Premier Financial (US:PFC)2019-07-23 19:06Financial Data and Key Metrics Changes - Net income for Q2 2019 was $12.2 million, or $0.61 per diluted share, a 13% increase from $11.1 million, or $0.54 per diluted share, in Q2 2018 [9][16] - Return on average assets improved to 1.52% from 1.48% year-over-year [10][38] - Loan growth rebounded with an annualized growth rate of 12% in Q2 2019, and year-to-date growth was 6.6% [11][18] - Total deposits increased by 8% year-over-year, but decreased by 0.08% on a linked quarter basis [12][19] - Net interest income rose to $29 million, up from $26.5 million in Q2 2018, reflecting a 9.2% increase [22][26] Business Line Data and Key Metrics Changes - Mortgage banking revenues for Q2 2019 were $2.1 million, up from $1.8 million in Q2 2018, with mortgage originations at $85.5 million [27][29] - Non-interest income totaled $10.5 million, down from $10.8 million in the linked quarter but up from $10.2 million in Q2 2018 [26] - Non-interest expenses were $24.2 million, down from $24.9 million in the linked quarter but up from $22.7 million in Q2 2018 [30][31] Market Data and Key Metrics Changes - The competitive pricing environment for deposits remains, with some easing observed in various markets [52] - The Columbus, Ohio market showed significant contributions to loan growth, indicating strong performance in that region [42] Company Strategy and Development Direction - The company is focused on core balance sheet growth, particularly in loan and deposit growth, expense control, and improved asset quality [41][46] - A new digital banking platform will be implemented to enhance digital capabilities and customer service [44] - The company aims to maintain upper single-digit annual loan growth and expects a rebound in deposit growth in the second half of the year [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong performance due to improved asset quality and a robust loan pipeline [41][46] - There is an expectation of margin contraction in the second half of the year due to downward pressure on asset yield [13][39] - The company remains optimistic about maintaining profitability despite anticipated challenges [39][46] Other Important Information - The company announced a Q3 2019 dividend of $0.19 per share, a 27% increase from Q2 2018 [15] - The allowance for loan loss increased to $28.9 million, reflecting growth in loans and improved asset quality metrics [34][36] Q&A Session Summary Question: Can you provide insight on deposit pricing in your markets? - Management noted that while the market remains competitive, there has been some easing in deposit pricing [52] Question: How does the loan pipeline compare to last quarter? - The loan pipeline is significant, with $400 million in commercial and $120 million in residential pipelines, indicating strong team commitment [53] Question: Do you expect the $24.2 million in expenses to be a good run rate going forward? - Management hopes to improve on this figure, focusing on expense containment as margins compress [55] Question: What is the expected impact of a Fed rate cut on margins? - A 25-basis-point cut could lead to a decline of five to six basis points in margins [64][67] Question: How are deposit gathering efforts in newer markets? - There has been limited impact from newer markets, with a focus on legacy markets for deposit growth [68] Question: What is the expected provision expense going forward? - A more normalized provision expense is anticipated to be around $750,000, tracking with loan growth [71]