Peoples Financial Corporation Posts $1,147,000 Loss For The Second Quarter 2013 Due To $3,538,000 Loss Provision

BILOXI, Miss., July 24, 2013 /PRNewswire/ -- Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, reported a loss of $1,147,000 for the second quarter of 2013, announced Chevis C. Swetman, Chairman and Chief Executive Officer of the holding company and the bank. 

During the second quarter of 2013, the Company provided $3,538,000 for its allowance for loan losses.  Of this total amount, $3,000,000 related to a single, out of area residential development loan with a balance of $15,318,000 at June 30, 2013. Although the loan has been on nonaccrual for some time, specific conditions now exist which led to this significant provision.

Losses per weighted average common share for the second quarter of 2013 were $.23 compared to earnings of $.11 per weighted average common share in the second quarter of 2012.   Losses and earnings per share figures are based on weighted average common shares outstanding of 5,134,620 and 5,136,918, respectively, for the three-month periods ended June 30, 2013 and June 30, 2012.

For the first half of 2013, the Company recorded a net loss of $541,000 compared to net income of $1,067,000 for the same period in 2012. As a result of this net loss, the Company will not pay its usual semi-annual dividend at this time.

"This loan loss provision is extremely painful but ultimately became necessary in our ongoing process of aggressively cleansing our balance sheet," said Swetman. "Our bank's core operations continue to be profitable, and recognizing this provision now is beneficial to the Company in the long run," he added.

Nonaccruing loans decreased in second quarter 2013 by 10% compared to the same quarter last year. Allowance for loan losses at the end of the most current quarter now stands at $12,150,000, representing 3.01% of total loans, and almost twice the amount set aside at the same time last year.

The bank's primary capital ratio stood at 14.20% at the end of the second quarter of 2013, compared to 14.05% at the end of the same period in 2012.

Founded in 1896, with $799 million in assets as of June 30, 2013, The Peoples Bank operates 17 branches along the Mississippi Gulf Coast in Hancock, Harrison, Jackson and Stone counties. In addition to a comprehensive range of retail and commercial banking services, the bank also operates a trust and investment services department that has provided customers with financial, estate and retirement planning services since 1936. 

The Peoples Bank is a wholly-owned subsidiary of Peoples Financial Corporation, listed on the NASDAQ Capital Market under the symbol PFBX. Additional information is available on the Internet at www.thepeoples.com.

This news release contains forward-looking statements and reflects industry conditions, company performance and financial results. These forward-looking statements are subject to a number of risk factors and uncertainties which could cause the Company's actual results and experience to differ from the anticipated results and expectation expressed in such forward-looking statements.

SOURCE Peoples Financial Corporation