PEOPLE’S FINANCIAL CORPORATION – GuruFocus.com

BILOXI, miss., May 11, 2022 /PRNewswire/ — Peoples Financial Corporation (the “Company”) (OTCQX Best Market: PFBX), parent company of The Peoples Bank, announced its results for the first quarter ending March 31, 2022.

First quarter results
The net result for the first quarter of 2022 was $887,000 compared to the net result of $4,330,000 for the first quarter of 2021. Weighted average earnings per common share for the first quarter of 2022 was $0.19 vs. weighted average earnings per common share of $0.89 for the first quarter of 2021. Per share figures are based on the weighted average number of common shares outstanding of 4,678,186 and 4,878,557 for the first quarters of 2022 and 2021, respectively.

Earnings for the first quarter of 2021 included a reduction in the provision for loan losses of $4,853,000. This reduction is the result of a recovery of $4,510,000 due to a previously written-off loan. The 2021 results also included the cost of $1,125,000 relating to the settlement of a lawsuit.

Investment depreciation
The Company has completed its review (the “review”) of the accounting relating to the application of generally accepted accounting principles in The United States of America (“GAAP”) which was previously announced in Current Reporting Form 8-K originally filed on April 25, 2022and modified the April 262022. As previously announced, the review focused on the accounting for a limited partnership investment (the “Investment”) in a low-income housing tax credit entity (the ” LIHTC entity”) which is owned by the company separately from its investment in its wholly owned banking subsidiary, The Peoples Bank, Biloxi, Mississippi. As a result of the review, the Company has concluded that its GAAP accounting for the investment in accordance with the “Codification of Accounting Standards (“ASC”)” 323, Equity Method and Joint Ventures (the “Guideline accounting”), by application of the equity method should also have included a periodic assessment of the investment for impairment (the “error”), as required by accounting guidelines. The investment was purchased in 2008 and was primarily designed to provide tax credits to the company over 10 years. Error Resulting from Failure to Periodically Assess the Investment for Impairment Totaled $2,110,000 cumulatively and should have been registered in the years ending December 31, 2018 and earlier.

As part of the review, the Company’s management has prepared an analysis relating to the potential impairment of the investment. The analysis has been prepared in accordance with the guidance set forth in Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 99, Materiality, and SEC Staff Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financials (collectively, the “SEC Guidance”). Based on management’s analysis prepared as part of the review, the Company’s Audit Committee concluded that the error did not create any material misstatements in the previously issued financial statements for the periods prior, current period, or earnings trend, considering both quantitative and qualitative data required by SEC guidelines. The Audit Committee, based on management’s analysis and recommendations, also concluded that correcting the cumulative effect of the error in the current period would result in a material misstatement in the current period. Accordingly, a correction of the error will be reflected in the company’s previously reported financial information contained in the Quarterly Report on Form 10-Q for the three months ended. March 31, 2022. This decision has been discussed with the company’s independent registered public accounting firm, Wipfli, LLP, as part of the preparation of Form 10-Q for the three months ended. March 31, 2022.

Equity
Total equity decreased by $92,350,000 at March 31, 2021 at $70,671,000 at March, 31st2022. The decrease is largely attributable to the increase in unrealized losses on the available-for-sale securities portfolio during the first quarter of 2022 from $19,334,000. These unrealized losses result from changes in interest rates. The Company’s risk-based capital ratios remain strong at 21.21% as of March 31, 2022.

About the company
Founded in 1896, with $939 million of total assets at March 31, 2022The Peoples Bank operates 18 branches along the Mississippi Gulf Coast in Hancock, Harrisson, jackson and Rock counties. In addition to offering a full range of personal and business banking services, the Bank also operates a trust and investment services department that has provided clients with financial, estate and retirement planning services since 1936.

Common stock of Peoples Financial Corporation is traded on the OTCQX best exchange under the symbol PFBX. Additional information is available on the Internet at the Company’s website, www.thepeoples.com, and at the Securities and Exchange Commission’s website, www.sec.gov.

This press release reflects industry conditions, company performance and financial results and contains “forward-looking statements”, which may include forecasts of our results and financial condition, expectations regarding our operations and our business, as well as our assumptions for such forecasts and expectations. place undue reliance on forward-looking statements. These forward-looking statements are subject to a number of risk factors and uncertainties that could cause the Company’s actual results and experience to differ materially from the anticipated results and expectations expressed in such forward-looking statements.

Factors that could cause our actual results to differ materially from our forward-looking statements are described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Regulation and Supervision” sections of the Company’s Annual Report. the corporation on Form 10-K for the fiscal year ended December 31, 2021, and in other subsequent filings by the Company with the Securities and Exchange Commission, available on the SEC’s website and on the Company’s website, each of which is referenced above. To the extent that statements in this press release relate to future plans, objectives, financial results or performance of the Company, such statements are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are generally identified by the use of words such as “may”, “believe”, “expect”, “anticipate”, “intend”, “will”, “should”, “plan”. “, “estimates”, “predicts”, “continues” ” and “potential” or the negative form of these terms or any other comparable terminology.

Forward-looking statements represent the beliefs of management, based on information available at the time the statements are made, with respect to the matters discussed; they are not guarantees of future performance. Forward-looking statements are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results or financial condition to differ materially from those expressed or implied by such statements. All information is as of the date of this press release. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to publicly revise or update any forward-looking statement for any reason.

PEOPLE’S FINANCIAL SOCIETY

(In thousands, except per share figures) (Unaudited)

WINNING SUMMARY

Quarter ended March 31

2022

2021

Net interest income

$4,780

$4,515

Allowance for loan losses

25

(4,853)

Non-interest income

1,594

1,510

Non-interest charges

5,462

6,548

Net revenue

887

4,330

Earnings per share

.19

.89

TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES

Quarter ended March 31

2022

2021

Allowance for loan losses, beginning of period

$3,311

$4,426

Collections

108

4,584

Landfills

(76)

(85)

Allowance for loan losses

25

(4,853)

Allowance for loan losses, end of period

$3,368

$4,072

RATE OF RETURN

March, 31st,

2022

2021

Average return on assets

0.40%

2.43%

return on average equity

4.43%

19.66%

Net interest margin

2.42%

2.65%

Efficiency report

86%

60%

SUMMARY OF THE BALANCE SHEET

March, 31st,

2022

2021

Total assets

$939,352

$750,165

Loans

241,098

272 273

Securities

488,785

337,049

Other real estate (ORE)

1,010

3,143

Total deposits

846 946

633 759

Equity

70,671

92,350

Book value per share

15.11

18.93

Weighted average shares

4,678,186

4,878,557

END OF PERIOD DATA

March, 31st,

2022

2021

Allowance for loan losses as

loan percentage

1.40%

1.50%

Loans 90 days past due and

still piling up

40

Unaccrued loans

574

2,941

Risk based capital

21.21%

23.31%

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SOURCE Peoples Financial Corporation

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