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Jun 30, 2023
Premier Financial Q2 2023 Earnings Report
Second quarter results announced with net income of $48.4 million, driven by loan growth and expense management, but impacted by margin decline.
Key Takeaways
Premier Financial Corp. reported a strong second quarter with net income of $48.4 million, or $1.35 per diluted common share. The results were positively influenced by the sale of the insurance agency, First Insurance Group, which generated a net gain of $32.6 million. Excluding the impact of this transaction, earnings per share would be $0.68. The company experienced loan growth, deposit growth, and core non-interest income revenue growth, while also reducing core expenses through cost reduction initiatives. However, the net interest margin continued to decline.
Completed the sale of the insurance agency at a significant gain, strengthening capital.
Executed hedges to improve asset-sensitivity and provide protection against additional rate increases.
CET1 ratio increased 80 basis points to 10.81%, and tangible equity ratio increased 52 basis points to 7.55% from the prior quarter.
Loan growth of $132.7 million (up 8.1% annualized), including $75.2 million for commercial loans excluding PPP (up 7.0% annualized).
Revenue by Segment
Forward Guidance
The organization is focused on moderate balance sheet growth, continued non-interest revenue improvement (adjusting for FIG), and strong expense management. Deposit mix will continue to be a challenge although beta management techniques continue to evolve.
Positive Outlook
- Moderate balance sheet growth
- Continued non-interest revenue improvement (adjusting for FIG)
- Strong expense management
- Hedging activity was initiated in June that will both add to near term net interest income
- Consumer deposit related fees and wealth management income for the current quarter exceed second quarter 2022 results by 7.7% and 8.7%, respectively
Challenges Ahead
- Deposit mix will continue to be a challenge although our beta management techniques continue to evolve.
- Margin continued to decline but at a more moderate pace.
- Migration of customers from non-interest bearing deposits into interest-bearing deposits, including higher cost time deposits, as customers sought to obtain yield.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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