People’s Financial Corporation (OTCMKST: PFBX), the parent company of The Peoples Bank, has announced its Q1 2021 earnings results for the quarter ended March 31, 2021.
People’s Bank reported a net income of $4.33 million
In the first quarter of 2021, net income was $4.33 million compared to $1.123 million in the first quarter of 2020. Earnings per common share during the quarter were $0.89, compared to $0.23 in the same period a year ago. The weighted average common shares outstanding for the first quarters of 2021 and 2020 were 4,878,557 and 4,927,616, respectively.
On February 22, 2021, the company reported that the Bank subsidiary recovered a previously charged-on loan of $4.5 million. The colossal recovery was taken into account when calculating our reserve for loan losses at the end of the quarter. Management declared a negative loan losses provision of $4,853,000 in Q1 2021 based on the allowance for loan losses calculation and the ongoing loan portfolio credit quality assessment.
An increase in non-interest expense reduced the company’s net income in the first quarter, mainly due to an accrual of $1,125,000 as a consequence of a provisional agreement to resolve litigation that, if finalized, will result in the company paying that expected amount in cash.
The Peoples Bank agrees to settle a lawsuit.
Chevis Swetman, the CEO of the Company and Bank, stated that they are glad to have generated a significant negative provision in Q1 2021. He said that the company’s ORE portfolio was also reduced to $3,143,000 at the end of the quarter. There are already contracts to liquidate an additional 10% of that portfolio in the coming weeks. Swetman said that after conferring with attorneys, the Bank management made the difficult but wise decision to settle the case and remove yet another impediment to the company’s future performance.