How Premier Financial Bancorp (Premier Bank) Achieved a 36% Annual Increase

Last week, West Virginia based Premier Financial, a $1.7 billion company consisting of two regional bank brands announced 2018 income of over $20 million, a $5.3 million year over year increase.  

• The increase in income was primarily due to a 6.2% increase in interest income.
• Additionally, the bank holding company also enjoyed a major decrease from the 2017 Tax Cuts and Jobs Act.  The tax cut resulted in lower corporate income tax in the calendar year 2018.
• Also, the acquisition of First Bank of Charleston added more than 10% to the overall gain.

President and CEO Robert W. Walker commented, "We are pleased to report a record net income performance in 2018, at $20.2 million, or $1.47 per diluted share.  Both are new records for our company.  This earnings performance included approximately $663,000 of net income from the operations of our newly acquired First Bank of Charleston ("First Bank") location, which is included in our financial results only from the October 12, 2018 acquisition date. Net interest income was up 3.9%, or $2.3 million in 2018 while net overhead expenses were down 0.6%, or $190,000, when compared to our 2017 results.  Our net interest margin remained strong in 2018 at 4.13%, compared to a 4.18% margin earned in 2017, and our provision for loan losses decreased by $184,000, or 7.4%, in 2018.  We continue to work through our non-performing assets and have increased our specific reserves on some impaired loans.  Our regulatory capital ratios remain strong as our equity-to-asset ratios improved from our positive earnings performance.  While our future results will still be subject to the strengths and weaknesses of our local and national economies, we are optimistic about our future and look forward to meeting its challenges."

What was particularly impressive was that the earnings did not come due to cutting overhead costs. Net overhead costs for the fourth quarter ended at $8.493 million compared to $7.564 million in the fourth quarter of 2017.  Staff costs went up by 10.4% in the fourth quarter in part because of the First Bank acquisition.