Peoples Financial Corp. Reports Operating Results (10-Q)

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Aug 09, 2010
Peoples Financial Corp. (PFBX, Financial) filed Quarterly Report for the period ended 2010-06-30.

Peoples Financial Corp. has a market cap of $69.45 million; its shares were traded at around $13.48 with a P/E ratio of 19.26 and P/S ratio of 1.56. The dividend yield of Peoples Financial Corp. stocks is 1.63%.

Highlight of Business Operations:

Net income for the second quarter of 2010 was $1,446,082 compared with $200,707 for the second quarter of 2009 and for the first half of 2010 was $2,317,537 compared with $1,903,674 for the first half of 2009. These increases were almost entirely attributable to the gain on the sale of securities of $1,563,441 during the second quarter of 2010. Also affecting net income were the increase in net interest income of $704,342 and the increase in the provision for loan losses of $885,000 for the six months ended June 30, 2010 as compared with the six months ended June 30, 2009, respectively.

Total non-interest income increased $1,518,151 for the second quarter of 2010 as compared with the second quarter of 2009. This increase was primarily the result of a gain on sales or calls or securities of $1,563,441 in 2010 as compared with $2 in 2009 as the Company liquidated its entire mortgage-backed securities portfolio and some of its short-term U.S. Treasuries during the second quarter of 2010. Trust department income and fees decreased $42,809 for the second quarter of 2010 as compared with the second quarter of 2009 as a result of the decrease in market value, on which fees are based, of personal trust accounts. Service charges on deposit accounts were impacted by the local economy and resulted in the decrease in NSF fee income of $64,345 and the decrease in ATM fees of $26,692. Other income increased $120,126 for the second quarter of 2010 as compared with the second quarter of 2009. Other income for 2010 included a decrease in rental income of $26,267 as the Company lost one tenant who had occupied a large rental space in its Downtown Gulfport branch. Other income for 2009 included a loss of $149,517 on the Companys investment in

Total non-interest income increased $1,028,863 for the first half of 2010 as compared with the first half of 2009, This increase was primarily the result of gains on sales or calls or securities of $1,567,486 in 2010 as compared with $136,799 in 2009 as the Company liquidated its entire mortgage-backed securities portfolio and some of its short-term U.S. Treasuries during the second quarter of 2010. Trust department income and fees decreased $71,779 for the first half of 2010 as compared with the first half of 2009 as a result of the decrease in market value, on which fees are based, of personal trust accounts. Service charges on deposit accounts were impacted by the local economy and resulted in the decrease in NSF fee income of $103 ,915 and the decrease in ATM fees of $44,300. Other income increased $120,126 for the second quarter of 2010 as compared with the second quarter of 2009. Other income for 2010 included a decrease in rental income of $26,268 as the Company lost one tenant who had occupied a large rental space in its Downtown Gulfport branch. Other income for 2009 included a loss of $149,517 on the Companys investment in preferred stock of an unaffiliated bank holding company which was closed by the FDIC.

Total non-interest expense decreased $396,141 for the second quarter of 2010 as compared with the second quarter of 2009. Salaries and employee benefits decreased $296,133 in 2010 as compared with 2009 as a result of the decrease in the number of employees as a result of attrition during 2009 and 2010. Included in the second quarter of 2010 was decreased occupancy expense of $97,121 relating primarily to decreased property and casualty insurance costs. FDIC regular assessments have increased for 2010 as banks fund the replenishment of the bank insurance fund which was depleted in recent years by bank closures. However, the Companys expense for the second quarter of 2009 includes the special assessment of $420,000. Other expense increased $153,989 in 2010 as compared with 2009 as a result of increased data processing charges, franchise tax expense and loss and write downs on other real estate. For the second quarter of 2010, data processing charges increased $56,367 over the second quarter of 2009 as a result of the outsourcing of the some of the banks I/T functions. Franchise tax expense increased $114,985 for the second quarter of 2010 as compared with the second quarter of 2009 as prior years refunds were received in 2009. The Company realized a loss of $26,350 during the second quarter of 2010 on the sale of other real estate.

Total non-interest expense decreased $22,658 for the first half of 2010 as compared with the first half of 2009. Salaries and employee benefits decreased $264,236 in 2010 as compared with 2009 as a result of the decrease in the number of employees as a result of attrition during 2009 and 2010. Included in the first half of 2010 was decreased occupancy expense of $124,205 relating primarily to reduced property and casualty insurance costs. FDIC regular assessments have increased as banks fund the replenishment of the bank insurance fund which was depleted in recent years by bank closures resulting in an increase of $116,465 for the first half of 2010 as compared with the first half of 2009. Other expense increased $267,109 for the first half of 2010 as compared with the first half of 2009 as a result of increased accounting, data processing charges, franchise tax expense and loss and write downs on other real estate and decreased consulting fees, trust expense and training costs. For the first half of 2010, accounting fees increased $67,275 over the first half of 2009 as a result of the outsourcing of the I/T audit function and the timing of external audit fees. For the first half of

2010, data processing charges increased $108,455 as compared with the first half of 2009 as a result of the outsourcing of the some of the banks I/T functions. Franchise tax expense increased $93,485 for the first half of 2010 as compared with the first half of 2009 as prior years refunds were received in 2009. Expenses relating to other real estate increased $143,158 during the first half of 2010 as compared with the first half of 2009 due to an increased number of foreclosures. Consulting fees decreased $37,954 for the first half of 2010 as compared with the first half of 2009 as 2009s results included costs associated with conducting a cost segregation study of our fixed assets. Trust expense decreased $29,880 for the first half of 2010 as compared with the first half of 2009 as the Company was able to reduce its monthly servicing fees for several months in 2010 using soft dollar credits from its processing vendor. Training costs decreased $27,363 for the first half of 2010 as compared with the first half of 2009 as the Company reduced its budget for off-site conferences and seminars.

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