2,411,000 (37 cents per diluted share) during the quarter ending September 30, 2012, a 33.0% increase from the $1,813,000 of net income reported for the third quarter of 2011. The increase in net income in 2012 is largely due to a decrease in interest expense, and non-interest expense. These items more than offset a decrease in interest income and non-interest income plus an increase in the provision for loan losses. On a diluted per share basis, Premier earned $0.37 during the third quarter of 2012 compared to $0.19 per share earned during the third quarter of 2011. For the first nine months of 2012 Premier realized net income of $7,333,000 (90 cents per diluted share) compared to $4,513,000 (45 cents per diluted share) earned during the first nine months of 2011.
President and CEO Robert W. Walker said we are once again pleased with our quarterly earnings and per share results. It should be noted that while not included in our reported net income, our per share results were impacted in a positive way by the discount realized upon our August 2012 redemption of 10,252 shares of our Series A Preferred Stock owned by the U.S. Treasury. The effect was to increase our earnings per share by approximately 11 cents for the third quarter and first nine months of 2012.
With our release from the July 29, 2010 Written Agreement with the Federal Reserve Bank of Richmond ("FRB"), we also resumed paying a quarterly cash dividend to common shareholders at the end of September. Our operating expenses are down because our 2011 data conversion is behind us and we are realizing cost savings on the new system. We continue to realize savings in staff costs, equipment costs, and supplies. Interest expense con- tinues to decrease due to the extended low interest rate environment. However, interest income is also being negatively affected by the extended low interest rate environment, as yields on earning assets continue to decrease. We are realizing some opportunities to liquidate troubled assets for reasonable values and continue to work toward reducing our non-performing loans outstanding.
Net interest income for the quarter ending September 30, 2012 totaled $11.017 million, compared to $11.214 million of net interest income earned in the third quarter of 2011. When compared to the third quarter of 2011, net interest income decreased by $197,000, or 1.8%, largely due to a $493,000 decrease in interest income earned on loans and an $184,000 decrease in interest income earned on investments. The decreases in interest income were partially offset by $477,000 of savings on interest expense. Total interest income earned in the third quarter of 2012 decreased by $674,000, or 5.1%, when compared to the third quarter of 2011, largely due to a $493,000, or 4.4%, decrease in interest income on loans. The decrease in interest income on loans is largely due to a $16.7 million, or 2.4%, decrease in average loans outstanding during the quarter compared to the third quarter of 2011, combined with a decrease in average loan yields of 13 basis points. Moreover, interest income on investments decreased by $184,000, or 9.3%, as yields on investments have fallen by 42 basis points when compared to the third quarter of 2011. Total interest expense in the third quarter of 2012 decreased by $477,000, or 23.4%, when compared to the third quarter of 2012, largely due to a $393,000, or 22.5%, decrease in interest expense on deposits. Otherwise, a $48,000 decrease in interest expense on FHLB advances at the subsidiary banks was complemented by a $21,000, or 10.0%, decrease in interest expense on other borrowings at the parent company and a $15,000 decrease in interest expense on repurchase agreements and other shortterm borrowings.