Peoples Financial Corporation Posts Quarterly Loss Caused By Continuing Issues With Two Loans

BILOXI, Miss., Oct. 22, 2014 /PRNewswire/ -- Peoples Financial Corporation (NASDAQ Capital Market: PFBX), parent of The Peoples Bank, reported a net loss of $1,799,000 for the quarter ended September 30, 2014, due primarily to continuing issues with two loans, announced Chevis C. Swetman, chairman and chief executive officer of the holding company and the bank. 

"As a result of receiving new appraisals, Management updated its evaluation of the collateral value relating to two previously impaired loans.  This updated evaluation caused the bank to provide an additional $1,700,000 loan loss provision for one out-of-area residential development loan and subsequently charge off $1,875,000 in principal on this loan.   Furthermore, the bank recorded a supplemental loan loss provision of $2,100,000 and charged off accrued interest of $161,000 for a previously reported troubled debt restructured credit that was placed on nonaccrual status during the third quarter of 2014," said Swetman.

"The fundamental business of our bank remains solid," said Swetman. "Because of our updated evaluation of the residential development outside our area, we had no choice but to write down the loan, and prudent business judgment dictated that we move the second loan to nonaccrual status," he added.

These actions contributed to the total provision for loan losses of $3,541,000 during the third quarter, compared to $542,000 for the same period in 2013. As of September 30, 2014, the total allowance for loan losses was $11,010,000, which represented 3.07% of total loans outstanding.

Earnings per weighted average common share for the third quarter of 2014 showed a net loss of $.35 compared to net earnings of $.18 per weighted average common share in the same period of 2013. Losses and earnings per share figures are based on weighted average common shares outstanding of 5,123,186 for the three months ended September 30, 2014 and September 30, 2013.

The most recent charges resulted in a net loss of $885,000 for the nine months ended September 30, 2014, compared to net earnings of $345,000 for the same period the year before.

The holding company's primary capital ratio stood at 14.77% at the end of the third quarter of 2014, compared to 14.04% at the end of the same period in 2013.

Founded in 1896, with $753 million in assets as of September 30, 2014, The Peoples Bank operates 18 branches along the Mississippi Gulf Coast in Hancock, Harrison, Jackson and Stone counties. In addition to offering 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. 

Peoples Financial Corporation is 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.

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SOURCE Peoples Financial Corporation