Premier Financial (US:PFC)2019-10-22 20:01Financial Data and Key Metrics Changes - Net income for Q3 2019 was $13.2 million or $0.66 per diluted common share, a 20% increase in EPS compared to $11.3 million or $0.55 per diluted common share in Q3 2018 [9][15] - Return on average assets was 1.58%, up from 1.47% in Q3 2018 [39] - Total deposits increased by 11.9% on an annualized linked quarter basis and 9.4% year-over-year [11] Business Line Data and Key Metrics Changes - Loan growth for Q3 2019 was $41 million, representing over 6% annualized growth, with year-to-date loan growth at $125 million or 6.6% annualized [16][17] - Noninterest income for Q3 2019 was $11.8 million, up from $10.5 million in the linked quarter and $9.9 million in Q3 2018, driven by improvements in mortgage banking and service fees [23][24] - Mortgage originations for Q3 2019 were $127 million, significantly up from $85.5 million in the previous quarter and $74 million in Q3 2018 [25] Market Data and Key Metrics Changes - The company experienced a decrease in loan yields of 8 basis points on a linked quarter basis and an increase of 19 basis points compared to Q3 2018 [10] - The net interest margin for the quarter was 3.88%, down 15 basis points from the previous quarter [19] Company Strategy and Development Direction - The company plans to open a new office in Dublin, Ohio, in early 2020 as part of its expansion strategy in the Columbus market area [44][45] - A new digital banking platform is set to enhance digital banking capabilities for personal and business clients, aiming to improve customer service [48] - The company is focused on executing its market strategy with attention to loan and deposit growth, expense control, and improved asset quality [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued solid performance due to strong deposit growth and a steady loan pipeline [43] - There is an expectation of margin contraction in the fourth quarter due to downward pressure on asset yields and limited pricing opportunities [12][40] - Management remains optimistic about meeting 2019 expectations despite anticipated challenges [40] Other Important Information - The company announced a Q3 2019 dividend of $0.22 per share, representing a 29% increase over Q3 2018 [14] - The company is progressing well with the implementation of CECL, expecting no significant impact on equity ratios [75] Q&A Session Summary Question: Can you help us think about the expense run rate in the fourth quarter? - Management indicated that the FDIC item will reverse, and they expect to return to a normal run rate by Q1 2020, with implemented cost-saving strategies in place [59][60] Question: What is the outlook for deposit pricing in your markets? - Management noted that deposit rates have significantly decreased in line with Fed cuts, and they expect this to positively impact margins in Q4 [61][62] Question: Can you discuss the increase in early-stage delinquency this quarter? - Management expects most of the early-stage delinquencies to be resolved, attributing the increase to one large credit being monitored [63] Question: What drove the increase in deposit balances this quarter? - The increase was primarily rate-driven, with management being cautious about cutting rates too quickly to support loan growth [66] Question: Are you progressing with CECL implementation? - Management confirmed they are making good progress and do not expect a significant uptick in loan loss reserves at the end of the day [75]