Premier Bank Reports $31.4M Income in Q2

YOUNGSTOWN, Ohio – Premier Financial Corp. reports net income of $31.4 million, or 84 cents per share, in the second quarter.

That represents an increase of $2.3 million from the same period last year minus expenses from the merger between Home Savings Bank and First Defiance Financial Corp.

“Results for the second quarter reflect the continued economic resurgence of our business and consumer clients across all markets,” said President and CEO Gary Small in a statement. “The Premier team drove excellent new business generation and delivered solid loan growth during the quarter in our core commercial, consumer and residential mortgage business lines. Household deposits remain high, debt levels have improved and a double-digit increase in debit card and ATM revenue suggests that our clients are more confident and well on their way to a brighter future.”

Premier has made 2,880 first-round Paycheck Protection Program loans totaling $443.3 million, resulting in $13 million as loan interest income. In the second round of the program, the bank made 2,229 loans totaling $193.6 million.

Net interest income rose to $56.6 million in the second quarter, up from $54.3 million in the same period last year, attributed to an increase in interest-earning assets, PPP fees and a 53% decrease in average cost of funds.

Noninterest income fell to $17.5 million, down from $23 million in the second quarter of 2020. Mortgage banking income dropped $2.2 million, down from $9.9 million a year ago. 

“While total mortgage loan production has been consistently strong compared to prior year, gains have declined due to compressed margins, a lower saleable mix and less favorable marks on the in-process portfolio,” the bank said in its earnings report.

Total assets at Premier were $7.59 billion at the end of the second quarter, up slightly from $7.53 billion in the first quarter and $7.01 billion in the year-ago quarter. 

Gross loans receivable fell to $70.2 million due to a significant decrease – $147.2 million – in PPP loans. If those loans are excluded, organic loan growth at Premier was $77 million, or 1.5%. Commercial loans excluding PPP increased $113.2 million year-over-year, or 3.4%, despite a $45.4 million decrease in lines of credit.

Total deposits were $6.29 billion, down from $6.35 at the end of the first quarter and up from $5.76 billion in the second quarter last year.

Key performance ratios for the quarters ended June 30 and June 30, 2020, include:

  • Return on average asset: 1.67%, 1.67%.
  • Return on average equity:12.5%, 12.53%.
  • Net interest margin: 3.34%, 3.51%.
  • Efficiency ratio: 52.02%, 48.96%.

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