Second quarter income falls to $200,000
BILOXI, Miss., July 22 /PRNewswire-FirstCall/ -- Peoples Financial Corporation (Nasdaq: PFBX), parent of The Peoples Bank, earned $1,904,000 in the first half of 2009, a decline of 55% from the same period in 2008, announced Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank.
Second quarter earnings fell 91% from the same period last year to $200,000.
Earnings for the second quarter were reduced largely because of an addition to the loan loss provision of $1,502,000. The provision was increased to account for loan charge-offs in the quarter totaling $3,301,000. One large residential development loan was responsible for approximately $2,500,000 of the charge, and an additional charge-off of $332,000 was the result of the loss on a loan participation.
"Events like these loan losses and the unprecedented, lingering national financial malaise have validated our longtime conservative philosophy of maintaining a very strong capital base," said Swetman. "Despite the painful loan loss, our primary capital remains above 12%, substantially higher than regulatory requirements. As bad as the second quarter was, we still made money," he added.
"In addition to the loan charge-offs, we had to accrue $420,000 for a special FDIC assessment in the second quarter," said Swetman. "Our FDIC assessments for the year are projected to be in excess of $1,000,000. In 2008 our FDIC insurance assessment amounted to $83,000 for the entire year. That is an increase of more than 1100%," he noted.
Earnings per share fell to $.04 per average weighted share for the second quarter of 2009, down from $.41 per share for the same period last year. Earnings per share figures are based on average weighted shares outstanding of 5,157,356 and 5,361,327 for the three months ended June 30, 2009 and June 30, 2008, respectively. Average shares outstanding were lower in the quarter due to the latest stock repurchase program launched in fourth quarter 2008.
For the six months ended June 30, 2009, earnings per average weighted share fell 53% to $.37, compared to $.79 for the first half of 2008. Earnings per share figures are based on average weighted shares outstanding of 5,189,474 and 5,379,112 for the six months ended June 30, 2009 and 2008, respectively.
"The large loan loss originated right here in South Mississippi, a clear indication that the financial crisis that started on Wall Street has finally hit Main Street hard," said Swetman. "We began increasing our loan loss reserves last year in anticipation of events like this, as we continue to monitor the health of every loan in our portfolio.
