Premier Weathers Q1 with $18.1M Net Income

DEFIANCE, Ohio – Premier Financial Corp. announced $18.1 million in net income, or $0.51 per diluted common share, for the first quarter of 2023.

That is down from $25.3 million, or $0.71 per diluted common share, the bank reported in the fourth quarter of 2022.

Premier reported that the lower numbers were due to the impact of $1.4 million in pre-tax equity investment losses, amounting to $0.03 per diluted share after tax; a negative mortgage pipeline hedge adjustment of $1.5 million pre-tax, or $0.03 per diluted share after tax; a commercial loan charge-off related to an annual appraisal update of $1.5 million pre-tax, or $0.03 per diluted share after-tax; as well as timing-related expenses including payroll taxes and benefits on annual incentive payouts.

Premier estimates that each 25 basis point change in the Federal Funds rate could impact net interest income by approximately $1.5 million on a pre-tax annualized basis based on the company’s balance sheet as of March 31.

“Over the course of the first quarter, the organization was fully engaged in deposit retention and expansion efforts with our consumer, wealth, commercial and public funds clients,” said Gary Small, president and CEO of Premier. “The industry is operating in a very dynamic rate environment, and we feel the impact of increasing deposit costs and margin compression when combining the Fed’s first-quarter rate increases with the full-quarter impact of the fourth quarter 2022 increases.”

Small thanked clients for their confidence in the bank, noting the challenges in the banking industry in March prompted Premier to have additional conversations with its clients regarding deposit insurance and safety.

“March saw a slight increase in customer deposits for Premier, demonstrating the effective effort by our team of banking professionals,” Small said.

Total deposits declined 2%, or $132.7 million, during the quarter, but total customer deposits increased by $14.2 million in March.

The bank increased the Common Equity Tier 1, a loss-absorbing capital mechanism, by 5 basis points to 9.96%, and tangible equity ratio increased 25 basis points to 7.03% from the prior quarter.

Delinquencies decreased by $7.2 million, or 39%, to 0.16% of loans from the prior quarter.

Loan growth was $115.2 million, up 7.1% annualized, including $69.2 million of commercial loans excluding PPP.

Premier’s board declared a dividend of $0.21 per share, which was up 3.3% from the first quarter of 2022.

Published by The Business Journal, Youngstown, Ohio.