Peoples Financial Corporation Earnings Increase 15% in 2011 Over 2010

Tue Jan 31, 2012 6:40pm EST

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Peoples Financial Corporation Earnings Increase 15% in 2011 Over 2010

Fourth quarter results are impacted by early retirement costs and charged off interest

PR Newswire

BILOXI, Miss., Jan. 31, 2012 /PRNewswire/ -- Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, earned $1,703,000 for the full year 2011, a 15% increase over results of 2010, announced Chevis C. Swetman, Chairman and Chief Executive Officer of the holding company and the bank.

Fourth quarter 2011 income showed a loss of $122,000, due mostly to expenses of $523,000, net of taxes, related to an early retirement program.  In addition, the bank charged off $406,000, net of taxes, in interest from loans placed on nonaccrual status during the quarter.

Despite lower loan loss reserves in each quarter of 2011, the total allowance for loan loss at the end of the year rose 12.4% to $7,476,000, said Swetman. Charge-offs in 2011 were down by nearly 80% compared to 2010, although nonaccrual loans increased from $14,537,000 at the end of 2010 to $57,592,000 at the end of 2011, as the bank continued to clean up its balance sheet, Swetman added.  Nonaccrual loans were $32,244,000 at September 30, 2011.

Commercial real estate loans totaling $8,331,000 were placed on nonaccrual during the fourth quarter as a result of the borrowers filing for bankruptcy.  "Fortunately, these loans are adequately secured," said Swetman. Residential and land development loans totaling $8,285,000 and commercial construction loans totaling $6,010,000 were also placed on nonaccrual during the quarter due to non-performance as a result of the economy. Specific reserves of $900,000 have been assigned to these loans.

"Our aggressive program of identifying and weeding out bad loans continued throughout the year," said Swetman. "This is a painful process, but the end result is a cleaner, stronger balance sheet that will position us for more robust growth as our economy gradually recovers," he added.  

Foreclosures in 2011 totaled $3,222,000, which is another part of the process of managing non-performing loans.  "The Bank is working diligently to liquidate these assets, and during 2011 sold other real estate with a carrying value of $2,101,000," Swetman said.  Losses on other real estate for the year totaled $558,000, net of taxes, including losses on sales and writedowns of property to market value.

Earnings per share for 2011 totaled $.33 per average weighted share, compared to $.29 per average weighted share in 2010. Earnings per share figures are based on average weighted shares outstanding of 5,136,918 and 5,151,661 for the twelve months ended December 31, 2011 and 2010, respectively.

Loan balances at the end of 2011 totaled $432 million, 5.5% higher than 2010.  "We have seen a gradual rise in loan demand in our area for at least the second half of the year," said Swetman. "Our loan volume exceeded our original expectations for the year, and growth in this segment of our operations is a signal that the worst of this terrible recession may be behind us," Swetman added.

The primary capital ratio increased 163 basis points from year to year, reaching 14.59% as of December 31, 2011, the highest level since 2004.

Founded in 1896, with $805 million in assets as of December 31, 2011, The Peoples Bank operates 16 branches along the Mississippi Gulf Coast in Hancock, Harrison, Jackson and Stone counties. In addition to a comprehensive range of retail and commercial banking services, the bank also operates a trust and investment services department that has provided customers with financial, estate and retirement planning services since 1936.  

The Peoples Bank is a wholly-owned subsidiary of Peoples Financial Corporation, listed on the NASDAQ Capital Market under the symbol PFBX. Additional information is available on the Internet at www.thepeoples.com.

This news release contains forward-looking statements and reflects industry conditions, company performance and financial results. These forward-looking statements are subject to a number of risk factors and uncertainties which could cause the Company's actual results and experience to differ from the anticipated results and expectation expressed in such forward-looking statements.

PEOPLES FINANCIAL CORPORATION

(Unaudited) (In thousands, except weighted average shares and per share figures)













EARNINGS SUMMARY


Three Months Ended December 31,


Year Ended December 31,



2011


2010


2011


2010

Net interest income


$               4,873


$               5,795


$ 21,855


$ 25,074

Provision for loan losses


544


3,065


2,275


6,845

Non-interest income


2,426


2,083


9,860


10,114

Non-interest expense


7,332


7,033


28,682


27,581

Income taxes


(455)


(1,023)


(945)


(723)

Net income


(122)


(1,197)


1,703


1,485

Earnings per share


(.02)


(.23)


.33


.29










TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES









Three Months Ended December 31,


Year Ended December 31,



2011


2010


2011


2010

Allowance for loan losses, beginning of period


$               7,024


$               8,995


$   6,650


$   7,828

Recoveries


17


104


223


268

Charge-offs


(109)


(5,514)


(1,672)


(8,291)

Provision for loan losses


544


3,065


2,275


6,845

Allowance for loan losses, end of period


$               7,476


$               6,650


$   7,476


$   6,650










ASSET QUALITY


December 31,







2011


2010





Allowance for loan losses as a









  percentage of loans


1.73%


1.62%





Loans past due 90 days and









  still accruing


$               1,828


$               2,962





Nonaccrual loans


57,592


14,537














PERFORMANCE RATIOS


December 31,







2011


2010





Return on average assets


.21%


.18%





Return on average equity


1.61%


1.45%





Net interest margin


3.15%


3.42%





Efficiency ratio


97%


97%





Primary capital


14.59%


12.96%














BALANCE SHEET SUMMARY


December 31,







2011


2010





Total assets


$           804,807


$           786,545





Loans


432,407


409,899





Securities


286,856


295,201





Other real estate (ORE)


6,198


5,744





Total deposits


468,439


484,140





Total federal funds purchased


157,601


140,102





Shareholders' equity


109,952


101,357





Book value per share


21.40


19.68





Weighted average shares


5,136,918


5,151,661







SOURCE Peoples Financial Corporation

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