Premier Financial Corp.

Hello, good morning and thank you for joining today's call. The call will begin shortly. Thank you for your patience. © transcript Emily Beynon Thank you. hello and thank you for joining the premier financial corporation fourth quarter 2021 earnings call we will begin shortly thank you for your patience © transcript Emily Beynon Thank you. Good morning and welcome to the Premier Financial Corp fourth quarter 2021 earnings conference call. My name is Gemma and I'll be the operator for this call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. To do so, please press star followed by one in the telephone keypad, and if you change your mind, it's star followed by two. Please note this event is being recorded. I would now like to hand the conference over to Paul Nongesta from Premier Financial Corp. Please go ahead. Thank you.

Thank you, Gemma. Good morning, everyone, and thank you for joining us for today's fourth quarter 2021 earnings conference call. This call is also being webcast, and the audio replay will be available at the Premier Financial Corp website at premierfincorp.com. Following our prepared comments on the company's strategy and performance, we will be available to take your questions. Before we begin, I'd like to remind you that during the conference call today, including during the question and answer period, you may hear forward-looking statements related to future financial results and business operations for Premier Financial Corp. Actual results may differ materially from current management forecasts and projections as a result of factors over which the company has no control. Information on these risk factors and additional information on forward-looking statements are included in the news release and in the company's reports on file with the Securities and Exchange Commission. And now I'll turn the call over to Gary for his comments.

Thank you, Paul, and good morning to everyone. We appreciate you joining us today. Let me start by affirming a message delivered on last quarter's call. The business environment across our markets continues to be strong, and our current new business loan portfolio pipeline reflects the extensive opportunities. While labor availability continues to be a constraint for some, folks are managing through the impacts in a reasonable fashion. Consumer household balance sheets remain in very good shape with plenty of excess cash on hand. We really just need the supply to catch up with the demand. We at Premier maintain a very positive outlook for 22. Now on to our performance result highlights for 21, fourth quarter. For the quarter, we reported $25.3 million in net income, or 69 cents a share, which brings our full year to 126 million and 339 a share, respectively. Full year ROA and ROE were 1.68 and 12.49, respectively, and very solid. The fourth quarter pre-tax pre-provision ROA came in at 176. That figure's a bit low versus our normal standard, and it's due to a combination of a seasonal slowdown in residential mortgage revenue and an incremental spending increase relative to some specific cost reduction initiatives and efforts we put underway in the fourth quarter. Loan growth was strong for the quarter as expected. On a PPP adjusted basis, Annual loan growth for the quarter totaled 8.7%, with commercial growth leading the way at 10.3%. It's worth noting that the annualized loan growth for the combined third and fourth quarters was over 7%, and that reflects the growth trajectory that we expect for 2022. Net interest income for the quarter expanded to 341, while core margin remained steady at 321. We continue to see reductions in our cost of funds. Non-interest income results were lower than expected for the quarter. As I mentioned, residential mortgage income at $3 million reflected a tight pricing environment and a seasonal slowdown in the second half of the fourth quarter. Certainly, COVID escalations in December contributed to that outcome. We are very pleased with the full-year residential mortgage results. The profit contribution is second only to the record performance of 2020. On the plus side, Bank service fees climbed 17% in the fourth quarter ahead of last year's results. Expenses were elevated in the fourth quarter. The quarter included one-time expenses of approximately $2 million. They mentioned for initiatives designed to immediately improve our expense run rate for 22 and beyond. From a credit perspective, more topic here than is typical for us. On our last quarter call, we discussed the specific credit that was placed on non-accrual, reflecting uncertainties regarding a key contract with the federal government, which was negatively affected by ongoing moratorium on the collection of student loan debt. Unfortunately, that contract was formally terminated by the Department of Education in the fourth quarter. While the loan remains current and our client has other revenue flows, the elevated level of repayment uncertainty made at prudent to take a charge off, significant charge off during the quarter. As you'll hear in later comments, the portfolio as a whole is performing very well and all leading indicators, credit performance remains strong. Now I'll turn it over to Paul and I'll provide some thoughts on the 22 performance expectations at the end of our presentation. Thank you, Gary.