Premier Financial Corp.

Good morning and welcome to the Premier Financial Corp first quarter 2024 earnings conference call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question, press star 1 on your telephone keypad. Please note this event is being recorded. I would now like to turn the conference over to Paul Nungester with Premier Financial Corp. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for today's first quarter 2024 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 I'll turn the call over to Gary for his opening comments.

Thank you, Paul, and good morning to everyone. Thanks again for joining us today. Quickly, for the quarter, we reported net income of $17.8 million, or 50 cents per share, and I will begin with comments on our most significant topic in the quarter. Our average annual deposit growth was a respectable 2.6% for the quarter. Consumer deposits were once again the strength of the storyline. Average outstandings were up 7.5% annualized, and that's a continuation of being up 6.7% annualized during the second half of 23. So that's three very strong quarters on the consumer side. Public funds grew $66 million from point to point over the course of the quarter, which was about 4%. Commercial deposits provided the unfavorable surprise for the quarter. with commercial non-interest-bearing deposit balances down $86 million, and that's about 8% in the month of January. And that's far in excess of the typical posterior end balance decline that you're accustomed to for tax payments and distributions and so forth. We performed a detailed client relationship review, and it revealed the elevated use of the deposit liquidity to fund more typical CapEx financings and other financeable working capital borrowing needs. Clients are making efficient use of their capital, and the NIB balance movement did stabilize over February and March, and balances were beginning to replenish in April. Premier secured higher cost funding to replace those NIB balances, and we expect to recover the majority of those lost NIB balances over the course of the next two quarters as businesses refill their coffers. The atypical January event resulted in a six to seven basis point hit to Premier's net interest margin for the quarter. It was a bit more of an episode than any sort of systemic decline. I will add that beginning in early March, we began a repricing program to get ahead of the Fed, selectively reducing deposit rates, testing elasticity of our deposit portfolios, etc. Early results are encouraging, and we expect more March forward pricing movement in advance of any reductions that would be triggered by the Fed move to reduce rates down the road. Switching gears, loan balances for the quarter were essentially flat on a linked quarter basis, with commercial payoffs occurring per plan and the pace of new business funding coming on board a bit more slowly than anticipated back at the beginning of the year. March saw a return to more typical commercial loan business activity and we have no change in our full year growth expectations that we expressed in January. We experienced excellent expense management during the quarter and our non-interest income benefited from a resurgence in residential mortgage volume and better unit gain on sale related to those mortgages. We also saw a continuation of strong wealth management fee income and it actually outperformed our expectations for the quarter. On the credit front, the consumer residential loan portfolio saw delinquency declines. Total MPLs are well in check, and net charge-off levels remain at a very modest level. Capital is in great shape, which Paul will have a couple numbers on, and I'm going to turn it to Paul for his perspective.