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Peoples Financial Corporation Announces Recovery Of $4,510,359 On Previously Charged Off Loan

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BILOXI, Miss., Feb. 22, 2021 /PRNewswire/ -- Peoples Financial Corporation (OTCQX Best Market: PFBX), parent of The Peoples Bank, announced the recovery of $4,510,359 on February 22, 2021 with respect to previously charged off amounts of a troubled loan. This recovery was related to a non-accrual loan that was charged off on September 30, 2020 for $5,424,923 and was the primary reason for the Company's net losses reported in the second and third quarters of 2020.

(PRNewsfoto/Peoples Financial Corporation)
(PRNewsfoto/Peoples Financial Corporation)

The bank had previously made provisions on this one commercial customer which was in bankruptcy as follows:

2nd Quarter 2020

$1,135,865

3rd Quarter 2020

$4,289,058

Charged off Loan 9/30/2020

$5,424,923

Loan Recovery 2/22/2021

$4,510,359

Net Loss on customer

$914,564

The following is the timeline associated with this commercial loan activity since non-accrual:

5/28/19 Loan placed on non-accrual
10/25/19 Commercial business files bankruptcy
6/30/20 $1,135,865 provision for loan loss reserve
9/4/20 Bankruptcy court approves final sale of assets free and clear of all liens, claims, interests and encumbrances by private sale for $5,130,000
9/30/20 $4,289,058 provision for loan loss reserve
9/30/20 $5,424,923 charged off loan on customer
11/18/2020 The closing for the sale was completed on 11/18/20, and the purchase money funds, less amounts stated pursuant to the sale order, were placed into an escrow account at Regions Bank
12/3/20 Motion to transfer funds filed by Peoples
1/28/21 Hearing set by court on Bank's motion to disburse funds. Judge grants motion to transfer funds.

"This significant recovery is very welcomed," said Chevis C. Swetman, Chairman and Chief Executive Officer of the holding company and the bank. He added, "Bank management has been focused on reducing all non-performing assets. The results of these efforts have been the decrease in non-accrual loans from $9,266,000 at December 31, 2019 to $3,027,000 at December 31, 2020 and the decrease in other real estate from $7,453,000 at December 31, 2019 to $3,475,000 at December 31, 2020. These efforts to improve the financial position of the bank will continue."

The company's capital maintains its position as one of the highest in the Southeast United States. The company's primary capital ratio was 15.62% and 16.27% at December 31, 2020 and 2019, respectively. This recovery will have a direct positive effect on net income and thus the capital of the company.

Founded in 1896, with $668 million in assets as of December 31, 2020, The Peoples Bank operates 18 branches along the Mississippi Gulf Coast in Hancock, Harrison, Jackson and Stone counties. In addition to offering 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 OTCQX Best Market under the symbol PFBX. Additional information is available on the Internet at www.thepeoples.com.

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,



2020


2019


2020


2019

Net interest income


$ 4,519


$ 4,393


$ 17,727


$ 17,682

Provision for loan losses


54


(169)


6,002



Non-interest income


1,638


1,579


7,251


6,367

Non-interest expense


5,438


5,015


21,727


22,370

Net income (loss)


665


1,126


(2,751)


1,679

Earnings (loss) per share


.14


.23


(.56)


.34










TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES








Three Months Ended December 31,


Year Ended December 31,



2020


2019


2020


2019

Allowance for loan losses, beginning of period

$ 4,401


$ 4,383


$ 4,207


$ 5,340

Recoveries


10


73


194


195

Charge-offs


(39)


(80)


(5,977)


(1,328)

Provision for loan losses


54


(169)


6,002



Allowance for loan losses, end of period


$ 4,426


$ 4,207


$ 4,426


$ 4,207










ASSET QUALITY


December 31,







2020


2019





Allowance for loan losses as a









percentage of loans


1.59%


1.56%





Loans past due 90 days and









still accruing


$


$





Nonaccrual loans


3,027


9,266














PERFORMANCE RATIOS


December 31,







2020


2019





Return on average assets


(0.43%)


0.28%





Return on average equity


(2.90%)


1.84%





Net interest margin


2.99%


3.23%





Efficiency ratio


114%


93%





Primary capital


15.62%


16.27%














BALANCE SHEET SUMMARY


December 31,







2020


2019





Total assets


$ 668,026


$ 594,702





Loans


278,421


268,949





Securities


260,560


253,314





Other real estate (ORE)


3,475


7,453





Total deposits


550,498


476,143





Shareholders' equity


94,866


95,123





Book value per share


19.45


19.24





Weighted average shares


4,893,151


4,943,186





Cision
Cision

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SOURCE Peoples Financial Corporation