Premier Financial Corp.

Good morning and welcome to the Premier Financial Corp second quarter 2023 earnings conference call. All participants will be in listen only mode. After today's presentation there will be an opportunity to ask a question. Press star followed by one on your telephone keypad to register your question. Please note this event is being recorded. I would now like to turn the conference over to Paul Noguesta with Premier Financial Corp. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for today's second quarter 2023 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 able 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 the 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 I'll turn the call over to Gary for his opening comments.

Thank you, Paul, and good morning to all. Thank you for joining us. On behalf of the Premier team, I'm pleased to announce second quarter earnings of $1.35 per share, with 68 cents of the earnings falling into the core operating category and another 67 cents a share resulting from a well-executed sale of our first insurance group agency. Coming out of our first quarter call, we shared our expectations for a more normalized quarterly core earnings range, and our team worked very hard to deliver on that expectation over the quarter. First, a comment on the first insurance group transaction. The genesis for the sale emanated from a strategic assessment of each of Premier's core business segments, taking into account earnings growth trajectory, effective capital utilization, and operating execution management. While the agency's financial performance has been consistently strong and currently on par with the industry, from a strategic perspective, we felt we could achieve a higher return on capital and better position the agency to achieve its potential by pursuing alternatives in today's very dynamic agency valuation environment. The net result, an excellent bump in Premier's reported current earnings for the quarter, $1.37 increase in tangible book value per share, and all with no EPS dilution effect on a go-forward basis. We improved capital and liquidity, and we're well-positioned to support future growth in our core banking businesses, a win on all fronts. I'll now move to Premier's banking performance highlights for the quarter. We continue to see commercial opportunities in the market that are being very selective. We stay focused on supporting our existing clients along with targeted CNI opportunities. Annualized loan growth totaled in excess of 8% for the quarter, and the commercial loan growth was 7% on the same annualized pace, with CNI representing 49% of our new business origination during the quarter. Total deposits grew 3% in absolute terms, with a slight drop in customer deposits over the course of the quarter. We continue to see migration of deposits to higher-earning products consistent with the industry. We are having success in neutralizing the effect of prior deposit premium offers upon repricing, while at the same time attracting new money with higher rate offers, primarily in the time deposit category. The core non-interest income category was up 9.4% versus the second quarter of last year, with wealth and deposit-related fee income reporting high single-digit increases. Targeted expense reduction initiatives are on track. the full quarter effects on the directions to be felt over the remainder of the year. Loan portfolios continue to perform well. NPA and delinquency numbers are in check, very much solid with the four-quarter averages, and we were in a net recovery position from a net charge-off perspective for the quarter. Consistent with expectations, we said on our call last quarter we engaged in hedging activity in early June which will provide a near-term boost to net interest income while also protecting margin from unfavorable impacts of future fed funds rate increases. We've also taken additional steps in right-sizing our residential mortgage operation, given the continued softness of the business, and doing so trims our expectations for balance sheet growth in the residential portfolio segment. Our unfunded construction commitments are down 70% versus this time last year. And with that, I'm going to turn it over to Paul for some more details.