8-K
Peoples Financial Corp /Ms/ (PFBX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 22, 2021
PEOPLES FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Mississippi
(State or Other Jurisdiction of Incorporation)
| 001-12103<br><br> <br>(Commission File Number) | 64-0709834<br><br> <br>(IRS Employer Identification No.) |
|---|---|
| 152 Lameuse Street Biloxi, MS<br><br> <br>(Address of Principal Executive Offices) | 39530<br><br> <br>(Zip Code) |
(228) 435-5511
(Registrant’s Telephone Number, Including Area Code)
| (Former Name or Former Address, if Changed Since Last Report) |
|---|
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None | PFBX | None |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2 below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4( c) under the Exchange Act (17 CFR 240.13e-4( c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On February 22, 2021, Peoples Financial Corporation (the “Company”) issued a press release announcing the recovery of a previously charged-off loan. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 22, 2021
| PEOPLES FINANCIAL CORPORATION<br><br> <br><br><br> <br><br><br> <br>By: /s/ Chevis C. Swetman<br><br> <br>Chevis C. Swetman<br><br> <br>Chairman, President and CEO |
|---|
Exhibit 99.1: Peoples Financial Corporation Press Release Dated February 22, 2021
FOR IMMEDIATE RELEASE
For more information, contact:
Chevis C. Swetman, President and CEO
228-435-8205
cswetman@thepeoples.com
PEOPLES FINANCIAL CORPORATION ANNOUNCES
RECOVERY OF $4,510,359 ON PREVIOUSLY CHARGED OFF LOAN
BILOXI, MS (February 22, 2021) **** ── Peoples Financial Corporation (OTCQX Best Market: PFBX), parent of The Peoples Bank, announced the recovery of $4,510,359 on February 22, 2021 with respect to previously charged off amounts of a troubled loan. This recovery was related to a non-accrual loan that was charged off on September 30, 2020 for $5,424,923 and was the primary reason for the Company’s net losses reported in the second and third quarters of 2020.
The bank had previously made provisions on this one commercial customer which was in bankruptcy as follows:
| 2^nd^ Quarter 2020 | $ | 1,135,865 |
|---|---|---|
| 3^rd^ Quarter 2020 | $ | 4,289,058 |
| Charged off Loan 9/30/2020 | $ | 5,424,923 |
| Loan Recovery 2/22/2021 | $ | 4,510,359 |
| Net Loss on customer | $ | 914,564 |
The following is the timeline associated with this commercial loan activity since non-accrual:
5/28/19 Loan placed on non-accrual
10/25/19 Commercial business files bankruptcy
6/30/20 $1,135,865 provision for loan loss reserve
9/4/20 Bankruptcy court approves final sale of assets free and clear of all liens, claims, interests and encumbrances by private sale for $5,130,000
9/30/20 $4,289,058 provision for loan loss reserve
9/30/20 $5,424,923 charged off loan on customer
11/18/2020 The closing for the sale was completed on 11/18/20, and the purchase money funds, less amounts stated pursuant to the sale order, were placed into an escrow account at Regions Bank
12/3/20 Motion to transfer funds filed by Peoples
1/28/21 Hearing set by court on Bank’s motion to disburse funds. Judge grants motion to transfer funds.
“This significant recovery is very welcomed,” said Chevis C. Swetman, Chairman and Chief Executive Officer of the holding company and the bank. He added, “Bank management has been focused on reducing all non-performing assets. The results of these efforts have been the decrease in non-accrual loans from $9,266,000 at December 31, 2019 to $3,027,000 at December 31, 2020 and the decrease in other real estate from $7,453,000 at December 31, 2019 to $3,475,000 at December 31, 2020. These efforts to improve the financial position of the bank will continue.”
The company’s capital maintains its position as one of the highest in the Southeast United States. The company’s primary capital ratio was 15.62% and 16.27% at December 31, 2020 and 2019, respectively. This recovery will have a direct positive effect on net income and thus the capital of the company.
Founded in 1896, with $668 million in assets as of December 31, 2020, 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.
The Peoples Bank is a wholly owned subsidiary of Peoples Financial Corporation, listed on the OTCQX Best Market under the symbol PFBX. Additional information is available on the Internet at www.thepeoples.com.
| PEOPLES FINANCIAL CORPORATION | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited) (In thousands, except weighted average shares and per share figures) | **** | **** | **** | **** | **** | |||||||
| EARNINGS SUMMARY | Three Months Ended December 31, | Year Ended December 31, | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net interest income | $ | 4,519 | $ | 4,393 | $ | 17,727 | $ | 17,682 | ||||
| Provision for loan losses | 54 | (169 | ) | 6,002 | ||||||||
| Non-interest income | 1,638 | 1,579 | 7,251 | 6,367 | ||||||||
| Non-interest expense | 5,438 | 5,015 | 21,727 | 22,370 | ||||||||
| Net income (loss) | 665 | 1,126 | (2,751 | ) | 1,679 | |||||||
| Earnings (loss) per share | .14 | .23 | (.56 | ) | .34 | |||||||
| TRANSACTIONS IN THE ALLOWANCE FOR LOAN LOSSES | **** | **** | **** | **** | **** | **** | **** | **** | **** | |||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Allowance for loan losses, beginning of period | $ | 4,401 | $ | 4,383 | $ | 4,207 | $ | 5,340 | ||||
| Recoveries | 10 | 73 | 194 | 195 | ||||||||
| Charge-offs | (39 | ) | (80 | ) | (5,977 | ) | (1,328 | ) | ||||
| Provision for loan losses | 54 | (169 | ) | 6,002 | ||||||||
| Allowance for loan losses, end of period | $ | 4,426 | $ | 4,207 | $ | 4,426 | $ | 4,207 | ||||
| ASSET QUALITY | December 31, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| 2020 | 2019 | |||||||||||
| Allowance for loan losses as a | ||||||||||||
| percentage of loans | 1.59 | % | 1.56 | % | ||||||||
| Loans past due 90 days and | ||||||||||||
| still accruing | ||||||||||||
| Nonaccrual loans | 3,027 | 9,266 | ||||||||||
| PERFORMANCE RATIOS | December 31, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| 2020 | 2019 | |||||||||||
| Return on average assets | (0.43% | ) | 0.28 | % | ||||||||
| Return on average equity | (2.90% | ) | 1.84 | % | ||||||||
| Net interest margin | 2.99 | % | 3.23 | % | ||||||||
| Efficiency ratio | 114 | % | 93 | % | ||||||||
| Primary capital | 15.62 | % | 16.27 | % | ||||||||
| BALANCE SHEET SUMMARY | December 31, | |||||||||||
| --- | --- | --- | --- | --- | ||||||||
| 2020 | 2019 | |||||||||||
| Total assets | $ | 668,026 | $ | 594,702 | ||||||||
| Loans | 278,421 | 268,949 | ||||||||||
| Securities | 260,560 | 253,314 | ||||||||||
| Other real estate (ORE) | 3,475 | 7,453 | ||||||||||
| Total deposits | 550,498 | 476,143 | ||||||||||
| Shareholders' equity | 94,866 | 95,123 | ||||||||||
| Book value per share | 19.45 | 19.24 | ||||||||||
| Weighted average shares | 4,893,151 | 4,943,186 |