Company Quick10K Filing
Quick10K
Premier Financial Bancorp
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$16.36 15 $239
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-08-07 Quarter: 2017-08-07
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-08 Enter Agreement, Regulation FD, Exhibits
8-K 2019-06-27 Off-BS Arrangement, Exhibits
8-K 2019-06-19 Shareholder Vote
8-K 2019-05-16 Regulation FD, Exhibits
8-K 2019-05-02 Earnings, Exhibits
8-K 2019-03-06 Earnings, Exhibits
8-K 2018-11-27 Regulation FD, Exhibits
8-K 2018-10-12 M&A, Exhibits
8-K 2018-09-24 Off-BS Arrangement, Exhibits
8-K 2018-09-05 Shareholder Vote
8-K 2018-09-05 Amend Bylaw, Exhibits
8-K 2018-08-17 Regulation FD, Exhibits
8-K 2018-06-29 Enter Agreement, Exhibits
8-K 2018-06-20 Shareholder Vote
8-K 2018-05-21 Amend Bylaw, Regulation FD, Exhibits
8-K 2018-05-02 Earnings, Exhibits
8-K 2018-04-18 Enter Agreement, Regulation FD, Exhibits
8-K 2018-03-01 Regulation FD, Exhibits
8-K 2018-02-27 Earnings, Exhibits
TECH Bio-Techne 7,650
COLM Columbia Sportswear 6,610
CEPU Central Puerto 1,420
RMAX RE/MAX 669
CDMO Avid Bioservices 209
LEAF Leaf Group 203
EMKR Emcore 105
HOTH Hoth Therapeutics 51
EMAN Emagin 26
ABWN Airborne Wireless Network 0
PFBI 2019-03-31
Part I - Financial Information
Item 1. Financial Statements
Note 1 - Basis of Presentation
Note 2 - Securities
Note 3 - Loans
Note 4 - Stockholders' Equity and Regulatory Matters
Note 5 - Premises and Equipment
Note 6 - Stock Compensation Expense
Note 7 - Earnings per Share
Note 8 - Fair Value
Item 2. Management's Discussion and Analysis
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
EX-31.1 exhibit31-1.htm
EX-31.2 exhibit31-2.htm
EX-32 exhibit32.htm

Premier Financial Bancorp Earnings 2019-03-31

PFBI 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 pfbi10q033119.htm PREMIER FINANCIAL BANCORP, INC. FORM 10Q, MARCH 31, 2019


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________

Commission file number 000-20908

PREMIER FINANCIAL BANCORP, INC.
(Exact name of registrant as specified in its charter)

Kentucky
 
61-1206757
(State or other jurisdiction of incorporation organization)
 
(I.R.S. Employer Identification No.)
     
2883 Fifth Avenue
Huntington, West Virginia
 
 
25702
(Address of principal executive offices)
 
(Zip Code)
     
Registrant’s telephone number    (304) 525-1600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.  Yes      No .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  
 
Accelerated filer 
Non-accelerated filer 
Smaller reporting company 
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).  Yes     No .
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, no par value
PFBI
The Nasdaq Stock Market LLC

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, no par value, – 14,636,402 shares outstanding at April 29, 2019


PREMIER FINANCIAL BANCORP, INC.
MARCH 31, 2019
INDEX TO REPORT


     
   
3
 
   
40
 
   
49
 
   
49
 
   
50
 
   
50
 
   
50
 
   
50
 
   
50
 
   
50
 
   
50
 
   
50
 
   
51
 


PREMIER FINANCIAL BANCORP, INC.
MARCH 31, 2019


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

The accompanying information has not been audited by an independent registered public accounting firm; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period.  All such adjustments are of a normal and recurring nature.  Premier Financial Bancorp, Inc.’s (“Premier’s”) accounting and reporting policies are in accordance with accounting principles generally accepted in the United States of America.  Certain accounting principles used by Premier involve a significant amount of judgment about future events and require the use of estimates in their application.  The following policies are particularly sensitive in terms of judgments and the extent to which estimates are used: allowance for loan losses, the identification and evaluation of impaired loans, and the impairment of goodwill.  These estimates are based on assumptions that may involve significant uncertainty at the time of their use.  However, the policies, the estimates and the estimation process as well as the resulting disclosures are periodically reviewed by the Audit Committee of the Board of Directors and material estimates are subject to review as part of the external audit by the independent registered public accounting firm.

The accompanying financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the registrant’s annual report on Form 10-K.  Accordingly, the reader of the Form 10-Q may wish to refer to the registrant’s Form 10-K for the year ended December 31, 2018 for further information in this regard.

Index to consolidated financial statements:

   
4
 
   
5
 
   
6
 
   
7
 
   
8
 
   
9
 


PREMIER FINANCIAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2019 AND DECEMBER 31, 2018
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


   
(UNAUDITED)
       
   
March 31,
2019
   
December 31,
2018
 
ASSETS
           
Cash and due from banks
 
$
24,542
   
$
22,992
 
Interest bearing bank balances
   
52,857
     
39,911
 
Federal funds sold
   
24,722
     
17,872
 
Cash and cash equivalents
   
102,121
     
80,775
 
Time deposits with other banks
   
1,094
     
1,094
 
Securities available for sale
   
369,082
     
365,731
 
Loans
   
1,155,874
     
1,149,301
 
Allowance for loan losses
   
(13,479
)
   
(13,738
)
Net loans
   
1,142,395
     
1,135,563
 
Federal Home Loan Bank stock, at cost
   
3,568
     
3,628
 
Premises and equipment, net
   
36,745
     
29,385
 
Real estate acquired through foreclosure
   
14,378
     
14,024
 
Interest receivable
   
4,638
     
4,295
 
Goodwill
   
47,640
     
47,640
 
Other intangible assets
   
5,040
     
5,268
 
Other assets
   
1,764
     
2,712
 
Total assets
 
$
1,728,465
   
$
1,690,115
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Deposits
               
Non-interest bearing
 
$
394,130
   
$
391,763
 
Time deposits, $250,000 and over
   
90,490
     
74,161
 
Other interest bearing
   
969,199
     
964,203
 
Total deposits
   
1,453,819
     
1,430,127
 
Securities sold under agreements to repurchase
   
22,025
     
22,062
 
Other borrowed funds
   
1,450
     
2,500
 
FHLB advances
   
7,335
     
8,819
 
Subordinated debt
   
5,413
     
5,406
 
Interest payable
   
860
     
733
 
Other liabilities
   
12,336
     
3,739
 
Total liabilities
   
1,503,238
     
1,473,386
 
                 
Stockholders' equity
               
Common stock, no par value; 30,000,000 shares authorized; 14,628,902 shares issued and outstanding at March 31, 2019, and 14,624,193 shares issued and outstanding at December 31, 2018
   
133,338
     
133,248
 
Retained earnings
   
91,314
     
87,333
 
Accumulated other comprehensive income (loss)
   
575
     
(3,852
)
Total stockholders' equity
   
225,227
     
216,729
 
Total liabilities and stockholders' equity
 
$
1,728,465
   
$
1,690,115
 

PREMIER FINANCIAL BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


   
Three Months Ended
March 31,
 
   
2019
   
2018
 
Interest income
           
Loans, including fees
 
$
16,289
   
$
14,034
 
Securities available for sale
               
Taxable
   
2,338
     
1,408
 
Tax-exempt
   
92
     
59
 
Federal funds sold and other
   
345
     
298
 
Total interest income
   
19,064
     
15,799
 
                 
Interest expense
               
Deposits
   
2,050
     
1,031
 
Repurchase agreements and other
   
9
     
8
 
Other borrowings
   
21
     
47
 
FHLB advances
   
55
     
-
 
Subordinated debt
   
94
     
78
 
Total interest expense
   
2,229
     
1,164
 
                 
Net interest income
   
16,835
     
14,635
 
Provision for loan losses
   
560
     
1,115
 
Net interest income after provision for loan losses
   
16,275
     
13,520
 
                 
Non-interest income
               
Service charges on deposit accounts
   
1,094
     
1,094
 
Electronic banking income
   
822
     
817
 
Secondary market mortgage income
   
24
     
32
 
Other
   
236
     
123
 
     
2,176
     
2,066
 
Non-interest expenses
               
Salaries and employee benefits
   
5,199
     
4,778
 
Occupancy and equipment expenses
   
1,664
     
1,610
 
Outside data processing
   
1,384
     
1,249
 
Professional fees
   
365
     
336
 
Taxes, other than payroll, property and income
   
238
     
240
 
Write-downs, expenses, sales of other real estate owned, net
   
249
     
(886
)
Amortization of intangibles
   
227
     
195
 
FDIC insurance
   
124
     
148
 
Other expenses
   
1,143
     
1,319
 
     
10,593
     
8,989
 
Income before income taxes
   
7,858
     
6,597
 
Provision for income taxes
   
1,682
     
1,464
 
                 
Net income
 
$
6,176
   
$
5,133
 
                 
Net income per share:
               
Basic
 
$
0.42
   
$
0.38
 
Diluted
   
0.42
     
0.38
 

PREMIER FINANCIAL BANCORP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


   
Three Months Ended
March 31,
 
   
2019
   
2018
 
Net income
 
$
6,176
   
$
5,133
 
                 
Other comprehensive income (loss):
               
Unrealized gains (losses) arising during the period
   
5,604
     
(3,862
)
Reclassification of realized amount
   
-
     
-
 
Net change in unrealized gain (loss) on securities
   
5,604
     
(3,862
)
Less tax impact
   
(1,177
)
   
811
 
Other comprehensive income (loss)
   
4,427
     
(3,051
)
                 
Comprehensive income
 
$
10,603
   
$
2,082
 

PREMIER FINANCIAL BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED MARCH 31, 2019
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


   
Common
Stock
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
Income (loss)
   
Total
 
Balances, January 1, 2018
 
$
110,445
   
$
74,983
   
$
(2,073
)
 
$
183,355
 
Net income
   
-
     
5,133
     
-
     
5,133
 
Other comprehensive income
   
-
     
-
     
(3,051
)
   
(3,051
)
Cash dividends paid ($0.12 per share)
   
-
     
(1,601
)
   
-
     
(1,601
)
Stock options exercised
   
13
     
-
     
-
     
13
 
Stock based compensation expense
   
27
     
-
     
-
     
27
 
Balances, March 31, 2018
 
$
110,485
   
$
78,515
   
$
(5,124
)
 
$
183,876
 


   
Common
Stock
   
Retained
Earnings
   
Accumulated
Other
Comprehensive
Income (loss)
   
Total
 
Balances, January 1, 2019
 
$
133,248
   
$
87,333
   
$
(3,852
)
 
$
216,729
 
Net income
   
-
     
6,176
     
-
     
6,176
 
Other comprehensive income
   
-
     
-
     
4,427
     
4,427
 
Cash dividends paid ($0.15 per share)
   
-
     
(2,195
)
   
-
     
(2,195
)
Stock options exercised
   
51
     
-
     
-
     
51
 
Stock based compensation expense
   
39
     
-
     
-
     
39
 
Balances, March 31, 2019
 
$
133,338
   
$
91,314
   
$
575
   
$
225,227
 

PREMIER FINANCIAL BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(UNAUDITED, DOLLARS IN THOUSANDS)


   
2019
   
2018
 
Cash flows from operating activities
           
Net income
 
$
6,176
   
$
5,133
 
Adjustments to reconcile net income to net cash from operating activities
               
Depreciation
   
467
     
433
 
Provision for loan losses
   
560
     
1,115
 
Amortization (accretion), net
   
(47
)
   
386
 
Writedowns (gains on the sale) of other real estate owned, net
   
(15
)
   
(1,080
)
Stock compensation expense
   
39
     
27
 
Changes in:
               
Interest receivable
   
(343
)
   
342
 
Other assets
   
(228
)
   
1,137
 
Interest payable
   
127
     
14
 
Other liabilities
   
1,131
     
(495
)
Net cash from operating activities
   
7,867
     
7,012
 
                 
Cash flows from investing activities
               
Net change on time deposits with other banks
   
-
     
-
 
Purchases of securities available for sale
   
(13,854
)
   
(15,527
)
Proceeds from maturities and calls of securities available for sale
   
15,869
     
13,717
 
Redemption of FHLB stock
   
60
     
-
 
Net change in loans
   
(7,555
)
   
19,838
 
Purchases of premises and equipment, net
   
(361
)
   
(346
)
Proceeds from sales of other real estate acquired through foreclosure
   
414
     
7,145
 
Net cash from (used in) investing activities
   
(5,427
)
   
24,827
 
                 
Cash flows from financing activities
               
Net change in deposits
   
23,637
     
30,514
 
Net change in agreements to repurchase securities
   
(37
)
   
(2,517
)
Repayment of other borrowed funds
   
(1,050
)
   
(750
)
Repayment of FHLB advances
   
(1,500
)
   
-
 
Proceeds from stock option exercises
   
51
     
13
 
Common stock dividends paid
   
(2,195
)
   
(1,601
)
Net cash from financing activities
   
18,906
     
25,659
 
                 
Net change in cash and cash equivalents
   
21,346
     
57,498
 
                 
Cash and cash equivalents at beginning of period
   
80,775
     
82,663
 
                 
Cash and cash equivalents at end of period
 
$
102,121
   
$
140,161
 

Supplemental disclosures of cash flow information:
           
Cash paid during period for interest
 
$
2,102
   
$
1,150
 
Loans transferred to real estate acquired through foreclosure
   
753
     
284
 
Securities purchased not yet settled
    -
      5,059
 
Operating right-of-use asset resulting from lease liability
    7,453
      -
 

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  1 - BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Premier Financial Bancorp, Inc. (the Company) and its wholly owned subsidiaries (the “Banks”):

                  March 31, 2018  
        Year
  Total
    Net Income  
Subsidiary
 
Location
 
Acquired
 
Assets
   
Qtr
 
Citizens Deposit Bank & Trust
 
Vanceburg, Kentucky
 
1991
 
$
459,409
   
$
1,379
 
Premier Bank, Inc.
 
Huntington, West Virginia
 
1998
   
1,261,402
     
5,374
 
Parent and Intercompany Eliminations
           
7,654
     
(577
)
  Consolidated Total
          
$
1,728,465
   
$
6,176
 

All significant intercompany transactions and balances have been eliminated.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This standard requires organizations that are lessees to recognize a lease liability, which is the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified property for the lease term.  The new guidance also requires lessees to disclose key information about leasing requirements for leases that were historically classified as operating leases under previous generally accepted accounting principles. This ASU became effective for Premier for interim and annual periods beginning after December 15, 2018.  The Company leases some of its branch locations.  The Company adopted Topic 842 on January 1, 2019.  The Company applied a modified retrospective transition approach for the applicable leases. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. The Company has also elected to use the practical expedient to make an accounting policy election for property leases to include both lease and non-lease components as a single component and account for it as a lease.  Upon adoption of this standard, the Company recorded a $7.6 million right of use asset, included in premises and equipment, determined by calculating an estimated present value of future lease payments over the extended lives of the Company’s leases.  The Company also recorded a $7.6 million finance lease liability, included in other liabilities.


PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  1 - BASIS OF PRESENTATION - continued

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments.  This ASU replaces the measurement for credit losses from a probable incurred estimate with an expected future loss estimate, which is referred to as the “current expected credit loss” or “CECL”.  The standard pertains to financial assets measured at amortized cost such as loans, debt securities classified as held-to-maturity, and certain other contracts, in which organizations will now use forward-looking information to enhance their credit loss estimates on these assets.  The largest impact will be on the allowance for loan and lease losses.  This ASU will become effective for the Company for interim and annual periods beginning after December 15, 2019.  Although early adoption is permitted the Company did not elect early adoption.  The company has formed a committee to oversee the steps required in the adoption of the new current expected credit loss method.  The committee has selected a third-party vendor to assist in data analysis and modeling as well as the required disclosures. Management is currently evaluating the impact of the adoption of this guidance on the Company’s financial statements.  Upon adoption, an initial cumulative increase in the allowance for loan losses is currently anticipated by management along with a corresponding decrease in capital as permitted by the standard.  However, due to the complexity of the calculation and evolving guidance on adoption management has not yet determined the one-time adjustment.

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  2 - SECURITIES

Amortized cost and fair value of investment securities, by category, at March 31, 2019 are summarized as follows:

2019
 
Amortized Cost
   
Unrealized Gains
   
Unrealized Losses
   
Fair Value
 
Available for sale
                       
Mortgage-backed securities
                       
U. S. sponsored agency MBS - residential
 
$
257,523
   
$
1,635
   
$
(1,719
)
 
$
257,439
 
U. S. sponsored agency CMO’s - residential
   
71,470
     
552
     
(386
)
   
71,636
 
Total mortgage-backed securities of government sponsored agencies
   
328,993
     
2,187
     
(2,105
)
   
329,075
 
U. S. government sponsored agency securities
   
22,328
     
379
     
(89
)
   
22,618
 
Obligations of states and political subdivisions
   
13,581
     
296
     
(10
)
   
13,867
 
Other securities
   
3,452
     
70
     
-
     
3,522
 
Total available for sale
 
$
368,354
   
$
2,932
   
$
(2,204
)
 
$
369,082
 

Amortized cost and fair value of investment securities, by category, at December 31, 2018 are summarized as follows:

2018
 
Amortized Cost
   
Unrealized Gains
   
Unrealized Losses
   
Fair Value
 
Available for sale
                       
Mortgage-backed securities
                       
U. S. sponsored agency MBS - residential
 
$
259,575
   
$
513
   
$
(4,846
)
 
$
255,242
 
U. S. sponsored agency CMO’s - residential
   
69,231
     
94
     
(782
)
   
68,543
 
Total mortgage-backed securities of government sponsored agencies
   
328,806
     
607
     
(5,628
)
   
323,785
 
U. S. government sponsored agency securities
   
24,154
     
196
     
(180
)
   
24,170
 
Obligations of states and political subdivisions
   
14,194
     
176
     
(43
)
   
14,327
 
Other securities
   
3,453
     
6
     
(10
)
   
3,449
 
Total available for sale
 
$
370,607
   
$
985
   
$
(5,861
)
 
$
365,731
 

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  2 - SECURITIES - continued

The amortized cost and fair value of securities at March 31, 2019 by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

   
Amortized
Cost
   
Fair
Value
 
Available for sale
           
Due in one year or less
 
$
6,795
   
$
6,762
 
Due after one year through five years
   
19,152
     
19,352
 
Due after five years through ten years
   
8,490
     
8,751
 
Due after ten years
   
4,424
     
4,642
 
Corporate preferred securities
   
500
     
500
 
Mortgage-backed securities of government sponsored agencies
   
328,993
     
329,075
 
Total available for sale
 
$
368,354
   
$
369,082
 

There were no sales of securities during the first three months of 2019 and 2018.

Securities with unrealized losses at March 31, 2019 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

   
Less than 12 Months
   
12 Months or More
   
Total
 
Description of Securities
 
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
 
                                     
U.S government sponsored agency securities
 
$
-
   
$
-
   
$
10,288
   
$
(89
)
 
$
10,288
   
$
(89
)
U.S government sponsored agency MBS – residential
   
10,718
     
(35
)
   
145,531
     
(1,684
)
   
156,249
     
(1,719
)
U.S government sponsored agency CMO – residential
   
-
     
-
     
18,953
     
(386
)
   
18,953
     
(386
)
Obligations of states and political subdivisions
   
-
     
-
     
1,847
     
(10
)
   
1,847
     
(10
)
Total temporarily impaired
 
$
10,718
   
$
(35
)
 
$
176,619
   
$
(2,169
)
 
$
187,337
   
$
(2,204
)

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  2 - SECURITIES - continued

Securities with unrealized losses at December 31, 2018 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

   
Less than 12 Months
   
12 Months or More
   
Total
 
Description of Securities
 
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
 
                                     
U.S government sponsored agency securities
 
$
999
   
$
-
   
$
11,057
   
$
(180
)
 
$
12,056
   
$
(180
)
U.S government sponsored agency MBS – residential
   
50,923
     
(243
)
   
158,791
     
(4,603
)
   
209,714
     
(4,846
)
U.S government sponsored agency CMO’s – residential
   
16,359
     
(41
)
   
26,386
     
(741
)
   
42,745
     
(782
)
Obligations of states and political subdivisions
   
679
     
(6
)
   
3,454
     
(37
)
   
4,133
     
(43
)
Other securities
   
1,712
     
(10
)
   
-
     
-
     
1,712
     
(10
)
Total temporarily impaired
 
$
70,672
   
$
(300
)
 
$
199,688
   
$
(5,561
)
 
$
270,360
   
$
(5,861
)

The investment portfolio is predominately high credit quality interest-bearing bonds with defined maturity dates backed by the U.S. Government or Government sponsored entities.  The unrealized losses at March 31, 2019 and December 31, 2018 are price changes resulting from changes in the interest rate environment and are considered to be temporary declines in the value of the securities.  Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.  Their fair value is expected to recover as the bonds approach their maturity date and/or market conditions improve.


NOTE  3 - LOANS

Major classifications of loans at March 31, 2019 and December 31, 2018 are summarized as follows:

   
2019
   
2018
 
Residential real estate
 
$
375,905
   
$
381,027
 
Multifamily real estate
   
52,929
     
54,016
 
Commercial real estate:
               
Owner occupied
   
138,366
     
138,209
 
Non-owner occupied
   
291,124
     
282,608
 
Commercial and industrial
   
106,383
     
103,624
 
Consumer
   
26,004
     
27,688
 
Construction and land
   
131,680
     
128,926
 
All other
   
33,483
     
33,203
 
   
$
1,155,874
   
$
1,149,301
 

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

Activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 was as follows:

Loan Class
 
Balance
Dec 31, 2018
   
Provision (credit) for loan losses
   
Loans charged-off
   
Recoveries
   
Balance
March 31, 2019
 
                               
Residential real estate
 
$
1,808
   
$
42
   
$
(32
)
 
$
5
   
$
1,823
 
Multifamily real estate
   
1,649
     
(61
)
   
-
     
2
     
1,590
 
Commercial real estate:
                                       
Owner occupied
   
2,120
     
236
     
(533
)
   
1
     
1,824
 
Non-owner occupied
   
3,058
     
400
     
(57
)
   
-
     
3,401
 
Commercial and industrial
   
1,897
     
(97
)
   
(110
)
   
31
     
1,721
 
Consumer
   
351
     
110
     
(107
)
   
11
     
365
 
Construction and land
   
2,255
     
(93
)
   
(13
)
   
-
     
2,149
 
All other
   
600
     
23
     
(51
)
   
34
     
606
 
Total
 
$
13,738
   
$
560
   
$
(903
)
 
$
84
   
$
13,479
 

Activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2018 was as follows:

Loan Class
 
Balance
Dec 31, 2017
   
Provision (credit) for loan losses
   
Loans charged-off
   
Recoveries
   
Balance
March 31, 2018
 
                               
Residential real estate
 
$
2,986
   
$
(691
)
 
$
(49
)
 
$
16
   
$
2,262
 
Multifamily real estate
   
978
     
(320
)
   
(11
)
   
-
     
647
 
Commercial real estate:
                                       
Owner occupied
   
1,653
     
164
     
(2
)
   
1
     
1,816
 
Non-owner occupied
   
2,313
     
(110
)
   
(16
)
   
-
     
2,187
 
Commercial and industrial
   
1,101
     
813
     
(267
)
   
4
     
1,651
 
Consumer
   
328
     
49
     
(33
)
   
25
     
369
 
Construction and land
   
2,408
     
913
     
(19
)
   
-
     
3,302
 
All other
   
337
     
297
     
(67
)
   
39
     
606
 
Total
 
$
12,104
   
$
1,115
   
$
(464
)
 
$
85
   
$
12,840
 

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

Purchased Impaired Loans

The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected.  The carrying amount of those loans is as follows at March 31, 2019 and December 31, 2018.

   
2019
   
2018
 
Residential real estate
 
$
2,655
   
$
2,665
 
Commercial real estate
               
Owner occupied
   
1,979
     
2,040
 
Non-owner occupied
   
3,142
     
3,434
 
Commercial and industrial
   
358
     
1,720
 
Construction and land
   
629
     
1,212
 
All other
   
229
     
225
 
Total carrying amount
 
$
8,992
   
$
11,296
 
Contractual principal balance
 
$
12,859
   
$
15,436
 
                 
Carrying amount, net of allowance
 
$
8,992
   
$
11,296
 

For those purchased loans disclosed above, the Company did not increase the allowance for loan losses during the three-months ended March 31, 2019 and March 31, 2018.

For those purchased loans disclosed above, where the Company can reasonably estimate the cash flows expected to be collected on the loans, a portion of the purchase discount is allocated to an accretable yield adjustment based upon the present value of the future estimated cash flows versus the current carrying value of the loan and the accretable yield portion is being recognized as interest income over the remaining life of the loan.

Where the Company cannot reasonably estimate the cash flows expected to be collected on the loans, it has continued to account for those loans using the cost recovery method of income recognition.  As such, no portion of a purchase discount adjustment has been determined to meet the definition of an accretable yield adjustment on those loans accounted for using the cost recovery method.  If, in the future, cash flows from the borrower(s) can be reasonably estimated, a portion of the purchase discount would be allocated to an accretable yield adjustment based upon the present value of the future estimated cash flows versus the current carrying value of the loan and the accretable yield portion would be recognized as interest income over the remaining life of the loan.  Until such accretable yield can be calculated, under the cost recovery method of income recognition, all payments will be used to reduce the carrying value of the loan and no income will be recognized on the loan until the carrying value is reduced to zero.  Any loan accounted for under the cost recovery method is also still included as a non-accrual loan in the amounts presented in the tables below.

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

The accretable yield, or income expected to be collected, on the purchased loans above is as follows at March 31, 2019 and March 31, 2018.

   
2019
   
2018
 
Balance at January 1
 
$
642
   
$
754
 
New loans purchased
   
-
     
-
 
Accretion of income
   
(53
)
   
(69
)
Loans placed on non-accrual
   
(14
)
   
(41
)
Income recognized upon full repayment
   
(42
)
   
-
 
Reclassifications from non-accretable difference
   
-
     
-
 
Disposals
   
-
     
-
 
Balance at March 31
 
$
533
   
$
644
 

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

Past Due and Non-performing Loans

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2019 and December 31, 2018.  The recorded investment in non-accrual loans is less than the principal owed on non-accrual loans due to discounts applied to the carrying value of the loan at time of their acquisition and interest payments made by the borrower which have been used to reduce the recorded investment in the loan rather than recognized as interest income.

March 31, 2019
 
Principal Owed on Non-accrual Loans
   
Recorded Investment in Non-accrual Loans
   
Loans Past Due Over 90 Days, still accruing
 
                   
Residential real estate
 
$
4,568
   
$
3,311
   
$
692
 
Multifamily real estate
   
4,127
     
3,849
     
-
 
Commercial real estate
                       
Owner occupied
   
4,332
     
4,050
     
118
 
Non-owner occupied
   
5,890
     
4,726
     
362
 
Commercial and industrial
   
1,128
     
524
     
24
 
Consumer
   
225
     
187
     
-
 
Construction and land
   
1,346
     
1,345
     
13
 
All other
   
75
     
73
     
-
 
Total
 
$
21,691
   
$
18,065
   
$
1,209
 

December 31, 2018
 
Principal Owed on Non-accrual Loans
   
Recorded Investment in Non-accrual Loans
   
Loans Past Due Over 90 Days, still accruing
 
                   
Residential real estate
 
$
4,966
   
$
3,708
   
$
954
 
Multifamily real estate
   
4,127
     
3,905
     
-
 
Commercial real estate
                       
Owner occupied
   
3,692
     
3,436
     
56
 
Non-owner occupied
   
5,761
     
4,592
     
76
 
Commercial and industrial
   
1,303
     
625
     
-
 
Consumer
   
292
     
253
     
-
 
Construction and land
   
857
     
856
     
-
 
All other
   
75
     
73
     
-
 
Total
 
$
21,073
   
$
17,448
   
$
1,086
 

Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some may only be included in one category.  Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

The following table presents the aging of the recorded investment in past due loans as of        March 31, 2019 by class of loans:

Loan Class
 
Total Loans
   
30-89 Days
Past Due
   
Greater than 90 days past due
   
Total Past Due
   
Loans Not
Past Due
 
                               
Residential real estate
 
$
375,905
   
$
7,503
   
$
1,719
   
$
9,222
   
$
366,683
 
Multifamily real estate
   
52,929
     
-
     
111
     
111
     
52,818
 
Commercial real estate:
                                       
Owner occupied
   
138,366
     
1,609
     
1,747
     
3,356
     
135,010
 
Non-owner occupied
   
291,124
     
461
     
3,674
     
4,135
     
286,989
 
Commercial and industrial
   
106,383
     
142
     
361
     
503
     
105,880
 
Consumer
   
26,004
     
149
     
52
     
201
     
25,803
 
Construction and land
   
131,680
     
288
     
833
     
1,121
     
130,559
 
All other
   
33,483
     
2
     
73
     
75
     
33,408
 
Total
 
$
1,155,874
   
$
10,154
   
$
8,570
   
$
18,724
   
$
1,137,150
 

The following table presents the aging of the recorded investment in past due loans as of December 31, 2018 by class of loans:

Loan Class
 
Total Loans
   
30-89 Days
Past Due
   
Greater than 90 days past due
   
Total Past Due
   
Loans Not
Past Due
 
                               
Residential real estate
 
$
381,027
   
$
7,078
   
$
2,594
   
$
9,672
   
$
371,355
 
Multifamily real estate
   
54,016
     
-
     
110
     
110
     
53,906
 
Commercial real estate:
                                       
Owner occupied
   
138,209
     
124
     
2,601
     
2,725
     
135,484
 
Non-owner occupied
   
282,608
     
172
     
3,301
     
3,473
     
279,135
 
Commercial and industrial
   
103,624
     
2,235
     
262
     
2,497
     
101,127
 
Consumer
   
27,688
     
247
     
112
     
359
     
27,329
 
Construction and land
   
128,926
     
388
     
810
     
1,198
     
127,728
 
All other
   
33,203
     
546
     
73
     
619
     
32,584
 
Total
 
$
1,149,301
   
$
10,790
   
$
9,863
   
$
20,653
   
$
1,128,648
 


PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2019:
   
Allowance for Loan Losses
   
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
   
Collectively Evaluated for Impairment
   
Acquired with Deteriorated Credit Quality
   
Total
   
Individually Evaluated for Impairment
   
Collectively Evaluated for Impairment
   
Acquired with Deteriorated Credit Quality
   
Total
 
                                                 
Residential real estate
 
$
-
   
$
1,823
   
$
-
   
$
1,823
   
$
68
   
$
373,182
   
$
2,655
   
$
375,905
 
Multifamily real estate
   
1,231
     
359
     
-
     
1,590
     
3,849
     
49,080
     
-
     
52,929
 
Commercial real estate:
                                                               
Owner occupied
   
140
     
1,684
     
-
     
1,824
     
3,274
     
133,113
     
1,979
     
138,366
 
Non-owner occupied
   
299
     
3,102
     
-
     
3,401
     
10,174
     
277,808
     
3,142
     
291,124
 
Commercial and industrial
   
203
     
1,518
     
-
     
1,721
     
440
     
105,585
     
358
     
106,383
 
Consumer
   
-
     
365
     
-
     
365
     
-
     
26,004
     
-
     
26,004
 
Construction and land
   
106
     
2,043
             
2,149
     
1,332
     
129,719
     
629
     
131,680
 
All other
   
-
     
606
     
-
     
606
     
-
     
33,254
     
229
     
33,483
 
Total
 
$
1,979
   
$
11,500
   
$
-
   
$
13,479
   
$
19,137
   
$
1,127,745
   
$
8,992
   
$
1,155,874
 

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2018:
   
Allowance for Loan Losses
   
Loan Balances
 
Loan Class
 
Individually Evaluated for Impairment
   
Collectively Evaluated for Impairment
   
Acquired with Deteriorated Credit Quality
   
Total
   
Individually Evaluated for Impairment
   
Collectively Evaluated for Impairment
   
Acquired with Deteriorated Credit Quality
   
Total
 
                                                 
Residential real estate
 
$
-
   
$
1,808
   
$
-
   
$
1,808
   
$
298
   
$
378,064
   
$
2,665
   
$
381,027
 
Multifamily real estate
   
1,281
     
368
     
-
     
1,649
     
3,905
     
50,111
     
-
     
54,016
 
Commercial real estate:
                                                               
Owner occupied
   
692
     
1,428
     
-
     
2,120
     
2,820
     
133,349
     
2,040
     
138,209
 
Non-owner occupied
   
267
     
2,791
     
-
     
3,058
     
10,111
     
269,063
     
3,434
     
282,608
 
Commercial and industrial
   
414
     
1,483
     
-
     
1,897
     
558
     
101,346
     
1,720
     
103,624
 
Consumer
   
-
     
351
     
-
     
351
     
-
     
27,688
     
-
     
27,688
 
Construction and land
   
142
     
2,113
     
-
     
2,255
     
1,351
     
126,363
     
1,212
     
128,926
 
All other
   
-
     
600
     
-
     
600
     
-
     
32,978
     
225
     
33,203
 
Total
 
$
2,796
   
$
10,942
   
$
-
   
$
13,738
   
$
19,043
   
$
1,118,962
   
$
11,296
   
$
1,149,301
 
PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

In the tables below, total individually evaluated impaired loans include certain purchased loans that were acquired with deteriorated credit quality that are still individually evaluated for impairment.

The following table presents loans individually evaluated for impairment by class of loans as of March 31, 2019.  The table includes $1,531,000 of loans acquired with deteriorated credit quality that the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

   
Unpaid Principal Balance
   
Recorded Investment
   
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
                 
Residential real estate
 
$
442
   
$
230
   
$
-
 
Multifamily real estate
   
110
     
110
     
-
 
Commercial real estate
                       
Owner occupied
   
2,916
     
2,639
     
-
 
Non-owner occupied
   
8,552
     
7,830
     
-
 
Commercial and industrial
   
552
     
42
     
-
 
Construction and Land
   
821
     
821
     
-
 
     
13,393
     
11,672
     
-
 
With an allowance recorded:
                       
Multifamily real estate
   
4,017
     
3,739
     
1,231
 
Commercial real estate
                       
Owner occupied
   
1,548
     
1,540
     
140
 
Non-owner occupied
   
2,886
     
2,808
     
299
 
Commercial and industrial
   
403
     
398
     
203
 
Construction and land
   
511
     
511
     
106
 
     
9,365
     
8,996
     
1,979
 
Total
 
$
22,758
   
$
20,668
   
$
1,979
 


PREMIER FINANCIAL BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED, DOLLARS IN TABLES IN THOUSANDS, EXCEPT PER SHARE DATA)


NOTE  3 - LOANS - continued

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2018.  The table includes $1,160,000 of loans acquired with deteriorated credit quality for which the Company cannot reasonably estimate cash flows such that they are accounted for on the cost recovery method and are still individually evaluated for impairment.

   
Unpaid Principal Balance
   
Recorded Investment
   
Allowance for Loan Losses Allocated
 
With no related allowance recorded:
                 
Residential real estate
 
$
426
   
$
298
   
$
-
 
Multifamily real estate
   
110
     
110
     
-
 
Commercial real estate
                       
Owner occupied
   
1,305
     
1,092<